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2024 Supreme(Mad) 389
IN THE HIGH COURT OF JUDICATURE AT MADRAS
S.S. Sundar, P.D. Audikesavalu, JJ.
M/s. Gemini Film Circuit rep.by its Managing Partner and Others – Petitioners
Versus
M/s. Venkateswara Financiers Hyderabad Private Limited, rep.by its Managing Director, Hyderabad and Another – Respondents
Rev.Appl. No. 27 of 2023 & OSA. No. 46 of 2023 & CMP. Nos. 1867, 4035 of 2023
Decided On : 11-03-2024
For the Appellant :V. Prakash, Senior counsel, S. Bala Subramaniam, Advocate.
For the Respondent:V.C. Janardhanan, Kavin Prabhu, Advocates.
IMPORTANT POINT
The main legal point established is that the court's power of review is limited to the scope of Order 47 Rule 1 of CPC and cannot be used as an appeal in disguise.
Headnote:
Loan Agreement - Recovery Suit - Mortgage - [CPC, Order 47 Rule 1; Letters Patent Act, Clause 15] - The court discussed the loan agreement, the recovery suit, and the mortgage, emphasizing the failure of the settlement and the conduct of the petitioners in not fulfilling their undertakings.
Fact of the Case:
The defendants entered into a Loan Agreement with the plaintiff for a film production. The plaintiff filed a suit for recovery based on the mortgage. The defendants failed to fulfill the settlement agreement and engaged in deceptive conduct.
Finding of the Court:
The court found that the defendants failed to fulfill their settlement agreement and engaged in deceptive conduct, leading to the dismissal of the appeal and the review application.
Issues: Failure to fulfill settlement agreement, deceptive conduct, dismissal of appeal and review application.
Ratio Decidendi: The court held that the review application was unsustainable as the essential condition of the settlement was not fulfilled. It also emphasized that the power of review cannot be compared with the appellate power and that review should be confined to the scope of Order 47 Rule 1 of CPC.
Final Decision: The court dismissed the review application and the Original Side Appeal, stating that both were filed only to gain time under the pretext of settlement.
JUDGMENT :
S.S. SUNDAR, J.
(Prayer: Review Application filed under Order 48 Rule 1 read with Section 114 of CPC to allow the review application and to set aside the order dated 22.10.2022 made in OSA.No.43/2020.
Original Side Appeal filed under Order 36 Rule 1 of Original Side Rules read with Clause 15 of Letters Patent Act against the judgment and decree of this Court dated 25.01.2023 in EP.No.70/2021 in CS.No.99/2018.)
1. Since both the Review Application and the Original Side Appeal arise out of same suit and parties are same, they are disposed of by this common judgment.
2. Review Application in Rev.Appl.No.27/2023 is filed by the petitioners who are defendants 1 to 6, 8 and 9 in CS.No.99/2018 to review the judgment and decree of this Court made in OSA.No.43/2020 dated 22.10.2022.
3. The Original Side Appeal in OSA.No.46/2023 is preferred by the appellants challenging the order of the learned Single Judge dated 25.01.2023 in EP.No.70/2021 in CS.No.99/2018, with a prayer to set aside the same.
4. Brief facts that are necessary for the disposal of the Review Application and the Original Side Appeal are as follows:-
5. The Review petitioners are the defendants 1 to 6 8 and 9 in the suit in CS.No.99/2018. The 1st petitioner is a Partnership Firm represented by its Managing Partner. Petitioners 2 to 8 are the partners in the Firm who are defendants 2 to 6, 8 and 9 in CS.No.99/2018. The 1st respondent is the plaintiff in the said suit.
6. It is admitted by the petitioners that they had entered into a Loan Agreement dated 23.07.2012 with the 1st respondent / plaintiff for a sum of Rs.7.50 Crores in connection with the film produced by the petitioners ''Madha Gaja Raja''. The petitioners have offered their immovable property measuring an extent of 3 acres of land situate in Survey No.172, Manapakkam Village, Sriperumbudur Taluk, Kanchipuram District as security apart from executing a Deed of Hypothecation, hypothecating their right in respect of the said film. The 1st respondent filed a suit in CS.No.99/2018 for recovery of a sum of Rs.17,93,78,446/- with future interest at 27% per annum from the date of plaint till the date of realisation and for consequential reliefs based on the mortgage.
7. Since written statement was not filed by the defendants/petitioners herein, an application was moved by the 1st respondent / plaintiff to pass summary judgment and decree in CS.No.99/2018. A learned Single Judge of this Court vide judgment dated 04.12.2019, decreed the suit in favour of the 1st respondent / plaintiff by directing the defendants to jointly and severally pay the plaintiff a sum of Rs.26,75,84,725.26p., with future interest at 27% per annum on the sum of Rs.17,33,78,446/- from the date of decree till the date of realisation. Further directions were issued to enable the plaintiff /1st respondent herein to realise the amount decreed by seeking appointment of a Receiver to sell the film and the mortgaged property.
8. Aggrieved by the judgment and decree of the learned Single Judge dated 04.12.2019 made in CS.No.99/2018, the defendants have preferred an appeal in OSA.No.43/2020. In the meanwhile, the plaintiff filed EP.No.70/2021 to execute the judgment and decree made in CS.No.99/2018 dated 04.12.2019.
9. It is to be noted that the petitioners have not disputed the transaction at any point of time during trial. From the proceedings recorded during the pendency of the appeal, it appears that the petitioners have expressed their willingness for settlement to reduce their liability towards the suit claim. A proposal for settlement came from the petitioners to pay a sum of Rs.15.30 Crores to the 1st respondent / plaintiff towards full and final settlement on or before 23.03.2020. A Memo was also submitted before the Bench in which the appeal was pending and the Division Bench has recorded the settlement proposal on 28.02.2020. Subsequently, the petitioners did not pay the money as promised. However, they managed to pay a sum of Rs.7.50 Crores in
