Madras High Court
Palanisamy vs K.T.Suriyaprakash on 16 December, 2021
S.A(MD)No.426 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 16.12.2021
CORAM
THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN
S.A(MD)No.426 of 2021
and
C.M.P(MD)No.5608 of 2021
Kalaimani (died)
1.Palanisamy
2.Tamilselvan
3.Dhanalakshmi ... Appellants/Appellants/Plaintiffs
Vs.
1.K.T.Suriyaprakash
2.The Branch Manager,
Punjab National Bank,
East Car Street,
Dindigul. ... Respondents/Respondents/Defendants
Prayer: Second Appeal filed under Section 100 of the Code of Civil
Procedure against the judgment and decree, dated 19.12.2018 passed
in A.S.No.3 of 2017, on the file of the Additional District Court,
Dindigul, confirming the judgment and decree dated 29.04.2016
passed in O.S.No.66 of 2014 on the file of the Additional Subordinate
Court, Dindigul.
For Appellants : Mr.A.Saravanan
1/16
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S.A(MD)No.426 of 2021
JUDGMENT
The concurrent Judgments and decrees passed in O.S.No.66 of
2014 by the Additional Subordinate Court, Dindigul and in A.S.No.3 of
2017, on the file of the Additional District Court, Dindigul, are being
challenged in the present Second Appeal.
2. Originally, one Kalaimani as plaintiff has instituted a suit in
O.S.No.66 of 2013 on the file of the trial Court for the relief of
declaration, permanent injunction and also to declare the sale deed,
dated 16.04.2009 of the first respondent herein in respect of the suit
property as null and void, wherein, the present respondents have been
shown as defendants.
3. For the sake of convenience, the parties are referred to as, as
described before the trial Court.
4. The case of the plaintiff is that originally the suit property
belonged to one Rajamaniammal, wife of late.S.P.Renganatha Mudaliar.
One Sukumaran, who is the son of the said Rajamaniammal, had
obtained loan in the second respondent/the Punjab National Bank by
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S.A(MD)No.426 of 2021
depositing the title deed of the suit property as security for the loan.
The said fact was not known to the plaintiff. However, without
disclosing the said depositing of title on the suit property as a security
for the loan obtained from the second respondent, the said Sukumaran
executed a power of attorney in favour of the husband of the plaintiff
viz., Palanisamy in respect of the suit property on 29.06.2005. Further,
an affidavit was also sworn in by the said Sukumaran, which was
attested by the Notary Public, dated 01.10.2005, to the effect that the
original title of the suit property had been stolen. Subsequently, on
29.03.2006, the said Palanisamy had sold the suit property to his wife,
namely, Kalaimani, the plaintiff. While the plaintiff was in possession
and enjoyment of the suit property, the first defendant came to the suit
property on 20.09.2013 with his henchmen and informed that he has
purchased the suit property and handed over the copy of the sale
certificate and ex-parte preliminary decree passed in O.S.No.445 of
2003, on the file of the Subordinate Court, Dindigul. Subsequently, on
24.01.2014, a legal notice was issued by the plaintiff and on
10.02.2014, the first respondent issued a reply notice in contrary to
the real facts. Hence, the plaintiff has filed the suit for the above stated
relief.
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S.A(MD)No.426 of 2021
5. The first defendant had filed a written statement and stated
that the suit property originally owned by Rajamani Ammal. Her son,
Sukumaran, who is running M/s.Abirami Textiles, had obtained loan
from the second defendant by depositing the title deeds of the suit
property. Later, the said Sukumaran executed a power of attorney in
favour of the husband of the plaintiff viz., Palanisamy, who in turn had
sold the same to his wife, the plaintiff. The plaintiff is not a bonafide
purchaser and the sale deed executed by the second defendant in
favour of the first defendant, dated 16.04.2009 is valid under law. On
14.09.2000, the said Sukumaran had obtained a loan from the second
defendant Bank for a sum of Rs.2,50,000/- by depositing the title deed
of the suit property. Due to the non-payment of the loan amount, the
second defendant filed a suit in O.S.No.445 of 2003, on the file of the
Subordinate Court, Dindigul, wherein, a preliminary decree was passed
on 01.07.2003 in favour of the second defendant Bank for a sum of
Rs.6,41,348.42/- with interest as on 22.09.2006. In the said suit,
Sukumaran and Rajamaniammal were shown as parties. The second
defendant Bank conducted a public auction of the suit property and the
first respondent was issued with sale certificate, dated 16.04.2009 and
possession was handed over and prayed for dismissal of the suit.
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S.A(MD)No.426 of 2021
6. Before the trial Court, on the side of the plaintiff, P.W.1 to
P.W.3 were examined and Exs.A1 to A8 were marked. On the side of
the defendants, the first defendant himself was examined as D.W.1 and
Ex.B.1 was marked.
7. On the basis of the rival pleadings made on either side, the
trial Court, after framing necessary issues and after evaluating both the
oral and documentary evidence, has dismissed the suit.
8. Aggrieved by the Judgment and decree passed by the trial
Court, the plaintiff, as appellant, had filed an Appeal Suit in A.S.No.3 of
2017. Pending the Appeal suit, the plaintiff died and her legal heirs
were brought on record as appellants 2 to 4/plaintiffs. The first
appellate Court, after hearing both sides and upon reappraising the
evidence available on record, has dismissed the appeal and confirmed
the Judgment and decree passed by the trial Court.
9. Challenging the said concurrent Judgments and decrees
passed by the Courts below, the present Second Appeal has been
preferred at the instance of the plaintiffs, as appellants.
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S.A(MD)No.426 of 2021
10. Heard the learned counsel for the appellants and also
perused the records carefully.
11. The learned counsel appearing for the appellants/plaintiffs
would submit that the Courts below ought to have appreciated the
documentary evidence marked under Ex.A.4-title deed of the plaintiff,
dated 29.03.2006 and claimed title to the suit property and unless the
same is set aside in the manner known to law, the title of the plaintiff
and thereafter the entitlement of other appellants, as legal heirs of the
deceased plaintiff cannot be doubted or denied in any circumstances.
The Courts below ought to have seen that though a preliminary for a
sum of Rs.6,41,348.42/- obtained by the second defendant Bank as on
22.09.2006 without the subsequent interest till the repayment, but has
sold the property for a sum of Rs.1,45,530/- to the first defendant, is
nothing but collusive, especially, the second defendant Bank being a
Public Sector Bank and not even contested the present suit. The Courts
below ought to have appreciated the fact that Ex.B.1 of the first
respondent sale certificate, dated 16.04.2009 itself averred that the
sale of the schedule property was made without freeing encumbrance
and not freed from the sale deed, dated 29.03.2006, which was
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S.A(MD)No.426 of 2021
marked as Ex.A.4, executed by Palanisamy as a power agent in favour
of the plaintiff. The first defendant also has never taken any steps to
cancel the said encumbrance as on today and prayed for allowing the
Second Appeal.
12. It is the admitted case of the plaintiff that originally the suit
property belonged to one Rajamaniammal, wife of late.S.P.Renganatha
Mudaliar and her Sukumaran had obtained loan in the second
respondent/the Punjab National Bank by depositing the title deed of
the suit property as security for the loan. However, without disclosing
the said depositing of title deed on the suit property as a security for
the loan obtained from the second respondent, the said Sukumaran
executed a power of attorney in favour of the husband of the plaintiff
viz., Palanisamy in respect of the suit property on 29.06.2005. Further,
an affidavit was also sworn in by the said Sukumaran, which was
attested by the Notary Public, dated 01.10.2005, to the effect that the
original title of the suit property had been stolen. Subsequently, on
29.03.2006, the said Palanisamy had sold the suit property to his wife,
namely, Kalaimani, the plaintiff. While the plaintiff was in possession
and enjoyment of the suit property, the first defendant came to the suit
property on 20.09.2013 with his henchmen and informed that he has
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S.A(MD)No.426 of 2021
purchased the suit property and handed over the copy of the sale
certificate and an ex-parte preliminary decree was passed in
O.S.No.445 of 2003, on the file of the Subordinate Court, Dindigul.
Subsequently, on 24.01.2014, a legal notice was issued and on
10.02.2014, the first respondent sent a reply notice, in contrary to the
real facts.
13. It is the admitted case of the defendant that the suit property
originally owned by Rajamani Ammal and her son, Sukumaran, who is
running M/s.Abirami Textiles, had obtained loan from the second
defendant by depositing the title deed of the suit property. Later, the
said Sukumaran executed a power of attorney in favour of the husband
of the plaintiff viz., Palanisamy, who in turn had sold the same to his
wife, the plaintiff. The plaintiff is not a bonafide purchaser and the sale
deed executed by the second defendant in favour of the first
defendant, dated 16.04.2009 is valid under law. On 14.09.2000, the
said Sukumaran had obtained a loan from the second defendant Bank
for a sum of Rs.2,50,000/- by depositing the title deed of the suit
property. Due to the non-payment of the loan amount, the second
defendant filed a suit in O.S.No.445 of 2003, on the file of the
Subordinate Court, Dindigul, wherein, a preliminary decree was passed
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S.A(MD)No.426 of 2021
on 01.07.2003 in favour of the second defendant/Bank for a sum of
Rs.6,41,348.42 with interest as on 22.09.2006. In the said suit,
Sukumaran and Rajamaniammal were shown as parties. The second
defendant Bank conducted a public auction of the suit property and the
first defendant was issued with sale certificate, dated 16.04.2009 and
the possession was handed over to him.
14. On a perusal of the materials available on record, it is seen
that the plaintiff claimed that she was not aware about the said
mortgage and the pendency of the suit proceedings by the second
defendant Bank against Sukumaran, wherein, he appeared and
defended his case and executed a document fraudulently in favour of
the plaintiff's husband ie., before the preliminary decree, dated
22.09.2006. The plaintiff's husband, being a power of attorney agent,
at the time of lis pendency, has executed a sale deed in favour of the
plaintiff. As the principal Sukumaran is aware about the said mortgage,
he cannot execute a power of attorney when the same has been held
as a security by the Bank for the loan obtained. The plaintiff or her
husband could not give any proper evidence to show that they had no
knowledge about the pendency of the suit when they allegedly state
that the original document was not in the hands of the principal
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S.A(MD)No.426 of 2021
Sukumaran and he gives a certificate for the same by an affidavit
vouched by the Notary Public on 01.10.2005, but in the affidavit it is
seen that the said document alleged to have been lost on 27.09.2005.
The date before loosing of the said document, he had executed the
power of attorney on 26.09.2005. The plaintiff's husband has not seen
the original document and only on the oral submission made that the
same has been lost as the stand taken by the plaintiff. This would show
that at the time of executing the document, the original document was
with the Bank. The plaintiff's husband also has believed the words of
Sukumaran that the said document is lost and executed a power of
attorney and based on the same, the plaintiff has also purchased it, but
purchased it without any consideration, which has been admitted by
the plaintiff.
15. The plaintiff's submission that the said Sukumaran had taken
loan from her husband and only for the said amount, he has executed
a power of attorney and the same has been sold to the plaintiff, was
also not proved by letting any evidence. It is also seen that the
plaintiff's husband getting a power of attorney and selling it to the wife
without any consideration, would prove that there was no valid sale
taken place based on the said document. After purchase, from the year
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S.A(MD)No.426 of 2021
2006, the plaintiff has not mutated the revenue records and has not
produced any document to prove the same. The second defendant had
installed a Board, wherein, it has been clearly stated that the property
has been mortgaged and it has been sold, was not even admitted by
the plaintiff when she is residing in the same place which would show
that it is only to deny the rights of the Bank. If at all the plaintiff has
taken this property as a security for the loan given to her, she can only
claim it through Sukumaran and not before the first defendant in the
suit. The plaintiff has not proved her title to the property and she
claimed that the first defendant has not proved his title and the same
is null and void, cannot be granted on the ground that the second
defendant has brought the property for sale by following the SARFAESI
Act and accordingly, the sale certificate was issued to the first
defendant is a valid one. The possession was not also proved by
producing any document by the plaintiff and not made out appropriate
case for proving her possession. The plaintiff cannot claim any right
through the sale deed executed as a power of attorney holder and the
original principal has not paid the amount and as per the sale of
property has been conducted by open auction and the said sale binds
on the principal and accordingly, the Bank in order to recover the loan,
has taken action under the SARFAESI Act. That being the case, the sale
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S.A(MD)No.426 of 2021
certificate issued in favour of the first defendant is valid and the
plaintiff cannot seek for declaration of the sale and the trial Court as
well as the first Appellate Court have rightly dismissed the same.
16. The plaintiff states that the Bank has to wait for a final
decree being passed by the Courts below for proceeding against the
said mortgagor and without waiting, they proceeded against him in the
other mode without giving an opportunity to the Judgment debtor to
clear the decreetal amount within the limitation period, cannot be
accepted, because the preliminary decree came to be passed on
22.09.2006 for a sum of Rs.6,41,348.42/- with subsequent date till the
date of realisation. According to the plaintiff, the ground taken that
when the auction sale certificate has been executed on 16.04.2009, till
the year 2013, the first defendant has not made any claim over the
suit schedule property, is without any valid reason, as it is clear that
the first defendant had approached the plaintiff for doing some
construction work. The sale of the property was made without being
encumbrance and not freed from the sale deed, dated 29.03.2006,
which was executed by Palanisamy in favour of Kalaimani, the said
encumbrance has not been cancelled till date and the first defendant
being a resident of Madurai, he did not made any attempt to get the
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S.A(MD)No.426 of 2021
transfer of revenue records, except the sale certificate dated
16.04.2009 and possession has not been handed over by the second
defendant and prayed that the same has not been within the limitation
period.
17.Section 26(C) of the SARFAESI Act reads as follows:-
"26-C.Effect of the registration of transactions,
etc.-
(1) .....
(2) Where security interest or attachment order
upon any property in favour of the secured creditor or
any other creditor are filed for the purpose of
registration under the provisions of Chapter IV and this
Chapter, the claim of such secured creditor or other
creditor holding attachment order shall have priority
over any subsequent security interest created upon such
property and any transfer by way of sale, lease or
assignment or licence of such property or attachment
order subsequent to such registration, shall be subject to
such claim."
Based on the above said Act, secured creditor have the priority right
over the other creditors.
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S.A(MD)No.426 of 2021
18. The claim of the plaintiff that Sukumaran had obtained loan
from them and in lieu of the said payment, he has executed the power
of attorney in favour of the plaintiff's husband, who in turn has
executed a sale deed is not accepted.
19. The sale certificate has been registered and the revenue
records mutated has not been produced either of the parties. If the
plaintiff is a genuine purchaser, she would have immediately mutated
the revenue records, but she has not mutated and now she cannot turn
around and ask the first defendant to mutate the records. Further, the
evidence of P.W.1 to P.W.3 are rejected and these are all factual
aspects and also the denial of knowledge of mortgage and based on a
encumbrance certificate and an affidavit executed was relied on by the
plaintiff is not accepted and it has been well considered by both the
Courts below and the case been appropriately rejected and valid
reasons have been given. In the year 2003, they have numbered the
suit and proceeded based on the preliminary decree and the SARFAESI
Act came into effect in the year 2002. That being the case, the
authorities are at liberty to chose their course of auction by an Act,
which is convenient to them.
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S.A(MD)No.426 of 2021
20. For the reasons aforesaid, this Court is of the considered
view that no substantial questions of law has been made out by the
appellants/plaintiffs to interfere with the well considered judgment and
decree rendered by the Courts below and accordingly, the Second
Appeal stands dismissed. No costs. Consequently, connected
Miscellaneous Petition is closed.
16.12.2021
Index : Yes/No
Internet : Yes/No
ps
Note :
In view of the present lock
down owing to COVID-19
pandemic, a web copy of the
order may be utilized for
official purposes, but,
ensuring that the copy of the
order that is presented is the
correct copy, shall be the
responsibility of the
advocate / litigant concerned.
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S.A(MD)No.426 of 2021
V.BHAVANI SUBBAROYAN, J.
ps
To
1.The Additional District Court,
Dindigul.
2.The Additional Subordinate Court,
Dindigul.
3.The Record Keeper,
V.R. Section,
Madurai Bench of Madras High Court,
Madurai.
Judgment made in
S.A(MD)No.426 of 2021
16.12.2021
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