Madras High Court
R.Babu Singh vs A.R.Paranthaman on 19 October, 2022
A.S.No.214 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 19.10.2022
CORAM :
THE HONOURABLE MR. JUSTICE S.S. SUNDAR
AND
THE HONOURABLE MRS. JUSTICE N. MALA
A.S.No.214 of 2013
and
M.P.No.1 of 2013
R.Babu Singh ... Appellant
Vs.
1.A.R.Paranthaman
2.The Development Credit Bank
No.61, Nungambakkam High Road,
Chennai – 600 034. ... Respondents
Prayer : Appeal Suit filed under Section 96 of Code of Civil Procedure
against the judgment and decree, dated 18.12.2012, in O.S.No.54 of 2010 on
the file of the II Additional District Court, Tiruvallur at Poonamallee.
For Appellant : Mr.S.Sethuraman
For R1 : M/s.T.Mathi
Page 1 of 15
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
JUDGMENT
(Judgment was delivered by S.S. SUNDAR, J.)
The 1st defendant in the suit in O.S.No.54 of 2010 before the II
Additional District Court, Tiruvallur at Poonamallee, is the appellant in the
above appeal.
2.The 1st respondent/plaintiff filed the suit in O.S.No.54 of 2010 for
recovery of a sum of Rs.48,61,334/- with interest due on a mortgage deed,
dated 20.05.2009, executed by the 1st defendant in favour of the plaintiff and
for consequential reliefs. In effect, the suit is for passing a preliminary
decree for recovery of money due on the mortgage and for a personal decree
against the 1st defendant, directing the 1st defendant to pay the balance
amount, in case the money realised is less than the decretal amount.
3.The case of the plaintiff in the plaint is that the 1st defendant
borrowed a sum of Rs.40,00,000/- on 20.05.2009 from the plaintiff and
created a simple mortgage by executing a deed of mortgage, dated
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
20.05.2009, and agreed to pay interest @ 2% per month. Stating that the 1st
defendant neglected to pay the amount due, despite a notice dated
05.04.2010 to the 1st defendant asking him to pay the outstanding amount to
the plaintiff, the suit was laid.
4.The suit was contested by the 1st defendant, specifically denying the
averment that the 1st defendant executed a mortgage deed after receiving a
sum of Rs.40,00,000/- on 20.05.2009. A peculiar case was pleaded in the
written statement by the 1st defendant, stating that there was a problem in
the house of the plaintiff regarding money transaction and that the plaintiff
approached the 1st defendant and requested him to execute the alleged suit
mortgage deed without any payment, only to show the plaintiff and his
family members that a huge sum is paid to the 1st defendant. In effect, the
pleading of the 1st defendant would only reveal that the case of the 1st
defendant is that the suit mortgage is a sham and nominal transaction
without any consideration. In the written statement, it is stated by the 1 st
defendant that he had surplus money in his hands at the time of mortgage
and there was no necessity for the 1st defendant to borrow such money. The
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
1st defendant also disputed the financial capacity of the plaintiff to advance
such a huge amount as per the mortgage.
5.The trial Court framed necessary issues. Before the trial Court, the
plaintiff examined himself as P.W.1 and examined two other persons, who
are the attestors of the document Ex.A1-mortgage deed. The plaintiff
marked Exs.A1 to A26 to substantiate his case. The appellant/1st defendant
examined himself as D.W.2 and D.W.1 was examined by the 2nd defendant
Bank. On behalf of the defendants, Exs.B1 to B7 were produced.
6.After holding that the document Ex.A1-mortgage deed is proved by
the plaintiff, the trial Court was unable to accept the case of the 1st
defendant that there was no consideration for Ex.A1-mortgage deed. The
case of the appellant/1st defendant that the mortgage deed was executed by
the 1st defendant at the request of the plaintiff, who was his long time friend,
without receiving any consideration, was not accepted by the trial Court by
giving cogent reasons. The trial Court specifically found that there are clear
variations between the pleadings and the evidence. Since the execution of
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
mortgage deed-Ex.A1 was proved by examining not only the plaintiff but
also the two attestors, the trial Court accepted the case of the plaintiff that
he had advanced a sum of Rs.40,00,000/- to the 1st defendant on the basis of
the mortgage under Ex.A1. On the analysis of facts admitted and the
evidence adduced, the trial Court came to the conclusion that the 1st
defendant is liable to pay the mortgage money due under Ex.A1 with agreed
interest. Considering the fact that the property under Ex.A1 was subject to
prior mortgage in favour of the 2nd defendant Bank, the trial Court also
granted a personal decree against the 1st defendant to realise the balance
amount available after the 2nd defendant realising the loan which was due on
the prior mortgage in favour of the 2nd defendant.
7.Aggrieved by the judgment and decree of the trial Court, the 1 st
defendant has filed the above appeal.
8.Learned counsel appearing for the appellant/1st defendant submitted
that there is no concrete proof established by the plaintiff to establish
payment of money under Ex.A1-mortgage deed. The learned counsel
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
submitted that the plaintiff has not produced Income Tax Returns and other
statutory documents to prove his financial capacity to advance such a huge
amount to the 1st defendant, even though the 1st defendant has specifically
denied passing of consideration under Ex.A1. The learned counsel also
submitted that, in the evidence, the 1st defendant has disclosed the
availability of huge funds with the 1st defendant at the time of mortgage.
Pointing out that the property which is the subject matter of the suit was
earlier mortgaged in favour of the 2nd defendant, the learned counsel
submitted that the possibility of the second mortgage in favour of the
plaintiff has not been considered by the trial Court, even though a specific
issue is raised by the 1st defendant.
9.Considering the pleadings, evidence, findings of the trial Court and
the submissions of the learned counsel appearing for the appellant, this
Court is of the view that the following issues are to be determined for the
disposal of this appeal :
i. Whether the suit mortgage under Ex.A1 and passing of
consideration is proved by the plaintiff/1st respondent ?
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
ii. Whether the suit mortgage under Ex.A1 was executed at the
instance of the plaintiff to solve some family issues faced by the
plaintiff ?
iii. Whether the plaintiff has proved his financial capacity and
means to advance the loan as per Ex.A1 ?
10.From the admitted case, it is seen that the suit property was
mortgaged in favour of the 2nd defendant by the 1st defendant earlier and the
2nd defendant Bank had also initiated proceedings under the Securitisation
and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 (SARFAESI Act). Therefore, the plaintiff has been granted a
limited relief by treating the plaintiff as a second mortgagee for the amount
that may be available after realising the dues of the 2nd defendant on the
basis of the previous mortgage in the pending proceedings.
11.On Issue Nos.1 and 2, the trial Court has given specific finding as
to the genuineness of the mortgage deed under Ex.A1. The document
Ex.A1 is a simple mortgage deed with usual clauses which are found in any
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
mortgage deed, either in favour of an individual or in favour of a Bank. The
attestors of the document Ex.A1 were examined as witnesses. As a matter
of fact, the execution of Ex.A1 is not in dispute. Therefore, examination of
attestors of the document is also not necessary in this case.
12.The plaintiff has proved the document Ex.A1 and the signature of
the 1st defendant in the document Ex.A1 is not in dispute. P.W.2 and P.W.3,
who are the attestors of the document Ex.A1, have also been examined to
prove that the mortgage deed was duly executed by the 1st defendant.
13.While it is open to the 1st defendant to plead that the mortgage
deed was never intended to be acted upon, there is a specific bar under
Section 92 of the Evidence Act to set up a plea contrary to the terms of the
mortgage deed. In other words, the 1st defendant has denied the transaction,
even though execution of Ex.A1-mortgage deed is not disputed. When the
suit on mortgage is contested on the ground that the mortgage deed is sham
and nominal without passing of consideration, the burden lies on the
appellant to prove by cogent evidence.
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
14.The plaintiff and the defendant are admittedly friends. The reason
stated by the 1st defendant in the written statement regarding the purpose for
which the mortgage under Ex.A1 was executed is that the plaintiff wanted
the transaction to be recorded to get rid of some problems faced by the
plaintiff in his family. Quite contrary to the stand taken by the 1st defendant
in the written statement, the suggestion put to the plaintiff during cross-
examination on behalf of the 1st defendant is otherwise and it is seen from
the evidence of P.W.1 as extracted below :
“1k; vjph;thjp mth; rnfhju rnfhjhpfis Vkhw;w
vd;dplk; fld; th';fpaJnghy v1I vd;
Jizf;bfhz;L rpUc&;o bra;tjw;F ehd; Jiz
nghndd; vd;Wk; mjd; fPH; ve;j gzghpth;jj
; ida[k;
eilg;bgwtpy;iy vd;Wk; mjdhy; tHf;F js;Sgo
bra;a ntz;Lk; vd;Wk; brhy;tJ rhpay;y/”
15.From the suggestion that was put to the plaintiff, the 1 st defendant
has exposed himself. The reason stated by the 1st defendant in the written
statement is therefore quite contrary to the stand taken by the 1st defendant
at the time of trial. This inconsistency is fatal to the case, where the 1st
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
defendant, admitted the execution of Ex.A1.
16.First of all, this Court is unable to accept the case of the 1st
defendant. It is admitted that the plaintiff and the 1 st defendant are friends
and there must be a reason for the plaintiff to file a suit for recovery of huge
amount, if the mortgage is not supported by consideration and it was at the
instance of the plaintiff to solve his family issues. No attempt is made by
the appellant/1st defendant to explain why he would agree to execute a
mortgage deed admitting borrowal of a huge sum of Rs.40,00,000/- without
receiving even a single pie under the document.
17.The reason given by the 1st defendant in the written statement to
execute Ex.A1 cannot be accepted in view of the suggestion that was put to
P.W.1 as regards the purpose for which the document Ex.A1 was required by
the 1st defendant. Having suggested to the plaintiff that Ex.A1 was executed
to help the 1st defendant to make his family members to believe that the 1st
defendant is indebted to plaintiff, the case of the 1st defendant in the written
statement is proved to be false.
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
18.The 1st defendant is not an illiterate and therefore, the plea of non
est factum that the transaction was not the one which was intended by the
parties, though permissible, the burden lies on the 1st defendant to prove the
same. This Court is unable to find any convincing evidence in this case. In
view of the glaring contradictions between the pleadings and evidence, this
Court is unable to accept the plea of the 1st defendant.
19.The 1st defendant is also a business man and the nature of evidence
given by the 1st defendant indicates that he has admitted some payments to
the plaintiff. A suggestion was put to P.W.1 whether he received
Rs.12,56,399/- by way of cheque, as if the 1st defendant has paid substantial
amount. This should be understood in the present context that the 1st
defendant has paid some amounts towards repayment of the amount which
was earlier advanced to the 1st defendant. The suggestion put to P.W.1
would only show that the 1st defendant was trying to establish several
payments made to the plaintiff towards discharge of the loan. Learned
counsel for the appellant did not refer to any document or evidence to
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
substantiate the stand taken by the 1st defendant in his written statement.
20.The case of the 1st defendant as a whole is false, as there are
several contradictions and variations between the pleadings and evidence.
Learned counsel appearing for the appellant/1st defendant is unable to
explain before this Court such contradictions. All these material
contradictions would only suggest that the case of the 1st defendant is false.
Having regard to the nature of the plea, this Court is unable to accept the
case of the 1st defendant that the mortgage deed was executed without
receipt of any money.
21.From the evidence, P.W.1 is also a business man and the
documents produced by the plaintiff would show that he is a man of means
and there is no difficulty for him to mobilize such huge amount to advance
to the 1st defendant. Therefore, this Court is unable to find favour with the
appellant/1st defendant as regards the means. The trial Court has also
rendered a finding about the means of the plaintiff.
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
22.Learned counsel appearing for the appellant is unable to
demonstrate before this Court that the documents marked on the side of the
1st defendant would show that the 1st defendant had surplus in his hands and
there was no necessity for the 1st defendant to borrow money from the
plaintiff. On the contrary, the appellant admitted that he could not repay the
money to the 2nd defendant Bank.
23.One of the grounds raised by the appellant is that the original deed
was not handed over to the plaintiff at the time of borrowing the amount. It
is admitted even in the pleading that the suit property itself was earlier
mortgaged in favour of the 2nd defendant Bank and mortgage in favour of
the 2nd defendant Bank was by deposit of title deeds. Therefore, this Court
is unable to give any importance to this point.
24.The trial Court has applied its mind and has given specific findings
with regard to the genuineness of the transaction and passing of
consideration after whole analysis of the case. This Court has no
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
compelling reason to interfere with the findings of the trial Court on facts.
In the absence of any material evidence or document to believe the story of
the 1st defendant/appellant, this Court is unable to interfere with the
judgment and decree of the trial Court.
25.Accordingly, this appeal is dismissed as devoid of any merit. The
judgment and decree of the trial Court in O.S.No.54 of 2010, dated
18.12.2012, is confirmed. No costs. Consequently, connected
miscellaneous petition is closed.
(S.S.S.R., J.) (N.M., J.)
19.10.2022
mkn
Internet : Yes
Index : Yes / No
To
The II Additional District Judge,
Tiruvallur at Poonamallee.
https://www.mhc.tn.gov.in/judis
A.S.No.214 of 2013
S.S. SUNDAR, J.
and
N. MALA, J.
mkn
A.S.No.214 of 2013
19.10.2022
https://www.mhc.tn.gov.in/judis
