Madras HC Lets Property Buyer Call Seller’s Daughter In Dispute Over Bank’s Claim To Property Secured For Third-Party Loan

The plaintiff brought O.S. No. 1 of 2015 seeking declaration and injunctions concerning property he claimed to have purchased from defendants 1 to 11 under a registered sale deed dated 17 December 2002.

The suit arose after the bank sought to proceed against the property on the basis that defendant 1 had offered it as security for a third party’s loan.

Defendants 1 to 11 did not contest the suit.

After the evidence was closed, the plaintiff applied to reopen the evidence and examine defendants 1 to 5 to establish that defendant 1 was not the sole owner and could not bind the other legal heirs by the guarantee.

The trial court dismissed the application because the suit had reached final arguments and the application was filed at a late stage.

The plaintiff challenged that order under Article 227 of the Constitution.

The Court considered its supervisory jurisdiction under Article 227 of the Constitution of India and applied the principle that there is no bar to a plaintiff calling a defendant as a witness.

It further held that, in the circumstances of this case, an opportunity to examine a legal heir was warranted where the plaintiff’s title and the extent of defendant 1’s authority to subject the property to security were in issue.

The judgment cited no statutory provision beyond Article 227 and no precedent.

The Court noted that the plaintiff’s title and interest in the property were at stake, and that he sought to show the property was not defendant 1’s exclusive property.

Because defendants 1 to 11 had not contested the plaintiff’s claim, the Court considered that examining a legal heir could assist in establishing whether defendant 1 could validly offer the entire property as security.

The late stage of the proceedings was not sufficient, in the circumstances, to deny that opportunity.

The Court therefore directed examination of the third defendant, rather than allowing the plaintiff to examine all the proposed defendants.

It directed the trial court to issue a subpoena to the third defendant, who was to be examined as a witness for the plaintiff, and to dispose of the suit within three months after completing the evidence.

No costs were awarded.