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2008 DIGILAW 342 (MAD)

Shivasankara Chettiar v. Natesa Chettiar

2008-01-31

S.TAMILVANAN

body2008
Judgment :- This appeal has been preferred against the Judgment and Decree, dated 17.02.1994 made in O.S.No.182 of 1992 on the file of the Additional Sub Judge, Chengalput. 2. The appellant herein was the plaintiff in the suit before the trial court. It is seen that the suit was filed by the appellant, based on a promissory note, dated 212. 1988 to recover the amount due and payable on the instrument with interest and costs. The trial court, considering the oral and documentary evidence and the arguments advanced by both sides, partly allowed the suit, directing the respondent / defendant to pay a sum of Rs.37,562.50/- with 6% interest from the date of filing of the suit, till the date of realisation. Aggrieved by which, this appeal has been preferred. .3. In this appeal, though, service of notice to the respondent is sufficient, the respondent neither appeared in person, nor through counsel. Hence, considering the evidence both oral and documentary and the arguments advanced by the learned counsel for the appellant, this appeal is disposed of on merits. There is no cross appeal preferred by the respondent / defendant. 4. Mr.T.V.Krishnamachari, learned counsel appearing for the appellant submitted that the appellant and the respondent are brothers and there was a partition of the family properties in the presence of panchayatdars. According to him, the respondent herein, elder brother of the appellant was given the ovalty to the oil mill and for the excess value of the property allotted to him, the respondent executed the suit promissory note, dated 212. 1988 for a sum of Rs.97,562.50/-, promising to repay the same with 12% interest, within nine months from the date of pro-note. However, on 010. 1989, he paid only a sum of Rs.40,000/-. Though he had to pay Rs.9,268.39/-towards 12% interest alone till 010. 1989, the respondent had voluntarily made an endorsement at the back of the pro-note for the sum of Rs.40,000/-paid by him by adding the words, that he had to pay only Rs.57,652.50/- as balance, without adding the interest and promised to pay on or before 30.05.1990. The plaintiff had also made an endorsement there itself stating that he had received only Rs.40,000/-towards the promissory note. The aforesaid endorsement made by the respondent was marked as Ex.A.2, Subsequently, on 09.08.1990, the respondent paid Rs.20,000/-. 5. The plaintiff had also made an endorsement there itself stating that he had received only Rs.40,000/-towards the promissory note. The aforesaid endorsement made by the respondent was marked as Ex.A.2, Subsequently, on 09.08.1990, the respondent paid Rs.20,000/-. 5. According to the learned counsel for the respondent, though as per Ex.A.1, promissory note, the respondent has agreed to repay the amount with 12% interest to the appellant, the trial court, without considering the same granted decree, directing the respondent to pay only Rs.37,562.50/-with 6% interest. The learned counsel further contended that valuable property was taken over by the respondent in the partition, as he is doing business in oil, paddy, rice and other commodities and therefore, the amount received under Ex.A.1 is towards commercial transaction. .6. In the plaint, the appellant / plaintiff had stated that up to 010. 1989, the respondent had to pay Rs.1,06,830.89/- towards the suit promissory note with interest. After deducting Rs.40,000/- paid by the respondent on 010. 1989, the balance payable was Rs.66,830.89/-. Subsequently, on 09.08.1990 with 12% interest of Rs.6,772.06/-, the respondent had to pay Rs.73,602.95/-, out of which, Rs.20,000/-was paid on the said date, hence, the balance was Rs.53,602.95/-and therefore, on the date of filing of the suit on 110. 1992, the interest payable for the balance amount was at Rs.14,132.30/-and as such, the total amount payable was Rs.67,735.25/-. It is seen from the calculation available in the plaint that as per the agreed rate of interest at 12%, the appellant has calculated the interest payable by the respondent. 7. The trial court has framed the following issues: 1. Whether the suit promissory note was not supported by consideration? 2. Whether the defendant had repaid the entire amount and discharged the loan, as per the pro-note? 3. Whether there was any agreement between the plaintiff and the defendant towards payment of interest. 4. What relief, the plaintiff is entitled to? 8. The trial court has held that the suit promissory note was supported by consideration and the respondent herein had not completely discharged the suit debt and the agreed rate of interest for the pro-note as 12% p.a. However, the trial court by the impugned Judgment and Decree directed the respondent to pay only a sum of Rs.37,562.50/-with 6% interest with proportionate costs. Therefore, in this appeal, the point for consideration is 1. Therefore, in this appeal, the point for consideration is 1. Whether the appellant is entitled to claim interest at 12% p.a. for the balance amount payable as claimed in the plaint? 2. Whether the appeal has to be allowed as prayed for by the appellant / plaintiff? .9. As found by the court below, by oral and documentary evidence, it has been established that the respondent had executed the suit promissory note on 212. 1988, promising to pay Rs.97,562.50/- with 12% interest on account of the properties allotted to him, during the partition between himself and his brother, the appellant herein. The respondent has also specifically stated in the promissory note that one Lakshmi Narayanan Oil Mill at value of Rs.6,00,000/-was taken over by him in the partition and considering the value of the property allotted to him, he had agreed to pay a sum of Rs.97,562.50/- with 12% interest, within nine months from the date of the agreement. 10. The respondent, who was examined as D.W.1 has admitted that he had to pay the amount, as per Ex.A.1, since he had taken over the oil mill to his share and also running the business, but according to him, he need not pay any interest to the appellant, as promised by him in Ex.A.1. 11. As the respondent herein has admitted the execution of Ex.A.1, promissory note and passing of consideration thereon, he is estopped from saying anything against the averments of Ex.A.1. As per the promissory note, the respondent has agreed to repay the amount due and payable by him with 12% interest p.a. within nine months from the date of the promissory note and therefore, the plea of the respondent that he need not pay any interest under Ex.A.1, cannot be legally accepted. 12. Learned counsel for the appellant contended that the respondent, while making an endorsement in Ex.A.2 on 08.02.1990 at the back of the pro-note for part payment of Rs.40,000/-, he has stated the balance amount at Rs.57,562.50/-without adding 12% interest, as per the promissory note, for which, there was no consent from the appellant. Therefore, it is not a part of the promissory note and further, as per the endorsement, he had agreed to pay the entire balance on or before 30.05.1990, but fail to comply with the same. Therefore, it is not a part of the promissory note and further, as per the endorsement, he had agreed to pay the entire balance on or before 30.05.1990, but fail to comply with the same. Further, on the same date, the appellant has made an endorsement only for the receipt of Rs.40,000/- on the said date and has not given up the interest and therefore, the appellant is entitled to claim interest at 12% p.a from the date of the pro-note. Ex.A.1. .13. In support of his contention, the learned counsel for the appellant relied on the decision, Sreenivasan vs. Subbarama Sastrikal, reported in AIR 1988 KERALA 112, wherein, it has been held that "a pro-note contains an unconditional undertaking signed by the maker to pay certain amount with certain interest to or to the order of the certain person on demand without fixing any time for payment and after execution of the promissory note on the back side of the promissory note an endorsement was recorded under the signature of both the parties that if the amount is paid within one month, the interest need not be paid." The Kerala High Court in the judgment has held that the endorsement is independent of the promissory note and it was executed only after execution of the promissory note. Even, if that was included and executed as part of the promissory note itself, it would not have in any way changed the nature of the pro-note as one payable otherwise than on demand. 14. In the instant case, admittedly, the respondent has executed the suit promissory note, Ex.A.1, promising to repay the amount with 12% interest on demand. As per the endorsement, Ex.A.2, made on the back of the promissory note, he has also made part payment on 010. 1989 and while making the endorsement, Ex.A.2, he mentioned the balance amount without adding interest payable as on the date and further, as per the endorsement, the entire balance should be paid on or before 30.05.1990. Therefore, as contended by the learned counsel for the appellant, it can be construed as an endorsement only for the part payment of Rs.40,000/-. It is clear that the endorsement unilaterally made by the respondent on the back of the suit pro-note does not form part of the pro-note. Therefore, as contended by the learned counsel for the appellant, it can be construed as an endorsement only for the part payment of Rs.40,000/-. It is clear that the endorsement unilaterally made by the respondent on the back of the suit pro-note does not form part of the pro-note. The respondent has also not complied with the condition stipulated by him, by making payment of the entire balance on or before 30.05.1990. Therefore, based on the endorsement, Ex.A.2, the Court cannot draw any legal presumption that the appellant had waived the interest payable to him from the date of pro-note till the date of the aforesaid endorsement. 15. It is clear that as per Ex.A.1, pro-note, the respondent has agreed to pay 12% interest for the sum of Rs.97,562.50/-, payable by him. The endorsement unilaterally made by the respondent does not alter the aforesaid agreed rate of interest and therefore, this Court is of the view to answer the point for determination No.1 in favour of the appellant and against the respondent. .16. It is not in dispute that the respondent, being the elder brother, while allotting his share has got oil mill, for which the value was estimated as per Ex.A.1 at Rs.6 lakhs and he had also agreed to pay the excess amount of Rs.97,562.50/-, payable towards his share to the appellant with 12% interest, within nine months from the date of Ex.A.1. As contended by the learned counsel for the appellant, the amount payable is more or less that of a loan obtained towards a commercial transaction. The respondent has also admitted in his evidence that he was running the oil business by using Lakshmi Narayana Oil Mill, which was earlier the family property of the appellant and the respondent. However, without any just and property reason, having taken over the Oil Mill to his share and agreed to pay the amount, payable to the share of the respondent, within nine months from the date of Ex.A.1, the respondent had unreasonable dragged his younger brother to Court. Therefore, the appellant is entitled to get the agreed contractual rate of interest at 12% for the amount payable to him. The trial court, without considering the facts and circumstances, has fixed the rate of interest, after the date of filing of the suit, till the date of realisation only at 6%, which is not just and reasonable. Therefore, the appellant is entitled to get the agreed contractual rate of interest at 12% for the amount payable to him. The trial court, without considering the facts and circumstances, has fixed the rate of interest, after the date of filing of the suit, till the date of realisation only at 6%, which is not just and reasonable. Considering the rate of interest, at least the trial court could have fixed the interest at 9%, subsequent to the filing of the suit. 17. On the facts and circumstances, this Court is of the view to meet the ends of justice to allow this appeal, whereby decreed the suit as prayed for, directing the respondent to pay Rs.67,735.25/- with subsequent interest at 9% per annum from the date of filing of the suit till the date of realisation with proportionate costs throughout. 18. In the result, the appeal is allowed with the above direction.