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2020 DIGILAW 2239 (MAD)

Parisutha Nadar v. Pichakkara Pillai

2020-11-27

G.JAYACHANDRAN

body2020
JUDGMENT : (Prayer: Second Appeal is filed under Section 100 of Civil Procedure Code, praying to set aside the judgment and decree of the learned II Additional Subordinate Court, Villupuram, dated 08.04.2009 in A.S.No.57 of 2006 reversing the judgment and decree of the learned Principal District Munsif Court, Thirukkovilur dated 12.04.2005 in O.S.No.572 of 2004.) (The case has been heard through video conference) 1. The second appeal against the judgment and decree of the first appellate Court, which has reversed the trial Court judgment and allowed the suit filed for recovery of money. 2. The short point involved in this second appeal is regarding the character of the document Ex.A1 dated 05/10/2001 upon which the suit for recovery of money laid. The trial Court considered the document as an unregistered deed of mortgage, so no cause of action arise from the said document. Whereas the lower appellate Court held it to be a promissory note or agreement of loan/receipt of acknowledge of debt and decreed the suit claim. 3. The short facts of the case leading to the second appeal: The suit laid for recovery of money by the first respondent herein on the premise that the appellant and the second respondent herein are brothers. They borrowed a sum of Rs.50,000/- promising to repay it with 12% interest p.m. on demand. Ex.A-1 dated 05/10/2001 was executed by them in the presence of witnesses. The scribe, who wrote the document Ex.A-1 had wrongly described the said document as receipt for the mortgage of the borrowers house. In spite of repeated demand, the defendants failed to repay the loan amount with interest as agreed under Ex.A-1. After causing pre-suit notice dated 29/09/2004[Ex.A-2], the suit laid based on Ex.A-1 pleading that the said document to be treated as receipt for the loan. 4. The said suit was resisted by the defendants stating that they borrowed only Rs.25,000/- from the plaintiff for which the plaintiff obtained two stamped blank papers. Later, the plaintiff had fabricated one of the signed paper as a pronote for Rs.50,000/- and filed suit in O.S.No.367/2004. The said suit culminated in a decree against them for Rs.25,000/-. Apart from the said decree amount, they are not liable to pay any other money to the plaintiff. However, the document in which the signatures obtained under threat in the presence of panchayatars, is now fabricated as a receipt for the mortgage loan. The said suit culminated in a decree against them for Rs.25,000/-. Apart from the said decree amount, they are not liable to pay any other money to the plaintiff. However, the document in which the signatures obtained under threat in the presence of panchayatars, is now fabricated as a receipt for the mortgage loan. The said document Ex.A-1, is an unstamped and unregistered document. Hence, it is not admissible in evidence. 5. The trial Court, after considering the evidence, held that the suit lack cause of action. The plaintiff failed to prove through acceptable evidence that Ex.A-1 is a valid and genuine document. 6. The aggrieved plaintiff filed first appeal before the II Additional Sub Court, Villupuram. After analysing the recital in Ex.A-1, the statements of the appellant herein(1st defendant) in the previous suit in O.S.No.367/2004 between the same parties [Ex.A-6 and Ex.A-7], and the reply notice Ex.A-5 dated 05/10/2001, the first appellate Court held that Ex.A-1 deemed to be a pro-note or in alternate a receipt/acknowledging the debt. Having admitted the signature in the document Ex.A1 and the money transaction with the plaintiff and having accepted the execution of Ex.A-1 in the other suit acknowledging the mortgage loan, the first appellate Court held that the defendants are liable to repay the loan amount as per the recital found in Ex.A-1. 7. The learned counsel appearing for the appellant submitted that the first appellate Court had not considered the evidence properly, which has resulted in miscarriage of justice. Ex.A1 document ought to have been rejected for not being duly stamped and registered. The recital of Ex.A1 would disclose that it is a mortgage deed. Any document in connection with transfer of immovable property value above 100 rupee must be registered under Section 17 of the Registration Act and it should be duly stamped. Any document with insufficient stamp presented before the Court should be impounded as per the provisions of Stamp Act. The Courts below oblivious of these legal provision had entertained Ex.A1 contrary to recital and nomenclature of the instrument. The lower appellate Court conclusion that Ex.A1 is a pro-note is not even the case of the plaintiff/1st respondent. Any document with insufficient stamp presented before the Court should be impounded as per the provisions of Stamp Act. The Courts below oblivious of these legal provision had entertained Ex.A1 contrary to recital and nomenclature of the instrument. The lower appellate Court conclusion that Ex.A1 is a pro-note is not even the case of the plaintiff/1st respondent. When the plaintiff/1st respondent himself has pleaded to treat Ex.A1 as an agreement for loan, the first appellate Court had misdirected itself by assuming Ex.A1 as a pro-note and extending the benefit of Sections 20 and 118 of Negotiable Instrument Act. Contrary to the content of the document the first appellate Court had accepted the plea of the plaintiff that Ex.A1 has wrongly been described as a mortgage deed by the scribe. The oral evidence of PW-1 has been accepted regarding the character of the document, which is illegal. The description and contradictions in the evidence of PW-2 and PW-3, which have been rightly noted by the trial Court omitted to be noted by the first appellate Court. 8. Considered the submissions made by the Counsels appearing for the appellant and the 1st respondent. 9. The character of a document has to be decided from its recital and from the intention of the parties who have executed the document. The nomenclature assigned by the parties to the document contrary to the content of the document will not sustain. The contention raised by the appellant’s counsel will hold merit and acceptance, if Ex.A1 is a deed of mortgage and the suit filed either for foreclosure or for redemption, based on the said document. In this case, the plaintiff has relied upon this document as an acknowledgement of the loan. Whether it can be considered as an acknowledgment of loan or document reflecting the agreement of mortgage has to be tested through its recital. Therefore, the recital found in Ex.A1 is extracted below:- “TAMIL” 10. The free English translation for the above recital found in Vernacular is that 1.Parisutha Nadar 2. Whether it can be considered as an acknowledgment of loan or document reflecting the agreement of mortgage has to be tested through its recital. Therefore, the recital found in Ex.A1 is extracted below:- “TAMIL” 10. The free English translation for the above recital found in Vernacular is that 1.Parisutha Nadar 2. Yesudoss Nadar, S/o Palraj Nadar on their free Will had executed the mortgage receipt in respect of house property to and in favour of Pichakkara Pillai, S/o Kathavaraya Pillai, on 5th day of October 2001 on receipt of Rs.50,000/- against the mortgage, with promise to repay the loan with interest at rupee 1 per 100 on demand by Pichakkara Pillai or to his authorised agent and shall cancel the mortgage receipt on repaying the loan. 11. The said document is witnessed by one Chakkarai, S/o Chinnaia pillai Kodiyur and one Kannan, S/o Gopal, Kodiyur. The scribe name is shown as Narayanasamy Pillai, S/o Kuppusamy Pillai. Both Parisutha Nadar and Yesudoss Nadar have signed on the one rupee revenue stamp. 12. This document, carries a promise to repay the amount mentioned with interest on demand. It also indicates that the amount mentioned was paid against the mortgage of the immovable property described under the schedule. This document is described as a mortgage receipt in the recital. 13. Section 4 of the Negotiable Instrument Act, 1881 defines: Promissory note as “A promissory note is an instrument in writing containing an unconditional undertaking signed by a maker, to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument. 14. The Negotiable Instrument Act, 1881 has given 8 illustration under this Section of which illustrations (a) and (b) are declared to be a promissory note. The said illustration are: (a) I promise to pay B or order Rs.500/- ; (b) I acknowledge myself to be indebted to B in Rs.1000/- to be paid on demand, for value receipt. 15. If this definition is applied to Ex.A1, there can be no second opinion that it is a pro-note. Reference to a mortgage transaction and naming it as a mortgage receipt will not take away the ingredient found in this document which are essential ingredient for a pro-note. The plaintiff has laid the suit treating it as an agreement for the loan. The defendant wants to call this document as a mortgage. Reference to a mortgage transaction and naming it as a mortgage receipt will not take away the ingredient found in this document which are essential ingredient for a pro-note. The plaintiff has laid the suit treating it as an agreement for the loan. The defendant wants to call this document as a mortgage. The first appellate Court has held it to be a pro-note/acknowledgement of debt. 16. As the Idiom say “Rose by any other name would smell as sweet”. The content of the document is important and not the nomenclature assigned by the parties. Ex.A1, on examination, we find it carries two parts. First the transaction of money and promise to repay with interest on demand. Secondly, the security of immovable property as mortgage for the loan advanced. When the suit is filed for recovery of money, relying upon one part of the document, which is not destructive to the other part but complimentary to the other part, the option is with the holder of the document. Had the plaintiff laid the suit for enforcement of the mortgage referred in the document, necessarily Ex.A.1 should have been impounded for insufficient stamp and it should have been thrown out as an inadmissible, as contended by the appellant. But, in this case, Ex.A.1 is relied for recovery of money and not for enforcement of the mortgage. The first part of the deed, which speaks about the receipt of money and promise to repay therefore gain significance, while considering the relief sought. The document ought to be looked corresponding to the relief sought and not in isolation. When a document is sought to be marked to establish the loan transaction, it cannot be rejected on the ground that it is an unregistered mortgage deed. 17. In an identical situation, this Court in Selvan v. Mohamad Gani reported in (2009) 1 MLJ 961 has held that “the suit is merely one for recovery of money, it is not a suit for foreclosure. Therefore, the petitioner wanted to rely upon the document in question, just for the purpose of establishing the loan transactions between the parties. In such circumstances, when the petitioner is not suing on an unregistered mortgage deed, the Court below ought to have accepted the document to be marked in evidence. This is a settled position of law. 18. Therefore, the petitioner wanted to rely upon the document in question, just for the purpose of establishing the loan transactions between the parties. In such circumstances, when the petitioner is not suing on an unregistered mortgage deed, the Court below ought to have accepted the document to be marked in evidence. This is a settled position of law. 18. The learned counsel appearing for the appellant heavily rely upon the decision of the Hon’ble Supreme Court rendered in Avinash Kumar Chauhan v. Vijay Krishna Mishra reported in (2009) 2 SCC 532 , wherein the Hon’ble Supreme Court, after analysing the provision of Stamp Act under Sections 33, 35 and 36 and Registration Act, 1908, under Sections 17 and 49, contended that Section 35 of the Stamp Act mandates that an instrument chargeable with duty should be stamped so as to make it admissible in evidence. Also, held that it is well settled that there is no prohibition under Section 49 of the Registration Act to receive an unregistered document as an evidence for collateral purpose, but the document so tendered should be duly stamped, if not stamped, the document cannot be received in evidence even for collateral purpose, unless it is duly stamped or duty and penalty are paid under Section 35 of the Stamp Act. 19. This Court has no second opinion or doubt about the said proposition. The point here is whether the said proposition requires to be applied to the facts of the case. As pointed out earlier, when the suit is laid for recovery of money based on the recital found in Ex.A1, the document is not used for collateral purpose, but to establish the money transaction as found in the said document. For the said purpose, the document is duly stamped as required for a receipt or pro-note. The defendants have signed upon the stamp paper. In the previous proceedings, they have admitted about the existence of this document and also the content. Therefore, there is nothing illegal or improper for the first appellate Court to treat this document as a pro-note or acknowledgement of the debt, either way having admitted the signature found in Ex.A1 and having failed to prove that the said document was obtained under force or duress, which could negate a document under Sections 14 and 15 of the Indian Contract Act. The appellant has no ground to sustain the challenge made against the first appellate Court. 20. Ex.A1 when treated as pro-note or acknowledgement of debt, registration is not required. For pro-note or a receipt of money one rupee stamp is sufficient. Therefore, this Court finds no merit in the appeal. 21. In the result, this Second Appeal is dismissed. The judgment and decree of the first appellate Court viz., II Additional Sub Court, Villupuram in A.S.No.57 of 2006 dated 08.04.2009 is confirmed. No order as to costs. Consequently, connected Miscellaneous Petition is closed.