Delhi High Court
Surakshit Exports Private ... vs M/S. Gcg Transglobal Housing ... on 20 December, 2011
Author: Sanjay Kishan Kaul
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 21.09.2011
% Date of decision : 20.12.2011
+ CS (OS) No.1077 of 2000
SURAKSHIT EXPORTS PRIVATE LIMITED & ORS. ..... Plaintiffs
Through: Mr. T.K. Ganju & Mr. Aman Lekhi, Sr.
Advs. with Mr. Dinesh Rastogi & Mr. Aditya
Ganju, Advocates.
Versus
M/s. GCG TRANSGLOBAL HOUSING
PROJECT PVT. LTD. ..... Defendant
Through: Mr. A.S. Chandhiok, Mr. Sandeep Sethi &
Mr. Raman Kapur, Sr. Advocates with
Mr. Amit Sibal, Mr. Amit Kumar,
Mr. Sidharth Bawa, Mr. Sandeep Bajaj,
Mr. Gurpreet S. Palwanda & Mr. Arvind Sah,
Advocates.
CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON‟BLE MR. JUSTICE RAJIV SHAKDHER
SANJAY KISHAN KAUL, J.
IA No.6386/2008 (under Order 23 Rule 1 CPC) in CS (OS) No.1077/2000
1. The prayer made by the plaintiffs seeking unconditional withdrawal
of the suit filed for foreclosure of mortgage or sale and in the
alternative for recovery or `2,04,76,219.00 is being resisted by the
defendant.
2. One Shri Shridev Sharma (for short „Mr. Sharma‟) is stated to be the
Director/Constituted Attorney and has controlling interests in all the
plaintiff companies except plaintiff No.8. Mr. V.K. Misra (for short
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„Mr. Misra‟), an acquaintance of Mr. Sharma is stated to have
informed Mr. Sharma that he intended to initiate a luxury housing
project for his son Mr. Gautam Misra for which he had identified 15
acres of land in Village Bamnauli, Tehsil Vasant Vihar, Near
Brijwasan in the National Capital Territory of Delhi. It is the case of
the plaintiffs that since Mr. Misra at that time was posted as the
Controller of Defence Accounts at Meerut, U.P. and held a
Government position, help of Mr. Sharma was sought for purchase of
the land and also for a loan of `2.00 crore. Mr. Sharma is stated to
have past experience in the real estate business in various capacities.
To achieve this object it was decided to incorporate a new company
with the father of Mr. Misra and his son being the only Directors and
shareholders apart from Mr. Sharma or his nominee as shareholders in
proportion to their financial involvement. Since Mr. Sharma is stated
not to have been comfortable with this arrangement an alternative
proposal of a loan of `2.00 crore was explored with rights to sell
luxury apartments to be built on the land.
3. Mr. Sharma is stated to have, thus, committed an investment of up to
`1.70 crore from the plaintiff companies to be repaid on or before
31.3.2000 together with interest @ 24 per cent per annum from the
date of payment of the money till the date of repayment and the title
deeds of the land were to remain deposited with the nominees of Mr.
Sharma, as security by way of equitable mortgage, who will be
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advancing the money. On the repayment of the entire amount the title
deeds had to be handed back. No construction is stated to have been
contemplated on the land prior to the said date of 31.3.2000 and, thus,
it was also agreed that the vacant physical possession of the land was
to remain with Mr. Sharma on behalf of the plaintiffs till repayment of
the entire amount advanced, as licensee of the defendant in whose
name the property was to be acquired. The total amount of
`1,69,95,000.00 was paid by the plaintiffs to the defendant as per
details set out in paragraph 6 of the plaint between the period July,
1999 to December, 1999. The only amount refunded is stated to be
`25,000.00. Sale deeds were executed by the owners in favour of the
defendant. The land in question is stated to had some existing
construction and in view of there being threat of encroachment, the
plaintiffs are stated to have spent monies for repairing the boundary
wall.
4. It is the say of the plaintiffs that the intention of the Misras turned
dishonest from the last week of the month of January, 2000 as they
started expressing their inability to repay the amount while
simultaneously wanting the possession of the land from the plaintiffs.
Since all negotiations broke down, the present suit was filed by the
plaintiffs.
5. It is the say of the plaintiffs that the license granted by the defendant
to exclusively use and occupy the property is not revocable till
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payment of dues of the plaintiffs. The title deeds are deposited with
the plaintiffs. The endeavour of the defendant to send some cronies to
take forcible possession of the land hastened litigation.
6. The plaintiffs say that an earlier suit No.338/2000 was filed by them
against the Misras simplicitor for injunction to restrain them from
forcibly dispossessing the plaintiffs from the aforesaid property till
repayment of the entire dues and by an interim order dated 18.2.2000
this Court had directed the defendants to maintain the status quo with
respect to the possession and the title of the property. The original
title deeds are stated to have been deposited by the plaintiffs in Suit
No.338/2000.
7. The plaintiffs claim a right as a mortgagee of the property in question
but an alternative prayer has also been made that in any case they are
entitled to continued possession of the land till repayment. The
prayer made is for recovery of `2,04,76,219.00 with interest @ 24 per
cent per annum and in default foreclosure of the mortgage and
possession and in the alternative sale of the property to satisfy the
claim with liberty to apply for a decree for the balance amount, in
case sale proceeds are insufficient, under Order 34 Rule 6 of the Code
of Civil Procedure, 1908 (hereinafter referred to as the „said Code‟)
along with prayer for costs.
8. The suit has been resisted by the defendant. Preliminary objections
have been raised on the suit being barred by Order 2 Rule 2 of the
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said Code in view of pendency of an earlier suit apart from the plea
that plaintiffs 4 to 6 are in the ownership and control of the Misra
family. The defendant has denied any loan transaction or having
handed over the title documents of the property towards any mortgage
or having handed over physical possession as licensee or otherwise.
However, a completely different story regarding the monies has been
set up.
9. It is the say of the defendant that Mr. Sharma was introduced to the
Misra family as a person knowledgeable in Astrology and Palmistry,
who speaks fluent Sanskrit and won over the trust and friendship of
the Misra family. Mr. Sharma is stated to have been a man of modest
means, who held himself out as a property broker. The three
companies referred to aforesaid were stated to have been incorporated
by Mr. Sharma at the behest of the Misra family for setting up the
grandson. There were transfer of companies which took place to the
Misras on representations of Mr. Sharma and a property, being
property No.L-1/7, Hauz Khas Enclave, New Delhi is stated to have
been acquired by the Misras in the name of these three companies in
terms of a scheme formulated by Mr. Arun Kumar Aggarwal, who
was an associate with Mr. Sharma. Flats were required to be
constructed on the property purchased and the prices at which they
were to be sold were also agreed. It was agreed to incorporate a new
company, i.e., the defendant, for the project at Hauz Khas. The
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payments are stated to be towards consideration for the flats to be
constructed and, thus, the monies received are stated to have nothing
to do with the agricultural land purchased by the defendant company.
In sum and substance it is pleaded that there were two separate and
distinct transactions undertaken by the defendant with the transaction
for purchase of agricultural land being without any assistance or loan
from the plaintiff company. The title deeds for this agricultural land
are stated to have been procured by Mr. Misra but to carry out
mutation in their name they were handed over to Mr. Sharma.
Despite all requests the title deeds were never returned nor were the
transfer of shares in the three companies carried out till the
relationship fell apart.
10. The plaintiffs had filed along with the suit an application for interim
relief under Order 39 Rules 1 & 2 of the said Code and while issuing
summons in the suit and notice on the application on 24.5.2000,
interim orders were passed directing status quo qua the agricultural
land to be maintained by the parties. The defendant filed an
application, being IA No.1641/2002, for deposit of sum of
`1,69,70,000.00 in the name of the Registrar of this Court to be kept
in fixed deposit until final disposal of the suit and consequently for a
direction to the Registrar to return the title deeds to the
defendant/applicant and a direction to the plaintiff to hand over vacant
physical possession of the property to the defendant, which came to
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be decided vide order dated 23.3.2004. In terms of the impugned
order, the learned single Judge (as he then was) directed that the
defendant should deposit a sum of `1,69,95,000.00 with the Registry
of this Court and for the balance amount of `34,81,219.00, for
recovery of which the present suit is filed, the defendant was to give
security in the form of a bank guarantee within three weeks to be kept
renewed from time to time till disposal of the suit. The amount of
`1,69,95,000.00 was permitted to be withdrawn by the plaintiff on
furnishing a bank guarantee failing which the amount would be kept
in a fixed deposit so that interest is earned on the same. On
compliance of the directions by the defendant the title deeds which
are in custody of the Court were directed to be handed over to the
defendant and the plaintiffs were to also hand over possession of the
property to the defendant.
11. We may note at this stage that, in the mean time, the plaintiffs filed an
application for amendment of the plaint (IA No.6930/2002) which
also came to be decided by the same order dated 23.3.2004. The
amendment was predicated on the plea that the plaintiffs had become
owners of the land by virtue of a deemed sale in terms of the rights
conferred under Sections 34 & 43 of the Delhi Land Reforms Act,
1954 (hereinafter referred to as the „said Act‟). Thus, declaratory
reliefs in these terms were prayed. The learned single Judge,
however, found that no foundation had been laid by the plaintiffs
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either in the plaint or in the application seeking amendment that the
land in question which is the suit property is agricultural land and the
provisions of the said Act would be applicable to the said agricultural
land. It is also not alleged that the defendant was a Bhumidar. The
learned single Judge also noticed that if it was so, the transfer made
by the defendant as Bhumidar in violation of Section 34 of the said
Act would be void as declared by the statute itself and, thus, no suit to
enforce such a void contract could be instituted. The fact that there
was no registered document of any usufructuary mortgage, which is
envisaged by section 43 of the Delhi Land Reforms Act, was also
taken note of. The application accordingly was rejected.
12. The appellants preferred an appeal, being FAO (OS) No.58/2004,
aggrieved by the order passed on the application for deposit of
amount. Another appeal FAO (OS) No.57/2004 was preferred against
the order rejecting the application for amendment of the plaint on the
same date.
13. Endeavours were made during the pendency of the appeals for
settlement which proved fruitless as is apparent from the order sheet
of the appeal files.
14. An application, being CM No.2670/2008, came to be filed in FAO
(OS) No.58/2004 for withdrawal of the appeal as well as the suit and
for return of the original title documents of the suit property to the
plaintiffs. This application was styled as one under Order 23 Rule 1
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of the said Code. It was averred in the application that the defendant
herein had filed an application in the present suit for allowing them to
deposit the amount of `1,69,97,000.00 and for handing over title
documents and possession of the suit property and it is during the
course of preparation of the reply to that application it had come to
the knowledge of the plaintiffs that the said property was being
governed under the said Act. It is in view thereof that they had filed
an application for amendment of the plaint by incorporating the plea
for a declaratory relief. The plaintiffs prayed in that application that
they did not wish to pursue the appeal as well as the suit without
prejudice to their rights and contentions to be handed over title
documents of the suit property being the four sale deeds. However,
before this application could be decided another application, being
CM No.8308/2008, came to be filed in the same appeal seeking
liberty to withdraw the earlier application (CM No.2670/2008) which
was allowed on 29.5.2008 with the result that CM No.2670/2008 was
permitted to be withdrawn. We may add that the suit proceedings
continued to be adjourned on account of pendency of the appeal.
15. The plaintiffs thereafter filed IA No.6836/2008 in the present suit
seeking to withdraw the suit. This application was resisted by the
defendant. The controversy was that the plaintiffs continued to press
that they had become Bhumidars of the suit land, the same being
mortgaged by the defendant to them as per the said Act while the say
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of the defendant was that in terms of the order dated 23.3.2004 the
defendant had been permitted to deposit the mortgaged amount with
leave to the plaintiff to withdraw the same against the bank guarantee.
The plaintiffs refused to receive the return of the mortgaged amount
in view of the plea they sought to advance of having become
Bhumidars. The appeal was already pending against the order
rejecting amendment of the plaint. The application was directed to
await the orders of the Division Bench as per an order dated
23.1.2009. This application thereafter continued to be adjourned to
await the order in appeal.
16. In the mean time, the two appeals also continued to be adjourned but
finally on 14.1.2009, the appeals were admitted and set down for
hearing. This postponement of both the appeals and suit proceedings
were also accompanied by another fact, i.e., that the amount deposited
by the defendant in Court as per order dated 23.3.2004 was withdrawn
on 26.04.2004 in view of interim orders in appeals.
17. The plaintiffs thereafter filed CM No.926/2011 in FAO (OS)
No.58/2004 praying that the pendency of the appeal should not come
in the way of the learned single Judge in deciding IA No.6836/2008
filed in the present suit for withdrawal of the suit. This application
(CM No.926/2011) came to be decided by us on 9.8.2011 broadly
noticing the history of the case. The order passed on 2.12.2010 on the
present application for withdrawal of the suit noticed that a
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clarification was sought from the Division Bench whether the learned
single Judge could proceed to decide the application under Order 23
Rule 1 of the said code which has necessitated this application. We
observed in our order dated 9.8.2011 that the application listed before
the learned single Judge on 21.9.2011 ought to be taken up by the
learned single Judge so that we can have the benefit of that order on
the application. This was so since the counsel for the plaintiffs herein
(appellants in the appeal) stated that he would withdraw the appeal
only if he succeeds in the application before the learned single Judge
failing which he would like to press the appeal. We simultaneously
passed an order on the appeal noticing the plea of the learned counsel
for the respondent that the respondent was ready and willing to
deposit the principal amount in the suit along with appropriate interest
to be determined by the Court so that the property can be redeemed
and the possession can be given to the respondent along with the title
deeds. Learned counsel stated that he would reserve his right to
recover that amount in appropriate proceedings but he is willing to
take instructions whether the respondent is willing to give up this
right in an overall amicable settlement. Learned counsel for the
appellants also stated that he would obtain necessary instructions as
the suit in effect stands decreed if the respondent pays the principal
amount and the interest as may be determined by the Court. We, thus,
noticed that there was a possibility of settlement and listed the appeals
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for directions on 25.8.2011. On 25.8.2011 it was stated that this
dispute alone could not be settled as there was another dispute
pertaining to the Hauz Khas property between the parties and some
more time was sought to explore the settlement possibility. Learned
counsel for the defendant/respondent stated that if the settlement did
not take place the offer of the respondent to satisfy the claim of the
appellants stands and that he had already got a cheque for the
principal amount and he would abide by the interest to be determined
by this Court and there was no need to first pass a preliminary decree
as the final decree itself can be passed for which suit file had been
called for by this Court. The settlement, however, did not materialize
and this was noted in our order dated 14.9.2011. The matter was
posted on 19.9.2011 for hearing of two appeals.
18. On 19.9.2011, FAO (OS) No.58/2004 pertaining to the issue of
deposit of amount was partly heard while a separate order was passed
on FAO (OS) No.57/2004 directed against the order dated 23.3.2004
dealing with the issue of rejection of the amendment. The following
order came to be passed on 19.9.2011 in that appeal:
"FAO (OS) No.57/2004
The present appeal is directed against the impugned
order dated 23.03.2004 dismissing the application of the
appellants being IA No.6930/2002 moved under Order 6 Rule
17 r/w Section 151 of CPC.
The appellants filed a suit as mortgagee for foreclosure
or sale of the mortgage and in the alternative for recovery of
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`2,04,76,219/-, the subject matter of the suit property being
15 acres of land in Village Bamnauli, Tehsil: Vasant Vihar
near Bijwasan, New Delhi. The appellants claimed that
monies for purchase of this land in the name of the
respondent came from the appellants and the registry was in
the name of the respondent. The registered title documents
were deposited with the appellants along with possession
being handed over to the appellants. Over these facts, there is
no dispute. However, the underlying arrangement inter se the
parties is disputed. The appellants sought to amend the plaint
vide the application in question and sought to set up a new
plea and a different relief arising from the provisions of the
Delhi Land Reforms Act, 1954 („the said Act‟ for short). This
amendment was predicated on Section 43 r/w Section 34 of
the said Act since the appellants claimed that in case a
mortgage is created with transfer of possession, the same
amounts to sale. A declaration was, thus, sought that the
appellants have become owners of the property in question by
reason of the said provisions.
Learned senior counsel for the appellants fairly states
that it may not be possible to amend the plaint by changing
the complete nature of relief, more so, when the case of the
appellants is that the competent court where such relief can be
granted is the Revenue Court. Learned counsel for the
appellants states that, in fact, subsequently appellants have
moved an application seeking withdrawal of the suit
unconditionally so that the appellants can take recourse to the
appropriate legal proceedings.
Learned counsel for the appellants, thus, states that the
appellants would only be pressing the relief of unconditional
withdrawal of the suit and in view thereof, there can be no
question of amendment of the suit.
It is in the aforesaid circumstances that learned senior
counsel for the appellants seeks to withdraw the appeal.
Dismissed as withdrawn leaving the parties to bear
their own costs."
19. The result of the aforesaid was that the plaintiffs found no useful
purpose in pursuing the issue of amendment of the plaint as it was
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their case that the matter was governed by the said Act for which they
would like to proceed to the Revenue Court and that they have
already moved an application for unconditional withdrawal of the
suit.
20. On 20.9.2011, when we were proceeding to hear the remaining
argument in FAO (OS) No.58/2004, learned counsel for the plaintiffs
(appellants in the appeal) stated that the appeal would become
infructuous if IA No.6836/2008 in the suit filed under Order 23 Rule
1 of the said Code is decided in favour of the appellants/plaintiffs.
This application was pending consideration to await the decision of
the Division Bench in the appeal. Learned counsels for the parties
made a joint request that instead of having a multiple tier of scrutiny
the suit file may itself be called before this Court and IA
No.6836/2008 be decided by the Division Bench so that the parties do
not have to go through another round of litigation. The suit record
was already called before this Court and, thus, with the consent of the
parties, we proceeded to hear the arguments on the issue of the prayer
made by the plaintiffs/appellants in IA No.6836/2008. It is this
application, which we are to decide.
21. In the aforesaid factual matrix, the submissions of the learned
counsels were confined to the issue whether the plaintiffs can be
permitted to withdraw the suit unconditionally under Order 23 Rule 1
of the said Code. Learned senior counsel for the plaintiffs/appellants
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contended that such a right to withdraw the suit is an absolute right as
held by various pronouncements.
22. The first judgement referred to in this behalf is of M/s. Hulas Rai Baij
Nath Vs. Firm K.B. Bass & Co. AIR 1968 SC 111. A suit was filed
for rendition of accounts by the principal. Issues were framed and
even part evidence recorded but no preliminary decree had been
passed. It is at that stage that an application under Order 23 Rule 1 of
the said Code came to be filed for withdrawal of the suit. It was held
by the Supreme Court that the language of Order 23 Rule 1, sub-Rule
(1), gives an unqualified right to a plaintiff to withdraw a suit and, if
no permission to file a fresh suit is sought under sub-Rule (2) of that
Rule, the plaintiff becomes liable for such costs as the Court may
award and becomes precluded from instituting any fresh suit in
respect of that subject matter under sub-Rule (3) of that Rule. It was
observed that there was no provision in the said Code which requires
the Court to refuse permission to withdraw the suit in such
circumstances and to compel the plaintiff to proceed with it.
Different considerations would arise where a set-off may have been
claimed under Order 8, or a counter claim may have been filed. The
plea raised for contesting such an application has been noticed in the
judgement as under:
"1. ....The main ground taken for contesting this
application for withdrawal was that, in a suit of this nature, it
is permissible to pass a decree in favour of the defendant if,
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on accounting something is found due to him against the
plaintiff and it followed that, if the defendant paid court fee
on the amount which was found due to him from the plaintiff,
his position became that of a plaintiff himself and he became
entitled to have the accounting done and to obtain a decree. It
was urged that the plaintiff‟s game in withdrawing the suit
after protracted duration and considerable expenditure on the
part of the defendant was to defeat this right of the
defendant."
As noticed above, this plea was negated.
23. In R. Rathinavel Chettiar & Anr. Vs. V. Sivaraman & Ors. (1999) 4
SCC 89, a suit after passing of the decree was sought to be withdrawn
by the plaintiffs at the appellate stage. The decree was passed in
favour of the plaintiffs, the suit property was sold by the plaintiffs to a
third party but the defendants preferred the appeal against the decree.
The prayer of the plaintiffs was for leave to withdraw the suit at the
appellate stage on the ground of having compromised the dispute with
the original defendants was rejected as that would result in nullifying
the substantive right to the property acquired by the third party
transferee. It was observed in paragraphs 11 & 12 as under:
"11. Once the matter in controversy has received judicial
determination, the suit results in a decree either in favour of
the plaintiff or in favour of the defendant.
12. What is essential is that the matter must have been finally
decided so that it becomes conclusive as between the parties
to the suit in respect of the subject-matter of the suit with
reference to which relief is sought. It is at this stage that the
rights of the parties are crystallised and unless the decree is
reversed, recalled, modified or set aside, the parties cannot be
divested of their rights under the decree. Now, the decree can
be recalled, reversed or set aside either by the court which
had passed it as in review, or by the appellate or revisional
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court. Since withdrawal of suit at the appellate stage, if
allowed, would have the effect of destroying or nullifying the
decree affecting thereby rights of the parties which came to
be vested under the decree, it cannot be allowed as a matter of
course but has to be allowed rarely only when a strong case is
made out. It is for this reason that the proceedings either in
appeal or in revision have to be allowed to have a full trial on
merits."
24. It is in view of the aforesaid, learned senior counsel for the
plaintiffs/appellants contended that in the present case there has been
no final adjudication of the rights of the parties which could arise only
on passing of a decree and no interim direction would amount to a
decree being passed. Thus, the appellants were well within their right
to withdraw the suit.
25. In Abha Arora Vs. Angela Sharma & Anr. 2007 (96) DRJ 221,
decided by one of us (Sanjay Kishan Kaul, J.), the principle of
abandonment of a suit in the context of Order 23 Rule 1 of the said
Code was examined and since the defendant was not claiming any
right in the property except right of residence with no right of counter
claim the suit was permitted to be dismissed as withdrawn.
26. The next case referred to was of K.S. Bhoopathy & Ors. Vs. Kokila &
Ors. AIR 2000 SC 2132. It was observed in paragraph 11 as under:
"11. The law as to withdrawal of suits as enacted in the
present Rule may be generally stated in two parts:
(a) a plaintiff can abandon a suit or abandon a part of his
claim as a matter of right without the permission of the court;
in that case he will be precluded from suing again on the
same cause of action. Neither can the plaintiff abandon a suit
or a part of the suit reserving to himself a right to bring a
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fresh suit, nor can the defendant insist that the plaintiff must
be compelled to proceed with the suit; and
(b) a plaintiff may, in the circumstances mentioned in sub-
rule (3), be permitted by the court to withdraw from a suit
with liberty to sue afresh on the same cause of action. Such
liberty being granted by the court enables the plaintiff to
avoid the bar in Order II Rule 2 and Section 11 CPC."
27. Lastly, a reference was also made to Shipping Corporation of India
Ltd. Vs. Machado Brothers & Ors. 110 (2004) DLT 649 (SC), which
has dealt with the inherent powers of the court to make orders to
prevent abuse of process of Court. The Courts below were held to
have erred in just keeping the interlocutory orders alive which
amounted to putting a cart before a dead horse. It was observed that
interlocutory orders are made in aid of final orders and not vice versa
and no interlocutory order will survive after original proceeding
comes to an end. It was held that the ground that the dismissal of the
suit would prejudice the respondent on ground of interlocutory order
getting dissolved was unsustainable.
28. The plea of learned senior counsel for the plaintiffs/appellants, thus, is
that similarly the plaintiffs cannot be compelled to continue the suit
merely because the interim orders already granted aided the
defendant.
29. Learned senior counsel for the defendant strongly opposed the plea of
withdrawal of the suit. It was his say that after the defendant had filed
the application, IA No.1641/2002, offering to deposit the amount and
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seeking return of possession and orders were reserved on the same on
20.2.2004, the application seeking amendment of the plaint was
moved belatedly six (6) months thenceforth. We may, however, note
that the said application on which relief was granted to the defendant
only prayed for deposit of `1,69,70,000.00 by the defendant to be
placed in fixed deposit and against that deposit for return of title
documents as well as handing over of physical possession. The order
was, however, passed on that application on 23.3.2004. Learned
counsel submitted that defendant not only deposited the sum of
`1,69,95,000.00 but also a sum of `34,81,219.00, which as per the
order dated 23.3.2004 was to be actually secured by way of bank
guarantee. However, since the operation of the order dated 23.3.2004
was stayed on 26.4.2004 in FAO (OS) No.57/2004, the amount so
deposited would have not achieved the objective and was permitted to
be withdrawn by the defendant with no objection from the plaintiffs.
Learned counsel also emphasized that even on 9.8.2011 (as noticed
above) he had volunteered on behalf of the defendant to pay the suit
amount along with appropriate interest to be determined by the Court
for redemption of the mortgage and for possession and for return of
title documents subject to the right of the defendant to recover the
amount in appropriate legal proceedings and the cheque for the
principal amount was also brought to the Court on 25.8.2011.
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30. In a nutshell the submission of the learned counsel for the defendant
is that the defendant had applied for redemption way back on
14.2.2002 by moving IA No.1641/2002 and, thus, the suit can be
decreed in terms of Order 12 Rule 6 of the said Code. In so far as the
issue of interest is concerned, it was pleaded that the plaintiffs had
abandoned their right, if any, to have interest after 26.4.2004 by
conveying their no objection to the withdrawal of the amount
deposited by the defendant in pursuance of the order dated 23.3.2004.
31. Learned counsel submitted that in a suit for foreclosure or sale, the
only remedy available to the defendant is to redeem the mortgage by
payment of the loan amount to which the plaintiffs cannot have any
objection and once the defendant has approached the Court and
offered to redeem the mortgage, the claim in the suit stands satisfied
and the decree must follow forthwith. The order dated 23.3.2004
assailed in FAO (OS) No.58/2004 is, thus, required to be appreciated
not in the context of an interim order but would amount to really a
decree and nothing survives for adjudication as the Court may pass an
order under Order 34 Rule 2 (1) of the said Code as a final decree
directing delivery of possession and title to the defendant.
32. Learned counsel sought to support the order passed on 23.3.2004 by
relying upon the judgements of Liberty Sales Services Vs. M/s. Jakki
Mull & Sons 1997 (1) RCR 555 and in FAO (OS) No.216/1998 titled
Mrs. Adarsh Chugh Vs. Mrs. Jaya Peralata decided on 13.10.1998,
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where a Division Bench had held that in case the relief claimed by the
defendant against the plaintiffs is arising out of the same cause of
action on which the plaintiffs had filed a suit and the relief is also
incidental to the refusal of the plaintiffs‟ relief then in such a case the
prayers made by the defendant are liable to be allowed. These
judgements are stated to have received the imprimatur of the Supreme
Court.
33. We may, however, note that in Liberty Sales Services case (supra) the
Division Bench was concerned with an order passed under Order 39
Rules 1 & 2 of the said Code and the defendant was held entitled to
move an application for injunction without filing a counter claim.
Mrs. Adarsh Chugh case (supra) is also in reference to proceedings at
the interlocutory stage.
34. Learned counsel has emphasized that in view of observations in Sneh
Gupta Vs. Devi Swaroop & Ors. (2009) 6 SCC 194, the right to
withdraw a suit under Order 23 Rule 1 of the said Code is unqualified
if no right has been vested in any other party. It is pleaded that in the
present case a vested right had accrued in favour of the
respondent/defendant and against the appellants/plaintiffs as a
consequence of the impugned order dated 23.3.2004 passed by the
learned single Judge.
35. Learned counsel also contended that this Court is not devoid of
jurisdiction to do substantive justice inter se the parties and should
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adopt a justice oriented approach keeping in mind the observations
made by the Supreme Court in Kewal Chand Mimani (dead) by Lrs.
Vs. S.K. Sen & Ors. (2001) 6 SCC 512 and Om Prakash Kuthiala Vs.
Dr. Sharad Rohtagi 1999 (49) DRJ 34.
36. The case canvassed on behalf of the plaintiffs/appellants was that a
suit for redemption of mortgage stands on a different footing. The
right of a mortgagor and mortgagee has been discussed in Achaldas
Durgaji Oswal (Dead) Through Lrs. Vs. Ramvilas Gangabisan Heda
(Dead) Through Lrs. & Ors. (2003) 3 SCC 614. The aspects
discussed in the relevant paragraphs are reproduced hereinunder:
"9. Mortgagor, despite having mortgaged the property might
still deal with it in any way consistent with the rights of the
mortgagee. He has an equitable right to redeem the property
after the day fixed for payment has gone by but his right or
equity of redemption is no longer strictly an equitable estate
or interest although it is still in the nature of an equitable
interest. (See Halsbury's Laws of England, 4th Edn., Vol. 32,
p. 264.)
10. The right of the mortgagor, it is now well settled, to deal
with the mortgaged property as well as the limitation to which
it is subject depends upon the nature of this ownership which
is not absolute, but qualified by reason of the right of the
mortgagee to recover his money out of the proceedings. The
right to redeem the mortgage is a very valuable right
possessed by the mortgagor. Such a right to redeem the
mortgage can be exercised before it is foreclosed or the estate
is sold. The equitable right of redemption is dependent on the
mortgagor giving the mortgagee reasonable notice of his
intention to redeem and on his fully performing his
obligations under the mortgage.
11. The doctrine of redemption of mortgaged property was
not recognised by the Indian courts as the essence of the
doctrine of equity of redemption was unknown to the ancient
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law of India. The Privy Council in Thumbasawmy Mudelly v.
Mohd. Hossain Rowthen called upon the legislature to make a
suitable amendment which was given a statutory recognition
by reason of Section 60 of the Transfer of Property Act which
reads thus:
"60. Right of mortgagor to redeem.--At any time after the
principal money has become due, the mortgagor has a right,
on payment or tender, at a proper time and place, of the
mortgage-money, to require the mortgagee (a) to deliver to
the mortgagor the mortgage-deed and all documents relating
to the mortgaged property which are in the possession or
power of the mortgagee, (b) where the mortgagee is in
possession of the mortgaged property, to deliver possession
thereof to the mortgagor, and (c) at the cost of the mortgagor
either to retransfer the mortgaged property to him or to such
third person as he may direct, or to execute and (where the
mortgage has been effected by a registered instrument) to
have registered an acknowledgement in writing that any right
in derogation of his interest transferred to the mortgagee has
been extinguished:
Provided that the right conferred by this section has not been
extinguished by act of the parties or by decree of a court.
The right conferred by this section is called a right to redeem
and a suit to enforce it is called a suit for redemption.
Nothing in this section shall be deemed to render invalid any
provision to the effect that, if the time fixed for payment of the
principal money has been allowed to pass or no such time
has been fixed, the mortgagee shall be entitled to reasonable
notice before payment or tender of such money."
12. A right of redemption, thus, was statutorily recognized as
a right of a mortgagor as an incident of mortgage which
subsists so long as the mortgage itself subsists. The proviso
appended to Section 60, as noticed hereinbefore, however,
confines the said right so long as the same is not extinguished
by an act of the parties or by a decree of court.
13. In the Law of Mortgage by Dr Rashbehary Ghose at pp.
231-32 under the heading "Once a mortgage, always a
mortgage", it is noticed:
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"In 1681 Lord Nottingham in the leading case of Howard v.
Harris firmly laid down the principle: „Once a mortgage,
always a mortgage‟. This is a doctrine to protect the
mortgagor's right of redemption: it renders all agreements in
a mortgage for forfeiture of the right to redeem and also
encumbrances of or dealings with the property by the
mortgagee as against a mortgagor coming to redeem. In 1902
the well-known maxim, „once a mortgage, always a
mortgage‟, was supplemented by the words „and nothing but
a mortgage‟ added by Lord Davey in the leading case of
Noakes v. Rice in which the maxim was explained to mean
„that a mortgage cannot be made irredeemable and a
provision to that effect is void‟. The maxim has been
supplemented in the Indian context by the words „and
therefore always redeemable‟, added by Justice Sarkar of the
Supreme Court in the case of Seth Ganga Dhar v. Shankar
Lal.
It is thus evident that the very conception of mortgage
involves three principles. First, there is the maxim: „once a
mortgage, always a mortgage‟. That is to say, a mortgage is
always redeemable and if a contrary provision is made, it is
invalid. And this is an exception to the aphorism, modus et
conventio vincunt legem (custom and agreement overrule
law). Secondly, the mortgagee cannot reserve to himself any
collateral advantage outside the mortgage agreement.
Thirdly, as a corollary from the first another principle may be
deduced, namely, „once a mortgage, always a mortgage, and
nothing but a mortgage‟. In other words, any stipulation
which prevents a mortgagor from getting back the property
mortgaged is void. That is, a mortgage is always redeemable.
The maxim „once a mortgage always a mortgage‟ may be
said to be a logical corollary from the doctrine, which is the
very foundation of the law of mortgages, that time is not of
the essence of the contract in such transactions; for the
protection which the law throws around the mortgagor might
be rendered wholly illusory, if the right to redeem could be
limited by contract between the parties. Right to redeem is an
incident of a subsisting mortgage and is inseparable from it
so that the right is coextensive with the mortgage itself. The
right subsists until it is appropriately and effectively
extinguished either by the acts of the parties concerned or by
a proper decree of the competent court."
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37. Learned senior counsel for the defendant/respondent, thus,
emphasized that the right to redeem the mortgage is a valuable right
possessed by the mortgagor and can be exercised before it is
foreclosed or estate is sold. Such a right of redemption is stated to
subsist so long as the mortgage itself subsists since once a mortgage,
always a mortgage. Such rights subsist until it is appropriately
extinguished either by acts of parties or a decree of a competent court.
38. The plea that the consent given by the plaintiffs to the defendant
withdrawing the amount post deposit would amount to acts in further
of redemption, is sought to be supported by reliance on K. Vlasini &
Ors. Vs. Edwin Periera & Ors. (2008) 14 SCC 349. In the facts of the
case, the redemption amount was paid and the mortgagor put in
possession by the order of the High Court. There was some delay in
depositing the redemption amount but finally the entire sum was
deposited and even the revalued amount was also deposited. The
mortgagee having accepted the redemption amount and the revalued
amount and the right to redeem having been enforced it was held that
it should not be interfered with.
39. Learned counsel submitted that the right of redemption of a
mortgagor was not extinguished under a mortgage giving a right to
redeem without the intervention of the court. Such right was held not
extinguishable on mere execution of such mortgage and the mere
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putting the property to auction would not extinguish the right unless
the sale was completed.
40. Learned counsel also relied upon the case of R. Rathinavel Chettiar &
Anr. case (supra) to canvass that where the vested or substantive
rights of the parties to the litigation would be adversely effected, the
suit cannot be permitted to be withdrawn even unconditionally.
41. We have considered the elaborate arguments by both the learned
counsels for the parties and the peculiar position faced where the
initiator of the litigation wants to walk out of it by withdrawing the
suit unconditionally while such a plea is being opposed by the
opposite party. There is no doubt that the motive behind the plaintiffs
seeking to withdraw the suit is to retain possession of the land and
enforce their right as a Bhumidar by initiating appropriate
proceedings before the Revenue Court since the jurisdiction of the
Civil Court is barred under the said Act. Whether the plaintiffs are
entitled to institute such a proceeding and whether they can at all
succeed in the same is a moot point. We are, however, not required to
comment on the same since so far as the present proceedings are
concerned, the plaintiffs seek to withdraw the suit unconditionally. If
the plaintiffs institute proceedings in the Revenue Court, all defences
in law would be available to the defendant. No specific liberty has
been claimed in this behalf in the present proceedings as the plaintiffs
appeared to be advised that they do not require any such liberty.
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Thus, it is a case of seeking to unconditionally withdraw the suit,
which of course, would result in a situation where the prolonged
litigation would ensue causing the defendant to incur the costs both in
the suit and the appeal proceedings. The question, however, remains
is whether there is anything in law which prohibits the plaintiffs from
doing so? The legal position is clearly settled that there is per se no
bar to the plaintiffs withdrawing the suit under order 23 Rule 1 of the
said Code and the defendant can only seek compensation of costs.
We reproduce the relevant provision as under:
"XXIII - WITHDRAWAL AND ADJUSTMENT OF
SUITS
1. Withdrawal of suit or abandonment of part of claim
(1) At any time after the institution of a suit, the plaintiff
may as against all or any of the defendants abandon his suit or
abandon a part of his claim:
Provided that where the plaintiff is a minor or other person to
whom the provisions contained in rules 1 to 14 of Order
XXXII extend, neither the suit nor any part of the claim shall
be abandoned without the leave of the Court.
(2) An application for leave under the proviso to sub-rule
(1) shall be accompanied by an affidavit of the next friend
and also, if the minor or such other person is represented by a
pleader, by a certificate of the pleader to the effect that the
abandonment proposed is, in his opinion, for the benefit of
the minor or such other persons.
(3) Where the Court is satisfied
a. that a suit must fail by reason of some formal defect,
or
b. that there are sufficient grounds for allowing the
plaintiff to institute a fresh suit for the subject-matter
of a suit or part of a claim,
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it may, on such terms as it thinks fit, grant the plaintiff
permission to withdraw from such suit or such part of the
claim with liberty to institute a fresh suit in respect of the
subject- matter of such suit or such part of the claim.
(4) Where the plaintiff
a. abandons any suit or part of claim under sub-rule (1),
or
b. withdraws from a suit or part of a claim without the
permission referred to in sub-rule (3),
he shall be liable for such costs as the Court may award and
shall be preclude from instituting any fresh suit in respect of
such subject-matter or such part of the claim.
(5) Nothing in this rule shall be deemed to authorise the
Court to permit one of several plaintiffs to abandon a suit or
part of a claim under sub-rule (1), or to withdraw, under sub-
rule (3), any suit or part of a claim, without the consent of the
other plaintiffs.]"
42. The principles governing such withdrawal of suit have been
elaborately discussed in the various judgements referred to aforesaid.
It has been held in M/s. Hulas Rai Baij Nath case (supra) that the
language of Order 23 Rule 1 of the said Code gives an unqualified
right to a plaintiff to withdraw from a suit and, if no permission to file
a fresh suit is sought under sub-Rule (2) of that Rule, the defendants
become entitled to such costs as the court may award. It has been
observed that there is no provision of the said Code which requires
the Court to refuse permission to withdraw the suit and to compel the
plaintiffs to proceed with it. The exception to this is where a set off
may have been claimed under Order 8 of the said Code or a counter
claim may have been filed.
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43. We may look at this aspect from another point of view. If the
plaintiffs choose not to appear, the only option for the Court would be
to dismiss the suit for non-prosecution. The plaintiffs cannot be
worse off by reason of appearing before the Court and seeking to
withdraw the suit. The rights of the parties are crystallized only when
a decree is passed and the same becomes conclusive between the
parties. It is in that context that in R. Rathinavel Chettiar & Anr. case
(supra) where a decree had been passed and rights created in favour of
a third party based on a decree passed in favour of the plaintiffs, the
endeavour of the plaintiffs and the defendants jointly to seek
withdrawal of the suit unconditionally at the appellate stage was
frowned upon as it would affect the rights of third parties pursuant to
the decree. This is not so in the present case as no decree has been
passed.
44. If we scrutinize the facts of the present case closely we find that the
proceedings before the appellate court arise from the interim orders
passed in the suit. An ex parte injunction was granted in favour of the
plaintiffs which continued. In terms of the ex parte order there was
status quo and, thus, the plaintiffs continued to enjoy the possession
of the property which was with them. An interesting aspect is that the
title deeds were deposited not in this suit but in the suit filed earlier
for injunction by the plaintiffs. The defendant filed IA No.1641/2002
but the prayer in the application was not that the defendant sought to
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pay the amount claimed for by the plaintiffs with interest and costs
but that as an interim measure they were willing to deposit a certain
part of the amount stated to be the principal amount and that
possession and title documents should be returned to the defendant
with the trial proceeding further. It was at the stage of granting order
on this application on 23.3.2004, that the Court not only directed the
amount offered by the defendant to be so deposited but also sought
bank guarantee for the balance amount. It is another matter that
instead of bank guarantee the balance amount is also stated to have
been deposited. The plaintiffs were granted liberty only to withdraw
the principal amount and that too on furnishing of the bank guarantee.
It was, thus, clearly not a case of unequivocal redemption on behalf of
the defendant but a prayer for interim relief pending trial of the suit.
45. It is undisputed that the defendant/respondent neither filed a suit for
redemption nor a counter claim in this behalf nor did they
unconditionally offer to pay the amounts in the suit by filing IA
No.1641/2002. Even at the appellate stage on 9.8.2011, the offer
made was that the principal amount would be paid along with interest
to be determined by this Court with leave to file separate legal
proceedings for recovery of that amount. This was, of course, much
after the filing of the application by the plaintiffs to withdraw the suit.
46. We are unable to accept the plea that the filing of IA No.1641/2002
by the defendant amounts to an unconditional offer to pay the amount
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and redeem the mortgage or that it amounts to a counter claim or that
the order passed on that application would amount to a decree. Such
a plea is only stated to be rejected. The defendant, thus, cannot bring
its case within the parameters of a counter claim filed. In fact, in
Abha Arora case (supra), it was noticed that if a plaintiff
unconditionally withdraws and abandons a suit ordinarily there is
nothing in the said Code which requires the court to refuse permission
for the same. The plaintiffs in the present case are not even seeking
any relief to file a fresh suit and thus take all risks which arise
therefrom.
47. We must distinguish between the orders passed in the decree and
interlocutory orders which operate during the pendency of the suit.
Thus, the judgements referred to by learned counsel for the defendant
in respect of interlocutory reliefs in Liberty Sales Services case
(supra) and Mrs. Adarsh Chugh case (supra) would have no
application. This is not a case where any adjudication on merits in
favour of the defendant by the trial court are being nullified by such
withdrawal as has been held in Executive Officer, Arthanareshwar
Temple Vs. R. Sathyamoorthy & Ors. (1999) 3 SCC 115. The plea is
based on a misconception that the order passed on the interlocutory
application filed by the defendant being IA No.1641/2002 amounts to
a final order in the suit. This is not so. We may usefully refer to the
observations in M/s. Hulas Rai Baij Nath case (supra) where the
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defendant pleaded that in the suit for accounts something may have
been found due to the defendant and the withdrawal of the suit after
protracted duration would defeat that right apart from the element of
costs. It is in that context it was observed that the remedy was only
by way of costs.
48. Interim orders operate only during the pendency of the suit.
Withdrawal of a suit naturally dissolves interim orders. Thus, if a
party while obtaining interim orders has altered the position of the
subject matter to its benefit and then seeks to preserve that status by
withdrawing the suit the Court can consider the issue under the
parameters of restitution. This is not so as in the present case the title
deeds were with the plaintiffs though deposited in an earlier suit,
possession is with the plaintiffs and they were seeking to recover the
amounts alleged to have been due from the defendant. If withdrawal
of suit dissolves interim orders, so be it. A contrary position would be
unsustainable in view of observation in Shipping Corporation of India
Ltd. case (supra).
49. There can be no quibble with the general principles defining the rights
of a mortgagor and mortgagee, which have been succinctly set out in
Achaldas Durgaji Oswal (Dead) Through Lrs. Case (supra). It is not
as if the rights of redemption of the defendant are being abolished but
the respondent not having claimed any such right nor having filed a
counter claim in the suit of the plaintiffs nor having unconditionally
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offered that amount, cannot be permitted to resist the plea of the
plaintiffs for withdrawal of the suit unconditionally leaving it for the
defendant to pursue its legal remedy for redemption in accordance
with law, if they are so advised. The issue really is whether such a
right of redemption can now be granted to the defendant in a suit filed
by the plaintiffs which they seek to unconditionally withdraw, the
defendant never having pleaded or offered the amount claimed under
the suit unconditionally.
50. In our considered view, the answer to the same would be in the
negative.
51. We may also examine the controversy from another point of view,
i.e., the respective pleadings of the parties qua the factual matrix. The
defendants in their written statement have categorically disputed
creation of a mortgage, the nature of transaction and denied the
liability to pay the amount. It is only with the objective of obtaining
possession of the title documents pending trial that IA No.1641/2002
was filed. All interim orders would, thus, naturally dissolve on the
suit being withdrawn.
52. We may also usefully refer to the judgement of the learned single
Judge of the Kerala High Court in Poulose & Anr. Vs. State Bank of
Travancore AIR 1989 Ker 79. A mortgage suit had been filed and the
defendant sought permission to deposit the amount under protest with
liberty to continue its contentions regarding the correctness of the
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amount due. It was held that such a deposit was not unconditional
and the offer of deposit could not be considered to be an
unconditional offer or tender of amount entitling the mortgagee to
receive the same and release the mortgaged security. The defendant
was agreeable to withdrawal of the amount by the mortgagee only
after the claim was adjudicated by the decree.
53. The facts of the present case are somewhat similar though parties
have continued to change their pleas during the pending proceedings.
The defendant categorically denied the transaction as a mortgagor.
The defendant, in fact, denied that the suit property at all was
mortgaged and claimed that the amounts advanced were transactions
qua another property at Hauz Khas. The circumstances in which the
title documents came into the possession of the plaintiffs and the
possession of the property to the plaintiffs were set out in a different
factual context by the defendant, i.e., documents were given in protest
to Mr. Sharma for purposes of mutation whereas the possession is
denied being given to the plaintiffs altogether only a right to ingress
and egress was given . Thus, the complete transaction of the plaintiffs
was disputed. At the cost of repetition we may say the objective of IA
No.1641/2002 was only to obtain interim orders for possession and
title documents pending the suit and this is more than apparent by the
stand taken by the defendant/respondent before us at the appellate
stage on 9.8.2011. Even on 25.8.2011, learned counsel for the
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defendant/respondent stated that if the settlement does not take place
its offer to satisfy the claim of the plaintiffs/appellants stand and that
he had already got a cheque for the principal amount and would abide
by the interest determined by this Court and, thus, there is no need to
first pass a preliminary decree as the final decree itself can be passed
for which the suit file had already been called for by this Court. Once
again, we may reiterate that this could also, thus, not be treated as an
unconditional offer to satisfy the claim in the suit in view of what we
have recorded aforesaid.
54. A broad overview of the judgments cited by the appellants would
clearly suggest that a plaintiff has an unqualified right to withdraw a
suit under the provisions of Order 23 Rule 1 read with Sub-rule (1) of
CPC, if no liberty is sought to file a fresh suit under sub-rule (2) of
that Rule of the CPC. In fact the plaintiff is precluded from
instituting a fresh suit in respect of the very same subject matter under
sub-rule (3) of Rule 1 of Order 23. The exceptions to this unqualified
right of the plaintiff appear to arise in cases where the defendant sets
up a set off, or a counter claim or in a suit involving dissolution of
partnership firms or in a suit for accounts or even in a case where in a
suit for partition a court has passed a preliminary decree declaring and
defining shares of parties in the suit [See M/s Hulas Rai Baij Nath
(supra)]. The underlying feature of all such exceptions to the general
right of the plaintiff to withdraw a suit without seeking liberty to file a
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fresh suit on the same subject matter, to our minds springs from the
principle that a vested right enures in the defendant either at the very
inception or during the pendency of the action in court.
55. In the case of mortgage suits undoubtedly there is a right vested in the
mortgagor to redeem the mortgaged property at any time prior to such
right being foreclosed by law. This right, prior to its legislative
recognition, stems from the principle "once a mortgage always a
mortgage" [See Noakes vs Rice 1902 AC 24 (HL)]. Section 60 of
the Transfer of Property Act, 1882 recognizes this principle of law.
As a matter of fact the courts have leaned in the favour of mortgagor
to the extent of permitting a mortgagor to redeem a mortgaged
property even after sale has taken place if it is not a conditional or an
anomalous mortgage. The stage at which such a right is barred is set
forth in the proviso to Section 60 of the Transfer of Property Act. The
two exceptions to the right to redeem as provided in the said proviso
are: (i) by a decree of a court; or (ii) by act of parties. It is no longer
res integra that the decree referred to in the proviso to Section 60 is a
final decree in a suit for fore-closure, as provided in Rule 3(2) of
Order 34 of the CPC, and similarly in a suit for redemption a final
decree as provided in Rule 8(3)(a) of Order 34 of CPC. The said
provisions make it clear that the right to redeem extinguishes only by
way of a formal declaration to that effect by the court. [See Rule 3(2)
and Rule 8(3)(a) of Order 34 which apply to a suit for fore-closure
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and a suit for redemption by conditional sale or anomalous mortgage
respectively]. [see Mhadagonda Ramgonda Patil & ors. Vs Shripal
Balwant Rainade & Ors. (1988) 3 SCC 298].
56. No doubt in the present case the mortgagor would by law have a
vested right to redeem the mortgage, the only difficulty is that there
has been no display of unconditional intent to seek redemption of
mortgage. The intent can only be deciphered by a court by examining
the pleadings on record and perhaps in certain cases the record of the
case as is reflected in the orders passed by a court from time to time.
In the instant case, both from the pleadings on record and also from a
perusal of the orders, we have not been able to gather such an intent.
As regards the latter part, Mr Chandhiok has sought to place reliance
on the following portion of the order passed by us on 25.08.2011:
"Learned counsel for the respondent states that if the settlement
does not take place, its offer to satisfy the claim of the appellant
stand and that he has already got a cheque for the principal
amount and he would abide by the interest to be determined by
this Court and thus there is no need to first pass a preliminary
decree as the final decree itself can be passed for which the suit
file has already been called for by this Court. Learned counsel
further states that the appellant should keep available its accounts
with respect to earnings from he land which may be relevant for
determining the quantum of interest."
57. On a bare perusal of what has been recorded by us on 25.08.2011, it is
evident that there is in the submissions made on that particular date a
pious hope that the mortgage would be redeemed. The submission
that a cheque is ready for the principal amount and that interest will
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be deposited is not what is the mandate of Section 60 of the T.P. Act.
If the mortgagor was certain that it wanted to redeem the mortgaged
property, it ought to have moved a specific application in that regard
averring therein, quite clearly, that the suit be decreed in terms of the
relief sought for in the plaint. If such an application had been made,
perhaps there would have been difficulty in permitting withdrawal of
suit by the appellant. To that extent the conduct of a mortgagor prior
to moving an application of this kind, is to our minds, not a relevant
factor. [See: Maganlal vs M/s Jaiswal Industries, Neemach and Ors.
(1989) 4 SCC 344 followed in Philomina Jose vs Federal Bank Ltd. &
Ors. (2006) 2 SCC 608]. What is relevant is the display of intent,
with clarity, which demonstrates keenness on the part of the
mortgagor to have the suit decreed in terms of the relief sought by the
mortgagee in his action before the court. This not being the case, the
application for withdrawal of suit would have to be allowed.
58. We, thus, conclude that there is no prohibition in law preventing
plaintiffs from withdrawing the suit in pursuance of the application
under Order 23 Rule 1 of the said Code resulting in dissolving of all
interim orders but the same would, of course, be subject to costs. The
costs must be appropriate in such a case because the suit proceedings
have dragged on for eleven (11) years and even appeals have arisen
from interim orders. The defendant, thus, has spent considerable
amount in litigation including engaging of senior counsels. It is a
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hard reality that the cost of litigation has escalated over a period of
time, costs in such a situation must bear semblance to the actual costs
incurred by the defendant. We therefore consider it appropriate to
impose `5.00 lakh as costs on the plaintiffs to be paid to the
defendant.
59. The application is allowed in the aforesaid terms.
CS (OS) No.1077/2000
60. In view of prayer made in IA No.6836/2008 being allowed, the suit is
permitted to be withdrawn by the plaintiffs unconditionally subject to
payment of `5.00 lakh to the defendant.
61. Dismissed as withdrawn.
SANJAY KISHAN KAUL, J.
DECEMBER 20, 2011 RAJIV SHAKDHER, J.
b'nesh
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