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2005 DIGILAW 1309 (MAD)

A. S. Prakasam & Another v. Padmavathi & Others

2005-08-09

R.BANUMATHI

body2005
Judgment :- (PRAYER: Revisions filed against the orders dated 23.07.1998, made in I.A.No.14236/1996 in O.S.No.5126/1996; I.A.No.13920 /1996 in O.S.No.4584/1996; I.A.No.13918/1996 in O.S.No.4579 /1996; I.A.No.13916/1996 in O.S.No.4575/1996; I.A.No.13917 /1996 in O.S.No.4578/1996; I.A.No.13889/1996 in O.S.No.4581 /1996; I.A.No.14234/1996 in O.S.No.5122/1996; I.A.No.12699 /1997 in O.S.No.4331/1996; I.A.No.13921/1996 in O.S.No.4580 /1996; I.A.No.14235/1996 in O.S.No.5125/1996; I.A.No.15104 /1997 in O.S.No.5762/1996; I.A.No.13919/1996 in O.S.No.4583 /1996; I.A.No.14237/1996 in O.S.No.5127/1996; on the file of the VIII Assistant Judge, City Civil Court, Madras.) These revisions are preferred against the orders made in I.A.No.14236/1996 in O.S.No.5126/1996; I.A.No.13920 /1996 in O.S.No.4584/1996; I.A.No.13918/1996 in O.S.No.4579 /1996; I.A.No.13916/1996 in O.S.No.4575/1996; I.A.No.13917 /1996 in O.S.No.4578/1996; I.A.No.13889/1996 in O.S.No.4581 /1996; I.A.No.14234/1996 in O.S.No.5122/1996; I.A.No.12699 /1997 in O.S.No.4331/1996; I.A.No.13921/1996 in O.S.No.4580 /1996; I.A.No.14235/1996 in O.S.No.5125/1996; I.A.No.15104 /1997 in O.S.No.5762/1996; I.A.No.13919/1996 in O.S.No.4583 /1996; I.A.No.14237/1996 in O.S.No.5127/1996; on the file of the VIII Assistant Judge, City Civil Court, Madras, dismissing the petitions filed under Or.37 R.3 CPC declining permission to defend the suits. Defendants are the Revision Petitioners. 2.Suits have been filed for recovery of the amount on the basis of the promissory notes. Case of the Plaintiffs (different Plaintiffs in all the cases; but the Defendants are the same in all the suits) is that for the value received by Account Payee cheque, the Defendants have executed the suit Promissory Note in favour of Plaintiffs, agreeing to repay the same with interest. Inspite of repeated demand and notice, the Defendants have not paid the amount. Hence the suit for recovery of amount. 3.Defendants have filed applications under Or.37 R.3 CPC seeking permission of the Court to grant leave to defend the suits. According to the Defendants, they did not have any money transaction with the Plaintiffs. In respect of their film production, they had money transaction with M/s.Sirish Kumar and Bros. and that they have borrowed a sum of Rs.5,00,000/- from the said M/s.Sirish Kumar and Bros. They have deposited the original Title Deeds of the house property at Anna Nagar. The said M/s.Sirish Kumar and Bros. instead of paying the loan amount in their name, paid the amount of Rs.5,00,000/- by cheques, in the names of several persons whom the Defendants have never met at any point of time. It is alleged that the Defendants have also given several blank Promissory Notes to M/s.Sirish Kumar and Bros. It is also alleged that M/s.Sirish Kumar and Bros. instead of paying the loan amount in their name, paid the amount of Rs.5,00,000/- by cheques, in the names of several persons whom the Defendants have never met at any point of time. It is alleged that the Defendants have also given several blank Promissory Notes to M/s.Sirish Kumar and Bros. It is also alleged that M/s.Sirish Kumar and Bros. have taken steps to sell the house property by Public Auction under Section 69 of the Transfer of Property Act. The first Defendant has filed O.S.No.8390/1995 and obtained an order of Interim injunction from selling the property in Public Auction. Having failed in their attempt to sell their property in Public Auction, the said M/s.Sirish Kumar and Bros. have filed the vexatious suits. Substantial amounts had been paid to M/s.Sirish Kumar and Bros. But they have failed to send the Statement of Accounts stating that they have a triable issue to put-forth. The Defendants have filed these applications to grant leave to them to file the Written Statement and contest the suit. 4.Resisting the application, the Plaintiffs have filed their counter statement contending that the borrowed amount was paid to the Defendants by way of Account Payee Cheque and the Defendants have also paid interest by way of Account Payee Cheques. Thus the Defendants having borrowed the amount from the Plaintiffs and paid interest have made false allegations that they have no privity of contract with the Plaintiffs. The Defendants' contention that suits have been filed because of misunderstanding between the Defendants and M/s.Sirish Kumar and Bros. is quite baseless. The Defendants have not raised any triable issue and hence the application cannot be maintained. 5.The learned Assistant Judge dismissed all the applications finding that the Defendants have not produced any document showing the transaction between them and M/s.Sirish Kumar and Bros. Finding that no documents have been produced by the Defendants showing that the suits have been instituted at the instance of M/s.Sirish Kumar and Bros., the learned Judge held that on the basis of interim order, leave cannot be granted to defend the suit. Non issuance of reply notice by the Defendants was also pointed out by the learned counsel. 6.Aggrieved over the dismissal of the applications, the Defendants have preferred these revision petitions. Non issuance of reply notice by the Defendants was also pointed out by the learned counsel. 6.Aggrieved over the dismissal of the applications, the Defendants have preferred these revision petitions. The learned counsel for the Revision Petitioners/Defendants have contended that when the Defendants have put-forth a substantial defence, the lower court erred in going into the merits of that contention and trying to find out the chance of success. Placing reliance upon 1978 (1) MLJ 36, [Raghveera Sons rep. By Partner Vs. Mrs.Padmavathi], it is contended that there is no necessity to produce evidence at the time of seeking leave to defend the suits. 7.The Plaintiffs have not entered appearance. Points urged by the Plaintiffs before the Court below had been taken into consideration for the disposal of these revision petitions. 8.The main point arising for consideration is "Whether the Defendants have made out a triable issue and whether the impugned order declining the leave to defend suffers from irregularity warranting interference ?" 9.The main defence of the Defendants is that in connection with the film production, they have borrowed a sum of Rs.5,00,000/- from the financier M/s.Sirish Kumar and Bros. It is the further contention that instead of they themselves issuing the amount of Rs.5,00,000/-, the said Financier had issued cheques in the names of several persons. It is also submitted that the signature of the Defendants had been taken in several blank Promissory Notes relating to the Public Auction, auctioning the property of the Defendants by M/s.Sirish Kumar and Bros., under Section 69 of the Transfer of Property Act. The Defendants have also filed the suit in O.S.No.8393/1995 and obtained an order of interim injunction restraining the financier from selling their property by Public Auction. Number of cases had been filed against the Defendants by various persons/Plaintiffs. At least thirteen cases are filed claiming a sum of Rs.5,06,920/- [Rs.2,25,000/- (Principal) + Rs.2,81,420/- (interest)]. 10.These revision petitions arise as under:- 11.Multitude of cases have been filed against the Defendants, the circumstances under which they could have borrowed or not ? is a substantial point to be determined. The contention of the Defendants that the signatures have been obtained in Blank Promissory Notes and the same have been used by M/s.Sirish Kumar and Bros. is a triable issue. is a substantial point to be determined. The contention of the Defendants that the signatures have been obtained in Blank Promissory Notes and the same have been used by M/s.Sirish Kumar and Bros. is a triable issue. Apart from the above cases, number of other suits have also been filed, which were the subject matter in a batch of revision petitions. The other batch of revision petitions cases are C.R.P.Nos.2230 to 2236, 2629, 2630, 3195 to 3198, 3208 to 3210/1998. The defence put-forth by the Defendants cannot be said to be frivolous or vexatious. Where the Defendants have raised triable issue, leave to defend the suit may be allowed. Normally, the Court where the suit is filed shall not decline the leave to defend unless on prima facie view, the Court is satisfied that the facts disclosed by the Defendants in the application for leave to defend do not indicate any substantial defence or where the defence raised by the Defendants is frivolous or vexatious. In view of the number of cases filed against the Defendants, this Court finds that prima facie, there is a triable issue. 12.While declining the leave to defend, the trial court has gone in detail, the merits of the defence. Pointing out the non issuance and non filing of any documents showing the transaction between M/s.Sirish Kumar and Bros. and the Defendants, the trial Court found that the Defendants have not produced any documents indicating that they have substantial defence to put-forth. At the stage while seeking leave to grant, the Defendant is not required to make out a case which warrants a sure success in the end. Where the Defendants have got a good defence to the claim of the Plaintiff, the Defendants are entitled for leave to defend the suit. The merits of the defence or the triable issue are to be determined only at the time of trial, when the parties adduce evidence. 13.The lower Court has also found that the Defendants could have produced materials from the Bank showing that they have not received the amount from the Plaintiff. Pointing out that the borrowed amount was paid through the Account Payee Cheque, the lower court found that prima facie, the Plaintiffs' suit for recovery of money on the basis of the Promissory Note was found to be proved. Pointing out that the borrowed amount was paid through the Account Payee Cheque, the lower court found that prima facie, the Plaintiffs' suit for recovery of money on the basis of the Promissory Note was found to be proved. The test of triable issue is to find out whether the Defendants would be able to resist the suit successfully, if later, he produces the evidence and proves the case. It is left to the discretion of the trial court to conclude whether, when the facts and materials placed before it, triable issues have arisen. A number of cases are filed against the Defendants. According to the Defendants, M/s.Sirish Kumar and Bros. – Financier have taken their signature in Blank Promissory Notes and that is how, number of suits have been filed against them for recovery of money on the basis of the Promissory Notes. The Defendants have raised triable issue. The lower court erred in going into the merits of the contention and declining the leave to defend on the ground that no documents have been produced. Leave to defend is to be granted even if the defence seems to be having remote connection, which of course is subject to scrutiny. 14.The Defendants have not only raised triable issue, but have also put-forth a bonafide defence. The learned counsel for the Revision Petitioner has also drawn the attention of the Court to the common order of this Court in C.R.P.Nos. 2230 to 2236, 2629, 2630, 3195 to 3198, 3208 to 3210/1998 wherein R.Balasubramanian, J. has allowed the revisions filed by the Revision Petitioners permitting them to defend the suit in the number of other suits. In these cases also, the Defendants have raised the same plea and are to be given an opportunity to defend the suits. 15.While allowing the earlier revision petitions, the learned Judge has directed the trial court to dispose of the suits before 30.04.1999. It is stated that those suits are still pending. Present suits are of the year 1996 pending for nearly a decade. The suits are for recovery of money on the basis of Promissory Notes which are pending for more than a decade. It is stated that those suits are still pending. Present suits are of the year 1996 pending for nearly a decade. The suits are for recovery of money on the basis of Promissory Notes which are pending for more than a decade. Considering the facts and circumstances of the case, this Court finds that the leave to defend may be granted to the Defendants directing them to furnish security for the sum of Rs.2,25,000/- (which is the principal amount) in the suits by way of security of immovable properties. Such a direction to furnish security would instil a sense of responsibility in the minds of the Defendants to cooperate with the trial court in the early disposal of the suits, which will also inspire the confidence of the Plaintiffs, who have filed the suits for recovery of money. 16.For the foregoing reasons, the impugned orders dated 23.07.1998, made in I.A.No.14236/1996 in O.S.No.5126/1996; I.A.No.13920/1996 in O.S.No.4584/1996; I.A.No.13918/1996 in O.S.No.4579/1996; I.A.No.13916/1996 in O.S.No.4575/1996; I.A.No.13917/1996 in O.S.No.4578/1996; I.A.No.13889/1996 in O.S.No.4581/1996; I.A.No.14234/1996 in O.S.No.5122/1996; I.A.No.12699/1997 in O.S.No.4331/1996; I.A.No.13921/1996 in O.S.No.4580/1996; I.A.No.14235/1996 in O.S.No.5125/1996; I.A.No.15104/1997 in O.S.No.5762/1996; I.A.No.13919/1996 in O.S.No.4583/1996; I.A.No.14237/1996 in O.S.No.5127/1996; on the file of the VIII Assistant Judge, City Civil Court, Madras, are set aside and these revision petitions are allowed. Consequently, CMP Nos.370 to 382 of 2000 are closed. In the circumstances of the case, there is no order as to costs. 17.Leave to defend is granted to the Revision Petitioners/Defendants on condition that they should furnish security of immovable property worth Rs.2,25,000/- (which is the principal amount on Promissory Notes), in O.S.No.5126/1996, O.S.No.4584/1996, O.S.No.4579/1996, O.S.No.4575/1996, O.S.No.4578/1996, O.S.No.4581/1996, O.S.No.5122/1996, O.S.No.4331/1996, O.S.No.4580/1996, O.S.No.5125/1996, O.S.No.5762/1996, O.S.No.4583/1996, O.S.No.5127/1996, within six weeks from the date of receipt of a copy of this order. At the time of furnishing security, the Revision Petitioners/Defendants are also directed to file their Written Statements. The trial court is directed to dispose of all the suits by the end of December 2005.