Dismissed

Accord Finance and Properties v. P. Varada Reddy

Madras HC14 Aug 2020A/3931/2015

Case brief

AI extract

What is this about?

Respondents appealed reject applicability of the limitation claim for their property recovery suit. The entitlement for the court below to dismiss the suit based on the advance of the limitation period without trial. For the claim to be barred by limitation, clear indication of the frustration of the plaintiffs' claim to the property. The judgment dismissed the applications under Order VII Rule 11

What did the court decide?

Applications under A.Nos. 3931 of 2015 and 3944 of 2013 to reject the plaint as barred by limitation were dismissed.

Accord Finance and Properties Vs P. Varada… — Contract and Commercial Disputes | Madras HC (2020)

¶1

¶2

IN THE HIGH COURT OF JUDICATURE AT MADRAS

¶3

(ORDINARY ORIGINAL CIVIL JURISDICTION)

¶4

FRIDAY, THE 14TH DAY OF AUGUST 2020

¶5

THE HON'BLE THIRU. JUSTICE M.GOVINDARAJ

¶6

A.Nos.3931 OF 2015 AND 3944 of 2013

¶7

¶8

C.S.No.716 of 2011 1.P.Varada Reddy (Deceased) (*)

¶9

2.Mrs..Prashanthi Reddy, No.20, Rutland Gate, 4^th Street, Nungambakkam, Chennai 600 034.

¶10

3.Shri Dodla Sesha Reddy, No.10, Wallace Garden, 1^st Street, Nungambakkam, Chennai 600 034. Rep. by his Power Agent P.Varada Reddy, the 1^st Plaintiff herein.

¶11

4.Shri Dodla Sunil Reddy, No.10, Wallace Garden, 1^st Street, Nungambakkam, Chennai 600 034. Rep. by his Power Agent Mrs.Prashanthi Reddy, the 2^nd Plaintiff herein.

¶12

5.Mrs.P.Smitha Reddy (*) D/o.P.Varadha Reddy (Deceased)

¶13

6.Smt.P.Shruthi Reddy (*) D/o.P.Varadha Reddy (Deceased)

¶14

https://hcservices.ecourts.gov.in/hcservices/

¶15

¶16

..Plaintiffs

¶17

Both are residing at No.20, Rutland Gate, IV Street, Nungambakkam, Chennai 600 006.

¶18

(*) Plaintiffs 5 & 6 brought on record as LRs of the Deceased 1^st Plaintiff as per order dated 13.03.2018 in A.Nos.2180 & 2181 of 2018)

¶19

-Versus-

¶20

1.M/s.Accord Finance & Properties (Pvt.) Ltd., Old No.51, New No.111, G.N.Chetty Road, T.Nagar, Chennai 600 017.

¶21

2.Mr.R.Ramakrishna Flat No.B-8, Atandra, No.15, Thirumalai Pillai Road, T.Nagar, Chennai 600 017.

¶22

3.M/s.Besser Concrete Systems Ltd., No.1/208 Kaliamman Koil Street, Kelambakkam, Kancheepuram District Pin code.603103.

¶23

4.Mr.Mohideen Sheikh Uduman, Old No.58/2, No.63, 2^nd Cross Street, CIT Nagar East, Chennai 600 035.

¶24

5.Mr.Sheikh Mohammed, Old No.58/2, No.63, 2^nd Cross Street, CIT Nagar east, Chennai 600 035.

¶25

6.ASuganthi W/o.R.S.Angamuthu, Sayani Complex, F-12, 1^st Floor, No.96, Konnur High Road, Ayanavaram, Chennai 600 023.

¶26

https://hcservices.ecourts.gov.in/hcservices/

¶27

¶28

7.M/s.ICICI Bank Ltd., Rep. by its Manager / Authorised Signatory, having office at ICICI Towers, East Wing, 9^th Floor, Santhome High Road, Chennai 600 028. ..Defendants

¶29

A.No.3931 of 2015:

¶30

1.M/s.Accord Finance & Properties (Pvt.) Ltd., Old No.51, New No.111, G.N.Chetty Road, T.Nagar, Chennai 600 017.

¶31

2.Mr.R.Ramakrishna Flat No.B-8, Atandra, No.15, Thirumalai Pillai Road, T.Nagar, Chennai 600 017. ..Applicants/Defendants 1 & 2

¶32

-Versus-

¶33

1.P.Varada Reddy S/o.late P.Raghava Reddy, No.20, Rutland Gate, 4^th Street, Nungambakkam, Chennai 600 034.

¶34

2.Mrs..Prashanthi Reddy, No.20, Rutland Gate, 4^th Street, Nungambakkam, Chennai 600 034.

¶35

3.Shri Dodla Sesha Reddy, No.10, Wallace Garden, 1^st Street, Nungambakkam, Chennai 600 034. Rep. by his Power Agent P.Varada Reddy, the 1^st Plaintiff.

¶36

4.Shri Dodla Sunil Reddy, No.10, Wallace Garden, 1^st Street, Nungambakkam, Chennai 600 034.

¶37

https://hcservices.ecourts.gov.in/hcservices/ Rep. by his Power Agent Mrs.Prashanthi Reddy, the 2^nd Plaintiff.

¶38

..Respondents 1 to 4 /Plaintiffs 1 to 4

¶39

¶40

5.M/s.Besser Concrete Systems ltd., No.1/208 Kaliamman Koil Street, Kelambakkam, Kancheepuram District Pin Code.603 103.

¶41

6.Mr.Mohideen Sheikh Uduman, Old No.58/2, No.63, 2^nd Cross Street, CIT Nagar East, Chennai 600 035.

¶42

7.Mr.Sheikh Mohammed, Old No.58/2, No.63, 2^nd Cross Street, CIT Nagar east, Chennai 600 035. 8.A.Suganthi W/o.R.S.Angamuthu, Sayani Complex, F-12, 1^st Floor, No.96, Konnur High Road, Ayanavaram, Chennai 600 023.

¶43

9.M/s.ICICI Bank Ltd., Rep. by its Manager / Authorised Signatory, having office at ICICI Towers, East Wing, 9^th Floor, Santhome High Road, Chennai 600 028. ..Respondents 5 to 9 / Defendants 3 to 7

¶44

Application praying that this Hon'ble Court be pleased to reject the plaint in suit C.S.No.716 of 2011.

¶45

A.No.3944 of 2013:

¶46

Besser Concrete Systems Ltd., No.1/208 Kaliamman Koil Street, Kelambakkam, Kancheepuram District 603 103. ..Applicant/3^rd Defendant

¶47

https://hcservices.ecourts.gov.in/hcservices/

¶48

-Versus-

¶49

¶50

1.P.Varada Reddy Son of late P.Raghava Reddy, No.20, Rutland Gate, 4^th Street, Nungambakkam, Chennai 600 034.

¶51

2.Mrs..Prashanthi Reddy, No.20, Rutland Gate, 4^th Street, Nungambakkam, Chennai 600 034.

¶52

3.Shri Dodla Sesha Reddy, No.10, Wallace Garden, 1^st Street, Nungambakkam, Chennai 600 034. Rep. by his Power Agent P.Varada Reddy, 4.Shri Dodla Sunil Reddy, No.10, Wallace Garden, 1^st street, Nungambakkam, Chennai 600 034. Rep. by his Power Agent Mrs.Prashanthi Reddy, ..Plaintiffs/Respondents

¶53

5.Accord Finance & Properties (Pvt.) Ltd., Old No.51, New No.111, G.N.Chetty Road, T.Nagar, Chennai 600 017.

¶54

6.Mr.R.Ramakrishna Flat No.B-8, Atandra, No.15, Thirumalai Pillai Road, T.Nagar, Chennai 600 017.

¶55

7.Mr.Mohideen Sheikh Uduman, Old No.58/2, No.63, 2^nd Cross Street, CIT Nagar East, Chennai 600 035.

¶56

8.Mr.Sheikh Mohammed, Old No.58/2, No.63, 2^nd Cross Street, https://hcservices.ecourts.gov.in/hcservices/ CIT Nagar east, Chennai 600 035.

¶57

¶58

9.ASuganthi W/o.R.S.Angamuthu, Sayani Complex, F-12, 1^st Floor, No.96, Konnur High Road, Ayanavaram, Chennai 600 023.

¶59

10.M/s.ICICI Bank Ltd.,

¶60

Rep. by its Manager / Authorised Signatory, having office at ICICI Towers, East Wing, 9^th Floor, Santhome High Road, Chennai 600 028.

¶61

..Respondents / Defendants

¶62

Application praying that this Hon'ble Court be pleased to delete the Applicant Company from the array of Defendants and reject the plaint in so far as the Applicant/Defendant Company is concerned.

¶63

These Applications coming on this day before this Court for hearing, the Court made the following order:

¶64

This application has been preferred by the first and second defendants

¶65

in the suit for rejection of Plaint Under Order VII Rule 11(d) of C.P.C. on the ground that it is barred by Law of Limitation.

¶66

According to the applicants the suit is filed for recovery of a sum of

¶67

Rs.3,95,97,448/ with future interest @24% per annum on Rs.1,83,32,328/from the date of plaint till the date of realization and also for damages for

¶68

Rs.15,00,000/- against the defendants 1 &2 . The cause of action for https://hcservices.ecourts.gov.in/hcservices/ institution of the suit as stated in the plaint arose on the date of sale of 1/7th

¶69

https://hcservices.ecourts.gov.in/hcservices/

¶70

¶71

undivided share out of 6.98 Acres, took place on 16.08.1999. Due to the fraud committed by the defendants 1 & 2, the plaintiffs had to deposit a sum of Rs. 1,83,32,328/- to avert the disaster sale by ICICI Bank in D.R.C.No.39 of 2006. The plaintiffs paid the money 8.11.2006, 20.10.2006 and 5.12.2006. Since the suit being of money claim, it ought to have been filed within three years i.e., on or before 07.11.2009 or 19.10.2009 or 04.12.2009. The proceedings before the DRT, DRAT, High Court and Hon’ble Supreme Court dealt with the issue as to whom the original documents of the property were to be returned and not with regard to the money claim of the Plaintiffs in the above suit. Those proceedings did not in any manner bar the recovery proceedings. The reference to those proceedings for saving limitation is untenable and unsustainable. Merely because the proceedings have been initiated for return of documents, it would not enlarge the period of limitation. As per Art.27, 19,20,21,22,23,24 and 25 three years is the period of limitation. Whereas the suit was filed on

¶72

08.11.2011. Therefore, the claim, on the face of it, is barred by limitation and it shall be thrown out on the threshold itself. The suit is an abuse of

¶73

process of court and law and has been filed with the sole objective of harassing the applicants. A claim which is frivolous, vexatious and speculative and barred by limitation does not entitle equitable consideration.

¶74

https://hcservices.ecourts.gov.in/hcservices/

¶75

The learned counsel for the applicants would vehemently contend

¶76

¶77

that the suit being a simple suit for recovery of money valued under Sec 22 of TNCF&SV Act, it would attract Art.27, 19,20,21,22,23,24 and 25 of Limitation Act, which is three years. The claim of the plaintiffs that the suit is based on indemnity and Charge cannot be accepted, since there is no assignment of debt by ICICI Bank in their favour. If it is a mortgage suit, it ought to have been laid under Order XXXIV Rule 2 CPC. It is not also laid under Order XXXVII Rule 3 of O.S.Rules and Form 84 Order XXXVII Rules 2 & 3read with Order XXXIV Rules 2& 3 for foreclosure and sale of personal decree for the deficit. Admittedly the suit has not been laid as mortgage suit , the claim of the plaintiffs has to be negatived, Further if it is a suit for charge over the property, it would arise only when there is an agreement for sale and consideration not returned or refunded. But the claim of the plaintiffs is for damages based on sale deed dated 16.08.1999, Art.62

¶78

of the Limitation Act will not apply as it has no foundation. He would rely

¶79

on the following judgments in support of his arguments.

¶80

K.Shanmugam and Another vs C.Samiappan and Others, (2013) 7 MLJ 670

¶81

T.Arivandandam vs. T.V. Satyapal and Another, 1977 4 SCC 467

¶82

I.T.C. Limited vs. Debts Recovery Appellate Tribunal and Others, 1998 2

¶83

SCC 70

¶84

https://hcservices.ecourts.gov.in/hcservices/

¶85

¶86

Raptakos Brett and Company Pvt Ltd vs. Modi Business Centre (Pvt) Ltd, 2006 2 CTC 799

¶87

M/. Subhash Pradhan & Co vs. Vasant Balu Mhatre of Raigad & Others, CDJ 2009 BHC 1763

¶88

Chandrakant Kantilal Jhaveri & another vs. Madhruiben Gautambhai &

¶89

Another, CDJ 2010 GHC 057

¶90

Punjab National Bank, rep. By its Manager vs. J.Samsath Beevi and Others, 2010 3 CTC 310

¶91

M.V.Jayavelu vs. E.Umapathy, 2010 5 L.W. 748

¶92

Lakshmi & Others vs. Prasanna Mani and Others, 2011 (2) MWN (Civil)

¶93

363

¶94

N.Ravindran vs. V. Ramachandran, 2011 (3) CTC 153

¶95

RamRameshwari Devi and Others vs. Nirmala Devi and Others, (2011) 8 SCC 249.

¶96

The learned counsel for the respondent/ Plaintiff would contend

¶97

that the defendants 1 & 2 have sold the suit properties suppressing the fact

¶98

that they were mortgaged to Bank of Madura now merged with ICICI Bank

¶99

and leased out to 3rd defendant. To their shock the properties were brought

¶100

to auction sale in DRT proceedings. In order to avert the sale they had to sell

¶101

https://hcservices.ecourts.gov.in/hcservices/

¶102

their personal properties and borrowed money on high interest rate and

¶103

¶104

discharged the mortgage debt. Since they have discharged the debt, they stepped in to the shoes of mortgagee and they are entitled to recover the amount from defendants 1 & 2. However, their claim to get the original title

¶105

deeds were negatived by the DRT and affirmed by the Hon’ble Supreme Court, they have to file a suit for recovery of money. Since fraud is played

¶106

upon and since they were taking continuous efforts, the suit is not barred by limitation. The question of Limitation being a mixed question of fact and law, the plaint is not liable to be rejected. In support of his contention, the

¶107

learned counsel for respondent would rely on the following judgments.

¶108

Maria Margarida Sequeria Fernandes and Ors V. Erasmo Jack de Sequeria (dead), 2012 AIR SCW 2162

¶109

K.Chandralekha vs. S.Ravikumar & Ors, 2016-II-MCC-265

¶110

Sopan Sukhdeo Sable and others vs. Assistant Charity Commissioner and others, AIR 2004 SC 1801

¶111

Himachal Pradesh Financial Corporation vs. Pawna and Others, (2015) 5

¶112

SCC 617

¶113

Chhotanben and Another vs. Kiritbhai Jalkrushnabhai Thakkar and Ors, 2018 (4) CTC 206

¶114

Saleem Bhai and Others vs. State of Maharashtra and Others, 2003 1 SCC

¶115

557

¶116

https://hcservices.ecourts.gov.in/hcservices/

¶117

¶118

Ramesh B. Desai & Others vs. Bipin Vadilal Mehta & Ors, AIR 2006 SC

¶119

3672

¶120

Kamala & Others vs. K.T. Eshwara Sa & Ors, AIR 2008 SC 3174

¶121

Girija Shankar vs. State of U.P, AIR 2007 SC 1808

¶122

Thirugnanasambandam vs. Venkatrama Pillai, order dated 07.11.2016 in

¶123

S.A.No.280 of 2011

¶124

K.Savithiri & another vs. L.Ramaamy and others, order dated

¶125

03.05.2017 in A.S.No.538 of 2012

¶126

Raptakos Brett and Company Ltd vs. Ganesh Property, 1998 7 SCC 184

¶127

Saleem Bhai and Others vs. State of Maharashtra and others, 2003 1

¶128

SCC 557

¶129

14.Deepak Bhandari vs. Himachal Pradesh State Industrial Development Corporation Limited, 2015 5 SCC 518.

¶130

Heard the submissions.

¶131

The Plaintiffs originally purchased 4/7th undivided shares of land

¶132

measuring an extent of 6.98 acres of land out of total extent of 12.14 acres

¶133

along with defendants 4-6, who purchased the remaining 3/7 undivided

¶134

shares in the year 1999. The 7^th defendant Bank initiated recovery

¶135

proceedings and brought the property for auction in DRC proceedings. The

¶136

total debt due and payable was RS.1,83,32,228/- The Plaintiffs paid the

¶137

https://hcservices.ecourts.gov.in/hcservices/

¶138

amount and averted the distress sale and protected the property. Before DRT

¶139

¶140

they claimed that on discharging the debt due by the Mortgagor, they stepped into the shoes of the Mortgagee and therefore they are entitled to get back the original title deeds. The defendants resisted the claim on the ground that the extent of the property mortgaged is huge and the plaintiffs have purchased a smaller extent only. Further the value of the property was more than 50 crores and the upset price fixed by the bank itself was Rs.19,00,00,000/- ( Nineteen crores only) . By paying 1.83 crores, without any request from the defendants on their own and without getting any assignment of mortgage, the plaintiffs are not entitled to the claim. It was also contended that the action of the plaintiffs was speculative and not bonafide and hence the documents shall be returned to the person deposited the title deeds and none else. The Debt Recovery Tribunal had held that the Plaintiffs has no right to claim the title deeds and directed release of deeds

¶141

in favour of defendants 1 & 2. On appeal DRAT had directed the Bank to withhold the documents till a decision taken by the Civil Court in the pending suit instituted by the Plaintiffs. On Challenge the High Court found that there being no suit pending, set-aside the order of the appellate tribunal and directed release of documents n favour of defendants 1 & 2. The Hon’ble Supreme Court dismissed the SLP preferred by the Plaintiffs. Having lost the battle the Plaintiffs filed the above suit for recovery of the https://hcservices.ecourts.gov.in/hcservices/ money deposited for discharge of mortgage debt along with interest and

¶142

¶143

damages.

¶144

In the above said background, it has to be seen as to whether the plaint is liable to be rejected under Order VII Rule 11 (d) CPC as one barred by law of limitation.

¶145

It is no doubt that for rejection of plaint the averments made in the plaint are germane. It is also true that a suit for recovery of money shall be filed within three years. Admittedly the money was deposited by the Plaintiffs on 5.12.2006 and was realized by the bank on 7.12.2006. The sale was cancelled and the property of the plaintiffs and defendants 4-6 was protected. A simple suit for recovery of money should have been filed within three years i.e., before 2009. But it was filed only in the year 2011. The judgments relied on by the learned counsel for petitioner for the legal principles with regard to the rejection of the plaint and to strike out the plaint for abuse of process of law are absolutely correct and rule the field. But those judgments apply to the cases where it is apparent on the face of the pleadings that it is barred by law of limitation. But the case on hand will not fall under that category.

¶146

Though the money suit shall be filed within three years, the pendency of the proceedings, initiated for return of documents, whether

¶147

would enlarge the period of limitation or not is a question of fact in view of https://hcservices.ecourts.gov.in/hcservices/ Sec 92 of the Transfer of Property Act, 1883. Even in the absence of any

¶148

¶149

privity of contract, a party having interest over the immovable property, who discharges the debt, in view of common equity steps into the shoes of the mortgagee. Thereby he is entitled to the rights of a mortgagee and gets a charge over the immovable property. The plaint averments raise a pleading that the efforts taken continuously in this direction before the courts would expand the limitation period. Whether the cause of action arose only after the date of judgment of Hon’ble Supreme Court or not? is again a triable issue on question of law and fact, which can be decided only after trial. The plaintiffs having paid the sale consideration for the properties and got it registered in their favour do have a right to protect their title, for which they have deposited a huge amount for discharge of the debt for the whole extent of the property. After having protected the entire property, they have issued a legal notice for return of that money. The impact of the order passed by the

¶150

Recovery Tribunals and High Court, as contended by the applicants/Defendants 1 & 2 is only with regard to the return of the originals of title deeds deposited with the bank. Whether it creates any statutory charge over the property in view of Sec 92 of the Transfer of Property Act, 1883 were not the issues before it. There is a clear pleading in the plaint that the plaintiff stepped into the shows of the mortgagee. Though

¶151

return of title deeds was a question decided in an interim application, none https://hcservices.ecourts.gov.in/hcservices/ of the courts have decided the issue of creation of a charge over the

¶152

¶153

property. The Debt Recovery Tribunal had decided the issue only with respect to enforceability of debt and it had no occasion, even assuming it has jurisdiction, to deal with the question of charge over the property. Since that issue is still to be decided and findings of the court on that issue may have an impact on period of limitation, it has to be tried in the suit. Such being the legal position, the plaint cannot be rejected at the threshold. The contention that the suit it is a simple suit for recovery of money valued under Sec 22 of TNCF&SV Act filed beyond a period of three years is barred by limitation cannot be accepted at this stage as the cause of action is founded on disputable facts. The issue of limitation being a question of fact and law, in the present factual circumstances of the present suit, the plaint cannot be rejected at the threshold as one barred by Limitation Act, 1963.

¶154

In view of the above discussions, the Application Nos.3931 of 2015

¶155

and 3944 of 2013 are dismissed.

¶156

Sd./-M.G.R.J 14.08.2020

¶157

Dated at Madras this the day of 2020.

¶158

JJ 26/08/2020

¶159

COURT OFFICER(O.S.)

¶160

From 25th day of September 2008 the Registry is issuing certified copies of https://hcservices.ecourts.gov.in/hcservices/ the Orders/Judgments/Decrees in this format.

Accord Finance and Properties v. P. Varada Reddy

Case brief

What is this about?

What did the court decide?

Accord Finance and Properties v. P. Varada Reddy

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

S.S.Thirumoorthy Vs S.Kumar

V.Pandian Vs the Tamilnadu Ex Servicemen and Pensioners Association

M/S.Vaishnavi Engineers Vs M.Arumugham

K.Esakki Vs G.Kumar

K.Kumar Vs Uma Rani

Sri Ramdev Construction Pvtltd Vs Mr.P.Vagthavarmal Pandya