IN THE COURT OF THE XI ADDITIONAL DISTRICT & SESSIONS JUDGE,
AT L.B.NAGAR, RANGA REDDY DISTRICT
PRESENT: P. PRADEEP NAIK, XI Addl. District & Sessions Judge, R.R.District at L.B.Nagar
Friday, the 30th day of January, 2026
O.S.No.1225 of 2017
Between:
Smt. N. Lakshmi, W/o N. Venkatesulu, Aged about 62 years, Occ: Housewife, R/o H.No. 2-3-940, Road No.4, Arunodaya Nagar Colony, Nagole, Ranga Reddy District. ….Plaintiff
AND
Smt. Malisetty Surekha Rani, W/o Laxmi Narayana, Aged about 43 years, Occ: Housewife, R/o Flat No. 105, 5th floor, Bharani Classic Apartments, Hakeemabad colony, Saheb Nagar Kurd village, Hayathnagar Mandal, RR District. ….Defendant
This suit is coming before me for final hearing on 12.12.2025 in the presence of Sri D.Mani Kumar, counsel for plaintiff and Sri A.Rajashekhar Reddy, counsel for defendant and upon hearing the counsel for both sides, perusing the material on record and the matter having stood over for consideration till this day, this court passed the following :
JUDGMENT
1.This suit filed by plaintiff for recovery of money on simple mortgage amount of Rs.39,34,933/-.
2.In brief, plaint is to the effect, that the defendant, being the absolute owner and possessor of the suit schedule property, namely Flat
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No.105 in Bharani Classic Apartments along with car parking and undivided share of land situated at Hakeemabad Colony, Saheb Nagar
Khurd Village, Hayathnagar Mandal, Ranga Reddy District, had longstanding family friendship with the plaintiff for over 15 years and, on the basis of such close relationship, approached the plaintiff for financial assistance on several occasions. Initially, in April 2009, the defendant borrowed a sum of Rs.2,50,000/- for her family needs and, upon receipt of the said amount in cash on 27-04-2009, executed and registered a simple mortgage deed in respect of her land situated at Bheemavaram
Village, Krishna District. Thereafter, despite repeated requests by the plaintiff for repayment, the defendant sought further time and again approached the plaintiff in June 2014 seeking an additional loan of
Rs.10,00,000/-, which was paid by the plaintiff on 03-06-2014 in cash, followed by execution of a registered simple mortgage deed bearing
Doc.No.2151/2014 by mortgaging the present suit schedule property.
Subsequently, in September 2016, the defendant once again requested further financial accommodation of Rs.21,00,000/-, which was advanced by the plaintiff on 16-09-2016, and an extension of the earlier mortgage was executed under registered document No.5438/2016, thereby acknowledging a total mortgage liability of Rs.31,00,000/- in respect of the suit schedule property. Further the plaintiff’s case is that, under the terms of the registered mortgage deed dated 03-06-2014 and the extension deed dated 16-09-2016, the defendant expressly agreed to repay the entire loan amount of Rs.31,00,000/- with interest at the rate of 24% per annum within the stipulated period, failing which the plaintiff
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XI ADJ Court, 3 of 30 was entitled to recover the dues by enforcing the mortgage against the suit schedule property. However, after receipt of the final amount of
Rs.21,00,000/-, the defendant neither paid interest nor repaid the
principal, and deliberately prolonged the matter on one pretext or
another. When the plaintiff demanded repayment on 01-10-2017, the defendant not only avoided payment but also allegedly threatened the plaintiff and attempted to coerce her into cancelling the registered mortgage without discharging the debt. Despite issuance of a legal notice
dated 13-10-2017, which was duly received by the defendant, there was
no response or compliance. Consequently, the plaintiff claims that a total sum of Rs.39,34,933/-, comprising Rs.31,00,000/- towards principal and
Rs.8,34,933/- towards accrued interest at 24% per annum from 16-09- 2016 to 30-10-2017, has become due and payable, and seeks a decree directing the defendant to pay the said amount with future interest at the same rate till realization, or in default, to permit recovery by sale of the suit schedule property through due process of law.
3.Defendant filed written statement to the effect that, while replying to paragraphs 2 and 3 of the plaint, categorically denies the averments therein except those expressly admitted and puts the plaintiff to strict proof. The defendant’s consistent case is that it was not the plaintiff but the plaintiff’s husband, Mr. N. Venkatesulu, a retired bank employee allegedly engaged in money-lending activities, who had financial dealings with the defendant’s husband, Mr. M. Laxminarayana. Out of such acquaintance, a hand loan of Rs.2,50,000/- was advanced in 2009, for
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XI ADJ Court, 4 of 30 which a registered simple mortgage deed bearing Doc.No.1390/2009 was executed over agricultural land at Bheemavaram, Krishna District, along with obtaining blank signed promissory notes and cheques as additional security. The defendant asserts that interest on this loan was paid regularly and the loan itself was substantially cleared by 2014–15, yet the plaintiff and her husband deliberately avoided releasing the said mortgage deed on false pretexts, despite repeated requests, while maintaining cordial relations to delay matters. The defendant further submits that in 2014, owing to financial necessity, a second loan of Rs.10,00,000/- was taken, again from the plaintiff’s husband, on the condition that the defendant mortgage her residential flat bearing No.105, Bharani Classic
Apartments, Hayathnagar. Though the value of the flat was far in excess of the loan amount, the plaintiff’s husband insisted on a registered mortgage deed (Doc.No.2151/2014) and additionally collected blank signed cheques and promissory notes. While interest on this loan was also allegedly paid regularly in cash, the plaintiff’s husband refused to release the first mortgage and coerced the defendant into executing an “Extension of Simple Mortgage Deed” dated 16-09-2016 (Doc.No.5438/2016), which was prepared unilaterally, hurriedly signed without explanation, and in English, a language not understood by the defendant. According to the defendant, this document was misrepresented as a mere extension of the second loan, whereas it was later misused to inflate liability and claim exorbitant amounts. It is the specific grievance of the defendant that thereafter the plaintiff and her husband, acting in collusion with third parties, misused the blank signed
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XI ADJ Court, 5 of 30 cheques and promissory notes to institute multiple civil and criminal proceedings, including money recovery suits and Section 138 NI Act cases, for huge and fictitious amounts. The defendant alleges acts of intimidation, criminal trespass, abuse, and outraging of modesty on 29- 04-2018, leading to police complaints and ultimately registration of FIR
No.520/2018 for serious offences including cheating, forgery, criminal conspiracy, and criminal intimidation. Faced with continued threats of dispossession, the defendant was constrained to file O.S.No.749 of 2018 seeking cancellation of the mortgage deeds and injunction. While disputes were pending, elders and mediators intervened and an MOU dated 29-10- 2018 was executed, settling all disputes for a lump sum of
Rs.35,00,000/- in full and final settlement, pursuant to which the defendant paid Rs.14,00,000/- and withdrew proceedings in good faith.
The defendant finally contends that despite her readiness and willingness to pay the balance amounts as per the MOU, the plaintiff and her husband deliberately avoided execution of release deeds, refused to accept payments, made demands contrary to the settlement, and even obtained an ex-parte decree behind the defendant’s back, thereby clearly demonstrating fraudulent intent and breach of trust. The plaintiff’s conduct in withdrawing some cases while prosecuting others, and in avoiding receipt of settlement amounts, is pleaded as evidence of mala fides aimed at usurping valuable mortgaged properties for meagre sums.
The defendant asserts that except for an amount of Rs.21,00,000/-which she has always been ready to pay in terms of the MOU, no legally enforceable debt subsists, and that the present suit is a vexatious money
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XI ADJ Court, 6 of 30 recovery action unsupported by proof of actual payment. On these grounds, the defendant prays for dismissal of the suit in limine with exemplary costs, as the claim is contrary to facts, law, and the binding
MOU dated 29-10-2018.
4.Plaintiff herself got examined as PW1 and exhibited Exs.A1 to Ex.A8 and Exs.B1 to B6 are marked during cross examination of PW.1. On the other hand, defendant got herself examined as DW.1, besides examining her husband-Mr.Lakshmi Narayan as DW.2 and got exhibited Exs.B7 to
B9.
5.Heard both side counsels.
6.Basing on the rival pleadings, following issues have been settled for trial :-
1) Whether the registered Mortgage Deed No.2151/2014,
dated: 03.06.2014 is true, valid and binding on defendants?
2) Whether the registered extension of simple Mortgage Deed
No.5438/2016, Dt:16.09.2016 is true, valid and binding on
defendant?
3)Whether the Memorandum of Understanding Dt:29.10.2018
as claimed by the defendant was true, valid and binding on the
plaintiff?
4) Is the defendant liable to pay only Rs.21,00,000/- to plaintiff as pleaded in the Written Statement?
5) Whether the plaintiff is entitled for suit an amount of
Rs.39,34,933/- and for preliminary decree accordingly?
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6) To what relief??
7.ISSUE Nos.1 & 2 : Plaintiff as PW.1 deposes reiterating the plaint pleadings that, that the defendant, a close family friend of over 20 years, repeatedly approached her for financial assistance and, on each occasion, voluntarily offered her own properties as security. Accordingly, in 2009 the plaintiff advanced a hand loan of Rs.2,50,000/-, secured by a registered mortgage deed, which was later enforced through court and ultimately discharged by the defendant. Thereafter, in 2014 and again in 2016, the defendant borrowed further amounts of Rs.10,00,000/- and
Rs.21,00,000/- respectively, executing registered mortgage deed
No.2151/2014 and extension deed No.5438/2016 in respect of her flat at
Bharani Classic Apartments, thereby acknowledging a total liability of
Rs.31,00,000/-. Despite the contractual obligation to repay the amounts with agreed interest, the defendant failed to discharge the debt, avoided payment on various pretexts, and ignored a legal notice dated 13.10.2017. Though a Memorandum of Understanding dated 29.10.2018 was entered into during compromise talks and a sum of Rs.14,00,000/- was paid thereunder, the defendant neither complied with the full settlement nor cleared the outstanding dues, and instead acknowledged her liability to pay the balance amount together with interest, which, as on the date of filing the suit, stood at Rs.39,34,933/-. The plaintiff therefore asserts that the defendant remains legally bound by the mortgage deeds and is liable to pay the suit amount with future interest until realization.
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8.Substantiating and supporting this oral testimony PW.1 exhibited following documentary evidence, Ex.A1, being the registered Mortgage
Deed bearing Document No.2151/2014 dated 03.06.2014; Ex.A2, the registered Extension of Simple Mortgage Deed bearing Document
No.5438/2016 dated 16.09.2016; Ex.A3, the registered Sale Deed bearing
Document No.3361/2013 dated 10.05.2013 establishing title of the defendant over the suit schedule property; Ex.A4, the Encumbrance
Certificate covering the period from 01.05.1995 to 30.09.2016; Ex.A5, the office copy of the legal notice dated 13.10.2017 issued to the defendant demanding repayment;Ex.A6, the original postal receipt dated 13.10.2017 evidencing dispatch of the said notice; Ex.A7, the acknowledgment card showing service of notice; and Ex.A8, the returned registered postal cover with acknowledgment due.
9.During cross examination of PW.1 following documents got marked
Ex.B1 certified copy of plaint in OS.No.5/2018, Ex.B2 signature of PW.1 on deposition in OS.No.5/2018 dt.15.11.2022, Ex.B3 MOU dt.29.10.2018 signed by PW.1, Ex.B4 signature of husband of PW.1 on the receipt for payment of Rs.5,00,000/-, Ex.B5 receipt dt.03.12.2018 for Rs.4,00,000/- and Ex.B6 receipt dt.31.12.2018 for Rs.5,00,000/-.
10.In the cross-examination, PW-1 admitted that she studied up to 10th class, can read and write English but cannot speak it, and that she signed the plaint and pleadings after they were explained to her by her advocate. She stated that she is a housewife with no independent
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XI ADJ Court, 9 of 30 avocation or business and that her husband, Mr. Neligari Venkatesulu, a retired SBI Manager (retired in 2010), was present in the court hall. She acknowledged that she is not an income-tax assessee, owns no ancestral property, and that her family constructed a residential house with the help of loans. She further admitted that her husband receives a pension of about Rs.30,000/- per month and that she does not have exact knowledge of his past salary, retirement benefits, or the education loans taken for her children. She deposed that her children are settled in the
USA and that they used to give her money in cash whenever they visited
India, though she neither deposited such amounts in any bank nor invested them anywhere. PW-1 admitted that she allegedly paid
Rs.2,50,000/- in 2009 and Rs.10,00,000/- in 2014 to the defendant in cash, but candidly conceded that she has not filed any documentary proof to show availability or withdrawal of such cash amounts at the relevant time. She further admitted that she had not pleaded either in the plaint or in her chief examination affidavit that, the said amounts were given to her by her parents or children, and that such details were not disclosed earlier. While she initially stated that her parents used to give her money from agricultural income, she later stated that the amount of
Rs.21,00,000/- allegedly paid in September 2016 was given by her children for purchasing property, but was instead lent to the defendant.
She admitted inconsistencies between her deposition in the present suit and her earlier evidence in O.S. No.5 of 2018 regarding the source of funds, stating at one stage that her parents gave the money and at
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XI ADJ Court, 10 of 30 another stage that her children gave it, and ultimately pleaded lack of memory when confronted with her prior statements.
11.With regard to the mortgage transactions, PW-1 stated that the 2014 mortgage deed (Ex.A1) was prepared at the L.B. Nagar registration office, but admitted that she does not clearly remember who prepared it or its contents except that it pertained to lending of Rs.10,00,000/-. She admitted that she did not thoroughly read the documents and that she cannot recollect several details relating to execution and registration. She further admitted that Ex.A2 (Extension of Mortgage Deed) was prepared at the instance of the defendant’s husband, that she merely saw the amount mentioned and signed it without reading the contents in detail, and that she paid Rs.21,00,000/- in cash at the registration office without any documentary proof. She denied suggestions of collusion but admitted that she does not remember several crucial aspects, including attesting witnesses and circumstances of execution, and that her recollection of events was limited due to lapse of time.
12.Regarding the Memorandum of Understanding (MOU) dated 29.10.2018, PW-1 admitted that she signed the MOU after going through its contents and understanding the same, that it was executed in the presence of her counsel, and that she and her husband received
Rs.14,00,000/- under the MOU, supported by receipts dated 29.10.2018, 03.12.2018, and 31.12.2018. She further admitted that no notice was issued immediately after 31.12.2018 demanding the balance amount, and
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XI ADJ Court, 11 of 30 that there was an oral understanding on 31.12.2018 to pay the balance within three months with 12% interest. However, she categorically stated that she is not willing to receive the balance amount even now, despite the defendant’s readiness, on the ground that she has already obtained a decree in her favour. She denied allegations of money-lending at exorbitant interest but admitted that compromise talks took place, cases were withdrawn pursuant to the settlement, and that the present dispute continues despite the admitted execution of the MOU and receipt of substantial amounts thereunder.
13.DW.1 filed her chief examination affidavit stating that, all financial dealings arose not directly with the plaintiff but through the plaintiff’s husband, a retired bank employee engaged in money-lending, who advanced loans to the defendant’s husband on the strength of close acquaintance and repeatedly insisted on excessive securities, including registered mortgages as well as blank cheques and promissory notes.
While the first loan of Rs.2,50,000/- was duly repaid with interest and ought to have resulted in release of the agricultural land mortgage, the plaintiff’s husband deliberately avoided doing so and, during the second loan of Rs.10,00,000/- in 2014, compelled the defendant to mortgage her residential flat and later to execute an extension deed in 2016 under misrepresentation and without proper understanding of its contents.
Despite regular payment of interest, the plaintiff’s husband allegedly misused the blank instruments to file false cases, demanded exorbitant sums, and even attempted forcible dispossession, leading to police
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XI ADJ Court, 12 of 30 complaints and litigation. Ultimately, with the intervention of elders, an
MOU dated 29.10.2018 was executed settling all disputes for
Rs.35,00,000/-, pursuant to which Rs.14,00,000/- was paid, but the plaintiff and her husband failed to honour the settlement, avoided receipt of the balance amount, and surreptitiously obtained an ex parte decree, thereby demonstrating a clear intent to defraud and unlawfully usurp the defendant’s properties; hence, as the defendant has always been ready and willing to comply with the MOU, the present suit is untenable, baseless, and liable to be dismissed. And got exhibited Ex.B7 original legal notice dt.23.02.2020 sent by petitioner to respondent, Ex.B8 original acknowledgments along with postal receipts and Ex.B9 original reply legal notice sent by respondent to petitioner.
14.In cross-examination, DW-1 admitted that she studied up to 10th class, she is a housewife, and that her three children are settled in the
USA. She admitted ownership of agricultural land at Bhimavaram and
Flat No.105 at Bharani Classic Apartments prior to 2017, though she conceded that she did not disclose the source of funds for purchase of those properties in her pleadings. She further admitted execution of the registered mortgage deed dated 27-04-2009 for Rs.2,50,000/-, the filing of
O.S. No.5 of 2018 by the plaintiff for recovery, the passing of decree
therein on 30-12-2022, and that she paid the decretal amount and obtained release of the mortgage to avoid sale of the mortgaged property.
She also admitted execution of the registered mortgage deed dated 03-06- 2014 for Rs.10,00,000/- in favour of the plaintiff, handing over original
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XI ADJ Court, 13 of 30 title deeds, and execution of the extension of simple mortgage deed (Ex.A2), which bears her signature and her husband’s attestation. DW-1 further admitted that as per Ex.A1 and Ex.A2 she agreed to repay a total sum of Rs.31,00,000/- together with interest at 24% per annum, and candidly admitted that she has not paid any interest under Ex.A1 and
Ex.A2 till date. She also admitted that, except for receipts evidencing payment of Rs.14,00,000/- under the Memorandum of Understanding, she has no documentary proof to show payment of any amounts towards the suit loan, and that as on the date of filing of the suit she had no proof of repayment of the suit claim. She further admitted initiation of compromise talks and execution of the Memorandum of Understanding (Ex.B3) in English, signing the same after understanding its contents, and agreeing to settle all disputes for Rs.35,00,000/- by 31-12-2018.
15.At the same time, DW-1 denied knowledge of several aspects and sought to distance herself from liability by claiming lack of personal knowledge about the plaintiff, the plaintiff’s husband, their occupations, and the financial transactions between her husband and the plaintiff’s husband. She denied having personal knowledge of loans taken by her husband and denied liability to pay the suit amount with interest as claimed by the plaintiff, contending that the terms of the MOU were not violated by her. She also denied the suggestion that she deliberately avoided repayment or that she is liable for the suit claim, though she admitted uncertainty about the total outstanding amount and ignorance
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XI ADJ Court, 14 of 30 regarding certain clauses of the MOU, including consequences of non- payment by 31-12-2018.
16.DW.2 filed his chief examination affidavit stating that, he is defendant’s husband submits that he alone was managing the financial affairs of the family and that all loan transactions were exclusively between him and the plaintiff’s husband, Mr. N. Venkatesulu, a retired bank employee who was engaged in money-lending, while his wife, being a homemaker, had no acquaintance with the plaintiff or her husband except at the time of registration of documents. In 2009–10, to meet his children’s educational expenses, he borrowed Rs.2,50,000/- from the plaintiff’s husband on the condition of furnishing collateral security, pursuant to which his wife mortgaged her agricultural land in Krishna
District under a registered mortgage deed, in addition to which blank signed cheques and promissory notes were obtained; though interest was paid regularly and the principal was cleared by 2015–16, the mortgage was not released on one pretext or another. In 2014, due to further financial need, a second loan of Rs.10,00,000/- was advanced on the condition of mortgaging their residential flat at Ranga Reddy District, despite its value being far higher than the loan amount, and again blank cheques and promissory notes were taken; when release of the first mortgage was sought, the plaintiff’s husband insisted on extension of the second mortgage, which was executed in haste, in English, and under the belief that it was only an extension for Rs.10,00,000/-, whereas no
additional amount was in fact paid at that time, a fact admitted by the
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XI ADJ Court, 15 of 30 plaintiff in her cross-examination. Thereafter, despite regular payment of interest, the plaintiff’s husband allegedly misused the blank instruments to file false cases, demanded an exorbitant sum of Rs.74,00,000/-, and even attempted forcible eviction in 2018, compelling police complaints.
Ultimately, with the intervention of elders and advocates, a Memorandum of Understanding dated 29.10.2018 (Ex.B3) was executed settling all disputes for Rs.35,00,000/-, pursuant to which Rs.14,00,000/- was paid under receipts Exs.B4 to B6, and the defendants repeatedly offered to pay the balance from 2019 onwards, including by depositing amounts with the plaintiff’s counsel and seeking simultaneous release of both mortgages; however, the plaintiff and her husband avoided receiving the money, refused to release the mortgages, demanded amounts contrary to the MOU, and clandestinely obtained an ex parte decree, thereby revealing a deliberate intent to defraud and usurp the defendants’ properties. Hence, as the defendants have at all times been ready and willing to perform their obligations under the MOU, the suit is false, baseless, and liable to be dismissed with exemplary costs.
17.In the cross-examination, DW-2 admitted that he is an uneducated person, that his chief-examination affidavit dated 26-08-2025 was filed in
English after going through its contents, and that though he described his occupation as business, he had no stable employment prior to that date.
He admitted that he is conducting film distribution business in the name and style of Surekha Film Distributors, an unregistered partnership, with an annual income of about Rs.50,000/- to Rs.60,000/-, and that he is
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XI ADJ Court, 16 of 30 not an income-tax assessee. He further admitted that he does not own any immovable property in his own name and that his wife (DW-1) is a housewife whose only source of income is agricultural income. He also admitted that he worked temporarily as an attender in SBI during 1995– 1997 and that he has been acquainted with the plaintiff’s husband, Mr.
N. Venkatesulu, since 1995 due to his bank employment.DW-2 admitted that the loan of Rs.2,50,000/- in 2009 was raised by him by convincing his wife to mortgage her agricultural land, that a recovery suit in O.S.
No.5 of 2018 was filed by the plaintiff at Nandigama, that the said suit was decreed, and that his wife paid the decretal amount and got the mortgage released. He further admitted that in 2014 his wife obtained a further loan of Rs.10,00,000/- from the plaintiff and executed a registered simple mortgage deed dated 03-06-2014 (Ex.A1) in respect of the house property at Chinthalkunta, and that as per Ex.A1 interest at 24% per annum was agreed. He also admitted that no receipts were filed by him evidencing repayment of the amounts under Ex.A1 and that no legal notice was issued seeking release of the mortgage, though he claimed that oral requests were made, which were not pleaded in his chief examination affidavit.
18.At the same time, DW-2 denied that any additional amount of
Rs.21,00,000/- was paid at the time of execution of Ex.A2 and denied that Ex.A2 acknowledged receipt of such amount or creation of liability for
Rs.31,00,000/- with interest at 24% per annum, though he admitted that he was an attesting witness to Ex.A2. He denied allegations of threatening
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XI ADJ Court, 17 of 30 the plaintiff or forcibly obtaining signatures on the Memorandum of
Understanding (Ex.B3) and denied suggestions that no payments were made pursuant to the MOU. He further denied liability to pay the suit amount under Exs.A1 and A2 and refuted the suggestion that he and
DW-1 were never ready to discharge the debt and are falsely deposing only to evade repayment, maintaining that the plaintiff and her husband failed to cooperate and accept the amounts offered by them.
19.Since both issues arise out of the same transaction and series of transactions, relate to the execution, validity, enforceability, and binding nature of the registered mortgage documents, and are supported by common oral and documentary evidence, they are conveniently taken up together and answered by a common finding.
20.At the outset, it is to be noted that Ex.A1, the registered Mortgage
Deed dated 03.06.2014, and Ex.A2, the registered Extension of Simple
Mortgage Deed dated 16.09.2016, are registered documents executed
before the competent Sub-Registrar. Under the settled principles of law, a
registered document carries a strong presumption of genuineness, legality, and due execution, unless the party disputing the same discharges a heavy burden of proving fraud, coercion, misrepresentation, or want of consideration. Mere bald allegations or explanations unsupported by cogent evidence are not sufficient to invalidate a registered instrument.
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21.In the present case, the execution of Ex.A1 is unequivocally admitted by both DW-1 and DW-2. DW-1 admitted in her cross- examination that she executed the registered mortgage deed dated 03.06.2014 for Rs.10,00,000/- in favour of the plaintiff, mortgaging her residential flat at Bharani Classic Apartments, and that she handed over the original title deeds to the plaintiff. DW-2 also admitted that the said loan was raised by him by convincing his wife, as the property stood in her name, and that Ex.A1 stipulates repayment with interest @24% per annum. These admissions goes to the root of the matter and conclusively establish that Ex.A1 was voluntarily executed, supported by consideration, and intended to create a valid mortgage.
22.The defence contention that interest amounts were allegedly paid in cash without receipts, or that the plaintiff failed to issue receipts, does not assist the defendant in any manner. Significantly, the written statement is silent on specific dates, amounts, and particulars of such alleged repayments, and no documentary proof whatsoever has been produced. Even during evidence, DW-1 and DW-2 admitted that they have
no receipts, no bank records, and no contemporaneous documents
evidencing repayment of either principal or interest under Ex.A1. It is also admitted that no legal notice was issued by the defendant seeking release of the mortgage deed on the ground of repayment. In such circumstances, the plea of repayment remains a bare assertion and cannot displace the binding nature of a registered mortgage deed.
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23.Coming to Ex.A2, the registered Extension of Simple Mortgage Deed
dated 16.09.2016, the execution thereof is also clearly admitted. DW-1
admitted her signature on Ex.A2 and further admitted that her husband signed as an attesting witness. DW-2 categorically admitted that he attested Ex.A2. Ex.A2 specifically records acknowledgment of a total mortgage liability of Rs.31,00,000/- and stipulates repayment with interest @24% per annum. Once execution and attestation are admitted, the onus squarely lies on the defendants to establish that the document is vitiated by fraud, coercion, or absence of consideration.
24.The defendants’ plea that no additional amount was paid at the time of execution of Ex.A2, or that the document was signed without understanding its contents, cannot be accepted. Both DW-1 and DW-2 admitted that they did not raise any objection before the Sub-Registrar, did not issue any notice immediately after execution disputing the contents, and did not initiate any proceedings for cancellation of Ex.A2 until much later. The plea of “not understanding the language” is also untenable, particularly when DW-1 admitted that she signed the
Memorandum of Understanding (Ex.B3), which is also in English, after understanding its contents. Moreover, ignorance of contents or
negligence in reading a document cannot invalidate a registered
instrument, especially when the execution is admitted.
25.The defendants placed heavy reliance on the Memorandum of
Understanding dated 29.10.2018 (Ex.B3). However, Ex.B3 does not
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XI ADJ Court, 20 of 30 supersede, nullify, or extinguish Exs.A1 and A2. On the contrary, Ex.B3 acknowledges the existence of multiple liabilities and merely provides a mechanism for settlement within a stipulated time. Clause 3 of Ex.B3 itself makes it clear that in the event of default, the plaintiff is entitled to recover the amounts as per law. It is an admitted fact that the defendants failed to comply with the terms of Ex.B3 within the agreed time as mentioned in EX-B3/MOU. However, in the cross examination of
Pw-01, she admitted that there was an admitted grace period of three months for payment of the amount as mentioned in EX-B3/MOU, but however for one or the other reason the said amount was not paid by defendant and /or not received by the plaintiff within stipulated time, even though Defendant alleged to had been ready to pay the same as per
EX-B7 legal Notice. Therefore, the plaintiff is entitled to receive the same along with interest.
26.The inconsistencies elicited in the cross-examination of PW-1 regarding the source of funds do not affect the legality or enforceability of
Exs.A1 and A2. Once execution, consideration, and acknowledgment of liability are established through registered documents and admissions of the defendants, the source from which the plaintiff arranged the money becomes irrelevant. Importantly, DW-1 admitted in her cross examination that she has not paid any interest under Exs.A1 and A2 till date and that she has no proof of repayment of the suit loan as on the date of filing of the suit.
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27.In view of the clear admissions of execution, attestation, acknowledgment of liability, absence of proof of repayment of entire amount, and the legal presumption attached to registered mortgage deeds, this Court has no hesitation in holding that the registered
Mortgage Deed No.2151/2014 dated 03.06.2014 (Ex.A1) and the registered Extension of Simple Mortgage Deed No.5438/2016 dated 16.09.2016 (Ex.A2) are true, valid, enforceable, and binding on the defendant. Accordingly Issue No.01 and 02 are answered in favor of plaintiff.
28. ISSUE Nos.3 & 4 : At the outset, it is to be noted that the execution of the Memorandum of Understanding dated 29.10.2018 (Ex.B3) is not in dispute. PW-1 categorically admitted in her cross-examination that she signed Ex.B3 after going through its contents and understanding the same, that it was executed in the presence of advocates, and that she and her husband received a sum of Rs.14,00,000/- under receipts Exs.B4 to
B6. DW-1 also admitted execution of Ex.B3, her signatures thereon, and the fact that the document was intended to settle all disputes for a sum of
Rs.35,00,000/- payable on or before 31-12-2018. Thus, Ex.B3 is a genuine and valid document so far as its execution is concerned.
29.However, the crucial question is whether Ex.B3 is binding on the plaintiff so as to restrict her claim only to Rs.21,00,000/- along with
Interest @ 12 % per annum and to extinguish the mortgage liability under
Exs.A1 and A2. A careful reading of Ex.B3, particularly Clause No.3,
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XI ADJ Court, 22 of 30 makes it abundantly clear that the settlement was conditional in nature.
The defendants undertook to pay the agreed amount within the stipulated time, failing which the plaintiff was expressly entitled to recover the amounts “as per procedure”. The MOU, therefore, did not operate as an absolute discharge or novation of the earlier mortgage liability but only provided a concessional mode of settlement subject to strict compliance by the defendants as per EX-B3.
30.The evidence on record clearly establishes that the defendants failed to comply with the terms of Ex.B3 within the agreed time.
Admittedly, only Rs.14,00,000/- was paid on different dates under the
MOU till 31-12-2018 and remaining Rs. 21,00,000/- was not paid. No documentary proof has been placed by the defendants to show that the entire settlement amount was paid within time, nor is there any endorsement on Ex.B3 evidencing full satisfaction. Moreover, no document is filed by the defendant to prove that she was ready with the balance amount of Rs. 21,00,000/- as on 31-12-2018 or on any subsequent day till three months thereafter. Even DW-1 admitted in cross-examination that she was not aware of the consequences of non- payment by 31-12-2018 and that she has no proof to show payment of the balance amount. Mere assertions that the defendants were “ready and willing” to pay the balance amount, without actual payment or tender in accordance with law, cannot amount to compliance with the conditions in
MOU.
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31.The contention of the defendants that the plaintiff ought to have issued a notice terminating the MOU is without merits. Ex.B3 itself provides the consequence of default, namely revival of the plaintiff’s right to recover the amounts as per law. When the defendants admittedly failed to perform their part of the contract within the stipulated time, no separate termination notice was required, and the plaintiff was legally entitled to fall back upon the original cause of action based on Exs.A1 and A2.
32.The plea of an alleged oral grace period of three months from 31-12- 2018 also does not advance the defendants’ case. Even assuming such an
Oral understanding existed, the defendants have failed to prove that the balance amount was actually paid within such extended period.
Significantly, PW-1, while admitting such oral discussion, categorically stated that she is not willing to accept the balance amount now as the defendants had already defaulted and she had enforced her legal remedies. An oral understanding, even if assumed, cannot override the express terms of a written and registered mortgage, nor can it defeat the plaintiff’s accrued legal rights, after default. Accordinglyh the MOU under EX-B3 is not binding on the plaintiff and therefore this Issue No.03 is answered in favor of Plaintiff.
33.Coming to Issue No.4, the plea of the defendant is that she is liable to pay only Rs.21,00,000/- along with Interest @ 12 % per annum as
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XI ADJ Court, 24 of 30 per MOU under EX-B3. This contention is based on a selective reading of
Ex.B3 and ignores the admitted execution of Exs.A1 and A2, which acknowledge a total mortgage liability of Rs.31,00,000/- with interest @24% per annum. DW-1 herself admitted in cross-examination that as per Exs.A1 and A2 she agreed to repay Rs.31,00,000/- with interest and further admitted that no interest whatsoever was paid under the said documents. She also admitted that except for Rs.14,00,000/- paid under the MOU, she has no proof of repayment of the entire suit loan amount.
34.Once the defendants failed to honour the MOU within the stipulated time, the concessional settlement stood frustrated, and the plaintiff’s original rights under the registered mortgage deeds revived in full. The liability of the defendant, therefore, cannot be artificially restricted only to
Rs.21,00,000/- along with interest @ 12 % per Annum. On the contrary, the evidence overwhelmingly establishes that the defendant is liable to pay the entire mortgage debt as acknowledged under Exs.A1 and A2, subject only to adjustment of amounts admittedly received.
35.In view of the above discussion, this Court holds that though the
Memorandum of Understanding dated 29.10.2018 (Ex.B3) was validly executed, it is not binding on the plaintiff due to non-compliance by the defendant within stipulated time, and it does not extinguish or reduce the mortgage liability. Consequently, the plea that the defendant is liable to pay only Rs.21,00,000/- with interest @ 12 % per annum is rejected.
Accordingly this issue is answered against the Defendant and in favor of plaintiff.
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36. ISSUE No. 5 : From the evidence on record, it clearly emerges that under the Memorandum of Understanding dated 29.10.2018, the total amount agreed to be paid by the defendant towards full and final settlement was Rs.35,00,000/- only, payable on or before 31.12.2018, but the defendant failed to comply with the conditions mentioned in MOU under EX-B3. However, in her cross-examination PW.1 has unequivocally admitted that after execution of the said MOU agreement she received a sum of Rs.14,00,000/- in the presence of Sri Srinivas Reddy, Advocate, which admission stands corroborated by receipts marked as Exs.B4 to
B6; she has further admitted that apart from the said Rs.14,00,000/-, she also received an additional sum of Rs.6,00,000/- in connection with the Nandigama case, thereby leaving no ambiguity with regard to the payments received by her. After deducting the admitted payment of
Rs.14,00,000/- from the MOU amount of Rs.35,00,000/-, a balance of
Rs.21,00,000/- admittedly remained payable by the defendant as on 31.12.2018. Since this balance amount was not paid within the stipulated time as per MOU, as such the interest at the agreed rate of 12% per annum as per MOU is not applicable and not tenable, therefore from 01- 01-2019 onwards the interest again has to be caliculated as per registered mortgage deeds under EX-A1 and A2 at the rate of 24 % per annum for the delayed period from January 2019 onwards on balance amount of RS.
21,00,000/- (Twenty One Lakhs).
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37. Since this balance amount was not paid within the stipulated time, interest at the agreed rate of 12% per annum for the delayed period from January 2019 to March 2023 works out to Rs.10,71,000/-, thereby making the total amount payable as of March 2023 Rs.31,71,000/-. From this amount, the sum of Rs.6,55,000/- admittedly paid by the defendant in O.S. No.5 of 2018 on the file of the Nandigama Court is liable to be deducted, which leaves a balance of Rs.25,16,000/- as of March 2023.
Thereafter, on the said balance, interest at 12% per annum from April 2023 to December 2025 comes to Rs.8,30,280/-, and thus the final balance amount payable by the defendant works out to Rs.33,46,280/-.
These figures are not based on any conjecture but flow directly from the admissions made by PW.1 in her cross-examination regarding receipt of amounts under the MoU and the Nandigama proceedings. In view of these clear and categorical admissions, coupled with the arithmetical calculation of interest on the undisputed balance, this Court holds that the plaintiff is entitled to recover a sum of Rs.33,46,280/- from the defendant, and accordingly Issue No.5 is answered in favour of the plaintiff to the said extent.
38.Since the defendant failed to comply with the conditions stipulated in the Memorandum of Understanding under Ex.B3, she is not entitled to claim interest at 12% per annum. On the contrary, in view of the registered mortgage deeds under Exs.A1 and A2, the plaintiff is entitled to recover the balance amount along with interest at 24% per annum. As a part-admitted amount of
Rs.6,00,000/- was already paid in O.S. No.5 of 2018 on the file of
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XI ADJ Court, 27 of 30 the Nandigama Court, the said amount shall be deducted as on the date of such payment, and interest shall be calculated on the remaining balance amount in accordance with Exs.A1 and A2 up to the date of pronouncement of the judgment, and thereafter at 6% per annum till the date of realization. Accordingly this Issue No.05 is answered in favor of plaintiff. For better appreciation, the same is illustrated in the following table :
Sl.No. PARTICULAR AMOUNT
1Principal balance amount as on 31-12-2018Rs.21,00,000/- 2Interest @ 24% p.a. from 31-12-2018 to Rs.20,16,000/- 30.12.2022 (48 months) on Rs.21,00,000/- 3Total amount as on 30.12.2022 (Principal + Rs.41,16,000/- Interest) 4Less: Part-payment made in O.S. No.5 of Rs.6,00,000/- 2018 of Nandigama case as on 30-12-2022 5Balance amount as on 30.12.2022Rs.35,16,000/- 6Interest @ 24% p.a. on Rs.35,16,000/- from Rs.26,01,840/- 30.12.2022 to 30-01-2026 ( 37 months) 7Total amount payable as on 30-01-2026 Rs.61,17,840/ -
39. ISSUE No.6 : -
In the result:- Suit is partly decreed with costs, in the following terms :
i)As per the above table, Plaintiff is held entitled to recover a sum of Rs.61,17,840/- (Rupees Sixty One Lakhs Seventeen Thousand
Eight Hundred and Forty only ) along with Future interest if any @ 6% per annum on the decreetal amount from the date of
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Judgment till its realization from the defendant, being the amount determined as due and payable under Issue No.5.
ii)The defendant is further directed to deposit the said decreetal amount of Rs.61,17,840/- (Rupees Sixty One Lakhs Seventeen
Thousand Eight Hundred and Forty only ) Before this court within a period of one (01) month after expiry of appeal time, if no appeal is preferred on this judgment.
iii)Up on Such depositing of Decreetal amount of RS.61,17,840/- (Rupees Sixty One Lakhs Seventeen Thousand Eight Hundred and Forty only) by the Defendant, the plaintiff is directed to execute necessary registered release of Mortgage deed as prayed by the Defendant, on payment of stamp Duty and registration charges, payable by the defendant to concerned authorities.
iv)Only After such registration of the necessary registered release document in favor of Defendant, the Plaintiff is at liberty to receive the deposited decreetal amount from this court.
v)In the event of default in payment of the decretal amount within the stipulated period by the defendant, the plaintiff shall be at liberty to initiate appropriate proceedings for recovery of the decretal amount in accordance with law.
vi)It is further directed that The defendant shall also bear the costs of the suit.
vii)Decree be drawn accordingly.
Typed to my dictation by the Stenographer, corrected and pronounced by me in the open court on this the 30 th day of January, 2026.
XI ADDITIONAL DISTRICT JUDGE
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RANGA REDDY DISTRICT
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
ON BEHALF OF PLAINTIFFS: ON BEHALF OF DEFENDANTS:
PW.1 : N. Lakshmi DW.1 : Malisetty Surekha Rani DW.2 : Laxmi Narayana
FOR PLAINTIFF :
Ex.A1 is the registered Mortgage Deed bearing Document No.2151/2014
dated 03.06.2014.
Ex.A2 is the registered Extension of Simple Mortgage Deed bearing Document No.5438/2016 dated 16.09.2016.
Ex.A3 is the registered Sale Deed bearing Document No.3361/2013 dated 10.05.2013 establishing the title of the defendant over the suit schedule property.
Ex.A4 is the Encumbrance Certificate covering the period from 01.05.1995 to 30.09.2016.
Ex.A5 is the office copy of the legal notice dated 13.10.2017 issued to the defendant demanding repayment.
Ex.A6 is the original postal receipt dated 13.10.2017 evidencing dispatch of the said notice.
Ex.A7 is the acknowledgment card showing service of notice.
Ex.A8 is the returned registered postal cover with acknowledgment due
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FOR DEFENDANT :
Ex.B1 is the certified copy of the plaint in O.S. No.5 of 2018.
Ex.B2 is the signature of PW.1 on her deposition in O.S. No.5 of 2018
dated 15.11.2022.
Ex.B3 is the Memorandum of Understanding dated 29.10.2018 signed by PW.1.
Ex.B4 is the signature of the husband of PW.1 on the receipt evidencing payment of Rs.5,00,000/-.
Ex.B5 is the receipt dated 03.12.2018 for a sum of Rs.4,00,000/-.
Ex.B6 is the receipt dated 31.12.2018 for a sum of Rs.5,00,000/-.
Ex.B7 is the original legal notice dated 23.02.2020 sent by the petitioner to the respondent.
Ex.B8 consists of the original acknowledgments along with postal receipts.
Ex.B9 is the original reply legal notice sent by the respondent to the petitioner
XI ADDITIONAL DISTRICT JUDGE
RANGA REDDY DISTRICT