High Court · 2006

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 25-8-2006CORAMTHE HONOURABLE MR.JUSTICE P.K.MISRAANDTHE HONOURABLE MR.JUSTICE M.JAICHANDRENO.S.A.No.290 of 20011.M/s.Abhirami Foundation Rep. by its Partner R.Premanayagam2.Premanayagam3.Avudainayagi.. Appellantsvs1.K.C.Nalini Bai2.K.C.Udaya Kumar Babu3.K.C.Rabindran Kumar Babu4.K.C.Krishna Kumari5.K.C.Lalitha Kumari6.K.C.Kamini Kumari7.K.C.Guna Kumari8.K.C.Sasi Kumari9.K.C.Sarala Kumari10.K.C.Radhika Raj Kumari11.K.Dhanapal.. Respondents Appeal under clause 15 of Letter patent and order XXXVIRule of O.S.Rules preferred against the judgment and decreedelivered by the Single Judge in C.S.No.648 of 1997 dated28.3.2001.For Appellants: Mr.M.SriramFor Respondents: Mr.R.Manickavel for RR1 to 10 R11-Dismissed order dated 18.2.2005JUDGMENT(Judgment of this Court was delivered by P.K.MISRA, J.)Heard the learned counsels appearing for the parties. https://hcservices.ecourts.gov.in/hcservices/

2. The defendants 1 to 3 have filed this appealagainst the judgment of the learned Single Judge in C.S.No.648of 1997 dated 28.3.2001. Such suit was filed by the plaintiffs1 to 10 / respondents for recovery of money and directing thedefendants jointly and severally to pay Rs.79,69,500/- togetherwith interest at the rate of 24% per annum on Rs.57,75,000/-.3. The allegations made in the plaint are brieflystated hereunder :-One Chittibabu Naidu was the owner of the propertycomprised in Door No.77, Arcot Road, Kodambakkam, Chennai,having an extent of 5 grounds and 454 sq.ft. Plaintiff No.1 isthe wife of Chittibabu and Plaintiffs 2 and 3 are their sons andPlaintiffs 4 to 10 are their daughters. On the death ofChittibabu on 11.11.1983, the plaintiffs succeeded to theproperty. First defendant is a partnership firm of which thedefendants 2 to 4 are the partners. First defendant was engagedin real estate business and also as promoters and developers ofhouse plots. Second defendant, who is an Auditor and FinancialConsultant, was introduced to the plaintiffs by their Auditor.In May, 1995, the plaintiffs and the defendants have enteredinto a joint venture agreement in respect of 50% of the suitproperty. As per such agreement, the first defendant firmagreed to promote and develop the land by constructing a multi-storied commercial and residential complex. To facilitate suchconstruction, the plaintiffs executed a power of attorney infavour of the second defendant on 19.5.1995 empowering suchdefendant to deal with 50% of the suit property. However, suchjoint venture agreement could not fructify and the plaintiffsagreed to sell the entire property in favour of the firstdefendant firm for a consideration of Rs.1,40,00,002/- andexecuted an agreement of sale dated 20.12.1995. The plaintiffshave agreed to execute a power of attorney in favour of thesecond defendant to seek and enter into agreement withprospective buyers, to sell the property, receive saleconsideration and to do all other acts. At that stage, thefirst defendant paid a sum of Rs.7 lakhs as advance and thefirst defendant agreed to pay the entire sale consideration inthree instalments by March, 1996. The defendants agreed to payRs.10 lakhs by January, 1996 and another Rs.10 lakhs by29.2.1996 and the entire balance by 31.3.1996. In pursuance ofsuch agreement of sale, the plaintiffs executed two power ofattorneys in favour of the second defendant to deal with thesuit property. The first defendant had so far paidRs.82,25,000/-. Last payment of Rs.5 lakhs was made on23.11.1996 and a balance sum of Rs.57,75,000/- was yet to bepaid. The second defendant at the time of the agreement hadundertaken not to execute sale deed till the entire amount hadbeen paid to the plaintiffs. Since the second defendant was notpaying the amount, the plaintiffs on enquiry found that the https://hcservices.ecourts.gov.in/hcservices/ second defendant had already sold substantial portion of thesuit property and received consideration, but had not handedover the money. On the persistent demands made by theplaintiffs, five cheques signed by the third defendant on behalfof the first defendant worth about Rs.47,75,000/- were handedover advising the plaintiffs to encash one cheque in a week andgiving the impression that all the five cheques can be encashedby the end of two months period. While the matter stood thus,the plaintiffs received a telegram dated 25.9.1997 from thesecond defendant asking the plaintiffs not to present thecheques for encashment and a letter to that effect was sent on26.9.1997. The plaintiffs having become suspicious, madeenquiries in the Office of the Sub Registrar and found that thesecond defendant had already executed 14 sale deeds in favour ofGoundamani, Selvi and Santhi between 25.3.1996 and 10.3.1997 andrealised a sum of Rs.1,41,22,000/- from them as against thepayment of Rs.82,25,000/- paid to the plaintiffs. Thereafterthe plaintiffs published a notice in Dina Thanthi canceling thepower of attorneys and also executed cancellation deeds revokingthe power granted in favour of the second defendant on 24.9.1997and 25.9.1997. The plaintiffs had also issued notice dated23.9.1997 calling upon the defendants to pay the balanceconsideration. The second defendant sent reply dated 7.10.1997.However, he had not given the details of the sale deeds executedon behalf of the purchasers. The second defendant issued afurther reply dated 7.10.1997 stating that by the impugnedpublication, the plaintiffs have caused damages to thereputation of the first defendant firm and therefore theplaintiffs should pay a sum of Rs.55 lakhs. It is the case ofthe plaintiffs that the defendants have acted in breach of theagreement and in view of the delay in payment, they were alsoliable to pay 24% interest on the balance consideration, besidesthe second defendant as power of attorney is liable to renderaccounts. Accordingly the suit was filed.4. The first defendant in his written statementindicated that such registered partnership of which thedefendants 2 to 4 were previously partners had beenreconstituted in 1997 and the new partners are one Murugan andPonnuswamy and such reconstitution had been informed to theplaintiffs. The second defendant and the plaintiffs' Auditorwere known to each other by 1989. In May, 1993, the plaintiffshad entered into a joint venture agreement with M/s.J.K.Estates, which was in respect of 3 grounds out of the disputedproperty. Since there was some dispute relating to thatagreement, the second defendant was nominated as arbitrator andsubsequently such agreement was cancelled with mutual consent.Thereafter the plaintiffs approached the first defendant in May,1995 for the purpose of developing a portion of the suitproperty and a development agreement was entered between theparties. It was agreed to put up a multi-storied residential https://hcservices.ecourts.gov.in/hcservices/ and commercial complex, the cost of which is to be sharedbetween the plaintiffs and the first defendant in equalproportion and in pursuance of such development agreement, theplaintiffs executed a power of attorney in favour of the firstdefendant, giving authority to the first defendant to deal with50% of the land in respect of which an agreement was enteredinto. Even while the agreement was in subsistence, theplaintiffs decided to sell away the entire extent of the suitproperty and accordingly there was a meeting between theplaintiffs and the first defendant firm, represented by thesecond defendant, and one Goundamani. Thereafter, on20.12.1995, the plaintiffs and the first defendant entered intoan agreement for sale in respect of the entire property and theplaintiffs have agreed to sell for the consideration ofRs.1,40,00,002/- and on the date of the agreement Rs.7 lakhs waspaid as advance and the first defendant was to pay Rs.10 lakhsby January, 1996, further Rs.10 lakhs by 29.2.1996 and thebalance by 31.3.1996. Before payment of the second instalment,it was agreed that the plaintiffs must get clearance from theIncome Tax authorities and Urban Land & Ceiling authorities, butthe plaintiffs did not get any such clearance and they were notable to give vacant possession, causing thereby delay. Thesecond defendant was able to bring about the entire sale of theproperty between 25.3.1996 and 10.3.1997 and the first defendanthas been able to realise a sum of Rs.1,24,54,000/-. The firstsale was effected in March 1996, but by then the seconddefendant had paid Rs.62 lakhs to the plaintiffs. Furtherpayments were made between 19.5.1995 and 31.12.1996 and thedefendants have so far paid Rs.1,44,75,000/-, which was inexcess of the agreed sale consideration. All such payments bycash, cheques, pay orders or drafts have been made by the thirddefendant without waiting for actual execution of the sale deed.The plaintiffs insisted the first defendant to issue cheques forbalance consideration as security and therefore, five chequesdrawn by the first defendant firm and signed by the thirddefendant were handed over to the plaintiffs. At that stage, itwas agreed that when accounts are settled and the entire amountis paid to the plaintiffs, they must return the signed chequeswhich have been given as security. Even though the plaintiffshave received more than the actual consideration amount, theyhave been demanding more payment. They were also instigatingthe tenants to file suit against the first defendant and others.Thereafter, without giving notice, the plaintiffs have chosen tocancel the power of attorney given in favour of the seconddefendant by executing cancellation deeds dated 24.9.1997 and25.9.1997. The plaintiffs had also caused publication innewspapers and upon such publication, the defendants informedthe plaintiffs not to present the cheques. As a matter of fact,the defendants have received more than the amount due. Thedefendants claimed in the written statement that they have madeseveral payments on the date mentioned against them, which areextracted hereunder :- https://hcservices.ecourts.gov.in/hcservices/

1. 19.05.1995By chequeRs. 3,50,0002. 19.05.1995By cashRs. 1,50,0003. 05.12.1995By cashRs.30,00,0004. 20.12.1995By cashRs. 1,00,0005. 20.12.1995By cashRs. 1,00,0006. 23.01.1995By cashRs.25,00,0007. 30.03.1996By cashRs.15,00,0008. 07.05.1996By chequesRs.10,00,0009. 13,.05.1996By chequeRs. 5,00,000 10. 20.05.1996By cashRs.10,00,000 11. 05.06.1996By cashRs.10,00,000 12. 05.07.1996toBy cheques & 31.12.1996pro-orderRs.32,75,000 -------------- Rs.1,44,75,000 --------------After receipt of the notice from the plaintiffs, a suitablereply was given by the defendants and justifying the claim ofRs.55 lakhs as damages. The defendants 2 and 3 filed a Memoadopting the written statement filed by the first defendant.5. On the above pleadings, the following issues wereframed :-(1) Whether the defendants have paid the entire saleconsideration as per the agreement dated 20.12.1995 ?(2) Whether the payments alleged in para 7 and 8 in thewritten statement of the defendant 1 is true and correct ?(3) Whether the defendants are liable to pay any interestand if so, to what amount ?(4) Whether the plaintiffs are entitled to the suitamount ?(5) To what relief ?6. Under Issue Nos.1 & 2, which are practically themain issues to be decided, the learned single Judge held thatthe defendants had not paid the entire sale consideration as perthe agreement Ex.P-2 dated 20.12.1995 and the defendants wereliable to Rs.57,75,000/-. It was further held that the plea ofthe defendants that they had paid Rs.75 lakhs in cash on thedates mentioned in the written statement had not been proved.Under issue Nos.3 and 4, the learned single Judge held that theplaintiffs are entitled to realise Rs.57,75,000/- with 24%interest with effect from 23.9.1997, the date of which they hadissued notice under Ex.P-15. Ultimately, the suit was decreedfor the aforesaid sum of Rs.57,75,000/- with 24% interest witheffect from 23.9.1997 till the date of decree and thereafter atthe rate of 9% till realisation with proportionate costs. https://hcservices.ecourts.gov.in/hcservices/

7. Learned counsel appearing for the appellant haschallenged the findings of the trial court by contending thatthe trial court has not considered the effect of evidenceadduced on the side of the defendants relating to variouspayments. It has been contended that though Plaintiff No.3 hadadmitted to have been signed many of the receipts indicatingpayments, the trial court has not given proper weight to suchdocuments. Moreover, the trial court has based its conclusionson surmises and conjectures. It has been contended that thetrial court should have sent the disputed receipts to thehandwriting expert for opinion.8. Learned counsel appearing for the respondents hassubmitted that conclusion of the trial court are based onappreciation of relevant materials on record and does not callfor any interference.9. One of the main defence taken by the presentdefendants/appellants is relating to the payment of Rs.70 lakhson different dates. The defendants sought to prove suchpayments by producing receipts purportedly signed by theplaintiff No.3. So far as these receipts which have been markedas Exs.D3, D4 and D6, are concerned, the plaintiff No.3 deniesthe signature in Exs.D4 and D6. So far Ex.D3 is concerned, theplaintiff No.3 admits the signature. According to the thirdplaintiff, his signature was obtained in a blank paper, whichhas been subsequently converted as receipt. When the plaintiffshave denied the signature in Exs.D4 and D6, the defendants filedan application for sending such disputed documents for opinionof handwriting expert. The grievance of the appellants is thatno specific order has been passed on that application. Aspecific ground has been raised in the memorandum of appeal.The counsel for the plaintiffs/respondents further submittedthat such application appears to have been ordered on the verysame date on which such application was filed that is to say on15.2.2001, and such application was numbered as O.A.829 of 2001on 16.2.2001. 10. The Counsel for the plaintiffs/respondentssubmitted that even though the Court had permitted photographsof the disputed documents to be taken for the purpose ofhandwriting expert, no further steps have been taken. TheCounsel for appellants submitted on this behalf that as a matterof fact, no such order copy has been drafted by the Office, andit was not within the knowledge of the appellants, andtherefore, the appellants were at a loss to know as to what hashappened. It is unfortunate that no formal order was passedindicating as to whether the application for sending thedocuments for expert's opinion is allowed or not. We find ofcourse there is an endorsement on the backside of theapplication. However, on the basis of such endorsement, no https://hcservices.ecourts.gov.in/hcservices/ formal order seems to have been drafted by the Office.Therefore, the contention of the appellants that they were notaware about such order permitting the handwriting expert toexamine the documents, appears to be justified. 11. The question as to whether the receipts had beensigned by the plaintiff is quite relevant in deciding theappeal. We also feel that interest of justice could be servedby setting aside the order of the learned Single Judge and bydirecting the two disputed documents in question to be examinedby the handwriting expert. For the aforesaid purpose, necessarysteps should be taken by the defendants/appellants by appointingan Advocate Commissioner in whose presence the handwritingexpert could be permitted to take the necessary photographs. 12. In order to avoid the further delay,Ms.R.Poornima, Advocate, No.13, Law Chambers, Chennai, who ispresent in Court, is appointed as Commissioner, in whosepresence the handwriting expert will be permitted to takephotographs. The Director, Government Forensic Department, isdirected to nominate an experienced handwriting expert belongingto such Department. The appellants are directed to deposit a sumof Rs.5,000/- (Rupees five thousand only) towards tentative costfor the handwriting expert, and the appellants undertake to paythe balance amount. Such amount shall be deposited within aperiod of four weeks from the date of receipt of the copy ofthis judgment. 13. So far as the Commissioner is concerned, theappellants shall pay a consolidated sum of Rs.10,000/- (Rupeesten thousand only) to the Commissioner towards fees and expenseswithin a period of four weeks from the date of receipt of thecopy of this judgment. After the handwriting expert furnishesthe opinion, he can be cross-examined by any of the parties byfiling proper application before the learned Single Judge, andit would be open to the parties to adduce further evidence. Thematter shall be disposed of by the learned Single Judge on thebasis of the existing evidence and further evidence to beadduced including the evidence of the expert. 14. It is made clear that any observation made by usshould not be construed as final opinion in the matter, and thematter should be decided afresh without being influenced in anymanner by any observations made in this order or by the learnedSingle Judge in the judgment impugned. The matter should befinalized by the learned Single Judge as expeditiously aspossible preferably within a period of six months after thereceipt of the opinion of the handwriting expert. https://hcservices.ecourts.gov.in/hcservices/

15. In the result, this appeal is disposed ofaccordingly. In view of the provisions contained in Section 67of the Tamil Nadu Court Fees and Suit Valuation Act, 1955, wefurther direct that the full amount of the court fee paid on theMemorandum of Appeal in O.S.A.No.290 of 2001 shall be refundedto the appellant.dpk/nsvSd/Asst.Registrar/true copy/Sub Asst.RegistrarTo:1)The Director, Government Forensic Department, Kamarajar Salai, Madras 600 001.2)Ms.R.Poornima, Advocate Commissioner, No.13, Law Chambers,High Court, Madras-104.(+ Warrant)3)The Sub Assistant Registrar, Original Side, High Court,Madras – 104 (with records)4)The Sub Asst Registrar, Judicial Dept.,High Court, Madras.5)The Section Officer,Accounts Section, High Court, Madras.6)The Record Keeper,V.R. Section, High Court,Madras 104.+ 1 cc to Mr. M. Sriram, Advocate SR No. 38576GM(CO)SR/9.11.2006O.S.A.No.290 of 2001