High Court · 2025

1/8A.S.No.548/2022IN THE HIGH COURT OF JUDICATURE AT MADRASDATED :: 23-07-2025CORAMTHE HONOURABLE DR.JUSTICE G.JAYACHANDRANAPPEAL SUIT No.548 of 2022and C.M.P.Nos.20498 of 2022 & 15974 of 2025Latha Balasubramaniam...Appellant -vs-1 V.Masilamani (Died) 2 M.Santhanagopalakrishanan3 M.Rajamani...Respondents (Respondent No.3 is brought on record as L.R.of deceased first respondent by order, dated 15.07.2025, in C.M.P.No.15971 of 2025)Appeal against the judgment and decree, dated 08.07.2022, passed in O.S.No.412 of 2021, on the file of Principal District Judge,Tiruppur.For Appellant : Mrs.L.Bobby PortiaFor Respondents 2 & 3 : Mr.D.Ambarish https://www.mhc.tn.gov.in/judis 2/8A.S.No.548/2022JUDGMENTO.S.No.412 of 2021 was a suit filed for recovery of money, based on a mortgage deed executed by the defendant, on borrowing of Rs.7.00 lakhs on 02.09.2013 with covenant to repay the money with interest at 30% per annum. Alleging that the defendant had neither paid principal nor interest as against the registered mortgage deed for Rs.7.00 lakhs, the suit for recovery of Rs.23,29,226/- was laid before Principal District Judge, Tiruppur. 2. The defendant contested the suit, by filing a written statement, stating that for her family emergency, she borrowed only Rs.4.00 lakhs from the first plaintiff and agreed to pay interest at 4% per month on or before 10th of every month, failing which a penal interest of Rs.160 per day for belated payment was also agreed. The time to discharge the loan was fixed as 18 months. To have security over the loan, the plaintiff insisted for executing a deed of mortgage of defendant's landed property. The suit mortgage deed came to be executed by her under duress. Even after paying more than Rs.14.00 lakhs towards the debt, the plaintiff was keeping on demanding penal interest, by not cancelling the mortgage deed. The rate of interest and penal interest are contrary to Tamil Nadu Prohibition of Charging Exorbitant Interest Act,2003. The defendant had taken a plea that the mortgage deed was per se against the public policy, unlawful and hence void. https://www.mhc.tn.gov.in/judis 3/8A.S.No.548/20223. The trial Court, based on the pleadings, framed the following issues :(1) Whether it is true that the defendant had repaid the loan borrowed from the plaintiffs with interest ?(2) Whether it is true that the plaintiffs are demanding exorbitant interest ?(3) Whether the plaintiffs are entitled for suit claim ?(4) To what relief ?4. The first plaintiff - Masilamani was examined as P.W.1 and, through him, two exhibits viz., original mortgage deed and certified copy of title deed were marked as Exs.A-1 and A-2. The attestor to the mortgage deed, by name, Duraisamy was examined as P.W.2 and his Aadhaar Card was marked as Ex.A-3. On the side of defendant, the defendant and her husband were examined as D.Ws.1 and 2. The police complaint given by them against the plaintiff for demanding exorbitant interest and the order of the High Court in the petition filed by the husband of the defendant, seeking a direction to police to register the complaint and investigate, were marked as Exs.B-1 and B-2.5. The trial Court, after appreciating the evidence, passed a preliminary mortgage decree, holding that borrowing and mortgage was proved, however, 30% interest per annum, demanded by the plaintiff, was against the provisions of Tamil Nadu Money Lenders Act. Therefore, the plaintiff was entitled only for interest at 12% per https://www.mhc.tn.gov.in/judis 4/8A.S.No.548/2022annum from the date of borrowing till the date of suit; 7.5% 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 realisation. 6. Being aggrieved by the preliminary decree as stated above, the defendant has preferred this appeal, on the ground that the trial Court had failed to properly appreciate the defence taken by the appellant. The fact that the source for advancing the loan was not disclosed by the plaintiff and charging of interest at 30% per annum was per se against Sections 23 and 10 of the Indian Contract Act. The trial Court, instead of dismissing the suit, had just reduced the rate of interest, which is improper, when the contract is per se illegal and against law.7. Pending appeal, the appellant has taken out an application under Order 41 Rule 27 of the Code of Civil Procedure in C.M.P.No.15974 of 2025, wherein she has sought for leave of this Court to receive two additional documents, which are (1) Notice sent by the plaintiffs to her through advocate on 22.09.2015, demanding repayment of loan amount of Rs.7.00 lakhs with interest at 24% per annum and (2) her reply, dated 29.09.2015, denying borrowing of Rs.7.00 lakhs, however, admitting borrowing of Rs.4.00 lakhs and the periodical payment of interest of Rs.16,000/- per month. In her reply, she has also explained under what context the suit mortgage deed was executed by her. https://www.mhc.tn.gov.in/judis 5/8A.S.No.548/20228. Learned counsel appearing for the appellant submitted that even after specific denial of liability of Rs.7.00 lakhs with interest claimed by the plaintiffs as early as 29.09.2015, the suit was filed only on 06.08.2021, even without disclosing the issuance of notice and receipt of reply. Therefore, these two documents are very essential for arriving at a right decision by the Court. 9. However, learned counsel appearing for the respondents submitted that the failure for not placing these two documents along with written statement or at least before completion of trial or even at the time of filing this appeal in the year 2022 would clearly indicate that the defendant had wantonly withheld these two documents though they were in her possession. Therefore, there is no justification to receive these documents at the appellate stage.10. This Court, after considering the rival submissions, finds that the plaintiff, who had caused notice on 22.09.2015 and received reply on 29.09.2015, ought to have disclosed these two facts in his plaint and no reason is assigned for not disclosing this fact. Except to contend that they are not material evidence or the facts necessary for the suit, the respondent has no other reason for suppressing this fact. This Court is of the view that when there was a communication between the parties regarding the debt and a specific denial, the same should have been brought in the pleadings with explanation why even after denial of liability through a reply notice, dated 29.09.2015, the suit is filed after six years. Likewise, the appellant, who has now produced these two https://www.mhc.tn.gov.in/judis 6/8A.S.No.548/2022additional documents, should have placed before the Court below about the existence of these two documents along with her written statement, which she failed to do. The omission on the part of the plaintiff as well as the defendant is now the impediment for this Court to arrive at a right decision about the dispute between the parties. Therefore, this Court is of the view that the matter has to be remanded to the trial Court to receive the additional documents, subject to proof, and give a finding on these documents, recasting issue. Particularly, when the plaint averment says that the defendant borrowed Rs.7.00 lakhs and agreed to repay it with interest at 30% per annum, but, contrarily in his notice, dated 22.09.2015, the plaintiff says that the loan amount of Rs.7.00 lakhs was lent to the defendant with interest at 24% per annum. The defendant had denied the amount borrowed and also the rate of interest. Demand of interest at 48% per annum with penal interest is also projected by the defendant. These disputed facts are to be tested by examining the witnesses. 11. Accordingly, the judgment and the decree passed by the trial Court in O.S.No.412 of 2021, dated 08.07.2022, are hereby set aside. The matter is remanded back to the trial Court for retrial. The trial should commence on 01.09.2025 and get completed within a period of four months from that date. 12. In the result, Appeal Suit is allowed and the matter is remanded back to the trial Court, as stated above. No costs. Consequently, the Civil Miscellaneous Petitions are closed. https://www.mhc.tn.gov.in/judis 7/8A.S.No.548/202213. Registry is directed to forward the records along with a copy of this order to the trial Court forthwith. 23-07-2025 Index : Yes / NoInternet : Yes / NodixitTo1.Principal District Judge, Tiruppur.2.Section Officer, V.R.Section, High Court, Madras. https://www.mhc.tn.gov.in/judis 8/8A.S.No.548/2022 DR.G.JAYACHANDRAN, J. dixitA.S.No.548 of 202223-07-2025