K P SEETHALAKSHMI Vs. INDIAN BANK

JUDGEMENT

(1.) The first respondent herein filed a suit in O.S.80 of 1999 against the petitioner herein as second defendant and respondents 2 to 4 herein as defendants 1, 3 and 4 on the file of Subordinate Court, Srivilliputhur, praying the Court to grant a decree directing defendants 1 and 2 to pay a sum of Rs.6,87,818.30 with interest thereon at the rate of 16.5% per annum with quarterly rest and for a preliminary decree for the said amount with the said interest thereon and in default permitting the plaintiff to apply for final decree and to bring the plaint 'B' schedule immovable mortgaged properties to Court auction sale and credit the sale proceeds towards the decree debt and further permit the plaintiff to bring plaint 'A' schedule movables to Court auction sale by way of charge and credit the sale proceeds towards the decree debt and for other reliefs. The plaint 'B' Scheduled property consist of (a) agricultural land measuring 3.56 acres in S.No.337/1 in Kunnor village, Ramanathapuram District; (b) an extent of 1.56 acres in S.No.945/1; and (c) 1.62 acres in S.No.945/2 in Sundarapandian village, Ramanathapuram District.

(2.) The case put forward in the plaint is that the first defendant is a Proprietary concern and for business purposes, availed a loan under Open Cash Credit facility and executed a pronote for the amount and it also executed an agreement of hypothecation, hypothecating the movables. Thereafter also first defendant availed some loans and the pronotes were periodically renewed. Suffice to mention that the first defendant borrowed moneys from the plaintiff and that the first defendant and second defendant periodically renewed the pronotes by execution of acknowledgment of debts on various dates. The second defendant stood as a guarantor for and on behalf of the first defendant for due repayment of the loans and executed an agreement of Continuing Guarantee on 11.2.1984 in favour of the plaintiff and she also deposited the title deeds of her properties viz., Plaint 'B' schedule properties already referred supra, with an intention to create an equitable mortgage.

(3.) Plaintiff initially filed the suit before the High Court of Madras and an application No.6263 of 1996 in the Original side, seeking leave to sue, was also filed. By an order dated 23.12.1996, the said application was ordered (i.e) leave was granted. But before numbering the suit, the Registry returned the papers with the following endorsement, "In view of the constitution of Debt Recovery Tribunal under Section 4 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (Central Act 51/1993), this may be represented before the Tribunal." This order was passed by the Assistant Registrar No.2 on 7.3.1997. Thereafter, the plaintiff appears to have re-presented the matter before the City Civil Court, obviously because of the reason the suit claim is less than Rs.10 lakhs and the Debt Recovery Tribunal entertains only claims of Rs.10 lakhs and above. On 6.12.1997, the City Civil Court returned the papers directing the plaintiff to present the papers before the Court, which has got territorial jurisdiction. Pursuant to this, plaintiff filed the suit before Sub Court, Srivilliputhur, within whose jurisdiction the properties that are subject matter of the suit i.e, plaint 'B' schedule are situate. The Subordinate Court took the matter on file and numbered the suit as O.S.80 of 1999.