Judgment Defendants 2 to 5 are the appellants in this Second Appeal which arises out of a suit by the plaintiff, who is the contesting respondent here, to enforce a mortgage executed in his favour by one Kumaraswami Mudaliar, deceased husband of defendants 1 and 2. Defendants 3 to 5 are the subsequent purchasers of the hypotheca. The main defence of the defendants, that is, of defendants 2 to 5 who contested the suit was, that the suit mortgage was a sham and nominal transaction, brought about in order to put the property outside the reach of Kumaraswami Mudaliar’s creditors, who it was alleged was in a bad financial condition at the date of the mortgage. The learned Subordinate Judge went into the whole matter and found that the defence set up by defendants 2 to 5 was not sustainable and held that the suit mortgage was true and binding. As against this judgment and decree on the mortgage, defendants 2 to 5 filed an appeal in the District Court of Chingleput. Before the learned District Judge several documents were filed by consent of parties and without formal proof. They are Exhibits A-2 to A-10 filed on behalf of the plaintiff and Exhibits B-5 to B-16 filed on behalf of the defendants and a new witness Kothandapani Pillai was examined and he proved the valid execution of the mortgage in favour of the plaintiff. Some of the documents filed by the defendants related to proceedings before the Debt Conciliation Board wherein Kumaraswami Mudaliar was the debtor. After these documents were filed an application was made before the learned District Judge to amend the pleadings and raise a defence that the debt due on the mortgagee to the plaintiff was discharged by reason of an order in the Debt Conciliation proceedings. The learned District Judge did not accede to this prayer and the main argument in this Second Appeal by Mr. Vaidialingam, learned counsel for the appellants, is that the learned District Judge should have afforded the defendants an opportunity to plead the case which arose on the documents which were received by the Court by consent and that they should have been allowed to show that the mortgage, even if true and binding originally, must be taken to have been discharged by reason of the proceedings under the Debt Conciliation Act.
I am not disposed to agree with this contention and this argument of the learned counsel for the appellants. In further support of his submissions learned counsel has filed certain other proceedings before the Conciliation Board and has applied in C.M.P. Nos. 4831 of 1950 and 5820 of 1953 to admit those documents as evidence in the Second Appeal. No grounds are shown for their admission under Order 41, rule 27, Civil Procedure Code and these applications for the admission of fresh evidence are without substance and are rejected. If these documents are rejected, the only question that arises for consideration is whether on the documents admitted by the learned District Judge there was any foundation for the argument that the debt due to the plaintiff was discharged by reason of the proceedings under the Debt Conciliation Act. I am clearly of the opinion that the submission of the learned counsel for the appellants cannot be upheld. The crucial point to be noted is that there is no proof at all in the documents filed before Court that a notice under section 10(1) of the Debt Conciliation Act was served upon the plaintiff who was the 11th creditor in these proceedings. In the absence of proof that he was so served, the penal consequences provided for by the other provisions of the Act do not come into play. Learned counsel for the appellants stressed before me the fact that in the proceedings before the Debt Conciliation Board as against the entry dated 30th September, 1940, there is an endorsement stating that section 10(1) notices were sent through the Tahsildar of Kancheepuram, etc. From this I am unable to infer that the present plaintiff was served in these proceedings. For, where penal consequences attach to the adjudication before the Tribunal or to the failure to appear before the Tribunal at the stage of the adjudication, there must be clear and indubitable proof that the party was served before these consequences can be visited upon him. Learned counsel also stressed the fact that as against the date 21st January, 1941, there is an endorsement that only creditor No. 8 was present. From this I am unable to draw the inference that creditor No. 11 was served with notice under section 10(1) and that he absented himself from the Tribunal on 21st January, 1941.
Learned counsel also stressed the fact that as against the date 21st January, 1941, there is an endorsement that only creditor No. 8 was present. From this I am unable to draw the inference that creditor No. 11 was served with notice under section 10(1) and that he absented himself from the Tribunal on 21st January, 1941. In these circumstances I do not see how the appellants are entitled to raise this new plea which was not in their original statement to defeat the claim of the plaintiff. No other point has been arg ued and the Second Appeal fails and is dismissed with the costs of the contesting plaintiff-1st respondent. No leave. K.C. ----- Appeal dismissed.