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2024 DIGILAW 1276 (MAD)

Pavan Mehta v. G. Rajalakshmi

2024-06-12

V.LAKSHMINARAYANAN

body2024
ORDER : V. LAKSHMINARAYANAN, J. 1. This civil revision petition arises against the order of the learned II Additional District Judge, City Civil Court, Chennai in I.A.No.4 of 2021 in O.S.No.4840 of 2021 dated 20.10.2022. 2. O.S.No.4840 of 2021 has been presented under the provisions of Order XXXVII Rule 1 & 2 of the Code of Civil Procedure. 3. The case of the plaintiff is that a sum of Rs.47,75,000/- had been paid by the plaintiff to the defendants on the foot of a promissory note executed in Kilpauk, Chennai. On 07.10.2020, the defendants executed a power of attorney for their property situated in Ambattur in favour of the plaintiff. Subsequently, the power of attorney was cancelled on 06.07.2021. The plaintiff pleading that the defendants are not paying the principle or the interest, presented the suit on 15.07.2021. 4. Being a suit under Order XXXVII Rule 1 and 2 of the Code of Civil Procedure, on summons being served on the defendants, notice of appearance was served by the learned counsel for the defendants on the plaintiff. Thereafter, summons for judgment was taken out by the plaintiff. On receiving the summons for judgment, an application was filed seeking leave to defend the suit. This application was numbered as I.A.No.4 of 2021. 5. The plea that had been taken on the leave to defend application is that the defendants out of the sum of Rs.47,75,000/- borrowed by them, had repaid a sum of Rs.13,00,000/- to the persons directed by the plaintiff. The said amount of Rs.13,00,000/- is divided into two components namely a sum of Rs.8,50,000/- by cash and a sum of Rs.4,50,000/- by way of RTGS on 19.10.2020. The payments were made to one Arun Kumar, Pawan Kumar Lodha, and Naveen Ostwal, who have been nominated by the plaintiff to receive the sums paid by the plaintiff. 6. The defendants would further state that as the sum of Rs.13,00,000/- had been returned on 19.10.2020 and a further sum of Rs.8,00,000/- had been paid on several dates, they are entitled for unconditional leave to defend. They would further plead that charging an interest at the rate of 36% per annum is usurious and excessive and all that an unsecured creditor, in terms of direction from the Reserve Bank of India, is entitled to receive only 12% per annum for the loans extended by them. They would further plead that charging an interest at the rate of 36% per annum is usurious and excessive and all that an unsecured creditor, in terms of direction from the Reserve Bank of India, is entitled to receive only 12% per annum for the loans extended by them. They would further plead that they have given the title deed for the property situated at Ambattur which is worth about Rs.1.5 crores. 7. On receipt of this petition seeking leave to defend, the plaintiff filed a detailed counter stating that there is an admission of liability of borrowal of Rs.47,75,000/- and also an admission on signature executed on the promissory note. He would dispute the payment of Rs.13,00,000/- and would state that Arun Kumar, Pawan Kumar Lodha and Naveen Ostwal, the persons mentioned in the leave to defend application have nothing to do with the plaintiff. He would allege that the plea of return of part of the amount is an averment in air without any evidence to substantiate the same. Therefore, he sought for dismissal of the application. 8. It is pertinent to point out that in the counter filed by the plaintiff, he had admitted that a sum of Rs.4,00,000/- has been paid by the defendants to him. On consideration of the petition and counter, the learned II Additional Judge, City Civil Court, Chennai came to the conclusion that as the defendants have returned a substantial sum to the plaintiff, they are entitled to unconditional leave to defend. She would point out that insofar as the payments made by the defendants to the plaintiff are concerned, it requires evidence and therefore, it is a triable issue. Following the judgment of this Court in Kokila vs. Dhanalakshmi, (2014) 4 CTC 805 , the learned Judge granted unconditional leave. 9. Feeling aggrieved by the said order, the plaintiff is before me on revision. 10. I have heard Mr.Mukund Rao for the petitioner and Mr.C.Sankar for the respondents. I have gone through the records and considered the submissions made on either side. 11. The principle of leave to defend has been settled by the Supreme Court of India in IDBI Trusteeship Services Ltd. v. Hubtown Ltd. ( 2017) 1 SCC 568 . 10. I have heard Mr.Mukund Rao for the petitioner and Mr.C.Sankar for the respondents. I have gone through the records and considered the submissions made on either side. 11. The principle of leave to defend has been settled by the Supreme Court of India in IDBI Trusteeship Services Ltd. v. Hubtown Ltd. ( 2017) 1 SCC 568 . The principles laid down in the said judgment are more less in line with that laid down in Mechelec Engineers & Manufacturers vs. Basic Equipment Corporation, (1976) 4 SCC 687 whereby it has been held that if the defendant raises plausible defence, then the court should normally grant an unconditional leave. If the defence raised by the defendant gives a room for a doubt, then the court should grant a conditional leave. The leave to defend petition must be dismissed only when the entire defence that has been taken by the defendant is moonshine and not worth pushing the parties to trial. Following the principles laid down by the Supreme Court in IDBI's case, I look at the facts of the present case. 12. The execution of the promissory note for a sum of Rs.47,75,000/- is not in dispute. The factum that on the foot of the promissory note, the defendants had also executed power of attorney in favour of the plaintiff is not in dispute. The cancellation of power of attorney and the fact that the plaintiff has retained the original document of the property situated at Ambattur is also not in dispute. In fact, the plaintiff would submit that the original title deed has been filed as a plaint document before the court. 13. The plea that has been raised by the defendants is that they have repaid a sum of Rs.13,00,000/-. The plaintiff, in addition, has admitted the fact that a sum of Rs.4,000,00/- has been repaid. Whether Rs.4,00,000/- has been received or Rs.13,00,000/- has been received is a matter which has to be gone into at the time of trial. The defendants have stated that they had made the payment to the persons nominated by the plaintiff and therefore, if such a nomination is proved, they are entitled for accounting that amount as against the amounts due to the plaintiff. 14. Therefore, I find that a plausible defence has been raised with respect to a sum of Rs.13,00,000/-. The defendants have stated that they had made the payment to the persons nominated by the plaintiff and therefore, if such a nomination is proved, they are entitled for accounting that amount as against the amounts due to the plaintiff. 14. Therefore, I find that a plausible defence has been raised with respect to a sum of Rs.13,00,000/-. With respect to the remaining amount of Rs.34,75,000/-, no plea has been raised. If the principle amount of Rs.47,75,000/- is admitted and the repayment comes to only Rs.13,00,000/-, the admitted liability would come to the figure that has been set forth above. Therefore, the learned trial judge ought to have imposed a condition directing the defendants to deposit the remaining amount and thereafter, contest the suit. 15. I would state that the defendants would have to be called upon to deposit the remaining amount, since the demand of the promissory note is at 36% per annum. Whether the Reserve Bank of India circular would apply to the plaintiff or otherwise, is a matter of law which has to be decided after evidence and arguments. Prima facie, since an objection has been raised on the rate of interest, I feel that also should have been taken into consideration by the court below while granting leave to defend. 16. Hence, I accept this revision. The order passed by the learned II Additional City Civil Court, Chennai in I.A.No.4 of 2021 in O.S.No.4840 of 2021 dated 20.10.2022 is set aside. The defendants shall deposit a sum of Rs.34,00,000/- to the credit of the suit in O.S.No.4840 of 2021 on or before 12.07.2024. The written statement, if not, already filed should be presented on or before 31.07.2024 and the trial court should decide the suit on or before 30.11.2024. The order of the learned trial judge granting unconditional leave to defend is modified to the aforesaid extent. In case, the defendants do not deposit the amount as directed in this order or do not file the written statement within the time granted in this order, the leave to defend petition will automatically stand dismissed without any further reference to the court. If the defendants deposit the amount in compliance of this order, the said amount shall be kept in deposit in a nationalized bank pending disposal of the suit. 17. With the aforesaid directions, this civil revision petition is allowed. No costs. If the defendants deposit the amount in compliance of this order, the said amount shall be kept in deposit in a nationalized bank pending disposal of the suit. 17. With the aforesaid directions, this civil revision petition is allowed. No costs. Consequently, the connected miscellaneous petitions are closed.