MADAPPILLIL BROTHERS Vs. ULLATTIL AGENCIES

JUDGEMENT

(1.) Defendants in O.S. No. 961 of 1994 on the file of the Principal Sub Court, Kottayam, are the appellants in the appeal. The suit was for realisation of money allegedly due from the defendants to the plaintiff. The plaintiff is a partnership firm engaged in money-lending business. The amounts are claimed from different defendants on different accounts and a single suit is filed in respect of all the accounts. Defendants 1 to 3 are partnership firms of which defendants 4 to 6 are partners. 7th defendant is also a partner of the 3rd defendant firm and he is not a partner of other partnership firms. The trial court has granted a decree almost in terms of the prayer in the plaint.

(2.) The case of the plaintiff is as follows. At the request of defendants 1, 4, 5 and 6 for credit facility to carry on their business under the name and style "M/s Madappillil Brothers", the plaintiff sanctioned a loan of Rs. 3,00,000 on 26-5-1986, another loan of Rs. 1,00,000 on 21-11-1986 and yet another loan of Rs. 1,08,333.33 on 9-5-1987 in the account of the 1st defendant. Defendants 1,4, 5 and 6 executed demand promissory note for Rs. 3,00,000 on 26-5-1986, another promissory note for Rs. 1,00,000 on 21-11-1986 agreeing to repay the amounts with interest thereon at the rate of 24.5% per annum with quarterly rest and another promissory note for Rs. 1,08,333.33 on 9-5-1987 agreeing to repay the amount with interest thereon at the rate of 18.5% per annum with quarterly rest. At the request of defendants 2, 4, 5 and 6 for credit facility to carry on their business under the name and style "M/s. Madappillil Agencies", the plaintiff sanctioned a loan of Rs. 1,50,000 on 26-6-1986. Defendants 2, 4, 5 and 6 executed demand promissory note for Rs. 1,50,000 on 26-6-1986 agreeing to repay the amount with interest thereon at the rate of 24.5% per annum with quarterly rest. At the request of defendants 4, 5 and 6 for credit facility to carry on their business in their individual capacities apart from their status as partners of defendants 1 to 3 firms, the plaintiff sanctioned a loan of Rs. 2,00,000 on 10-11-1986 and on their further request sanctioned a further loan of Rs. 2,00,000 on 21-11-1986. To secure the aforesaid two loans, defendants 4, 5 and 6 executed a demand promissory note for Rs. 2,00,000 on 10-11-1986 and another demand promissory note on 21-11-1986 in favour of the plaintiff agreeing to repay the amount with interest thereon at the rate of 24.5% per annum with quarterly rest. At the request of defendants 3, 4, 5, 6 and 7 for credit facility to carry on their business under the name and style "M/s. L.P.R. Brothers", the plaintiff sanctioned a loan of Rs. 1,50,000 on 26-6-1986 in the account of the 3rd defendant. To secure the above said loan, defendants 3, 4, 5 and 6 executed a demand promissory note for Rs. 1,50,000 on 26-6-1986 in favour of the plaintiff agreeing to repay the amount with interest thereon at the rate of 24.5% per annum with quarterly rest. As collateral security for the above said various loans availed by defendants 4, 5 and 6, they deposited their title deeds relating to their property described in the schedule to the plaint at the office of the plaintiff situated in Kottayam on 11-5-1987 with intent to create equitable mortgage by way of security for the amounts due to the plaintiff from the defendants and executed a letter in favour of the plaintiff acknowledging the deposit of title deeds. After availing the loans, the defendants made payments which have been credited in their accounts. Since substantial amounts were due, a lawyer notice was sent on 26-9-1994 demanding the entire balance amount. The transactions between the parties are commercial transactions and the plaintiff is entitled to collect interest at the rate of 24.5% per annum with quarterly rest from the date of suit till realisation except for a loan of Rs. 1,08,333.33 for which 18.5% was the interest agreed upon. It is also stated in paragraph 17 of the plaint that as per the ledger maintained by the plaintiff in the name of the defendants, the balance amount outstanding due from the defendants under different accounts as on 7-12-1994 were as follows: <p>(a) Under D.P.N. Loan of Rs. 3,00,000 dated 26-5-1986 in the account of M/s Madappillil Brothers - Rs. 6,12,376.14 (b) Under D.P.N. Loan of Rs. 1,00,000 dated 21-11-86 in the account of M/s Madappillil Brothers - Rs. 5,67,734.32 (c) Under D.P.N. Loan of Rs. l,08,333,33 dated 9-5-1987 in the account of M/s Madappillil Brothers - Rs. 4,08,232.23 (d) Under D.P.N. Loan of Rs. 1,50,000 dated 26-6-1986 in the account of M/s Madappillil Brothers - Rs. 8,31,840.85 (e) Under D.P.N. Loan of Rs. 2,00,000 dated 10-11-1986 in the account of Mr. Lakshmana Hegden and 2 others - Rs. 5,83,540.83 (f) Under D.P.N. Loan of Rs. 2,00,000 dated 21-11-1986 in the account of Mr. Lakshmana Hegden and 2 others - Rs. 11,35,468.65 (g) Under D.P.N. Loan of Rs. 1,50,000 dated 26-6-1986 in the account of M/s L. P. R. Brothers - Rs. 8,31,840.85 ___________________ TOTAL - Rs. 49,71,033.87 ___________________

(3.) M/s. Madappillil Brothers is the 1st defendant and M/s Madappillil Agencies is the 2nd defendant and M/s L.P.R. Brothers, Ettumanoor is the third defendant. The cause of action for the suit is said to have arisen on the dates of the execution of the demand promissory notes on 26-5-1986, 21-11-1986, 9-5-1987, 26-6-1986, 10-11-1986 and on 26-9-1994 which is the date of the lawyer notice and subsequently. The plaintiff prayed for a decree against defendants 1 to 6 for a sum of Rs. 49,71,033.87 as per statement of accounts A, B, D, E, F and evaluation given in the plaint together with interest at the rate of 24.5% per annum compounded quarterly from the date of suit till realisation. The plaintiff also prayed for a decree against defendants 1 to 7 to pay to the plaintiff an amount of Rs. 4,08,232.23 as per statement of C valuation together with interest thereon at the rate of 18.5% per annum compounded quarterly from the date of suit till realisation. The plaintiff further prayed for a decree to recover the amount by sale of the plaint schedule property and if it is not sufficient to realise the balance amount due from the defendants personally and from their assets. However, C valuation shown in the statement of accounts will show that the amounts were claimed against defendants 1 to 6 only and not against the 7th defendant. Defendants 4 to 7 are the partners of the 3rd defendant firm.