Madras High Court
M/S.Gemini Film Circuit vs M/S.Venkateswara Financiers on 22 October, 2021
OSA No.43 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 22.10.2021
CORAM :
THE HON'BLE MR.SANJIB BANERJEE, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE P.D.AUDIKESAVALU
OSA No.43 of 2020
and CMP Nos.1566, 7462 and 8305 of 2020
1. M/s.Gemini Film Circuit,
Rep. by its Managing Partner,
Mr.A.Manohar Prasad,
28, New Bangaru Colony,
West K.K.Nagar, Chennai 600 078.
2. A.Manohar Prasad
3. A.Sai Siva Jyothi
4. A.Lakshmi Anandi
5. A.Anand Prasad
6. Kovelamudi Bapaiah
7. A.Chandini
8. Kiran Parvataneni ... Appellants
-vs-
1. M/s.Venkateswara Financiers
Hyderabad Private Limited,
Rep. by its Managing Director,
Mr.A.Venkatesh Reddy, H.No.8-2-269/S/90,
Plot No.90, Sagar Co-operative Housing
Society, Road No.2, Banjara Hills,
Hyderabad – 500 034.
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OSA No.43 of 2020
2.M/s.Gemini Industries & Imaging Limited,
Rep. by its Managing Director,
Mr.A.Manohar Prasad,
28, New Bangaru Colony, West K.K.Nagar,
Chennai 600 078. ... Respondents
Appeal filed under Order XXXVI Rule 1 of OS Rules read with
Clause 15 of the Letters Patent against the judgment and decree dated
04.12.2019 passed in C.S.No.99 of 2018 on the file of original side of
this court.
For the Appellants : Mr.V.Prakash
Senior Counsel
for Mr.G.Rajesh
For the Respondents : Mr.Krishna Ravindran
for R-1
*****
JUDGMENT
(Delivered by the Hon'ble Chief Justice)
The appeal has been needlessly dragged by the appellants and in
course of the last few months, both the court and the respondent
plaintiff have been deceived by false promises made by or on behalf of
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OSA No.43 of 2020
the appellants without, as it now turns out, any intention to abide by
the same.
2. Adjournments had been sought and obtained over the last
year while making promises for payment, but the payment has not
been forthcoming. However, that aspect may now be forgotten since
the appeal has been heard out on merits. It may only be recorded that
the appellants may have avoided the subterfuge that was resorted to
in the appellants' attempt to give an impression that they intended to
satisfy the claim of the respondent.
3. On merits, there is nothing much that the appellants have to
show. It is the admitted position that a loan for Rs.7.5 crore was
obtained by the appellants in the year 2012 upon agreeing to pay
interest at the rate of 27 per cent per annum. Till date, inclusive of
interest, a sum of Rs.12.85 crore has been paid and the payments
received have to be credited against the interest first before the
principal sum is adjusted. By the judgment and order impugned dated
December 4, 2019, the claim has been summarily allowed upon the
appellants herein failing to file the written statement and, further,
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OSA No.43 of 2020
upon the appellants herein failing to deal with the applications for
summary judgment filed under Order XIII-A of the Code, as amended
by the Commercial Courts Act, 2015, on merits. The impugned
judgment records that it was indicated in the counter-affidavit to the
application for summary judgment that the suit may not have been
maintainable, that the plaintiff was not entitled to any payment, but
the averments leading upto the claim and the substance of the claims
were not dealt with at all.
4. Indeed, the trial court recorded that while dealing with the
application for summary judgment in A.No.1601 of 2019, the claims or
the documents relied upon in support of the claims had not been dealt
with. The trial court observed that multiple applications were taken
out by the defendants to subvert the spirit of Order VIII Rule 1 of the
Code.
5. The trial court was satisfied that the writ of summons had
been duly served on the defendants and recorded the respective dates.
The summons were served between February 2018 and June 2018.
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OSA No.43 of 2020
6. The trial court recorded that sufficient time had been afforded
to the defendants to file their written statement “even beyond the time
prescribed” and the defendants forfeited their right to file the written
statement on November, 2019. The trial court found that there was no
credible challenge to the agreement of July 23, 2012, the registered
mortgage deed of May 27, 2014 or the supplemental agreement of
February 5, 2015. The mortgage was registered. In addition, the rights
pertaining to the negative of the film by the name of “Madha Gaja
Raja” had been furnished by way of security.
7. However, in course of the present appeal, upon the
appellants' assurance that a certain sum of money would be paid to
the plaintiff by March 31, 2020, the plaintiff was induced to allow the
film to be released by the appellants herein though the promised
payment has not been made despite the passage of more than 18
months after the promised date.
8. The trial court referred to the applicable provisions of the
Code, particularly to Order XIII-A as amended. Order XIII-A permits a
summary judgment to be pronounced in a commercial suit, whether
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OSA No.43 of 2020
for a part or the entirety of the claim. Rule 3 of such Order permits the
court to pronounce summary judgment on a claim if it considers that
the plaintiff has no real prospect of succeeding on the claim or the
defendant has no real prospect of successfully defending the claim, as
the case may be, and there is no compelling reason why the claim
should not be disposed of before recording of oral evidence. Rule 6
under Order XIII-A permits the court to pass a judgment on the claim
or a conditional order. In any event, upon the defendants not filing any
written statement, particularly when the time to file the written
statement was mandatory and no extension could be granted therefor,
the claim as made out in the plaint stands virtually admitted. There is
no real dispute in this case about obtaining the loan or as to the terms
of the loan or the nature of the security furnished or the quantum of
repayment made. On the basis of what was evident before the trial
court, the discretion exercised was perfectly in order and it does not lie
in the mouth of the appellants to complain that there has been any
flawed procedure or perverse exercise of discretion, particularly since
no shred of any possible defence to the claim was indicated by way of
any affidavit or document placed before the trial court.
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OSA No.43 of 2020
9. Though Learned Senior Counsel appearing for the Appellant
endeavoured to impeach the judgment under appeal citing the decision
of this Court in Syrma Technology Private Limited -vs-
Powerwave Technologies Sweden AD (Order dated 13.03.2020 in
O.S.A. No. 345 of 2019), nothing has been shown on facts or in law
that could have disentitled the plaintiff from obtaining summary
judgment as claimed. There is no dispute as to the quantum of money
received, no dispute as to the rate of interest and no dispute as to how
much has been repaid and what remains due.
10. Defaulting borrowers, like the present Appellants, take
advantage of the existing judicial system and prey on its shortcomings.
This is because more often than not, courts do not pass appropriate
order for costs and do not take matters to their logical conclusion by
taking action in perjury in respect of false affidavits. The entire object
of the Act of 2015 would be defeated if commercial matters are not
dealt with by applying commercial principles and by awarding
appropriate costs and interest. There is no doubt that the appellants
here took advantage of the system and its delays in dragging the
matter over a long period and being bold enough to submit to court
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OSA No.43 of 2020
that cheques had been issued which were to arrive the next day only
to proffer some further specious excuse for the non-arrival of the
cheques the following day. There is no ground for interfering with the
judgment and order impugned.
11. It is made clear the amounts paid during the pendency of the
suit and appeal will be adjusted first against the interest due in terms
of the decree before being adjusted against the principal.
12. OSA No.43 of 2020 is dismissed as being completely devoid
of merit. The appellants will pay costs assessed at Rs.25 lakh to the
respondent in addition to whatever is due in terms of the decree that
has been upheld. CMP Nos.1566, 7462 and 8305 of 2020 are closed.
(S.B., CJ.) (P.D.A., J.)
22.10.2021
Index : no
sra
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OSA No.43 of 2020
To:
The Sub Assistant Registrar
Original Side
High Court, Madras.
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OSA No.43 of 2020
THE HON'BLE CHIEF JUSTICE
AND
P.D.AUDIKESAVALU, J.
(sra)
OSA No.43 of 2020
22.10.2021
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