AI Structured Summary
Not yet generated for this judgment
Judgment
The defendant is the appellant herein. This second appeal is directed against the concurrent judgment of the courts below allowing the suit for
recovery of money. For convenience, the parties are described as per their status in the suit.
The plaintiff corporation is the Tamilnadu Government Undertaking established with an object to lend finance for entrepreneurs to establish and
promote Industries. The defendant was sanctioned Rs.80,000/- to establish an Industry under the name and style of ''''Light Engineering Metal
Industry'''' at Plot No.67, SIDCO Industrial Estate, Ranipet. The suit schedule properties were mortgaged to the plaintiff for the said loan. Later,
the defendant borrowed further sum of Rs.9,900/- towards 10% of the Marginal Money. The defendant was supposed to repay the Marginal
Money loan with 9% interest by installments in 5 years payable from 1.3.77. For this loan, a special mortgage was created upon the suit property
on 25.10.75. The defendant defaulted in payment of the loans. The last payment towards the Marginal Money loan was Rs.2,000/- on
21.07.1988.
The suit for recovery of money was resisted by the defendant on the ground that, he was an young engineering graduate. The plaintiff
corporation and TIIC formulated a consortium scheme offering the defendant advance at attractive rates of interest. The defendant accepted the
offer made by the plaintiff corporation. No specific cost was fixed for the land and building by the plaintiff. The loan amount was fixed as
Rs.65,000/- with interest at the rate of 7?% with moratorium of 2 years. Contrary to that moratorium, 15% interest was charged for 2 years. Since
the same was protested, the original schedule of payment was re-scheduled for more than one occasion. At last, the defendant paid
Rs.83,837.45/- till the year 1986 towards the cost of the workshed, water charges, maintenance charges and Marginal Money assistance. Till
1986, the plaintiff corporation did not maintain any separate account for separate assistance and the defendant also did not make his payments on
separate heads or accounts.
On 27.03.1986, the Estate Officer of the plaintiff corporation issued proceedings under Tamil Nadu Public Premises (Eviction of Unauthorised
Occupants) Act, 1975, informing that the premises of the defendant will be taken possession on 08.05.1986 for default of payment of
Rs.1,49,144.30/- towards Margin Money Assistance. Challenging this proceedings, suit for permanent injunction in O.S.No.163/86 before the
District Munsif Court, Ranipet and W.P.No.387/86 before the High Court, Madras were filed. Later, on the representation by the defendant, the
Chairman of the plaintiff corporation accepted one time settlement of Rs.34,445.02/- towards all the arrears to the plaintiff corporation and same
was paid by 13.04.1987. Pursuant to the settlement of all dues with SIDCO, sale deed for workshed was executed on 13.04.1987 in favour of
the defendant. The eviction order was revoked and the suit filed by the defendant was withdrawn. There was no reference of due towards Margin
Money Assistance in any of the letters issued on behalf of the plaintiff. While so, the suit has been filed as if there is arrears in payment of Margin
Money Assistance. The alleged payment of Rs.2000/- on 13.07.88 was paid towards water charges and not towards arrears of Margin Money
Assistance.
The Trial Court based on the above pleadings framed the following issues:-
1)Whether the plaintiff is entitled for the amount claimed?
2)Whether the defendant is not liable to pay any money to the plaintiff as claimed?
3)Whether the suit is barred by limitation?
4)To What the relief the plaintiff is entitled?
In the trial, PW1 was examined and Exs.A1 to A42 were marked, on the side of the plaintiff. DW1 was examined and Exs.B1 to B8 were
marked on the side of the defendant.
After appreciating the evidence, the Trial Court held that the loans for workshed and Margin Money Assistance are distinct and what covered
under one time settlement and cleared on 13.04.1987 was only workshed loan and not Margin Money Assistance. The payment of Rs.2,000/-
paid on 13.07.88. Whereas, the cash receipt copy Ex.A41 for payment of Rs.2,000/- and the notice dated 16.07.1988 prove that the suit filed on
17.09.1989 is well within the period of limitation.
The first appeal filed challenging the decree passed by the trial Court was dismissed. Being unsuccessful in both the courts below, the second
appeal is preferred by the defendant. This Court at the time of admitting the second appeal has formulated the following substantial questions of
law:-
''''1)Whether the sale deed executed under Ex.B4 dated 30-4-87 in favour of the appellant only after the entire payment made
towards the loan account?
2)Whether the respondent after issuance of no due certificate under Ex.B.3, B.5, B.6 and B.8 and the respondent acquised from
claiming the loan amount?
3)Whether the appellant paid a sum of Rs.2,000/- on 21- 7-88 under Ex.A.41 towards margin money assistance or towards water
charges and maintenance charges?''''
The learned counsel for the appellant/defendant referring to the communications marked as Exs.B3 to B8 contended that after payment of
Rs.34,445.02/- on 13.04.1987, the SIDCO has revoked the cancellation order, executed sale deed and had acknowledged in unambiguous term
that the defendant has settled the entire dues out of court. Ex.B8 is singularly enough to show that as on 3.8.87 there was no arrears to SIDCO.
Therefore, the suit is liable to be dismissed. The Court below without proper appreciation of these documents have arrived at erroneous conclusion
leading to miscarriage of justice. When there was no separate account for different loan transaction and when the evidence clearly shows that
payment was made consolidately to both the loans viz., workshed assistance and Margin Money Assistance and the one time settlement arrived on
13.04.1987 ought to be considered as to inclusive settlement and not for workshed assistance alone.
Per contra, the learned counsel for the respondent/plaintiff contended that, the amount involved in the suit relates to Margin Money Assistance
sanctioned to the defendant on 18.09.1975. Under Ex.A4, Rs.9,900/- was given as loan based on the order issued on 29.09.1975. As per the
terms stipulated in Ex.A5, the defendant executed a simple mortgage deed Ex.A3 on 25.10.1975. The account for the Margin Money Assistance
is independent of the account maintained for workshed loan. Payments were not made consolidately as alleged by the defendant. Exs.A13 to A20
prove regarding payment of arrears towards Margin Money Assistance. Ex.B3 to B8 which are communications relating to the workshed loan
exclusively. After settlement of that loan, the mortgage relating to that loan was discharged. Whereas the second mortgage for the Margin Money
Assistance created under Ex.A3 is still in force. The Courts below have properly appreciated the evidence and has held that the loan advanced
under Margin Money Assistance is distinct and independent of the loan advanced for workshed.
From the exhibits relied by the respective parties, it is evident that loan was sanctioned to the defendant by the plaintiff corporation for
purchase of workshed under lease cum sale agreement and created first charge over the suit property in favour of TIIC. Under Ex.A3 second
charge has been created in favour of SIDCO the plaintiff/respondent herein. Ex.A1 the copy of the affidavit in W.P.3871/86 filed by the appellant
challenging the proceedings of SIDCO Ex.B2 issued on 27.3.1986 which is targeted against the exorbitant interest claimed for the loan advanced
for workshed and no whisper about the arrears of Margin Money Assistance. Ex.B3 to B8 are fall out of the proceedings marked as Ex.B2 relates
only in respect of workshed loan of Rs.1,49,144.30/-. On the date of Ex.B2, proceedings the arrears against Margin Money Assistance was
Rs.19,116.34/-. The defendant has made payments subsequent to 28.02.1986, and the same is reflected in Ex.A41 statement of accounts.
The letters of the defendant to the plaintiff which are marked as Exs.A6, A14, A17 to A24 clearly establish that there was distinct and
separate account for Margin Money Assistance and the defendant was tendering payments towards that Account separately and specifically
mentioning that the payment is towards Margin Money Assistance account. Therefore, the court below have rightly held that the suit claim is
nothing to do with the settlement entered into between the parties in respect of workshed loan. The subsequent loan as Margin Money Assistance
and second mortgage under Ex.A3 not discharged and the plaintiff is entitled to recover the money. This Court finds that there is no error in the
finding of the Court below warranting interference. Hence, the second appeal is dismissed without costs.