Smt. Sudesh Madhok & Anr. vs M/S. Lunar Diamonds Limited And ...
2012 Latest Caselaw 4519 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              CS(OS)No.154/1999

%                                                               31st July, 2012

SMT. SUDESH MADHOK & ANR.                   ..... Plaintiffs
                 Through: Mr. Akhil Sibbal, Advocate with Mr.
                          Kamal Gupta, Advocate and Mr.
                          Pradeep Chhindra, Advocate.

                      versus

M/S. LUNAR DIAMONDS LIMITED AND ORS.          ..... Defendants
                 Through: Mr. Madan Gera, Advocate for
                           defendant Nos.1 to 4.
                           Mr. Sandeep Sethi, Senior Advocate
                           with Mr. Deepak Jain, Advocate and
                           Mr. Karthik Ashok, Advocate for
                           defendant No.5.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J. MEHTA


    To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1.

By means of the present judgment, prayer of the plaintiffs to pass

a money decree under Order 12(6) CPC against defendant Nos.2 and 3 in the

suit is being heard and disposed of.

2. Plaintiffs filed the subject suit for recovery of ` 1,31,07,607/- on

the ground that at the request of the defendant No.1 moneys were advanced to

defendant No.2 and for which both the defendant Nos.1 and 2 stood as co-

obligants by signing the documents including the promissory note and a

receipt. The method of advancing the moneys was that a Bill of Exchange

was drawn by defendant No.2 on defendant No.1, and this Bill of Exchange

was discounted by the plaintiffs by advancing a sum of ` 1 crore. The plaint

thereafter makes averments with respect to the defendant No.1 paying an

amount of ` 25 lacs and consequently the principal balance would be reduced

to ` 75 lacs. There are averments in the plaint with respect to a mortgage

having been created in favour of the plaintiffs by the defendant Nos.1, 3, 4 and

5 of the property bearing No.10-H, Vandana Building, Tolstoy Marg, New

Delhi-110001 for securing the moneys advanced. The suit plaint in addition

to claim of the principal amount of ` 75 lacs also claims interest @ 18% per

annum and prays for a mortgage decree under Order 34 CPC to be passed in

favour of the plaintiffs and against the defendants (viz defendant Nos.1,3,4

and 5) with respect to the mortgaged property.

3. At the outset, I must clarify that today learned counsel for the

plaintiffs sought only a limited money decree against defendant Nos.2 and 3 to

the suit and did not claim a decree against the defendant no. 3 under Order 34

CPC. The other aspects with respect to whether or not a mortgage was created

of the Vandana Building property or whether the said property was in fact

transferred to the plaintiffs in discharge of the debt as pleaded by the

defendants in the written statement or the issues of whether the subsequent

purchasers of this property who have filed the I.A. No.1243/2012 are the

owners of the property; and if so under what terms and conditions as to any

prior rights in the property of the plaintiffs, being disputed questions of facts

would require issues to be framed and evidence to be led by the parties on

such issues and thus such aspects are not being dealt with in the present

judgment.

4. A reading of the plaint paragraphs 3 to 5 shows that by

discounting of the Bill of Exchange the plaintiffs paid the amount of ` 1 crore.

The Bill of Exchange of ` 1,03,84,000/- was drawn in favour of the plaintiffs

by the defendant No.2 and accepted by the defendant No.1. There is included

a component of interest in this figure of ` 1,03,84,000/- payable by the

defendant Nos.1 and 2 to the plaintiffs inasmuch as admittedly the principal

loan amount was `1 crore. Para 5 of the plaint refers to a deed of guarantee

dated 13.2.1996 executed by defendant No.3 in favour of the plaintiffs.

A reference to the corresponding paras of the written statement

shows that in response to para 5 of the plaint, the defendants (who filed a joint

written statement) admitted the contents of para 5 to be correct i.e. of the

defendant No.3 having stood as a guarantor under the deed of guarantee dated

13.2.1996. Though of course, in this para there is mention of discharge of

liability on account of the fact that the Vandana Building property was said to

have been given to the plaintiffs in discharge of the total claim however such

transactions being not in accordance with law, as stated hereinafter, would be

hence void. So far as paras 3 and 4 of the written statement in reply to paras

3 and 4 of the plaint which talks of giving the loan, it is not disputed that the

Bill of Exchange drawn by defendant No.2 was accepted by the defendant

No.1, and payment of moneys were made to the defendant No.2, by the

plaintiff discounting the Bill of Exchange and thus the defendant No.2 was

liable is not disputed. There are only general denials without denial of the

specific averments of the plaint and hence there is no denial in the eyes of law

inasmuch as it is not disputed that amount of ` 1 crore was received. The only

specific defence which is laid out is that the liability stands discharged, and

which is subsequently explained in the written statement to mean discharge by

giving ownership of the Vandana Building property to the plaintiffs.

Pleading of discharge is thus an acceptance of the factum of the loan having

been taken.

The defendants have denied creation of the mortgage of the

Vandana Building property in favour of the plaintiffs, and which is one of the

causes of action in the plaint, and instead it is pleaded that the property was

'transferred' and not mortgaged.

In replication, the plaintiffs re-affirm the creation of the mortgage

and dispute the fact that Vandana Building property was given in full

discharge of the liability of the plaintiffs. It is reiterated that a mortgage was

created with respect to Vandana Building property in favour of the plaintiffs.

5. A reading of the aforesaid shows that the following conclusions

can be drawn, and which emerge from the admitted position on record:-

(i) The amount of ` 1 crore was paid by the plaintiffs to the

defendant No.2, and for which defendant Nos.1 and 2 stood as co-obligants.

(ii) The defendant No.2 drew out a Bill of Exchange for the sum of `

1 crore and interest thereon totaling to ` 1,03,84,000/- and which bill was

discounted by the plaintiffs. The defendant No.2 therefore as a drawer of the

Bill of Exchange and defendant No.1 as the acceptor of the Bill of Exchange

are liable to pay the amount to the plaintiffs.

(iii) The plaintiffs have already received back the amount of ` 25 lacs

out of the principal amount of ` 1 crore.

(iv) There is inherent interest element on the principal amount of ` 1

crore inasmuch as the amount of ` 1,03,84,000/- had to be repaid for the

amount advanced of ` 1 crore.

(v) The plea of the defendants that Vandana Building property was

given to the plaintiffs in full discharge of the claim of the plaintiffs, is the plea

which would be barred under Section 17(1)(b) of the Registration Act, 1908

inasmuch as there cannot take place transfer of immovable property unless

there is a registered instrument evidencing the same.

(vi) Since the plaintiffs have original title deeds of this Vandana

Building property, it will be an issue in the suit as to whether this property was

mortgaged to the plaintiffs so that the plaintiffs can claim a decree under

Order 34 of the Code of Civil Procedure, 1908 (CPC).

6. I may also at this stage take on record the statement of the

counsel for the plaintiffs that for the present the money decree is claimed only

with respect to the balance principal amount of ` 75 lacs and the interest

payable thereon as against the defendant Nos.2 & 3 herein only, and, no

decree is prayed for against the defendant No.1-company which has gone into

winding up and a notice will have to be issued to the Official Liquidator

before proceeding ahead with the claim against the defendant No.1-company.

The plaintiffs claim a decree , besides against the defendant no.2, also against

defendant No.3 who stood as a guarantor under the deed of guarantee dated

13.2.1996. Therefore this judgment deals only with issues of passing a decree

under Order 12 Rule 6 CPC against the defendant No.2 as the co-obligant with

the defendant No.1, and the defendant No.3 as the guarantor.

7. In view of the conclusions drawn out above from the plaint, and

the written statement, it is clear that it is admitted on record that ` 1 crore was

advanced to the defendant Nos.1 and 2 by the plaintiffs discounting the Bill of

Exchange drawn by the defendant No.2 in favour of defendant No.1. There is

also an interest element inasmuch as for having advanced ` 1 crore, a sum of

` 1,03,84,000/- was repayable and the calculation of the excess amount shows

that interest figure comes to 15% on thereabouts. Counsel for the plaintiffs

restricts the claim of pre-suit interest at 15% per annum simple.

8. Counsel appearing for defendant Nos.1 to 4 and also defendant

no.5 contended that no decree can be passed against defendant Nos.2 to 5

inasmuch as defendant Nos.2 to 5 have claimed discharge of their liability in

the written statement filed, by pleading that the property at Vandana Building

was transferred to the plaintiffs in discharge of their liability. This argument I

reject because I have already observed that in view of Section 17(1)(b) of the

Registration act, 1908 ownership of an immovable property cannot be

transferred except by means of a registered instrument and admittedly there is

no registered instrument evidencing the transfer of this property in favour of

the plaintiffs. In fact, it is for this reason that the plaintiffs in the replication

have denied the stand of discharge of liability by getting ownership of the

Vandana Building property and has pressed the claim with respect to

enforcement of the equitable mortgage against the Vandana Building property.

9. The object of Order 12 Rule 6 CPC is to ensure that there should

not be prolongation of litigation once the main ingredients of cause of action

with respect to passing of a decree are found to be admitted in pleadings or

otherwise. In my opinion, in the present case it is clearly found to be admitted

in the written statement of the defendants that defendant Nos.1 & 2 received

the amount of ` 1 crore for which they have to return back the amount of `

1,03,84,000/-, and that the defendant No.3 stood as a guarantor for such

repayment..

10. I therefore pass a decree for a sum of ` 75 lacs alongwith interest

@ 15% per annum simple from 13.2.1996 till filing of the suit and also

pendente lite and future interest at the same rate in favour of the plaintiffs and

against the defendant Nos.2 and 3 in the present suit. Plaintiffs are also

entitled to costs of the suit in terms of the rules of this Court. Decree sheet be

prepared accordingly.

11. I may finally note that the defendant No.5 during the pendency of

the suit had given a bank guarantee of ` 2.25 crores of Punjab & Sind Bank at

Sector -17C Chandigarh and which is on the record of this Court alongwith

the index dated 14.12.2011. In terms of the bank guarantee, in case any

decree is passed against any of the defendants, then, the plaintiffs can enforce

the decree by claiming payment under the aforesaid bank guarantee. In case

therefore the judgment debtors, namely, defendant Nos.2 and 3 do not pay the

amount under the present decree, then, plaintiffs for the amount decreed today

will be entitled to enforce this bank guarantee which is in fact given as a

surety in terms of Section 145 CPC.

12. List the suit for further proceedings on 4th September, 2012.

VALMIKI J. MEHTA, J JULY 31, 2012 Ne