Proper documentation and acknowledgment of transactions are essential for enforcing claims in chitty agreements, and interest must be calculated from termination notices.

Sathish Ninan, J.

The suit for money was decreed by the trial court.

Defendants 1 and 3 to 5 are in appeal. The second defendant died pending the suit and the other defendants were recorded as the legal representatives.

2. The plaintiff is a private limited company engaged in the business of conducting chitties. Chit Nos.9 and 10 were prized by the defendants. According to the plaintiff, the defendants executed Ext.A2 karar dated 04.03.1998 with regard to the transactions. To secure Chit No.9, Ext.A3 registered mortgage was created. Chit No.10 was secured by equitable mortgage by deposit of title deeds. Such deposit was confirmed by memorandum of deposit of title deeds. Installments were defaulted from 08.01.2002. It is for realisation of the unpaid installments that the suit has been filed.

3. In the written statement there was a total denial of the transactions, the execution of document and furnishing of security.

4. The trial court after appreciating the evidence on record granted a decree with respect to the claim. Though there was a claim for yet another chitty bearing No.12, the claim was disallowed. The details of the same are not being referred to, it being not relevant herein.

5. We have heard learned counsel on either side.

6. Learned counsel for the appellants argued that Ext.A5 memorandum of deposit of title deeds is a compulsorily registered document since Ext.A5 recites the terms of the transaction. The learned counsel relied on the judgment of this Court in South Indian Bank Ltd. v. Ramachandran [ 2017 (2) KHC 998 ], in support of the contention. Referring to Ext.A2 Kuri karar he would point out that though Ext.A2 is dated 04.03.1998 the stamp paper is seen purchased only on 19.03.1998. Therefore, Ext.A2 cannot be relied on. It is next contended that the interest calculated at the rate of 18% is excessive and exorbitant. Lastly it is contended that the date of termination of the chitties was 08.01.2012 and Exts.A13 and A14 notices terminating the chitties and demanding the amounts were issued only on 20.03.2009. Therefore, interest would be applicable only from the said date.

7. A reading of Ext.A5 memorandum shows that it only acknowledges that the defendants are having prized the chitty and having deposited the title deeds by way of equitable mortgage. It is not the document under which the terms of the transaction have been arrived at and as agreed to by the parties. The rights and liabilities were not created under that document. Therefore, the first contention of the appellants that Ext.A5 cannot be looked into, it being the unregistered instrument, has no force.

8. With regard to Ext.A2 Kuri karar we find force in the contention. Though the karar is dated 04.03.1998, it is seen written on a stamp paper purchased on 19.03.1998. Of course, while PW1 is cross-examined the same was not put to the witness to enable him explain the discrepancy. At any rate, we do not think it appropriate to rely upon Ext.A2.

9. Though in the written statement there was an outright denial of the entire transaction, the first defendant, while examined as DW1 admitted of having joined and prized both chitties. He has also admitted Ext.A3 registered mortgage deed and also the deposit of Exts.A6 to A9 title deeds and also the handing over of Exts.A10 and A11 possession certificate and Ext.A12 building tax receipts with the plaintiff. He has also admitted of having entrusted the same to the plaintiff voluntarily. He has also admitted Ext.A5 memorandum deposit of title deeds. The above sufficiently proves the transactions.

10. As was contended by the learned counsel for the appellants, the period of chitty terminated only on 08.01.2012. The suit was filed in 2009