Partly allowed

F.Ashok Kumar v. S.Ayub Khan

Madras HC10 Nov 2016CS/450/2010

Case brief

AI extract

What is this about?

The High Court of Madras, in a suit filed for recovery of money along with sale of mortgaged property and permanent injunction, found that while the borrowal was proved, no valid mortgage existed over the property due to lack of consideration and the defendant not being the absolute owner. The suit was partly decreed for money recovery but dismissed regarding sale and injunction.

What did the court decide?

Decree for recovery of Rs. 31,59,500/- with interest and costs allowed; time for payment fixed at three months. Reliefs for sale of property and permanent injunction dismissed.

F.Ashok Kumar Vs S.Ayub Khan — Contract and Commercial Disputes | Madras HC (2016)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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RESERVED ON: 08.11.2016 PRONOUNCED ON:10.11.2016

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CORAM:

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THE HONOURABLE MR.JUSTICE C.V.KARTHIKEYAN

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CS.No.450 of 2010
F.Ashok Kumar
Plaintiff
Vs
S.Ayub Khan Defendant
Prayer:- This Civil Suit is filed under Order IV Rule 1
of the Original Side Rules and Order 37 Rule 1 of Original
Side Rules read with Order 34 Rule 15 of CPC and Order VII
Rule 1 of CPC.
For Plaintiff : Mr.V.K.Elango
For Defendant : Mr.Shah & Shah
Defendant-Set Exparte
JUDGEMENT
This civil suit has been filed to pass a judgement

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and decree, against the Defendant:-

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a) directing the Defendant to pay the Plaintiff a sum of Rs.31,59,500/- (Rupees thirty one lakhs fifty nine thousand and five hundred only) with interest at 12% per annum on Rs.17,75,000/- from the date of the plaint till the date of realisation, failing which, directing the sale of the mortgaged property more fully described in the schedule and directing appropriation of the sale proceeds towards the decreed amount and if there is any deficit, pass a personal decree against the

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Defendant for the deficit.

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b) granting permanent injunction restraining the Defendant from alienating or encumbering the suit property without settling the amounts due to the Plaintiff as claimed in this suit.

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c) directing the Defendant to pay the costs of the suit.

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The case of the Plaintiff, in a nutshell, as

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set out in the plaint, is that the Defendant had borrowed

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a sum of Rs.17,75,000/- from the Plaintiff, by executing a promissory note, dated 24.02.2007, agreeing to repay the same with interest at 24% p.a. The Defendant is the lessor of the suit property viz. Plot No.4B, Old No.471, Anna

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Salai, Nandanam, Chennai-35 under the lease agreement dated

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18.11.1999 for 50 years. The Defendant had also deposited

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the title deeds pertaining to the suit property with the Plaintiff as security for said borrowed amount under the said promissory note and also executed a letter dated 5.3.2007, admitting the borrowal and confirming the deposit of the said tile deeds as security. The Defendant

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had also executed a letter dated 27.2.2007, empowering the Plaintiff to collect the monthly rent of Rs.75,000/-, which is inclusive of interest of Rs.35,000/- and principal

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amount of Rs.40,000/-, from his tenant A.Pandian, who is running a hotel business in the suit property. The Defendant had also informed the tenant by letter dated

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25.3.2007 about such authorisation given to the Plaintiff to collect the rent from him. However, the tenant did not pay the rent to the Plaintiff. The Defendant alone has been receiving the rent, but however, he did not pay any amount from the beginning. As on April 2010, the interest accrued was Rs.13,84,500/-. Further, the Defendant is attempting to alienate the suit property without paying the dues. There was an equitable mortgage created by the Defendant by depositing the title deeds with the Plaintiff and hence, the Plaintiff has got a charge over the suit property by way of equitable mortgage. In all, the Defendant is due and liable to pay a sum of Rs.31,59,500/-. In spite of several demands, since the Defendant did not come forward neither to pay the interest nor the principal amount, the Plaintiff had sent a legal notice dated 20.1.2010, for which there was no reply from the Defendant.

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In such circumstances, this civil suit has been filed for the reliefs as stated above.

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After service of notice to the Defendant, the written statement had been filed by the Defendant only in the year 2013, denying the plaint averments, particularly,

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the borrowal of the amount and execution of the promissory note on the ground that it was a forged one, by using blank papers and playing fraud. In the written statement, it had

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also been denied that the Plaintiff had a charge over the leasehold property of the Defendant on the ground that when the Defendant is the lessor of the suit property or in other words, he is not the owner of the suit property, the question of mortgaging the leased out property will not arise. It had also been alleged in the written statement that the title documents had been stolen by the Plaintiff and had been misused by the Plaintiff.

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The Plaintiff had filed the proof affidavit

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for his chief examination and receipt of 11 documents as documentary evidence. In the Evidence, the Plaintiff had examined himself as PW.1 and marked Exs.P1 to P11 as documentary evidence. On the side of the Defendant, neither any document was filed nor any witness was examined.

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Plaintiff and considered his submissions and also perused the materials placed on record.

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Though the Defendant is represented by his counsel, the Defendant was set exparte by order dated

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01.11.2016, on the ground that though the Plaintiff had let

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in evidence, the Defendant did not come forward to cross examine the witnesses of the Plaintiff in spite of sufficient opportunity granted to him.

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The relief (a) sought for by the Plaintiff is in two folds, viz. one part is for recovery of money and another is for sale of the property in question and appropriation of the sale proceeds towards the amount due. The relief (b) is for permanent injunction, restraining the

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Defendant from alienating the suit property.

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relating to recovery of money is concerned, it is seen from the documentary evidence Ex.P1 to Ex.P11 and the oral evidence, particularly, Ex.P1 the promissory note dated 24.02.2007, the borrowal of the amount has been established. Further, though the Defendant had filed a written statement, denying the plaint averments, he did not come forward either to cross examine the Plaintiff’s witness or to let in evidence to substantiate the averments made in the written statement. Hence, it can be held that the Plaintiff has proved the suit claim in respect of the said part of the relief (a) relating to

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recovery of money under Ex.P1 alone.

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In so far as the other part of the relief (a) relating to sale of the property in question and

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appropriation of the sale proceeds towards the amount due and the relief (b) relating to permanent injunction, sought

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for based on the charge allegedly created over the suit

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property by deposit of the title deeds are concerned, it is well settled that for enforcing a charge or lien created over the property under a mortgage, first of all, there must be a valid mortgage entered into between the parties. In the case on hand, there was no valid mortgage executed between the Plaintiff and the Defendant at all and there were only exchange of letters, which would not fall under the category of mortgage, as there was no consideration received by the mortgagee, the Plaintiff herein. Hence, the relationship of the mortgagor and the mortgagee between the Plaintiff and the Defendant is not subsisting at all. Further, since the Defendant is only the lessor of the suit property, the question of alienation and creating encumbrance over the suit property will also not arise. Even if there is any encumbrance by the Defendant, it is not for the Plaintiff to question the same and it is for

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the owner of the suit property. Consequently, permanent injunction restraining Defendant as prayed for under the relief (b) cannot be granted. Like wise, that part of the relief (a) relating to sale of the property in question and appropriation of the sale proceeds towards the amount due also cannot be granted.

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In the result, considering the oral and documentary evidence, viz. Ex.P1 to Ex.P11 adduced by

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PW.1, this Court is of the view that the plaintiff has proved the suit claim only in respect of the part of the relief (a) relating to recovery of money. Accordingly, in so far as the relief (b), seeking permanent injunction, is concerned, this civil suit is dismissed. With respect to the part of the relief (a) relating to sale of suit property and appropriation of the sale proceeds also, this civil suit is dismissed. In so far as the part of the relief (a), seeking recovery of money alone, is concerned, this civil suit is decreed with costs. Time for payment is three months. sd/.C.V.K.J 10.11.2016 //Certified to be a true copy// Dated this the day of 2017 R.s/21.04.2017 COURT OFFICER

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From 25.09.2008 the Registry is issuing certified copies of the Order/Judgment Decree in this format.

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F.Ashok Kumar v. S.Ayub Khan

Case brief

What is this about?

What did the court decide?

F.Ashok Kumar v. S.Ayub Khan

Case brief

What is this about?

What did the court decide?

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