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Judgment
Venuthurumalli Gopala Krishna Rao, J
The 1st defendant/State Bank of India, represented by its Manager, Anantapur, filed this appeal. The plaintiffs in O.S.No.5 of 2000 on the file of Additional Senior Civil Judge’s Court, Anantapur, filed the suit against the defendants with a prayer to cancel preliminary decree dated 31-10-1996 in O.S.No.327 of 1993 on the file of Principal Senior Civil Judge’s Court, Anantapur, for adjudicating upon the correct amount due to the 1st defendant as prayed in the plaint.
The case of the plaintiffs as narrated in the plaint, in brief, is as follows:
The 1st plaintiff is a cinema theatre which belongs to the other plaintiffs and the said cinema theatre is a joint family property and the 5th plaintiff is managing the business i.e. cinema theatre on behalf of the other plaintiffs. Plaintiffs 2 to 7 along with defendants 2 to 5 were guarantors to the loan. As the loan could not be repaid in full, the 1st defendant filed a suit on 14-10-1993 against the plaintiffs 1 to 7 and defendants 2 to 5 in O.S.No.327 of 1993 on the file of Principal Senior Civil Judge’s Court, Anantapur, for recovery of Rs.9,61,152/- and in the said suit, a preliminary decree was passed on 31-10-1996 and in the said preliminary decree, it is observed by the Court that the defendants paid Rs.8,00,000/- on 31-3-1996 and the defendants were still due an amount of Rs.1,61,152/- towards the suit amount and Rs.2,36,731/- towards interest calculated at the rate of 15% per annum. The plaintiffs further pleaded that the plaintiffs 2 to 7 paid Rs.6,00,000/- on 28-6-1996 in addition to the above amounts, earlier than the date of passing of preliminary decree and the plaintiffs paid in total a sum of Rs.14,05,041/- to the 1st defendant and the said amount is not at all reflected in the preliminary decree and the 1st defendant assured the plaintiffs 2 to 7 that they would file full satisfaction memo and also refund the excess amount to them and the plaintiffs were wrongfully induced by the 1st defendant to pay Rs.6,00,000/-tentatively without giving proper account. The plaintiffs further pleaded that the 1st defendant played fraud on the plaintiffs by not filing a memo into the Court regarding the payment and the same was suppressed before the Court by the date of passing of preliminary decree and that the plaintiffs are constrained to file the suit.
The 1st defendant/bank filed a written statement. The defendants 2 to 4 remained set ex parte. The 5th defendant reported died and her legal representatives were brought on record as plaintiffs 2, 4, 6 and 7 to 14.
The brief averments in the written statement filed by the 1st defendant are as follows:
The 1st defendant is admitting the relationship in between the plaintiffs. The 1st defendant pleaded that various payments made by the defendants in O.S.No.327 of 1993 were outside the Court and the said payments were not made in the Court and at the request of plaintiffs, the bank has collected interest as per the contract rate and arrived at a figure and the plaintiffs agreed to pay the said amount and they have voluntarily paid the said amount. There is no need for the bank to play fraud or to suppress the payments and the defendants in that suit wanted additional accommodation of loan for other business and there a condition that unless the debt is cleared, new loan amount cannot be sanctioned. The 1st defendant further pleaded that the 1st defendant has given a credit for the payments made and for the balance amount only, the preliminary decree was passed. The 1st defendant further pleaded that the plaintiffs are not entitled to recover any amount paid to the 1st defendant and there is no cause of action for the suit and the 1st defendant prayed to dismiss the suit with costs.
Based upon the pleadings of both the parties, the trial Court framed the following issues for trial:
(1) Whether the plaintiffs are entitled to cancellation of the preliminary decree ? and
(2) To what relief ?
The trial Court framed the following additional issues on 14-9-2004:
(1) Whether the plaintiffs are entitled for suit claim as prayed for ? and
(2) To what relief ?
During the course of trial, on behalf of the plaintiffs, P.W.1 is examined and Exs.A-1 to A-9 are marked. On behalf of the 1st defendant, D.W.1 is examined and Exs.B-1 to B-4 are marked.
After completion of the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs against the 1st defendant by cancelling the preliminary decree dated 31-10-1996 in O.S.No.327 of 1993 passed by the learned Principal Senior Civil Judge, Anantapur, since the plaintiffs discharged the entire amount due to the plaintiff therein and further, the plaintiffs are entitled for refund of Rs.2,13,146/- with interest at 12% per annum from the date of suit till decree and with future interest at 6% per annum on Rs.2,13,146/- from decree till realisation and the plaintiffs are directed to pay court fee on Rs.2,13,146/- within 30 days from the date of decree and the office was directed to prepare decree after payment of court fee.
Heard Sri Venkata Rama Rao Kota, learned standing counsel for the appellant/bank and Sri C.B. Rama Mohan Reddy, learned Senior Counsel, representing Sri Siddarth C.B., learned counsel for the respondents.
The learned standing counsel for appellant/bank would contend that the finding of the trial Court that the bank has failed to bring to the notice of the Court below about the payments made by the respondents/ plaintiffs herein pending the suit is bad in law. The learned standing counsel for appellant/ bank would contend that the respondents/plaintiffs herein made payments voluntarily as per the contract rate and all the payments were made in terms of the contract entered by the respondents/plaintiffs and therefore, the suit is liable to be dismissed. He would further contend that the plaintiffs are not at all entitled to the refund of amount as ordered by the trial Court.
Per contra, the learned Senior Counsel on behalf of the respondents /plaintiffs would contend that on appreciation of the entire evidence on record, the learned trial Judge rightly decreed the suit and there is no need to interfere with the finding given by the learned trial Judge.
Now, the points for determination are:
(1) Whether the trial Court is justified in decreeing the suit by cancelling the preliminary decree passed in O.S.No.327 of 1993, dated 31-10-1996, on the file of Principal Senior Civil Judge’s Court, Anantapur and the plaintiffs are also entitled to the refund of Rs.2,13,146/- with interest as ordered by the trial Court ? and
(2) To what extent ?
Point No.1:- Whether the trial Court is justified in decreeing the suit by cancelling the preliminary decree passed in O.S.No.327 of 1993, dated 31-10-1996, on the file of Principal Senior Civil Judge’s Court, Anantapur and the plaintiffs are also entitled to the refund of Rs.2,13,146/- with interest as ordered by the trial Court ?
The case of the plaintiffs is that the 1st plaintiff is a cinema theatre which belongs to the plaintiffs 2 to 7 and all the plaintiffs are inter-related. The relationship in between the plaintiffs is not at all disputed by the defendants. The plaintiffs further pleaded that the 1st defendant is State Bank of India, a nationalized bank, represented by its Manager and the plaintiffs 2 to 7 along with defendants 2 to 5 are guarantors to the loan borrowed by the plaintiffs. As the loan could not be repaid in full, the 1st defendant filed the suit against plaintiffs 1 to 7 and defendants 2 to 5 in O.S.No.327 of 1993 for recovery of Rs.9,61,152/- and in the said suit, a preliminary decree was passed on 31-10-1996. The plaintiffs further pleaded that they paid Rs.6,00,000/- on 28-6-1996 in addition to the above amounts as stated in the preliminary decree passed by the trial Court. Earlier than the date of preliminary decree, an amount of Rs.6,00,000/- is paid by the plaintiffs. The said amount of Rs.6,00,000/- is not at all reflected in the preliminary decree. The plaintiffs further pleaded that the 1st defendant played fraud upon the plaintiffs by not filing memo regarding the payment and the same was suppressed before the Court by the time of preliminary decree granted and the amounts paid by the plaintiffs were not brought to the notice of the Court, but the 1st defendant failed to file full satisfaction memo before the Court below.
The relief claimed by the plaintiffs in the suit is that to cancel the preliminary decree dated 31-10-1996 in O.S.No.327 of 1993 on the file of Principal Senior Civil Judge’s Court, Anantapur, by adjudicating upon the correct amount due to the 1st defendant/bank. It is not in dispute by both sides that the 2nd plaintiff herein is practising as an advocate for more than 10 years in those days and his father is a proprietor of the 1st plaintiff cinema theatre. The learned standing counsel for appellant/bank would contend that if mortgage decree amount is discharged by the defendants, they have to file a petition as per law before the trial Court which passed the preliminary decree, but the question of cancelling the preliminary decree does not arise.
Order XXI, Rule 2 of CPC speaks as follows:
“2. Payment out of Court to decree-holder.—(1) Where any money payable under a decree of any kind is paid out of Court, or a decree of any kind is otherwise adjusted in whole or in part to the satisfaction of the decree-holder, the decree-holder shall certify such payment of adjustment to the Court whose duty it is to execute the decree, and the Court shall record the same accordingly.
(2) The judgment-debtor or any person who has become surety for the judgment-debtor also may inform the Court of such payment or adjustment, and apply to the Court to issue a notice to the decree-holder to show cause, on a day to be fixed by the Court, why such payment or adjustment should not be recorded as certified; and if, after service of such notice, the decree-holder fails to show cause why the payment or adjustment should not be recorded as certified, the Court shall record the same accordingly.
(2A) No payment or adjustment shall be recorded at the instance of the judgment-debtor unless—
(a) the payment is made in the manner provided in rule 1; or
(b) the payment or adjustment is proved by documentary evidence; or
(c) the payment or adjustment is admitted by, or on behalf of, the decree-holder in his reply to the notice given under sub-rule (2) of rule 1, or before the Court.
(3) A payment or adjustment, which has not been certified or recorded as aforesaid, shall not be recognized by any Court executing the decree.”
Admittedly, P.W.1 practised as an advocate since more than 10 years at Anantapur town and the same is not at all in dispute by both sides, but the plaintiffs failed to adopt the aforesaid procedure as contemplated under law. The bank also failed to discharge its duty by filing a memo before the Court which passed the preliminary decree. The contention of the plaintiffs is that they made payment of Rs.6,00,000/- on 28-6-1996. The preliminary decree was passed by the trial Court on 31-10-1996. There was a gap of approximately 4 months in between the date of payment made by the plaintiffs and the date of passing of preliminary decree, in such a case, it is the duty of the bank to file a memo before the Court below by informing the said payment of Rs.6,00,000/- which was paid by the plaintiffs. In those days in 1996, the said amount of Rs.6,00,000/- is not a small amount. It was contended by the appellant that the plaintiffs have paid the amount voluntarily as per the contract and all the payments which were made on 18-3-1996, 29-3-1996 and 28-6-1996 were in terms of the contract entered by the plaintiffs with the bank. Admittedly, the plaintiffs have not claimed any refund of excess amount, if any, paid by them. The relief claimed in the plaint by the plaintiffs is that to adjudicate upon the correct amount due to the 1st defendant/bank and the excess amount paid by the plaintiffs. Therefore, admittedly, the plaintiffs have not sought for refund of any excess amount allegedly paid by them.
Another ground urged by the appellant/bank is that cancellation of preliminary decree passed by the trial Court in the suit on hand is not sustainable. The learned Senior Counsel for plaintiffs would contend that the plaintiffs made payment of Rs.6,00,000/- which is a huge amount on 28-6-1996, the bank also passed a receipt to that extent under Ex.A-7 and Ex.A-8 certificate issued by the 1st defendant clearly goes to show about the payment of Rs.6,00,000/- made by the plaintiffs on 28-6-1996. Furthermore, the decree under challenge is not a final decree and it is only a preliminary decree passed in O.S.No.327 of 1993 on 31-10-1996.
In the case on hand, a preliminary decree of mortgage is passed by the learned Principal Senior Civil Judge, Anantapur, on 31-10-1996 in O.S.No.327 of 1993. Ex.A-7 letter issued by the bank shows that the plaintiffs paid an amount of Rs.14,05,041/-. Ex.A-8 certificate issued by the bank also goes to show that the plaintiffs paid an amount of Rs.14,05,041/-. D.W.1, who is the Manager of the bank, admits in his evidence in cross-examination itself that the plaintiffs paid Rs.4,00,000/- on 18-3-1996 and they have given credit to the suit loan account. He further admits that on 29-3-1996, the plaintiffs paid an amount of Rs.4,05,041/- and the plaintiffs also paid an amount of Rs.6,00,000/- on 28-6-1996. The above admissions of D.W.1 clearly support Exs.A-7 and A-8 documentary evidence. In view of the above admissions of D.W.1, it is clear that the plaintiffs paid a payment of Rs.6,00,000/- on 28-6-1996 directly in the bank itself. The preliminary decree was passed by the trial Court on 31-10-1996. As stated supra, there was a gap of 4 months in between the alleged payment made by the plaintiffs and passing of preliminary decree. Therefore, the 1st defendant/bank, which is a nationalized bank, have received a considerable amount of Rs.6,00,000/- on 28-6-1996 failed to bring it to the notice of the Court which passed a preliminary decree. In those days, it is not a small amount, but the bank failed to bring it to the notice of the Court and obtained a preliminary decree for a total sum. The above circumstances clearly go to show that the 1st defendant suppressed the payment of Rs.6,00,000/- made by the plaintiffs and after 3 months obtained a preliminary decree for whole amount.
To prove the case of the plaintiffs, the 2nd plaintiff is examined as P.W.1. His evidence goes to show that he is practising as an advocate at Anantapur since 16 or 17 years and for commercial purpose, they obtained a loan from the 1st defendant/bank. He further admits that the payments shown in Ex.A-7 were made by them in the bank and they did not ascertain the balance amount due to the bank by the date of payment of Rs.4,00,000/-on 18-3-1996 and after 3 months, they again paid an amount of Rs.6,00,000/-. He further admits that the bank has not initiated any final decree proceedings against the preliminary decree till now.
As per the case of both the parties, the preliminary decree was passed on 31-10-1996. Though 28 years have been elapsed, no final decree is instituted against the said preliminary decree. The material on record clearly goes to show that the plaintiffs made total payment of Rs.14,05,041/-towards full satisfaction of the debt including final payment made in the bank itself, but the 1st defendant/bank suppressed the same and failed to file full satisfaction memo before the Court which passed the preliminary decree. The material on record further goes to show that the plaintiffs voluntarily paid the said payments in the bank, as admitted by P.W.1 and the debt is borrowed for commercial purpose, in such a case, the plaintiffs have to pay interest as per the contractual rate. The law is well settled that if any excess payment is made by the plaintiffs to the bank outside the Court, they have to initiate a separate suit for recovery of amount which was paid in excess to the bank, but no such proceedings are initiated by the plaintiffs except filing this suit with a prayer to cancel the preliminary decree dated 31-10-1996 by adjudicating upon the correct amount due to the 1st defendant. The learned Senior Counsel for the plaintiffs fairly contended that the preliminary decree dated 31-10-1996 was passed by the Court below, no final decree has been instituted by the bank even though 28 years have been elapsed. As stated supra, the bank calculated interest amount as per the contract rate since it is a commercial transaction. Therefore, the material on record clearly goes to show that the plaintiffs herein made payment of Rs.14,05,041/- towards full satisfaction of the debt in O.S.No.327 of 1993 on the file of Principal Senior Civil Judge’s Court, Anantapur. But, the 1st defendant/bank suppressed the same and failed to bring it to the notice of the Court which passed the preliminary decree. Resultantly, after 3 months, the preliminary decree is passed by the learned Principal Senior Civil Judge, Anantapur, which is not sustainable under law. Therefore, the same is liable to be cancelled. As stated supra, the suit transaction is a commercial transaction. The plaintiffs themselves paid an amount in the bank directly outside the Court towards full satisfaction. Therefore, they are not entitled to refund of amount as ordered by the trial Court in the case on hand.
For the aforesaid reasons, the appeal is partly allowed by setting aside the finding of the trial Court that the plaintiffs are entitled to refund of amount of Rs.2,13,146/- with interest as ordered by the trial Court. The plaintiffs in O.S.No.5 of 2000 on the file of Additional Senior Civil Judge’s Court, Anantapur, are entitled to the relief of cancelling the preliminary decree passed by the learned Principal Senior Civil Judge, Anantapur, in O.S.No.327 of 1993, dated 31-10-1996.
Point No.2:- To what extent ?
In the result, the appeal is partly allowed. Pending applications, if any, shall stand closed. Considering the circumstances of the case, I order each party to bear their own costs in the appeal.