Karnataka High Court
M/S Gaurav Rose Real Estate Pvt Ltd vs M/S Blue Horizon Hotels Pvt Ltd on 23 November, 2024
Author: H.P.Sandesh
Bench: H.P.Sandesh
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
RD
R
DATED THIS THE 23 DAY OF NOVEMBER, 2024
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
M.F.A. NO.4806/2018 (CPC)
BETWEEN:
1. M/S. GAURAV ROSE REAL ESTATE PVT. LTD.,
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956,
HAVING ITS REGISTERED OFFICE
AT NO.9/12, LAL BAZAR STREET,
MERCHANTILE BUILDING,
BLOCK-E, 2ND FLOOR,
KOLKATA - 700001.
REPRESENTED BY ITS
AUTHORISED SIGNATORY,
ROHAN AGARWAL. ... APPELLANT
(BY SRI AJESH KUMAR S., ADVOCATE)
AND:
1. M/S. BLUE HORIZON HOTELS PVT. LTD.,
A COMPANY INCORPORATED UNDER THE
COMPANIES ACT, 1956,
HAVING REGISTERED OFFICE AT:
NO.172/1, SRINIVAS INDUSTRIAL ESTATE,
N.S. PALYA, BANNERGHATTA ROAD,
BENGALURU - 560076.
REPRESENTED BY ITS DIRECTORS,
A.C. SRINIVAS RAJU AND A.M. RAMA RAJU.
2. M/S. PHOENIX ARC PRIVATE LIMITED
A COMPANY INCORPORATED UNDER
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THE COMPANIES ACT, 1956,
HAVING ITS REGISTERED OFFICE AT:
7TH FLOOR, DANI CORPORATE PARK,
158 CST ROAD, KALINA SANTACRUZ (E),
MUMBAI - 400 098.
REPRESENTED BY ITS SENIOR ASSOCIATE,
VAIBHAV MAHESHWARI.
3. M/S. EDELWEISS ASSET RECONSTRUCTION
COMPANY LIMITED
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT, 1956,
HAVING ITS REGISTERED OFFICE AT:
EDELWEISS HOUSE, C.S.T. ROAD,
KAILNA, MUMBAI - 400098.
REPRESENTED BY ITS MANAGING DIRECTOR,
SIBY ANTONY.
4. M/S. A.S.MUNISWAMY RAJU HINDU UNDIVIDED FAMILY,
REPRESENTED BY ITS KARTHA,
MR. A.M.RAJU
S/O. LATE A.S.MUNISWAMY RAJU,
RESIDING AT: NO.536, 10TH MAIN,
5TH BLOCK, JAYANAGAR,
BENGALURU - 560 041. ... RESPONDENTS
(BY SRI ANANT MANDGI, SENIOR COUNSEL FOR
SRI R.A.CHANDRASHEKARA REDDY, ADVOCATE FOR R1 AND R2)
THIS M.F.A. IS FILED UNDER ORDER 43 RULE 1(r) OF CPC,
AGAINST THE ORDER DATED 28.04.2018, PASSED ON IA.1/2017
AND IA.2/2017 IN O.S.NO.25855/2017, ON THE FILE OF THE IV
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, MAYO HALL
UNIT, BENGALURU (CCH-21), REJECTING THE IA.1/2017 AND
IA.2/2017 FILED UNDER ORDER 39 RULE 1 AND 2 OF CPC.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 08.11.2024 THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
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CORAM: HON'BLE MR JUSTICE H.P.SANDESH
CAV JUDGMENT
Heard the learned counsel for the appellant and learned
Senior counsel for respondent Nos.1 and 2.
2. This miscellaneous first appeal is filed praying this
Court to set aside the order dated 28.04.2018 passed by the IV
Additional City Civil and Sessions Judge at Mayo Hall Unit,
Bengaluru (CCH-21) in O.S.No.25855/2017 on I.A.Nos.I/2017
and II/2017 and allow the said applications and pass such other
order as deems fit in the circumstance of the case.
3. The appellant/plaintiff while seeking the relief of
judgment and decree sought for a direction to the defendant
No.1 and defendant No.4 to pay the plaintiff a sum of Rs.5
Crores as per the Deed of Mortgage dated 04.04.2014 executed
by defendant No.1 in favour of the plaintiff as per Document
No.4 to the plaint and along with interest on the said sum at
24% per annum from the date of suit and also sought the relief
to declare that the Mortgage Deed dated 28.05.2015 executed
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by defendant No.1 in favour of defendant Nos.2 and 3 as per
plaint Document No.10 is not binding on the plaintiff and its
rights under the Mortgage Deed dated 04.04.2014 and so also
sought the relief that in the event of the defendant Nos.1 and 4
failing to repay the sums due to the plaintiff, then the Hon’ble
Court be pleased to direct the sale of the suit schedule property
belonging to the defendant Nos.1 and 4, and to direct that the
sums owed to the plaintiff are paid from the said sale
proceedings and grant such other relief.
4. While seeking such relief, it is pleaded that the
defendants received a sum of Rs.5 Crores from the appellant and
respondent No.1 executed Mortgage Deed in favour of the
appellant/plaintiff agreeing to repay the said sum within a period
of 120 days, failing which agreed to pay interest at 24% per
annum over the said sum and the said document was executed
on 04.04.2014 and details of advancement of the amount is
narrated in the plaint.
5. It is also the case of the appellant that they have
sent the legal notice to the plaintiff demanding payment of
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Rs.10,86,77,568/- in terms of Annexure-D on 18.12.2015,
including the principal amount and also interest at the rate of
24% per annum. It is contended that respondent No.1 sent
reply admitting the said sum and also admitted execution of the
documents and relies upon the reply marked as Annexure-E
dated 30.01.2016. It is also contended that respondent No.4
being the owner of the appeal schedule property has sent a
letter to the appellant expressing willingness to pay the said sum
of Rs.10,86,77,568/- on 26.02.2016. It is further contended
that when the amount was not paid, suit was filed for recovery
of the said amount in terms of Annexure-B and also inter alia
sought for an interim order restraining the defendants from
mortgaging the suit schedule property to third parties and to
restrain commercial operation in the suit schedule premises in
terms of I.A.Nos.I and II. It is contended that the respondents
filed written statement and also objections to the suit and I.As.
and contend that commercial transaction document was
executed by the respondents in favour of their parties in terms
of Annexure-M.
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6. Learned counsel for the appellant would vehemently
contend that the Trial Court committed an error in dismissing the
applications even though the defendant No.1 has borrowed an
amount of Rs.5 Crores. But, disputes the execution of Mortgage
Deed on the ground that as per Sections 58(f) and 59 of
Transfer of Property Act, 1882, no registered instrument is
required under Section 59 of the Act thereof as in other classes
of mortgage and contend that, it requires compulsory
registration under Section 17 of the Indian Registration Act. and
Section 17(1)(c) of the Registration Act requires compulsory
registration, except deposit of the title deed of mortgage and the
Trial Court committed an error in considering those provisions
while granting the relief. Learned counsel also brought to notice
of this Court paragraph No.12 of the order of the Trial Court,
wherein an observation is made with regard to availing of loan of
Rs.5 Crores which is an admitted fact, but only disputes the
interest at 24% per annum. The Trial Court also in paragraph
No.13 of the order, made a discussion with regard to the fact
that there is a license agreement which has taken place with
some company in connection to the suit schedule property by
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receiving more than Rs.30 lakhs from each company mentioned
in the license agreement. It appears that there is a commercial
dispute in between the defendant No.1 and other defendants.
The counsel also brought to notice of this Court paragraph No.14
of the order, wherein discussion was made that the property is a
commercial property and it consists of multistoried buildings and
its value would be more than Rs.5 Crores. But, the Trial Court
erroneously comes to the conclusion that there is no prima facie
case and balance of convenience in favour of the appellant and
the very approach of the Trial Court is erroneous.
7. Learned counsel for the appellant in his argument
would vehemently contend that in the written statement and
statement of objections also, the defendant No.1 not disputes
the availing of loan amount. The Trial Court though made an
observation that the appellant ought to have taken security, but
no such security was given and no permission was sought. The
counsel would contend that, if the company is wound up, the
appellant/plaintiff will be nowhere.
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8. Learned counsel for the appellant, in support of his
argument, relied upon the judgment in LAKSHMIRATTAN
COTTON MILLS CO. LTD. AND MESSRS BEHARI LAL RAM
CHARAN VS. ALUMINIUM CORPORATION OF INDIA LTD.
reported in (1971) 1 SCC 67 and brought to notice of this Court
paragraph No.9, wherein discussion was made that conditional
acknowledgement of the debt is also an acknowledgement of
debt.
9. The counsel also relied upon the judgment in FOOD
CORPORATION OF INDIA VS. ASSAM STATE COOPERATIVE
MARKETING & CONSUMER FEDERATION LTD. AND OTHERS
reported in (2004) 12 SCC 360 and brought to notice of this
Court paragraph Nos.14 and 15, wherein discussion was made
regarding jural relationship, wherein an observation is made in
paragraph No.14 that according to Section 18 of the Limitation
Act, an acknowledgment of liability made in writing in respect of
any right claimed by the opposite party and signed by the party
against whom such right is claimed made before the expiration
of the prescribed period for a suit and the said statement
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providing foundation for a plea of acknowledgment must relate
to a present subsisting liability, though the exact nature or the
specific character of the said liability may not be indicated in
words.
10. The counsel also relied upon the judgment in PAUL
RUBBER INDUSTRIES PRIVATE LIMITED VS. AMIT CHAND
MITRA AND ANOTHER reported in 2023 SCC ONLINE SC
1216 and brought to notice of this Court paragraph No.15,
wherein discussion was made as to what is offering the property
for collateral purpose. The nature and character of possession
constitutes the primary dispute and hence, the Court is excluded
by law from examining the unregistered deed for that purpose.
11. The counsel also relied upon the judgment in
WANDER LTD. AND ANOTHER VS. ANTOX INDIA P. LTD.
reported in 1990 SUPP SCC 727 and brought to notice of this
Court paragraph No.14, the scope of interference by the
Appellate Court, wherein it is observed that an appeal against
exercise of discretion is said to be an appeal on principle.
Appellate Court will not reassess the material and seek to reach
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a conclusion different from the one reached by the Court below,
if the one reached by that Court was reasonably possible on the
material. If the discretion has been exercised by the Trial Court
reasonably and in a judicial manner the fact that the appellate
Court would have taken a different view may not justify
interference with the Trial Court’s exercise of discretion.
12. The counsel also relied upon the judgment in
DALPAT KUMAR AND ANOTHER VS. PRAHLAD SINGH AND
OTHERS reported in (1992) 1 SCC 719 and brought to notice
of this Court paragraph Nos.4 and 5, wherein discussion was
made with regard to both oral and documentary evidence placed
on record, exercising discretion and making out a prima facie
case.
13. The counsel also relied upon the judgment in BNP
PARIBAS, FRANCE VS. UB (HOLDINGS) LTD., BANGALORE
AND OTHERS reported in 2013 SCC ONLINE KAR 9885,
wherein discussion was made with regard to leave of the Court
to sell the property.
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14. The counsel also relied upon the judgment in
GURPREET SINGH VS. UNION OF INDIA reported in (2006)
8 SCC 457 and brought to notice of this Court paragraph Nos.36
and 53, wherein discussion was made with regard to adjustment
of amount, if any made first towards the interest and if any
surplus remains and the same would be adjusted towards the
principal amount.
15. The counsel also relied upon recent judgment of the
Apex Court in SEETHARAMA SHETTY VS. MONAPPA in CIVIL
APPEAL NOS.10039-40 OF 2024, wherein discussion was
made with regard to impounding of instruments and also
discussion was made that as per Sections 34 and 39 of the
Karnataka Stamp Act, 1957 and stamp duty was also paid and
receipt for having paid the stamp duty was also produced.
16. Learned counsel for the appellant referring these
judgments would vehemently contend that when the suit is filed
for recovery of money and the defendant No.1 borrowed money
and admitted the same, even if the document is not registered,
it can be used for collateral purpose and also discussed with
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regard to the scope and prima facie case, acknowledgment of
debt, selling of property with the leave of the Court and also
regarding liability.
17. Per contra, learned Senior counsel for the
respondent Nos.1 and 2 would vehemently contend that the
plaintiff relies upon execution of Mortgage Deed and the same is
disputed, since the document is undated, unregistered,
unstamped, unsigned and not attested. Hence, the said
document cannot be relied upon. The counsel also would
vehemently contend that to the tune of Rs.5,94,00,000/- was
paid to the plaintiff and relies upon the details of payment made
to G.K. Steels as well as plaintiff company and in total, the
respondent Nos.1 and 2 had made payment of Rs.5,94,00,000/-,
out of which, Rs.2,14,00,000/- was paid to G.K. Steel and the
remaining amount was paid to the plaintiff on different dates to
the tune of Rs.3,80,00,000/-. Learned counsel also produced
the copy of Company Petition No.161/2016 and also relied
upon the order passed by this Court in W.P.No.22247/2024
C/w. W.P.No.17586/2024, wherein joint memo was filed by
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the petitioner and respondents in both the writ petitions, wherein
the defendant-M/s.Blue Horizon Hotels Private Limited is also a
party and the petitioner has agreed to pay a sum of Rs.600
Crores to the respondent No.3 towards full and final settlement
of their claim and by making misrepresentation, obtained interim
order when the parties made their attempt to comply the terms
of the compromise entered in the writ petitions by giving a
publication. The counsel also would submit that already the
defendant No.1 had paid the maximum amount and now, the
plaintiff relies upon the unregistered document of Mortgage
Deed. The counsel brought to notice of this Court that stamp
duty was paid on 08.06.2017 and according to the plaintiff,
document came into existence in 2014 and also brought to
notice of this Court Section 40 of the Indian Stamp Act. The
counsel further contends that Section 59 of Transfer of Property
Act, 1882 is very clear that, if any document other than deposit
of title deeds, it requires compulsory registration and brought to
notice of this Court Section 17 of the Karnataka Stamp Act,
1977.
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18. The counsel also brought to notice of this Court
Section 38 and Section 41(h) of Specific Relief Act and contend
that very applications itself are not maintainable and the plaintiff
cannot seek relief under Order 39 Rule 1 and 2 CPC. At the
most, if the appellant/plaintiff has got any case, he has to invok
Order 38 Rule 5 CPC, since suit is simple for recovery of money.
19. In support of his argument, learned Senior counsel
for respondent Nos.1 and 2 relied upon the judgment in UNITED
BANK OF INDIA LTD. VS. LEKHARAM SONARAM AND CO.
AND ORS. reported in AIR 1965 SC 1591, wherein Section 17
of the Indian Registration Act, 1908 has been discussed in
paragraph No.7 and so also Sections 58(f) and 59 of the
Transfer of Property Act, 1882 and it is observed that only in
case of deposit and the document both form integral parts of the
transaction and are essential ingredients in the creation of the
mortgage. It follows that in such a case the document which
constitutes the bargain regarding security requires registration
under Section 17 of the Indian Registration Act, 1908. Hence,
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the document which the appellant rely upon cannot be looked
into.
20. The counsel also relied upon the judgment in STATE
OF HARYANA AND ORS. VS. NAVIR SINGH AND ORS.
reported in MANU/SC/1036/2013, wherein it is held that
Section 59 of Transfer of Property Act, 1882 mandates that
every mortgage other than a mortgage by deposit of title-deeds
can be effected only by a registered instrument. When the
debtor deposits with the creditor title-deeds of the property for
the purpose of security, it becomes mortgage in terms of Section
58(f) of the Transfer of Property Act, 1882 and no registered
instrument is required under Section 59 thereof as in other
classes of mortgage and contend that it requires compulsory
registration under Section 17 of the Indian Registration Act.
21. The counsel also relied upon the judgment in THE
SANGLI BANK LTD. VS. CHANDRASHEKAR
CHANNABASAPPA KARCHI AND ORS. reported in ILR 2005
KARNATAKA 5142, wherein discussion was made with regard
to Section 34 of Karnataka Stamp Act, 1957 and this Court held
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that there is no registered simple mortgage deed for having
deposited the title deed of the suit schedule property, since the
document is not registered as required in law which is
mandatory, the same cannot be marked as it is inadmissible
under Section 34 of the Karnataka Stamp Act. Therefore, the
Bank cannot claim agreed rate of interest nor seek sale of the
property on the basis of inadmissible document, namely the
unregistered mortgage deed.
22. The counsel also relied upon the judgment of the
Calcutta High Court in CALCUTTA PROPERTIES LTD. AND
ORS. VS. S.N. CHAKRABORTTY reported in AIR 1988 CAL
131 and brought to notice of this Court paragraph No.6, wherein
discussion was made that in view of Section 59A of Transfer of
Property Act, 1882 which was inserted by the Amending Act of
1929 make it clear that the expressions “mortgagor” and
“mortgagee” would include all persons deriving title under them
and the words “mortgagor” has been omitted to avoid
implication that the mortgagee can only sue the mortgagor
himself and not his transferee or successor.
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23. The counsel also relied upon the judgment in SUNIL
KAKRANIA AND ORS. VS. SALTEE INFRASTRUCTURE LTD.
AND ORS. reported in AIR 2009 CAL 260 and brought to
notice of this Court discussion made in paragraph No.22,
wherein it is observed that, once we hold that in a simple money
suit, an immovable property, for the construction of which the
money is allegedly payable by the defendant, cannot be the
“property in dispute in the suit”, clauses (a) and (c) of Order 39
Rule 1 cannot have any application and Clause (b) may be
applicable provided the condition mentioned therein is present.
It is also held in paragraph No.23 that Order 39 Rule 2 refers to
a “suit for restraining the defendant from committing a breach of
contract or other injury of any kind” and thus, a simple suit for
recovery of an ascertained amount of money for non-payment of
the dues for the construction-work already done, does not come
within the purview of such provision.
24. The counsel also relied upon the judgment in
KOHINOOR STEEL PRIVATE LTD. VS. PRAVESH CHANDRA
KAPOOR reported in AIR 2011 CAL 29 and brought to notice
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of this Court paragraph Nos.17 to 20, wherein discussion was
made with regard to scope of Order 39 Rule 1 Clauses (a) and
(c) and so also clause (b). Order 39 Rule 2 refers to a “suit for
restraining the defendant from committing a breach of contract
or other injury of any kind. In a suit for recovery of specific
amount of money, the plaintiff is not remediless and the
legislature has enacted the provisions of Order 38 of the Code
and Rule 5 thereof, prescribes the circumstances when the Court
can order attachment before judgment by way of interim
measure.
25. The counsel also relied upon the judgment in
COTTON CORPORATION OF INDIA LIMITED VS. UNITED
INDUSTRIAL BANK LIMITED AND OTHERS reported in
(1983) 4 SCC 625, wherein discussion was made that Court
has no jurisdiction either under Section 41(b) of the Specific
Relief Act, 1963 or under its inherent powers under Section 151,
CPC to grant temporary injunction restraining a person from
instituting any proceeding which such person is otherwise
entitled to institute in a Court not subordinate to that from which
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the injunction is sought and held that debtor-Bank not entitled to
an interim injunction restraining creditor-Corporation from
presenting a winding-up petition against the Bank, wherein also
discussed Section 41(b) and 37 of the Specific Relief Act.
26. Having heard learned counsel for the appellant and
learned Senior counsel for respondent Nos.1 and 2, the points
that would arise for consideration of this Court are:
(1) Whether the Trial Court committed an error in
rejecting the applications and it requires
interference of this Court?
(2) What order?
Point No.(1)
27. Having heard the respective counsels and also on
perusal of the material available on record and principles laid
down in the judgment referred supra by both the learned
counsel, the Court has to analyze the material available on
record. Having perused Annexure-B i.e., plaint, the prayer is
with regard to a money suit based on the Mortgage Deed dated
04.04.2014 executed by defendant No.1 in favour of the plaintiff
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and document is also placed before the Court. Based on that
document, the plaintiff claims Rs.5 Crores and also interest at
the rate of 24% per annum from the defendant No.1 and also
sought that Mortgage Deed dated 28.05.2015 executed by
defendant No.1 in favour of defendant No.2 is not binding on the
plaintiff, in view of the Mortgage Deed dated 04.04.2014 and so
also sought for the relief to order for sale of the property, if the
defendant No.1 fails to pay the amount,
28. Admittedly, the Mortgage Deed dated 04.04.2014 is
not a registered document. The defendant No.1 also not
disputes the fact of availing loan of Rs.5 Crores from the
plaintiff. But, denies the very execution of the document of
Mortgage Deed dated 04.04.2014. It is rightly pointed out by
the learned counsel for the appellant that the defendant No.1 did
not deny the signature available in the document of Mortgage
Deed dated 04.04.2014. It is also the contention of the
appellant/plaintiff that subsequently, stamp duty is paid in 2017
and receipt is also produced. There is no dispute with regard to
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the principles laid down in the judgments referred supra by the
learned Senior counsel for the respondent Nos.1 and 2.
29. The Apex Court, in the judgment in STATE OF
HARYAN AND ORS. discussed the scope of Section 58(f) of the
Transfer of Property Act, 1882 and no registered instrument is
required under Section 59 thereof as in other classes of
mortgage and contend that it requires compulsory registration
under Section 17 of the Indian Registration Act. In the case on
hand, it is not the case of the plaintiff that it is a deposit of title
deed. It is also important to note that, in the judgment of
UNITED BANK OF INDIA LTD. the Apex Court discussed with
regard to Sections 58 and 59 of Transfer of Property Act, 1882
and so also Section 17 of Registration Act as regards registration
of document, if it is in the nature of mortgage. The very
contention of the appellant/plaintiff is that document is a
Mortgage Deed and the recital is also very clear that it is a
Mortgage Deed.
30. This Court also in the judgment in THE SANGLI
BANK LTD. categorically held that since the document is not
22
registered as required in law which is mandatory, the same
cannot be marked, as it is inadmissible under Section 34 of the
Karnataka Stamp Act and also held that Bank cannot claim
agreed rate of interest nor seek sale of the property on the basis
of inadmissible document, namely an unregistered Mortgage
Deed.
31. I have already pointed out that prayer is sought in
the plaint for sale of the property and the defendant No.1 also
disputes the rate of interest at 24% per annum. Learned Senior
counsel for the respondent Nos.1 and 2 also brought to notice of
this Court the interest claimed, even in terms of the Mortgage
Deed at 12% per annum. It is important to note that the Court
has to take note of the fact that the plaintiff has sought the relief
invoking Order 39 Rule 1 and 2 CPC and two applications are
filed. Admittedly, suit is filed for recovery of money based on
the Mortgage Deed which is not a registered document and
whether subsequent payment of stamp duty creates right or not
is a matter on merits. It is also important to note that the
Calcutta High Court in the judgment in SUNIL KAKRANIA AND
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ORS. referred supra discussed the scope of Order 39 Rule 1 and
2 in paragraph Nos.22 and 23, wherein it is held that Order 39
Rule 2 refers to a “suit for restraining the defendant from
committing a breach contract or other injury of any kind” and
thus, a simple suit for recovery of an ascertained amount of
money for non-payment of the dues for the construction-work
already done, does not come within the purview of such
provision.
32. The High Court of Calcutta in the judgment in
KOHINOOR STEEL PRIVATE LTD also discussed the scope of
Order 39 Rule 1 and 2 CPC in paragraph Nos.17 to 20, wherein it
is held that in a suit for recovery of specific amount of money,
the plaintiff is not remediless and the legislature has enacted the
provisions of Order 38 of the Code and Rule 5 thereof, prescribes
the circumstances when the Court can order attachment before
judgment by way of interim measure. In the case on hand,
admittedly, no such application was filed before the Trial Court.
No doubt, the Trial Court also made the discussion with regard
to insisting for security, the same is only a finding. In the other
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judgment of the Apex Court in COTTON MILLS CO. LTD. AND
MESSRS BEHARI LAL RAM CHARAN, the Apex Court
discussed Section 41(b) and Section 37 of Specific Relief Act and
also Order 39 Rule 1 and 2 CPC.
33. No doubt, learned counsel for the appellant also
relied upon several judgments with regard to the collateral
security, but here is a case seeking recovery of money based on
the unregistered document and no dispute with regard to the
principles laid down in the judgment in LAKSHMIRATTAN
COTTON MILLS CO. LTD. AND MESSRS BEHARI LAL RAM
CHARAN’s case regarding acknowledgment is concerned and
here is also there is an acknowledgment for having availed the
money. In the judgment in PAUL RUBBER INDUSTRIES
PRIVATE LIMITED, discussion was made with regard to
collateral purpose and the defendant No.1 dispute the recovery
that the same cannot be made based on the unregistered
document and the scope of the appeal before the Appellate Court
is very limited as held in the judgment in WANDER LTD’s case
which was relied upon by the learned counsel for the appellant
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and whether the Court considered the material on record or not.
In DALPAT KUMAR’s case also, the Apex Court discussed with
regard to prima facie case exercising discretion. No doubt, there
is no dispute with regard to the principles laid down in the
judgment in GURPREET SINGH’s case with regard to interest
apportionment, the same is towards principal amount at the first
instance and if any surplus remains, the same shall be adjusted
on the principal amount.
34. The learned Senior counsel for respondent Nos.1 and
2 also contend that though the respondent No.1 made payment
to the tune of Rs.3,80,00,000/- and inspite of it, the principal
amount is due and interest is also due. Admittedly, the
defendant No.1 is liable to pay the balance amount with interest.
But, whether it is in terms of the document of unregistered
Mortgage Deed or in terms of contractual liability is to be taken
note while considering the mater on merits. Admittedly, no
application is filed under Order 38 Rule 5 CPC and suit is filed for
recovery of money based on document of Mortgage Deed, which
is not registered, it is only a simple suit for recovery of money.
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When such being the case, the appellant has to seek for remedy
under Order 38 Rule 5 CPC and not under Order 39 Rule 1 and 2
CPC. It is settled position of law that in a suit for recovery of
money, Order 39 Rule 1 and 2 CPC cannot be invoked and the
wisdom of the legislature also has to be taken note of and in
order to protect the interest of the lender, the provision under
Order 38 Rule 5 CPC to recover the money is made or otherwise,
it will become paperless decree and the appellant/plaintiff is
having alternate and efficacious remedy as provided in law.
Hence, I do not find any error committed by the Trial Court in
rejecting the application, when relief is sought under Order 39
Rule 1 and 2 CPC. Therefore, it does not require interference of
this Court and this Court can exercise the discretion, only if the
order of the Trial Court is blatantly error in coming to a
conclusion in determining the prima facie case of the appellant
and such circumstance is not warranted in the case on hand and
there is an appropriate and efficacious remedy available to the
appellant/plaintiff under law as observed in the judgment and
the issue of admissibility of documents and right of recovery
based on the Mortgage Deed could be considered while
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considering the matter on merits. Hence, I do not find any merit
in the appeal to interfere with the order passed by the Trial
Court in rejecting the applications.
35. In view of the discussion made above, I pass the
following:
ORDER
The miscellaneous first appeal is dismissed.
Sd/-
(H.P. SANDESH)
JUDGEST