Research › Search › Judgment

Madras High Court · body

2021 DIGILAW 344 (MAD)

A. v. Murali VS Kiran Kumar P. Jain

2021-02-02

G.JAYACHANDRAN

body2021
JUDGMENT : (Prayer: First Appeal has been filed under Section 96 of Civil Procedure Code, against the decree and judgment passed by the Hon’ble XVIII Additional City Civil and Sessions Court at Chennai in O.S.No.7509 of 2010 dated 27th September 2013.) 1. The Suit property originally belongs to the Appellant herein. The respondent herein is the purchaser of the property in the auction held on 26.10.2006. The sale deed was registered in favour of the respondent on 26.1102007. After notice to hand over the possession, the suit came to be filed for recovery of possession and mesne profit. The Trial Court decreed the suit. The relief of recovery of possession granted. For past and future mesne profit, leave to proceed separately under Order 20 Rule 12 of C.P.C ordered. Aggrieved by the judgement of the Trial Court, the present appeal is filed by the defendant in the suit. 2. The pleadings as found in the plaint:- On 16.05.2000, the defendant first borrowed a sum of Rs.1,50,000/- from one Hastimal jain Proprietor of M/s.Jain Finance and created a mortgage of deposit of title deed. Subsequently, borrowed another sum of Rs.1,50,000/- from the son of Hastimal Jain one Girish Kumar (Proprietor of M/s.Prem Investments) under a deed of simple mortgage dated 22.05.2000. Both the mortgages were left undischarged. Girish kumar brought the suit property for sale under Section 69 of the Transfer of Property Act, for recovery of mortgage money. At the instance of the mortgagee/Mr.Girish kumar, the property was put to public auction through M/s.Verma and Company on 26.10.2006. The plaintiff was the successful bidder for Rs.15,50,000/-. He paid Rs.3,87,500/- by cash on the date of auction. (26/10/2006). The balance sale consideration of Rs.11,62,500/- was paid by cheque dated 09.11.2006 which was revalidated to 26.10.2007 at the request of the mortgagee and encashed. On payment of entire sale consideration, sale deed was executed in the name of the plaintiff and got it registered on 26.11.2007. The plaintiff on several occasions orally requested the defendant to hand over the possession. The defendant did not heed the request. Then the plaintiff through his Counsel caused notice dated 08.06.2008 to vacate the suit property and deliver possession. The defendant received the notice on 16.06.2008 but neither vacated the premises nor replied to the notice. Hence, the suit. 3. The plaintiff on several occasions orally requested the defendant to hand over the possession. The defendant did not heed the request. Then the plaintiff through his Counsel caused notice dated 08.06.2008 to vacate the suit property and deliver possession. The defendant received the notice on 16.06.2008 but neither vacated the premises nor replied to the notice. Hence, the suit. 3. Pleadings as found in the written statement: The alleged auction sale dated 26.10.2006 is a fraudulent and collusive deal between the mortgagee and the plaintiff. On the date of auction, the suit in O.S.No.437 of 2005 filed by the defendant was pending before the II Assistant City Civil Court, Chennai. Further, suit to declare the auction sale as null and void filed before the same Court also pending in O.S.No.8613 of 2006. The suit is bad for non-joinder of necessary parties viz., the mortgagee M/s.Prem Investment and the auctioneer M/s.Verma and Company. The defendant borrowed Rs.1,50,000/- as hand loan from Hasthimal Jain. The original document pertaining to the suit property was handed over to Hastimal Jain but not with any intention to create an equitable mortgage. No memorandum signed evidencing the deposit of title deed for the purpose of creating an equitable mortgage. Signatures in blank papers and unfilled pronotes were obtained by Hastimal Jain. A sum of Rs.1,50,000/- was borrowed from Grish kumar He is the son of Hastimal jain. Girish kumar for the said loan gave a cheque for Rs.1,00,000/- after deducting interest and brokerage. Due to economic duress, he was compelled to execute a simple mortgage deed in favour of Girish kumar. The interest shown in the mortgage deed is usurious and in violation of Tamil Nadu Money Lenders Act, 1957. The recital in the simple mortgage deed enabling the mortgagee to bring the property for sale under section 69 of the Transfer of Property Act, without the consent of the mortgagor is anti-ethical. As orally agreed, the defendant has paid Rs.7,500/- every month towards interest and principal. The bank statement between 01.01.2000 to 22.12.2004 will reveal the payments were made within the stipulated period. As on 06.12.2005, a sum of Rs.2,60,000/- paid to the mortgagee towards principle and interest. 4. Earlier M/s.Jain Financiers issued notice to repay the loan availed under pro-note. Inspite of reply to furnish statement of account, auction notice was issued on 28.12.2004 fixing the auction date as 18.01.2004. As on 06.12.2005, a sum of Rs.2,60,000/- paid to the mortgagee towards principle and interest. 4. Earlier M/s.Jain Financiers issued notice to repay the loan availed under pro-note. Inspite of reply to furnish statement of account, auction notice was issued on 28.12.2004 fixing the auction date as 18.01.2004. Therefore, the defendant filed suit for permanent injunction in O.S.No.313 of 2005 on the file of II Assistant City Civil Court, Chennai, restraining M/s.Jain Financiers from any manner bringing the property for sale in public auction. After realising that M/s.Jain Financiers have no authority to bring the property for auction without any authorisation from M/s.Prem Investments, another suit was filed by the defendant for same relief against M/s.Prem Investments in O.S.No.437 of 2005. A fresh notice for auction sale was issued by M/s.Prem Investments on 11.11.2005. This notice was challenged in O.S.No.7519 of 2005. Interim injunction was granted on condition to pay Rs.75,000/- and the said amount was paid. However, after enqiry, the interlocutory application was dismissed and the interim order of injunction was vacated. Since, as mortgagor, he has the right to redeem the mortgage. The defendant filed redemption suit in O.S.No.4130 of 2006 and sought for a preliminary decree to determine the actual amount due on the mortgage deed dated 22.05.2000. In the interlocutory application I.A.No.8089 of 2006 interim injunction was granted, on condition to deposit Rs.50,000/- on or before 05.06.2006. Meanwhile, M/s.Prem Investment tried to bring the property for auction illegally, hence the defendant filed C.R.P.No.804 of 2006 before the vacation Court of the High Court and obtained interim injunction. The said Civil Revision Petition was disposed by the High Court without expressing any view on merits with liberty to explore the alternate remedy. Time to comply the condition to deposit Rs.50,000/- was extended upto 06.10.2006. 5. In complete disregard to the directions given by the High Court, auction notice dated 25.09.2006 was issued fixing the auction date as 26.10.2006. The Interlocutory Application in the pending suit O.S.No.437 of 2005 for the relief of interim injunction restraining the public auction was dismissed. The defendant, therefore, made a request for extension of time to comply the conditional order passed in I.A.No.8089 of 2006 in O.S.No.4130 of 2006. The said I.A was dismissed on 26.10.2006. However, no auction held on 26.10.2006. The Interlocutory Application in the pending suit O.S.No.437 of 2005 for the relief of interim injunction restraining the public auction was dismissed. The defendant, therefore, made a request for extension of time to comply the conditional order passed in I.A.No.8089 of 2006 in O.S.No.4130 of 2006. The said I.A was dismissed on 26.10.2006. However, no auction held on 26.10.2006. The alleged sale pursuant to the action is illegal, fraudulent, collusive and contravening the provisions contained in the Transfer of Property Act. The auction is hit by lispendent in view of the pendency of the suit in O.S.No.4130 of 2006 on the file of II Assistant City Civil Court. When the representatives of M/s.Prem Investment came to the suit property on 26.10.2006 at about 3.00 p.m, the wife and son of the defendant were present and they apprehending danger called police over phone and informed them about the harassment. Due to the intervention of the police, the attempt to auction the property got aborted. Any document to show that auction held on 26.10.2006 are only concocted and manufactured documents. The right of the defendant to redeem the property as per section 60 of the Transfer of Property Act, cannot be taken away. In any event, the suit for possession without declaration of title is not maintainable since there is a cloud over the title. The suit property is worth more than a crore ruprees. The financier has undervalued the property and created a false sale deed in favour of the plaintiff to snatch away the property. The defendant is taking steps to restore his redemption suit O.S.No.4130 of 2006. 6. Based on the pleadings, the Trial Court has framed the following issues:- 1). Whether the plaintiff is entitled for vacant possession of the suit schedule property? 2). Whether the plaintiff is entitled for the past and future mesne profits as claimed in the plaint? 3). To what relief the plaintiff is entitled? 7. Before the Trial Court, one witness and two documents were relied by the plaintiff. Four witnesses were examined in support of the defendants. 8. In support of his plaint, the plaintiff mounted the witness box and deposed. The photocopy of the sale deed dated 26.11.2007 executed by Girish kumar in favour of the plaintiff and the notice copy along with the postal acknowledgement card are the Ex.A-1 and Ex.A-2 respectively. Four witnesses were examined in support of the defendants. 8. In support of his plaint, the plaintiff mounted the witness box and deposed. The photocopy of the sale deed dated 26.11.2007 executed by Girish kumar in favour of the plaintiff and the notice copy along with the postal acknowledgement card are the Ex.A-1 and Ex.A-2 respectively. The witnesses for the defendants had deposed to ascertain that on 26.10.2006 no public auction held as claimed by the plaintiff. 9. The Trial Court allowed the suit concluding the defendant admits that he mortgaged his property to Girsh kumar and created simple mortgage for Rs.1,50,000/-. He has not proved the discharge of the said loan. The plea that the public auction bristles with fraud not proved. The sale deed Ex.A-1 in favour of the plaintiff not challenged by the defendant through counter claim or through an independent suit. There is no specific pleading that the public auction held on 26.10.2006 not conducted in terms of Section 69 of the Transfer of Property Act. The defendant by not replying to the quit notice Ex.A-2, accept the title of the plaintiff and hence liable to vacate the suit premises. 10. In the appeal, the Trial Court judgment is assailed primarily on the ground that, the trial court erred in accepting Ex.A-1 which is a photocopy of the sale deed based on which the plaintiff claim possession. Ex.A-1 being a secondary evidence viz., photocopy of the certified copy of the sale deed, it is inadmissible in evidence without obtaining the permission of the Court as contemplated under the Evidence Act. The plaintiff without proving his title over the property, cannot sustain the suit for recovery of possession. 11. In spite of specific plea about the fraudulent conduct of the mortgagee and adequately eliciting during the cross examination of the plaintiff that the mortgagee was present in the Court and he was in fact conducting the case, the Trial Court omitted to frame relevant issue regarding non-joinder of necessary party and also miserable failed to note that the examination of the vendor viz., the mortgagee to prove the due execution of Ex.A-1 is germane to the case. 12. 12. The Learned Counsel for the appellant pointing out the dismissal of the Interlocutory Application filed to let additional evidence by summoning the auctioneer M/s.Verma and Company, to prove no public auction held on 26.10.2006 and the plaintiff was not bonafide purchaser, contended that, the Trial Court was unfair in dismissing the said application and without giving enough opportunity to challenge the said order, the suit was disposed within a week. 13. As reply, the Learned Counsel for the respondent/plaintiff submitted that, the vendor of the plaintiff is not a necessary party. The appellant/defendant without any objection allowed to mark the photocopy of the certified copy of the sale deed. Therefore, he is estopped from raising the plea that Ex.A-1 is not admissible in evidence. The validity of the auction sale never questioned by the appellant. The spate of frivolous suits filed by the appellant/defendant whenever the mortgagee brought the suit property for auction to recover the debt, is a telltale evidence to show he was not interested in repaying the loan and redeem the mortgaged property but to deprive the mortgagee his lawful right to recover his debt through due process of law. 14. In the light of the submission made by the Learned Counsels for the Appellant and the Learned Counsel for the respondent and on considering the pleadings, evidence and the judgment the Court, the following point for determination is formulated. Whether the Trial Court erred in not framing issue regarding non-joinder of necessary party and whether Ex.A-1 secondary evidence of a secondary evidence admitted and relied by the Trial Court is legally sustainable? 15. The suit is filed on the premise that the plaintiff derived title over the suit property through Ex.A-1 sale deed dated 26.11.2007. According to the plaintiff, he purchased it in the auction held on 26.10.2006 when the mortgagee brought the property for sale without intervention of the Court under Section 69 of Transfer of Property Act. Admittedly, the plaintiff has paid only Rs.3,87,500/- by cash on the date of auction (26.10.2006). The balance sale consideration of Rs.11,62,500/- was paid by cheque dated 09/11/2006 which was revalidated to 26.10.2007 at the request of the mortgagee and subsequently encashed. There is no explanation in the plaint for revalidating the cheque after nearly one year. Admittedly, the plaintiff has paid only Rs.3,87,500/- by cash on the date of auction (26.10.2006). The balance sale consideration of Rs.11,62,500/- was paid by cheque dated 09/11/2006 which was revalidated to 26.10.2007 at the request of the mortgagee and subsequently encashed. There is no explanation in the plaint for revalidating the cheque after nearly one year. Further, generally if the auction purchaser fails to pay the balance sale consideration as per the public auction terms and condition, the auction will get vitiated. In this case, the plaintiff has not produced the sale certificate though admit in his cross examination that when the auction took place the auctioneer gave him the sale certificate and it is with him. The belated payment of the balance sale consideration and non-production of the sale certificate by the plaintiff, disable the Court to find out whether or not the allegation of fraud and collusion between the mortgagee and the plaintiff is true. 16. The Trial Judge has allowed the suit solely on the ground that the defendant has not challenged the validity of the auction sale therefore cannot resist the suit for delivery of possession. No doubt, the defendant has filed several suits to prevent the mortgagor from realising the money. All those suit were at one point of time not pursued and dismissed. From his own admission made in the written statement, this Court finds that appellant had failed to pursue the suit filed for redemption and he failed to pursue the suit filed to declare the auction sale as null and void. However, the conduct of the defendant resorting to legal remedy but not pursuing further or failure to reply to the lawyer notice Ex.A-2, can be a ground to allow the suit when the plaintiff who claim title through the sale deed fail to produce the original sale deed and satisfy the Court that he is a bonafide purchaser in the auction and paid the sale consideration as per the terms of the auction. 17. The plaintiff has to stand or fall on his own merit. When the defendant has pleaded that no public auction held on 26.10.2006 and alleges collusion and fraud. To dispel the allegation, the plaintiff ought to have examined his vendor or the auctioneer. 17. The plaintiff has to stand or fall on his own merit. When the defendant has pleaded that no public auction held on 26.10.2006 and alleges collusion and fraud. To dispel the allegation, the plaintiff ought to have examined his vendor or the auctioneer. At least the auction notice with terms and condition, the auction proceedings and the sale certificate should have been produced before the Court to show he is a bonafide auction purchase and innocent buyer. It is seen from the records that when the defendant attempted to reopen the case and adduce additional evidence by summoning the auctioneer to produce document, the said application was dismissed. 18. This Court is conscious of the fact that under section 69 of the Transfer of Property Act, when mortgaged property is sold in auction without the intervention of the Court through recognised auctioneer, the conditions mandated under the statute should be scrupulously complied. The successful bidder, who wants to take possession of the property cannot succeed in getting possession of the property merely based on the sale deed entered between him and the mortgagee when the mortgagor allege collusion. It is the burden of the plaintiff/auction purchaser to prove his bonafide and payment of sale consideration as per the terms of auction. 19. In this case, the appellant had availed loan of Rs.1,50,000/- each from Hasitmal Jain and his son Girish Kumar during the month of April 2000. The son who brought the property for his mortgage loan due of Rs.1,50,000/- has sold it on 26.10.2006 for a consideration of Rs.15,50,000/- to the respondent. About ¾ of the sale consideration is paid after one year. Whether this sale consideration was adequate to discharge the debt or whether any surplus amount available could be spoken only by the mortgagee or the auction purchaser. The day when the plaintiff P.W-1 was cross examined, the defendant Counsel had elicited that his vendor Mr.Girishkumar present in the Court. Strangely, the plaintiff had not chosen to examine him as a witness. He has neither filed the original sale deed though he admits in the cross examination that he is in possession of the original. Ex.A-1 is only the photocopy of the secondary evidence (certified copy). No explanation given for production of the secondary evidence. The plaintiff before adducing the secondary evidence ought to have complied the limitations mentioned under section 65 of the Act. (i). Ex.A-1 is only the photocopy of the secondary evidence (certified copy). No explanation given for production of the secondary evidence. The plaintiff before adducing the secondary evidence ought to have complied the limitations mentioned under section 65 of the Act. (i). The Hon’ble Supreme Court in Ashok Dulichand -vs- Madahavalal Dube reported in 1975(4) SCC 664 held that, “According to clause (a) of Section 65 of the Evidence Act, secondary evidence may be given of the existence, condition or contents of a document when the original is shown or appears to be in the possession or power of the person against whom the document is sought to be proved, or of any person out of reach of, or not subject to, the procress of the Court, or of any person legally bound to produce it, and when, after the notice mentioned in Section 66, such person does not produce it.” (ii). The Hon’ble Supreme Court in H.Siddiqui -vs- A.Ramalingam reported in 2011(4)SCC 240 has held as below:- “In a case where the original documents are not produced at any time, nor has any factual foundation been laid for giving secondary evidence, it is not permissible for the court to allow a party to adduce secondary evidence. Thus, secondary evidence relating to the contents of a document is inadmissible, until the non-production of the original is accounted for, so as to bring it within one or other of the cases provided for in the section. The secondary evidence must be authenticated by foundational evidence that the alleged copy is in fact a true copy of the original.” It has been further held that mere admission of a document in evidence does not amount to its proof. Therefore, it is the obligation of the Court to decide the question of admissibility of a document in secondary evidence before making endorsement thereon.” 20. The Trial Court has dismissed the I.A.No.64 of 2013 filed to reopen and adduce additional evidence summoning M/s.Verma and Company, the auctioneer to produce auction records. The Trial Court had dismissed the I.A. assigning acceptable reasons. It being the 4th petition to reopen the case posted for arguments, no error could be pointed in the said order of dismissal. The Trial Court has dismissed the I.A.No.64 of 2013 filed to reopen and adduce additional evidence summoning M/s.Verma and Company, the auctioneer to produce auction records. The Trial Court had dismissed the I.A. assigning acceptable reasons. It being the 4th petition to reopen the case posted for arguments, no error could be pointed in the said order of dismissal. However, when the Court is of the opinion that, such document will assist the Court to clarify the evidence on the issues and will assist in rendering justice such application can be allowed. 21. In the instant case, though there is enough material to say the Appellant herein had protracted the Trial by filing several petitions, the facts and circumstances also indicates that the auction record could have certainly assisted the Court for proper rendering of justice. In this context, the delay tactics adopted by the Appellant has over weighed the minds of the Trial Court, ignoring the extend of assistance, the auction record could have rendered to decide the suit. 22. In the said context, it is appropriate to remind the caution made by the Hon’ble Supreme Court in K.K.Velusamy vs. N. Pallanisami reported in ( 2011 (11) SCC 575 ), which has examined the power of the Courts with regard to re-opening the evidence and recalling witnesses. This Court, while examining the relevant provisions of the Code of Civil Procedure, 1908, has culled out the principles for invoking the inherent powers of the Court and said:- “16. We may add a word of caution. The power under section 151 or Order 18 Rule 17 of the Code is not intended to be used routinely, merely for the asking. If so used, it will defeat the very purpose of various amendments to the Code to expedite trials. But where the application is found to be bona fide and where the additional evidence, oral or documentary, will assist the court to clarify the evidence on the issues and will assist in rendering justice, and the court is satisfied that non-production earlier was for valid and sufficient reasons, the court may exercise its discretion to recall the witnesses or permit the fresh evidence. But if it does so, it should ensure that the process does not become a protracting tactic. The court should firstly award appropriate costs to the other party to compensate for the delay. But if it does so, it should ensure that the process does not become a protracting tactic. The court should firstly award appropriate costs to the other party to compensate for the delay. Secondly the court should take up and complete the case within a fixed time schedule so that the delay is avoided. Thirdly if the application is found to be mischievous, or frivolous, or to cover up negligence or lacunae, it should be rejected with heavy costs. If the application is allowed and the evidence is permitted and ultimately the court finds that evidence was not genuine or relevant and did not warrant the reopening of the case recalling the witnesses, it can be made a ground for awarding exemplary costs apart from ordering prosecution if it involves fabrication of evidence. If the party had an opportunity to produce such evidence earlier but did not do so or if the evidence already led is clear and unambiguous, or if it comes to the conclusion that the object of the application is merely to protract the proceedings, the court should reject the application.” 23. Therefore, this Court holds that, the Trial Court erred in admitting secondary evidence without adhering to Section 65 of the Evidence Act. The non examination of the vendor to prove the valid execution of the sale deed and the non production of the auction records had resulted in truncated trial vitiating the judgment. 24. For the said reason, in exercise of the power under Order 41 Rule 23-A of C.P.C, this Court set aside the judgment and decree of the Trial Court and remand the matter to the Trial Court for the limited purpose namely to enable the parties to produce or summon the auction records from M/s.Verma & Company, for the Court to find whether the auction held in accordance with law. To examine witnesses who are necessary to speak about the auction, execution of sale deed and payment of sale consideration. The parties are not permitted to go beyond the above said purpose for which the case is remanded. The Trial Court shall complete the Trial within a period of 4 months, from the date of receipt of the records. The Registry is directed to forward the records forthwith. 25. As a result, the Appeal Suit is Allowed. The Trial Court judgment and decree is set aside. The Trial Court shall complete the Trial within a period of 4 months, from the date of receipt of the records. The Registry is directed to forward the records forthwith. 25. As a result, the Appeal Suit is Allowed. The Trial Court judgment and decree is set aside. The matter remanded to the Trial Court for further Trial as stated above. No order as to costs.