An unregistered family arrangement cannot bind third-party creditors; delays in litigation undervalue statutorily established recovery rights.

JUDGMENT :

K.GOVINDARAJAN THILAKAVADI, J.

Feeling aggrieved and dissatisfied with the impugned order dated 14.02.2003, passed in A.S.No.80 of 2022 on the file of the learned VII Additional Judge, City Civil Court at Chennai, reversing the judgment and decree in I.A. No.5 of 2022 in O.S. No.7963 of 2021 dated 06.09.2022 on the file of the VI Assistant Judge, City Civil Court, Chennai, the present Second Appeal has been preferred by the appellant Bank.

2. The suit has been filed by the plaintiff for the following reliefs:

(a) for a declaration that the Memorandum of Oral Family Arrangement dated 05.04.2022 is valid and binding;

(b) for a permanent injunction restraining the 7^th defendant, their men, agents and subordinates from interfering with the plaintiff's peaceful possession and enjoyment of the suit property except by due process of law and for costs.

3. The facts leading to the present appeal are as under:

3.1. One L.V.Prasad executed a Will dated 27.09.1990 by which he bequeathed the suit property in favour of his two grandsons, namely, A.Ravishankar Prasad and A. Manohar Prasad to manage the property as kartha of their respective joint families. M/s. Ravishankar Industries, availed a loan of Rs.2,00,00,000/- from M/s. Ind Bank Merchant Banking Services Limited in the year 1994-95 in the nature of lease of imported machinery and Airconditioning equipments with Mr.A. Manohar Prasad and Mr.A.Ravishankar Prasad as guarantors. On account of the default in repayment of the said dues, the said M/s.Ind Bank Merchant Banking Services Limited, filed a suit in C.S. No.225 of 1999 before this Court for recovery of Rs.1,64,27,003.57/- from Ravishankar Industries and his guarantors Mr.A.Ravishankar Prasad and Mr. A. Manohar Prasad. During the pendency of the said civil suit, a compromise was arrived at between the parties therein and accordingly, consent terms were entered into between them on 30.11.2000. A Memo of Compromise along with the consented terms was filed before this Court and a Consent Decree was passed by this Court on 11.12.2000 in the said C.S. No.225/1999. The Will executed by Late Mr.L.V.Prasad, was accorded a probate by this Court on 22.11.2001 in TOS No.45 of 1995. As the defendants in C.S. No.225/1999 failed to abide by the terms and conditions of the said Compromise Decree and committed default in paying the dues as per the said Compromise Decree dated 11.12.2000, the said M/s.Ind Bank Merchant Banking Services Limited, filed the Execution Petition in E.P. Nos.45, 46 and 47 of 2005 before this Court. On 11.04.2005, the said Execution Petitions were allowed and M/s.Ind Bank Merchant Banking Services Limited, was permitted to attach and sell the properties of the defendants, more particularly the house property at Adyar and land properties at Manapakkam. Thereafter, assignment was made to M/s.Kotak Mahindra Bank Limited, the appellant herein, by the decree holder. The said Bank, thereafter, filed O.A. No.84/2011 before the DRT II, Chennai, and obtained an order dated 13.12.2011, directing Mr.A.Manohar Prasad and Mr.A.Ravishankar Prasad to pay a sum of Rs.15,14,19,212/- together with interest at 24% per annum from the date of filing of the O.A., till the date of realization, with costs to Kotak Mahindra Bank Limited. On 13.12.2011 an order of attachment was passed by the learned Tribunal in I.A. No.216/2011, as per Section 19 (13), 13(B) of Recovery of Debts due to Banks and Financial Institutions Act, 1993. On 19.11.2012, the learned Tribunal ordered for issuance of a recovery certificate in O.A. No.84/2011, for realization of the said dues. Accordingly, a Recovery Certificate was issued on 11.01.2013 in DRC No.5/2013. The order dated 19.11.2012 passed in O.A.