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2000 DIGILAW 36 (MAD)

M. v. Suresh Reddy and Another VS Indian Bank

2000-01-11

A.RAMAMURTHI

body2000
Judgment :- A. RAMAMURTHI, J. Application filed by the defendants under Order 14, rule 8 of the Original Side Rules read with Order 24, rule 1 of the Code of Civil Procedure, 1908, to permit the defendants to deposit a sum of Rs. 13, 64, 500 and direct the plaintiff-bank to deliver the documents of title to them and pass appropriate orders by way of injunction as against the plaintiff from initiating parallel proceedings in the Debt Recovery Tribunal Chennai in respect of the alleged loan amount. The case in brief is as follows : The applicants are defendants in C.S. No. 361 of 1998. They commenced construction of a commercial building for the purpose of letting it out so that they would derive some decent rental income and in that process, the plaintiff-bank was interested in moving into the building to be constructed. The applicants also sent the money by cheque for the purpose of discharging the entire loan together with interest. Having received the cheque, the bank kept quiet till the month of February/March, 1998, and returned the same staling that they are not interested in receiving the money. They had deposited with the bank the property documents pertaining the said premises by way of collateral security and wanted return of the same. However, the plaintiff-bank chose to return the said cheque and subsequently filed the present suit together with interlocutory application. They had lost considerable amount of money in the entire process and they have been put to severe financial constraint. They received a communication from the advocates of the plaintiff-bank, demanding a sum of Rs. 20, 47, 908. They had tendered the amount on December 10, 1997, to an extent of Rs. 13, 50, 000 but it was not accepted. They have calculated the interest to the bank up to December 31, 1997. There is no other liability for these applicants. It is not open to the plaintiff-bank once again to issue legal notice and ask for an amount for the identical period. Having failed to get any interlocutory relief before this court, it is possible that the plaintiff may be tempted to seek certain other interlocutory reliefs before the Debt Recovery Tribunal, and to prevent multiplicity of proceedings, interim injunction restraining the plaintiff from taking recourse as necessary to settle the matter in respect of the loan availed. Having failed to get any interlocutory relief before this court, it is possible that the plaintiff may be tempted to seek certain other interlocutory reliefs before the Debt Recovery Tribunal, and to prevent multiplicity of proceedings, interim injunction restraining the plaintiff from taking recourse as necessary to settle the matter in respect of the loan availed. The repayment of the loan is without prejudice to the rights of these defendants to contest the suit and claim appropriate compensation and damages from the bank. Hence, the petition.The respondent-bank filed a counter that if the applicants seek to redeem the mortgage, they should file an independent suit for redemption of the mortgage and not by any other petition. They were sanctioned loan with concession rate of interest as it was part of the contract that the petitioners will provide the suit premises to the respondent-bank to house its Kotturpuram Branch. After availing of the loan in full, the petitioners at the last minute committed breach of the assurance and attempted to induct a third party as a tenant. The respondent-bank was constrained to move this court and obtained the order of status quo and also appointment of an Advocate Commissioner to submit the report. The petitioners and the third party violated the order of this court and contempt petition was also filed for wilful disobedience. They are liable to repay the loan together with interest at the commercial rate With quarterly rests and the same works out to Rs. 21, 19, 638 as on September 30, 1999, with further interest. The petitioners availed of the loan and created mortgage over the immovable property. Having taken illegal possession of the premises in question, they cannot plead that they are entitled to repay the loan with concessional rate of interest. The respondent-bank has sought mandatory in junction and alternatively direct the petitioners to pay interest at the commercial rate. If the petitioners do not deposit the entire claim at the commercial rate, they have no other go except to seek legal redress. The bank is prepared to accept the same without prejudice to its right to proceed with the relief sought for. In any event, the returning of the cheque by the bank cannot be put against it. The bank is even now prepared to take on lease the suit property on the admitted terms and conditions. The petitioners are liable to pay Rs. In any event, the returning of the cheque by the bank cannot be put against it. The bank is even now prepared to take on lease the suit property on the admitted terms and conditions. The petitioners are liable to pay Rs. 21, 19, 638 as on September 30, 1999, with further interest. The reliefs claimed in this application are outside the realm of the relief claimed in the suit. The petitioners cannot seek the relief of injunction to restrain the bank from proceeding with the right to recover their legitimate dues in accordance with law.Heard learned counsel of both the sides. The points that arise for consideration are : (1) Whether the applicants/defendants can be permitted to deposit a sum of Rs. 13, 64, 500 and direct the plaintiff-bank to deliver the documents of title to them ? (2) Whether the plaintiff-bank can be restrained from initiating parallal proceedings in the Debt Recovery Tribunal in respect of the alleged loan amount ? and (3) To what relief ? Points : The defendants filed this application to permit them to deposit a sum of Rs. 13, 64, 500 and direct the plaintiff-bank to deliver the documents of title to them and also pass appropriate orders by way of injunction, restraining them from initiating parallel proceedings in the Debt Recovery Tribunal, Chennai, in respect of the loan amount. The plaintiff-bank filed a suit against the defendants for mandatory injunction, directing them to execute a registered lease deed in favour of the plaintiff for a period of ten years in respect of the schedule mentioned property or alternatively directing them to pay a sum of Rs. 57 lakhs odd by way of damages towards excess rent and also defendants to pay Rs. 2 lakhs odd towards the difference in concessional interest and the regular interest and also for a permanent injunction restraining the defendants and their men from letting out the suit premises to any other person and costs. The defendants commenced construction of a commercial building for the purpose of letting out. When the plaintiff-bank was interested in moving into the building, the bank granted loan and there was also an arrangement between the parties and on and after the construction, the property would be leased out to the bank on a particular rate of rent. The defendants commenced construction of a commercial building for the purpose of letting out. When the plaintiff-bank was interested in moving into the building, the bank granted loan and there was also an arrangement between the parties and on and after the construction, the property would be leased out to the bank on a particular rate of rent. It appears that after the completion of the building, the property was not let out to the bank and instead, the defendants sent a cheque for a sum of Rs. 13, 50, 000 in December, 1997, and called upon the bank people to return the documents given by way of collateral security after receiving the money. The plaintiff-bank returned the cheque and thereafter filed the present suit, claiming other interim reliefs also. The main contention of learned counsel for the petitioners is that after receiving the sum of Rs. 13, 50, 000 the bank people ought to have returned the title deeds and they should also be restrained from initiating parallel proceedings before the Debts Recovery Tribunal for the loan amount.Per contra, learned counsel for the plaintiff contended that they should file an independent suit for redemption of the mortgage and the present application itself is not maintainable. The plaintiff has filed a suit for mandatory injunction and also alternatively claimed damages as the defendants have failed to put the bank in possession of the property, as agreed upon. Learned counsel for the plaintiff further contended that on the assurance given by the defendants only, the loan was sanctioned at a concessional rate to the defendants. If the defendants want to repay the principal amount, then they should pay interest only at a commercial rate and as such, the amount sent by the defendants is not proper and correct and hence, it was returned. The defendants have committed breach of the assurance and attempted to induct a third party as a tenant and thereafter, the bank was constrained to move the court and obtained an order of status quo. According to the plaintiff-bank, the loan amount with interest at commercial rate works out to Rs. 21, 19, 638 as on September 30, 1999, with further interest. No doubt, the defendants have sent a cheque for Rs. 13, 50, 000 and the bank could have received the same without prejudice to their contentions. According to the plaintiff-bank, the loan amount with interest at commercial rate works out to Rs. 21, 19, 638 as on September 30, 1999, with further interest. No doubt, the defendants have sent a cheque for Rs. 13, 50, 000 and the bank could have received the same without prejudice to their contentions. The other dispute could have been decided at a later point of time. Now, learned counsel for the defendants want a direction that the plaintiff-bank should return the documents of title, which are deposited earlier on receipt of the said amount. Only when proper amount is tendered, then alone the plaintiff-bank can be directed to return the documents of title. It cannot be said that the amount now offered by the defendants is a proper and correct amount. There is dispute between the parties with reference to the interest rate. According to the plaintiff, the loan was given with a concessional rate of interest as there was an assurance on the part of the defendants to let out the property to the bank itself after completion of the construction. Now, the defendants want to repay the amount and, as such, they cannot avail of concessional rate of interest when the building was not let out to the bank. Learned counsel for the defendants relied upon State Bank of Patiala v. Harbans Singh , wherein it was observed that the landlord, who had taken loan for constructing the premises and leasing back to the bank for commercial purpose, was not liable to pay interest at more than 15 per cent. and he need not pay interest at quarterly rest. This decision can be made applicable to the case on hand.From the available records, it is clear that the concessional rate of interest was given to the defendants since there was an assurance between parties that after completing the construction, the property would be let out to the bank. Now, the defendants are not prepared to let out the premises to the bank after completion and under the circumstance, it is just and necessary that the defendants have to be directed to pay the principal amount with interest at 15 per cent. per annum. The amount now offered by the defendants cannot be accepted as a proper and correct one. per annum. The amount now offered by the defendants cannot be accepted as a proper and correct one. So far as the claim of damages made by the plaintiff is concerned, it can be decided separately and for the purpose of getting damages, it is absolutely unnecessary for the plaintiff-bank to retain the title deeds. Having regard to the facts and circumstances of the case, in case, the defendants deposit the principal amount with interest at 15 per cent. per annum, then the plaintiff-bank can be restrained from proceeding parallel proceedings before the Debt Recovery Tribunal. For the reasons stated above, the defendants are directed to deposit the principal amount with interest at 15 per cent. per annum within a period of six weeks from this date and on such deposit, the plaintiff-bank is directed to return the title deeds to the defendants. On such deposit, the plaintiff-bank is also restrained to take parallel proceedings before the Debt Recovery Tribunal. The claim of damages and other reliefs claimed by the plaintiff-bank can be considered separately. Application is ordered accordingly.