THE HON'BLE MS JUSTICE B.S.BHANUMATHI
A.S.No.169 of 2017
JUDGMENT:
This appeal is filed against the decree and judgment dated 23.12.2016 in O.S.No.113 of 2013 on the file of the Court of the Senior Civil Judge, Chirala for recovery of an amount of Rs.5,62,950/- with subsequent interest from the date of the suit till the date of realization and costs from defendants No. 1 to 8.
2. The appellant filed the suit for recovery of the amount on the grounds briefly as follows:
The first defendant is a partnership firm doing business at Vetapalem and defendants No.2 to 7 are its partners. The first defendant borrowed Rs.5,38,710/- from the plaintiff on 01.04.2013 by executing a promissory note duly signed by 2nd and 4th defendants as partners of the 1st defendant on the even date agreeing to repay the same with interest @ Rs.1.50 paise per month (18% p.a.). But, since the said amount was not paid inspite of repeated demands, the suit was filed by the plaintiff. Since the firm is carrying on business, the debt relief Acts are not applicable. The plaintiff learnt that the defendants No.1 to 7 are trying to dispose of the property and trying to leave the jurisdiction without discharging the debt. As such, the plaintiff got published a notice in Eenadu daily news paper dated 2 AS 169 of 2017 18.06.2013 about alienation of the property and invited objections, if any, about the alleged alienation. The defendant No.8 is arrayed in the suit as proforma defendant, since he is the prospective purchaser of the property of the firm and he is also a proper and necessary party as he is liable to pay the decretal amount if the other defendants failed to pay it.
3. The suit amount is calculated on the principal amount of Rs.5,38,710/- with interest of Rs.24,240/-, calculated @ 18% p.a. from 01.04.2013 to 01.07.2013 on the said principal amount, making a total of Rs.5,62,950/-.
4. The second defendant filed written statement and the same has been adopted by defendants No.1, 4, 6 and 7. The suit against D-3 was abated. The defendants No.5 and 8 remained ex parte.
5. The case of the contesting defendants in their written statement is briefly as follows:
The suit is not maintainable under law. The interest calculated is wrong and the plaintiff is not entitled to the suit amount. It is wrong that the plaintiff filed the suit as the firm sold the property to the 8th defendant. They sold the property only for the purpose of discharging the debts incurred by the firm, including the debt of the plaintiff. All the debtors, including the plaintiff elected six mediators to settle the matters. They are also coming for registration of the property 3 AS 169 of 2017 sold. The mediators alone would receive the amount of consideration and will distribute the same among all the creditors. So, these defendants are willing and ready to discharge the debts of all the creditors by selling their properties through the mediators elected by the creditors. They have good faith to clear all the debts, filing of suits would cause hurdle to sell the properties and discharge the debts. Hence, these defendants request the plaintiff to wait till the matters are settled, by giving no objection for registration of the properties of the defendants sold. They prayed to dismiss the suit with costs.
6. Basing on the pleadings, the trial Court framed the following issues:
1. Whether the plaintiff is entitled for decree as prayed for?
2. To what relief?
7. On behalf of the plaintiff, he got himself examined as PW.1 and Ex.A.1 i.e. suit promissory note was marked. On behalf of the contesting defendants, the second defendant was examined as D.W.1 and he was cross examined. Though Sri Nalam Venkateswara Swamy who is allegedly working in the first defendant's firm filed his affidavit in chief examination giving evidence for the defendants, did not appear and therefore his affidavit was eschewed by the trail Court. No documentary evidence was filed by the defendants.
4 AS 169 of 2017
8. After hearing both parties, the trial Court dismissed the suit. Therefore, the aggrieved plaintiff filed this appeal.
9. The learned counsel for the appellant being represented by Sri G.R.Sudhakar, learned counsel submitted that a memo has been submitted to the Court not pressing the appeal against respondent No.8/defendant No.8. In this appeal, though notices was served on respondents No.2, 4, 5, 6 and 7, none of them have appeared. The respondent No.1 is represented by respondent No.2. As such, it is treated that the respondents who have been duly served notice have no interest in contesting the appeal. No representation for R-8.
10. The learned counsel representing the appellant submitted that the trial Court having held that the defendants No.1 to 7 have admitted the suit claim and failed to show how the interest calculated by the plaintiff is wrong, dismissed the suit solely on the ground that the plaintiff failed to prove that the first defendant is a registered firm and the defendants No.2 to 7 are its partners, without there being a plea in the written statement and an issue being framed on this aspect. He further submitted that since all the partners of the firm are made parties to the suit, the trial Court ought not to have dismissed the suit.
11. A perusal of the pleadings would show that the suit claim, except to the extent of the interest payable is admitted in clear 5 AS 169 of 2017 terms. The trial Court clearly held that Ex.A.1 is valid and it was executed for consideration received by the first defendant firm. The trial Court further held that the first defendant sold the property to the 8th defendant for the purpose of discharging the debts of the firm, including the debt of the plaintiff and that the first defendant is due the suit amount to the plaintiff. With regard to the interest payable the trial Court held that the defendants failed to prove how the interest calculated is wrong. As against these findings of the trial Court, there is no appeal preferred by the contesting defendants or any other defendant. Thus, these findings became final.
12. As such, it is only to be examined whether the trail Court is correct in dismissing the suit on the ground that the plaintiff did not prove that the first defendant is a registered firm. It is fundamental principle that there must be a pleading in respect of a disputed fact or law and there must be an issue framed, so as to enable the plaintiff or the defendant, as the case may be, to lead evidence on the disputed fact or law. Here, in the present case, there is absolutely no pleading in the written statement that the first defendant is not a registered firm nor is maintainability of the suit challenged on that ground. In the evidence of D.W.1 also there is no statement that the first defendant is not a registered firm. It is only in the cross examination of PW.1, a suggestion was given to PW.1 and the 6 AS 169 of 2017 same has been denied by him. It is recorded as a denial. Further PW.1 expressed his ignorance as to whether the first defendant was registered or not. He has also not filed certificate of registration of the first defendant. Except these three statements, there is nothing on record either in the form of pleadings, issue or evidence regarding registration or non- registration of the first defendant. The very purpose of framing an issue is to draw attention of both parties to lead evidence on the disputed fact or law. Similarly, the purpose of filing pleadings is to enable the parties and the Court to identify the facts or law in dispute or agreement, so as to adjudicate the dispute. It is astonishing that without there being fair opportunity to the plaintiff to place evidence with regard to registration of the first defendant, since there is no plea of denial or issue, the suit was dismissed on mere suggestion given in the cross examination of PW.1. As such, the finding of the trial Court that the plaintiff failed to establish that the first defendant is a registered firm is liable to be set aside, since a Court is expected to give his finding on the disputed questions of fact or law and it cannot take upon itself the task of deciding the matter not in dispute.
13. Since Section 34 of CPC gives discretion to the Court to award interest pending and post suit, it is apropos to mention Section 34 of CPC.
7 AS 169 of 2017 (1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, (with further interest at such rate not exceeding six per cent, per annum as the Court deems reasonable on such principal sum), from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit:
2) Where such a decree is silent with respect to the payment of further interest (on such principal sum) from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefor shall not lie.
14. As the amount borrowed in the suit promissory note is in relation to a commercial transaction, the rate of interest need not be limited to 6% even for period post suit and it can be @ as agreed in the contract i.e. suit promissory note.
15. As such, the trial Court erred in dismissing the suit and consequently the appeal is to be allowed.
16. In the result, the appeal is allowed as against respondents No.1 to 7 and the order 23.10.2016 in O.S.No.113 of 2013 on the file of the Court of the Senior Civil Judge, Chirala is set aside and the suit is decreed directing the defendants No.1, 2, 4 to 7 to pay the plaintiff Rs.5,62,950/- with subsequent interest @ 18% per annum from the date of suit till the date of realization and costs throughout i.e. costs in the suit and in the 8 AS 169 of 2017 appeal. The appeal against the respondent No.8 is dismissed without costs as not pressed.
Miscellaneous Petitions, if any pending, in this appeal, shall stand closed.
___________________________ JUSTICE B.S.BHANUMATHI Date : 10-10-2022 PNV