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2025 DIGILAW 471 (AP)

K. N. Ramaraju v. G. Ganapathi

2025-03-17

NYAPATHY VIJAY

body2025
ORDER : (NYAPATHY VIJAY, J.) Impugned order: This Civil Revision Petition is filed questioning the order dated 27.02.2023 in I.A.No.54 of 2020 in O.S.No.201 of 2017 passed by the X Additional District Judge, Tirupati, Chittoor District, rejecting an application for amendment of plaint filed under Order 6 Rule 17 CPC by the Petitioner/Plaintiff. 2. The introductory facts: The suit O.S.No.201 of 2017 was filed by the Petitioner/Plaintiff to pay an amount of Rs.9 crores within a time to be fixed by the Court and in the event the amount not being paid, sale of mortgaged properties towards satisfaction of the decree and the further relief sought was interest @ 24% p.a.from the date of suit till realization. 3. The facts leading to the institution of the suit as per the plaint are that the Petitioner and Respondents are friends and the Petitioner used to lend money by way of hand loans to meet their personal expenses. 4. In the year 2012, the Respondent No. 1 was involved in real estate and was borrowing amounts from the Petitioner from time to time. The outstanding amounts payable to the Petitioner at one stage came to Rs.6 crores. At that point of time, the Respondents had purchased the suit scheduled property A, B and C under three individual sale deeds for different extents. In view of the outstanding amount, the Respondents voluntarily came forward to provide security to the amount and delivered original documents of title of a portion of the schedule property standing in the name of Respondent No.1, i.e. about 18 cents and about 161/3 cents standing in the name of Respondent No.2. 5. The Respondents delivered original documents of title for the said portions along with the xerox copies for the remaining portion i.e. 12 cents standing in the name of Respondent No.1 on the ground that the originals were not immediately available and that the originals would be delivered at a later point of time. As a result, the Respondents mortgaged the scheduled properties. As the Respondents had agreed to pay interest @ 24% p.a. on the monies borrowed from time to time, the interest along with principal borrowed by the Respondents amounted to Rs.9 crores and the Respondents executed receipts in proportion to the monies borrowed for each of the three properties. 6. As a result, the Respondents mortgaged the scheduled properties. As the Respondents had agreed to pay interest @ 24% p.a. on the monies borrowed from time to time, the interest along with principal borrowed by the Respondents amounted to Rs.9 crores and the Respondents executed receipts in proportion to the monies borrowed for each of the three properties. 6. The Respondent No.1 said to have executed two receipts on 20.04.2016 for Rs.3,49,78,000/- and Rs.2,33,00,000/- and Respondent No.2 executed a receipt for Rs.3,17,22,000/-in favour of the Petitioner. To further assure the amounts due, the Respondents are said to have executed three registered General Power of Attorneys (GPAs) in favour of the Petitioner with regard to the schedule properties. On 12.02.2017, the Respondent No.1 acknowledged the dues towards the principal amount as well as interest and agreed to repay @ 12 lakhs per month from March 2017. 7. As the Respondents were unable to keep up their promise of repayment, Respondent No.1 on 15.09.2017 said to have purchased a stamp paper and typed out a document, Memorandum of Understanding (MOU), signed and delivered to the Petitioner agreeing to pay the amounts due by 31.12.2017. Subsequently, it was pleaded that Respondent No.1 had unilaterally cancelled the registered General Power of Attorneys given to the Petitioner and since the conduct of the Respondents amounts to repudiation to their promises to pay the outstanding amounts to the Petitioner, the suit was filed for foreclosure of the equitable mortgage and recovery of monies due. 8. The Respondents filed their written statement disputing the claims of the Petitioner. In their written statement, it was pleaded that the Respondents were involved in real estate business for over 25 years and it was pleaded that the Petitioner had approached the Respondents for purchase of sites in the name of his sons by namely R.A.Devaraju and Chama Devaraju and after due negotiations, cheques for an amount of Rs.50 lakhs were given and stated that his sons would pay the balance sale consideration. Pursuant to the payments, the Petitioner had taken General Power of Attorney in his name on 29.05.2013, but as the balance sale consideration was not paid, the Power of Attorney was cancelled on 20.04.2016. Pursuant to the payments, the Petitioner had taken General Power of Attorney in his name on 29.05.2013, but as the balance sale consideration was not paid, the Power of Attorney was cancelled on 20.04.2016. On the very same day, it was stated that the Petitioner obtained three General Power of Attorneys i.e. two documents executed by Respondent No.1and another document executed by Respondent No.2 and the Respondents denied execution of any other documents on 20.04.2016, which was styled as receipts. 9. It was further pleaded that the Petitioner mischievously and with mala fide intention obtained signatures in several papers and therefore, the Respondents are not aware of the recitals and signatures of witnesses on those documents. It was pleaded that when the Petitioner approached the Respondents to hand over the original documents of the suit properties on the ground that a big client was interested to purchase the property, pursuant to the request, handed over two original sale deeds of A and B schedule properties to the Petitioner. The Respondents further pleaded that the C schedule property was pledged with the Bank. 10. After receipt of the title deeds, the Petitioner started insisting on payment of amounts due with interest @ 120% per annum on monthly rents and the Respondents being realtors, to keep their reputation, had paid amount of Rs.1,27,00,000/- by way of cash as admitted by the Petitioner at paragraph 4 of the plaint. It was further alleged that on 21.09.2017 at about 10.30 p.m., the Petitioner and his followers criminally trespassed into the house of the Respondents and abused their family members in filthy language and threatened with dire consequences and it was in that context, the signatures of the Respondents on empty non-judicial stamp papers with an intent to grab the house property were obtained. 11. The Respondents eventually contended that there is no privity of contract and denied the amounts and no mortgage was created for the amounts by way of deposit of title deeds. The Respondents further denied the execution of Memorandum of Understanding dated 15.09.2017 filed as Annexure ‘G’ along with the plaint. 12. 11. The Respondents eventually contended that there is no privity of contract and denied the amounts and no mortgage was created for the amounts by way of deposit of title deeds. The Respondents further denied the execution of Memorandum of Understanding dated 15.09.2017 filed as Annexure ‘G’ along with the plaint. 12. The amendment sought: In the course of suit, the Petitioner filed an application seeking amendment of plaint by adding paragraph 11(a) and consequential amendment in the prayer seeking alternative relief of directing the Respondents to execute registered sale deed pertaining to A, B and C schedule properties and deliver possession of the same to the Petitioner. Para 11(a) and the alternative prayer (e) are extracted below: 11(a). The plaintiff further submits that, on 15-09-2017 the first defendant executed "OPPUDALA PATHRAM" (M.O.U.) in favour of the plaintiff with certain terms and conditions, as per "OPPUDALA PATHRAM" (M.O.U.) point No. 2, the first defendant promised to repay Rs. 9,00,00,000-00 by 31-12- 2017 with up to date interest, if he fails to pay the aforesaid amount within the stipulated period as stated supra, the first defendant along with his wife who is the second defendant herein shall execute a registered sale deeds in favour of the plaintiff pertaining to property covered under the registered General Power of Attorney deeds i.e., the plaint A, B & C schedule mentioned properties without demanding any additional amount, without any condition or any notice and deliver possession of properties by mentioning the boundaries and measurements and the plaintiff shall bear the expenses for obtaining registered sale deed. As the defendants failed to perform their part of contract as per the "OPPUDALA PATHRAM" (M.O.U.), the plaintiff is entitled to get registered sale deed from the defendants. In the aforesaid circumstances, without prejudice to other reliefs as prayed in the plaint, with abundant caution only seeking alternative relief of obtaining sale deeds from the defendants. 13. This application was opposed by the Respondents on the ground that the proposed relief cannot be specifically enforced in the suit filed by the Petitioner and the proposed amendment would convert the suit for mortgage into a suit for specific performance. 13. This application was opposed by the Respondents on the ground that the proposed relief cannot be specifically enforced in the suit filed by the Petitioner and the proposed amendment would convert the suit for mortgage into a suit for specific performance. The District Court after considering the rival submissions passed a detailed order dismissing the application on the ground that the amendment, if allowed, would change the nature of the suit and the necessary pleadings required for suit for specific performance being not available in the plaint. Hence, the present revision petition. 14. Contentions: Heard Sri O.Manohar Reddy, learned senior counsel representing Sri T.V.Jaggi Reddy, learned counsel for the Petitioner and Sri N.Subba Rao, learned senior counsel representing Sri Surya Teja Anmolu, learned counsel for the Respondents. 15. Learned senior counsel for the Petitioner contended that by seeking an alternative relief, the nature of suit is not altered and the alternative relief is being sought on account of the nature of the suit document itself. It was further contended that the suit is at pre- trial stage and no prejudice would be caused to the Respondents by allowing the amendments to the plaint and a liberal approach should be adopted while considering the pre-trial amendments. As regards the merits of the application, learned counsel contended that the nature of the suit document is such that the alternative option was given in the said document. As the substance is for enforcement of the contractual obligation due under the said document, the amendment per se would not cause prejudice and alternative prayers though inconsistent with the main prayer can also be ordered by the Courts. Learned senior counsel further contended that as the defendant had denied the conscious execution of the suit MOU, the relief that is proposed under the amendment is only subject to the Petitioner establishing conscious execution of the suit document and therefore no prejudice would be caused. In support of his arguments, learned senior counsel relied upon the following judgments: 1. G.Nagamma and another v. Siromanamma and another, (1996) 2 SCC 2 2. Firm Sriniwas Ram Kumar v. Mahabir Prasad and others, AIR 1951 SC 177 3. Ganesh Prasad v. Rajeshwar Prasad and others, (2023) 6 SCR 893 16. In support of his arguments, learned senior counsel relied upon the following judgments: 1. G.Nagamma and another v. Siromanamma and another, (1996) 2 SCC 2 2. Firm Sriniwas Ram Kumar v. Mahabir Prasad and others, AIR 1951 SC 177 3. Ganesh Prasad v. Rajeshwar Prasad and others, (2023) 6 SCR 893 16. Sri N.Subba Rao, learned counsel for the Respondents contended that the alternative relief that is being sought is wholly outside the scope of the suit and the parameters for grant of relief of specific performance are completely different and therefore, the amendment cannot be ordered. It was contended that though the relief that is being sought is an alternative relief, but the nature of the suit cannot be altered from a suit for mortgage to a suit for specific performance and whether the plea is prior to trial or post- trial, the amendment cannot be ordered. It was further contended that in a specific performance suit, readiness and willingness are to be pleaded and proved and in the present case, no such pleadings are raised by the Petitioner. It was further contended that the suit for specific performance requires prior notice and there is bar of limitation since the time starts for seeking for enforcement of the decree of specific performance from the date of document i.e.15.09.2017. The counsel relied on the following judgments: 1. Ashutosh Chaturvedi v. Prano Devi @ Parani Devi and others, (2008) 15 SCC 610 2. Asian Hotels (North) Limited v. Alok Kumar Lodha and others, (2022) 8 SCC 145 17. Reasoning : The clause (2) of suit document styled as MOU dated 15.09.2017 refers to the Respondent agreeing to execute schedule properties in favour of the Petitioner or his nominee subject to the cost for stamp duty to be borne by the Petitioner. Generally, Courts are liberal in allowing pre-trial amendments as no prejudice would be caused to the defendant since he has an opportunity to file additional written statement. The only hindrance for allowing pre-trial amendment is that the party under the guise of amendment is seeking to resile from the admissions made in the pleadings or the very nature of the suit is altered. The only hindrance for allowing pre-trial amendment is that the party under the guise of amendment is seeking to resile from the admissions made in the pleadings or the very nature of the suit is altered. It is appropriate to refer to the Judgment of the Hon’ble Supreme Court in Life Insurance Corporation of India v. Sanjeev Builders Pvt., Ltd. ,, 2022 SCC Online SC 1128 wherein it was held paragraph 71.11 as under: “71.11. Where the amendment is sought before commencement of trial, the court is required to be liberal in its approach. The court is required to bear in mind the fact that the opposite party would have a chance to meet the case set up in amendment. As such, where the amendment does not result in irreparable prejudice to the opposite party, or divest the opposite party of an advantage which it had secured as a result of an admission by the party seeking amendment, the amendment is required to be allowed. Equally, where the amendment is necessary for the court to effectively adjudicate on the main issues in controversy between the parties, the amendment should be allowed.” 18. Coming to the question whether the Petitioner is entitled to seek for alternative reliefs which are totally inconsistent to each other. The Hon’ble Supreme Court in Firm Sriniwas Ram Kumar v. Mahabir Prasad and others (2 supra) considered this aspect and held that the court is empowered to grant relief an alternative relief which inconsistent to the primary plea of the plaintiff on the basis of admitted facts. 19. In G.Nagamma and another v. Siromanamma and another (1 supra), the Hon’ble Supreme Court while considering a similar fact situation permitted the plaintiff to amend the plaint raising inconsistent pleas. In that case, the suit was filed for specific performance of agreement for reconveyance and thereafter an application was filed seeking amendment of the plaint with an alternative relief for redemption of mortgage. In that context, the Hon’ble Supreme Court permitted the amendment at paragraphs 2 and 3 of the said judgment which are extracted below: 2. The appellants laid the suit for specific performance of the agreement of reconveyance dated 30-8-1967. Application under Order 6 Rule 17 of Code of Civil Procedure, 1908 was filed seeking amendment of the plaint by incorporating averments in paragraph 3 thereof. The appellants laid the suit for specific performance of the agreement of reconveyance dated 30-8-1967. Application under Order 6 Rule 17 of Code of Civil Procedure, 1908 was filed seeking amendment of the plaint by incorporating averments in paragraph 3 thereof. Thus the appellants pleaded that the transactions of execution of sale deed and obtaining a document for reconveyance were single transactions, viz., mortgage by conditional sale. In paragraph 9, they wanted alternative relief to redeem the mortgage. At the end of the prayer, the plaintiff sought alternatively to grant a decree for a redemption of mortgage. This application was rejected by the trial court. On revision, the High Court of Andhra Pradesh confirmed the same holding that in the original plaint the suit was for specific performance and the reconveyance was not incorporated in the sale deed and that, therefore, the amendment was not warranted. Amendment would change the nature of the suit as well as cause of action. 3. We called upon the appellant to produce original agreement of reconveyance. We have seen the original document which contains the recitals in support of the contention raised by the appellants. It is settled law that the plaintiff is entitled to plead even inconsistent pleas. In this case, they are seeking alternative reliefs. The application was for amendment of the plaint whereby neither cause of action could change nor the relief could be materially affected. We allow the same. 20. A similar view was taken by the Hon’ble Supreme Court in Praful Manohar Rele v. Krishnabai Narayan Ghosalkar and others , [ 2014 (2) ALD 149 (SC)] 21. The above three judgments were quoted with approval by the Hon’ble Supreme Court in the latest judgment between Ganesh Prasad v. Rajeshwar Prasad and others (3 supra) and after referring to the above mentioned judgments held that the inconsistent alternative pleas are permissible. 22. Coming to the issue of limitation urged by the learned senior counsel for the Respondents and the reliance on the judgment of the Hon’ble Supreme Court in Ashutosh Chaturvedi v. Prano devi and others (4 supra), the written statement denying the execution of the suit document i.e. MOU dated 15.09.2017 was filed on 15.03.2018. The amendment application was filed on 24.01.2020 seeking to incorporate the above mentioned relief. The amendment application was filed on 24.01.2020 seeking to incorporate the above mentioned relief. Even, if the limitation is to be calculated from the date of agreement, i.e. from the date of denial of execution of agreement by way of written statement, i.e. 15.09.2017 and 15.03.2018 respectively, the application filed by the Petitioner is within the outer limit of three years and therefore, the issue of bar of limitation would not arise for considering the amendment application. 23. Coming to the second judgment cited by the learned senior counsel for the Respondents i.e. Asian Hotels (North) Limited v. Alok Kumar Lodha and others (5 supra) was a case where by virtue of amendment, the mortgage executed on 29.03.1982 was sought to be questioned. In the said case, the original plaintiffs were granted licenses for individual shops which are part of the entire premises. At the time of creation of mortgage in the year 1982, none of the original plaintiffs were license holders and they were granted license for individual shops at the premises from 1983 onwards. The licences were terminated by the owner and the termination was the subject matter in the suit. As the licencees/plaintiffs were not at all concerned with the mortgage, the amendment was refused. The further reason for refusing amendment was that the plaintiffs were aware of the mortgage of the year 1982, which was said to have been extended and / or rolled over, refinanced and replaced from time to time. The further contention that the readiness and willingness are not pleaded to support the relief of specific performance, the same would not in issue as there is no balance consideration to be paid to the defendants as per the plaint, even otherwise, the said objection is with regard to the merits of the claim which need not be considered at this stage. 24. Result: Considering the above, this Court is of the opinion that the order of the trial Court is erroneous and hence the same is set aside. 25. The revision petition is accordingly allowed. No order as to costs. As a sequel, pending applications, if any, shall stand closed.