Madras High Court
M/S.Caprican Wire Products vs The Tamil Nadu Industrial on 22 July, 2021
S.A.No.1980 of 2002
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 22.07.2021
CORAM:
THE HON'BLE MR. JUSTICE ABDUL QUDDHOSE
S.A.No.1980 of 2002
1.M/s.Caprican Wire Products,
rep. by its Partner,
Tmt.M.Unnamalai,
No.55, Abbas Garden,
TVS Nagar,
Coimbatore – 25.
2.Tmt.M.Unnamalai
3.K.N.Manivannan ...Appellants
vs.
1.The Tamil Nadu Industrial
Investment Corporation Ltd.,
United Shopping Complex,
No.94, Dr.Nanjappa Salai,
Coimbatore – 18.
2.R.Muthu
3.C.Muthukaruppan
4.C.Gomathi ...Respondents
(Cause title accepted as per order of this Court
dated 15.11.2002 in CMP.No.16389/2002)
Prayer: Second Appeal filed under Section 100 CPC, against the
Judgment and Decree dated 16.7.1999 made in A.S.No.179 of 1998, on
the file of the II Additional District Judge, Coimbatore, reversing the
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S.A.No.1980 of 2002
judgment and decree dated 24.8.1998 made in O.S.No.648 of 1994, on
the file of the III Additional District Munsif at Coimbatore.
For Appellants : Ms.Abbiraami
for M/s.Sarvabhauman Associates
For Respondents : Mr.Bijesh Thomas for R1
for Mr.K.F.Manavalan
R2 to R4 – No such persons
JUDGMENT
(This case was heard through Video Conferencing)
This Second Appeal has been filed challenging the impugned
judgment of the Lower Appellate Court viz., II Additional District Court,
Coimbatore dated 16.07.1999 passed in A.S.No.179 of 1998 wherein the
Lower Appellate Court has reversed the findings of the Trial Court
passed in its judgment and decree dated 24.08.1998 in O.S.No.648 of
1994 on the file of the Munsif Court, Coimbatore.
2.The Appellants are the plaintiffs in the suit O.S.No.648 of 1994
on the file of the Munsif Court, Coimbatore. They filed a suit against the
respondents seeking for a declaration that no amount is due from them to
the first respondent/first defendant in its Loan Reference No.C-53 and
consequential mandatory injunction was also sought for to direct the first
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S.A.No.1980 of 2002
respondent/first defendant to return the original title deeds of the third
Appellant/third plaintiff.
3.The case of the Appellant/plaintiff before the Trial Court was
that though the first defendant sanctioned the loan of Rs.3,60,000/-, they
lent only a sum of Rs.2,46,824/- and that too the said sum was paid
directly to the seller of the machineries which was purchased by the
Appellants/plaintiffs. Therefore, according to them, they had suffered
huge loss on account of the breach of contract committed by the
respondents/defendants by not granting sanctioned loan amount of
Rs.3,60,000/-. In such circumstances, they filed a suit for declaration and
for consequential mandatory injunction against the
respondents/defendants as stated supra.
4.A written statement has been filed by the first respondent/first
defendant denying the allegations of the Appellants/plaintiffs. In the
written statement, they have pleaded that the loan was granted by them to
the Appellants/plaintiffs only for the purpose of purchasing machineries
and not for their working capital. According to them, the loan contract
entered into between the Appellants and the first defendant also makes it
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S.A.No.1980 of 2002
clear that the loan was granted only for the purchase of purchasing
machineries and not for their working capital. Since the first
respondent/first defendant has paid the value of the machineries
purchased by the Appellants/plaintiffs which amounts to Rs.2,46,824/-,
they have not committed breach of contract as alleged by the
Appellants/plaintiffs.
5.The Trial Court framed issues and after trial, decreed the suit in
favour of the Appellants/plaintiffs by its judgment and decree dated
24.08.1998 passed in O.S.No.648 of 1994.
6.Aggrieved by the same, the respondents/defendants preferred an
appeal before the II Additional District Court, Coimbatore in A.S.No.179
of 1998. By judgment and decree dated 16.07.1999 passed in A.S.No.179
of 1998, II Additional District Court, Coimbatore reversed the findings
of the Trial Court and allowed the appeal filed by the
respondents/defendants on the ground that the suit filed by the
Appellants/plaintiffs is barred by law of limitation. According to the
Lower Appellate Court, since loan agreement was terminated by the
respondents/defendants as per Ex.B14 on 20.01.1990, the suit having
been filed only in the year 1994, the suit is barred by law of limitation.
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S.A.No.1980 of 2002
7.The Lower Appellate Court has held that the
Appellants/plaintiffs did not take proper steps as against the auctions of
the machineries conducted by the respondents/defendants even though
two suits were filed by them challenging the suit auctions. The Lower
Appellate Court has also held that injunction cannot be granted to loan
related suits and hence Trial Court ought not to have granted a decree in
favour of the Appellants/plaintiffs.
8.Aggrieved by the reversal findings of the Lower Appellate Court
in its judgment and decree dated 16.07.1999 passed in A.S.No.179 of
1998, the Appellants/plaintiffs have preferred this Second Appeal. At
the time of admission of the Second Appeal on 13.12.2002, this Court
formulated the following substantial question of law:
“Whether the learned District Judge is correct in law in
dismissing the suit by allowing the appeal especially when appellant had
established that first respondent committed breach of the terms of the
agreement?”.
9.Learned counsel for the Appellants Ms.Abbiraami would submit
that Ex.B1 loan contract is a reciprocal promise and the first
respondent/first defendant failed to perform its part of the contract by
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S.A.No.1980 of 2002
lending the sanctioned amount of Rs.3,60,000/- to the
Appellants/plaintiffs but instead has lent only Rs.2,46,824/- that too paid
directly to the seller of the machineries.
10.Learned counsel for the Appellants drew the attention of this
Court to the deposition of DW1 and would submit that the first
respondent/first defendant's witness (DW1) has himself admitted that the
loan was sanctioned for a sum of Rs.3,60,000/- but the said amount was
not granted to the Appellants/plaintiffs.
11.Learned counsel for the Appellants also drew the attention of
this Court to the deposition of DW2 and would submit that he also
admitted that the sanctioned loan amount was Rs.3,60,000/- but the said
loan amount was not granted its entirety. Therefore, she would submit
that the Appellants/plaintiffs have proved that the first respondent/first
defendant has committed breach of the loan contract and therefore, the
Trial Court has rightly decreed the suit in favour of the
Appellants/plaintiffs but the Lower Appellate Court has erroneously
reversed the said findings. According to her, the suit was filed within the
period of limitation. She would submit that since the machineries were
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S.A.No.1980 of 2002
auctioned only in the year 1994, the suit filed by the Appellants/plaintiffs
against the respondents/defendants in the year 1994 is well within the
period of limitation.
12.Learned counsel for the Appellants also drew the attention of
this Court to the Lower Appellate Court findings and would submit that
Lower Appellate Court has erroneously by total non-application of mind
to the evidence available on record has reversed the findings of the Trial
Court.
13.She has also drew the attention of this Court to the deposition
of DW1 and DW2 and would submit that the respondents/defendants
have admitted that no money was paid directly to the
Appellants/plaintiffs. This being the case, she would submit that the
Appellants/plaintiffs cannot be made liable to pay any further sums to the
respondents/defendants.
14.Per contra, Mr.Bijesh Thomas, learned counsel for the
respondents would submit that under Ex.B1 dated 15.06.1987, loan was
granted to the Appellants/plaintiffs by the respondents/defendants only
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S.A.No.1980 of 2002
for the purpose of purchasing machineries and not for their working
capital. Since the value of the machineries purchased by the
Appellants/plaintiffs was Rs.2,46,824/-, the first respondent had lent only
that amount. Therefore, he would submit that there is no breach of
contract committed by the respondents/defendants as alleged by the
Appellants/defendants.
15.He would also submit that the Lower Appellate Court has
rightly reversed the findings of the Trial Court by holding the suit filed
by the Appellants/plaintiffs is barred by law of limitation. According to
him, the loan contract was terminated on 20.01.1990 under Ex.B14 but
the suit was filed only in the year 1994 and therefore, the Lower
Appellate Court rightly reversed the findings of the Trial Court by
holding that the suit is barred by law of limitation.
16.Before the Trial Court, the Appellants/plaintiffs have filed 3
documents which were marked as Exs.P1 to P3, namely (a) Registration
Certificate of the Appellants/plaintiff's Company, (b) Legal Notice sent
by the Appellants/plaintiffs counsel to the respondents/defendants and
(c) Reply dated 25.02.1993 sent by the respondents/defendants to the
Appellants/plaintiff's counsel.
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S.A.No.1980 of 2002
17.On the side of the Appellants/plaintiffs, the third
Appellant/third plaintiff was examined as the only witness (PW1). On
the side of the respondents/defendants, 26 documents were filed which
were marked as Exs.B1 to B26 which included the loan contract entered
into between the Appellants/plaintiffs and the respondents/defendants
(Ex.B1) and the termination letter which was also marked as exhibit and
two witnesses were examined viz., DW1 and DW2.
18.As seen from the evidence available on record, without demur,
the Appellants/plaintiffs have accepted the loan of Rs.2,46,824/- from the
respondents/defendants instead of Rs.3,60,000/- which the
Appellants/plaintiffs claim was the sanctioned amount. The loan was
disbursed by the respondents/defendants in the year 1987 and was
directly paid to the seller of the machineries from whom
Appellants/plaintiffs purchased.
19.Excepting for filing 3 documents which have been marked as
exhibits as referred to supra, the Appellants/plaintiffs have not filed any
documents to show that immediately after the disbursement of the loan
amount in the year 1987, they had protested to the
respondents/defendants about the lesser loan amount disbursed to them.
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S.A.No.1980 of 2002
20.The Suit O.S.No.648 of 1998 before the District Munsif Court,
Coimbatore was filed seeking for a declaration that no money is due and
payable by the Appellants/plaintiffs to the respondents/defendants and in
the same suit, a consequential mandatory injunction has also been sought
for to direct the first respondent/first defendant to return the original title
deeds of the third Appellant/third plaintiff.
21.The Trial Court in its judgement and decree dated 24.08.1998
has erroneously based on the deposition of DW2 that the full loan
amount was not given to the Appellants/plaintiffs has given a finding that
no amount is due and payable by the Appellants/plaintiffs to the
respondents/defendants.
22.The Trial Court has also erroneously held that since
machineries were repossessed by the respondents/defendants from the
Appellants/plaintiffs, the Appellants/plaintiffs are entitled for a decree as
prayed for in the suit. The findings of the Trial court are erroneous for
the following reasons:
(a)As seen from Ex.B1 (Loan Contract), the loan was given by the
respondents/defendants to the Appellants/plaintiffs for the purpose of
purchasing the machineries and not for their working capital.
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S.A.No.1980 of 2002
(b)The relevant clause in Ex.B1 (Loan Contract) makes it clear that
the amount was sanctioned by the respondent/defendants to the
Appellants/plaintiffs only for the purpose of purchasing the machineries
and with regard to working capital, the Appellants/plaintiffs will have to
make their own arrangement.
(c)A consistent stand has also been taken by the
respondents/defendants before the Courts below that they are not liable
to lend money under the contract for the working capital needs of the
Appellants/plaintiffs. The written statement filed by the
respondents/defendants also supports the said consistent stand.
(d)Admittedly, the loan was granted in the year 1987 by the
respondents/defendants in favour of the Appellants/plaintiffs. If the
Appellants/plaintiffs are aggrieved by the disbursement of a lesser loan
amount than what was agreed upon, the Appellants/plaintiffs would have
raised protest with the respondents/defendants. But as seen from the
evidence available on record, no such protest letter was issued by the
Appellants/plaintiffs to the respondents/defendants for non-disbursement
of the entire loan of Rs.3,60,000/-.
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S.A.No.1980 of 2002
(e)Admittedly, the Appellants/plaintiffs have not repaid the loan to
the respondents/defendants in accordance with the loan contract marked
as Ex.B1 before the Tribunal.
(f)In view of the default and in accordance with the terms and
conditions of the loan contract, the respondents/defendants have
repossessed the machineries from the Appellants/plaintiffs and thereafter
have made attempts to auction the said machineries. Having lent a sum
of Rs.2,46,824/- towards purchase of machineries at the request of the
Appellants/plaintiffs, the respondents/defendants cannot be prevented
from taking any legal action in accordance with the terms and conditions
of the loan contract (Ex.B1).
(g)The Lower Appellate Court by its judgment and decree dated
16.07.1999 in A.S.No.179 of 1998 has rightly reversed the findings of
the Trial Court by holding that the suit O.S.No.648 of 1994 filed by the
Appellants/plaintiffs is barred by law of limitation. The Lower Appellate
Court has given a finding that the loan contract was terminated by the
respondents/defendants under Ex.B14 on 20.01.1990 which has also not
been disputed by the Appellants/plaintiffs as seen from the evidence
available on record.
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S.A.No.1980 of 2002
(h)The Lower Appellate Court has also rightly held that since suit
has not been filed within a period of 3 years from 20.01.1990 being the
date of the termination letter, the suit is barred by law of limitation.
23.This Court is in agreement with the findings of the Lower
Appellate Court and does not find any perversity in the said findings with
regard to the consequential injunction also which was earlier granted by
the Trial Court. The Lower Appellate Court has held that injunction
cannot be granted to loan related suits. Though there cannot be any such
blanket order and grant of injunction in a money related transaction
depends upon facts and circumstances of each and every case, since this
Court is in agreement with the findings of the Lower Appellate Court
that the suit is barred by law of limitation, no necessity has arisen for this
Court to give its point of view with regard to the finding of the Lower
Appellate Court that injunction cannot be granted to loan related suits.
24.The Lower Appellate Court has rightly considered the evidence
available on record and has rightly reversed the findings of the Trial
Court by allowing the appeal filed by the respondents/defendants. This
Court does not find any perversity in the findings of the Lower Appellate
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Court as the findings of the Lower Appellate Court are based on the
materials and evidence available on record and is in accordance with law
and there are no debatable question of law involved in this Second
Appeal.
25.For the foregoing reasons, the substantial questions of law
formulated by this Court on 13.12.2002 at the time of Second Appeal is
answered against the Appellants/plaintiffs as there is no substantial
questions of law involved in this appeal as the issues raised by the
Appellants have been adequately and correctly considered by the Lower
Appellate Court in accordance with law.
26.In the result, the Second Appeal is dismissed. No costs.
22.07.2021
Index: Yes/No
Internet: Yes/No
Speaking Order/Non-Speaking Order
pam
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S.A.No.1980 of 2002
To
1.The II Additional District Judge, Coimbatore.
2.The III Additional District Munsif at Coimbatore.
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S.A.No.1980 of 2002
ABDUL QUDDHOSE, J.
pam
S.A.No.1980 of 2002
22.07.2021
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