Kerala Permanent Benefit Fund Ltd vs M.V.Pradeep
2021 Latest Caselaw 22617 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                 PRESENT
                THE HONOURABLE MR. JUSTICE P.SOMARAJAN
     FRIDAY, THE 19th DAY OF NOVEMBER 2021 / 28TH KARTHIKA, 1943
                        RFA NO. 281 OF 2016 (I)
 AGAINST THE JUDGMENT AND DECREE DATED 19.01.2016 IN OS No.1243/2012
                 OF II ADDITIONAL SUB COURT, THRISSUR
NAME AND ADDRESS OF THE APPELLANT/PLAINTIFF:

            KERALA PERMANENT BENEFIT FUND LTD.,
            A COMPANY REGISTERED UNDER THE COMPANIES ACT 1956 HAVING
            ITS REGISTERED OFFICE AT ALUVA AND A BRANCH OFFICE AMONG
            OTHER PLACES AT 18, SATHYA SHOPPING COMPLEX,
            OLARIKKARA.P.O.,PULLAZHY, THRISSUR,
            REPRESENTED BY MURALI B.MENON, AGED 66 YEARS,
            S/o BHASKARA MENON, REGIONAL HEAD, NORTHERN RANGE,
            KERALA PERMANENT BENEFIT FUND LTD.,
            THEKKE MADOM(LAKSHMI MANDAPAM),
            THEKKE MADOM ROAD, THRISSUR-680 001.

            BY ADVS. SRI.LAWRENCE D' CUNHA
                     SRI.MATHEW JACOB KUNNATHU
                     SRI.MATHEW BONSTANE
                     SRI.K.MADHUSOODANAN
                     SRI.T.G.PAUL

                      SRI. R.R.KAMATH


NAME AND ADDRESS OF THE RESPONDENTS/DEFENDANTS:

     1      M.V.PRADEEP, AGED 38 YEARS,
            S/o K.K.VIJAYAN, MULLARAN HOUSE, AMMADAM.P.O.,
            THRISSUR TALUK, THRISSUR DISTRICT, PIN-680 563.

     2      M.B.REKHA, AGED 38 YEARS, W/o K.S.SATHYAN,
            KATHIRAPPILLY HOUSE, PATTIKKAD.P.O.,
            PANACHERRY VILLAGE, THRISSUR TALUK,
            THRISSUR DISTRICT, PIN-679 325.


     THIS   REGULAR   FIRST   APPEAL   HAVING   COME   UP   FOR   HEARING   ON
19.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 RFA No.281 of 2016                          2

                                       JUDGMENT

A suit for recovery of money was taken as one for

declaration of charge and sale of mortgaged property by

the trial court simply on the reason that in the loan

transaction by way of security, a mortgage was also

created. The suit was proceeded by the trial court under

that wrong impression.

2. There are lot of differences between a suit for

recovery of money based on original transaction from that

of a suit for foreclosure of mortgage or sale or a suit

based on a negotiable instrument. There can be creation

of a mortgage or execution of a negotiable instrument

such as promissory note, cheque etc. by way of security

to an alleged loan transaction. When mortgage of

property or issuance of negotiable instrument also

involved in a loan transaction, at least three options

are available to the creditor/plaintiff that he can

maintain a suit for recovery of loan amount based on the

original transaction or a suit for recovery of money

covered by the negotiable instrument i.e. promissory note

or cheque or he can go for a suit for foreclosure or sale

of property based on the nature of mortgage. When the

creditor opted to file a suit based on the original

transaction, there is no legal embargo in the production

of those documents, which were executed by way of

security to the loan transaction in order to prove or in

support of the alleged transaction. But, that suit cannot

be construed as a suit either for foreclosure or for

sale or a suit based on negotiable instrument.

3. Further, the observation made by the court below

that the suit ought to have been valued under Section 33

of the Kerala Court Fees and Suits Valuation Act, 1959

cannot be sustained. There is no difference in the court

fee payable under Section 22 and 33 of the Act. In both

sections, court fee shall be paid on the amount claimed.

Hence, the discussion made in paragraph 11 of the

judgment is really unwarranted. Further, it is not a

question to be taken into consideration at the final

stage of the suit and if it was taken at the final stage,

it shall not be a ground for dismissing the suit. In

such situation, the court has to proceed under Order VII

Rule 11 C.P.C..

4. Further, the court below misunderstood the legal

position settled by a five Judge Bench of the Apex Court

in Central Bank of India v. Ravindra [2001 (3) KLT SN 98

(C.No.127) SC]. In that decision, what is dealt with is

the capitalization of penal interest. When penal interest

is claimed, the court can reject the same, but that is

not a ground to reject the amount lawfully entitled by

the party by way of a decree. Hence, the decree and

judgment of the trial court cannot be sustained and

liable to be set aside. I do so. The matter is remanded

back to the trial court for fresh disposal. The parties

shall appear before the trial court on 20/12/2021.

The appeal is allowed in part accordingly. No costs.

Sd/-

P.SOMARAJAN JUDGE DMR/-