Kandukuri China Chenchaiah vs The Indian Cashews, Vetapalem,
2022 Latest Caselaw 7572 AP

        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