Andhra Pradesh High Court - Amravati
Addagalla Anjaneya Varaprasad, ... vs Central Bank Of India, Mandapeta ... on 17 August, 2022
THE HON'BLE SRI JUSTICE SUBBA REDDY SATTI
APPEAL SUIT No.148 of 2010
JUDGMENT:
Defendants 5 to 8 and 10, filed the above appeal under
Section 96 of the Code of Civil Procedure, 1908 against the
judgment and decree dated 20.04.2009 in O.S.No.111 of 2005
on the file of Senior Civil Judge, Ramachandrapuram.
2. For the sake of convenience, parties to this judgment are
referred to as they were arrayed in the suit.
3. Plaintiff, a nationalized bank, represented by Assistant
Regional Manager filed the suit against the defendants 1 to 13
for recovery of an amount of Rs.8,18,498/- basing on mortgage.
4. Averments, in the plaint, in brief, are that 1st defendant is
a partnership firm carrying on rice mill business in Tapeswaram
village. Defendants 2 to 7 are partners of 1st defendant firm
along with 3 others, by name, Nune Sujatha, W/o Veerraju
Chowdary, Chikkala Vemanna, S/o Suryanarayana Murthy and
Rimmalapudi Veera Venkata Satyanarayana, S/o Venkataraju.
Defendants 8 to 13 stood as guarantors to the 1st defendant
firm.
(b) 2nd defendant being Managing Partner of 1st defendant
firm approached the plaintiff on 17.04.1999 for grant of cash
credit limit of Rs.10,00,000/- for carrying on their rice milling
business. Plaintiff bank sanctioned cash credit limit of
Rs.10,00,000/- and 1st defendant utilized the same from time to
time. Cash credit loan account No.30019 was opened on
22.04.1999 in the name of 1st defendant firm and its partners in
the plaintiff's books of account. Managing partner of 1st
defendant firm and all its partners executed a demand
promissory note for Rs.10,00,000/- on 22.04.1999 agreeing to
repay the same with interest at 15.81% p.a. with quarterly.
They also executed an interest variation letter dated 22.04.1999
in favour of plaintiff bank agreeing to pay interest at such higher
rate as may be notified by the bank from time to time as per
bankers usual practice. They also executed a letter of continuity
in favour of plaintiff bank. Hypothecation dated 22.04.1999 was
executed hypothecating goods and trade as security.
Defendants 8 to 13 agreed to stand as guarantors to 1st
defendant firm and executed a letter of guarantee for advances
and credits generally dated 22.04.1999.
(c) Defendants 4, 12 and 13 executed equitable mortgage
over their properties on 22.04.1999. Defendants 5, 7 to 11
executed equitable mortgage over an extent of Ac.2-43 cents of
land, which is described in plaint schedule by deposit of title
deeds i.e. registered sale deed dated 28.08.1974 and registered
sale deed dated 12.05.1977 executed in favour of Addagalla
Venkata Rao, S/o Seshayya, who is father of defendants 5, 7, 9
to 11 and husband of 8th defendant.
(d) At request of Managing Partner of 1st defendant firm,
the plaintiff bank enhanced the cash credit limit to
Rs.15,00,000/- on 08.04.2000 and accordingly, all the
defendants once again executed relevant documents in favour of
plaintiff bank for the enhanced limit of Rs.15,00,000/- on
08.04.2000. Interest variation letter, letter of continuity,
agreement of hypothecation, letter of guarantee and revival
letters were executed. The 2nd defendant and one Reddy
Suryakumari, W/o Bharata Raju, who stood as guarantors,
created equitable mortgages separately for the enhanced limit of
Rs.15,00,000/-, in addition to equitable mortgages created by
defendants 4, 12, 13 and 5, 7 to 11.
(e) Later, cash credit limit was reduced at the request of
2nd defendant being Manager Partner of 1st defendant firm to
Rs.10,00,000/- from Rs.15,00,000/- with interest at 15.15%
p.a. with quarterly rests on 30.03.2002.
(f) Nune Sujatha, Chikkala Vemanna and Rimmalapudi
Veera Venkata Satyanarayana retired from the partnership firm
and hence, the remaining partners entered a partnership firm
and got executed a partnership deed dated 27.01.2002. Letter
of partnership to that effect dated 30.03.2002 was also given to
the plaintiff bank. At that time, Reddy Suryakumari, W/o
Bharata Raju who created equitable mortgage has been given up
by releasing her security at her request by all the partners and
guarantors. All the defendants again executed relevant
documents in favour of plaintiff bank for reduced limit of
Rs.10,00,000/-.
(g) 1st defendant executed a debt confirmation letter in
favour of plaintiff bank confirming the amount due by it as on
23.03.2005 for Rs.3,05,647/- plus interest from 01.08.2002. A
sum of Rs.8,18,498/- is due as on 19.04.2005 and despite
repeated demands, defendants failed to discharge the amount.
Hence, plaintiff filed the suit for recovery of Rs.8,18,498/- with
interest at 15.15% p.a. with quarterly rests and for sale of plaint
schedule property by passing preliminary and final decree
5. 2nd Defendant, Managing Partner of 1st defendant firm
filed written statement and the same was adopted by defendants
1, 3, 4, 12 and 13. 2nd defendant contended that the bank has
created forged and fabricated documents; that the claim is
barred by limitation; that 1st defendant firm was dissolved long
back and the same is not in existence; that the plaintiff bank
failed to return some of the documents and eventually, prayed
to dismiss the suit.
6. Pending the suit, the name of 1st defendant was amended
from Sri Hanuman Traders to Sri Sri Hanuman Traders.
7. Basing on the pleadings, the trial Court framed the
following issues:
(1) Whether the suit is barred by time?
(2) Whether the plaintiff is entitled for the suit amount?
(3) To what relief?
8. During trial, P.W.1 is examined on behalf of plaintiff and
Exs.A-1 to A-27 were marked. 2nd Defendant examined himself
as D.W.1 and no documents were marked on behalf of
defendants.
9. The trial Court on consideration of both oral and
documentary evidence, passed preliminary decree on
20.04.2009. Aggrieved by the same, defendants 5 to 8 and 10
filed the above appeal. Appellants herein did not contest the
suit and the appellants, who contested the suit, did not file the
appeal.
10. Heard Ms.Anusha, learned counsel, representing Sri
Ch.Dhanamjaya, learned counsel for appellants and Sri Ch.Siva
Reddy, learned Standing Counsel for 1st respondent.
11. Learned counsel for the appellants would submit that
even before the borrowed amount is discharged, properties of
the other guarantors were returned and since some of the
guarantors were discharged, that itself shows the collusion
between the bank and those persons. She would further submit
that the appellants neither stood as guarantors to the loan
availed by the 1st defendant firm and when the appellants nor
created any equitable mortgage over their landed property by
depositing of title deed under Exs.A-7 and A-8.
12. Learned counsel for 1st respondent-bank supported the
preliminary passed by the trial Court.
13. Basing on the pleadings and evidence, the following points
arise for consideration in this appeal:
(1) Whether the appellants stood as guarantors
to the loan borrowed by 1st defendant firm
and created equitable mortgage over the
landed properties by deposit of title deeds
under Exs.A-7 and A-8?
(2) Whether the suit claim is barred by
limitation?
(3) To what relief?
14. Since the points 1 and 2 are inter-connected, this Court
deems it appropriate to deal with the same together.
15. POINT No.2:
Going by the pleadings and evidence, the suit was filed on
19.04.2005 for recovery of money basing on mortgage. Article
62 of the Limitation Act, 1963 prescribes period of limitation in
case of equitable mortgage is 12 years. Defendants did not deny
about the borrowal of loan and execution of mortgage deeds on
three occasions i.e. 22.04.1999, 08.04.2000 and 30.03.2002.
Suit was filed in the year 2005. Hence, the contention of
defendants that claim is barred by limitation falls to ground. In
view of the same, this Court is of the considered opinion that
the suit filed by the plaintiff bank is within the limitation.
16. POINT No.1:
The branch manager of plaintiff bank was examined as
P.W.1 and got marked promissory note, interest variation letter,
letter of continuity, letter of hypothecation, agreement of
guarantee executed by defendants on 22.04.1999 and deposit of
title deeds creating equitable mortgage as Exs.A-1 to A-7.
Promissory note, interest variation letter, letter of continuity,
agreement of hypothecation executed by 1st defendant firm
dated 08.04.2000 are marked as Exs.A-9 to A-12. Agreement of
guarantee dated 08.04.2000 executed by defendants 8 to 13 is
marked as Ex.A-13. In respect of second loan transaction, debt
revival letter dated 30.09.2001 executed by 1st defendant is
marked as Ex.A-14. Promissory note, interest variation letter,
letter of continuity, agreement of hypothecation dated
30.03.2002 executed by 1st defendant firm and its partners were
marked as Exs.A-16 to A-19. Agreement of guarantee executed
by defendants 2, 8 and 13 and another agreement of guarantee
executed by defendants 2, 5, 7, 11 and 13 dated 30.03.2002
were marked as Exs.A-20 and A-21. These documents relate to
third transaction. Debt revival letter dated 01.08.2002 executed
by 1st defendant firm through Managing Partner 2nd defendant
and another revival letter dated 23.03.2005 were marked as
Exs.A-22 and A-23. Exs.A-24 and A-25 are the letters dated
05.04.2002 sent by defendants 7 to 11 and by 5th defendant,
confirming the deposit of title deeds. Copy of loan account is
marked as Ex.A-26.
17. Appellants are defendants 5 to 8 and 10. In the light of
defenses by the defendants that the most of the documents are
forged and fabricated, neither a suggestion put to P.W.1
regarding execution nor their signatures on those documents. It
is not even their case that they did not understand the contents
of documents. In fact, it is not even the case of defendants that
they are illiterates or some of them are Paradashin ladies. In
the cross examination, D.W.1 admitted that he and other
defendants executed Exs.A-1, A-6, A-13 and A-14. However, it
was suggested that Ex.A-14 was blank when he put his
signature. In fact D.W.1 also admitted with regard to execution
of Exs.A-5 to A-21 and also Exs.A-22 and A-23.
18. As per Exs.A-20 and A-21 agreement of guarantee, clause
Nos.7 and 8 show guarantee shall not be revoked and shall
remain in force till all the amounts due and payable to the bank
are paid up in full inclusive of interest, charge etc. It also
manifests that the guarantee shall continue to remain in force
and the guarantor continued to be liable thereunder for all the
amounts due and payable by the principals even though the
principals have not renewed the documents and even though
the amounts due from the principals get time barred.
19. Going by the averments in the written statement filed by
2nd defendant, appellants also stood as guarantors and their
liability is coextensive with that of the principal debtors. Suit, is
one filed for recovery of loan amount basing on mortgage of
properties shown in the plaint schedule offered as security by
the guarantors i.e. defendants 5, 7 to 11, some of the appellants
herein. As noted supra, appellants remained exparte and did
not contest the suit.
20. Trial Court on consideration of both oral and documentary
evidence, passed preliminary decree vide judgment dated
20.04.2009. As narrated supra nothing contra was elicited in
the cross examination of P.W.1. In fact, D.W.1 admitted
execution of documents including letter of guarantee and
creating mortgage. However, he pleaded blank paper theory.
Having pleaded no evidence was let in by D.W.1. Going by the
oral and documentary evidence and in the absence of any
contra evidence elicited from the evidence of P.W.1 regarding the
execution of documents, this Court is of the view that
preliminary decree passed by the trial Court is based on
evidence on record and it does not call for any interference.
21. Appeal was filed with a delay of 71 days and the same as
condoned by this Court on 04.03.2010. Later, on 27.09.2010
this Court granted stay subject to depositing half of the decretal
amount together with costs. There are no merits in the appeal
and the appeal is liable to be dismissed.
22. Accordingly, the appeal suit is dismissed with costs.
As a sequel, all the pending miscellaneous applications
shall stand closed.
_________________________
SUBBA REDDY SATTI, J
17th August, 2022
PVD
