OSA/245/2022 of T.SRILATHA HARI Vs T.R.SREEKANTH on 12 October 2026

JUDGMENT

(Judgment of the Court was delivered by N.Sathish Kumar J.) The present Original Side Appeal has been filed challenging the order dated 11.04.2022 passed by the learned Single Judge in Application No. 1415 of 2022 in the unnumbered Civil Suit of 2022, dismissing the application seeking leave to sue the respondents.

2. The brief facts of the Case: The appellant/plaintiff instituted the suit for recovery of money due under a mortgage transaction. According to the appellant, in December 2015, the respondents approached her seeking financial assistance of Rs.40,00,000/- for the purchase of the suit property and offered to mortgage the property as security for the amount advanced. The total consideration for the purchase of the suit property was Rs.80,00,000/-, of which the appellant contributed Rs.40,00,000/-, representing 50% of the purchase consideration. The said amount was directly transferred to the vendors' account at the request of the respondents. On 07.01.2016, the sale deed was executed in favour of the respondents and registered as Document No.191 of 2016. The contribution of Rs.40,00,000/- made by the appellant was acknowledged in the sale deed. On the same date, the respondents executed a registered mortgage deed in favour of the appellant, bearing Document No.192 of 2016, agreeing to repay the loan amount with interest at the rate of 24% per annum. As per the terms of the mortgage deed, the respondents were obligated to pay interest on or before the prescribed date every calendar month. In the event of default, the unpaid interest was to be added to the principal amount and the respondents were liable to pay interest at the agreed rate on the accumulated arrears. The respondents allegedly paid interest only for the first three months, up to April 2016 and thereafter committed default in payment of both the principal and interest. Despite repeated demands and reminders, the respondents failed to discharge their liability. The appellant issued a legal notice dated 07.04.2021. The respondents, by their reply dated 26.06.2021, admitted their liability towards the principal sum of Rs.40,00,000/- and interest from April 2021, but disputed the appellant's claim for interest for the earlier period. The appellant issued a further reply dated 02.07.2021, denying the respondents' contention and reiterating that interest had been paid only for the initial three months. The respondents, however, maintained their stand in a subsequent reply. According to the appellant, the accumulated interest as on 07.03.2022 amounted to Rs.1,63,18,197.55. The appellant further contended that a substantial part of the cause of action arose within the territorial jurisdiction of this Court. The respondents had approached the appellant at her residence in T. Nagar, Chennai; the requisition for payment was made there; the amount was transferred from the appellant's bank at T. Nagar; and the mortgage deed was registered in Chennai. The appellant also relied upon the fact that the respondents had paid interest for the initial three months pursuant to the mortgage transaction. Since the respondents resided outside the original jurisdiction of this Court, the appellant filed Application No.1415 of 2022 seeking leave to institute the suit. However, the learned Single Judge dismissed the application on the ground that the mortgaged property was situated outside the territorial jurisdiction of this Court. Aggrieved by the said order, the appellant has preferred the present appeal.

3. The learned counsel for the appellant submitted that the suit was essentially one for recovery of money due under a mortgage transaction and could not be construed as a suit for land merely because the claim was secured by a mortgage over immovable property situated outside the territorial jurisdiction of this Court. It was further submitted that, in terms of Clause 12 of the Letters Patent, the suit was maintainable on the Original Side of this Court, as a substantial part of the cause of action had arisen within its jurisdiction. In support of the said contention, the learned counsel relied upon the Full Bench judgment of the Bombay High Court in Hatimbhai Hassanally v. Framroz Eduljee Dinshaw, reported in CDJ 1927 BHC 024 and the judgment of the Division Bench of this Court in Southern Petrochemical Industries Corporation Limited v. Durga Iron Works, reported in 1990 MLJ 375, besides the other decisions referred to in the memorandum of appeal.

The learned counsel contended that a suit for recovery of mortgage money is not necessarily a suit for land and that the learned Single Judge had dismissed the application without properly considering the legal principles laid down in the aforesaid decisions. It was therefore submitted that the order of the learned Single Judge was contrary to the settled legal position and was liable to be set aside.

4. The learned counsel for the respondents submitted that the mortgaged property was situated outside the territorial jurisdiction of this Court and that the suit was therefore not maintainable on the Original Side. The learned counsel supported the order passed by the learned Single Judge dismissing the application for leave to sue.

5. The point that arises for consideration in this appeal is whether the learned Single Judge was justified in dismissing the application seeking leave to sue solely on the ground that the mortgaged property was situated outside the territorial jurisdiction of this Court?

6. We have considered the submissions made by the learned counsel appearing on either side and perused the materials available on record.

7. The principal question that arises for consideration is whether the suit instituted by the appellant is a suit for land or a suit for recovery of money due under a mortgage transaction. The appellant has instituted the suit for recovery of money due under the mortgage deed executed by the respondents. The relief sought is for recovery of the amount due under the mortgage transaction and the claim is founded upon the respondents' alleged failure to repay the amount borrowed, together with the accrued interest. The mere fact that the claim for recovery of money is secured by a mortgage over immovable property does not, by itself, necessarily render the suit a suit for land. The nature of the suit and the relief sought therein have to be considered for determining its maintainability under Clause 12 of the Letters Patent.

8. The Full Bench of the Bombay High Court in Hatimbhai Hassanally v. Framroz Eduljee Dinshaw, reported in CDJ 1927 BHC 024, relied upon by the appellant, has considered the distinction between a suit for recovery of mortgage money and a suit for land. The appellant has also relied upon the decision of the Division Bench of this Court in Southern Petrochemical Industries Corporation Limited v. Durga Iron Works (1990 SCC Online Mad

184) in support of the contention that a suit for recovery of money secured by a mortgage is maintainable under Clause 12 of the Letters Patent.

9. In the present case, the appellant seeks recovery of the money advanced to the respondents under the mortgage transaction. The dispute, at this stage, concerns the appellant's entitlement to institute the suit and obtain leave to sue the respondents, who admittedly reside outside the original jurisdiction of this Court.

10. The question as to the enforcement of the mortgage against the property, including any relief that may involve the property itself, would have to be considered in the light of the nature of the reliefs actually claimed in the suit. The mere location of the mortgaged property outside the jurisdiction cannot, by itself, conclude the question of maintainability without examining the nature of the suit and the applicable provisions of Clause 12 of the Letters Patent. In the light of the principles laid down in the decisions relied upon by the appellant, we are of the view that the learned Single Judge ought to have considered whether the suit, as framed, was one for recovery of money under a mortgage transaction rather than proceeding solely on the ground that the mortgaged property was situated outside the territorial jurisdiction of this Court. Having regard to the nature of the claim and the legal position relied upon by the appellant, we are unable to sustain the order dismissing the application without proper consideration of the scope and applicability of Clause 12 of the Letters Patent.

11. In view of the foregoing discussion, we are of the considered view that the order passed by the learned Single Judge is not in accordance with law and is liable to be set aside. Accordingly, the order dated 11.04.2022 passed by the learned Single Judge in Application No.1415 of 2022 in the unnumbered Civil Suit of 2022 is set aside. The Original Side Appeal is allowed and leave to sue is granted to the appellant, as prayed for. There shall be no order as to costs. (N.S.K.,J.) (G.K.M.,J.) 12-10-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No VKR To The Sub Assistant Registrar (Original Side), High Court of Madras, Chennai.

N.SATHISH KUMAR, J. AND GK.MUTHUKUMAAR, J. VKR OSA No. 245 of 2022 12-10-2026