IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF MAY, 2017 BEFORE THE HON’BLE MR. JUSTICE L. NARAYANA SWAMY REGULAR FIRST APPEAL NO.1229 OF 2006 BETWEEN:
SMT. ADILAKSHMI W/O SUBRAMANYA AGED ABOUT 55 YEARS, R/AT NO.85, 5TH CROSS, 3RD MAIN ROAD, OPP; B.D.A. KALYANANAGAR, BANGALORE.
... APPELLANT (BY SRI.M B CHANDRA CHOODA, ADV.) AND:
A VENU S/O CHANGALA NAIDU SINCE DEAD BY LRS 1 A) SMT.SAVITHRI W/O LATE A VENU AGED 60 YEARS 1 B) SHIVAKUMAR S/O LATE A VENU AGED 35 YEARS 1 C) VIJAY S/O LATE A VENU AGED 32 YEARS 1D) SHEELA D/O LATE A VENU AGED 38 YEARS 1E) KAVITHA D/O LATE A VENU AGED 33 YEARS ALL ARE R/AT 89-E, 3RD MAIN ROAD, RAMACHANDRAPURAM, BANGALORE-21) (CAUSE TITLE AMENDED AS PER COURT ORDER DATED 04.10.2010) (R1(A) TO (C) ARE SERVED, UNREPRESENTED) ... RESPONDENTS THIS RFA IS FILED U/S 96 OF CPC AGAINST THE JUDGMENT AND DECREE DT.03.04.2006, IN O.S. NO.1267/2000 ON THE FILE OF THE XXX ADDL. CITY CIVIL JUDGE, BANGALORE CITY, DECREEING THE SUIT FOR RECOVERY OF MONEY.
THIS APPEAL COMING ON FOR FINAL HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:
J U D G M E N T Respondent-plaintiff filed the suit for recovery. It is the case of the plaintiff that the defendant had approached plaintiff for monetary help towards construction of house taken-up by her and borrowed a sum of Rs.50,000/-. The defendant-appellant had agreed to repay the said amount together with interest at the rate of two per cent per month. It is the further case of the plaintiff that the defendant-appellant executed on demand promissory note Exhibit-P1 and also issued a post-dated cheque for Rs.50,000/-. The cheque was presented, it was returned with an endorsement “insufficient funds”. Notice-Exhibit-P5 has been issued to the defendant-appellant; it was not served. Thereafter, suit has been filed. It is the case of the respondent- plaintiff that though the plaintiff had admitted his signature on the cheque-Exhibit-P3, but however, denied the same found on Exhibits P1 and P2. The same is improper on the part of the defendant. The notice was issued on the defendant-appellant and the defendant-appellant had filed written statement denying the transaction. It has been stated in the written statement that Exhibits P1 and P2, on demand promissory note has not been signed and the signature on it is denied. One Rangaiah, who happens to be the friend of the defendant-appellant has misused the cheque Exhibit P3 and in collusion with him the plaintiff has preferred the suit. It is further stated about the non-execution of Exhibits P1 and P2 and also Exhibit P3 to the plaintiff. In order to establish the same, the plaintiff should have examined the witness Rangaiah. It is further stated that the consideration has not been established and Rangaiah has not been examined which is fatal to the case. However, the learned judge has committed an error and decreed the suit. The court below framed issues and the same have been answered in favour of the plaintiff and suit has been decreed directing the defendant to pay the agreed amount of Rs.50,000/- plus interest. Against the said decree, this appeal is preferred.
2. The plaintiff has been examined as PW1 and the defendant has been examined as DW1. The plaintiff marked document Exhibits-P1 to P8, viz. on demand promissory note and consideration receipt as Exhibits P1 and P2; cheque, bank endorsement as Exhibits P3 and P4; copy of legal notice and postal receipt made through certificate of posting and returned postal cover as Exhibits P5 to P8. Defendant has not produced or marked any document. It is the contention of the defendant-
appellant that primarily the legal notice issued as per Exhibit P5 has not been served on the defendant. Hence, there is no compliance of issuance of notice. Secondly, as it is admitted by PW1 in his chief and cross examination that Rangaiah was witness to Exhibits P1 and P2 and the signature on Exhibits P1 and P2 has been denied, plaintiff should have examined Rangaiah. Under the circumstance the plaintiff has disowned in establishing the fact of execution of Exhibits P1 and P2. The defendant-appellant has relied upon the judgment in the case of SAFTARSAB v. B. ALLAIAH @ ALLAPPA reported in ILR 2005 KAR. 2911 and submitted that execution of Exhibits P1 and P2 on demand promissory note has to be proved and unless it is established the liability shall not be shifted on the defendant- appellant to prove it.
3. Heard the learned counsel for the parties and gone through the records that are made available. It is the case of the plaintiff that the defendant has executed on-demand Promissory Note Exhibit P1; it also bears the signature of the defendant on it dated 26th February 1987 executed for Rs.50,000/-. Exhibit P2 is the acknowledgement for having accepted Rs.50,000/-. It is stated therein that for the purpose of putting up construction at site No.89 allotted by the Bangalore Development Authority, she has taken loan of Rs.50,000/- from the plaintiff and has paid the entire amount and the is acknowledged. It bears the signature of defendant. In the witness column, name of Rangaiah has been found. The submission of the appellant, both in written statement as well as the submission before this Court, is that the signature found in Exhibit P1 and P2 is not her signature. When such is the denial, it is the duty on the part of the plaintiff to establish about the signature. No such effort has been made by the plaintiff. Secondly, with regard the fact that Rangaiah who happen to the witness to Exhibit P2, it is specially alleged by the appellant that Rangaiah has misused the cheque which was in his possession and he colluded with the plaintiff to file the suit for recovery of money. Here, two denials have been made, (1) that absolutely the signature of the defendant on Exhibit P2 is not her signature; and (2) Rangaiah has misused the cheque. When these two denials are alleged against Rangaiah, it is the duty on the part of the plaintiff to examine Rangaiah but the same has not been done. On the other hand, in order to establish the fact that the signature on Exhibit P2 is of the defendant, necessary application should have been made or submission should have been made to the Court to compare the signature taken on Exhibits P1 and P2 with other signatures of the Defendant-appellant or the signatures made on Exhibit P2 should have been referred to an expert for comparison. Further, it is found out from the records that Exhibit P5 is the legal notice issued to the defendant, but though in the evidence of PW1 it has come out that it has been served, the defence of DW1 is that exhibit P5 has not been served on the defendant. These two fundamental defects have been found. Had execution of Exhibits P1 and P2 is admitted, then it would have been easy for the Court to decree the suit directing the defendant to pay the amount. But basically, when execution of Exhibits P1 and P2 having been denied, then the Court has committed an error in not directing the plaintiff to prove the signature of the defendant or else to examine Rangaiah who is the witness to Exhibit P2. Unless these two things have been complied with, question of decreeing the suit or directing the appellant to pay the said amount is improper. Exhibit P3 is the cheque which is available in the record on which the name of the plaintiff is found as Venu Naidu. Whereas, in the suit from the cause title, it is seen the plaintiff’s name is A Venu S/o Chengala Naidu. These discrepancies have not been discussed by the Court below. The ‘date’ column and the ‘Rupees’ column are kept blank. Since it was brought to the notice of of the defendant, he has shown to the court the certified copy obtained from the Court in which the date column and the amount column has been filed with a particular date and also the amount in figures as Rs.50,000/-. This has not been clarified as to how the documents in possession of the appellant- defendant in which the date and amount has been filed and it is not so in the Exhibit P3. The submission of the appellant- defendant that when the execution of Exhibits P1 and P2 itself is denied, the burden shifts on the plaintiff to prove. Unless execution of on demand promissory note and acknowledgement are proved, the burden would not shift on the defendant to prove or disprove. In this regard, it is useful to refer to the judgment of this Court in the case of SAFTARSAB (supra) wherein in the course of the judgment at paragraph 8, it is observed thus:
8. As per Section 118, certain presumptions can be attached to a negotiable instrument, until the contrary is proved. But before these presumptions can be drawn, the execution of the instrument must be proved. There is no presumption about the execution of a negotiable instrument and in case of denial by the opposite side, the party basing its claim on such instrument must fully prove its execution. Even Section 114 of the Evidence Act gives the Court discretion to presume consideration in case of bills of exchange. But, a decree cannot be given for the full amount on the strength of the presumption. Section 118 based on special rule of evidence is applicable to negotiable instruments and the presumption is one of law and thereunder a Court shall presume INTERALIA that the negotiable instrument or the indorsement was made or indorsed for consideration. In effect, it throws the burden of proof of failure of consideration on the maker of the note or the indorser. The burden is on the maker of the instrument to discharge the same. Further, as per Section 101 of the Evidence Act, whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist. Therefore, the burden initially rests on the plaintiff who has to prove that the promissory note was executed by the defendant. As soon as the execution of the promissory note is proved the rule of presumption laid down in Section 118 of the Negotiable Instruments Act helps him to shift the burden to the other side. As soon as the execution is proved, Section 118 of the Act imposes a duty on the Court to raise a presumption in his favour that the said instrument was made for consideration. This presumption shifts the burden of proof on the defendant and the defendant may have to adduce evidence to prove that the promissory note was not supported by consideration and if he has adduced acceptable evidence, the burden against shifts to the plaintiff and so on. The defendant may also rely upon circumstantial evidence and if he circumstances so relied upon are compelling, the burden again shifts to the plaintiff.
4. Though the Court has framed the issues and answered the same in favour of the plaintiff, but lost sight in examining the evidence of PW1 and DW1. Evidence of PW1 is that notice has been served on him but in her defence, DW1 has stated that no notice is served; and secondly Rangaiah was present when the defendant-appellant approached the plaintiff seeking financial assistance and also he relied on Exhibit P2 the signature of Rangaiah, but he has not taken steps to prove the execution of Exhibits P1 and P2. The evidence of PW1 is that he has not seen the execution of Exhibits P1 and P2. He deposes that “ D ªÉüÉAiÀÄ°è gÀAUÀ¥Àà ¥ÀæwªÁ¢AiÀÄ UÀAqÀ EzÀÝgÀÄ. D ªÉüÉAiÀÄ°è AiÀiÁªÀÅzÉà §gÀªÀtÂUÉAiÀÄ£ÀÄß ªÀiÁqÀ°®è. zÀÄqÀÄØ PÉÆlÖ £ÀAvÀgÀ §gÀªÀtÂUÉAiÀÄ£ÀÄß ªÀiÁrPÉÆlÖgÀÄ. ¸ÀzÀjà ºÀt PÉÆlÖ ¨Á§ÄÛ £Á£ÀÄ, ¥ÀæwªÁ¢¬ÄAzÀ D£ï rªÀiÁåAqï ¥ÀvÀæ ºÁUÀÆ ZÉPÀÌ£ÀÄß §gÉzÀĺÁQgÀÄvÁÛgÉ. ¥ÀæwªÁ¢AiÀĪÀgÀÄ D£ï rªÀiÁåAqï£ÀÄß ¥ÀæwªÁ¢AiÉÄà §gÉzÀÄPÉÆAqÀÄ vÀA¢zÀÝgÀÄ. £À£Àß ¸ÀªÀÄPÀëªÀÄ ¸ÀzÀj D£ï rªÀiÁåAqï E J¥ï ¦A1 §gÉAiÀÄ°®è. ¥ÀæwªÁ¢AiÀÄÄ §gÀĪÁUÀ¯ÉÃ, ¸ÀzÀjà EJPïì¦-1 C£ÀÄß §gÉzÀÄPÉÆAqÀÄ §A¢zÀÝgÀÄ. D ªÉüÉUÁUÀ¯Éà D£ïrªÀiÁåAqïUÉ ¸À» ºÁQzÀÝgÀÄ. £À£Àß JzÀÄj£À°è ¸ÀzÀjà gÀAUÀ¥Àà ¸À»AiÀÄ£ÀÄß D£ï rªÀiÁåAqïUÉ ºÁQzÀÝgÀÄ. ¸ÀzÀjà gÀAUÀ¥Àà C®èzÉà ¨ÉÃgÉ AiÀiÁgÀÆ ¸À» ºÁQgÀĪÀÅ¢®è. ¸ÀzÀjà EJPïì ¦-1 C£ÀÄß AiÀiÁgÀÄ §gÉzÀgÀÄ J£ÀÄߪÀÅzÀÄ £À£ÀUÉ w½¢®è. CzÀgÀ°è K£ÀÄ §gÉ¢zÉ J£ÀÄߪÀÅzÀÄ £À£ÀUÉ UÉÆwÛ®è. ”
5. This piece of evidence of PW1 shows that Rangaiah has not witnessed the execution of Exhibit P1. On the other hand, it has been deposed that it has been brought before him fully signed. Rangaiah who was present has also signed. It goes without saying that Rangaiah was witness to execution of Exhibits P1 and P2. If that is the case, Rangaiah must have witnessed execution of Exhibits P1 and P2. When such being the case, it is the duty on the part of the plaintiff to examine Rangaiah. Further, he has deposed that he is not aware as to on what date legal notice has been served to the defendant. He is also not aware that notice has been served on the defendant. Per contra, he has deposed that the defendant has signed Exhibit P2 in his presence only. The inconsistency in evidence is that on one hand he says that it was brought with full signature to the defendant; and on the other hand he says that the defendant has signed Exhibit P2 in his presence only. Defendant-appellant filed her examination-in-chief by way of affidavit and in that it is stated at paragraph 2 that she has not executed on demand promissory note on 26th February 1987 in favour of the plaintiff; has not borrowed Rs.50,000/- from the plaintiff and the signature found on the on demand promissory note dated 26th February 1987 is not her signature. It is further stated that her signature on promissory note dated 26th February 1987 is forged one since she has not borrowed a sum of Rs.50,000/- from the plaintiff. In paragraph 4 it has been stated that “I know the person by name Rangaiah, I had borrowed a sum of Rs.10,000/- from him by executing on demand promissory note and issued post-dated cheque to Rangaiah in the year 1991. I have repaid the loan; however Rangaiah did not return the on demand promissory note or the post-dated cheque issued to him. The relationship between me and Rangaiah is strained.” This evidence of PW1 and DW1 makes it clear that defendant has specifically denied the case of the plaintiff for having had executed Exhibits P1 and P2. When such is the specific denial, the burden is on the plaintiff in proving the execution of Exhibits P1 and P2. The judgment referred above makes it clear that unless and as long as execution of Exhibits P1 and P2 has been proved, it would not shift the burden on the defendant to prove the case. These are all the inbuilt lapses that are not examined by the court below. Under these circumstances, the issues framed and answered in favour of the plaintiff is on the basis of the evidence. The burden has not been carried out by the plaintiff.
6. In that view of the matter, I am of the considered opinion that the judgment and decree dated 03rd April 2006 passed in Original Suit No.1267 of 2000 by the XXX Additional City Civil Judge, Bangalore are liable to be set aside and are accordingly set aside. The appeal is allowed.
Sd/- JUDGE lnn