Andhra Pradesh High Court - Amravati

Mattupalli Siva Naga ... vs Mattupalli Subba Rao on 20 October, 2023

     THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO

                  APPEAL SUIT NO.115 OF 2014

JUDGMENT:

1. The Appeal, under Section 96 of the Code of the Civil Procedure,

1908 (for short, 'C.P.C'), is filed by the appellant/defendant challenging

the decree and Judgment dated 29.06.2013 in O.S.No.329 of 2012

passed by the learned District Judge, Guntur, (for short, 'trial court').

Respondent is the plaintiff, who filed the suit in O.S.No.329 of 2012

seeking recovery of Rs.12,91,197/- which includes principal and

interest accrued against the defendant.

2. The parties will hereinafter be referred to as arrayed before the trial

Court.

3. The facts leading to the present Appeal, in a nutshell, are as

under:

The plaintiff and defendant are brothers. The defendant borrowed

Rs.6,00,000/- personal loan from State Bank of Hyderabad, Arundelpet

branch, Guntur (for short, 'S.B.H') on 09.08.2004. The plaintiff and his

two sons, Murali Mohan and Mahesh, stood as guarantors for the due

payment of debt and signed an agreement of guarantee. Subsequently,

the defendant failed to discharge the debt, despite demands made by

S.B.H. Consequently, S.B.H issued a notice to the plaintiff and his sons

to discharge debt serving notice under SARFAESI Act, 2002, dated

09.11.2006 demanding them to pay the debt due to bank. On receipt of

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the notice, the plaintiff, having no other alternative, paid a total sum of

Rs.6,60,000/- to S.B.H on different dates to the credit of the

defendant's loan account bearing No.520996645438 of the defendant.

Subsequently, the plaintiff made several demands for repayment of the

amount which he paid towards loan dues, but the defendant did not

pay any amount.

4. In the written statement, the defendant denied the material

averments of the plaint inter-alia, contended that the plaintiff or his

sons did not discharge the loan with S.B.H.; the plaintiff also obtained

a loan from S.B.H., and the defendant himself paid installments in his

account through agents; the amount shown in plaint paid by plaintiff

belongs to the defendant; due to relationship between plaintiff and

defendant, he handed over amounts to deposit to the credit of his

account; thus, the defendant himself discharged the loan due to S.B.H.;

Mahesh, plaintiff's son, also filed O.S.No.365 of 2010 on the file of V

Additional Senior Civil Judge, Guntur for recovery of the same amount,

as such, the plaintiff is not entitled to recover any amount obtaining

any decree; plaintiff's claim is barred by limitation; there is no

agreement or usage for payment of interest @ 24% per annum and that

calculation of interest on the deposit is incorrect and plaint valuation is

not proper.

5. Based on the above pleadings, the trial Court framed the following

issues:

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(1) Whether the plaintiff is the guarantor for the loan borrowed by the defendant and whether the plaintiff paid the amount to the State Bank of Hyderabad on demand to discharge the debt due by the defendant.

(2) Whether the plaintiff entitled to recover the suit amount in view of the claim by Mattupalli Murali in O.S.No.365 of 2010 pending on the file of Principal Senior Civil Judge, Guntur? (3) Whether the suit claim of the plaintiff is in time? (4) To what relief?

6. During the trial, on behalf of the plaintiff, P.W.1 was examined and

marked Exs.A.1 to A.6. On behalf of the defendant, D.W.1 was

examined, and Exs.B.1 to B.6 were marked.

7. After the completion of the trial and hearing the arguments of

both sides, the trial Court decreed the suit in part with proportionate

costs for Rs.1,35,000/- together with interest @ 18% per annum on

Rs.1,35,000/- from 04.09.2009 till the date of filing of suit and

thereafter @ 12% per annum from the date of suit till the date of decree

and thereafter, @ 6% per annum from the date of decree till the date of

realization.

8. Sri D.V.Chalapathi Rao, learned counsel for the

appellant/defendant, put forth an argument that the trial Court having

accepted the point of limitation of three years for filing of a suit by the

surety under article 42 of Limitation Act, but erroneously decreed the

suit by party allowing the respondent's claim for Rs.1,35,000/- despite

filing of the suit after lapse of three years; the trial Court made grave

mistake in calculating the limitation for the transaction dt.04.09.2009

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and came to an erroneous conclusion that the suit is in limitation,

despite the fact that the suit is registered on 25.09.2012 after lapse of

limitation as mentioned under article 42 of the Indian Limitation Act,

which is hopelessly barred by 22 days; the trial Court failed to consider

that the appellant discharged the plaintiff's loan as per Ex.B.2 to B.6;

the trial Court ought not to have awarded interest on the suit amount

as the same is not under the contract as there is no privity of contract

between the parties and the award of interest on the decreed amount is

also excessive.

9. No representation is made on behalf of the respondent/plaintiff

despite the granting of adjournment. Hence, it is treated as heard.

10. With regard to the pleadings in the suit, the findings recorded by

the Trial Court and in light of the rival contentions and submissions

made on either side before this Court, the following points would arise

for determination:

1) Is the trial Court justified in decreeing the suit in part for Rs.1,35,000/- together with interest @ 18% per annum?

2) Does the Judgment passed by the trial Court need any interference?

POINT NOs.1 & 2:

11. Either parties do not dispute the following facts:

The plaintiff and defendant are brothers. The defendant borrowed Rs.6,00,000/- as a personal loan from S.B.H., on

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09.08.2004. The plaintiff, along with his two sons, Murali Mohan and Mahesh, stood as guarantors for the due payment of debt and signed an agreement of guarantee. Subsequently, the defendant failed to discharge the debt, despite demands made by S.B.H. Consequently, the bank authorities issued Ex.A.1 notice under the SARFAESI Act, 2002 on 09.11.2006.

Notice was addressed to the guarantors, i.e., Mattupalli Subbarao, Mattupalli Murali Mohan, Mattupalli Mahesh, and the defendant. The S.B.H., demanded not only the defendant but also the guarantors for the discharge of the debt due under the personal loan amount of the defendant.

12. The plaintiff contends that as the bank intends to proceed against

the property in terms of provisions of the SARFAESI Act, he discharged

the debt, i.e., personal loan amount due under personal loan account

bearing No.52099645438 of the defendant under the following

installments:

    Sl.No.        Payment                           Date
      1.        Rs.80,000/-          29-12-2006 (through his son Mahesh)
      2.        Rs.20,000/-          28-02-2007 (through his son Mahesh)
      3.        Rs.2,25,000/-        29-08-2008 (through his son Mahesh)
      4.        Rs.2,00,000/-        30-12-2008 (through his son Murali)
      5.        Rs.1,35,000/-        04-09-2009 (through his son Murali)

13. The plaintiff's case is that he and his two sons stood as sureties to

the personal loan amount due by the defendant, which is not disputed.

The defendant has not denied the plaintiff's case that he obtained a

personal loan from the S.B.H. The defendant contends that he repaid

the loan amount to the S.B.H. The defendant has not refuted the

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execution of the guarantee agreement by the plaintiff and his two sons.

The plaintiff's main contention is that he paid Rs.6,60,000/- to settle

the loan upon receiving notice (Ex.A.1). This payment is substantiated

by various counterfoils such as Exs.A.2 to A.6. The trial Court has

considered the details of this payment in a clear tabular format which is

provided below:

Sl.No. Exhibit Date of payment Amount Account No.

1. Ex.A.2 29-12-2006 Rs.80,000/- 645438

2. Ex.A.3 28-02-2007 Rs.20,000/- ---

3. Ex.A.4 29-08-2008 Rs.2,25,000/- 52099645438

4. Ex.A.5 30-12-2008 Rs.2,00,000/- 52099645438

5. Ex.A.6 04-09-2009 Rs.1,35,000/- 52099645438

Ex.A.2 to Ex.A.6 go to show that the plaintiff discharged the

defendant's debt due to S.B.H. bearing loan account No.52099645438.

14. As mentioned earlier, the defendant claimed that he made the

payments corresponding to Exs.A.2 to A.6. However, the defendant failed

to provide any documentary evidence to substantiate this assertion. If

the defendant had indeed made these payments, one would expect to

find records or documentation of these transactions. After a careful

examination of the available evidence, the trial court rightfully dismissed

the defendant's claim that he had made payments in accordance with

Exs.A.2 to A.6.

15. On the other hand, the defendant has also produced Exs.B.2 to

B.6 receipts evidencing the payments. The trial court has extracted the

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said payments made by the defendant concerning Exs.B.2 to B.6 in a

tabular form, which is as follows:

S.No. Exhibit Date of payment Amount Account No.

1. Ex.B.2 24-05-2002 Rs.7,100/- 01593010673

2. Ex.B.3 23-02-2005 Rs.7,500/- 0159301067300

3. Ex.B.4 27-05-2002 Rs.7,100/- 01593010673

4. Ex.B.5 27-03-2002 Rs.7,100/- 01593010673

5. Ex.B.6 21-12-2002 Rs.20,000/- 0159301067300

16. The trial court correctly noted that the account numbers

mentioned on the receipts correspond to the plaintiff's account, not the

defendant's. This strongly suggests that it was the plaintiff who paid off

the defendant's loan. It's important to emphasize that these payments

cannot be adjusted within this suit unless the defendant initiates a

counterclaim or claims a set-off in accordance with Order 8 of C.P.C.

17. In the facts of the case, the trial court is justified in holding that

Exs.B.2 to B.6 would not come to the defendant's aid. The trial Court

has rightly concluded that the oral evidence of PW.1 coupled with

Exs.A.2 to A.6 show that the plaintiff discharged the loan obtained by

the defendant with the loan account bearing No.52099645438 with

S.B.H., on receipt of Ex.A.1 notice. The trial Court has also referred to

the defendant's payment, that he did not produce any documentary

evidence in proof of discharge of the debt relating to his loan account

bearing No.52099645438.

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18. The trial Court further observed that the plaintiff's claim for

Rs.80,000/-, Rs.20,000/-, Rs.2,25,000/- and Rs.2,00,000/- covered by

the payments, dated 29.12.2006, 28.02.2007, 29.08.2008 and

30.12.2008 under Exs.A.2 to A.5 are barred by limitation and entitled

to recover only Rs.1,35,000/-, since the last installment paid on

04.09.2009 under Ex.A.6, as it was in time. The plaintiff has not

preferred any appeal or cross-objection against the said finding.

Aggrieved by the said finding only, the defendant preferred this Appeal.

19. The trial Court further observed that the plaintiff is entitled to

recover the amount of Rs.1,35,000/- paid by him on 04.09.2009 vide

Ex.A.6 to the loan account of the defendant. The defendant contends

that the said payment made by the plaintiff was also barred by

limitation as the suit was registered on 25.09.2012, after the lapse of

limitation as mentioned under article 42 of the Indian Limitation Act,

which is hopelessly barred by 22 days. The material on record shows

that the plaint was presented on 04.09.2012, and the payment was

made on 04.09.2009. This Court is of the view that the date of the

presentation of the plaint has to be considered for the purpose of

limitation, but not the date of registration of the plaint. As such, this

Court finds that the contention raised by the defendant in this regard is

unsustainable.

20. The other contention raised is that the trial Court granted

interest @ 18% per annum from 04.09.2009 till the date of filing of the

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suit, and it is not permissible under law, as there is no privity of

contract between the parties. The trial Court also considered the

contention raised by the defendant, and it is observed as follows:

However, given an implied contract of indemnity between the plaintiff and defendant, the plaintiff is entitled to recover the rate of interest which the bank is claiming on the loan dues. Therefore, the plaintiff is entitled to recover interest @ 18% per annum, which is the bank's interest rate from the date of payment covered by Ex.A.6, i.e., 04.09.2009.

As the evidence on record shows that the S.B.H., calculated

interest @ 18% per annum from the plaintiff, this Court views that

granting such a rate of claim against the defendant by the trial court is

just and reasonable.

21. After careful consideration, the trial Court correctly appreciated

the evidence. There is no reason for this Court to arrive at a different

conclusion than the one arrived at by the trial Court. I believe the

findings arrived at by the trial Court are correct, and no justifiable

reasons have been shown by the appellant/defendant for arriving at

different conclusions. I agree with the conclusion reached by the trial

Court.

22. Given the preceding discussion, the view taken by the trial court