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2018 DIGILAW 2491 (MAD)

R. Radhakrishnan @ R. Durai v. S. Kannan

2018-08-10

T.RAVINDRAN

body2018
JUDGMENT : Challenge in this second appeal is made to the judgment and decree dated 22.04.2004 passed in A.S.No.200 of 2002 on the file of the IV Additional Judge, City Civil Court, Chennai reversing the judgment and decree dated 30.04.2001 passed in O.S.No.9145 of 1995 on the file of the III Assistant Judge, City Civil Court, Chennai. 2. The Second Appeal has been admitted on the following substantial questions of law : (a) Whether the payment of money towards purchase of the house site can be taken as money paid on Promissory Notes though the money was paid on Promissory notes and vouchers to avoid rendering of accounts to the Income Tax Department? (b) Whether the payment of money on promissory notes and vouchers paid towards the purchase price of the land given for construction of apartments to sell to the prospective buyers can be taken as a separate to sell to the prospective buyers can be taken as a separate cause of action, when it is merged with the original cause of action of the Joint Venture of purchase of land from the Appellant and allotment of apartment after construction to the Appellant being the land owner and other prospective buyers? (c) Whether the judgment of the lower appellate court reversing the judgment and decree of the trial court is correct by relying on Ex.B1 which is nothing but a xerox copy of the unauthorised statement of the respondent? 3. Inasmuch as the scope of controversy involved between the parties as regards the subject matter is lying in a narrow scale, it is unnecessary to dwell into the facts of the case in detail. 4. Suffice to state that the plaintiffs have laid the suit against the defendant for recovery of money based on the promissory notes as detailed in the plaint. 5. Materials placed on record to go to show that the defendant along with his sons had agreed to sell the property to the plaintiffs for the purpose of putting up the flats and it is found that in connection with the above-said arrangement between the parties, an agreement of sale in respect of the property belonging to the defendant had been entered into with the plaintiffs on 16.05.1992, the copy of which has come to be marked as Ex.A1. Further, it is also noted that the defendant and the plaintiffs had entered into a construction agreement, the plaintiffs being the partners of M/s Sri Ammaiyappan Builders, Civil Engineering Contractors, which document has come to be marked as Ex.B14 and by way of the same, it is found that the plaintiffs had agreed to construct an ownership flat with a plinth area of 1268 sq.ft to the defendant in the proposed construction to be made by them. Accordingly, it is found that the flats had been constructed by the plaintiffs and it is stated by the plaintiffs that the defendant had come to occupy the flat earmarked for him without the knowledge and consent of the plaintiffs by break opening the locks and it is also stated that the defendant had conducted the house warming ceremony therein and according to the plaintiffs, the possession of the said flat by the defendant is unlawful. On the other hand, it is the case of the defendant that he had been allowed to occupy the flat earmarked for him by the plaintiffs as per the construction agreement entered into between the two parties and therefore put forth the defence that the plaintiffs had falsely alleged that the defendant had unlawfully occupied the flat. Be that as it may, it is found that the agreement of sale Ex.A1 had been entered into between the parties which remains not in dispute, for sum of Rs.9,00,000/-. Accordingly, it is found that as per the construction agreement Ex.B14 entered into between the parties, it is further noted that the plaintiffs having agreed to entrust the flat to the defendant of a plinth area measuring 1268 sq.ft accordingly, it is seen that fixing the value per sq.ft at Rs.580/-, the flat earmarked for the defendant has been valued at 7,35,550/- and the same is agreed to be adjusted towards the purchase money for the sale of the property at Rs.9,00,000/-. Further, according to the plaintiffs, they had paid the amount remaining to be paid to the defendant on various dates, which according to them amounts to Rs.2,72,228/-, which could also be evidenced from Exs.A2 to A10 and the same is also not put in dispute by the defendant. Further, according to the plaintiffs, they had paid the amount remaining to be paid to the defendant on various dates, which according to them amounts to Rs.2,72,228/-, which could also be evidenced from Exs.A2 to A10 and the same is also not put in dispute by the defendant. It is also found that the plaintiffs had agreed to pay a sum of Rs.1,00,000/- as profit margin to the defendant, in connection with the flat promotion and accordingly, it is seen that in toto the plaintiffs had to pay Rs.10,00,000/- and of the said sum, deducting the value of the flat to be entrusted to the defendant amounting to Rs.7,35,550/- and the piecemeal payments made by the plaintiffs to the defendant on various occasions amounting to Rs.2,72,028/-. Thus, it is found that the plaintiffs had paid the entire amount with reference to the agreement entered into between the parties as regards the sale of the property and the entrustment of the flat to the defendant as agreed to between the parties under Ex.A1 agreement and Ex.B14 construction agreement. 6. It is the case of the plaintiffs that in the course of the construction of flats, the defendant had borrowed money on various occasions from them as hand loans and in evidence of the said borrowals, the defendant had executed the promissory notes in support of the same and the defendant had assured that he would repay the borrowed sum by way of mortgaging the flat to be entrusted to him after the construction and accordingly it is the case of the plaintiffs that believing the abovesaid assurance of the defendant and his promise to repay the sums accordingly, they had been lending the various sums to the defendant under the promissory notes which had come to be marked as Exs. A13 to A21 as detailed in the plaint and accordingly it is the further case of the plaintiffs that inasmuch as the defendants had failed to pay the abovesaid borrowed sum received under the promissory notes, they had been necessitated to lay the suit against the defendant. 7. A13 to A21 as detailed in the plaint and accordingly it is the further case of the plaintiffs that inasmuch as the defendants had failed to pay the abovesaid borrowed sum received under the promissory notes, they had been necessitated to lay the suit against the defendant. 7. Per contra, it is the case of the defendant that in addition to the profit margin of Rs.1,00,000/- agreed to be paid by the plaintiffs to the defendant, it is his case that the plaintiffs had also agreed to pay another sum of Rs.1.5 lakhs to the defendant as the defendant had organized to get the purchasers for the flats at a good price than expected by the plaintiffs and accordingly, it is his case that the above said sum had been paid by the plaintiffs in piecemeal and further according to him in order to enable the plaintiffs to get the tax concession, as per their directions, he had executed the promissory notes in respect of the said payments made to him in piecemeal by the plaintiffs and therefore it is his contention that the amounts borrowed as abovestated cannot be termed as loan transactions and accordingly it is contended that the suit laid by the plaintiffs is not maintainable and liable to be dismissed. It is further stated that inasmuch as the defendant had moved the District Consumer Redressal Forum against the plaintiffs for the poor and inferior construction made by the plaintiffs, enraged over the same according to him, the plaintiffs had laid the false suit against him. 8. The defendant has marked the statement of account as Ex.B1 and on a perusal of the same , it is found that as put forth by the plaintiffs the value of the property agreed to between the parties as per Ex.A1 come to be Rs.9,00,000/- the profit margin accepted to be give by the plaintiffs to the defendant being fixed at Rs.1,00,000/-, it is seen that the total amount payable by the plaintiffs to the defendant would come only to Rs.10,00,000/-. Further deducting the sum of Rs.2,72,228/- paid by the plaintiffs to the defendant in piecemeal as abovenoted and evidenced from Exs.A2 to A10 and also not in dispute by the defendant as such and further also deducting the value of the flat of an extent of 1268 sq.ft allotted to the defendant fixed at Rs.7,35,440/-, it is found that altogether in connection with the purchase of the property and the construction of the flat earmarked and to be handed over to the defendant coupled with the profit margin agreed to be paid by them, the plaintiffs are found to have paid an excess sum of Rs.7,668/- to the defendant. 9. The defendant's son has been examined as DW1 and he has clearly admitted the borrowal of the amount based on various promissory notes projected in the plaint and also admitted that the above-said amount received under the promissory notes had not been adjusted in the statement of account marked as Ex.B1 and accordingly, it is seen that, from the admission of DW1, it is found that the defendant, had indeed, borrowed a sum of Rs.97,000/- as determined by the first appellate court based on the promissory notes. Accordingly, it is found that even in the statement of account marked as Ex.B1, there is a reference about the payment made by the plaintiffs to the defendant towards the loans amounting to Rs.85,000/- as on 25.02.1993 and the split up of figures with reference to the same are also detailed in the above-said statement of account for Rs.85,000/-. This is also admitted by the defendant in the letter of acknowledgment executed by him on 08.07.1993 marked as Ex.A24, whereunder, the defendant had agreed that he had to repay the loan amount of Rs.95,000/- borrowed from the plaintiffs on various promissory notes and also Rs.7,000/- due to them as per the accounts before taking possession of the flat intended for him in the proposed construction. Accordingly, it is found that when the execution of the promissory notes in evidence of the borrowal of the amounts mentioned therein, had not been disputed by the defendant in the written statement as such, and also admitted by DW1, during the course of evidence and further when the amounts borrowed under the various promissory notes are not shown to be related to the construction of the flats put up by the plaintiff and also not shown to be associated in any manner with the agreement entered into between the parties under Ex.A1 as well as the construction agreement entered into between the parties under Ex.B14 and when it is seen from the materials placed on record, particularly, Ex.B1, the plaintiffs have paid more amount than what is due to the defendant in respect of the purchase of the property coupled with the adjustment of the said sum with the value of the flat earmarked for the defendant plus the piece meal payments made by the plaintiffs to the defendant on various occasions amounting to Rs.2,72,228/- and in such view of the matter, when de hors the same, the defendant is found to have borrowed various sums from the plaintiffs to meet his expenses under various promissory notes and when there is no material placed by the defendant that the plaintiff had agreed to pay a further sum of Rs.1,50,000/- to him on the footing that he had arranged purchasers for the flats put up by the defendant at a good price and with reference to the above-said defence, there is nil material on the part of the defendant and when Exs.A13 to A21 promissory notes do not in any manner recite that they had been executed in connection with the Ex.A1 agreement and Ex.B14 construction agreement, accordingly, it is found that as rightly determined by the first appellate court, it is found that the defendant had received the various sum from the plaintiff amounting to Rs.97,000/- as determined by the first appellate court and accordingly, inasmuch as had failed to repay the same, despite the demands made by the plaintiffs, it is found that the plaintiffs had been necessitated to lay the suit for necessary relief’s. 10. The contention of the defendant that the suit has been laid by the plaintiff falsely on account of the action initiated by him before the District Consumer Redressal Forum against the plaintiffs as such cannot be accepted, when it is found that the present suit has been laid prior to the filing of the above-said proceedings initiated by the defendant. Further, the defendant for the reasons best known to him had not chosen to enter into the witness box to repudiate the claim of the plaintiffs under the various promissory notes and also failed to establish his version that the amount received under the promissory notes are only towards the sum of Rs.1,50,000/- agreed to be paid by the plaintiff's for his arranging the prospective purchasers of the flats as put forth in the written statement. On the other hand, the evidence of DW1 would only go to show that the promissory notes had been executed only for the sums borrowed as loan from the plaintiffs by the defendant. 11. In the light of the above discussions, the materials placed on record would go to show that the defendant had borrowed the various sums from the plaintiff under the promissory notes Exs.A13 to A21 as put forth by the plaintiffs and when the defendant had failed to establish his case that the promissory notes had come to be executed for enabling the plaintiffs to get the tax concession from the Income tax Department and further, when the defendant had failed to establish, that he had arranged the prospective purchasers of the flats put up by the plaintiffs and that the plaintiffs had agreed to pay a sum of Rs.1,50,000/- to him with reference to the same and when the amount borrowed under Exs.A13 to A21 are not shown to be in any manner associated with the agreements entered into between the parties under Ex.A1 and Ex.B1, accordingly, it is found that the trial Court had erred in clubbing both the transactions together, i.e., the transaction made under Ex.A1 and Ex.B14 and the transactions under the various promissory notes as a common one and thereby is found to have erroneously dismissed the plaintiff's suit. On the other hand, the first appellate Court has rightly appreciated the materials placed on record and finding that the transactions between the parties under the various promissory notes are not having any link with the agreements entered into between the parties under Ex.A1 and Ex.B14 and accordingly, noting that DW1 himself having admitted the borrowal of sums under the various promissory notes and the same is also buttressed by EX.B1 statement of account plus Ex.A24, acknowledgment letter executed by the defendant, in all, it is seen that the first appellate court had rightly determined that the defendant is liable to pay a sum of Rs.97,000/- with interest as determined by it. In such view of the matter, considering the issues involved between the parties, there is no need for the impleadment of the other parties as put forth in the written statement as they are not in any manner associated with the issues involved in the matter. It is further noted that the plaintiffs had not split up the cause of action as contended by the defendant, when it is found that the flat promotion venture initiated by the plaintiffs is in no way connected with the borrowal of the amount by the defendant under the various promissory notes. Accordingly, the substantial questions of law formulated in the second appeal are answered against the defendant and in favour of the plaintiffs. 12. For the reasons afore-stated, the Second Appeal fails and is accordingly dismissed with costs. Consequently, connected miscellaneous petition, if any, is closed.