Housing Development Finance Corporation Limited v. M.V. Moideenkutty and Steel Complex Limited

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **THURSDAY, THE 11[TH] DAY OF AUGUST 2022 / 20TH SRAVANA, 1944 RSA NO. 616 OF 2008** **AGAINST THE JUDGMENT AND DECREE IN AS 104/2003 OF ADDITIONAL DISTRICT COURT-II KOZHIKODE AGAINST TEH JUDGMENT AND DECREE IN OS 1037/1997 OF PRINCIPAL MUNSIFF COURT ,KOZHIKODE-II** ## **APPELLANT/1ST RESPONDENT/PLAINTIFF:** HOUSING DEVELOPMENT FINANCE CORPORATION CORPORATION LIMITED, H.D.F.C. HOUSE, RAVIPURAM, KOCHI-682 015. BY ADV SRI.K.K.CHANDRAN PILLAI, SC, HDFC ## **RESPONDENTS/APPELLANT/1ST DEFENDANT & 2ND RESPONDENT/2ND** ## **DEFENDANT:** 1 M.V.MOIDEENKUTTY,S/O.IMBICHALI, RESIDING AT KALARI PARAMBA, NALLALAM BAZAR, NALLALAM AMSAM, KOZHIKODE TALUK. 2 STEEL COMPLEX LIMITED FACTORY AT CHERUVANNUR, FAROKE AMSAM, KOZHIKODE. BY ADVS. SRI.K.M.JAMALUDHEEN SRI.K.K.KRISHNA KUMAR SMT.LATHA PRABHAKARAN SMT.MARIAM MATHAI SRI.M.PATHROSE MATTHAI SR. SRI.SAJI VARGHESE SRI.P.THOMAS GEEVERGHESE THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON 11.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING ## **Sathish Ninan, J. ============================== R.S.A No.616 of 2008** ## **========================== Dated this the 11[th] day of August, 2022** ## **JUDGMENT** The plaintiff in a suit for recovery of money is the appellant. The suit was decreed by the trial court. The decree was reversed in appeal and the suit was dismissed. 2. The plaintiff is the Housing Development Finance Corporation Limited. The 1[st] defendant was an employee of the 2[nd] defendant Company. A Scheme was formulated between the plaintiff and 2[nd] defendant Company where under it was agreed that the plaintiff will advance amounts to the 2[nd] defendant for granting loans to its eligible employees. On such grant, the employees were to execute loan agreements with the plaintiff. Such loans were to be guaranteed by the 2[nd] defendant. In terms of the said Scheme, the 1[st] defendant was granted a loan of D35,000/-. Ext A1 is the loan agreement and Ext A2 is R.S.A No.616 of 2008 -: 2 :- the Demand Promissory Note executed in relation to the same. While so, certain employees of the 2[nd] defendant Company were proposing to avail Voluntary Retirement from Service and hence, the 2[nd] defendant gave the list of such persons and required the plaintiff to inform the amounts under their loan accounts. Ext A3 is the communication in the said regard. The plaintiff informed the 2[nd] defendant that the balance amount due under the loan transaction of the 1[st] defendant is D4,073/-. The 2[nd] defendant deducted the said amount from the benefits payable to the 1[st] defendant and on 13.05.1995 issued a cheque for the said amount in favour of the plaintiff. The name of the 1[st] defendant-borrower is 'M.V.Moideenkutty'. Another employee of the 2[nd] defendant Company by name “M.V.Kunhi Moideenkutty” had also availed loan under the Scheme. In fact, Rs.4,073/was the due under the loan account availed by M.V.Kunhi Moideenkutty and the due amount payable under the loan R.S.A No.616 of 2008 -: 3 :- account of the 1[st] defendant was D43,113/-. On realising the mistake, the plaintiff communicated the same to the defendants. It is on failure to pay the balance amount that the present suit was filed. 3. The 1[st] defendant raised a plea of discharge. The 2[nd] defendant contended that, based on the communication from the plaintiff regarding satisfaction of the liability, the settlement amounts payable to the 1[st] defendant were paid, and that the 2[nd] defendant does not have any further liability. Subsequently, by way of an additional written statement, a further contention was raised that the Company has been declared as sick under the Sick Industrial Companies (Special Provisions) Act, 1980. 4. The trial court granted a decree as against the 1[st] defendant, and dismissed the claim against the 2[nd] defendant. Challenging the said decree the 1[st] defendant preferred appeal. The appellate court found that the R.S.A No.616 of 2008 -: 4 :- plaintiff has failed to prove that amounts are due from the 1[st] defendant. The Court further proceeded to find that, in the light of Exts B4 and B5 communications from the plaintiff, the entire liability has been discharged. Accordingly, the decree of the trial Court was interfered with and the suit was dismissed. 5. Heard the learned senior counsel Sri.K.K.Chandran Pillai on behalf of the appellant/plaintiff, Sri.K.M.Jamaludeen on behalf of the 1[st] respondent, and Smt. Mariyam Mathai on behalf of the 2[nd] respondent on the following substantial question of law: _“Was the First Appellate Court correct in holding that Exts_ _B4 and B5 communications from the plaintiff evidence_ _discharge of the liability of the 1[st] defendant?”_ 6. As noticed, consequent on a mistake on the part of the plaintiff, the amounts payable under the loan account of one “M.V.Kunhi Moideenkutty” was communicated R.S.A No.616 of 2008 -: 5 :- to the 2[nd] defendant as the amount payable by the 1[st] defendant “M.V.Moideenkutty”. The amount, as communicated, was paid by the 1[st] defendant on 13.05.1995. It is immediately thereafter on 22.05.1995 that Exts B4 and B5 communications were sent by the plaintiff to the defendants to the effect that, the liability of the 1[st] defendant has been discharged in full. Obviously, Exts B4 and B5 has been issued in the light of the payment made by the 2[nd] defendant on 13.05.1995. The mistake that occurred on the part of the plaintiff cannot be taken advantage of by the defendants. Exts B4 and B5 communications dated 22.05.1995 issued by the plaintiff pursuant to the payment made by the 2[nd] defendant on 13.05.1995, cannot be made the basis to hold that there has been discharge of the liability. The substantial question of law is answered accordingly. R.S.A No.616 of 2008 -: 6 :- 7. Now coming to the amounts if any due from the defendants, Ext A12 is the account relating to the 1[st] defendant and Ext A13 is the account relating to “M.V.Kunhi Moideenkutty”. Since the account did not contain certification in terms of Section 65B of the Indian Evidence Act, the appellate court held the accounts to be inadmissible. There upon the appellate court held that the plaintiff has failed to prove that any amounts are due from the defendants. The apex court in _**Ravinder Singh @ Kaku v. State of Punjab (AIR 2022 SC 2726 )**_ held that the certification under Section 65B is a mandatory requirement of the law. In the absence of such certification, the first appellate court was justified in not relying on Exts A12 and A13 documents. 8. Learned senior counsel appearing for the appellant/plaintiff requested that the plaintiff may be granted an opportunity to produce the original statement of accounts before the court and prove its claim. Such a R.S.A No.616 of 2008 -: 7 :- request could have been made before the first appellate court. Be that as it may, on the facts of the case, I am of the opinion that an opportunity could be granted to the plaintiff to prove its claim. 9. It is to be noticed that, the suit as against the 2[nd] defendant was dismissed by the trial court. As against the said dismissal, there has been no appeal by the plaintiff. Therefore, the dismissal of the suit as against the 2[nd] defendant has become final. Now the claim of the plaintiff can only be maintained against the 1[st] defendant. 10. Resultantly, the decree and judgment of the courts below, insofar as it relates to the decree against the 1[st] defendant, are set aside. The matter is remanded back to the trial court for disposal de novo. Both sides shall be afforded opportunity to adduce further evidence. Let every endeavour be made to dispose of the suit within a period of three months from the R.S.A No.616 of 2008 -: 8 :- date of receipt of a copy of this judgment. The plaintiff and the 1[st] defendant to appear before the trial court on 02.09.2022. Sd/- **Sathish Ninan, Judge** vdv