Madras High Court
Raja Holding (Firm) vs N.Navaneethakrishnan [Died on 23 September, 2024
Author: P.Velmurugan
Bench: P.Velmurugan
A.S.(MD).No.220 of 2018
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED:23.09.2024
CORAM:
THE HON'BLE Mr. JUSTICE P.VELMURUGAN
AND
THE HON'BLE Mr. JUSTICE K.K.RAMAKRISHNAN
A.S.(MD).No.220 of 2018
and
C.M.P.(MD).No.726 of 2019
Raja Holding (Firm),
Rep.by its Managing Partner,
R.V.Subramaniam,
No.69, Town High School Road,
Kumbakonam ... Appellant
Vs.
1.N.Navaneethakrishnan [Died]
2.N.Kanthimathi
3.S.Rajinikanth
4.N.Meenakshi
5.M.Geetha
6.S.Sakthivel ... Respondents
Prayer : First Appeal filed under Section 96 of Civil Procedure Code,
1
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A.S.(MD).No.220 of 2018
praying to set aside the Judgment and final decree dated 23.12.2016 in
O.S.No.51 of 2013 on the file of the Principal District Judge, Thanjavur in
so far as against the appellants and grant the decree as prayed for in favour
of the appellants against the third defendant.
For Appellant : Mr.A.RL.Sundaresan (Senior Counsel)
for Mr.C.Mahadevan
For Respondents :R1 and R2 died
:Mr.R.Paranjothi for R3
:Mr.Harish Vaidyanathan for
Mr.Guru Dhananjay for R4
:R5 and R6 No appearance.
JUDGMENT
[Order of the Court was made by K.K.RAMAKRISHNAN, J.]
The plaintiff in O.S.NO. 51 of 2013 on the file of the Principal
District Judge, Thanjavur, has filed this appeal challenging the dismissal of
the suit against the third and fourth defendants and also the dismissal of the
claim of interest of 30% as agreed by the first and second defendants to pay
the amount of Rs.3,98,20,200/- with the interest of 30%.
2.For better appreciation of fact and easy reference, the rank of the
parties stated in the Court below is followed hereunder:
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2.1.The appellant is running a finance business in the name of
M/s.Raja Holding (Firm registered under the partner ship Act 1932) at
Door No.69, town High Secondary School Road, Kumbakonam.
3.The first defendant is arrayed as first respondent in this appeal and
the second defendant is arrayed as second respondent and the third and
fourth defendants are arrayed as third and fourth respondents. During the
pendency of the appeal, the first defendant died and hence, the legal heirs
are added as a party to this proceeding.
4.The case of the plaintiff before the trial court
4.1.The first and second defendants, son-in-law is third defendant and
the daughter is fourth defendant. First and second defendants have jointly
borrowed a sum of Rs.2,78,00,000/- upon execution of 13 promissory notes
on various dates commencing from 30.06.2009, with undertaking to repay
the amount with interest of 36% per annum for the family business
Senthilnathan Agency and N.Meena Enterprises and for other family
expenses. Apart from that on 30.03.2011, the defendants 1 and 2 jointly
borrowed a short term loan amount of Rs.3 crores from the plaintiff on
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30.03.2011 upon executing the promissory note in favour of the plaintiff
with undertaking to pay the interest for the said loan at the rate of 36% per
annum. Thereafter they have made some payment and agreed to repay the
entire amount by executing undertaking letter dated 07.05.2011 with
promise to pay the amount within a week. Again on 22.10.2011 D1 and D2
have jointly executed confirmation letter acknowledging the repayment of
the amount of Rs.2,99, 40,000/-. In the said letter, they undertook to repay
within 20 days. The third defendant/son-in-law and the fourth
defendant/daughter of the defendant Nos.1 and 2 specifically undertook to
repay the amount by executing the guarantee letter dated 15.11.2012. They
were also not interested in the repayment. On the basis of the letter dated
07.05.2011, 22.10.2011 and 15.11.2012, all the defendants are jointly and
severally liable to pay the debt amount. Since, the defendants 3 and 4 in the
guarantee letter dated 15.11.2012 demanded reduction of interest and also
some interest was paid and the plaintiff filed a suit claiming 30% interest.
The plaintiff suit was filed for recovery of the amount of Rs.3,99,20,220/-
with agreed interest of 30% from the date of plaint till the date of
realization.
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5.The case of the defedants 1 and 2 before the trial court:
They defendant Nos.1 and 2 have filed the written statement
admitting the relationship and also admitted the above mentioned
transaction in the plaint. They also admitted the execution of the promissory
notes, execution of the undertaking letter dated 07.05.2011, 22.10.2011 and
further the guarantee letter executed by D3 and D4 dated 15.11.2012. But,
they sought to dismiss the suit against D3 and D4 and also they sought the
benefit under the Tamil Debt Relief Act and also raised a plea that the rate
of interest was against the law and the same amounts to the collection of
usurious interest. They also pleaded that more than 3.35 crores have already
been paid to the plaintiff. They also pleaded that the amount was not
obtained for anyother family business and as a Kartha of the family.
6. The case of the defendants 3 and 4 before the trial court:
They denied that the amount was borrowed for the business purpose
and for the Senthilnathan agency and N.Meena enterprises. They pleaded
that there was a negotiation relating to the repayment of the loan amount in
their presence and during the said negotiation, they persuaded the
defendants 1 and 2 to pay the amount with reasonable and admissible rate of
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interest. The said document dated 15.11.2012 is not properly stamped and
inadmissible inevidence. Therefore, they are not necessary parties to the suit
and hence they prayed to dismiss the suit under Order 1 Rule 10 of C.P.C.
on the ground of misjoinder of the party. They also pleaded that the suit
claim with the interest is against law and there is no privity of contract
between the plaintiff and the defendants. They also reserved the right to file
the petition to reject the plaint on the ground that they are not necessary and
proper party to the suit.
7. Finding of the learned judge :-
7.1. The learned trial Judge after completion of the pleadings framed
more than 13 issues.To prove the case of the plaintiff, P.W.1 to P.W.4 were
examined and Ex.A1 to Ex.A39 were marked. On the side of the defendants,
the first defendant was examined as DW1 and the third defendant was
examined as DW3 and the officer from the City Union Bank, Kumbakonam,
was examined as DW2 and the marked Ex.B1 to B4 and Ex.C1 to Ex.C4
were filed with documents ie.,relating to account statement of fourth
defendant in the City Union Bank, Kumbakonam.
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8.The learned Trial Judge has dismissed the suit as agianst D3 and D4
on the ground that they are not a proper party to the suit and there was no
triparte agreement and hence the claim on the basis of Ex.A19 dated
15.11.2012, executed by the D3 and D4 is not maintainable. The learned
trial judge also decreed the suit agianst the D1 and D2 with direction to pay
interest at the rate of 12% from the date of the plaint upto the date of the
decree and further interest of 6% from the date of decree till relization by
passing the impugned judgement and decree in O.S.No. 51 of 2013 on the
file of the Principal District Judge, Thanjavur dated 23.12.2016.
Challenging the same, the appellant have filed this appeal.
9.The learned Senior Counsel Mr.A.R.L.Sundaresan appearing for
the appellant made the following submissions:
9.1.D3 and D4 have filed the written statement and they admitted the
execution of A19 dated 15.11.2012. The Ex.A19 was the letter of guarantee
and both D3 and D4 clearly undertook to pay the amount and the same is
letter of guarantee. They have filed the interlocutory appliction in I.A.No.
14 of 2014 to remove them from the array of the defendants in the suit
under Order 1 Rule 10 of C.P.C., stating that they are not the necessary and
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proper party. The same was dismissed and aggrieved over the same they
filed the C.R.P.No. 678 of 2015 before this court and this court dismissed
the said petition and held that they cannot be heard to say that they are
unnecessary party. In the said circumstances, the Learned Trial Judge
finding that D3 and D4 is not proper party is erroenous one.
9.2. Under the Ex.A19, D3 and D4 clearly gave an undertaking to
repay the amount and the same was not properly considered by the learned
trial judge. Ex.A19 satisified all the ingredients of the guarantee and
therefore the dismissal of the suit against the D3 and D4 is not accordance
with law.
9.3. Once the learned trial Judge gave a finding that the appellant is
entitled to 30% interest on the basis of Ex.A18, the learned trial Judge ought
to have granted interest of 30%. He has no discretionary power to award
interest when there was a commercial transaction and there is an agreement
to pay the commercial interest. Apart from that there was no appeal either
by the D1 & D2 or by D3 & D4 therefore he seeks to set aside the dismissal
of suit agianst the D3 & D4 and decree the suit against the D3 & D4 and
also grant interest of 30%.
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9.4.D1 and D2 made number of alienation in order to defeat and
thwart the claim of the plaintiff and also made the transfer of the valuable
property in favour of the D4 and D3 and the said special circumstances
ought to have been taken by the Learned Trial Judge to decree the suit.
10.The learned counsel for the D3 and D4 made the following
submission:
10.1. The learned trial Judge considered the various documents
namely Ex.A17, A18 and A19 and has held that the D3 & D4 had not
signed A17 and A18 and D1 & D2 had not signed the A19 and hence there
was no triparte agreement and therefore the claim against D3 & D4 is not
maintainable. The said finding is on the basis of the evidence and
appreciation of the contents of the documents. Therefore, this court has no
power to interefere with said finding.
10.2. The learned trial judge specifically held that the D3 & D4 is not
proper party and the suit is not maintainable against them. There is no
pervesity in the said finding and the same needs no intereference.
10.3. The learned trial judge considering the payment made by D1 &
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D2, has reduced the interest and therefore the same needs no intereference.
10.4. The alienation made in favour of the D3 & D4 to pay the bank
dues cannot be taken against the D3 & D4 to fix the liability of D1 and D2.
10.5. The plaintiffs obtained the Ex.A19 under threat and coercion
and the same was stated in the counter affidavit filed before this court in the
C.M.P.No. 726 of 2019 filed before this court by the plaintiff under order 39
rule 1 and 2 of C.P.C., claiming the relief of restraining the defendants from
alienating the properties. In the said counter affidavit, it is clearly stated that
the document was executed under threat and coercion. Therefore, the claim
is not maintainable on the basis of Ex.A19 against the D3 and D4.
11. The learned senior counsel Mr.A.R.L.Sundaresan made the
following reply:
11.1. The Learned counsel for D3 & D4 raised a new plea of threat
and coercion. In the written statement, he never raised the said plea and also
D1 and D2 also admitted the said execution. D1 also deposed before this
court above the execution of Ex.A19. In the said circumstances the said plea
is liable to be rejected.
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12.This Court considered the rival submission and perused the record
and also the precedents relied upon by them.
13.The following points for determination arise in this appeal:
13.1.Whether appellant is entitled to get decree against D3 and D4 on
the basis of Ex.A19?
13.2.Whether the learned trial Judge is correct in awarding the
interest of 12% from the date of the suit up to date of the decree12% and 6%
till the date of recovery?
14.Discussion on the plea of Coercion and undue influence
The respondents admitted their relationships. The first and second
defendants in the suit are the parents of the fourth defendant. The third
defendant is the husband of the fourth defendant. The appellant case is that
D1 and D2 borrowed a sum of Rs.2,78,00,000/- upon executing 13
promissory notes with undertaking to repay the amount with 36% per
annum and this is not disputed. They committed default and hence, they
further agreed to repay the said amount of the remaining amount of Rs.
2,99,40,000/- on 07.05.2011. Further, D1 and D2 acknowledged and
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confirmed the said loan amount with undertaking to repay the amount by
letter dated 22.10.2011. To discharge the said amount, in order to save D1
and D2, D3 and D4 jointly executed letter of undertaking to pay the agreed
debt amount mentioned in the letter dated 20-10-2011. The said undertaking
is marked as Ex.A19. On the basis of Ex.A19, the suit was filed by the
appellant to repay the amount. D3 and D4 have filed the written statement
stating that the said document is inadmissible and also the same is not in the
stamp paper and hence, the same is not admissible. The claim made on the
basis of the same is not legally sustainable. They further pleaded that they
never agreed to repay the loan amount. They also pleaded that they are not
necessary party to the suit and hence, the suit is liable to be dismissed on the
ground of the mis-joinder of party. But, during the course of the
interlocutory proceedings, they took a stand that the said document was
obtained by the force and under duress. This Court considered the evidence
available on record. The case of D3 and D4 that the same was obtained
under duress cannot be accepted on the ground that they neither raised a
plea in the written statement nor established the said plea. Their specific
case during the chief examination, is that the said document was obtained
by force. They further admitted that they have not taken any action against
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the person, who had obtained this said document by force. They also
admitted that they never raised the said plea in the written statement.
15. It is well settled, as per the order 6 Rule 4 of the C.P.C. pleadings
must be specific relating to the “undue influence” etc., Further, order 8 rule
5 of the C.P.C.also demands specific denial of the Ex.A19 with required
pleadings under which circumstances it had been executed.
16. Pleadings are foundation of the litigation. Pleadings not only
define the issues between the parties for the final decision of the court at the
trial, and also they manifest and exert their importance throughout the whole
process of the litigation.
17.This Court is unable to find any pleadings of either coercion or
undue influence and the only available pleadings is as follows:
This defendant only stated that this defendant will inform or
persuade the borrowers to pay the amount borrowed with
reasonable and admissible rate of interest and never agreed to pay
the amount, if not paid by the defendants 1 and 2. Hence there was
no undertaking to repay the amount. Under no stretch of
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imagination, the plaintiff can contend, that the letter dated
15.11.2012 is a guarantee document and therefore, this defendant
and fourth defendant are also liable for suit claim. The document
dated 15.11.2012 is not properly stamped and it is clearly
inadmissible in evidence. Based on the invalid, inadmissible and
not properly stamped document, the plaintiff has no right to
implead this defendant and fourth defendants in the above suit.
Hence, this defendant is not either jointly or severally liable to pay
the suit claim. In view of this defendant and fourth defendant are
unnecessary party to the suit, the suit as against this defendant has
to be dismissed as per the provisions of Order 1 Rule 10 of the
C.P.C. For instituting a case against wrong person.
Therefore, the learned trial judge also has not framed any issue.
18.During the course of the trial, D3 examined himself as D.W.3. In
his evidence, he specifically deposed that the plaintiff's son and another
person came and obtained the signature under the threat in his house, from
him and his wife. At that time, their servants were available in the house.
They threatened and obtained the signature and left the house around 1'o
clock on the day. He never called any person to help. He never made a
police complaint. He also did not disclose the same to any person. He also
admitted that he never disclosed the above fact in the written statement also.
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Curiously, he further deposed that no force was used to obtain the signature.
Considering the said deposition of D.W.3, this Court has every reason to
hold that D.W.3 had made false story to disown their liability. His evidence
is not trustworthy. Apart from that, D.W.1 admitted that D3 and D4
executed A19. In the said circumstances, the plea of the execution of the
said document under duress is nothing but without plea and without any iota
of evidence. Hence, new case of D3 and D4 in the course of the present
appeal suit proceedings that the same was obtained by the force and
coercion has no legs to stand on. Therefore, this Court declines to accept the
argument of the learned counsel for the defendants 3 and 4 that Ex.A19 had
been obtained by force and coercion on the basis of the averment made in
the counter affidavit filed in the interlocutory application filed by the
appellants under order 39 rule 1 and 2 of CPC to restrain the defendants
from making alienation cannot be accepted. Accordingly, Ex.A19 is
executed without any force or duress as argued by the learned counsel for
the appellant.
19.Discussion on the contents of Ex.A19:
19.1.The next contention of the learned counsel for D3 and D4 that
the said contents of the document could not create any liability either under
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the implied guarantee or the expressed guarantee.
19.2.On the plain words of the Ex.A19 it is clear that the defendants 3
and 4 under took to repay the amount of Rs.2,99,40,000/-. There is a clear
promise to make the repayment of D1 and D2 without any ambiguity either
in the form or words of the contents of the Ex.A19. Before making further
discussion on this issue, it is relevant to extract the contents of Ex.A19
which reads as follows:
S.Rajinikanth & R.Meenakshi,
42 fourth Street,
Arulanada Nagar,
Thanjavur
15.11.2012
Mr.R.V.Subramanian,
M/s. Roja Holdings,
No. 69, Town Higher Secondary School Road,
Kumbakonam.
Dear Sir,
With regards to the borrowal of Shri.
M.Naveentha Krishnan and Shrimathi. N.Kanthimathi
we have come to understand that the total principal
amount due to you is Rs.2,99,40,000.00/- (Rupee Two
Crores Ninety Nine Lakhs Forty Thousand only).
With reference to the numerous discussions that
we had on the above subject, and in consideration of
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the borrowers age and as requested by you, we have
come forward to undertake and facilitate the repayment
of the same before 31.03.2013. And as assured by you,
we also request you to offer us a waiver/ concession on
the same.
Thanking you
Sincerely
S.Rajinikanth
R.Meenakshi
20. From the above contents of Ex.A19, there is a clear enumeration
of the following facts:
20.1.There is undeniable liability to pay a sum of Rs.2,99,44,000/-.
20.2.There is unequivocal, clear, unambiguous undertaking to pay the
said amount.
20.3.There is a promise to accelerate, speedup and quicken the
repayment before 30.03.2013.
20.4.Above all, their intention to undertake the payment not only on
the basis of the relationship and surrounding circumstances namely, mother-
in-law of D.W.3 transferred her property in favour of D.W.3.
20.5.Therefore, in view of the above discussion, this Court has firm
opinion that the essential condition of guarantee as required under Section
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126 of the Contract Act to mulct liability of the D1 and D2 under Ex.A19 is
available in its clear terms. Hence, the learned trial judge's finding that there
is no privity of contract is not correct. Therefore, D3 and D4 are liable to
pay the amount of Rs.2,99,40,000/-. In the view of the above discussion, the
contention of the counsel that there was no undertaking and there was no
obligation created under Ex.A.19 cannot be accepted.
21.Discussion on the mis-joinder of party
During the pendency of the suit, D3 and D4 have filed the
interlocutory application under Order 1 Rule 10 of C.P.C., before the
learned trial Judge to exonerate them from the suit as mis-joinder of parties.
The said plea was negatived by the learned trial judge and the same was
confirmed by this Court in C.R.P.(MD).No.678 of 2015. In the said
circumstances, the learned judge's finding that they are not necessary party
to the proceedings is perverse and the same is liable to be set aside.
22.Discussion on interest:
22.1.The learned Senior counsel appearing for the appellant
contended that the learned trial judge without any reason granted decree for
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by the liability from the date of the plaint and grant of 12% interest from the
date of the plaint to the date of the judgment and the subsequent interest of
6% is not in accordance with law. This Court perused the various
communications said to have taken place between the parties. In Ex.A18,
there was a reference about the number of communication to reduce the
interest on behalf of the D1 and D2. In Ex.A19 also, there is a reference
about the reduction of interest. Even as per the appellant's case, the original
agreed interest of 36% was reduced to 30%. Further, there was a payment
also made towards the interest. In assessing the overall circumstances, this
Court concurs with the awarding of interest by the learned trial Judge at the
rate of 12% from the date of the plaint to the date of decree and subsequent
interest of 6% from the date of the decree till realisation. There is no reason
to interfere with.
22.2.In view of the above discussion, the finding of the learned trial
judge that D3 and D4 are not liable to pay the amount under Ex.A19 is
erroneous and hence, the same is liable to be set aside and the finding of the
learned trial Judge in awarding the interest as discussed above is in
accordance with law and the same is not required to be interfered.
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23.Accordingly, the appeal is partly allowed with cost payable by D.3
and D.4 in the following terms:-
23.1.The judgment and the decree passed by the learned Principal
District Judge, Thanjavur, in O.S.No.51 of 2013, dated 23.12.2016 is set
aside in respect of the portion of dismissing the suit against D.3 and D.4.
23.2.All the defendants D.1 to D.4 are jointly and severally liable to
pay the decree amount granted in O.S.No.51 of 2013.
23.3.The plaintiff is entitled to relief of decree as against D-3 and
D-4 also.
Consequently, connected miscellaneous petition is closed.
[P.V.J,] [K.K.R.K.J,]
23.09.2024
NCC : Yes/No
Index : Yes/No
Internet : Yes/No
sbn
To:
The Principal District Judge,
Thanjavur.
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P.VELMURUGAN, J.
AND
K.K.RAMAKRISHNAN, J.
sbn
and
23.09.2024
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