UNION BANK OF INDIA Vs. VUMMIDIAR AGENCIES

JUDGEMENT

(1.) Vummidiar Agencies (for short 'the firm' - first defendant) is a partnership firm doing business at No.162, Anna Salai, Madras-2. Defendants 2 to 4 are the partners of the firm. Union Bank of India, carrying on banking business at No. 24, G.N. Chetty Road, T. Nagar, Madras-17, the plaintiff made certain advances to firm. When the firm made default in honouring its commitments, in the sense of discharging the advances taken by way of loan by them, the plaintiff-bank was rather constrained to file C.S. No. 473 of 1977.

(2.) The suit was laid for recovery of a sum of Rs. 21,85,191.65 with interest thereon at the rate of 16 per cent per annum. During the pendency of the suit, a compromise was entered into between the plaintiff-bank and the firm. In the compromise, three items of properties belonging to the family of the partners were offered as security for the due discharge of the amount of the consent decree. Thirumathi V. Shantha (applicant in Application No.4333 of 1989) and Thirumathi V. Srirangammal (applicant in Application No. 4334 of 1989) were also included as parties to the compromise decree, though they were not parties to the suit, inasmuch as they were having certain interests in those three items of immovable properties offered as security for the due satisfaction of the decree. Based on the compromise, a consent decree was passed on 6-2-1978 for a sum of Rs. 22,61,720.75, inclusive of costs with interest thereon at the rate of 15 per cent per annum. The terms of the decree provided for payment of the amount in monthly instalments of Rs. 60,000/- each and the first instalment was to be paid on or before 15/03/1978 and all subsequent instalments to be payable on or before the 15th day of each and every succeeding English calendar month. It was also provided therein that if there was a single default in payment of any of the monthly instalments, then the entire decretal amount shall become payable forthwith and the plaintiff shall be at liberty to execute the decree for recovery of the same. There shall be a charge for the amount of the decree and for payment of all costs, charges and expenses and all their rights, title and interest including the reversionary right on the immovable properties offered as security. A bond under S.145, C.P.C. was executed on 16-9-1978. The defendants also agreed to registered the bond as well as the decree on or before 6-3-1978, with the Sub-Registrar of Assurances at Madras, after obtaining necessary tax clearance certificates. The bond, though presented for registration on 27-9-1978, yet it was registered on 18-4-1980, as a result of the delay involved in producing the income-tax clearance certificates by the defendants. Though the defendants did not effect payment of the instalments as contemplated by the decree, yet they were making payment everyday on and from March, 1978 not less than Rs.1,000/- till up to 30/11/1981. Thereafter, for no reason whatever, they stopped payments.

(3.) Thereafter, the plaintiff-bank filed E.P. No.1 of 1982 for the sale of the securities. The sale was ordered on 5-3-1982 and proclamation was also settled. When the sale was fixed, the debtor-firm came before this Court with various applications seeking stay of sale and praying for permission for sale of one of the immovable properties offered as security, namely Vummidiar Shopping Complex by way of a private negotiation and thereby to enable it to discharge the decree debt and obtain necessary reliefs as prayed for. Certain shops in the complex were sold and some payments have been made from the sale proceeds towards the discharge of the decree. Thereafter, nothing took place. Consequently, the plaintiff-bank came forward with Application No.2748 of 1989 praying for a direction to the Commissioner already appointed, namely, Messrs Murray and Co., put up the remaining portion of Vummidiar Shopping Centre for sale on a date to be fixed by this Court.