M/s.Air Pack Gases vs M/s.Air Pack Gases And Others

R.N.Manjula, J

The applicant / plaintiff has filed the suit for recovery of money against the respondents / defendants.

The applicant / plaintiff had filed an application by directing the respondents 1 and 2 / defendants 1 and 2 to deposit the suit amount or furnish security for the suit property of Rs.1,25,67,470/- (Rupees One Crore Twenty Five Lakhs Sixty Seven Thousand Four Hundred and Seventy Only) on failing which to attach the schedule mentioned property.

Heard the learned Senior Counsel for the applicant / plaintiff and the learned counsel for the respondents / defendants and perused the materials available on record.

The averments of the application in brief:-

The applicant / plaintiff is a registered Partnership Firm represented through its Managing Partner; the firm is involved in the business of Gas Manufacturing; the first respondent, who is the husband of the second respondent was the sole proprietor of M/s.SR Hot Dip Galvanising and it was managed by the second respondent; the first respondent who is the brother of one of the partners in the applicant's firm got acquainted with the plaintiff; during the year 2020, the respondents approached the applicant to provide financial support in order to improve and develop their business and settle the loans borrowed for the development of their business with a promise to repay the loan along with interest @ 18% per annum.

4.1. The applicant had agreed to lend money to the respondents whenever required; on various occasions, the applicant / plaintiff lent money to the respondents and it aggregated to the tune of Rs.85,61,000/-; the applicant had transferred the huge sum through RTGS from the firm's current account to the first respondent business account under the name M/s.SR Hot Dip Galvanising, towards discharge of the said loan; the first respondent issued a cheque bearing No.000559 in favour of the firm drawn on Lakshmi Vilas Bank; however, the first respondent choose not to repay the loan whenever demanded; he gave evasive replies and hence the plaintiff has filed the suit for recovery of money after exchange of pre-

litigation notices to the respondents / defendants. As the applicant firm has made out a prima facie case and has got balance of convenience, a direction should be given to furnish security by depositing the suit amount or on its failure to attach the schedule mentioned property.

Counter affidavit of the respondents:-

The plaintiff has filed a vexatious suit; the first respondent’s father Selvaraj had two daughters viz. Saraswathy and Shantha; he runs a small scale industry by name M/s.SR Hot Dip Galvanising; the first daughter Saraswathy was married to one Ramamoorthy and the second daughter Shantha was married to Sivakumar; the first respondent had married the second respondent and the father’s business was transferred to the first respondent and he was in need of financial assistance for the business as the business was running in loss.

5.1. The second daughter Shantha’s husband Sivakumar and his friend Murali were running a partnership firm namely M/s.Air Pack Speciality Gases and both the companies were operated by Sivakumar and Murali jointly and their respective wives were sleeping partners; Murali who represents the plaintiff is not the Managing Partner of the plaintiff's company; since the father of the first respondent did not have any cibil score to avail bank loan, his sister Shantha’s husband Sivakumar suggested that the property of Selvaraj be settled in favour of Shantha in order to avail loan from the bank and settle the debts of the first respondent’s industry M/s.SR Hot Dip Galvanising; it was assured by Sivakumar that once the loan amount is settled, the property will be transferred to the name of the father; on 17.09.2019 the first respondent approached the bank and offered a one time settlement; as per the one time settlement letter, the first respondent had to pay Rs.85,36,000/- to the bank.

5.2. On the basis of the above said family arrangement, Selvaraj settled his property in favour of his daughter Shantha to enable her to get a bank loan by mortgaging the property and settle the debts of the industry; subsequently Sivakumar demanded the proprietorship be converted into a partnership firm and Shantha be made as a partner in the industry; it was suggested that after settling the loan, Shantha would be removed from the partnership firm; accordingly the proprietorship firm was converted into a partnership firm by including the sister of the first respondent, Shantha and wife of the first respondent Iniya as partners for M/s.SR Hot Dip Galvanising; the deed of partnership was duly executed between themselves and the same was attested by Sivakumar and the first respondent’s father Selvaraj.

5.3. Thereafter, the first respondent ceased to be the proprietor of the firm and deed of partnership was executed on 26.08.2019; the property was duly settled in favour of Shantha on 06.02.2020 and the deed of settlement was registered; subsequently Shantha mortgaged the property with Syndicate Bank, availed loan and settled the loan of Rs.85,36,000/- of M/s.SR Hot Dip Galvanising; so the money was never paid to the first respondent or the second respondent at any point of time.

5.4. Instead of retiring from the partnership firm, Shantha inducted another sister Saraswathy as a partner and reconstitution of partnership was executed on 14.08.2021; subsequently a loan of Rs.1 Crore was availed from Canara Bank on 23.12.2021 without the knowledge of the first respondent and his father Selvaraj, when this was questioned by the first respondent’s father, Sivakumar has stated that the property is settled in the name of his wife once and for all and there is no question of reconveyance; the first respondent's father got hurt due to the above activity of Sivakumar and settled his property situated at George Town, Chennai in favour of his elder daughter Saraswathy and the first respondent vide settlement deed dated 31.01.2022. Aggrieved over the same, Sivakumar induced his friend Murali to give troubles to the respondents by giving police complaint and by filing suits. The respondents 1 and 2 never availed any financial support in their individual capacity from the applicant / plaintiff and the suit has got no cause of action and hence the application should be dismissed.

Submissions of the applicant:-

The learned Senior Counsel for the applicant / plaintiff submitted that the applicant had agreed to provide financial support by considering the first respondent's relationship with the other partner Shantha, the applicant lent a sum of Rs.85,61,000/- by way of account transfer between the period July 2020 and October 2020 through 6 transactions; M/s.SR Hot Dip Galvanising is a sole proprietorship concern and the first respondent was running the business until 30.12.2020; the respondents now attempt to show that there was also a partnership firm existing in the name of M/s.SR Hot Dip Galvanising by having the second respondent and Shantha as partners, at the time of borrowing money from the applicant’s firm and it is not true.

6.1. The first respondent redeemed his Gummidipoondi property from mortgage with the sum borrowed from the applicant’s firm as he was running M/s.SR Hot Dip Galvanising in the said property; the settlement made by the father of the first respondent in favour of his children is out of love and affection and there is no question of reconveyance. Hence, the respondents should be called upon to furnish security or on their failure to attach the schedule mentioned property.

Submissions of the respondents:-

The learned counsel for the respondents submitted that the first respondent never availed any loan from the applicant / plaintiff and all that was done to discharge the debts of M/s.SR Hot Dip Galvanising in which the first respondent’s sister Shantha was also a partner; the plaintiff Murali being the friend of Shantha’s husband Sivakumar had filed this suit; the first respondent’s father has settled his property in the name of Shantha to enable her to raise loan by offering the same as security for the purpose of discharging the debts of Selvaraj; in view of the same, Shantha was inducted as a partner in M/s.SR Hot Dip Galvanising; after availing the loan and repaying the same Shantha had not chosen to reconvey the property in the name of the father; since the first respondent denies his liability, the application is liable to be dismissed.

Discussions:-

The plaintiff has filed the suit by stating that the respondents 1 and 2 had availed loan from the applicant's firm on various occasions to the tune of Rs.85,61,000/-. It is shown that the transactions between the applicant and the respondents were made only through bank transactions of the respondents 1 and 2. The cheque issued by the respondents have also been produced as one of the documents by stating that it is offered as security by the first respondent. The first respondent did not avail any loan and the arrangement was only in respect of the partnership firm in which the first respondent is not a partner and hence, there is no necessity for the first respondent to issue any cheque as security.

Even if the respondents have got a good defence that can only be proved during the trial with the limited document that is available before the Court. The applicant / plaintiff could make out a prima facie case through the bank transactions shown in the plaint that the first respondent had availed loan of Rs.85,61,000/- from him. Since the suit amount is heavy and if the plaintiff could prove his entitlement for recovery of money at the end of the trial, the failure on the part of the defendants to produce the security will render the decree useless and the plaintiff may not be able to recover the decree amount. The respondents did not state anywhere that they had an urgency and hence they are going to encumber the petition mentioned property. Since the balance of convenience as stated above is in favour of the applicant / plaintiff, it will be ideal to call upon the respondents 1 and 2 to furnish security.

In the result, the application in A.No.2407 of 2023 is allowed and the respondents 1 and 2 is directed to deposit the suit amount or to furnish security for the suit property of Rs.1,25,67,470/- (Rupees One Crore Twenty Five Lakhs Sixty Seven Thousand Four Hundred and Seventy Only) within a period of two weeks, failing which the schedule mentioned property will be attached.