Madras HC Sets Aside Money Decree Granted Without Pleadings, Reiterates Courts Cannot Grant Unclaimed Relief [Read Judgment]

Chennai: The Madras High Court has delivered a significant judgment emphasizing that courts cannot exercise inherent powers to grant money decrees in favour of parties who have neither pleaded nor sought such relief, reinforcing the fundamental principle of judex ne eat ultra petita partium.

Justice Dr. A.D. Maria Clete pronounced the judgment in A.S. No. 644 of 2019, addressing an appeal arising from a property dispute involving allegations of fraud, misuse of power of attorney, and collusive transactions.

The case originated from O.S. No. 311 of 2013 filed by the plaintiff Jayalakshmi, seeking to set aside a sale deed dated 04.10.2013 executed by the second defendant in favour of the third defendant, and a sale agreement dated 04.10.2013 between the first and third defendants.

The plaintiff’s case centred on financial distress following her son’s death from cancer. The court noted, “About three months prior to 17.06.2013, her elder son died after undergoing unsuccessful treatment for cancer. Owing to the substantial debts incurred towards medical expenses, the plaintiff was in acute financial distress.”

According to the plaintiff, she approached the second defendant for a loan of Rs. 5,00,000/-, for which she executed a power of attorney and a sale agreement as security. The court observed, “The second defendant is stated to have advanced the said amount as a loan, repayable with interest at 18% per annum, and, by way of security for the repayment thereof, obtained a power of attorney (Ex.A2) in his favour and a sale agreement (Ex.A3) in favour of the first defendant.”

The plaintiff alleged that without her knowledge, the second defendant cancelled the sale agreement and executed a sale deed in favour of the third defendant. The court stated, “According to the plaintiff, without her knowledge or consent, the second defendant cancelled the said sale agreement on 04.10.2013 and, on the very same day, acting under the power of attorney, executed a sale deed in favour of the third defendant without passing any consideration.”

The defendants contended that all transactions were legitimate, with the plaintiff’s consent and knowledge. However, the court found significant inconsistencies in their version. Addressing the defendant’s testimony, the court noted, “The second defendant, examined as D.W.1, deposed in his chief examination that on 17.06.2013 the plaintiff and the first defendant entered into a sale agreement fixing the sale consideration at Rs. 15,00,000/-. However, in cross-examination, he resiled from the said version and stated that he had no knowledge of any sale agreement entered into between the plaintiff and the first defendant. This material inconsistency strikes at the root of the defence case.”

The court found the execution of the power of attorney to be superfluous if the defendants’ version were true and stated, “If the contention of the second defendant, that the plaintiff and her husband approached him merely to locate a purchaser for the suit property, is to be accepted, the execution of a power of attorney would be wholly superfluous, as the proposed purchaser, namely the first defendant, had already been identified.”

Regarding the suspicious circumstances surrounding the transactions, the court observed, “If the plaintiff were truly present and consenting, there was no necessity for a life certificate or execution through a power agent. The second defendant has deposed that the plaintiff was present during all the transactions. If that were so, there was no necessity whatsoever to cancel Ex.A3 through a power agent or to produce a life certificate.”

The court further identified multiple inconsistencies in the defendants’ case regarding the sale consideration and financing, while noting, “While the written statement asserts that a sum of Rs. 5,00,000/- was borrowed, Ex.A6 reflects an advance of only Rs. 50,000/-. There is no explanation as to how the third defendant paid the balance sale consideration or met the stamp and registration expenses.”

Regarding the alleged receipt for Rs. 15,52,000/-, the court found it suspicious and undated. The court therefore concluded that the sale deed was executed under suspicious circumstances. The judgment declared, “From the foregoing discussion, it is evident that the execution of the sale deed dated 04.10.2013 (Ex.A4) is shrouded in suspicious circumstances which the defendants have failed to satisfactorily dispel.”

On the question of possession, the court applied the principle that possession follows title. The court stated, “The suit property is a vacant site. In such circumstances, the settled principle of law is that possession follows title. As the title to the suit property continues to vest with the plaintiff, it necessarily follows that the plaintiff is deemed to be in possession thereof.”

The most significant aspect of the judgment relates to the trial court’s grant of a money decree to the second defendant. The High Court found this to be a serious procedural error. The court observed, “The second defendant neither pleaded nor asserted any claim that the plaintiff was indebted to him in a sum of Rs. 5,00,000/-. On the contrary, it was the plaintiff who put forth a case that the second defendant had advanced Rs. 5,00,000/- as a loan.”

Addressing the trial court’s exercise of power, the court stated, “The trial Court, in granting a money decree in favour of the second defendant despite the absence of any pleading or counter-claim, acted in derogation of the settled principle, judex ne eat ultra petita partium.”

The court emphasized the mandatory requirements for granting money decrees. The judgment noted, “Further, the trial Court granted a money decree in favour of the second defendant without insisting upon payment of the requisite court fee or compliance with the provisions of the Tamil Nadu Court-Fees and Suits Valuation Act, 1955.”

While acknowledging the court’s power to mould relief, the High Court set clear boundaries. The court stated, “It is no doubt true that, in appropriate cases, a civil court may mould or modify the relief sought, either by granting a lesser relief than that prayed for or by exercising its inherent powers under Section 151 CPC. However, such power does not extend to granting a relief which has not been prayed for at all.”

The court further elaborated, “While a court may grant a lesser relief where a party claims more than what it is legally entitled to, it cannot grant a relief which has not been specifically sought, unless the pleadings are duly amended in accordance with law prior to the pronouncement of judgment.”

Criticizing the trial court’s approach, the High Court observed, “Granting relief to a defendant who has not sought such relief either by way of a counter-claim or through independent proceedings amounts to travelling beyond the pleadings and violates the settled principle that no party can be granted a relief which it has neither prayed for nor proved.”

The court held that the money decree disclosed a clear jurisdictional error. The judgment stated, “A money decree granted ultra petita, in favour of a party who has neither sought nor pleaded such relief, discloses a clear jurisdictional error. The trial Court, without adverting to these fundamental aspects, mechanically granted a money decree as though it possessed unbridled authority to do so.”

Regarding the fiscal requirements, the court emphasized, “The Court does not have any extraordinary authority to grant relief to a person who has neither invoked its jurisdiction in the manner known to law nor complied with the procedural and fiscal requirements mandated under the CPC and the Court-Fees Act.”

In its final holding on this issue, the court declared, “This Court holds that the decree granted in favour of the second defendant directing the plaintiff to pay a sum of Rs. 5,00,000/- is not sustainable in law and is liable to be set aside.”

The High Court confirmed the trial court’s decision declaring the sale deed dated 04.10.2013 as null and void but set aside the direction requiring the plaintiff to pay Rs. 5,00,000/- to the second defendant.

In conclusion, the court stated, “The judgment and decree passed by the trial Court in O.S. No. 311 of 2013 declaring the sale deed dated 04.10.2013 (Ex.A4) as null and void is confirmed. However, the direction issued by the trial Court directing the plaintiff to pay or return a sum of Rs. 5,00,000/- with interest to the second defendant is set aside.”

The appeal was dismissed with costs, while the suit was allowed without granting any decree or relief in favour of the defendants.

Mr. T. Murugamanickam, Senior Counsel for M/s. Zeenath Begam, appeared for the appellant, while Mr. C. Jagadish appeared for the first respondent.

Case Title: Thangapandiyan vs. Jayalakshmi and Others

[Read Judgment]