IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 04.10.2011 CORAM THE HONOURABLE MR.JUSTICE M.VENUGOPAL A.S.No.131 of 2004 A.M.Ambrose ... Appellants/Plaintiff Vs. 1.S.Jeyaraj 2.Duraisingh 3.D.Mallika ... Respondents/Defendants Appeal Suit filed under Section 96 of the Civil Procedure Code against the Judgment and Decree dated 22.09.2003 made in O.S.No.3230 of 2001 on the file of the Learned II Additional City Civil Court Judge, Chennai. For Appellant : Mr.S.William For Respondents : Mr.J.J.R.Edwin J U D G M E N T The Appellant/Plaintiff has filed the present Appeal before this Court as against the Judgment and Decree dated 22.09.2003 in O.S.No.3230 of 2001 passed by the Learned II Additional City Civil Court Judge, Chennai. PLAINT FACTS: 2.The 2nd Respondent/2nd Defendant was the neighbour of the Appellant/Plaintiff. He introduced his brother-in-law, the 1st Respondent/1st Defendant, who was doing the Real estate business and he needed funds for his business. On several occasions, the Appellant/Plaintiff advanced a loan to the 1st Respondent/1st Defendant which was repaid by him together with interest @24% per annum. In June 1999, the 1st Respondent/1st Defendant approached the Appellant/Plaintiff and wanted a sum of Rs.6.5 lakhs for purchasing a property and promised to return the said amount, within a period of eight months, at the latest by February 2000. 3.The Appellant/Plaintiff advanced a sum of Rs.6.5 lakhs on https://hcservices.ecourts.gov.in/hcservices/ 15.06.1999 and that the 1st Respondent/1st Defendant executed a Promissory Note for an amount of Rs.6.5 lakhs on 15.06.1999, promising to repay the loan along with interest @24% per annum. The 3rd Respondent/3rd Defendant after receipt of an amount of Rs.35,000/- executed a separate Promissory Note on 17.02.1999, promising to repay the loan of Rs.35,000/- with interest @24% per annum. During February 2000, the Appellant/Plaintiff requested the Respondents/Defendants to repay the aforesaid amount with interest, since he fell sick and was in need of money for his medical treatment. The 1st Respondent/1st Defendant promised to settle the amount during the last week of February 2000. When the Appellant/Plaintiff approached the 1st Respondent/1st Defendant in the last week of February 2000, the 1st Respondent/1st Defendant refused to see him. In spite of the Appellant/Plaintiff approaching the Respondents/ Defendants along with friends requesting to settle the amount, the Respondents/Defendants failed and neglected to pay the amount. 4.The Appellant/Plaintiff also advanced a hand loan of Rs.50,000/- to the 2nd Respondent/2nd Defendant. The 2nd Respondent/2nd Defendant promised to repay the said loan along with interest @ 24% per annum. The Respondents/Defendants in spite of several demands made by the Appellant/Plaintiff had failed to repay the amount. 5.For the due repayment of the loans, as referred to supra, the 3rd Respondent/3rd Defendant mortgaged the property on 22.06.19996 bearing Paimash No.242, S.No.64, Block No.1, T.S.No.39, consisting of a House and Ground at Puliyur Village, Kamala Nehru, as collateral security for the repayment of the loan and created a mortgage for the loans advanced and for future loans to be granted by the Appellant/Plaintiff to the Respondents/Defendants. The security was kept alive, since there was some loams or the other advanced to both the defendants with remained unpaid. Further the security was continuing as an account of the Respondents/Defendant with the Appellant/Plaintiff was a running account. 6.The 3rd Respondent/3rd Defendant for the due repayment of the loan had created the following mortgage. 1.Name of the Mortgagor : Mrs.D.Mallika 2.Name of the Mortgagee : Mr.A.M.Ambrose, No.5, Vasuki Street, Thiruvalluvar Nagar, Arumbakkam, Chennai 106. https://hcservices.ecourts.gov.in/hcservices/ 3.property subject to : 1.Property bearing Mortgage Paimash No.242, S.No.64, Block No.1, T.S.No.39, consisting of a house and ground, Puliyur Village, Kamala Nehru Nagar, within the state of Tamil Nadu. 4.Rate of Interest : 24%p.a. 5.Amount due : Rs.7,35,000/- as on 09.04.2001. 7.The Appellant/Plaintiff issued a Lawyer's notice dated 23.03.2001 to the Respondents/Defendant, since the mortgage was in his favour in respect of three loans. The 3rd Respondent/3rd Defendant sent a reply stating that document of title was lost and that he gave the Police complaint for the same and this reply was only to evade payments. The Respondents/Defendants had not repaid the amount due to the Appellant/Plaintiff, in spite of reminders. The Appellant/Plaintiff, although he was entitled to claim interest @ 24% per annum for the sum of Rs.7,35,000/-, he restricted his claim only in respect of the Principal amount as he was unable to pay Court Fee for the interest portion. As such, the Respondents/Defendants were to pay a sum of Rs.7,35,000/- with future interest @24% per annum from the date of Plaint till the date of realisation. 8.The Mortgage created by the 3rd Respondent/3rd Defendant was for all the three loans. Therefore, a single suit was filed by the Appellant/Plaintiff in respect of three loans due by the Respondents/Defendants to the Appellant/Plaintiff, as a different cause of action against the Respondents/Defendants were clubbed as per order Order II Rule 3 of the Civil Procedure Code. Therefore, the present suit had been filed in directing the Respondents/Defendants jointly and severally to pay the Appellant/Plaintiff a sum of Rs.7,35,000/- along with further interest @ 24% per annum (along with penal interest), the quarterly rest from the date of filing of the suit till date of realisation and in default of the payment of the said amount within the time granted by the Court, the Plaint schedule mentioned property may be ordered to be sold etc. WRITTEN STATEMENT AVERMENTS OF THE 1st RESPONDENT/1st DEFENDANT (ADOPTED BY THE 2nd AND 3rd RESPONDENTS/DEFENDANTS: https://hcservices.ecourts.gov.in/hcservices/ 9.The 1st Respondent/1st Defendant became a Partner in the real estate business run by the Appellant/Plaintiff's wife Mrs.Innocent Ambrose in which they both did business amounting to more than Rs.3 crores. On numerous occasions, he had financial transactions with his business Partner viz., the wife of the Appellant/Plaintiff and the same was shared by him during a short period of time. Later, because of the Appellant/Wife's fraudulent activities Police arrested the Appellant/Plaintiff and his wife. They were remanded to judicial custody. Hence, he quit the business which he had with the wife of the Appellant/Plaintiff, though his due amount was not paid by her. 10.Although the Appellant/Plaintiff promised the 2nd Respondent/2nd Defendant to pay the said sum of Rs.30,00,000/- as his share of profit. The Appellant/Plaintiff, in the partnership business, had not bothered to pay the profit share as agreed to. Thereafter, when he requested the Appellant/Plaintiff's wife, he was threatened by the Appellant and his wife that they would forge his signature in the Promissory Note and filed cases through nominees. The Appellant/Plaintiff had misused all the documents, Promissory Notes and Cheques to his convenience. 11.Before the trial Court, the Appellant/Plaintiff was examined as witness PW1 and Ex.A.1 to Ex.A.8 were marked. On the side of the Respondents/Defendants, the 3rd Respondent/3rd Defendant was examined as DW1 and no exhibits were marked. 12.On an appreciation of oral and documentary evidence available on record, the trial Court came to the conclusion that “the Promissory Notes were misused by the Appellant/Plaintiff and his wife and further held that the Pro-notes and alleged mortgage deed were not genuine documents and resultantly, dismissed the suit with costs.” 13.Feeling aggrieved against the Judgment and Decree dated 22.09.2003 in O.S.No.3230 of 2001 passed by the trial Court, the Appellant/Plaintiff has projected the present Appeal. 14.The Points that arise for consideration in this Appeal are: "1.Whether the Appellant/Plaintiff is entitled to recover an amount of Rs.7,35,000/- together with interest @ 24% per annum?. 2.Whether the Appellant/Plaintiff is entitled to file a single suit for all the three loans due by the Respondents/Defendants (clubbing the different cause of action) as per Order II Rule 3 of the Civil Procedure Code?. 3.Whether the Appellant/Plaintiff has misused the Pro-notes etc., as alleged by the Respondents /Defendants?. https://hcservices.ecourts.gov.in/hcservices/ The Contentions, Discussions and Findings on Point Nos.1 and 3: 15.The Learned Counsel for the Appellant/Plaintiff submits that the trial Court failed to appreciate the fact that the Respondents/Defendants nowhere in the Written Statement denied the execution of Ex.A.1 unregistered Mortgage Deed dated 22.02.1996, Ex.A.2 Pro-Note dated 07.02.1999 and Ex.A.3 Pro-Note dated 15.06.1999 and the liability to pay the amounts. 16.It is the contention of the Learned Counsel for the Appellant/Plaintiff that the 3rd Respondent/3rd Defendant did not deny his signature in Ex.A.1 unregistered Mortgage Deed dated 22.02.1996 in the Written Statement filed. Further, she had not denied the receipt of Rs.2,00,000/-. But these aspects were not looked into by the trial Court in a proper perspective. 17.The Learned Counsel for the Appellant/Plaintiff urges before this Court that DW1 in her evidence had deposed that Ex.A.1 unregistered Mortgage Deed dated 22.02.1996 was not signed by her, but there was no pleading to that effect. 18.According to the Appellant/Plaintiff, DW1 (3rd Defendant) admitted in her evidence that her husband gave the Ex.A.1 guarantee document based on her property described in the suit on 22.02.1996. Also, DW1 admitted in her evidence that her husband handed over the title deed Ex.A.7 viz., the Original Sale Deed dated 26.03.1992 to the Appellant/Plaintiff and received a sum of Rs.10,000/-. However, these vital facts were not taken into consideration by the trial Court which had resulted in miscarriage of justice. 19.The Learned Counsel for the Appellant/Plaintiff strenuously contends Ex.A.1 unregistered Mortgage Deed dated 22.02.1996 was a deposit of title deed creating an equitable mortgage in respect of the suit schedule property and this was executed for the amount mentioned in the document which was borrowed by the 1st and 2nd Respondents/Defendants and the future loan to be obtained by the Defendants. But, this was not taken into account by the trial Court which had resulted in an erroneous Judgment being passed against the Appellant/Plaintiff. 20.The Learned Counsel for the Appellant/Plaintiff projects a plea that Ex.A.1 unregistered Mortgage Deed dated 22.02.1996 was not required to be registered as per recitals of the document and that no objection was raised by the Respondents/Defendants at any point of time in regard to the admission of Ex.A.1, as a document in evidence. 21.The Learned Counsel for the Appellant/Plaintiff submits that DW2 had admitted in cross examination that he executed Ex.A.3 Pro- https://hcservices.ecourts.gov.in/hcservices/ note dated 15.06.1999 for Rs.6,50,000/-, but mentioned that only he received a sum of Rs.10,000/- and Ex.A.3 was executed in the year 1994 and that he had not mentioned anything about these aspects in the Written Statement. Yet another contention is raised on behalf of the Appellant/Plaintiff that a suggestion was put to the Appellant/Plaintiff that DW1 (3rd Defendant) received only a sum of Rs.10,000/- and not Rs.35,000/- and that it was created as Rs.35,000/- but curiously this was not made mention of in the Written Statement. As such, no amount of evidence could be let in by a party without there being a pleading to that effect. 22.It is the case of the Appellant/Plaintiff that the trial Court had committed an error in not appreciating the fact that the Defendants stated in one place that that Appellant/Plaintiff forged the document in another place, the Appellant/Plaintiff misused the Cheques and Pro-notes and Stamp Papers and in another place, the Appellant/Plaintiff obtained the document by police force and all these allegations were not proved. 23.The Learned Counsel for the Appellant/Plaintiff submits that the 2nd Respondent/2nd Defendant had not denied the borrowal of Rs.50,000/- in the Written Statement. Also, he had not issued any reply to the notice of the Appellant/Plaintiff. 24.The Appellant/Plaintiff takes a stand that the 2nd Respondent/2nd Defendant was not examined before the trial Court and that was fatal to the Respondents/Defendants case. 25.The Learned Counsel for the Appellant/Plaintiff contends that the trial Court erred in coming to the conclusion that there was dispute between the Appellant/Plaintiff's wife and the 1st Respondent/1st Defendant (S.Jayaraj). When the 2nd Respondent/2nd Defendant (Duraisingh) claimed Rs.30,000/- as share and that prompted the Appellant/Plaintiff to fabricate the document etc. for which there was no basis to verify at such a conclusion. 26.It is the plea of the Appellant/Plaintiff that the trial Court wrongly came to the conclusion that there was no independent witness in regard to the Appellant/Plaintiff's claim, when the Respondents/Defendant had not denied the execution and the borrowings in the written statement. In the absence of the same, there was no necessity for the Appellant/Plaintiff to prove his case through an independent witness when it is the specific case of the Appellant/Plaintiff that there was no independent witness present at the time of the transaction. 27.Lastly, it is the contention of the Learned Counsel for the Appellant/Plaintiff that the trial Court ignored the weight of evidence altogether. https://hcservices.ecourts.gov.in/hcservices/ 28.Conversely, it is the submission of the Learned Counsel fro the Respondents 1 to 3/Defendants that the trial Court had analysed the oral and documentary evidence and had come to a correct conclusion that the Appellant/Plaintiff and his wife were already arrested by the Police for cheating and such persons would stoop down to any level to create documents with a view to grab money by others by adopting any foul means etc. Further, it held the Pro-Notes were not genuine document and ultimately dismissed the suit with costs, which need not be disturbed by this Court at this distance point of time. 29.At this juncture, this Court refers to the evidence of PW1 and DW1 & DW2 for appreciation of the case. 30.It is the evidence of PW1(Appellant/Plaintiff) that in Ex.A.2 Pro-Note, dated 17.02.1999 Rs.35,000/- was returned by Duraisingh and at the time of bringing him of Ex.A.2 Pro-note by Duraisingh (the 2nd Defendant) Rs.35,000/- was already returned and he did not know who had returned the same and further he did not know who had mentioned the date in Ex.A.2 Pro-note and who had written the said pro-note. 31.PW1 in his further evidence deposed that at the time when the 2nd Respondent/2nd Defendant gave their pro-note his wife was present and nobody else was present and in pro-note, signature of either his wife or that of the 2nd Defendant had not been obtained and it was incorrect to state that in Ex.A.2 Pro-note, the small letters were written by his wife and at the time of receiving Ex.A.2 Pro-note no paper was purchased and he handed over a cash sum of Rs.35,000/- from his possession and that his wife handed over her salary to him and that he gave a sum of Rs.35,000/- to the 2nd Respondent/2nd Defendant for Ex.A.2 Pro-note. 32.The evidence of PW1 is to the effect that the 3rd Defendant's (D.Mallika) house document was handed over by the 2nd Respondent/2nd Defendant and his wife on 22.06.1996 and they handed over the said document for the purpose of receiving the money and they paid a sum of Rs.1,40,000/- in part and the Pro-note date is 17.02.1999 and that he had not filed any case on the basis of the 2nd Respondent/2nd Defendant's statement made in the year 1996 and that on 22.06.1996, the 2nd Respondent/2nd Defendant and his wife, the 3rd Respondent/3rd Defendant gave a letter and took Rs.2,00,000/- in cash and for the said payment of Rs.2,00,000/- no pro-note was taken and in Ex.A.1 no witness signature was obtained and in Ex.A.1 unregistered mortgage Deed dated 22.02.1996, the 2nd Respondent2nd Defendant had signed as a witness and he had lent a sum of Rs.2,00,000/- from his Bank account. For the payment of Rs.2,00,000/-, no mortgage deed or Othi Deed was registered. https://hcservices.ecourts.gov.in/hcservices/ 33.That apart, the evidence of PW1 was that since the Defendant was in the habit of taking loan from him and he was having a continuous account in that manner. As such, he had not filed a case against him and during the year 1999, he had not received interest amount from the 2nd Respondent/2nd Defendant. 34.PW1 also deposed that in Ex.A.1 unregistered Mortgage Deed dated 22.02.1996 the rate of interest was mentioned as 24% and ruing the 1st week of April 1999 a sum of Rs.85,000/- was due to be paid by the 2nd Respondent/2nd Defendant and that the 2nd Respondent/2nd Defendant had to pay a sum of Rs.50,000/- and his wife had to pay a sum of Rs.35,000/- as outstanding amount and he had filed the present case for recovery of sum of Rs.85,000/-. 35.Continuing further, it is the evidence of PW1 that as per Ex.A.2 Pro-note dated 17.02.1999 and as per Ex.A.7 Original Sale Deed dated 26.03.1993, he had to receive a sum of Rs.85,000/- in all and that he filed a case before the trial Court for one promissory note and that Ex.A.3 pro-note dated 15.06.1999 was in the name of Jayaraj, who is the brother in law and he signed in his presence and the rest which was written already, was brought by him and at the time of writing of Ex.A.3 Pro-note dated 15.06.1999, no one was present. Also, at the time of execution of Ex.A.3 Pro-note dated 15.06.1999, the 2nd Respondent/2nd Defendant was present and the signature was not obtained and that he did not receive the interest for Ex.A.3 Pro- note. 36.PW1 in his evidence proceeded to state that in Ex.A.4 Lawyer's notice dated 23.03.2001 there was no mention of the payment of Rs.2,00,000/- and the sum of Rs.50,000/- paid under pro-note was included in the sum of Rs.85,000/- and that from Jayaraj for the payment of Rs.6.5 lakhs he had obtained the Pro-note and that the had not received house documents in the name of Jayaraj and he had obtained a sum of Rs.6.5 lakhs in cash from his possession and that Jayaraj for the purpose of real estate business for payment of advanced money received a sum of Rs.6.5lakhs from him and for the said sum of Rs.6.5lakhs, he had not received the interest and that he advanced the loan of Rs.6.5 lakhs to Jayaraj based on the confidence he reposed on him. 37.PW1 (in cross examination) had stated that the 1st Respondent/1st Defendant beginning from the year 1996 to 1999 on different dates had received different amounts, but he could not say on what date and month the said amounts were received by him and further for the first time how much amount he received from him he did not know and the 1st Respondent/1st Defendant approximately 25 times would have received money from him and that he had repaid the money received from him for 24 occasions out of 25 and he had not kept account for the money paid by the 1st Respondent/1st Defendant on https://hcservices.ecourts.gov.in/hcservices/ the 24th occasion. Further, he did not remember how much money the 1st Respondent/1st Defendant had received from him on 24th occasion and even for the 24th occasion when he received money from him he obtained a pro-note executed in his favour and that in Ex.A.1 unregistered Mortgage Deed dated 22.02.1996, the 3rd Respondent and the 2nd Defendant had affixed their signature as guarantors for 1st Respondent/1st Defendant and even for the future loan amount to be advanced also they stood as guarantors and Ex.A.1 was executed for the 3rd Respondent receiving a sum of Rs.2,00,000/- and that the 1st Respondent/1st Defendant for the sum of Rs.2,00,000/- received he returned back a sum of Rs.1.95 lakhs and he could not say as to whether he repaid the money and for the receipt of sum of Rs.2,00,000/- in Ex.A.1 unregistered Mortgage Deed dated 22.02.1996, he had paid a sum of Rs.1,95,000/- in cash and that there was a balance of Rs.5,000/- and at the time of filing the present case Rs.5,000/- was left out and in Ex.A.1 there was no signature of 1st Respondent/1st Defendant. 38.The evidence of DW1 (3rd Defendant) is to the effect that the 1st Respondent/1st Defendant was her own brother and that in her proof affidavit she had stated that her husband, the 2nd Respondent/2nd Defendant had deposited the documents and received a sum of Rs.10,000/- from the Appellant/Plaintiff, but she did not know the loan details, her husband had informed her about the money received as loan by him and that he informed her that he gave the document to the Appellant/Plaintiff about which she had not asked and that no lawyer's notice was received by her and she had not signed and received the same. 39.It is the further evidence of DW1 that the 1st Respondent/1st Defendant (her brother) was doing real estate business and it was incorrect to state that she along with other Defendants on 22.02.1996, had received a sum of Rs.2,00,000/- from the Appellant/Plaintiff by creating a mortgage and she did not know that on 17.02.1999 she received a sum of Rs.35,000/- as loan from the Appellant/Plaintiff and executed a Pro-Note. 40.The evidence of DW2 is to the effect that he had not taken any loan and that he was doing a real estate plot sales broker job and that he along with the Appellant/Plaintiff and his wife were doing the real estate business and for this partnership real estate business there was no document and everything was oral and that on the basis of the complaint lodged by one Kannan, the Appellant/Plaintiff was arrested by the police and that he had not given the complaint. 41.Added further, it is the evidence of DW2 that he did not know about the Ex.A.1 guarantee letter and that since the Appellant/Plaintiff had included them as three persons in the https://hcservices.ecourts.gov.in/hcservices/ guarantee letter it was written that the suit property was included and further that he did not know about the execution of Pro-note by the 3rd Respondent/3rd Defendant (D.Mallika) and the signature was not to be seen in the said Pro-note as stated by him in the Written statement and in Ex.A.3 the signature was fabricated and it was correct to state that he had mentioned that only he received a sum of Rs.10,000/- and not Rs.6,50,000/- mentioned in Ex.A.3 Pro-note dated 15.06.1999 and that during the year 1994, he received a sum of Rs.10,000/-. 42.DW2 further deposed that during the year 1999 he had not received a sum of Rs.10,000/- either from the Appellant/Plaintiff or from his wife and that during the year 1994, he executed a blank on demand bond by affixing his signature and when he asked the Appellant/Plaintiff after filing of the present case, he informed him that he had torn the Pro-note executed by him in the year 1994. 43.The Learned Counsel for the Appellant/Plaintiff cites the decision of the Honourable Supreme Court Ravinder Singh v. Janmeja Singh and Others, (2000) 8 Supreme Court Cases 191, at Page 192 wherein it is held that 'no evidence can be led on a plea not raised in the pleadings and no amount of evidence can cure defect in the pleadings.' 44.He also relies on the decision of this Court Arulmigu Viswewaraswami and Veeraraghava Perumal Temples Tiruppur, Coimbatore District v. R.V.E.Venkatachala Gounder and another, 1996 (II) CTC 1999, wherein it is observed that 'it is settled law that without specific plea no evidence can be let in'. 45.The Learned Counsel for the Appellant/Plaintiff invites the attention of this Court to the decision Union of India v. Sankar Store and another, AIR 1974 ORISSA 85, at Page 86, wherein it is laid down as follows: “Thus the plaintiffs having omitted to plead a case that they obtained title to the goods on paying full price for it, through their agent, to the consignor, evidence in that regard should not have been allowed to be led.” 46.Yet another decision K.Kanakarathnam v. A.Perumal and another, AIR 1994 MADRAS 247, is relied on the side of the Appellant, wherein it is held hereunder: “In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, necessary and material facts should be pleaded in support of the case set up and that in the https://hcservices.ecourts.gov.in/hcservices/ absence of pleading, evidence if any produced cannot be considered. The object of the rule is that in order to have a fair trial it is imperative that the party should state the essential material facts so that the other party may not be taken by surprise.” 47.The Learned Counsel for the Appellant/Plaintiff brings it to the notice of this Court to the