1 IN THE HIGH COURT OF JUDICATURE AT MADRAS (Ordinary Original Civil Jurisdiction) Wednesday, the 21st day of April 2010 THE HONOURABLE MS.JUSTICE R.MALA A.NO.1700 OF 2008 IN C.S.NO.938 OF 2005 1. Smt. G.R. Kanta, W/o. Late Grandhi Ranga Ramanujam, 2. Smt. M. Jaya @ Jayalakshmi W/o. Sri. M. Jagadish, No.63, Pachaiyppa's College Hostel Road, Chetpet, Chennai 600 031. 3. Mr. G.R. Chandrasekar, S/o. Late Grandhi Ranga Ramanujam, 4. Smt. A Padmavathy W/o. Dr. R. Asokan, No.21, Parameshwari Colony, Andavar Nagar, Kodambakkam, Chennai 600 024. 5. Mr. G.R. Rajasekhar, S/o. Late Grandhi Ranga Ramanujam, 1,3 and 5th Plaintiff residing at New NO.39, Old NO.30, Padmanabha Chetty Street, T. Nagar, Chennai 600 017. 1to 5 represented by power of attorney agent K.V.SIVARAM PRASAD, No.3, (Old No.19), Tilak Street, T. Nagar, Chennai 600017. ...Plaintiffs. Vs. 1. M/s. PARKTOWN BENEFIT FUND LIMITED, # 995, Diamond Plaza 2nd Avenue, Anna Nagar,Chennai-40. Represented by its Chairman Mr. R. Vivekanantan. 2. S.G. Pandurangan S/o. S. Ganapathy Mudaliar, No.281, Old No.472, Mint Street, Park Town,Chennai 600 003. ...Defendants. https://hcservices.ecourts.gov.in/hcservices/ 2 A.NO.1700 OF 2008 S.G. Pandurangan S/o. S. Ganapathy Mudaliar, No.281, Old No.472, Mint Street, Park Town, Chennai 600 003. ...Applicant/2nd Defendant. Vs. 1. Smt. G.R. Kanta, W/o. Late Grandhi Ranga Ramanujam, New NO.39, Old NO.30, Padmanabha Chetty Street, T. Nagar, Chennai 600 017. 2. Smt. M. Jaya @ Jayalakshmi W/o. Sri. M. Jagadish, No.63, Pachaiyppa's College Hostel Road, Chetpet, Chennai 600 031. 3. Mr. G.R. Chandrasekar, S/o. Late Grandhi Ranga Ramanujam, New NO.39, Old NO.30, Padmanabha Chetty Street, T. Nagar, Chennai 600 017. 4. Smt. A Padmavathy W/o. Dr. R. Asokan, No.21, Parameshwari Colony, Andavar Nagar, Kodambakkam, Chennai 600 024. 5. Mr. G.R. Rajasekhar, S/o. Late Grandhi Ranga Ramanujam, New NO.39, Old NO.30, Padmanabha Chetty Street, T. Nagar, Chennai 600 017. ...Respondents/Plaintiffs. Application praying that this Hon'ble Court be pleased to reject the suit for want of cause of auction and barred by limitation. This application is filed by the second defendant to reject the plaint in C.S.No.938 of 2005. 2. The respondents-plaintiffs filed the suit for declaration that the public auction held on 19.4.2002 under Section 69 of the Transfer of Property Act, said to have been conducted by the first defendant, is fraud and illegal https://hcservices.ecourts.gov.in/hcservices/ 3 and consequently to declare the sale deed dated 23.8.2002 as void ab-initio and not binding on the plaintiffs and also for permanent injunction restraining the defendants from in any manner interfering with the plaintiffs' peaceful possession and enjoyment of the plaint schedule mentioned property and also for permanent injunction restraining the defendantss from in any manner alienating or encumbering the plaint schedule mentioned property and for other reliefs. 3. The second defendant who is the auction purchaser, has come forward with this application for rejection of the plaint under Order 7 Rule 11 C.P.C., stating as follows: (a) The plaintiffs filed the suit for declaration that the auction under Section 69 of the Transfer of Property Act, and the sale deed executed in favour of the second defendant is null and void and also for permanent injunction. The suit property originally belonged to Mrs.Grem Rukmani Ammal and she bequeathed the same in favour of one G.Ranga Ramanujam. (b) As per the probate O.P. in O.P.No.275 of 1990, the probate has been granted and the said Ranga Ramanujam executed two mortgage deeds in favour of the first defendant-M/s.Park Town Benefit Fund Limited and since he has not repaid the amount, a redeemed mortgage notice under Section 69 of the Transfer of Property Act, has been https://hcservices.ecourts.gov.in/hcservices/ 4 effected and the property has been brought in public auction. The applicant/second defendant is the successful bidder for Rs.73 lakhs in the auction held on 19.4.2002. (c) The suit is barred by limitation. Wantonly, the plaintiffs have suppressed the material facts. The first plaintiff only sought time to clear the loan and take back the original documents and not as averred in the plaint. (d) After purchase by the applicant/second defendant, he has been taking steps for getting the patta transferred in his name. There is suppression of material facts in the plaint. The plaintiffs had knowledge about the sale in favour of the applicant/second defendant on 22.4.2002 and the fact that plaintiffs came to know of the sale in August 2005, is a fraud played and the suit itself is an abuse of process of Court. (e) The Power of Attorney Agent cannot file the suit in respect of happenings which are not to his knowledge or which were done by him and the suit is liable to be rejected. The factum of auction being known to them and their acquiescence, is to be treated as estoppel and the document filed with this application shows that at the time of mortgage with the Park Town Benefit Fund Limited as well as on other occasions, the plaintiffs as well as Ranga Ramanujam have disclosed that the document had been lost and had not disclosed the factum of mortgage with the State Bank of India, Gudur Branch. The first plaintiff, on https://hcservices.ecourts.gov.in/hcservices/ 5 receipt of the communication from the auctioneers, intimating that the property was sold in public auction for Rs.20 lakhs, said to have been conducted on 19.4.2002, immediately sent objections for the said auction and thereafter, the plaintiffs did not receive any communication from the first defendant either about the confirmation of the auction or the statement of dues from the first defendant, which will show that the plaintiffs had knowledge of the auction held and its confirmation, and therefore, the suit filed after three years from the date of registration of the sale deed, viz., execution on 23.8.2002 and registration on 26.8.2002, the suit was filed on 7.10.2005, is barred by limitation. (f) The Bank did not issue any notice to Park Town Benefit Fund Limited or to the applicant/second defendant, disclosing the factum of mortgage or that the property is subject to such mortgage. (g) The plaintiffs have not filed the suit for redemption of mortgage after receipt of auction notice, which will clearly show that the present suit has been filed only to have a grab at the property from the person who had bought the same for valuable consideration and bona-fidely. (h) The applicant/second defendant issued a paper publication on 31.7.2002 in "Malai Murasu" and the other on 3.8.2002 in "News Today", informing the public of his https://hcservices.ecourts.gov.in/hcservices/ 6 auction purchase, and that the document is to be registered in his favour. At that point of time, the respondents- plaintiffs have not raised any objection or such a notice is deemed to be notice of purchase by the applicant/second defendant and the plaintiffs having failed to challenge the process at the initial stage, now, after knowing that they don't have a title to the property and also of the factum that they are bound by the mortgage by Ranga Ramanujam and the subsequent sale, due to non-payment of the amounts borrowed, had laid the suit, which is not maintainable in law and on facts. (i) Since the applicant/second defendant purchased the property and the plaintiffs have been evading to hand over the possession, with ulterior motive to grab the property, seems to have given a complaint to the Police and the Police on seeing that the sale deed is registered in applicant's name, had dropped the proceedings, as the applicant had a valid right to demand possession. The plaintiffs are bound by the sale and the unauthorised manner in which they deny the applicant of the possession, will show that the same is done with ulterior motive to grab the property. The applicant/second defendant prays for rejection of the plaint. 4. The gist and essence of the counter affidavit filed by the respondents/plaintiffs are as follows: (a) The original owner Mrs.Grem Rukmani Ammal https://hcservices.ecourts.gov.in/hcservices/ 7 mortgaged the property in favour of the State Bank of India, Gudur Branch, during her lifetime. The respondents are not aware of the allegation that Mr.Ranga Ramanujam had given any declaration that the original title deeds relating to the said property had been lost. However, the original title deeds were deposited to the State Bank of India, Gudur, for loan availed of by Mrs.Grem Rukmani Ammal and the respondents/plaintiffs had discharged the said loan and took possession of the original documents and subsequently, as per the direction of this Court, the said original documents were deposited before this Court for safe custody. (b) The applicant/second defendant in collusion with Park Town Benefit Fund Ltd., created documents and records to make it appear as though the auction was held on 19.4.2002 under Section 69 of the Transfer of Property Act and the suit property was sold for a sum of Rs.20 lakhs. The sale deed has been executed by the Park Town Benefit Fund Limited and the sale consideration as per the sale deed is Rs.45 lakhs, whereas the applicant/second defendant has mentioned that he purchased the same for Rs.73 lakhs, which is totally false, misleading the Court. (c) The applicant/second defendant is liable to be prosecuted for gross perjury for having made false affidavit before this Court. The plaintiffs were always in possession of the property and are continuing to be in https://hcservices.ecourts.gov.in/hcservices/ 8 possession till today. The respondents/plaintiffs have not suppressed any facts. On the other hand, it is the applicant/second defendant who has come out with false case of purchasing the property under the alleged auction for a sum of Rs.73 lakhs. The highest bid offered by Kamini Pandurangan was not accepted and therefore, the alleged sale deed dated 23.8.2002 is totally void ab-initio without any authority for executing the sale deed. (d) The plaintiffs came to know about the sale deed only when the applicant/second defendant attempted to interfere with the peaceful possession and enjoyment of the suit property by the respondents/plaintiffs on 30.8.2005 and so, the suit is not barred by limitation. (e) The decree in O.S.No.122 of 1999 would confirm that the property was mortgaged in favour of State Bank of India, Gudur, much before creation of the alleged simple mortgage in favour of Park Town Benefit Fund Limited, and hence, the same is binding on Park Town Benefit Fund Limited. The newspaper publication in Tamil daily will not absolve either the Park Town Benefit Fund Limited or the applicant/second defendant from putting the plaintiffs out of the alleged sale registration. (f) The fact that the defendants 1 and 2 kept quiet till about more than three years after having executed the illegal and concocted sale deed dated 23.8.2002 is ample proof of the sinister and criminal conspiracy by the https://hcservices.ecourts.gov.in/hcservices/ 9 defendants 1 and 2 to deprive the respondents/plaintiffs of their property. (g) No explanation has been given by the applicant/second defendant, for the Park Town Benefit Fund Limited mentioning the highest bid amount of Rs.20 lakhs, the sale deed mentioning as Rs.45 lakhs and the applicant/second defendant stated that he had paid Rs.73 lakhs. (h) The allegation that the plaintiffs have sub-let the property to one Sree Sai Cars is totally false, and is not correct. Originally, the business was carried on under the name Modern Cars by one Mr.Hakim along with Mr.Neelavannan and subsequently, the business was taken over by Mr.Neelavannan and the name of the business was changed to Sree Sai Cars from Modern Cars. (i) The hard earned property of the plaintiffs is now sought to be grabbed by the criminal conspiracy of the defendants 1 and 2. The applicant/second defendant has not made out any case under Order 7 Rule 11 C.P.C., and hence, the plaintiffs pray for dismissal of the application seeking for rejection of the plaint. 5. The pith and substance of the reply affidavit filed by the applicant/second defendant, are as follows: (a) In paragraph 13 of the plaint, the plaintiffs have stated that they have sent their objections to the auction held on 19.4.2002, which will show that they had https://hcservices.ecourts.gov.in/hcservices/ 10 the knowledge of the auction dated 19.4.2002. They have also filed a communication dated 22.4.2002 as a document along with the plaint, which will also show that they have knowledge of the auction. (b) The suit ought to have been filed within three yeas from the date of auction, i.e. before 18.4.2005, but the present suit was filed only on 7.10.2005, which is clearly barred by limitation. (c) The applicant/second defendant is the bona-fide purchaser for value and there is no irregularity in the sale conducted after the valid publication and after valid communication sent for confirmation of the sale. The applicant/second defendant is the husband of Kamini Pandurangan and she has nominated the applicant for execution of the sale deed and this cannot be allowed to be questioned at this point of time. (d) No suit can be tried, which is barred by limitation on the face of it. This Court, in common order passed in various applications in the connected case, on 23.11.2007, held that the State Bank of India, Gudur cannot be held to be a first charge holder and the charge having been cleared prior to the present suit, will estop the respondents/plaintiffs from pleading the said fact. Without disclosing the proper facts, as held by this Court in the prior applications, a false and distorted version has been filed as counter and though the auction was held for Rs.20 https://hcservices.ecourts.gov.in/hcservices/ 11 lakhs, there was two registered mortgages and in the sale deed, it was mentioned by Park Town Benefit Fund Limited that the applicant/second defendant is liable to pay interest and other charges and the applicant has cleared all the dues as required by the Park Town Benefit Fund Limited, amounting to Rs.73 lakhs. This fact was also discussed by this Court in the prior order and this Court held that no fraud has been pleaded or shown in the present suit. The said order of this Court was not challenged by the respondents-plaintiffs and the same has become final. (e) The present person who has sworn to the counter affidavit, has no right to maintain the suit, as he is not aware of any fact, nor he is in-charge of the activities of the principal canvassed in the suit. (f) The mortgage in favour of the State Bank of India, Gudur Branch, is said to have been created after the death of Mrs.Rukmani Ammal, as could be seen from the documents. It has also been held by this Court in the other connected applications that the original respondent had given no objection for creation of mortgage in favour of the Park Town Benefit Fund Ltd., and this will estop them from raising any further plea challenging the mortgage or the sale effected in pursuance of the failure to pay the mortgage amount. The receipts for the amounts paid by the auction purchaser have been produced and if at all there is any grievance of the respondents-plaintiffs with Park Town https://hcservices.ecourts.gov.in/hcservices/ 12 Benefit Fund Limited, in the matter of accounting, the same will not amount to fraud, as there is no pleading regarding any fraud and there is no question of any criminal conspiracy as pleaded. (g) A person who is a rank trespasser and who has usurped the property, is not supposed to file a counter affidavit of this nature, which is highly condemnable. The applicant/second defendant stepped into the shoes of the first defendant on purchase and any defence available to the first defendant, has been raised and rightly upheld by this Court while disposing of several applications and the order has become final. (h) The suit is liable to be rejected on the ground of limitation, vagueness and bar in granting the relief as claimed for in the suit. Hence, the applicant/second defendant prayed for allowing the application seeking for rejection of the plaint. 6. Heard both sides. 7(a). The respondents, as plaintiffs, filed the suit to declare the auction held on 19.4.2002 as illegal and and also to declare the sale deed executed on 23.8.2002 as invalid and void ab-initio and for other reliefs. (b) The applicant/D2/auction purchaser, filed this application under Order 7 Rule 11 C.P.C. for rejection of the plaint, stating that where the suit appears from the statement in the plaint to be barred by any law, as per https://hcservices.ecourts.gov.in/hcservices/ 13 Order 7 Rule 11(d) CPC, the plaint shall be rejected as barred by limitation, since the auction was held on 19.4.2002 and the sale deed was executed on 23.8.2002 and the suit was only filed on 7.10.2005. 8. Learned counsel appearing for the applicant- second defendant-auction purchaser, culled out paragraphs 13 and 22 of the plaint, and submitted that the suit ought to have been filed on or before 22.8.2005, but the plaintiffs filed the suit only on 7.10.2005 and it is clearly barred by limitation. He relied upon Article 59 of the Limitation Act and submitted that as per Document No.4 of the plaint schedule documents filed by the plaintiffs, it shows that the plaintiffs had knowledge on 22.4.2002 about the auction on 19.4.2002 and so, the plaintiffs ought to have filed the suit on or before 21.4.2005. Learned counsel for the applicant/second defendant relied upon the decision of the Supreme Court, reported in 2005 (2) CTC 582 (SC) (Vithalbhai Pvt. Ltd. Vs. Union Bank of India). Learned counsel for the applicant/second defendant further submitted that the plaintiffs filed the suit challenging the auction and the plaintiffs are only entitled to damages under Section 69(3) of the Transfer of Property Act and they are neither entitled for declaring the auction as illegal, nor to declare the sale deed as void-ab-initio. Learned counsel for the applicant-second defendant prayed for rejection of the plaint. https://hcservices.ecourts.gov.in/hcservices/ 14 9. Repudiating the said contentions, learned counsel for the respondents/plaintiffs, while relying on paragraph 13 of the plaint, stated that the first plaintiff received the communication from the auctioneers about the public auction and immediately the plaintiffs sent a reply, but no notice for confirmation of the auction/sale had been issued to the plaintiffs and so, the plaintiffs had no knowledge about the factum as to when the auction has been held, when it was confirmed and when the sale deed has been executed. Learned counsel for the respondents/plaintiffs relied upon paragraphs 8 and 9 of the plaint and also culled out some portions in paragraphs 4 and 5 of the affidavit filed by the applicant/second defendant in the application for rejection of the plaint. He further relied upon the decision of this Court reported in 2009 (5) CTC 837 (Dega Jayalakshmi Vs. Kapoor Enterprises) and submitted that the application has been filed to reject the plaint only on the basis that the claim is barred by limitation and the question of limitation is a mixed question of facts and law and so, that can be decided only after letting in oral and documentary evidence and not at the threshold. Learned counsel for the respondents/plaintiffs prayed for dismissal of the application for rejection of the plaint. 10. While considering the arguments advanced by both counsel, it is seen that the respondents-plaintiffs are the owners of the property and Ranga Ramanujam executed two https://hcservices.ecourts.gov.in/hcservices/ 15 mortgage deeds in favour of M/s.Park Town Benefit Fund Limited and since he has not repaid the amount, they have taken steps under Section 69 of the Transfer of Property Act. The auction was held on 19.4.2002 and then, on 22.4.2002, intimation has also been sent to the respondents-plaintiffs by the auctioneers, stating that the property had been auctioned on 19.4.2002 for the value of Rs.20 lakhs and they requested the plaintiffs that as per the conditions of the auction sale notice, the respondents- plaintiffs were to settle the entire dues, due to M/s.Park Town Benefit Fund Ltd., and the same has to be settled within 15 days from the date of the auction, otherwise, the public auction sale of the property conducted on 19.4.2002 would be confirmed to Mrs.Kamini Pandurangan and other her nominees, being the highest bidder. Admittedly, the respondents-plaintiffs have not repaid the amount and subsequently, the sale deed has been executed on 23.8.2002 for Rs.45 lakhs. But the plaintiffs have filed the suit only on 7.10.2005. At this juncture, the applicant-second defendant has come forward with the application to reject the plaint, stating that the suit is barred by limitation. 11. Learned counsel for the applicant-second defendant would submit that the applicant/second defendant is entitled to get protection under Section 69(3) of the Transfer of Property Act, and so, if at all the plaintiffs are entitled to get any relief, it can only be for damages https://hcservices.ecourts.gov.in/hcservices/ 16 and not, as sought for by them, to declare the auction and sale deed as illegal and hence, learned counsel for the applicant/second defendant prayed for rejection of the plaint. 12. Further, as per Order 7 Rule 11(d) C.P.C., where the suit appears from the statement in the plaint to be barred by any law, the plaint shall be rejected. 13. Now, this Court has to consider as to whether the suit is barred by Section 69(3) of the Transfer of Property Act. It is appropriate to incorporate Section 69 (3) of the Transfer of Property Act, which reads as follows: "Section 69: Power of sale when valid.-- ... ... (3) When a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorise the sale, or that due notice was not given, or that the power was otherwise improperly or irregularly exercised; but any person damnified by an unauthorised, or improper, or irregular exercise of the power shall have his remedy in damages against the person exercising the power." 14. Thus, Section 69(3) of the Transfer of Property Act, gives protection to the auction purchaser from initiating action on the ground of fraud committed by the mortgagee while conducting the public auction. At this juncture, learned counsel for the applicant-second https://hcservices.ecourts.gov.in/hcservices/ 17 defendant would contend that no fraud has been put-forth by the respondents-plaintiffs while filing the suit, and so, if at all the respondents-plaintiffs are entitled to get any relief, it can only be for damages and not to declare the public auction and the sale in favour of the applicant- second defendant, as illegal. 15. In this regard, it is appropriate to consider the averments in the plaint, wherein fraud has been pleaded in paragraphs 12 and 15 and the last paragraph 24(a) of the plaint relating to prayer, as follows: "12. The plaintiffs respectfully state that taking advantage of the destitute of the plaintiffs after the demise of the Ranga Ramanjuam the first defendant played a fraud on the plaintiffs and has in the guise of using the powers under Section 69 of the Transfer of Property Act has created records as though the property has been sold in public auction whereas the fact remains that there was no such auction at all at any time as contemplated under the Transfer of Property Act." "15. The said sale deed mentions the auction as Rs.45,00,000/- even though the stamp duty for the sale is calculated on the guidelines market value of the property which was Rs.76,00,000/-. Even in respect of Rs.45,00,000/- the sale deed is silent about the manner and mode of paying the remaining Rs.25,00,000/-. On reading of the said sale deed it is clearly disclosed that the first defendant in collusion and conspiracy with the second defendant has played a fraud on the plaintiffs and created https://hcservices.ecourts.gov.in/hcservices/ 18 documents as if the sale was conducted in public auction and executed the sale deed. In fact, there was not even a request for payment of the amount before the auction. Nor was any intimation from the first defendant about the alleged auction and confirmation of the auction." "24. The plaintiffs therefore prays for decree and judgment: (a) declaring that the public auction dated 19.4.2002 under section 69 of the Transfer of Property Act said to have been conducted