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Judgment
T.Mallikarjuna Rao, J
The Appeal, under Section 96 of the Code of the Civil Procedure, 1908 (for short, 'C.P.C'), is filed by the appellant/defendant challenging the decree and Judgment dated 29.06.2013 in O.S.No.329 of 2012 passed by the learned District Judge, Guntur, (for short, ‘trial court’). Respondent is the plaintiff, who filed the suit in O.S.No.329 of 2012 seeking recovery of Rs.12,91,197/- which includes principal and interest accrued against the defendant.
The parties will hereinafter be referred to as arrayed before the trial Court.
The facts leading to the present Appeal, in a nutshell, are as under:
The plaintiff and defendant are brothers. The defendant borrowed Rs.6,00,000/- personal loan from State Bank of Hyderabad, Arundelpet branch, Guntur (for short, 'S.B.H') on 09.08.2004. The plaintiff and his two sons, Murali Mohan and Mahesh, stood as guarantors for the due payment of debt and signed an agreement of guarantee. Subsequently, the defendant failed to discharge the debt, despite demands made by S.B.H. Consequently, S.B.H issued a notice to the plaintiff and his sons to discharge debt serving notice under SARFAESI Act, 2002, dated 09.11.2006 demanding them to pay the debt due to bank. On receipt of the notice, the plaintiff, having no other alternative, paid a total sum of Rs.6,60,000/- to S.B.H on different dates to the credit of the defendant's loan account bearing No.520996645438 of the defendant. Subsequently, the plaintiff made several demands for repayment of the amount which he paid towards loan dues, but the defendant did not pay any amount.
In the written statement, the defendant denied the material averments of the plaint inter-alia, contended that the plaintiff or his sons did not discharge the loan with S.B.H.; the plaintiff also obtained a loan from S.B.H., and the defendant himself paid installments in his account through agents; the amount shown in plaint paid by plaintiff belongs to the defendant; due to relationship between plaintiff and defendant, he handed over amounts to deposit to the credit of his account; thus, the defendant himself discharged the loan due to S.B.H.; Mahesh, plaintiff's son, also filed O.S.No.365 of 2010 on the file of V Additional Senior Civil Judge, Guntur for recovery of the same amount, as such, the plaintiff is not entitled to recover any amount obtaining any decree; plaintiff's claim is barred by limitation; there is no agreement or usage for payment of interest @ 24% per annum and that calculation of interest on the deposit is incorrect and plaint valuation is not proper.
Based on the above pleadings, the trial Court framed the following issues:
(1) Whether the plaintiff is the guarantor for the loan borrowed by the defendant and whether the plaintiff paid the amount to the State Bank of Hyderabad on demand to discharge the debt due by the defendant.
(2) Whether the plaintiff entitled to recover the suit amount in view of the claim by Mattupalli Murali in O.S.No.365 of 2010 pending on the file of Principal Senior Civil Judge, Guntur?
(3) Whether the suit claim of the plaintiff is in time?
(4) To what relief?
During the trial, on behalf of the plaintiff, P.W.1 was examined and marked Exs.A.1 to A.6. On behalf of the defendant, D.W.1 was examined, and Exs.B.1 to B.6 were marked.
After the completion of the trial and hearing the arguments of both sides, the trial Court decreed the suit in part with proportionate costs for Rs.1,35,000/- together with interest @ 18% per annum on Rs.1,35,000/- from 04.09.2009 till the date of filing of suit and thereafter @ 12% per annum from the date of suit till the date of decree and thereafter, @ 6% per annum from the date of decree till the date of realization.
Sri D.V.Chalapathi Rao, learned counsel for the appellant/defendant, put forth an argument that the trial Court having accepted the point of limitation of three years for filing of a suit by the surety under article 42 of Limitation Act, but erroneously decreed the suit by party allowing the respondent’s claim for Rs.1,35,000/- despite filing of the suit after lapse of three years; the trial Court made grave mistake in calculating the limitation for the transaction dt.04.09.2009 and came to an erroneous conclusion that the suit is in limitation, despite the fact that the suit is registered on 25.09.2012 after lapse of limitation as mentioned under article 42 of the Indian Limitation Act, which is hopelessly barred by 22 days; the trial Court failed to consider that the appellant discharged the plaintiff’s loan as per Ex.B.2 to B.6; the trial Court ought not to have awarded interest on the suit amount as the same is not under the contract as there is no privity of contract between the parties and the award of interest on the decreed amount is also excessive.
No representation is made on behalf of the respondent/plaintiff despite the granting of adjournment. Hence, it is treated as heard.
With regard to the pleadings in the suit, the findings recorded by the Trial Court and in light of the rival contentions and submissions made on either side before this Court, the following points would arise for determination:
1) Is the trial Court justified in decreeing the suit in part for Rs.1,35,000/- together with interest @ 18% per annum?
2) Does the Judgment passed by the trial Court need any interference?
POINT NOs.1 & 2:
Either parties do not dispute the following facts:
The plaintiff and defendant are brothers. The defendant borrowed Rs.6,00,000/- as a personal loan from S.B.H., on 09.08.2004. The plaintiff, along with his two sons, Murali Mohan and Mahesh, stood as guarantors for the due payment of debt and signed an agreement of guarantee. Subsequently, the defendant failed to discharge the debt, despite demands made by S.B.H. Consequently, the bank authorities issued Ex.A.1 notice under the SARFAESI Act, 2002 on 09.11.2006. Notice was addressed to the guarantors, i.e., Mattupalli Subbarao, Mattupalli Murali Mohan, Mattupalli Mahesh, and the defendant. The S.B.H., demanded not only the defendant but also the guarantors for the discharge of the debt due under the personal loan amount of the defendant.
The plaintiff contends that as the bank intends to proceed against the property in terms of provisions of the SARFAESI Act, he discharged the debt, i.e., personal loan amount due under personal loan account bearing No.52099645438 of the defendant under the following installments:
Sl.No.
Payment
Date
1.
Rs.80,000/-
29-12-2006 (through his son Mahesh)
2.
Rs.20,000/-
28-02-2007 (through his son Mahesh)
3.
Rs.2,25,000/-
29-08-2008 (through his son Mahesh)
4.
Rs.2,00,000/-
30-12-2008 (through his son Murali)
5.
Rs.1,35,000/-
04-09-2009 (through his son Murali)
The plaintiff's case is that he and his two sons stood as sureties to the personal loan amount due by the defendant, which is not disputed. The defendant has not denied the plaintiff's case that he obtained a personal loan from the S.B.H. The defendant contends that he repaid the loan amount to the S.B.H. The defendant has not refuted the execution of the guarantee agreement by the plaintiff and his two sons. The plaintiff's main contention is that he paid Rs.6,60,000/- to settle the loan upon receiving notice (Ex.A.1). This payment is substantiated by various counterfoils such as Exs.A.2 to A.6. The trial Court has considered the details of this payment in a clear tabular format which is provided below:
Sl.No.
Exhibit
Date of payment
Amount
Account No.
1.
Ex.A.2
29-12-2006
Rs.80,000/-
645438
2.
Ex.A.3
28-02-2007
Rs.20,000/-
---
3.
Ex.A.4
29-08-2008
Rs.2,25,000/
52099645438
4.
Ex.A.5
30-12-2008
Rs.2,00,000/-
52099645438
5.
Ex.A.6
04-09-2009
Rs.1,35,000/-
52099645438
Ex.A.2 to Ex.A.6 go to show that the plaintiff discharged the defendant's debt due to S.B.H. bearing loan account No.52099645438.
As mentioned earlier, the defendant claimed that he made the payments corresponding to Exs.A.2 to A.6. However, the defendant failed to provide any documentary evidence to substantiate this assertion. If the defendant had indeed made these payments, one would expect to find records or documentation of these transactions. After a careful examination of the available evidence, the trial court rightfully dismissed the defendant's claim that he had made payments in accordance with Exs.A.2 to A.6.
On the other hand, the defendant has also produced Exs.B.2 to B.6 receipts evidencing the payments. The trial court has extracted the said payments made by the defendant concerning Exs.B.2 to B.6 in a tabular form, which is as follows:
S.No.
Exhibit
Date of payment
Amount
Account No
1.
Ex.B.2
24-05-2002
Rs.7,100/-
01593010673
2.
Ex.B.3
23-02-2005
Rs.7,500/-
0159301067300
3.
Ex.B.4
27-05-2002
Rs.7,100/-
01593010673
4.
Ex.B.5
27-03-2002
Rs.7,100/-
01593010673
5.
Ex.B.6
21-12-2002
Rs.20,000/-
0159301067300
The trial court correctly noted that the account numbers mentioned on the receipts correspond to the plaintiff's account, not the defendant's. This strongly suggests that it was the plaintiff who paid off the defendant's loan. It's important to emphasize that these payments cannot be adjusted within this suit unless the defendant initiates a counterclaim or claims a set-off in accordance with Order 8 of C.P.C.
In the facts of the case, the trial court is justified in holding that Exs.B.2 to B.6 would not come to the defendant's aid. The trial Court has rightly concluded that the oral evidence of PW.1 coupled with Exs.A.2 to A.6 show that the plaintiff discharged the loan obtained by the defendant with the loan account bearing No.52099645438 with S.B.H., on receipt of Ex.A.1 notice. The trial Court has also referred to the defendant's payment, that he did not produce any documentary evidence in proof of discharge of the debt relating to his loan account bearing No.52099645438.
The trial Court further observed that the plaintiff’s claim for Rs.80,000/-, Rs.20,000/-, Rs.2,25,000/- and Rs.2,00,000/- covered by the payments, dated 29.12.2006, 28.02.2007, 29.08.2008 and 30. 12.2008 under Exs.A.2 to A.5 are barred by limitation and entitled to recover only Rs.1,35,000/-, since the last installment paid on 04.09.2009 under Ex.A.6, as it was in time. The plaintiff has not preferred any appeal or cross-objection against the said finding. Aggrieved by the said finding only, the defendant preferred this Appeal.
The trial Court further observed that the plaintiff is entitled to recover the amount of Rs.1,35,000/- paid by him on 04.09.2009 vide Ex.A.6 to the loan account of the defendant. The defendant contends that the said payment made by the plaintiff was also barred by limitation as the suit was registered on 25.09.2012, after the lapse of limitation as mentioned under article 42 of the Indian Limitation Act, which is hopelessly barred by 22 days. The material on record shows that the plaint was presented on 04.09.2012, and the payment was made on 04.09.2009. This Court is of the view that the date of the presentation of the plaint has to be considered for the purpose of limitation, but not the date of registration of the plaint. As such, this Court finds that the contention raised by the defendant in this regard is unsustainable.
The other contention raised is that the trial Court granted interest @ 18% per annum from 04.09.2009 till the date of filing of the suit, and it is not permissible under law, as there is no privity of contract between the parties. The trial Court also considered the contention raised by the defendant, and it is observed as follows:
However, given an implied contract of indemnity between the plaintiff and defendant, the plaintiff is entitled to recover the rate of interest which the bank is claiming on the loan dues. Therefore, the plaintiff is entitled to recover interest @ 18% per annum, which is the bank's interest rate from the date of payment covered by Ex.A.6, i.e., 04.09.2009.
As the evidence on record shows that the S.B.H., calculated interest @ 18% per annum from the plaintiff, this Court views that granting such a rate of claim against the defendant by the trial court is just and reasonable.
After careful consideration, the trial Court correctly appreciated the evidence. There is no reason for this Court to arrive at a different conclusion than the one arrived at by the trial Court. I believe the findings arrived at by the trial Court are correct, and no justifiable reasons have been shown by the appellant/defendant for arriving at different conclusions. I agree with the conclusion reached by the trial Court.
Given the preceding discussion, the view taken by the trial court does not call for any interference, and this Appeal fails and is hereby dismissed. The impugned Decree and Judgment passed by the trial court is upheld. Accordingly, the points are answered.
As a result, the Appeal is hereby dismissed without costs by confirming the Decree and Judgment in O.S.No.329 of 2012, dated 29.06.2013, passed by the learned District Judge, Guntur.
Miscellaneous petitions pending, if any, in this Appeal, shall stand closed.