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Heerakar Baloji Vs. Kaleru Venkataiah and Others - Court Judgment

LegalCrystal Citation
CourtAndhra Pradesh High Court
Decided On
Case NumberAPPEAL SUIT No. 262 of 1992
ActsIndian Contract Act - Sections 177, 172
AppellantHeerakar Baloji
RespondentKaleru Venkataiah and Others
Appellant AdvocateY.N.Lohita, Adv.
Respondent AdvocateNarsing Rao Nandikonda, Adv.
[mr.j.s.khehar, chief .justice ; mr.justice a.s.bopanna, j.j.] this writ petition is filed under articles 226 and 227 of the constitution of india praying to set aside the impugned order dated 2.3.2011 in ia no. 1479/2010 in air (sa) 882/2010 vide annexure-u and allow the same in accordance with the law and direct the drat, chennai to adjudicate the appeal in air (sa) 882/2010 on its merits., and payment of the debt or performance of the promise at the stipulated time, he may redeem the goods pledged at any subsequent time before the actual sale of them; but he must, in that case, pay, in addition, any expenses which have arisen from his default. therefore, it clearly says that a redemption of the pledged goods should be by payment of the amount due and also additional expenses, which has arisen from his default. 14. so far as the period of limitation is concerned, article 70 of the limitation act is relevant. "to recover the movable property deposited or pawned from a depository or pawnee the period of limitation is three years from the date of refusal after demand". in this case, evidently, the evidence given by the plaintiff in stc no.396 of 1982 clearly goes to show.....

1. The plaintiff in O.S.No. 40 of 1984 on the file of the Subordinate Judge, Bhongir, is the appellant herein.

2. The suit was filed for preliminary decree for redemption of the plaint schedule ornaments, which were pledged towards the loans and on determination of amount payable, to direct the defendant to return the same.

3. According to the case of the plaintiff, the 2nd defendant is the son of the 1st defendant. On 22-05-1975 the plaintiff obtained a loan of Rs.2,000/- from the 1st defendant and pledged the schedule property ornaments and a document was executed. Subsequently, on 05-06-1975, on 28-06-1975 two loans of Rs.2,000/- each were obtained on the same pledge and defendant No.1 gave plaintiff a small chit signed by the 2nd defendant showing the principal amount as Rs.6,000/-. The rate of interest agreed was 6% per annum. As the plaintiff's financial condition went on dwindling day by day, he could not redeem the pledge by paying the loan amount. About four months prior to filing of the suit, the defendants demanded more than Rs.20,000/- for discharge of the loan saying that the principal amount, for which, the plaint schedule ornaments were pledged totalled Rs.15,000/-. He suspected the bona fides of the defendants and sought the mediation of the elders Patnam Venkat Narsaiah, Vasam Satyanarayana, Sadu Narayana Muthyam Prakash, Dathrak China Rajaiah, Kadipe Yadagiri and Kandari Rajaiah. The said elders assembled in the house of Dathri Yadagiri on 09-05-1982 and called the defendants for settlement. Before the said elders, the defendants admitted the pledge of the plaint schedule ornaments with them by the plaintiff, but claimed Rs.15,000/- as principal amount and interest at the rate of 24% per annum. When the plaintiff showed the aforesaid documents to the elders, the defendants got angry and scolded the plaintiff and beat him with their slippers. In view of all the above facts, the plaintiff cannot redeem the pledged ornaments. Hence the suit.

4. As the 1st defendant died, defendants Nos. 3 to 6 were added, as they are the legal representatives of 1st defendant.

5. The defendants filed a written statement denying the allegations in the plaint with regard the pledge and also with regard to the issuance of the chit. There was no transaction in the manner pleaded by the plaintiff. The 1st defendant advanced a loan of Rs.10,000/- on 22-05-1975 to the plaintiff and obtained a promissory note. There is no other loan transaction. The alleged panchayat pleaded by the plaintiff is not true. It is only an attempt to save the limitation. The suit is not maintainable as there is no cause of action. The valuation is not correct. The suit is vexatious. Therefore, the suit is liable to be dismissed.

6. On the basis of the above pleadings, the following issues have been framed by the trial court, for trial:

1) Whether the plaintiff pledged gold ornaments mentioned in schedule on 22-05- 1975 and obtained loan of Rs.2,000/- and also obtained loan of Rs.2,000/- on 05-06-1975 and Rs.2,000/- on 26-06-1975 from 1st defendant?

2) Whether defendants constitute Joint Hindu Family?

3) Whether 2nd defendant gave any chit on 28-06-1975 and if so, what is the effect?

4) Whether there was any panchayathi on 09-05-1982 as alleged in Plaint?

5) Whether defendant demanded Rs.20,000/- for discharge of loan?

6) Whether suit is bad for misjoinder of parties?

7) Whether suit is bad for misjoinder of cause of action?

8) Whether suit is maintainable?

9) Whether suit is within limitation?

10) To what relief the parties are entitled?

7. On behalf of the plaintiff, PWs. 1 to 5 were examined and marked Exs.A-1 to A-12. On behalf of the defendants DWs.1 to 4 were examined and marked Exs.B- 1 to B-20 and Exs.X-1 to X-75.

8. After considering the evidence on record, the learned Subordinate Judge, Bhongir, dismissed the suit of the plaintiff. Aggrieved by the said judgment and decree, the present appeal is filed.

9. The points that arise for consideration are:

1) Whether the pledge pleaded by the plaintiff is true?

2) Whether the suit as framed is maintainable?

3) Whether the suit is in time?

4) Whether the judgment and decree passed by the learned Subordinate Judge, Bhongir, is legal and sustainable?


The claim of the plaintiff is that on 22-05-1975 a sum of Rs.2,000/- was borrowed and on that day, the articles were pledged and the 1st defendant has given the receipt under Ex.A-3. Subsequently, two borrowings were said to have been made and for a total sum of Rs.6,000/- Ex.A-1 chit is said to have been given by 2nd defendant.

11. The learned counsel for the appellant contends that the circumstances in this case coupled with the evidence of PW-5, the expert, clearly establishes the transaction and Exs.A-1 and A-3 proves the case of the plaintiff and therefore, the dismissal of the suit by the lower Court is not correct. Evidently, in order to substantiate the claim of the plaintiff, it has to be shown that Ex.A-3 was in fact given as a receipt after payment of Rs.2,000/- as loan to the plaintiff and in proof of the same, list of articles mentioned in Ex.A-3 were given. As can be seen from Ex.A-3, which is said to be letter, dated 22-05- 1975, certain items of the gold ornaments were kept with the 1st defendant. This receipt is said to have been given by 1st defendant. This does not show as to what was the amount paid and what was the interest agreed between the parties. If really on 22-05-1975 Rs.2,000/- was borrowed and pledge was agreed under Ex.A-3, then naturally this fact should be reflected in Ex.A-3. But, it is totally silent. The further reliance on Ex.A-1 also of no avail. This is said to be a chit given by defendant No.2 on 28-06-1975 about the total amount being due as Rs.6,000/-. This also does not disclose that towards the pledge earlier created by the plaintiff, this chit is given. If at all any amount was borrowed, naturally, it is for the borrower to give an acknowledgement of the amount.

12. Assuming to be that there was a pledge and the amount was arrived at, still it is for the plaintiff to obtain a receipt about the particulars of the pledge and the amount borrowed. Even, Ex.A-1 is also silent about it. Ex.A-1 is also silent as to whom it was addressed by the 2nd defendant. Therefore, both these things put together, it does not in any way advance the case of the plaintiff that there was a pledge under Ex.A-3 and he has borrowed Rs.6,000/-. Therefore, his claim is baseless as rightly held by the lower Court. Merely because the defendant has come up with a plea that earlier there was a loan transaction for Rs.10,000/-, it does not mean that the plea of pledge claimed by the plaintiff is true.

13. Apart from it, the pledge of the articles is said to be in the year, 1975. The suit was filed originally in form of paupery in June, 1982, which is after a period of seven years. The lower Court while considering the issue of limitation found that the suit is barred by time. Evidently, the legal notice was not given within three years expressing the readiness and willingness to pay the debt and redeem the pledged articles. A mediation is said to have been happened on 09-05-1982 when the defendant demanded higher interest, but to prove the same no document is filed. In this connection, it is useful to refer Section 177 of Indian Contract Act.

177. Defaulting pawnor's right to redeem:- If a time is stipulated for the payment of the debt, or performance of the promise, for which the pledge is made, and the pawnor makes default in payment of the debt or performance of the promise at the stipulated time, he may redeem the goods pledged at any subsequent time before the actual sale of them; but he must, in that case, pay, in addition, any expenses which have arisen from his default.

Therefore, it clearly says that a redemption of the pledged goods should be by payment of the amount due and also additional expenses, which has arisen from his default.

14. So far as the period of limitation is concerned, Article 70 of the Limitation Act is relevant.

"To recover the movable property deposited or pawned from a depository or pawnee the period of limitation is three years from the date of refusal after demand".

In this case, evidently, the evidence given by the plaintiff in STC No.396 of 1982 clearly goes to show that he approached the defendants to take the loan amount with principal amount and return the gold ornaments, but he was avoiding to take back the money and returning the gold ornaments. Therefore, it is quite clear even at least by 1976 and 1977, the plaintiff is aware that the defendants are not returning the ornaments and a demand was made and it was not complied with. Further-more as already stated, no legal notice about the conduct of the defendants was given. Therefore, it is a clear case where the suit is hopelessly barred by time as held by the lower Court.

15. The maintainability of the suit as framed is also to be considered. Evidently, this is not a case for redemption or foreclosure of immovable property. Whenever the money was borrowed and pledge was created, unless the money was paid the question of return of the pledged goods does not arise, there cannot be any accounts to be settled since according to the plaintiff, a sum of Rs.6,000/- was borrowed and interest payable is 6% per annum. It is an ascertained money with specified interest. Therefore, it is the duty of the plaintiff to deposit the said amount and seek for return of the pledged goods. But, however, in this case, the plaintiff instead of instituting the suit for return of the ornaments on deposit of the amount due has resorted to the suit of settlement of accounts, which is not at all proper.

16. The learned counsel for the appellant relied on a decision reported in S.L. Ramaswamy Chetty and another v. M.S.A.P.L. Palaniappa Chettiar1, which considered the rights of the pledgor and pledgee. That case deals with sale of the pledged goods and consequential right of the plaintiff to institute the suit. In this case, it is not the contention of the plaintiff that the pledged goods were sold or not available. In the particular circumstances of the case, it was held that the deposit of money is not necessary. But, however, it is useful to refer to the decision reported in Sri Raja Kakarlapudi Venkata Sudarsana Sundara Narasayyamma Garu (died) and others v. Andhra Bank Ltd., Vijayawadaand others2, which is the Division Bench Judgement of this Court, in that case, the decision relied on by the counsel for the appellant was also considered. It was held that in case where sale of goods was done by the pledgee, the pledgor can file a suit for redemption by depositing the money, treating the sale as if it had never taken place, or where the suit for redemption is not filed, to ask for damages on foot of conversion. Therefore, essential requisite is about the pledgor to tender the amount before he seeks for redemption of the pledged goods. In this case, the plaintiff has not done so.

17. It is also useful to refer the another decision reported in Sait Kesarimal Mulaji v. Sait Nainimal and others3, wherein it was held that -

"The statutory provisions governing a transaction of pledge are those contained in sections 172 to 177 of the Contract Act and a right on the part of the pledgor to ask the pledgee for accounts is not enumerated among them. It may be, when there is a dispute between the pledgor and the pledgee about any amount borrowed or repaid or about any articles pledged or redeemed, necessary for the court to go into the accounts. This does not mean that either of the parties is entitled to sue the other for accounts. The suit for accounts is a special form of suit and that remedy has been recognised only in certain cases like suit by a principal against the agent or a beneficiary against the trustee or by a partner or in other cases where there is a liability to account existing either under a statuette or under common law.

When there is a dispute regarding the amount due by the pledgor and also regarding the articles pledged and redeemed from time to time, the proper course for the pledgor to adopt was either to sue for redemption of the articles which according to him were with the pledgree, tendering the amount which according to him was due or in the alternative he could sue the pledgee for damages for the sale of the pledged articles illegally held. In either case if the defendant disputed the accuracy of the statement of the plaintiff regarding the amount due or the articles pledged or redeemed the court would go into the question and determine the same. It is not open to the plaintiff taking advantage of the dispute, to file a suit for accounts".

In the above decision, it is clearly held that no suit for settlement of accounts is maintainable and the only remedy is to deposit the money and seek for the return of the goods. Therefore, viewed from any angle, the claim of the plaintiff is not sustainable and the suit is not maintainable and there are no grounds to interfere with the judgment and decree passed by the lower Court. Accordingly, the points are answered.

18. In the result, appeal is dismissed. There shall be no order as to costs.

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