Bangalore District Court
Gaurav Rose Real Estate Pvt Ltd Rep By Its … vs Blue Horizon Hotels Pvt Ltd Rep By A.C … on 1 April, 2026
KABC170012282021
IN THE COURT OF LXXXIV ADDL. CITY CIVIL &
SESSIONS JUDGE, AT BENGALURU (CCH-85)
(Commercial Court)
THIS THE 1st DAY OF APRIL 2026
PRESENT:
SRI. ANAND T. CHAVAN. B.Com.,LL.B.(Spl.)
LXXXIV ADDL. CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.OS.No.25855/2017
Plaintiff:- M/s Gaurav Rose Real Estate Pvt.
Ltd. A Company incorporated under the
Companies Act, 1956
Having its registered office at
No.9/12, Lal Bazar Street,
Merchantile Building,
Block-E, 2nd floor, Kolkata-700 001.
Rep. by its Authorized Signatory
Rohan Agarwal
(Rep by M/s AKS Law Associates -Advocate)
V/s
2 Com.OS No.25855/2017
Defendants:- M/s Blue Horizon Hotels Pvt. Ltd.
A company incorporated under the
Companies Act, 1956,
Having registered office at:
No:172/1, Srinivas Industrial Estate,
N.S.Palya, Bannerghatta Road,
Bengaluru-560076
Rep. by its Directors
A.C.Srinivas Raju and A.M.Ramaraju
2. M/s. Phoenix ARC Pvt. Ltd.,
A Company incorporated under the
Companies Act, 1956, Having its
Registered Office at 7th Floor,
Dani Corporate Park, 158 CST Road,
Kalina Santacruz (E),
Mumbai-400 098.
Rep by its Senior Associate
Vaibhav Maheshwari.
3. M/s. Edelweiss Asset
Reconstruction Company Ltd.
A Company incorporated under the
Companies Act, 1956, Having its
Registered Office at Edelweiss House,
of CST Road, Kalina, Mumbai-400 098.
Rep by its Managing Director,
Siby Antony.
4. M/s. A.S Muniswamy Raju
Hindu Undivided Family,
Rep by its Kartha,
3 Com.OS No.25855/2017
Mr. A.M. Raju,
S/o Late A.S Muniswamy Raju,
Aged about 72 years,
R/at No.536, 10th Main,
5th Block, Jayanagar,
Bengaluru-560 041.
5. M/s. Green Park Hotels & Resorts
Ltd., Having Registered Office at
4th Floor, Hotel Green Park,
Greenland, Begumpet,
Hyderbad-560 016, Telangan.
Rep by its Director,
Mr. B. Gautam.
6. M/s. Oriental Hotels Ltd.,
Having Registered Office at
Taj Coromandel, 37,
Mahatma Gandi Road,
Chennai-600 034.
Rep by its Authorized Signatory,
Mr. Sanjay Kumar Gupta.
(D1 rep. by Mr. Ajesh Kumar S- Adv)
(D2 rep. by Sri. B.C Avinash- Adv)
(D3 rep. by VGB Associates- Adv)
(D4 rep. by Sri. Prathap K.- Adv)
(D5 rep. by J.Sagar Associates- Adv)
(D6 rep. by Kochha & Co.,- Adv)
Date of Institution of the 25.07.2017
suit
4 Com.OS No.25855/2017
Nature of the suit (suit on
pro note, suit for Suit for recovery of Money
declaration & Possession, and for declaration.
Suit for injunction etc.)
Date of commencement of 24.07.2023
recording of evidence
Date on which judgment 01.04.2026
was pronounced
Total Duration Year/s Month/s Day/s
08 08 07
LXXXIV Addl.City Civil & Sessions Judge,
Bengaluru.
JUDGMENT
The plaintiff has filed present suit against
defendants seeking following reliefs:-
(a) To direct the 1st Defendant Company being
M/s. Blue Horizon Hotels Pvt. Ltd., and the 4 th
Defendant HUF represented by Mr. A.M Rama Raju
Kartha of the HUF Jointly and Severally pay the
plaintiff a sum of Rs.5,00,00,000/- as per Deed of
Mortgage dated 04.04.2014 executed by 1 st
Defendant in favour of the Plaintiff along with
interest on the said sum at 24% per annum
commencing from the date of payment of the total
loan amount i.e., 25.05.2012 till the date of
realization.
5 Com.OS No.25855/2017
(b) To declare that the Mortgage Deed
dtd.28.05.2015 executed by Defendant No.1 M/s.
Blue Horizon Hotels Pvt. Ltd., in favour of Defendant
No.2 M/s. Phoenix ARC Private Limited and
Defendant No.3 M/s. Edelwiss Asset Reconstruction
Company Limited is not binding on the Plaintiff and
its rights under the Mortgage Deed dated
04.04.2014.
(c) In the event of Defendant Nos.1 and 4
failing to repay the sums due to the Plaintiff, to direct
the sale of the Suit Schedule Property belonging to
the Defendant Nos.1 and 4 and to direct that the
sums owed to the plaintiff are paid from the sale
proceedings.
2. The brief averments of plaint are that:
The plaintiff is a company incorporated under
Companies Act 1956. During May 2012 defendant
No.1 approached plaintiff and sought for a business
loan of Rs.5 Crores to fund its business M/s. Blue
Horizon Hotels Ltd. Since said defendant was unable
to repay the said money along with interest at the
rate of 24% per annum, said defendant sought for
more time and also unconditionally agreed to repay
the said amount in fresh timeline. The parties agreed
to the timelines for repayment of said amount and
6 Com.OS No.25855/2017interest and in pursuant to the same, defendant No.1
executed a deed titled as Mortgage Deed
dtd.04.04.2014 by admitting its liability. The plaintiff
paid adequate stamp duty to Registrar Jayanagar on
08.06.2017 for sum of Rs.5,15,000/- by virtue of
demand draft No.011844 of Axis Bank Bengaluru. As
admitted in the terms of Mortgage Deed, plaintiff had
paid aforesaid sum of Rs.5 Crores to said defendant
in following manner:-
Sl.No. Cheque Date Cheque No. Amount (Rs.)
1. 22/05/2012 150171 2,00,00,000=00
2. 24/05/2012 150172 2,00,00,000=00
3. 25/05/2012 150173 1,00,00,000=00
TOTAL 5,00,00,000=00Defendant No.1 agreed to repay the said loan
within 120 days from date of execution of said deed,
that is on or before 04.08.2014. It further agreed to
pay interest at the rate of 24% per annum on said
amount from May 2012, the date on which said sum
was paid to the defendant. The suit schedule land is
owned by defendant No.4 Hindu Undivided Family of
A.S Muniswamy Raju and said defendant is not only
7 Com.OS No.25855/2017bound by Mortgage Deed, but they agreed to subject
the said land to the liability of defendant No.1
company. Defendant No.1 company put up a building
known as Vega City Mall comprising of theaters,
shopping areas, hotels, offices and other
developments. By execution of aforesaid Mortgage
Deed, the defendant No.1 and 4 subjected the said
land and building to the liability owed to plaintiff and
in case of default committed by defendant No.1, the
said land and building shall be subjected to sale for
recovery of sums due to the plaintiff. It is further
averred that till date plaintiff has neither received the
said sum nor defendant No.1 has paid the interest
due on it. Defendant No.1 company failed and
neglected to repay the said amount with interest and
as such the security offered by the defendant No.4 is
liable to be liquidated to meet the debts of plaintiff.
Though as a business enterprise, plaintiff had
opportunity to utilize the above sums and it would
have earned sum not less than 36% per annum, it
has restricted its claim to the extent agreed in
8 Com.OS No.25855/2017
Mortgage Deed. Subsequently plaintiff caused a legal
notice dtd.18.12.2015 to defendant No.1 company
calling upon it to repay the said sum of Rs.5 Crores
with interest at the rate of 24% per annum
calculated quarterly from 25.05.2012 to 20.12.2015
amounting to Rs.5,86,77,568/-, which is arrived at
Rs.10,86,77,568/-. Instead of complying said notice,
defendant No.1 chose to send a vague reply
dtd.30.01.2016 taking untenable contentions without
repaying the said amount, while categorically
admitting and acknowledging receiving of Rs.5
Crores by defendant No.1 company in the year 2012
and also by admitting execution of the above
Mortgage Deed. Hence defendant No.1 company and
its promoter A.M Raju being kartha of defendant
No.4 having committed breach of agreed terms of
Mortgage Deed are liable to the aforesaid sums along
with agreed interest and failing which the suit
schedule land and building would have to be put for
sale for recovery of money due to the plaintiff.
9 Com.OS No.25855/2017
It is further averred that as per Clause No.3 of
Mortgage Deed, the defendant No.1 company has
deposited copies of title documents in respect of
schedule A property. Further defendant No.1
company had agreed to obtain signatures from all
those persons necessary to further more perfectly
assuring to mortgage the suit schedule property and
defendant No.1 company had also permitted to
plaintiff to enter into the suit schedule property at
any point of time for inspection and they had agreed
not to alienate the same. As per Clause No.6 of
Mortgage Deed, defendant No.1 company has to
repay the loan amount to plaintiff before repayment
date and in case of failure of defendant No.1
company to repay the loan, it is lawful for plaintiff to
sell the suit schedule property or any part thereof in
public auction or private agreement in the manner
and terms deemed fit and proper, without being
answerable for loss of diminution of price occasioned
thereby and to do all other acts for completing the
10 Com.OS No.25855/2017
sale for recovery of loan. Defendant No.4 is aware
and bound by the said Clause.
It is further averred that, contrary to Clause
No.11 of Mortgage Deed dtd.04.04.2014, first
defendant executed a Mortgage Deed dtd.28.05.2015
in favour of defendant Nos.2 and 3 companies,
without notifying execution of the same to plaintiff,
with sole intention to defeat the claim of plaintiff.
However since the Mortgage Deed of plaintiff is
executed prior to above Mortgage Deed, claim of
plaintiff precedes the defendant Nos.2 and 3 to
realize sum of money from suit schedule property.
Hence the deed of mortgage executed in favour of
defendant Nos.2 and 3 are not binding upon plaintiff
and it does not dilute right of plaintiff over suit
schedule property and remedies thereof. It is further
averred that plaintiff has already filed winding up
petition against defendant No.1 before Hon’ble High
Court of Karnataka in Company Petition No.161/2016
and notice has been issued to said defendant in said
case. Further in view of having offered suit schedule
11 Com.OS No.25855/2017
property as security under above Mortgage Deed,
defendant No.1 is bound to register the same before
concerned Sub-Registrar and in the event it fails to
registered the same, this court may register the said
document as security towards aforesaid loan of Rs.5
Crores and interest due thereon. It is further averred
in plaint that, as on 18.12.2015 defendant No.1 is
liable to pay total sum of Rs.10,86,77,568/- towards
above dues with interest at the rate of 24% per
annum. Plaintiff issued one more letter through their
lawyer on 09.02.2016 demanding payment of said
amount. Defendant No.1 by reply dtd.26.02.2016
while admitting their liability, has failed to pay said
amount. It is further averred that, Defendant No.4
being owner of land described in suit schedule A
property by signifying their readiness and willingness
to repay the loan had offered the said property as a
security to above loan vide above Mortgage Deed.
Plaintiff learned about execution of deeds in favour of
defendant Nos.2 and 3 after receiving aforesaid reply
dtd.26.02.2016, for which no consent of plaintiff was
12 Com.OS No.25855/2017
sought and defendant Nos.1 and 4 were estopped
from creating further interest or charge as per Clause
No.11 of the Mortgage Deed. It is further averred
that as per extension of Mortgage Deed
dtd.28.05.2015, defendant No.4 represented by A.M
Ramaraju, Kartha of A.S Muniswamyraju HUF has
offered said land as a surety on mortgage to
defendant No.2 and 3. Additionally defendant No.4
offered to part with suit schedule property in order to
repay the amount due to plaintiff. Hence defendant
Nos.2 and 3 could not have executed the said deed
without consent of plaintiff. Further katha of 4 th
defendant by name A.M Ramaraju is also the
promoter director of 1st defendant company. Hence
liability of defendant Nos.1 and 4 to repay the loan is
joint and several. These amongst other grounds, it is
prayed to decree the suit as prayed for.
3. Defendant Nos.1 to 6 have appeared in pursuant
to summons and defendant Nos.1, 3, 4 and 5 have
filed their separate written statements. However
13 Com.OS No.25855/2017
defendant Nos.2 and 6 have not chosen to contest
the suit by filing their written statement.
4. Defendant No.1 Blue Horizon Hotels Pvt Ltd., has
averred in it’s written statement that, suit is not
verified in accordance with law and existence of
board resolution dated 08.01.2016 authorising it’s
representative is not admitted. However defendant
no.1 has specifically admitted in para No.2 of it’s
written statement that, aforesaid amount of
Rs.5,00,00,000/- (Rupees Five Crores) had been
advanced, but it denies that it had agreed to pay
interest of 24%. Defendant No.1 has further denied
the averments of plaint that it unconditionally agreed
to pay the loan in fresh timeline with interest and
executed the aforesaid Mortgage Deed
dtd.04.04.2014 by acknowledging the said debt.
Defendant No.1 has seriously denied and disputed
the validity, correctness and genuineness of aforesaid
Mortgage Deed and it denies to know payment of
stamp duty on it by plaintiff. It is further averred that
no such document was executed by admitting the
14 Com.OS No.25855/2017
debt and no terms of repayment were agreed in said
document. Defendant No.1 has further denied that in
terms of said Mortgage deed aforesaid sum of Rs.5
Crores was paid, but it admits receipt of said
amount. Further defendant No.1 has specifically
denied the execution of aforesaid Mortgage Deed and
asserts that since the claim has become time barred
all other statements such as existence of mortgage
are made only to overcome question of limitation.
5. Defendant No.1 has further contended that the
Mortgage Deed is not registered and as such same
cannot be looked into. Defendant No.1 never
represented that it is the owner of schedule property
and no point of time it has created the above
mortgage. The averments of plaint that defendant
No.1 agreed to repay the loan within 120 days from
said Mortgage Deed with interest at the rate of 24%
per annum, the correctness of ledger account and
averments that defendant No.1 is promoted by 4 th
defendant are denied in toto. Defendant No.1 has
further stated that suit schedule property does not
15 Com.OS No.25855/2017
belong to defendant No.4 and said defendant is
neither a party nor a signatory to said transaction.
Hence said mortgage is not tenable and plaintiff has
no right to right in respect of schedule property. It is
further averred that since the suit is barred by
limitation, plaintiff is prohibited from seeking any
remedy from the court. It is further averred that
absolutely there is no reference about defendant
No.4 in legal notice dtd.18.12.2015 and assuming
lapses on the part of defendant No.1 in repayment of
loan, schedule property cannot be availed since it
does not belong to defendant No.1 and defendant
No.4 has not offered it as security. It is further
averred that defendant No.4 is not a guarantor and
when there is no jural relationship pleaded,
contention of mortgage which is contrary to law
cannot be accepted. Further though defendant No.1
has admitted issuance of legal notice
dtd.18.12.2015, it asserts to have replied said notice
and it denies that it had admitted execution of above
Mortgage Deed. It is further averred that there is no
16 Com.OS No.25855/2017
privity of contract between plaintiff and defendant
No.4 and as such committing of any default by said
defendant does not arise. Further the law does not
permit the mortgage of property without legal
necessity. Defendant No.1 has further denied the
depositing of copies of title documents of schedule
property and said defendant agreed to obtain
signatures of others on mortgage. Further the
averments of plaint that plaintiff was permitted to
inspect the suit property and defendant No.1 had
agreed not to alienate the same are denied and it is
further contended that the suit is misjoinder for
impleading of defendant Nos.2 to 4. It is further
averred that the law does not enable the court to
cause registration of document and more so such
relief would be barred by time. Further there was no
agreement to pay interest and entire claim of plaintiff
for Rs.10,86,77,568/- are denied. It is further
averred that statements of defendant No.1 in reply
dtd.22.06.2016 do not bind defendant No.4 and suit
is barred by law. It is further averred that date of
17 Com.OS No.25855/2017
registration of Mortgage Deed is blank and same is
not registered. Further since the above amount was
paid on 22.05.2012, 24.05.2012 and 25.05.2012,
the claim of plaintiff is barred by virtue of limitation
as on 25.05.2015 since the very legal notice is issued
on 18.12.2015. Further there is no plea of
acknowledgment of liability. These amongst other
grounds defendant No.1 has prayed for dismissal of
the suit.
6. Defendant No.3 has filed its separate written
statement, wherein its averred that the suit of
plaintiff is not maintainable and same is liable to be
dismissed. Defendant no.3 has denied the entire
averments of the plaint with regard to aforesaid loan
transaction, execution of Mortgage Deed by
defendant No.1, liability of defendant Nos.1 and 4 to
repay the loan. It is further averred that the above
story is concocted in order to extract money from
defendant No.3 and plaintiff has no locus to demand
money from this defendant. Defendant No.3 has
denied the entire case of plaintiff in its para wise
18 Com.OS No.25855/2017
remarks. It is further contended by defendant No.3
that there is no cause of action to file present suit
and plaintiff is not entitled for discretionary relief of
recovery of money and cancellation of Mortgage
Deed dtd.28.05.2015 executed in favour of this
defendant.
7. Apart from above averments, defendant No.3 has
contended that State Bank of Mysore, Bank of India
and State Bank of India sanctioned financial facility
of Rs.97 Crores and Rs.112 Crores to defendant No.1
and said defendant has executed loan and security
documents in favour of said banks. Thereafter State
Bank of Mysore and Bank of India who are
collectively referred as assignor banks have assigned
debt of borrower along with interest, rights and
underline security in favour of defendant No.3 vide
Assignment Agreement dtd.29.03.2014 and
30.10.2013 respectively. In pursuant to said
Assignment Deed, defendant No.3 stepped in to
shoes of assigner banks under Sec.5(2) of SARFAESI
Act. Thereafter State Bank of India appointed the
19 Com.OS No.25855/2017
lead bank by the members of consortium and
mortgaged documents were executed and held by
the lead bank on behalf of all lenders. Subsequently
SBI assigned all debts along with rents to defendant
No.2 Phoenix ARC and schedule A and B of the suit
are mortgaged in favour of all consortium lenders
vide memorandum of entry dtd.06.12.2008 and
29.08.2012. It is further averred that no permission
was sought by defendant No.1 to create mortgage in
favour of plaintiff in 2014 and the mortgage created
in favour of consortium lenders were prior in time.
These amongst other grounds defendant No.3 has
prayed for dismissal of the suit.
8. Defendant No.4 has filed its written statement, by
contending that, it does not know whether 1st
defendant has taken money from plaintiff and
whether there was any agreement to pay interest.
Defendant No.4 has specifically denied that
defendant No.1 had sought time and unconditionally
agreed to repay the loan in fresh timeline with
interest. Defendant No.4 has also denied execution
20 Com.OS No.25855/2017
of aforesaid mortgage deed by defendant No.1 and
asserts non-entitlement of said defendant to execute
the same as property does not belonged to it.
Defendant No.4 has also denied the alleged
acknowledgment of debt by defendant No.1 and the
genuineness of above Mortgage Deed. It has also
contended that the suit is barred by limitation.
Defendant No.4 has reiterated the averments of
written statement of defendant No.1 denying that
defendant No.4 being promoter of defendant No.1, it
is liable to pay the suit loan in pursuant to Mortgage
Deed. Defendant No.4 has further contended that
though the schedule property belongs to it, it is not a
party to the suit transaction nor it is not a party or a
signatory to above Mortgage Deed. It is further
contended by defendant No.4 that plaintiff has no
right over suit schedule property and since said
property was not offered by this defendant, it is not
entitled for relief claimed in the suit. Defendant No.4
has also asserted that it is not a guarantor to
aforesaid loan and there is no privity of contract
21 Com.OS No.25855/2017
between plaintiff and said defendant. The averments
of plaint that defendant No.4 had signified its
readiness and willingness to repay the loan are
denied and it is also denied that defendant No.4 was
estopped from creating charge or interest and HUF
properties cannot be mortgaged without family
necessity, which is absent as per plaint averments.
These amongst other grounds, defendant No.4 has
prayed to dismiss the suit with exemplary costs.
9. Defendant No.5 GreenPark Hotels and Resorts,
who appears to be pendent lite purchaser of portion
of suit schedule property, from defendant no.1, has
also denied the entire averments of plaint in its
written statement and it has contended that said
defendant is a company incorporated under
Companies Act by engaging itself in hospitality
services. Defendant No.5 has further contended that,
it has no direct connection with dispute raised by
plaintiff, which pertains to alleged recovery of money
by plaintiff from defendant Nos.1 to 4. It is further
averred that no allegations have been made against
22 Com.OS No.25855/2017
defendant No.5 and entire transaction has arisen
between plaintiff and defendant Nos.1 to 4. The role
of this defendant is extremely limited. Further
defendant No.5 has narrated with regard to filing of
two interim applications by plaintiff restraining
defendant Nos.1 to 4 by alienating suit properties
and restraining their tenants from carrying any
commercial operations in schedule premises. This
court dismissed said applications on 28.04.2018 with
certain observations with regard to aforesaid dispute
between plaintiff and defendant Nos.1 to 4, which as
on the date stands valid, since plaintiff has not
chosen to challenge said order. Further while deciding
the above applications, this court has observed with
regard to dispute between the plaintiff and defendant
Nos.1 to 4 that value of the building on schedule
property is more than Rs.5 Crores and this court
further concluded that plaintiff cannot prevent said
defendants from executing any sale deed or any
nature of conveyance deeds with third party. It is
further averred that, this court held that in the event
23 Com.OS No.25855/2017
defendant Nos.1 to 4 are restrained from alienating
said properties, they will be put to hardship and
accordingly the injunction applications were
dismissed. Thus by said order, this court permitted
defendant Nos.1 to 4 to create third party interest
and to sell building or portions of schedule property
to third parties.
10. It is specific contention of defendant No.5 that,
in the light of above background, said defendant
purchased portion of schedule property described as
hotel property under Sale Deed dtd.17.07.2019 from
defendant No.4 and defendant No.1 as confirming
party to the same. Further defendant No.5 purchased
said property by following due legal course and by
way of abundant cautions by issuing public notices by
specifying details of property and its intention to
purchase the same. They have issued public notices
on 02.08.2018 and 17.05.2019 in leading English
and Vernacular Newspapers regarding purchase of
such properties. Further title of schedule property
concerning to defendant No.5 is not disputed and
24 Com.OS No.25855/2017
same has been legally and validly purchased by it.
Further defendant Nos.1 to 4 have validly challenged
the Mortgage Deed relied upon by plaintiff and
defendant No.5 is not party to the same. Hence this
defendant cannot certify the contents and validity of
said Mortgage Deed. Further defendant No.5 was not
privy to correspondence and discussions taken place
between plaintiff and defendant Nos.1 to 4, since
there is no privity of contract between plaintiff and
this defendant and there was no exchange of
communications or instructions by either party. It is
further averred that arrangement agreed between
plaintiff and defendant Nos.1 to 4 was not known to
defendant No.5 including execution of Mortgage Deed
or terms thereof. Hence defendant No.5 cannot made
liable for breach of contractual obligations of
defendant Nos.1 to 4 and suit is liable to be
dismissed in respect of defendant No.5. Further the
case of plaintiff is neither with regard to suit
schedule property nor dispute is raised about its
ownership. The dispute is purely a money recovery
25 Com.OS No.25855/2017
dispute and defendant No.5 has no nexus with it. The
sale of schedule property in favour of defendant No.5
does not violate order of this court and there are no
allegations against this defendant in plaint. Hence
defendant No.5 cannot be held liable for actions or
inaction on part of defendant Nos.1 to 4 and
consequently no action can be brought against it
under alleged rights of plaintiff. Defendant No.5 is
neither necessary nor proper party for adjudication
of dispute or breach of alleged Mortgage Deed by
other defendants and suit is not maintainable against
it. These amongst other grounds, it is prayed to
dismiss the suit.
11. In view of pleadings of both parties, this court
has framed following issues:
1. Whether the plaintiff proves that
defendants 1 and 4 executed
mortgage deed dated 04.04.2014 by
deposit of title deeds as claimed in
para 9 of the plaint?
2. Whether the plaintiff proves that
the 1st defendant had agreed to pay
interest at 24% p.a. on the advance
of Rs.05 Crores?
26 Com.OS No.25855/2017
3. Whether the defendants 1 and 4
prove that the suit is time barred?
4. Whether the defendants 1 and 4
prove that the suit is bad for
misjoinder of defendants 2 to 4?
5. Whether the 3rd defendant proves
that the mortgage created in favour
of the consortium lenders, SBM, Bank
of India and SBI was prior in point of
time?
6. Whether the plaintiff is entitled to
recover Rs.05 Crores from defendants
1 and 4 with interest at 24% p.a.
from the date of suit as claimed?
7. Whether the plaintiff is entitled
for declaration that the mortgage
deed dated 28.05.2015 in favour of
defendants 2 and 3 is not binding?
8. Whether the plaintiff is entitled for
a direction to sell the suit property to
recover the amount claimed in the
suit?
9. What order or decree?
27 Com.OS No.25855/2017
ADDITIONAL ISSUE DTD.05.12.2025
1. Whether defendant No.1 proves that
Mortgage Deed dtd.04.04.2014 is
invalid, void and opposed to law?
12. In support of its case, plaintiff company has got
examined its Authorized Representative as PW1 and
got marked 15 documents as per Ex.P1 to Ex.P15.
Further plaintiff has got marked Ex.P16 and 17
through DW1, by way of confrontation during cross-
examination of said witness. On the other hand,
defendant company has got examined its Authorized
Representative as DW1 and got marked 32
documents as Ex.D2 to Ex.D32. The defendant No.5
has got examined its Representative as DW2 and got
marked Ex.D34 to Ex.D43 documents. Defendant
No.1 has got marked Ex.D1 and 33 during cross-
examination of PW1 by way of confrontation of said
documents.
13. Heard arguments of learned counsels for the
plaintiff and defendants. Perused evidence adduced
by both parties and written arguments filed by
counsels for both sides.
28 Com.OS No.25855/2017
14. The followings are answers to above:
Issue No.1:- In the Negative.
Issue No.2:- In the Negative.
Issue No.3:- In the Affirmative.
Issue No.4:- In the Negative.
Issue No.5:- In the Negative.
Issue No.6:- In the Negative.
Issue No.7:- In the Negative.
Issue No.8:- In the Negative.
Addl.Issue No.1:- In the Affirmative.
Issue No.9:- As per the final Order
for the following;
REASONS
15. Issue Nos.1, 8 and Addl. Issue dated
05.12.2025:- These issues are taken together for
consideration as finding on one issue may have
bearing on findings on other issues and in order to
avoid repetition of facts and evidence of case. The
averments of plaint and written statement are
already narrated in detail in foregoing paras and
same need not be repeated. In support of its case,
plaintiff has got examined its Authorized
Representative by name Rohan Agarwal as PW1, who
has filed his chief examination affidavit by reiterating
entire averments of plaint.
29 Com.OS No.25855/2017
16. PW1 has got marked Certified copy of Board
resolution of plaintiff company dtd.08.01.2016
authorizing him to conduct present case as per
Ex.P1, Computer generated Memorandum of Article
of association of plaintiff company as per Ex.P2, the
Original unregistered Mortgage Deed said to have
been executed by defendant No.1 by leaving space of
date blank as “___ day of March 2014” as per Ex.P3
along with an endorsement of concerned Deputy
Commissioner of Stamps and District Registrar
Jayanagar Bengaluru for having collected deficit
stamp duty of Rs.2,57,500/- and penalty of
Rs.2,57,500/- i.e., total amount of Rs.5,15,000/- on
said document. PW1 has further got marked Form
No.15 of said stamp duty issued by District Registrar
of Stamps as per Ex.P3(a), Bank account statement
of plaintiff held in Standard Chartered Bank from
01.04.2012 to 10.01.2013 as per Ex.P4, Computer
generated ledger account of defendant No.1
maintained by plaintiff as per Ex.P5, Certified copy of
Memorandum of confirming the extension of
30 Com.OS No.25855/2017
equitable mortgage executed by defendant No.1 and
4 in favour of defendant No.2 dtd.28.05.2015 as per
Ex.P6, Certificate of PW1 under Sec.65B of Evidence
Act as per Ex.P7, Office copies of legal notices issued
by plaintiff to defendant No.1 dtd.18.12.2015 and
09.02.2016 as per Ex.P8 and Ex.P9, Office copy of
legal notice issued by plaintiff to director of
defendant No.1 dtd.10.06.2020 as per Ex.P10, Postal
receipt and acknowledgment showing service of said
legal notice on defendant No.1 as per Ex.P10(a) and
(b), Reply notice issued by defendant No.1 to counsel
for plaintiff as per Ex.P11, Certified copy of company
petition filed by plaintiff against defendant No.1
under Company petition No.161/2016 along with
objections filed by defendant No.1 to said case as per
Ex.P12 and Ex.P13, Copies of Reply notices issued by
defendant No.1 to counsel for plaintiff
dtd.30.01.2015 and 26.02.2015 as per Ex.P14 and
Ex.P15.
17. In relevant portion of cross examination of PW1
by counsel for defendants side, he asserts
31 Com.OS No.25855/2017
to be Manager of plaintiff company by joining it
2007-08 and he asserts to have personal knowledge
about the suit transaction. However PW1 denies that
Director of plaintiff has not signed Ex.P1. He denies
to know type of Ex.P3 mortgage and admits that it is
not attested by witnesses. He further admits that
date of execution of Ex.P3 is left blank and states
that it was executed in March/April 2014 in his
presence. He further admits that he has not signed
Ex.P3 as a witness and said deed is also not signed
by its 2nd party. Though PW1 has explained that he
was told about signatures could be done at the time
of registration, he was not intimated about date of
registration. PW1 has denied suggestions that Ex.P3
was introduced for the first time in the suit and he
denies to know if original title deeds have to be
collected if mortgage is by depositing of title deeds.
PW1 clearly admits that they have not collected
original title deeds at the time of execution of Ex.P3
and he does not know where such title deeds are. He
further admits that Ex.P3 is not registered since
32 Com.OS No.25855/2017
defendant did not come forward to register the same
and he denies to know if there are no entries of said
document in encumbrance certificate. It is clearly
suggested to him that Ex.P3 is created for the
purpose of this case. In his further cross-examination
PW1 admits that Ex.P4 is not attested by bank and
Ex.P5 is self attested for the purpose of this case.
PW1 further denies to know about issuance of paper
publications by defendant No.5 before purchasing the
property and said defendant is bonafide purchaser of
it.
18. After production of legal notices and copies of
company petition as per Ex.P8 to Ex.P13, PW1 has
been further subjected to cross examination by
defendants side wherein he has clearly admitted that
plaintiff has not signed the deed of mortgage, but
denies that Ex.P3 is concocted for the purpose of this
suit. PW1 admits filing of Company Petition
Nos.161/2016 and 160/2016 by plaintiff on
confrontation as per Ex.D1 and he further admits
that defendant No.1 is making payment in Company
33 Com.OS No.25855/2017
Petition No.161/2016. He further admits receiving of
Rs.2,35,00,000/- from defendant No.1 and even
after filing of his affidavit evidence they received
Rs.45 Lakhs from 1st defendant. PW1 denies to know
receiving of Rs.2,14,00,000/- in Company Petition
No.160/2016.
19. Most importantly on confrontation of Ex.P3,
PW1 admits that on 1st page of said deed date is
mentioned as 04.04.2014 and on 2nd page the date is
mentioned as March 2014, which is prior to purchase
of stamp. He further clearly admitted that promoter
of defendant No.1 was owner of property mortgaged
under Ex.P3 and defendant No.1 was not owner of it.
It is specifically suggested to PW1 that Ex.P3 is not
executed by defendant No.1 or its directors and
same has been created to overcome the period of
limitation. Most importantly PW1 admits that, Ex.P9
Notice was issued on behalf of M/s. G.K.Ispath and
not on behalf of plaintiff. PW1 further admits that, 1 st
defendant had placed orders for supply of iron and
steel worth more than Rs.25 Crores and they had
34 Com.OS No.25855/2017
good relationship with plaintiff. However he denies
that, due to such good relationship, the above loan
was advanced without interest. Further though PW1
asserts that they had passed a resolution with regard
to sanctioning of loan to defendant No.1, no such
resolutions are produced. It is suggested to him that
in view of good business relationship, plaintiff had
advanced above loan of Rs.5 Crores without any
interest.
20. During his further cross examination by
defendant No.1 side, on confrontation of certified
copy of memo dtd.04.02.2020, PW1 admits that they
had received 1st payment from defendant No.1 on
said date and said document is marked as Ex.D33.
Further though PW1 admits that Ramaraju was
kartha of defendant No.4, he has stated that he
cannot recall whether said Ramaraju signed any
documents about suit transaction, but clearly admits
that as per para No.7 plaintiff has admitted that
defendant No.1 was not owner of suit schedule
properties. He has further admitted that defendant
35 Com.OS No.25855/2017
No.4 was not party to Ex.P3 Mortgage Deed and
denies to know that said properties were already
mortgaged SBI as on date of Ex.P3. Further PW1
admits that he is not aware as to where, when and
how defendant No.4 is liable to pay the suit liability
to plaintiff and he also denies to know if defendant
No.4 did not get any benefit from suit transaction.
21. PW1 has denied that Srinivasaraju has not
signed Ex.P3 and he denies to remember multiple
people present at the time of execution of said
document. He further asserts that since Srinivasaraju
assured to get signature of witnesses, they did not
obtain such signatures on Ex.P3. However this fact is
not pleaded in plaint. Further PW1 states that, they
purchased stamp paper of Rs.200/- for said
document as per advise of their advocate. However
he denies to remember name of said advocate and
invalidity of such document without attestation. He
has clearly denied suggestion that Ex.P3 has been
prepared the after the debt become time barred,
knowing fully well that limitation of mortgage deed is
36 Com.OS No.25855/2017
12 years. Further PW1 denies to remember further
payments made in company petition No.161/2016
and he also denies to know receiving of substantial
amount by GK Ispat from plaintiff in company
petition No.160/2016. PW1 further admits that
plaintiff is not party to Ex.P6 and Ex.P9 documents
and denies that there was no agreement for payment
of interest.
22. Most importantly PW1 denies to know whether
plaintiff pays income tax on their entitlements or on
the amount of interest they get. He further denies to
know whether they have paid income tax on the
basis of amount claimed in the suit and denies
suggestion that they have not paid any such tax on
interest. Further though PW1 asserts that
Srinivasaraju had agreed to obtain signatures of all
concerned persons on behalf of defendant No.1, he
denies to recall as to who were the other persons
who need to sign said document. The entire evidence
of PW1 is denied in toto and it is suggested to him
37 Com.OS No.25855/2017
that plaintiff is not entitled for any relief claimed in
the suit.
23. Defendant No.1 has got examined it’s
authorised representative by name Prasad Babu N.
S/o. Sri Narayanappa as DW1, who has filed his chief
examination affidavit by reiterating entire averments
of their WS. DW1 has admitted receiving of aforesaid
sum of Rs.5 Crores by defendant No.1 from plaintiff
company out of good business relationship, but he
has denied rest of case of plaintiff with regard to
agreeing to pay interest on said loan, execution of
Mortgage deed and asserts that alleged mortgage
deed has been fabricated for the sole purpose of this
suit. Further DW1 has challenged the validity and
admissibility of aforesaid deed on the ground of
being undated, unsigned, non-registration, non
attestation. DW1 has further stated on oath that,
plaintiff has instituted a parallel proceedings before
Hon’ble High Court of Karnataka under Company
Petition No.161/2016 for very same transaction and
defendant No.1 has paid entire principal sum of Rs.5
38 Com.OS No.25855/2017
Crores, and additionally Rs.94 Lakh due under sister
concern transaction in Company Petition
No.160/2016. DW1 has narrated details of such
payments in his chief examination affidavit.
24. DW1 has got marked Certified copy of Board
Resolution executed by defendant No.1 company in
his name to conduct and depose in present case,
Ex.D3 Statement of bank Account of defendant No.1
held in Bank of Baroda dtd.12.02.2020 showing
transfer of amount to plaintiff, Ex.D4 Copy of DD
No.184704 of Vijaya Bank dtd.02.07.2020 for
Rs.20,00,000/- drawn in favour of plaintiff, Ex.D5 to
Ex.D12, Ex.D14, Ex.D16, Ex.D18 to Ex.D23
Statement of Accounts held by defendant No.1 in
Bank of Baroda, HDFC Bank showing transfer of
partial amounts to the company of plaintiff, Copies of
DDs drawn in favour of plaintiff towards various
payments as per Ex.D13, Ex.D15, Ex.D17, Ex.D24.
DW1 has further got marked Certified copies of
Company Petitions filed by plaintiff under Company
Petition No.161/2016 against defendant No.1 as per
39 Com.OS No.25855/2017
Ex.D25, Certified Copy of petition in Company
Petition No.160/2016 filed by M/s G.K Ispat which is
said to be sister concern of plaintiff as per Ex.D26,
Certified copy of Common Order sheet of Hon’ble
High Court of Karnataka of aforesaid both company
petitions as per Ex.D27, showing pendency of said
petition between parties. On perusal of Ex.D25 it
discloses that the plaintiff has filed said petition
seeking to order of winding up of 1 st defendant
company for payment of aforesaid debt of Rs.5
Crores, which is also subject matter of present suit,
but nothing is whispered by plaintiff with regard to
details of said petition in the plaint. Similarly G.K.
Ispat has filed Ex.D26 Company Petition
No.160/2016 seeking winding up of defendant No.1
company for recovery of dues from defendant No.1.
DW1 has further got marked Certified copy of final
order passed by Hon’ble High Court of Karnataka in
WP No.4668/2025, which shows that the Hon’ble
High Court of Karnataka has disposed of said petition
challenging order passed by this court on IA No.18
40 Com.OS No.25855/2017
filed under Order VII Rule 11(a) and 11(d) of CPC,
dtd.30.01.2025, with direction to this court to decide
the matter in accordance with law on merits. Further
DW1 has produced Digital certified copies of Deed of
Extension of Mortgage dtd.16.12.2011 executed by
Kartha of defendant No.4 HUF and Director of
defendant No.1 company by name A.C Srinivasaraju
in favour of State Bank of India as per Ex.D30,
Digital certified copy of another Mortgage Deed
dtd.09.12.2012 executed by them in favour of SBI,
Hudson Circle Branch as per Ex.D31 and his
certificate under Sec.63 of BSA in support of digital
document as per Ex.D32.
25. DW1 has been subjected to elaborate cross-
examination by plaintiff side, wherein he admits that
he is not looking after accounts of defendant No.1
company and same is handled by one Mahesh Kulal
of Accounts Department. He further states that one
Ramaraju and A.C Srinivasaraju were only Directors
of defendant No.1 company in the year 2012 and he
admits that both were in-charge of affairs of
41 Com.OS No.25855/2017
defendant No.1 company during said period. DW1
further states that he has ascertained the
truthfulness of the information given by their director
and he has gone through Ex.P14 Reply notice
dtd.30.01.2016 issued by counsel for defendant No.1
prior to preparing his evidence affidavit. Further DW1
has testified that they have borrowed sum of Rs.295
Crores from SBI agreeing to repay the loan with
interest, but he denies to recall the rate of interest.
He further states that the said loan of SBI was taken
over by defendant Nos.2 and 3, but admits that they
have not produced any such document showing
assignment of said loans. DW1 further states that he
does not remember whether loan granted under
Ex.D30 Mortgage Deed were on commercial interest,
but asserts that same were used for commercial
purpose of constructing mall. Further though DW1
testifies that subsequently they have made payment
to plaintiff by reaching to settlement, he admits that
no documents were executed in that regard, but
again states that they have made payments as per
42 Com.OS No.25855/2017
court order, which appears to be depositing of Rs.9
Crores before this court by defendant No.1 in
pursuant to direction in WP No.4668/2025.
26. Most importantly, DW1 admits that A.C
Srinivasaraju has no physical problem to attend the
court and he was not present at all the times when
said A.C Srinivasaraju executed documents. He has
further clearly admitted that he was not present
personally when A.C Srinivasaraju borrowed loan
from plaintiff on behalf of defendant No.1 and he has
not given instruction to their lawyer at the time of
preparing reply notice or written statement. DW1
further admits that he was not representing
defendant No.1 before Hon’ble High Court of
Karnataka in Company Petition Nos.160/2016 and
161/2016. Further DW1 testified that as per Ex.D5 to
Ex.D24 entire principle amount has been paid to
plaintiff, but when there are other transactions
between defendant No.1 and M/s. G.K Ispat, without
support of cogent documents or account statements,
it is difficult to believe that such payments were
43 Com.OS No.25855/2017
made by defendant No.1 to plaintiff towards suit loan
itself. DW1 further admits that they have not taken
any steps after knowing that the Mortgage Deed was
fabricated. On confrontation of Certified copy of
order of Hon’ble High Court of Karnataka in WP
No.17586/2024, DW1 has admitted the same and
same is marked as Ex.P16. Further Ex.P17 MCA
portal data of defendant No.1 company is also
admitted by DW1 by way of confrontation. Ex.P16
discloses settlement arrived between defendant No.1
with some other parties with regard to the dues.
DW1 admits that he has no idea if defendant No.1
company is a party to Debenture Trust deed
dtd.22.10.2020 entered into with Vistara ITCL Ltd.,
and one Mr. Sachin Raju has signed the said
document.
27. Further Defendant No.5 has also got examined
it’s Authorized Representative by name K. Rama
Govinda Reddy S/o. K.Sreerami Reddy as DW2, who
has reiterated the averments of written statement of
Defendant No.5 in his written statement and testified
44 Com.OS No.25855/2017
that defendant No.5 has purchased portion of suit
schedule property which is referred as “Hotel
property” with due legal course by issuing public
notices in news paper and as such it has validly
acquired the same. Further DW2 has also denied to
know the transaction between plaintiff and
defendants No. 1 to 4.
28. DW2 has got marked Copy of board resolution
of defendant No.5 dtd.02.09.2022 showing his
authorization to depose in the matter as per Ex.D34,
Copy of certificate of incorporation of defendant No.5
company as per Ex.D35, Copy of another Board
Resolution dtd.02.09.2022 as per Ex.D36, relevant
pages of Indian Express, The Hindu, Kannada
Prabha, Udayavani Newspapers dtd.17.05.2019
showing publication of public notice prior to
purchasing of portion of suit schedule property from
defendant No.1 as per Ex.D37 to Ex.D40 and his
Certificate under Sec.65B of Evidence Act as per
Ex.D41. Further DW2 has got marked Certified copy
of Sale Deed dtd.17.07.2019 with regard to
45 Com.OS No.25855/2017
purchasing of portion of suit schedule property from
defendant No.1 as per Ex.D42 and his another
Certificate under Sec.65B of Evidence Act in respect
of said sale deed as per Ex.D43.
29. DW2 has also been subjected to cross-
examination by counsel for plaintiff, wherein he
denies that at the time of execution of above Sale
Deed by defendant No.1, they were aware that said
defendant has not taken permission of the court.
Further DW2 has stated that a due legal course
refers to legal opinion taken by them and issuance of
public notices by way of paper publication. However
he denies to know the dates of legal opinion and
admits that Ex.P3 Mortgage Deed has not come to
their notice. DW2 has specifically denied that in view
of Ex.D3 Mortgage Deed defendant No.1 has no right
to execute the Sale Deed in favour of defendant
No.5. Further DW2 has testified that they had not
received any response to public notices published by
them, but categorically denies that prior to execution
of Ex.D42 Sale Deed, defendant No.5 was aware
46 Com.OS No.25855/2017
about present proceedings; asserts that defendant
No.1 had not informed them about pendency of
present proceedings prior to execution of said sale
deed.
30. Thus on perusal of pleading and evidence
adduced by both parties, it clearly shows that,
advancement of suit loan of Rs.5 Crores has not been
denied and disputed by defendant No.1, since it is
unequivocally admitted by said defendant in it’s
written statement and also in it’s Ex.P14 Reply dated
30.01.2026. The plaintiff has asserted that, after
issuance of Ex.P8 Legal notice dtd.18.12.2015 to
defendant No.1, said defendant by issuing Ex.P14
Reply dtd.30.01.2016 has categorically admitted and
acknowledged receiving of Rs.5 Crores by defendant
No.1 company in the year 2012 and also by
admitting execution of the above Mortgage Deed.
However on perusal of Ex.P14 Reply notice said to
have been issued by Defendant No.1, it shows that,
though said defendant has admitted borrowing of
aforesaid business loan of Rs.5 Crores, it has
47 Com.OS No.25855/2017
seriously denied the execution of said mortgage.
Under such circumstances, the burden lies upon
plaintiff to prove genuineness, validity and
admissibility of said Mortgage.
31. Further as per case of plaintiff, Ex.P3 Mortgage
deed has been executed by one Srinivas Raju, who is
said to be director of defendant No.1 and on bare
perusal of said document, it shows that, defendant
No.4 has not executed it. In spite of it, plaintiff
asserts that, defendant No.1 company and its
promoter A.M Raju being kartha of defendant No.4
having committed breach of agreed terms of
Mortgage Deed are liable to the aforesaid sums along
with agreed interest and failing which the suit
schedule land has to be sold for realization of dues.
PW1 has clearly admitted that promoter of defendant
No.1 was owner of property mortgaged under Ex.P3
and defendant No.1 was not owner of it. The plaintiff
has asserted that, defendant No.1 company had
agreed to obtain signatures from all those persons
necessary to further more perfectly assuring to
48 Com.OS No.25855/2017
mortgage the suit schedule property. However
absolutely no evidence is put forth by plaintiff to
prove aforesaid facts.
32. Most importantly on confrontation of Ex.P3,
PW1 admits that on 1st page of said deed date is
mentioned as 04.04.2014 and on 2nd page the date is
mentioned as March 2014, which is prior to purchase
of stamp. PW1 has categorically admitted in his cross
examination that, the date of execution of Ex.P3 is
left blank and he vaguely asserts that, it was
executed in March/April 2014 in his presence. But he
admits that he has not signed Ex.P3 as a witness and
said deed is also not signed by its 2nd party. Though
PW1 has explained that he was told about signatures
could be done at the time of registration, he admits
that, he was not intimated about date of registration.
Further, PW1 denies to know if original title deeds
have to be collected if mortgage is by depositing of
title deeds and clearly admits that they have not
collected original title deeds at the time of execution
49 Com.OS No.25855/2017
of Ex.P3, which is also a serious ground to disbelieve
genuineness of aforesaid document.
33. Thus it is crystal clear that aforesaid Mortgage
deed is neither signed by both parties nor it is
attested as required under law. Defendant No.1 and
4 have further contended that the Mortgage Deed is
not registered and as such same cannot be looked
into. Defendant No.1 never represented that it is the
owner of schedule property and no point of time it
has created the above mortgage. PW 1 admits that
Ex.P3 is not registered since defendant did not come
forward to register the same and he denies to know
if there are no entries of said document in
encumbrance certificate. These all aspects, make out
strong grounds to believe that, Ex.P3 is created for
the purpose of overcoming period of limitation.
34. Further, it is not disputed that Ex.P3 Mortgage
deed is not registered. Learned counsels for
defendants No.1 and 4 have relied upon section 59 of
Transfer of property Act and same is extracted as
under:-
50 Com.OS No.25855/2017
59. Mortgage when to be by assurance:-
Where the principal money secured is one
hundred rupees or upwards, a mortgage, other than a
mortgage by deposit of title-deeds can be effected only
by a registered instrument signed by the mortgagor
and attested by at least two witnesses. Where the
principal money secured is less than one hundred
rupees, a mortgage may be effected either by a
registered instrument signed and attested as aforesaid,
or except in the (case of a simple mortgage) by
delivery of the property.
35. The aforesaid section clearly shows that the
mortgage deed is a compulsory required to be
registered and attested, whereas Ex.P3 is neither
registered nor attested by witnesses. Further plaintiff
or it’s authorised signatory themselves have not
attested their signatures on said deed. In this regard
counsels for defendants no. 1 and 4 have relied upon
section 68 of Evidence Act, which mandates proving
of documents required to be compulsorily attested.
The said section is extracted as under:-
68. Proof of execution of document
required by law to be attested:-
If a document is required by law to be attested,
it shall not be used as evidence until one attesting
51 Com.OS No.25855/2017witness at least has been called for the purpose of
proving its execution, if there be an attesting witness
alive, and subject to the process of the Court and
capable of giving evidence :[Provided that it shall not
be necessary to call an attesting witness in proof of
the execution of any document, not being a Will,
which has been registered in accordance with the
provisions of the Indian Registration Act, 1908,
unless its execution by the person by whom it
purports to have been executed is specifically denied.
36. On the other hand, Learned counsel for plaintiff
has vehemently argued that, the executant of Ex.P3
being representative of Defendant no.1 company has
deliberately not chosen to enter into witness box to
speak about said document, which is strong ground
to presume deemed admission of execution of said
document by him on his behalf as well as, on behalf
of defendant No.4. The said counsel has further
argued that, aforesaid Mortgage is in the nature of
acknowledgment of admitted debt borrowed by
defendant No.1 and as such same cannot be
discarded on the basis it’s nomenclature and said
documents binds defendants No.1 and 4 to subject
52 Com.OS No.25855/2017
the suit schedule property for sale for satisfaction of
loan dues. In this regard Learned counsel for plaintiff
has relied upon following caselaws:
(2008) 4 SCC 451 between B.K. Muniraju V/s
State of Karnataka and Others (Hon’ble Supreme
Court)
“18. The document in question which is filed as
Annexure P-3, has been styled or titled as “Certificate
of Grant”. In order to know the real nature of the
document, one has to look into the recitals of the
document and not the title of the document. The
intention is to be gathered from the recitals in
the deed, the conduct of the parties and the
evidence on record. It is settled law that the
question of construction of a document is to be
decided by finding out the intention of the
executant, firstly, from a comprehensive reading
of the terms of the document itself, and then, by
looking into to the extent permissible the
prevailing circumstances which persuaded the
author of the document to execute it. With a view
to ascertain the nature of a transaction, the document
has to be read as a whole. A sentence or term used
may not be determinative of the real nature of
transaction. Reference in this regard can be made to
the following cases i.e. Vidhyadhar vs. Manikrao & Anr.,
(1999) 3 SCC 573, Subbegowda (Dead) by LR. vs.
Thimmegowda (Dead) by LRs., (2004) 9 SCC 734 and
Bishwanath Prasad Singh vs. Rajendra Prasad & Anr.,
(2006) 4 SCC 432.
53 Com.OS No.25855/2017
19. The above principles make it clear that we
have to see terms and conditions and recitals in the
document and not the title alone. Though the
document, according to the appellant, “Certificate of
Grant”, perusal of the clauses therein, clearly shows
that the land was sold on 04.03.1948 in a public
auction and Motappa purchased the same for a price of
Rs.408.12. In addition to the recitals, the “darkhast
register extract” produced as Annexure “C” before the
High Court also shows that the land in question was
sold for a “price”. Form I also indicates that the land in
question was purchased and what was paid by the
purchaser under the said document was the purchase
price.”
(1976) 4 SCC 147 between Union of India V/
s D.N. Revri and Co. and Others (Hon’ble
Supreme Court)
“7. It must be remembered that a contract is a
commercial document between the parties and it must
be interpreted in such a manner as to give efficacy to
the contract rather than to invalidate it. It would not
be right while interpreting a contract, entered
into between two lay parties, to apply strict rules
of construction which are ordinarily applicable to
a conveyance and other formal documents. The
meaning of such a contract must be gathered by
adopting a common sense approach and it must
not be allowed to be thwarted by a narrow
pedantic and legalistic interpretation. Here, at the
time when the arbitrator came to be nominated and
the reference was made, there was a Ministry of Food
54 Com.OS No.25855/2017
& Agriculture and there was a Secretary in that
Ministry, but the only difficulty, according to the High
Court, was that there were. instead of one, two
Secretaries and it could not be predicated as to which
Secretary was intended to exercise the power of
nominating an arbitrator. …..”
(2022) 4 SCC 657 between Maharashtra
State Electricity Distribution Company Limited V/
s Maharashtra Electricity Regulatory Commission
and Others. (Hon’ble Supreme Court)
“178. The proposition that Courts cannot rewrite
a contract mutually executed between the parties, is
well settled. The Court cannot, through its
interpretative process, rewrite or create a new
contract between the parties. The Court has to
simply apply the terms and conditions of the
agreement as agreed between the parties, as
observed by this Court in Shree Ambica Medical
Stores and Ors. v. Surat People‘s Co-operative
Bank (supra), cited by Ms. Divya Anand. This
appeal is an attempt to renegotiate the terms of the
PPA, as argued by Ms. Divya Anand as also other
Counsel. It is well settled that Courts cannot substitute
their own view of the presumed understanding of
commercial terms by the parties, if the terms are
explicitly expressed. The explicit terms of a contract
are always the final word with regard to the intention
of the parties, as held by this Court in Nabha Power
Ltd. (NPL) vs. Punjab State Power Corporation Ltd.
(supra) cited by Ms. Anand.”
55 Com.OS No.25855/2017
2026 SCC Online SC 316 between General
Secretary Vivekananda Kendra V/s Pradeep
Kumar Agarwalla and Others (Hon’ble Supreme
Court)
“19. If the words in a contract/deed are
clear, there is very little the courts must do in the
construction of the contract in determining the
intention of the parties. In furtherance of
determining the intention, the deed must be read
as a whole to ascertain the true meaning of its
clauses, and the words of each clause should be
interpreted harmoniously. This intention must be
derived directly from the plain and ordinary
meaning of the text itself. Furthermore, these
words should be understood exactly as the
intended parties would commonly use them. The
covenants must be applied precisely as written, neither
diluted into irrelevance nor stretched beyond their
original scope. If the construction of the contract/deed,
through its words and context, does not provide the
court with the parties’ intention, the court may have
regard to the circumstances surrounding its creation
and the subject- matter to which it was designed and
intended to apply…..
20. In the present case, the impugned judgment
refers to the ex-post facto conduct of the parties to
determine the intention of the parties while executing
the “lease deed”. For instance, in paragraph 21, the
impugned judgment relies on the plaintiff’s witnesses’
cross-examination to establish the nature of possession
and occupation of Defendant No.1. It must be noted
that while the circumstances of a deed are not the
safest guide for interpreting a crystallised document,
56 Com.OS No.25855/2017
courts may rely on it when the document’s purport is
unclear through literal construction. However, courts
must exercise far greater restraint when inferring the
parties’ intention from circumstances arising after the
creation of the terms. For, the conduct may not be in
tandem with either the literal expression or the
purpose of the document.
20.1 …………… The above clauses in Ext. 1 denote
that the Plaintiff is a lessee, and Ext. 1 satisfies the
meaning of a lease deed. Unless the parties agree
bilaterally, disturbing the Plaintiff’s possession is illegal.
20.2 Further, the impugned judgment’s reliance
on the lessor’s occupation of the first floor does not
imply that Ext. 1 is a licence because exclusive
possession is assessed vis-à-vis the demised portion,
and not the portion excluded from the scope of the Ext.
1-agreement.
21. Thus, in the case at hand, the reason for
ignoring literal construction is not convincing to
us. We note that interpreting intention through
purposive construction or through ex-post facto
circumstances is unnecessary when the intention
is understood from the plain and ordinary
meaning of the text. There is no doubt that the
nomenclature alone of the document is not the
decisive factor of the nature of a document; it is
the text and the context that point to the
obligations undertaken by the parties to a written
document. In the case at hand, the document’s
nomenclature, text and context lead to only one
conclusion: that Defendant No. 1 entered into a 99-
year lease deed. Thus, the unilateral cancellation, in
the facts and circumstances of this case, is illegal, and
57 Com.OS No.25855/2017
it should be understood as having interfered with the
right of the Plaintiff to remain in possession of the
Plaint Schedule Property for 99 years. Therefore, the
prayers, as made, are available and are rightly granted
by the Trial and First Appellate Courts.”
2014 SCC Online Kar 10118 between Sri.
Armugam V/s Smt. Shakuntla and Ors., (Hon’ble
High Court of Karnataka)
“3. Counsel for the respondents to stand by his
contention to defend the order passed by the Trial
Court, relied upon the Supreme Court decision in the
case of Anil Rishi v. Gurbaksh Singh. . 2006 5 SCC
558, to contend that burden is on the plaintiff since he
raised an issue of denying the adoption and the Will
and accordingly submitted, the onus is on the plaintiff
and more over, such an issue is not necessary as the
plaintiff sought for a declaration and since he has
pleaded everything, it covers the issue and no specific
issue needs to be raised with regard to the adoption
and the Will. ………
5. Regarding Sections 101, 102 and 106 of the
Evidence Act, the Apex Court in the above cited
case, while dealing with the reversal of burden of
proof held that a distinction exists between a
burden of proof and onus of proof. The right to
begin follows onus probandi. It assumes
importance in the early stage of a case. Question
of onus of proof has greater force, where the the
question is, which party is to begin. Burden of
proof is used in three ways: (i) to indicate the duty of
bringing forward evidence in support of a proposition at
the beginning or later; (ii) to make that of establishing
58 Com.OS No.25855/2017
a proposition as against all counter evidence; and (iii)
an indiscriminate use in which it may mean either or
both of the others. Ultimately, referring to Section
101 of the Evidence Act, it is held that burden of
proving facts rests on the party who substantially
asserts the affirmative of the issue and not on
the party who denies it. The said rule may not be
universal in its application and there may be exception
there to. The suit will fail if both the parties do not
adduce any evidence, in view of Section 102 of the Act.
In terms of Section 102, the initial onus is always on
the plaintiff and if he discharges that onus and makes
out a case which entities him to a relief, the onus shifts
to the defendant to prove those circumstances, if any,
which would disentitle the plaintiff to the same.”
(1999) 3 SCC 573 between Vidhyadhar V/s
Manikrao and Anr (Hon’ble Supreme Court)
“17. Where a party to the suit does not
appear into the witness box and states his own
case on oath and does not offer himself to be
cross examined by the other side, a presumption
would arise that the case set up by him is not
correct as has been held in a series of decisions
passed by various High Courts and the Privy Council
beginning from the decision in Sardar Gurbakhsh Singh
V.s Gurdial Singh and Anr. ….”
Hon’ble High Court of Karnataka in RFA
No.155 of 2006 (SP) between Sri. N.
Narayanappa and Ors V/s Sri. Pillappa.
“24. The defendant, being a key witness to
the transaction, held crucial information that
59 Com.OS No.25855/2017could have clarified the circumstances
surrounding the creation of the alleged
agreement of sale. By not stepping into the
witness box, the defendant deprived the plaintiff
of the opportunity to cross-examine him on these
allegations. This failure to present himself as a
witness not only weakens his case but also prevents
the Court from evaluating the veracity of his claims
through cross-examination, which is a crucial
mechanism in the judicial process to test the credibility
of evidence. The significance of this omission is
heightened because the defendant, as a party to the
disputed
transaction, had personal knowledge of the facts,
which makes his testimony indispensable.
25. The Hon’ble Apex Court in Vidhyadhar vs.
Manikrao and Another (supra) has established a
well- settled principle of law that when a party
who has personal knowledge of the facts of the
case fails to appear in the witness box to depose
in support of his pleadings, an adverse inference
can be drawn against him under Section 114(g)
of the Indian Evidence Act. This section
empowers the Court to presume that evidence
which could be and is not produced would, if
produced, be unfavorable to the person
withholding it. In Vidhyadhar‘s case, the Court
emphasized that when a defendant does not offer
himself for cross-examination, it gives rise to the
presumption that the case set up by him is not
true. Applying this principle to the present case, the
defendant’s deliberate abstention from testifying and
offering himself for cross-examination leads to the
60 Com.OS No.25855/2017inference that his allegations are not credible and that
the case put forward by the plaintiff is genuine.
26. Furthermore, the defendant’s failure to
provide specific evidence regarding the loan allegedly
taken by the plaintiff or the circumstances under which
the thumb impression was obtained adds to the
suspicion surrounding his claims. When a party who
bears the burden of proof withholds material evidence
or fails to testify, Courts are justified in drawing an
adverse inference. The defendant’s non-appearance
creates a significant void in the defense, as he was in
the best position to explain the alleged fraud
concerning the agreement of sale. The absence of this
testimony strengthens the presumption in favour of the
plaintiff, whose case remains uncontested due to the
defendant’s failure to discharge his burden of proof.”
37. Further counsel for plaintiff has relied upon
following caselaws and vehemently argued that,
when defendant No.1 unequivocally admits the loan
transaction and the other surrounding circumstances
are sufficient to prove execution of mortgage
admitting terms of repayment with interest, the
burden casted upon plaintiff to establish the
document as an acknowledgment of debt stands
discharged. In this regard counsel for plaintiff has
61 Com.OS No.25855/2017
relied upon following caselaws on admissions and
relevant portions are extracted as under:-
(2000) 3 SCC 312 between Subhra
Mukherjee and Another V/s Bharat Coking Coal
Ltd., and Others (Hon’ble Supreme Court)
“12. There can be no dispute that a person who
attacks a transaction as sham, bogus and fictitious
must prove the same. But a plain reading of question
No.1 discloses that it is in two parts; the first part
says, whether the transaction, in question, is bona fide
and genuine one which has to be proved by the
appellants. It is only when this has been done that the
respondent has to dislodge it by proving that it is a
sham and fictitious transaction. When circumstances
of the case and the intrinsic evidence on record
clearly point out that the transaction is not bona
fide and genuine, it is unnecessary for the court
to find out whether the respondent has led any
evidence to show that the transaction is sham,
bogus or fictitious.”
Hon’ble Supreme Court in SLP (Civil) No.9975
of 2025 between Rajiv Ghosh V/s Satya Naryan
Jaiswal.
“26. The primary object underlying Rule 6 is to
enable a party to obtain speedy judgment at least to
the extent of admission. Where a plaintiff claims a
particular relief or reliefs against a defendant and
the defendant makes a plain admission, the
former is entitled to the relief or reliefs admitted
by the latter.”
62 Com.OS No.25855/2017
(2004) 6 SCC 325 between Vice-Chairman
Kendriya Vidyalaya Sangathan and Anr V/s
Girdharilal Yadav (Hon’ble Supreme Court)
“11. The admitted facts remain that the
respondent is a permanent resident of Haryana. It
further stands admitted that at the relevant time,
Ahirs/Yadavs of Haryana were not treated as OBC. It
further stands admitted that the respondent obtained a
certificate showing that he was a resident of Rajasthan,
which he was not. It is not disputed that a detailed
enquiry was conducted by the District Magistrate, Kota,
wherein the respondent had been given an opportunity
of hearing. It is also not in dispute that he had given
an opportunity to show cause as to why his
appointment should not be cancelled not only by the
appointing authority but also by the Appellate
Authority. In terms of Section 58 of the Evidence
Act, 1872 facts admitted need not be proved. It is
also a well-settled principle of law that the
principles of natural justice should not be
stretched too far and the same cannot be put in a
straitjacket formula.”
38. On the other hand Learned counsel for
defendant No.1 has relied upon following case-laws
on validity and admissibility of Ex.P3 Unregistered
Mortgage deed and argued that mere mechanical
marking of an inadmissible document does not
dispense with proof of such document and same has
63 Com.OS No.25855/2017
to be considered in the light of settled principles of
law and other surrounding circumstances of the case.
Learned counsel for defendant No.1 has further
argued that any amount of evidence behest pleading
cannot be looked into and mere stray admissions of
otherside, do not absolve the burden of plaintiff to
establish his case on merits. The relevant portions
are culled out as under:-
(2008) 8 SCC 564 between K.B. Saha and Sons
Private Limited V/s Development Consultant
Limited (Hon’ble Supreme Court)
“34. From the principles laid down in the various
decisions of this Court and the High Courts, as referred
to hereinabove, it is evident that:-
1. A document required to be registered is not
admissible into evidence under Section 49 of
the Registration Act.
2. Such unregistered document can however
be used as an evidence of collateral purpose as
provided in the Proviso to Section 49 of the
Registration Act.
3. A collateral transaction must be independent
of, or divisible from, the transaction to effect
which the law required registration.
4. A collateral transaction must be a
transaction not itself required to be effected by
64 Com.OS No.25855/2017a registered document, that is, a transaction
creating, etc. any right, title or interest in
immovable property of the value of one
hundred rupees and upwards.
5. If a document is inadmissible in evidence for
want of registration, none of its terms can be
admitted in evidence and that to use a
document for the purpose of proving an
important clause would not be using it as a
collateral purpose.”
(2010) 4 SCC 491 between LIC of India and
Ors V/s Ram Pal Singh Bisen (Hon’ble Supreme
Court)
“26. We are of the firm opinion that mere
admission of document in evidence does not
amount to its proof. In other words, mere
marking of exhibit on a document does not
dispense with its proof, which is required to be
done in accordance with law. As has been
mentioned herein above, despite perusal of the record,
we have not been able to come to know as to under
what circumstances respondent plaintiff had admitted
those documents. Even otherwise, his admission of
those documents cannot carry the case of the
appellants any further and much to the prejudice of the
respondent.
AIR 2009 SC 1103 between Bachhaj Nahar V/s
Nilima Mandal and Ors (Hon’ble Supreme Court)
“12. It is thus clear that a case not specifically
pleaded can be considered by the court only where the
65 Com.OS No.25855/2017
pleadings in substance, though not in specific terms,
contains the necessary averments to make out a
particular case and the issues framed also generally
cover the question involved and the parties proceed on
the basis that such case was at issue and had led
evidence thereon. As the very requirements indicate,
this should be only in exceptional cases where the
court is fully satisfied that the pleadings and issues
generally cover the case subsequently put forward and
that the parties being conscious of the issue, had led
evidence on such issue. But where the court is not
satisfied that such case was at issue, the question of
resorting to the exception to the general rule does not
arise. The principles laid down in Bhagwati Prasad and
Ram Sarup Gupta (supra) referred to above and
several other decisions of this Court following the same
cannot be construed as diluting the well settled
principle that without pleadings and issues, evidence
cannot be considered to make out a new case which is
not pleaded. Another aspect to be noticed, is that the
court can consider such a case not specifically pleaded,
only when one of the parties raises the same at the
stage of arguments by contending that the pleadings
and issues are sufficient to make out a particular case
and that the parties proceeded on that basis and had
led evidence on that case. Where neither party puts
forth such a contention, the court cannot obviously
make out such a case not pleaded, suo moto.”
AIR 2000 SC 153 between T.H Musthaffa V/s
M.P Varghese and Ors., (Hon’ble Supreme Court)
“10. ….. So far as the evidence that had
been adduced in the case is concerned, it need
66 Com.OS No.25855/2017
not have been looked at by the learned Judge in
the absence of appropriate pleadings in that
regard. However Shri E.M.S Anam, the learned
counsel for the appellant submitted that the fact that
votes in the two polling stations at Varikoli School and
Puttannoor School had been cast by using a wrong
instrument was not in dispute and the evidence of the
Returning Officer clearly indicated the use of the wrong
instrument in the two polling stations which amounted
to an admission in the case and, therefore, even in the
absence of an appropriate pleading in that regard the
evidence could be looked at. We fail to appreciate this
argument. Unless the appellant had put forth his
case in the pleading and the respondents are put
on notice, the respondents cannot make an
admission at all and there is no such admission in
the course of the pleadings. If the pleadings did
not contain the necessary foundation for raising
an appropriate issue, the same cannot go to trial.
Any amount of evidence in that regard, however
excellent the same may be, will be futile.
Therefore, the learned counsel is not justified in
making the said submission and the same is rejected.
…..”
(2004) 6 SCC 341 between M. Chinnasamy V/s
K.C Palanisamy and Ors., (Hon’ble Supreme
Court)
“42. With respect we are not in a position to
endorse the views taken therein in its entirety.
Unfortunately, the decision of a larger Bench of this
Court in Jagjit Singh (supra) had not been noticed
therein. Apart from the clear legal position as laid down
67 Com.OS No.25855/2017
in several decisions, as noticed hereinbefore, there
cannot be any doubt or dispute that only because a
recounting has been directed, it would be held to be
sacrosanct to the effect that although in a given case
the court may find such evidence to be at variance with
the pleadings, the same must be taken into
consideration. It is now well-settled principle of
law that evidence adduced beyond the pleadings
would not be admissible nor any evidence can be
permitted to be adduced which is at variance
with the pleadings. The court at a later stage of
the trial as also the appellate court having regard
to the rule of pleadings would be entitled to
reject the evidence where for there does not
exist any pleading.
45. In T.H. Mustaffa (supra), this Court held that
when the pleadings do not contain the material facts
and necessary particulars, any amount of evidence
would be insufficient.”
AIR 2004 SC 3905 between Mukand Ltd., V/s
Mukand Staff and Officers’ Association (Hon’ble
Supreme Court)
“63. The above submission of learned counsel for
the appellant is well founded under the Act. Disputes
can be raised only by the workmen with the employer.
The workmen, however, can in appropriate cases
espouse the cause of non-workmen if there is
community of interest between the workmen and the
non-workmen. In the instant case, it is an
admitted fact that the community of interest or
estoppel has never been pleaded and the findings
rendered by the High Court on this issue is in the
68 Com.OS No.25855/2017
absence of pleadings. If the non-workmen are given
the status and protection available to the workmen, it
would men that the entire machinery and procedure of
the Act would apply to the non-workmen with regard to
their employment/non-employment, the terms of
employment, the conditions of labour etc. This would
cast on the appellant-Company the onerous burden of
compliance with the provisions of the Act in respect of
the non- workmen. In our view, the situation is not
envisaged by the Act which is solely designed to
protect the interests of the workmen as defined in
Section 2(s) of the Act.”
39. Learned counsel for Defendant No.4 has argued
that, plaintiff has not chosen to prove the signature
of executant on Ex.P3 mortgage deed with the aid of
expert and without discharging such basic burden,
the execution of said mortgage deed cannot be
proved. The said counsel has also relied upon
following case-laws in support of his arguments on
inadmissibility of Ex.P3 mortgage deed and relevant
portions are extracted as under :-
MANU/SC/0305/1996 between O. Bharatan
V/s K. Sudhakaran and Ors. (Hon’ble Supreme
Court)
“It is true that under Section 73 of the
Evidence Act a disputed signature could be
69 Com.OS No.25855/2017compared only with the admitted signature or
signature proved to the satisfaction of the court
to have been written or made by that person.
Reliance was placed on the decision reported in State
(Delhi Admn.) vs. Pali Ram and contended that it is not
advisable that a judge should take up the task of
comparing the admitted handwriting with the disputed
one to find out whether the two agree with each other
and the prudent course is to obtain the opinion and
assistance of an expert. This opinion was expressed by
the Supreme Court in a criminal case while considering
the question whether the accused had committed the
offence of forgery and chearing. In Fakhruddin vs.
State of Madhya Pradesh (AIR 1967 SC 1326),
the Supreme Court observed that comparison of
the handwriting by the court with the other
documents not challenged as fabricated, upon its
own initiative and without the guidance of an
expert is hazardous and inconclusive. These
observations were made in the facts and circumstances
of such case. But, in the instant case, comparison of
the signature found in the counterfoil are made to
ascertain whether both signatures were put by the
same person.”
MANU/SC/0189/1978 between The State
(Delhi Administration) V/s Pali Ram. (Hon’ble
Supreme Court)
“30. The matter can be viewed from another
angle, also. Although there is no legal bar to the
Judge using his own eyes to compare the
disputed writing with the admitted writing, even
70 Com.OS No.25855/2017
without the aid of the evidence of any
handwriting expert, the Judge should, as a
matter of prudence and caution, hesitate to base
his finding with regard to the identity of a
handwriting which forms the sheet- anchor of the
prosecution case against a person accused of an
offence solely on comparison made by himself. It
is, therefore, not advisable that a Judge should take
upon himself the task of comparing the admitted
writing with the disputed one to find out whether the
two agree with each other; and the prudent course is
to obtain the opinion and assistance of an expert.”
40. However in response to said arguments of
defendants’ side, learned counsel for plaintiff has
further argued that, when plaintiff has made such
efforts of examining and proving the disputed
signature of director of defendant No.1 by taking
necessary steps and when the Court has disallowed
their request for examining such signature with the
aid of expert, it is not open for defendants to take
plea of challenging the execution of said document.
It is further argued that, in such circumstances,
Court by its own comparison of writing can form it’s
opinion. The caselaw relied upon by learned counsel
for plaintiff in this regard is culled out as under:-
71 Com.OS No.25855/2017
(2003) 3 SCC 583 between Lalit Popli V/s
Canara Bank and Others (Hon’ble Supreme Court)
“13. It is to be noted that under Sections 45 and
47 of the Evidence Act, the Court has to take a view on
the opinion of others, whereas under Section 73 of the
said Act, the Court by its own comparison of writings
can form its opinion. Evidence of the identity of
handwriting is dealt with in three Sections of the
Evidence Act. They are Sections 45, 47 and 73. Both
under Sections 45 and 47 the evidence is an opinion.
…”
(Hon’ble Supreme Court) in Civil Appeal No.
of 2025 between Prem Aggarwal and Mohan
Singh and Ors.,
“15. The maxim ‘actus curiae neminem gravabit’,
which means that the act of the Court shall prejudice
no one, is a principle firmly embedded in our
jurisprudence. It is founded on the equitable
notion that no party should suffer owing to an
error, delay, or inadvertence attributable to the
Court itself. The Court, acting as in appendage of
justice, cannot permit its own procedure or
inadvertent lapse to occasion injustice.
Accordingly, where a party has been
disadvantaged by reason of an act of the Court, it
is incumbent upon the Court to undo such
prejudice and restore the party to the position he
would have occupied but for such act. ….
41. The maxim thus operates as a constant
reminder that the Court’s authority must be
exercised not to the disadvantage of litigants, but
in furtherance of justice. After all, to err is
72 Com.OS No.25855/2017
human, and when an inadvertent omission is
brought to the Court’s attention, it becomes the
Court’s solemn duty to ensure that no party
suffers on account of such mistake. In such
circumstances, the Court is obliged to restore the party
to the very position he would have occupied had the
error not occurred.”
42. Leaned counsel for plaintiff has further argued
that, the author of document need not be examined,
if signature is not denied and Deed cannot be re-
interpreted based on party’s later conduct, when
terms are clear and unambiguous. Further when a
party i.e. signatory of Ex.P3 who bears the burden of
proof withholds material evidence or fails to testify,
the Courts are justified in drawing adverse inference
against such party. He has further drawn attention of
pleadings of defendants No.4 and 5 and argued that,
mere taking contention by such defendants that they
have no knowledge of facts pleaded by the plaintiff
does not tantamount to denial of existing facts. The
relevant case-laws relied upon by plaintiff side in this
regard are culled out as under:-
73 Com.OS No.25855/2017
(2022) 17 SCC 645 between Star Paper Mills
Limited V/s Beharilal Madanlal Jaipuria Limited
and Others (Hon’ble Supreme Court)
“21. The High Court, in the impugned judgment
erred in holding that the appellant had not examined
the author of the documents. Such reasoning is
absolutely erroneous as in the written statement, the
respondents had not denied their signatures on the
documents referred to by the appellant but pleaded
duress in executing of these large number of
documents. The witness examined by Respondent 1 in
his cross-examination admitted his signature or that of
the representative of company on invoices, debit notes
and on ST-1 Form. The respondent had led no evidence
in respect of fraud or duress apart from self-serving
statement. The consignment of goods was sent from
the month of November, 1985 to January 1986. The
respondent had signed large number of documents
during this period. However, no complaint was made to
any person or authority or even to the plaintiff. It is a
denial of receipt of goods without any basis raised only
in the written statement filed. Such stand is wholly
bereft of any truth and is thus rejected.
Hon’ble High Court of Karnataka in RFA
No.155 of 2006 (SP) between Sri. N.
Narayanappa and Ors V/s Sri. Pillappa.
“24. The defendant, being a key witness to the
transaction, held crucial information that could have
clarified the circumstances surrounding the creation of
the alleged agreement of sale. By not stepping into the
witness box, the defendant deprived the plaintiff of the
74 Com.OS No.25855/2017opportunity to cross-examine him on these allegations.
This failure to present himself as a witness not only
weakens his case but also prevents the Court from
evaluating the veracity of his claims through cross-
examination, which is a crucial mechanism in the
judicial process to test the credibility of evidence. The
significance of this omission is heightened because the
defendant, as a party to the disputed transaction, had
personal knowledge of the facts, which makes his
testimony indispensable.”
1966 SCC Online SC 194 between Jahuri Sah
and Ors V/s Dwarika Prasad Jhunjhunwala and
Ors., (Hon’ble Supreme Court)
“9. In our opinion the High Court was right in
holding that the Act is inapplicable to this case. The
plaintiffs and defendants were admittedly co-owners of
the property. As the property had not been partitioned it
was open to either or both the parties to occupy it. The
defendants occupied the property except a small portion
which was in possession of the tenants. The plaintiffs
acquiesced in it because of an agreement between the
parties that the defendants would pay Rs. 200/- p.m. as
compensation to them. The defendants did not dispute
that there was an agreement about payment of
compensation between the parties but their plea was that
the amount agreed to was Rs. 501- p.m. and not Rs.
200/- p.m. Their contention in this behalf was rejected by
the High Court which accepted the plaintiffs’ contention
that the amount was Rs. 200/- p.m. This part of the High
Court’s judgment is not challenged before us by Mr.
Sarjoo Prasad. He, however, challenged the finding of the
High Court that the claim to compensation was
75 Com.OS No.25855/2017
enforceable. But before we deal with this matter it would
be appropriate to deal with the reasons given by him in
support of the contention that the suit was not
maintainable. He reiterated the argument urged before
the trial court based upon the non-joinder of Shankarlal
as a party to the suit. According to him, as Shankarlal’s
adoption is not been established by the plaintiffs he was
also a co-owner of the property and his non-joinder as a
party to the suit rendered the suit incompetent. The High
Court has pointed out that the plaintiffs have clearly
stated in para 1 of the plaint that Shankarlal had been,
given in adoption to Sreelal. In neither of the two written
statements filed on behalf of the defendants has this
assertion of fact by the plaintiffs been specifically denied.
Instead, What is stated in both these written statements
is that the defendants have no knowledge of the
allegations made in para 1 of the plaint. Bearing in mind
that O.VIII, r. 5, C.P.C. provides that every allegation of
fact in the plaint, if not denied specifically or by
necessary implication or stated to be not admitted in the
pleading of the defendant shall be taken to be admitted,
to say that a defendant has no knowledge of a fact
pleaded by the plaintiff is not tantamount to a denial of
the existence of that fact, not even an implied denial. No
specific issue on the question of adoption was, therefore,
raised. In the circumstances the High Court was right in
saying that there was no occasion for the parties to lead
any envidence on the point. However, Sreelal who was
examined as a witness on behalf of the plaintiffs has
spoken about the fact of adoption and his statement can
at least be regarded as prima facie evidence of adoption.
It is true that he admits the existence of a deed of
adoption and of its non-production in the court. This
admission, however, would not render oral evidence
76 Com.OS No.25855/2017
inadmissible because it is not by virtue of a deed of
adoption that a change of status of a person can be
effected. A deed of adoption merely records the fact that
an adoption had taken place and nothing more. Such a
deed cannot be likened to a document which by its sheer
force brings a transaction into existence. It is no more
than a piece of evidence and the failure of a party to
produce such a document in a suit does not render oral
evidence in proof of adoption inadmissible. We, therefore,
agree with the High Court that the plaintiffs’ suit for
partition of their half share in the property was not
incompetent because Shankarlal was not made a party
thereto. We will now deal with the other ground urged by
Mr. Sarjoo Prasad in support of his contention that the
suit is not maintainable. Under sub-s. (2) of s. II of the
Act as it stood on the date of the suit a claim for eviction
of a tenant or a claim for recovery of possession of a
building and claim for rent thereof had to be made before
the Rent Controller alone and consequently the
jurisdiction of the civil court for the enforcement of such
claims was ousted. But, for the provisions of this section
to apply, the relationship between the plaintiff and the
defendant should be that of a landlord and tenant. If they
are co-owners of the property and the property is held by
them as tenants-in- common no question of relationship
of landlord and tenant comes into being as between
them. The common case of the parties is that they are in
fact co-owners of the property and the respective shares
of the two families have not been demarcated. They,
therefore, continue to be tenants in common. It is true
that the entire property (save a small portion which was
in possession of tenants) is in the actual occupation of
the defendants which means that they are in occupation
not only of their share in the property but also of the
77 Com.OS No.25855/2017
plaintiffs’ share. That fact, however, would not make
them tenants of the plaintiffs. Under the law each
tenantin-common is entitled to the possession of the
entire property, that is, to every part of it though its right
to possession is limited to the extent of the share in the
property. The mere fact that the defendants agreed to
pay compensation to the plaintiffs for their occupation of
the entire property (ignoring the portion in possession of
the tenants) would not bring into existence a relationship
of landlord and tenant. By this agreement, the parties
never intended to constitute a relationship of landlord
and tenant between the defendants and their co-owners.
The provisions of the Act are, therefore, inapplicable. The
second ground urged by Mr. Sarjoo Prasad, therefore,
fails.
43. However Learned counsels for defendants No.1
and 4 have relied upon following common caselaws
on admissions and argued that, the plaintiff has
neither denied the evidence of DW1 nor he has
elicited anything from his mouth to disbelieve the
veracity of said witness. Under such circumstances,
there is no ground to casually discard evidence of
said witness. The relevant portions of caselaws are
culled out as under: –
AIR 1992 P&H 252 between Mela Ram V/s
Shiromani Gurudwara Parbandhak Committee,
78 Com.OS No.25855/2017Amritsar (Hon’ble High Court of Punjab and
Haryana).
“11. ….. It is well established rule of
evidence that a party should put to each of its
opponent’s witness so much of his case as
concerns that particular witness. If no such
questions are put, the Courts presume that the
witness account has been accepted.”
MANU/SC/0991/2003 between Saikou Jabbi
V/s State of Maharashtra (Hon’ble Supreme
Court)
“14. So far as compliance with Section 42(2) is
concerned, the statement of PW-1 to the effect that he
had informed his superior remained unshaken and
there was even no cross-examination to point out any
falsity in the said statement. The note of intelligence
information was placed on record vide Exh.16-A to
substantiate the testimony of PW-1. That being so the
High Court was justified in holding that the provisions
of Section 42(2) had been complied with.
15. Coming to the plea regarding non-compliance
of Sec.55 of the Act, as rightly submitted by learned
counsel for the respondent-State, there was not
even any argument advanced on that score
before the trial Court and the High Court. Even
otherwise also the evidence of the investigating
officer about safe custody of the contraband
articles have not been challenged or shaken in
the cross-examination. That being the position
we are not inclined to accept the plea that there
was non- compliance with the requirements of
Sec.55 of the Act.”
79 Com.OS No.25855/2017
44. Thus on going through aforesaid evidence
adduced by both parties, aforesaid provisions of
Transfer of property Act and Evidence Act relied upon
by defendants side and the above case-laws, it is
crystal clear that a mortgage deed required to be
compulsory attested under evidence, needs to be
signed by minimum two witnesses and same to be
proved by examining atleast one of such witness.
However as already stated above neither Ex.P3
mortgage deed is attested by witnesses nor it is
registered as required under law. Hence in view of
aforesaid caselaws relied upon by counsels for
Defendants No.1 and 4, Ex.P3 is invalid and not
admissible in evidence. Further Defendants No.1 and
4 have seriously denied and disputed the validity,
admissibility and genuineness of aforesaid Mortgage
Deed.
45. However as rightly contended by plaintiff, the so
called signatory of Ex.P3 mortgage deed has not
stepped into witness box to deny execution of said
document by him. Moreover as per DW1, said
80 Com.OS No.25855/2017
witness has no impediment to conduct the case or to
enter into witness box. Moreover, DW1 has admitted
that no action has been taken by Defendant no.1
after coming to know alleged fabrication of mortgage
deed. Hence adverse inference can be drawn against
said witness of defendant with regard to allegations
of fabrication of said document by plaintiff.
46. However mere non proving of said aspect does
not absolve the burden of plaintiff to prove execution
of said document and it’s admissibility in evidence for
any purpose. As already stated above, it clearly
shows that, according to plaintiff himself only
Srinivas Raju, who is said to be one of promoter of
defendant No.1 has signed Ex.P3 and none from
defendant No.4 HUF have signed said documents.
The said aspect has been categorically admitted by
PW1 and it is not in dispute that, the suit schedule
property exclusively belongs to HUF of defendant
No.4. Mere the fact that the Kartha of D4 HUF was
also one of promoter of defendant No.1 company,
cannot be a ground to automatically hold defendant
81 Com.OS No.25855/2017
No.4 liable under Ex.P3 Mortgage deed, in the
absence of valid execution of said document. As
already stated above, the date of Ex.P3 has been
seriously disputed and it is not attested as per law.
The defendants have also sufficiently proved that,
the document is hit by Section 49 of Transfer of
property Act for want of Registration and attestation
and it is also hit by provisions Registration and
Stamps Act. These all circumstances, and the
grounds urged by defendants No.1 and 4 are
sufficient to hold that, plaintiff has failed to prove
that defendant No.1 and 4 have executed Ex.P3
mortgage deed by depositing of title deeds of suit
schedule property. On the other hand, defendants
No.1 and 4 have sufficiently proved that said
mortgage deed is invalid, void and opposed to law.
Further when defendants have proved that, the
aforesaid mortgage deed is void, invalid, inadmissible
and opposed to law, plaintiff is not entitled for any
direction for sale of suit schedule property for
recovery of admitted debt. Accordingly Issue
82 Com.OS No.25855/2017
Nos.1 and 8 are answered In the Negative and
Additional Issue dated 05.12.2025 is answered
In the Affirmative.
47. Issue No.2 and 6:- The plaintiff has
specifically contended that, defendant No.1 had
agreed to repay the aforesaid loan of Rs.5 Crores
with interest at the rate of 24% per annum and as
such it is entitled to recover the said loan amount
from with above interest from defendant No.1 and 4.
As far as liability of defendant No.4 is concerned,
Defendant No.4 has already proved that though the
schedule property belongs to it, it is neither a party
to the suit transaction nor it is a party or a signatory
to above Mortgage Deed. It is further contended by
defendant No.4 that plaintiff has no right over suit
schedule property and since said property was not
offered by this defendant, it is not entitled for relief
claimed in the suit. Defendant No.4 has also asserted
that it is not a guarantor to aforesaid loan and there
is no privity of contract between plaintiff and said
defendant. Further, Plaintiff has clearly admitted in
83 Com.OS No.25855/2017
para 7 of the plaint that, the suit schedule land is
owned by defendant No.4 Hindu Undivided Family of
A.S Muniswamy Raju and as such said defendant is
not only bound by Mortgage Deed, but they agreed
to subject the said land to the liability of defendant
No.1 company. However as already concluded in
foregoing paras, the very execution of aforesaid
mortgage deed by defendant No.4 and it’s validity
are not proved to the satisfaction of the Court and it
is also proved to be inadmissible in evidence.
48. Further plaintiff asserts that, defendant No.1
company had agreed to obtain signatures from all
those persons necessary to further more perfectly
assuring to mortgage the suit schedule property,
same is not proved and the elaborate reasons
mentioned on Issue No.1 have already rendered the
Ex.P3 mortgage deed invalid under law. For these
reasons, it is crystal clear that, absolutely there is no
nexus between suit loan and Defendant No.4 HUF
and as such they are not entitled to repay either the
suit loan or any interest as claimed by plaintiff.
84 Com.OS No.25855/2017
Further, as already concluded on Issue No.1,
defendant No.1 has not denied and disputed
borrowing of suit loan from plaintiff, but they have
seriously denied that they had agreed to repay the
same with interest and they have also denied it’s
repayment as per terms of Ex.P3 mortgage deed,
which is held to be invalid under eyes of law. Plaintiff
has claimed interest on aforesaid Rs.5 Crores from
25.05.2012 i.e. last date of loan installment. Plaintiff
further contends that, since said defendant was
unable to repay the said money along with interest at
the rate of 24% per annum, said defendant sought
for more time and also unconditionally agreed to
repay the said amount in fresh timeline and
defendant No.1 agreed to repay the said loan within
120 days from date of execution of said deed that is
on or before 04.08.2014. It further agreed to pay
interest at the rate of 24% per annum on said
amount from May 2012. On the other hand
defendant No.1 asserts that, there was no agreement
to pay interest and entire claim of plaintiff for
85 Com.OS No.25855/2017
Rs.10,86,77,568/- are denied. Defendant No.1 in
Para 8 of it’s written statement has specifically
denied that it had agreed to pay interest of 24% and
it has disputed the correctness of ledger produced by
plaintiff. It is has further denied execution of
aforesaid Mortgage Deed dtd.04.04.2014 by it,
acknowledging the said debt. During cross
examination, PW1 has denied the suggestions of
defendant No.1 that in view of good business
relationship, plaintiff has not charged any interest on
aforesaid loan amount. However, when plaintiff has
failed to prove the validity and lawful execution of
aforesaid mortgage deed, there is no reason to
believe that defendant No.1 had agreed to pay
interest at the rate of 24% per annum as per clause
B of said mortgage deed. Further, absolutely no other
independent evidence is put forth by plaintiff to
prove that defendant No.1 had agreed to repay the
said loan amount with said interest nor anything is
elicited from the mouth of PW1 to prove the said
aspect. For these reasons, it is incumbent upon this
86 Com.OS No.25855/2017
Court to hold that, plaintiff has failed to prove that
defendant No.1 had agreed to pay interest at 24%
per annum on aforesaid loan of Rs.5 Crores and as
such plaintiff is not entitled for any such interest on
said loan. Accordingly Issue Nos.2 and 6 are
answered In the Negative.
49. Issue Nos.5 and 7:- Defendant No.3 has
contended that State Bank of Mysore, Bank of India
and State Bank of India sanctioned financial facility
of Rs.97 Crores and Rs.112 Crores to defendant No.1
and said defendant has executed loan and security
documents in favour of said banks. Thereafter State
Bank of Mysore and Bank of India who are
collectively referred as assignor banks have assigned
debt of borrower along with interest, rights and
underline security in favour of defendant No.3 vide
Assignment Agreement dtd.29.03.2014 and
30.10.2013 respectively. In pursuant to said
Assignment Deed, defendant No.3 stepped into shoes
of assigner banks under Sec.5(2) of SARFAESI Act.
Thereafter State Bank of India appointed the lead
87 Com.OS No.25855/2017
bank by the members of consortium and mortgaged
documents were executed and held by the lead bank
on behalf of all lenders. Subsequently SBI assigned
all debts along with rents to defendant No.2 Phoenix
ARC and schedule A and B of the suit are mortgaged
in favour of all consortium lenders vide Memorandum
of entry dtd.06.12.2008 and 29.08.2012. It is further
averred that no permission was sought by defendant
No.1 to create mortgage in favour of plaintiff in 2014
and the mortgage created in favour of consortium
lenders were prior in time.
50. On the other hand plaintiff has averred in Para
17 of plaint that, contrary to Clause No.11 of Ex.P3
Mortgage Deed dtd.04.04.2014, defendant No.4
executed a Mortgage Deed dtd.28.05.2015 in favour
of defendant Nos.2 and 3 companies, without
notifying execution of the same to plaintiff, with sole
intention to defeat the claim of plaintiff. It is further
contention of plaintiff that, since the Mortgage Deed
of plaintiff is executed prior to above Mortgage Deed,
claim of plaintiff precedes the defendant Nos.2 and 3
88 Com.OS No.25855/2017
to realize sum of money from suit schedule property.
Hence plaintiff asserts that, the deed of mortgage
executed in favour of defendant Nos.2 and 3 are not
binding upon plaintiff and it does not dilute right of
plaintiff over suit schedule property and remedies
thereof.
51. It is further case of plaintiff that, Defendant
No.4 being owner of land described in suit schedule A
property by signifying their readiness and willingness
to repay the loan had offered the said property as a
security to above loan vide above Mortgage Deed.
Plaintiff learned about execution of deeds in favour of
defendant Nos.2 and 3 after receiving aforesaid reply
dtd.26.02.2016, for which no consent of plaintiff was
sought and defendant Nos.1 and 4 were estopped
from creating further interest or charge as per Clause
No.11 of the Mortgage Deed. It is further averred
that as per extension of Mortgage Deed
dtd.28.05.2015, defendant No.4 represented by A.M
Ramaraju, Kartha of A.S Muniswamyraju HUF has
89 Com.OS No.25855/2017
offered said land as a surety on mortgage to
defendant No.2 and 3. Additionally defendant No.4
offered to part with suit schedule property in order to
repay the amount due to plaintiff. Hence defendant
Nos.2 and 3 could not have executed the said deed
without consent of plaintiff.
52. However despite filing it’s written statement,
defendant No.3 has not put forth any evidence in
support of it’s contention to prove that mortgage
created in favour of consortium lenders i.e. SBM,
Bank of India and SBI was prior to the date of Ex.P3
Mortgage deed nor any documents are placed before
this Court. Hence defendant No.3 has failed to prove
Issue No.5 in it’s favour.
53. But, as far as entitlement of plaintiff to seek
declaration that mortgaged deed dated 28.05.2015
executed in it’s favour is not binding upon it is
concerned, as already concluded on above issues,
plaintiff has failed to prove, the validity, execution
and admissibility of Ex.P3 mortgage deed to the
satisfaction of the Court. Further plaintiff has also
90 Com.OS No.25855/2017
failed to prove personal liability of defendant no.4
either to repay the suit loan to plaintiff or to subject
suit schedule property as security to said loan. Under
such circumstances, the aforesaid contentions raised
by plaintiff challenging right of defendant No.4 to
subject suit schedule property towards the loan
borrowed from defendant No.2 and 3 or mortgage
created in favour of consortium lenders do not hold
any water. Hence, plaintiff is also not entitled for
relief of declaration claimed with regard to non
binding of mortgage deed executed in favour of
defendant No. 2 and 3. Hence Issue No.7 is not
proved by plaintiff. For these reasons, Issue
Nos.5 and 7 are answered In the Negative.
54. Issue No.4:- Defendants No.1 and 4 have
taken specific contentions in their written statements
that, since there was neither mortgage nor
agreement to mortgage, impleading of defendant
No.2 to 4 was not necessary. It is further contended
by defendant No.1 that said defendants are
impleaded to create misunderstanding between
91 Com.OS No.25855/2017
defendant no.1 and defendant No.2 to 4, and as
such suit is bad for misjoinder of parties.
55. However as already stated above, plaintiff has
specifically asserted that, Ex.P3 Mortgage deed has
been executed by one Srinivas Raju, who is said to
be director of defendant No.1. Further, defendant
No.1 company and its promoter A.M Raju being
kartha of defendant No.4 have offered suit schedule
property as a security to suit loan, holding plaintiff
entitled to realize the loan dues by sale of suit
schedule property. It is further contended by plaintiff
that, defendant No.1 company had agreed to obtain
signatures from all those persons necessary to
further more perfectly assuring to mortgage the suit
schedule property.
56. Further it is case of plaintiff that, contrary to
Clause No.11 of Ex.P3 Mortgage Deed
dtd.04.04.2014, defendant no.4 executed a Mortgage
Deed dtd.28.05.2015 in favour of defendant Nos.2
and 3 companies, without notifying execution of the
92 Com.OS No.25855/2017
same to plaintiff, with sole intention to defeat the
claim of plaintiff. Accordingly plaintiff has sought for
a relief of declaration that the mortgage deed
executed in favour of Defendant No.2 and 3 are not
binding upon it. Though defendants have denied said
plea of plaintiff, considering, the relief claimed by
plaintiff in present suit presence of defendants No.2
to 4 appears to be necessary for effective
adjudication of matter in dispute. Hence absolutely
no grounds are made out by defendants No.1 and 4
to show that, the suit is bad for misjoinder of parties.
Accordingly Issue No.4 is answered in the
Negative.
57. Issue No.3:- Defendant No.1 and 4 have
specifically denied the execution of aforesaid
Mortgage Deed and asserts that since the claim has
become time barred all other statements such as
existence of mortgage are made only to overcome
question of limitation. Defendant No.1 has
specifically contended that, since the above amount
was paid on 22.05.2012, 24.05.2012 and
93 Com.OS No.25855/2017
25.05.2012, the claim of plaintiff is barred by virtue
of limitation as on 25.05.2015 since the very legal
notice is issued on 18.12.2015. Further there is no
plea of acknowledgment of liability.
58. As per plaintiff the suit loan amount of Rs.5
Crores has been advanced by plaintiff to defendant
No.1 in following three tranches, which is not denied
by defendant No.1.
Sl.No. Cheque Date Cheque No. Amount (Rs.)
1. 22/05/2012 150171 2,00,00,000=00
2. 24/05/2012 150172 2,00,00,000=00
3. 25/05/2012 150173 1,00,00,000=00
TOTAL 5,00,00,000=00
59. The Learned counsel for plaintiff has relied upon
following case-law on limitation and vehemently
argued that Ex.P3 Mortgage deed is nothing but an
acknowledgment of liability executed on 04.04.2014,
which is within period of three years from
25.05.2012. The said counsel has further argued
that, under Section 18 of the Limitation Act, an
acknowledgment of liability made in writing in respect
94 Com.OS No.25855/2017
of any right claimed by the opposite party and signed
by the party against whom such right is claimed made
before the expiration of the prescribed period for a suit
in respect of such right has the effect of commencing a
fresh period of limitation from the date on which the
acknowledgment was so signed. The relevant portion of
case law is extracted as under:-
(2004) 12 SCC 360 between Food Corporation
of India V/s Assam State Cooperative Marketing
and Consumer Federation Ltd., and Others (Hon’ble
Supreme Court)
“14. According to Section 18 of the Limitation Act,
an acknowledgment of liability made in writing in respect
of any right claimed by the opposite party and signed by
the party against whom such right is claimed made
before the expiration of the prescribed period for a suit in
respect of such right has the effect of commencing a
fresh period of limitation from the date on which the
acknowledgment was so signed. It is well-settled that to
amount to an acknowledgment of liability within the
meaning of Section 18 of the Limitation Act, it need not
be accompanied by a promise to pay either expressly or
even by implication.”
60. On the other hand Learned counsel for
defendant No.1 has relied upon following case law
and vehemently argued that the acknowledgment, if
any, has to be prior to the expiration of the prescribed
95 Com.OS No.25855/2017
period for filing the suit, and if the limitation has
already expired, it would not revive under this Section.
The expiry of the period of limitation prescribed for a
suit to recover the amount due, does not destroy the
right to the amount, but it bars the remedy. The
relevant portions of caselaws relied upon by said
counsel are culled out as under:-
AIR 1999 SC 1047 between Sampuran Singh
and Ors V/s Niranjan Kaur and Ors., (Hon’ble
Supreme Court)
“9. In his endeavor, learned counsel for the
appellants, referred to Section 18 of the Limitation Act
to hold that the acknowledgment by the original
mortgagees to the respondents, through the said
registered document dated 11th January 1960, the
period of limitation is revive which would only start
from that date of acknowledgment hence the suit filed
in the year 1980 would be within limitation. The said
submission is without any force. Section 18, sub-
section (1), itself starts with the words “Where,
before the expiration of the prescribed period for
a suit or application in respect of any property or
right, an acknowledgment of liability in respect of
such property or right has been made…”. Thus,
the acknowledgment, if any, has to be prior to
the expiration of the prescribed period for filing
the suit, in other words, if the limitation has
already expired, it would not revive under this
Section. It is only during subsistence of a period of
96 Com.OS No.25855/2017
limitation, if any, such document is executed, the
limitation would be revived afresh from the said date of
acknowledgment. In the present case, admittedly the
oral mortgage deed is in March 1893. If the period of
limitation for filing suit for redemption is 60 years then
limitation for filing a suit would expire in the year
1953. Thus, by the execution of this document dated
llth January 1960 it cannot be held by virtue of Section
18 that the period of limitation is revived afresh from
this date.”
ILR 1990 Kar 3518 between Banhatti Co-
operative Spinning Mill Ltd., V/s Karnataka
Electricity Board. (Hon’ble High Court of
Karnataka)
“9. It is relevant to notice that a claim may be
barred by time but nevertheless it does not disappear
nor it is extinguished. In the event the claim is
barred by time, all that happens is that such a
claim cannot be enforced in a Court of Law by
way of a suit or other proceeding to which the
Limitation Act applies. The expiry of the period of
limitation prescribed for a suit to recover the
amount due, does not destroy the right to the
amount. It only bars the remedy. Section 27 of
the Limitation Act, 1963 only provides that at the
determination of the prescribed period of
limitation limited to any person for instituting a
suit for possession of any property, his right to
such property shall be extinguished. Thus Section
27 in terms applies only where a suit for
possession of property has become barred by
limitation. The Limitation Act with regard to
97 Com.OS No.25855/2017
personal actions bars the remedy without
extinguishing the rights. It is only in the case of
recovery of possession of any property on the
determination of the period of limitation prescribed by
the Limitation Act, not only the remedy is lost but the
right is also extinguished. But it is relevant to notice
that there is a distinction between actions for recovery
of debts and those for recovery of possession of
property. A debt does not cease to be due merely
because it cannot be recovered through a Court of Law
by filing a suit, after the expiration of the period of
limitation prescribed under the Act for instituting the
suit. Thus in all personal actions, the right subsists
although the remedy is no longer available. It is on this
principle, a creditor whose debt becomes barred by
time by reason of expiry of the period of limitation can
even realise the debt by any other method other than
by way of a suit. …..”
Hon’ble Supreme Court in Civil Appeal
No.6144/2024 between K.P Khemka & Anr. V/s
Haryana State Industrial and Infrastructure
Development Corporation Limited & Ors.,
“2. ….. By the said judgment, the High Court
dismissed the writ petitions and rejected the
contention of the appellants herein that if a debt is
time barred under the Limitation Act, 1963, the same
cannot be recovered by resorting to the Haryana Public
Moneys (Recovery of Dues) Act, 1979 (for short “the
Recovery of Dues Act”) read with the State Financial
Corporation Act, 1951. In so holding, the Division
Bench applied the well established principle that
98 Com.OS No.25855/2017
the Limitation Act, which applies to Courts,
merely bars the remedy and does not extinguish
the debt.
12. It is well settled that the laws of
limitation only bar the remedy and do not
extinguish the right, except in cases where title
is acquired by prescription. We may note here
that V.R Kalliyanikutty (supra) did not dispute
the principle that the statue of limitation only
bars the remedy and does not extinguish the
debt. After considering this principle it went onto hold
that there was no enlargement of right in the Kerala
Revenue Recovery Act. …”
61. Further, learned counsel for defendant No.4 has
also relied upon following case law and vehemently
argued that when a debt becomes time-barred, it does
not become extinguished but only unenforceable in a
court of law.
AIR 1958 SC 328 between Bombay Dyeing &
Manufacturing Co. Ltd., V/s The State of Bombay
and Ors., (Hon’ble Supreme Court)
“In American Jurisprudence, Vol. 34, page 314, the
law is thus stated :
“A majority of the courts adhere to the view that a
statute of limitations, as distinguished from a statute
which prescribes conditions precedent to a right of
action, does not go to the substance of a right, but
only to the remedy. It does not extinguish the debt or
preclude its enforcement, unless the debtor chooses to
99 Com.OS No.25855/2017avail himself of the defence and specially pleads it. An
indebtedness does not lose its character as such
merely because it is barred; it still affords sufficient
consideration to support a promise to pay, and gives a
creditor an insurable interest.”
20. In Corpus Juris Secundum, Vol. 53, page 922,
we have the following statement of the law :
“The general rule, at least with respect to debts or
money demands, is that a statute of limitation bars, or
runs “against, the remedy and does not discharge the
debt or extinguish or impair the right, obligation, or
cause of action.”
29. It has been already mentioned that when a
debt becomes time-barred, it does not become
extinguished but only unenforceable in a court of law.
….”
62. The ratios laid down in aforesaid case-laws on
the question of limitation relied upon by both parties
are well founded and same cannot be disputed.
However, in present facts and circumstances of the
case, date of limitation for recovery of suit loans has
to be reckoned under article 19 of Limitation Act,
which provides for period of 3 years from date of
advancement of loan i.e. from 25.05.2012, which is
date of payment of last tranch of the loan. Hence in
normal course, the period of limitation to file suit
100 Com.OS No.25855/2017
expires on 24.05.2015. However present suit is filed
by plaintiff on 26.07.2017, which is after 5 years 2
months from the date of payment of last installment
loan amount. Though plaintiff asserts and contends
that, Ex.P3 mortgage deed was dated 04.04.2014
was executed by plaintiff is in the form of
acknowledgment of debt, plaintiff has failed to prove
the validity of said document or to prove that said
document amounts to acknowledgment of debt as
per elaborate reasons mentioned on Issue No.1 and
additional Issue. It is further proved that, Ex.P3
mortgage deed is void and invalid and it has no legal
sanctity in the eyes of law. Under such
circumstances, though defendant No.1 does not deny
borrowing of suit loan of Rs.5 Crores from plaintiff,
the period of limitation for filing present suit expires
on 24.05.2015 itself. For these reasons, defendant
no. 1 and 4 have sufficiently proved that, the present
suit filed by plaintiff on 25.07.2017 is barred by
limitation. Accordingly Issue No.3 is answered In
the Affirmative.
101 Com.OS No.25855/2017
63. Issue No.9:- In view of reasons and findings
given on Issues No.1 to 8 and additional issue dated
05.12.2025, the plaintiff is not entitled for any relief
claimed in the suit and the suit deserves to be
dismissed with costs. Further, the amount of
Rs.9,00,00,000/- already deposited by plaintiff
before this Court, in pursuant to directions of Hon’ble
High Court of Karnataka in Writ Petition No.
4668/2025 deserves to be refunded to defendant
no.1 after expiry of the appeal period along with
interest accrued on said amount. Hence, for the
above reasons and finding given on Issue Nos.1 to 8
and additional issue dated 05.12.2025, following is;
ORDER
The suit of the plaintiff is
dismissed with costs.
The amount of Rs.9,00,00,000/-
deposited by defendant No.1 before
this Court in pursuant to directions of
Hon’ble High Court of Karnataka in Writ
Petition No.4668/2025 shall be
102 Com.OS No.25855/2017
refunded to defendant No.1 after
expiry of the appeal period along with
accrued interest.
Draw decree accordingly.
Office to send soft copies of the
judgment to the e-mail Id’s of the both
parties, if email IDs are furnished.
[Dictated to the Stenographer Grade-III, directly on the computer, typed
by her, then corrected and signed by me and pronounced in the Open
Court, dated this the 1st day of April 2026]
Digitally signed by
ANAND T ANAND T CHAVAN
CHAVAN Date: 2026.04.08
16:18:21 +0530
(ANAND T. CHAVAN)
LXXXIV Addl.City Civil & Sessions Judge,
Bengaluru.
ANNEXURE
LIST OF WITNESSES EXAMINED ON BEHALF OF
THE PLAINTIFF
PW.1 Rohan Agarwal.
LIST OF DOCUMENTS EXHIBITED ON BEHALF OF
THE PLAINTIFF
Ex.P1 Certified true copy of Board Resolution dated
103 Com.OS No.25855/2017
08.01.2016
Computer generated memorandum and Article
Ex.P2 Association of the plaintiff company (marked
subject to production of certificate U/Sec.65B of the
Evidence Act)
Original unregistered deed of mortgage dated
Ex.P3 &
04.04.2014 executed by the 1st defendant with
3(a)
receipt of payment of stamp duty
Certified statement of Standard Chartered Bank
Ex.P4 from 01.04.2012 to 10.01.2013 in respect of
account No.33105155545
Computer generated ledger statement showing the
Ex.P5 calculation of interest (marked subject to production
of certificate U/Sec.65B of the Evidence Act)
Certified copy of memorandum dated 28.05.2015
confirming extension of equitable mortgage
Ex.P6
executed by and between the 1st defendant and 2nd
defendant
Ex.P7 Certificate under Sec.65-B of Indian Evidence Act.
Ex.P8 O/c of legal notice dated 18.12.2015
Ex.P9 O/c of legal notice dated 09.02.2016
Ex.P10,
Ex.P10 O/c of legal notice dated 10.06.2020 with postal
(a) & receipt and postal acknowledgment
(b)
104 Com.OS No.25855/2017
Ex.P11 The 1st defendant’s reply dated 03.07.2020
Ex.P12
Cc of the company petition filed before the Hon’ble
&
High Court with defendant’s counter
Ex.P13
Ex.P14
& Copies of reply dtd.30.01.2016 & 26.02.2016.
Ex.P15
Digital certified copy of order in WP
Ex.P16
No.17586/2024.
Copy of document obtained from website of
Ex.P17
Ministry of Corporate Affairs.
LIST OF WITNESSES EXAMINED ON BEHALF OF
THE DEFENDANT
DW1 Prasad Babu N
DW2 K. Rama Govinda Reddy.
LIST OF DOCUMENTS EXHIBITED ON BEHALF OF
THE DEFENDANT
Certified copy of petition in Company Petition
Ex.D1
No.160/2016.
Copy of Board resolution of defendant No.1
Ex.D2
company dated 15.09.2025
Statement of account issued by Bank of Baroda
Ex.D3
dated 12.02.2020
Copy of DD No.184704 dated 02.07.2020 of Vijaya
Ex.D4
Bank certified by Bank of Baroda
105 Com.OS No.25855/2017
Statement of account of defendant No.1 held in
Ex.D5
Bank of Baroda showing entries dated 10.07.2020
Statement of account of defendant No.1 held in
Ex.D6
Bank of Baroda showing entries dated 21.07.2020
Statement of account of defendant No.1 held in
Ex.D7 HDFC Bank for the period between 01.02.2021 to
28.02.2021
Statement of account of defendant No.1 held in
Ex.D8
Bank of Baroda showing entries dated 24.04.2023
Statement of account of defendant No.1 held in
Ex.D9
Bank of Baroda showing entries dated 07.06.2023
Statement of account of defendant No.1 held in
Ex.D10
Bank of Baroda showing entries dated 29.08.2023
Statement of account of defendant No.1 held in
Ex.D11
Bank of Baroda showing entries dated 03.10.2023
Statement of account of defendant No.1 held in
Ex.D12 Bank of Baroda for period between 01.11.2023 to
30.11.2023 (only 2 pages i.e. page No.1/11, 4/11)
Copy of DD No.077215 of Bank of Baroda dated
Ex.D13
20.11.2023
Statement of account of defendant No.1 held in
Ex.D14 Bank of Baroda for period between 01.01.2024 to
31.01.2024 (only 2 pages i.e. page No.1/12, 5/12)
Copy of DD No.077322 of Bank of Baroda dated
Ex.D15
18.01.2024
Ex.D16 Statement of account of defendant No.1 held in
106 Com.OS No.25855/2017
Bank of Baroda for period between 01.02.2024 to
29.02.2024 (only 2 pages i.e. page No.1/12, 3/12)
Copy of DD No.077342 of Bank of Baroda dated
Ex.D17
09.02.2024
Statement of account of defendant No.1 company
Ex.D18 held in Vijaya Bank from 01.04.2018 to
12.09.2018 (04 pages)
Statement of account of defendant No.1 held in
Ex.D19
Bank of Baroda showing entries dated 25.07.2022
Statement of account of defendant No.1 held in
Ex.D20
Bank of Baroda showing entries dated 23.09.2022
Statement of account of defendant No.1 held in
Ex.D21
Bank of Baroda showing entries dated 16.11.2022
Statement of Escrow account of defendant No.1
Ex.D22 held in HDFC Bank for the period between
01.08.2022 to 31.08.2022 (03 pages)
Statement of account of defendant No.1 held in
Ex.D23
Bank of Baroda showing entries dated 05.01.2023
Copy of DD No.076804 of Bank of Baroda dated
Ex.D24
24.04.2023
Certified copy of petition in Company Petition
Ex.D25
No.161/2016 with verifying affidavit
Certified copy of petition in Company Petition
Ex.D26
No.160/2016 with verifying affidavit
Ex.D27 Certified copy of order sheet of Hon’ble High Court
of Karnataka in Company Petition No.160/2016 C/w
107 Com.OS No.25855/2017
Company Petition No.161/2016
Certified copy of order of Hon’ble High Court of
Ex.D28 Karnataka in WP No.4668/2025 (GM-CPC) dated
22.03.2025
Certified copy of order of Hon’ble High Court of
Ex.D29 Karnataka in WP No.6621/2025 (GM-CPC) dated
22.03.2025
Digital certified copy of Memorandum confirming
the extension of Equitable Mortgage dated
Ex.D30
16.12.2011 executed by Karta of defendant No.4
A.M.Ramaraju in favour of SBI Bank
Digital certified copy of Memorandum of Deposit
for creation of further charge for term loan by way
Ex.D31
of Mortgage by DTD dated 09.02.2012 executed by
A.M.Ramaraju
Ex.D32 Certificate U/Sec.63 of BSA, 2023
Ex.D33 Certified copy of Memo dtd.04.02.2020.
Copy of Board Resolution of defendant No.5 dated
Ex.D34
02.09.2022.
Copy of certificate of incorporation of defendant
Ex.D35
No.5 company (02 pages)
Ex.D36 True copy of Board resolution dated 02.09.2022
Relevant two pages of Indian Express newspaper
Ex.D37 dated 17.05.2019 showing publication of public
notice
Ex.D38 Relevant two pages of The Hindu newspaper dated
108 Com.OS No.25855/2017
17.05.2019 showing publication of public notice
Relevant two pages of Kannada Prabha newspaper
Ex.D39 dated 17.05.2019 showing publication of public
notice
Relevant two pages of Udayavani newspaper dated
Ex.D40
17.05.2019 showing publication of public notice
Ex.D41 Certificate U/Sec.65B of Evidence Act
Digitally signed by
ANAND T ANAND T CHAVAN
CHAVAN Date: 2026.04.08
16:18:34 +0530
(ANAND T. CHAVAN)
LXXXIV Addl.City Civil & Sessions Judge,
Bengaluru.
