J.Raji v. Mr.D.Pratish Vedhappudi

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 22.12.2023

CORAM

THE HON`BLE MR.JUSTICE N.SATHISH KUMAR Civil Suit Nos.253, 287 and 342 of 2021 C.S.No.253 of 2021 J.Raji ..... Plaintiff -verusD.Pratish Vedhappudi ..... Defendant PRAYER: Civil Suit filed under Order IV Rule 1 of High Court Original Side Rules 1956 read with Order VII Rule 1 of Civil Procedure Code for the following reliefs :

(a) Decree for recovery of a sum of Rs.5,72,27,725/- (Rupees Five Crores Seventy Two Lakhs Twenty Seven Thousand Seven Hundred and Twenty Five Only) with future interest @ 12% per annum from the date of presentation of the plaint till the date of realization; (b) Costs of the Suit.

For Plaintiff : Mr.P.H.Aravindh Pandian Senior Counsel for Mr.Vikram Veerasamy For Defendant : Mr.R.Venkatraman for M/s.TATVA Legal Chennai

C.S.No.287 of 2021 Mrs.Shweta Raja ..... Plaintiff -verusD.Pratish Vedhappudi ..... Defendant PRAYER: Civil Suit filed under Order IV Rule 1 of High Court Original Side Rules 1956 read with Order VII Rule 1 of Civil Procedure Code for the following reliefs:

(a) Decree for recovery of a sum of Rs.5,64,08,109/- (Rupees Five Crores Sixty Four Lakhs Eight Thousand One Hundred and Nine Only) and Twenty Five Only) along with future interest @ 12% per annum from the date of presentation of the plaint till the date of realization; (b) Costs of the Suit.

For Plaintiff : Mr.P.H.Aravindh Pandian Senior Counsel for Mr.Vikram Veerasamy For Defendant : Mr.R.Venkatraman for M/s.TATVA Legal Chennai C.S.No.342 of 2021 Mrs.Preeti Raja ..... Plaintiff -verusD.Pratish Vedhappudi ..... Defendant PRAYER: Civil Suit filed under Order IV Rule 1 of High Court Original

Side Rules 1956 read with Order VII Rule 1 of Civil Procedure Code for the following reliefs :

(a) Decree for recovery of a sum of Rs.5,82,27,725/- (Rupees Five Crores Eighty Two Lakhs Twenty Seven Thousand Seven Hundred and Twenty Five Only) along with interest @ 12% per annum from the date of presentation of the plaint till the date of realization; (b) Costs of the Suit.

For Plaintiff : Mr.P.H.Aravindh Pandian Senior Counsel for Mr.Vikram Veerasamy For Defendant : Mr.R.Venkatraman for M/s.TATVA Legal Chennai COMMON JUDGMENT There are three Suits filed against the defendant. 2.The Suit in C.S.No.253 of 2021 has been filed by the plaintiff Mrs.J.Raji, for recovery of a sum of Rs.5,72,27,725/- (Rupees Five Crores Seventy Two Lakhs Twenty Seven Thousand Seven Hundred and Twenty Five Only) from the defendant with future interest @ 12% per annum from the date of presentation of the plaint till the date of realization. 3.The Suit in C.S.No.287 of 2021 has been filed by the plaintiff

Mrs.Shweta Raja, for recovery of a sum of Rs.5,64,08,109/- (Rupees Five Crores Sixty Four Lakhs Eight Thousand One Hundred and Nine Only) from the defendant with future interest @ 12% per annum from the date of presentation of the plaint till the date of realization. 4.The Suit in C.S.No.342 of 2021 has been filed by the plaintiff Mrs.Preeti Raja, for recovery of a sum of Rs.5,82,27,725/- (Rupees Five Crores Eighty Two Lakhs Twenty Seven Thousand Seven Hundred and Twenty Five Only) from the defendant with future interest @ 12% per annum from the date of presentation of the plaint till the date of realization. 5.0. The brief facts leading to the filing of the present civil suits are as under:- 5.1. The defendant was introduced to the plaintiffs by their erstwhile auditors One Mr.Sridhar Rao and Mr.Chandrakumar Bafna.

The defendant made himself known to be the Managing Director of VGN Projects Estates Private Limited. He approached the plaintiff(s) some time in March, 2014 and expressed his dire need of funds for his business venture and approached the plaintiffs for loan on a friendly basis assuring that he would repay the same as and when demanded.

required by the defendants on various dates for his business venture for which the defendant executed promissory notes agreeing to repay the loan amount with interest @ 24% p.a. The loans were disbursed through cheques. 5.2. The details of the loans advanced by the plaintiff(s) in the respective suits are as follows:- (A) Details of loans advanced by the plaintiff in C.S.No.253 of 2021: Date Cheque Number Bank Amount 17.03.2014 000026 HDFC Bank 3,08,00,000 09.09.2014 000050 HDFC Bank 75,00,000 19.08.2015 000064 HDFC Bank 25,00,000 Total 4,08,00,000 (B) (i) Details of loans advanced by the plaintiff in C.S.No.287 of 2021:

Date Cheque Number Bank Amount in Rupees 17.03.2014 000001 & 000002 HDFC Bank 1,25,00,000 09.09.2014 000021 HDFC Bank 70,00,000 19.08.2015 000010 HDFC Bank 25,00,000 Total 2,20,00,000 (ii) Details of the amount transferred by the plaintiff in C.S.No.287 of 2021 through her mother-Raji and sister-Preeti Raja:

Date Cheque Number Bank Amount in Rupees 17.03.2014 000026 HDFC Bank 88,00,000 17.03.2014 963105 HDFC Bank 2,00,000 Total 90,00,000 (C) Details of loans advanced by the plaintiff in C.S.No.342 of 2021: DATE Cheque Number Bank Amount in Rupees 17.03.2014 963105 HDFC Bank 2,67,00,000 09.09.2014 963107 HDFC Bank 30,00,000 19.08.2015 963116 HDFC Bank 25,00,000 Total 3,22,00,000 5.3. It is the further case of the plaintiffs that the defendant had paid interest at the agreed rate of interest only until October, 2017 and thereafter, he neither paid interest nor did he repay the principal due and payable to the plaintiff(s) despite repeated requests made by the plaintiffs. Hence, the suits.

6. The suits are summary suits. Order XXXVII of the Code of Civil Procedure, 1908, lays down the procedure for filing and adjudication of summary suits. Rules 2 and 3 of Order XXXVII provides the procedure for summary suits. Rule 2 provides that after the summons of the suit having been issued to the defendant, the defendant must appear and the plaintiff will

serve a summons for judgment on the defendant. The defendant has no right to defend the suit unless he enters an appearance and gets leave from the court to defend the suit. In default of this, the plaintiff will be entitled to a decree, as prayed for, which will be executed forthwith.

8. Rule 3 provides the mode of service of summons and leave to defend by the defendant. The defendant must apply for leave within 10 days from the date of service of summons upon him.

9. Though the defendant sought leave to defend the suits in C.S.Nos. 287 & 342 of 2021 by way of two separate applications in A.No. 1776 of 2022 and A.No.150 of 2023, their request to defend the suit was turned down by the Master by order dated 27.04.2023 and the learned Master had refused to grant leave by holding that borrowal is admitted; no proof is submitted for repayment; and that mere allegation that the plaintiff(s) are the money lenders and that they charged exorbitant interest will not form a triable issue.

10. Insofar as the suit in C.S.No.253 of 2021 is concerned it was decreed ex parte by judgment and decree dated 27.04.2022 and on the application filed by the defendant in A.SR No.112398 of 28.03.2023

(subsequently numbered as A.No. of 2024), the ex parte decree and judgment has been set aside by this court today by a separate order. Pending the applications in C.S.No.253 of 2021 and the suits in C.S.No.287 of 2021 and C.S.No.342 of 2021, on 19.12.2023, both the parties agreed to settle the matter in all the three suits. Therefore, this court proceeded to record compromise in C.S.No.287 of 2021 as well as in C.S.No.253 of 2021 and C.S.No.342 of 2021 though leave to defend the suits was rejected based on the settlement arrived at between the parties.

11. Mrs.J.Raji, the plaintiff in C.S.No.253 of 2021 is none other than the mother of Mrs.Shweta Raja, the plaintiff in C.S.No.287 of 2021 and Mrs.Preeti Raja, the plaintiff in C.S.No.342 of 2021. The respective plaintiffs in C.S.No.287 and 2021 and C.S.NO.342 of 2021 had originally authorized their mother who is the plaintiff in C.S.No.253 of 2021 to enter into compromise by way of E-mails. The above said Email communication was also produced for the perusal of this court.

12. Earlier this court was informed that there had been settlement talks between the parties to settle the matters amicably. On the last hearing i.e., 19.12.2023, the plaintiff-J.Raji and the defendant were present in court and

they agreed to settle the matter and the defendant was directed to file memorandums admitting his liability and readiness to pay the amounts due and payable to the respective plaintiffs. Based on such progress in the settlement talks, this court recorded on 19.12.2023 recorded as under:-

13. The sole defendant in the respective suits filed memorandums individually for each suit in which, while admitting his liability, claimed partial discharge of liability on various dates. It is agreed by the defendant to pay the principal amounts with reasonable interest that may be fixed by the court subject to adjustment of the amounts already paid towards partial discharge of loans.

14. The memorandums filed by the learned counsel on behalf of the defendant in the suits read as under:-

C.S.No.253 of 2021

C.S.No.287 of 2021

C.S.No.342 of 2021

15. The learned senior counsel for the respective plaintiffs was not in a position to dispute the repayment made by the defendant to an extent as claimed in the respective memorandums. One of the plaintiffs MrsRaji, who has been present in court has agreed to pass decree on the admissions made by the defendant in his memorandums filed in the respective suits.

16. This court is of the view that rate of interest claimed by the plaintiff is exorbitant and is against the provisions contained in the Tamil Nadu Prohibition of Charging of Exorbitant Interest Act, 2003.

17. Though the learned senior counsel for the plaintiff in all the suits would submit that rate of interest cannot be reduced, considering the manner in which the loans were advanced and the promissory notes were obtained would all go to show that loans were advanced only for the purpose of earning more money by of interest. No person shall charge exorbitant interest on any loan advanced by him or her, and he or she should be reasonable in charging interest for the loan advanced and the rate of interest should not be usurious. Though there was a contract entered by way of promissory note, the plaintiff(s) who lent loan cannot be allowed to charge such exorbitant interest. Charging such exorbitant interest is against the provision contained in Section

3 of the Tamil Nadu Prohibition of Charging of Exorbitant Interest Act, 2003.

18. As already discussed in the preceding paragraphs, more particularly, as captured from the plaints, and the memorandums filed in the respective suits as against the suit loans of (i) Rs.3,25,00,000/-; (ii) Rs.3,10,00,000/-; and (iii) Rs.3,20,00,000/-, the defendant has, without prejudice to his contentions of the merits of the claims in the respective suit, in the light of the settlement arrived at before this court on 22.12.2023, stated that he is ready to pay the suit claims with interest @ 10.12% p.a. from the date of borrowal till this date subject to giving credit to the repayments that he had already made to the respective plaintiffs. Thus as against the total dues of (i) Rs.3,25,00,000/-; (ii) Rs.3,10,00,000/-; and (iii) Rs.3,20,00,000/- payable with interest @ 10.12% p.a.

, as agreed before the court, from the date of borrowal till this date, after adjusting the repayments of (i) Rs.2,46,38,400/-; (ii) Rs.2,24,19,000/-; and (iii) Rs.2,36,13,600/- so far made to the credit of the loans availed by the defendant from the respective plaintiffs, the defendant has agreed to pay a sum of (i) Rs.3,91,57,758/- to the plaintiff in C.S.No.253 of 2021, (ii) Rs.3,86,45,175/- to the plaintiff in C.S.No.287 of 2021; and (iii) Rs.3,96,45,775/- to the plaintiff in C.S.No.342 of 2021.

19. When this court pointed out that the suits can be disposed of on the basis of admissions made by either party, the learned counsel appearing for the defendant in all the suits, on instructions, from the defendant, who was present in court, fairly conceded that the defendant would pay the decree amount within a period of eight months from today. The said statement is recorded.

20. In the event the defendant pays the sum adjudged above within a period of eight months as undertaken by him before the court there will be no issue. If the defendant fails to pay the sum adjudged by this court herein above within eight months, the amount adjudged by the court shall carry simple interest @ 18% p.a. from the date of decree till date of realization. In the result, (i) C.S.No.253 of 2021:- Suit is decreed in part with proportionate costs. The defendant is directed to pay a sum of Rs.3,91,57,758/- to the plaintiff. The defendant shall pay the decree amount as directed above within a period of eight months from today. If the defendant

fails to pay the decree amount within a period of eight months from today, the same shall carry simple interest @ 18% p.a. The suit in respect of the rest of the claim is dismissed.

(ii) C.S.No.287 of 2021:- Suit is decreed in part with proportionate costs. The defendant is directed to pay a sum of Rs.3,86,45,175/- to the plaintiff. The defendant shall pay the decree amount as directed above within a period of eight months from today. If the defendant fails to pay the decree amount within a period of eight months from today, the same shall carry simple interest @ 18% p.a. The suit in respect of the rest of claim is dismissed.

(iii) C.S.No.342 of 2021:- Suit is decreed in part with proportionate costs. The defendant is directed to pay a sum of Rs.3,96,45,775/- to the plaintiff. The defendant shall pay the decree amount as directed above within a period of eight months from today. If the defendant fails to pay the decree amount within a period of eight months from today, the same shall carry simple interest @ 18% p.a. The suit in respect of the rest of claim is

dismissed.

22.12.2023 Index : yes / no : yes / no Speaking / Non-speaking order TK

LIST OF WITNESSES EXAMINED ON THE SIDE OF THE PLAINTIFF - NIL LIST OF WITNESSES EXAMINED ON THE SIDE OF THE DEFENDANT - NIL LIST OF DOCUMENTS MARKED ON THE SIDE OF THE PLAINTIFF - NIL LIST OF DOCUMENTS MARKED ON THE SIDE OF THE DEFENDANT - NIL 22.12.2023 2/3

N.SATHISH KUMAR, J.

TK Civil Suit Nos.253, 287 & 342 of 2021 22.12.2023