IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 8TH DAY OF JULY, 2019 BEFORE THE HON’BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY R.F.A.No.1354 OF 2011 BETWEEN:
1. Smt. Amudha W/o. Late S.Mahendrapandian, Aged about 45 years, Presently working at Salem, in the office of Divisional Finance Manager, Southern Railways.
2. M.Shivani Aged about 15 years, D/o. Late S.Mahendrapandian.
(Since Minor represented through her Mother & Guardian the 1st Appellant) Both residing at D.No.8, 11th St. CFTRI Quarters, Mysore and the 1st Appellant working at Presently working at Salem, in the office of Divisional Finance Manager, Southern Railway.
(By Sri. V. Vinod Reddy, Advocate) …Appellants AND:
V.Madhu, S.O.Vishkantiah, Aged about 40 years, Residing at D.No.2605, Ventikoppal, V.V.Mohalla, Mysore.
(By Sri. S.K.Manjunath, Advocate) **** …Respondent This Regular First Appeal is filed under Section 96 of the Code of Civil Procedure, 1908, against the judgment and decree dated:30-03-2011 passed in O.S.No.555/2007 on the file of the I Additional Judge, Court of Small Causes and Additional Senior Civil Judge, Mysore, decreeing the suit for recovery of money.
This Regular First Appeal coming on for Hearing, this day, the Court delivered the following:
J U D G M E N T It is a defendants’ appeal challenging the judgment and decree dated 30-03-2011 passed by the I Additional Judge, Court of Small Causes and Additional Senior Civil Judge at Mysore (hereinafter for brevity referred to as “Trial Court”) in O.S.No.555/2007, wherein the suit of the plaintiff was decreed against the defendants for a sum of `8,27,000/- with interest at `12% per annum from the date of the suit till realisation on the principal amount of `7,00,000/-. The present respondent was a plaintiff in the Trial Court.
2. The summary of the case of the plaintiff in the Court below was that, the defendant No.1 is the mother of defendant No.2 who is a minor girl. Late Sri.S. Mahendrapandian, the husband of the first defendant and father of the second defendant had availed a loan of a sum of `5,00,000/- from the plaintiff to meet his family necessities on 19-07-2005 and agreeing to repay the same with interest at the rate of `18% per annum, had executed an On-demand Promissory Note on the same day for a sum of `5,00,000/- in favour of the plaintiff. He had also issued a post-dated cheque dated 19-07-2006 bearing No.005265 drawn on the State Bank of Mysore, CFTRI Branch, Mysore for a sum of `5,00,000/- in favour of the plaintiff towards repayment of the said amount. The said Late Sri.S. Mahendrapandian issued one more cheque for a sum of `50,000/- bearing No.005327 drawn on the same Bank dated 19-07-2006. Once again, in December 2005, the defendant No.1 and Late Sri.S. Mahendrapandian approached the plaintiff and requested to lend another sum of `2,00,000/-. The plaintiff lent them the loan of a sum of `2,00,000/- on 15-12-2005. On that occasion also, Late Sri.S. Mahendrapandian had executed an On-demand Promissory Note in favour of the plaintiff on 15-12-2005 for a sum of `2,00,000/- and had also issued a post-dated cheque bearing No.005269 drawn on State Bank of Mysore, CFTRI Branch, Mysore for a sum of `2,00,000/- in favour of the plaintiff.
It was further the case of the plaintiff that Late Sri.S. Mahendrapandian had issued one more cheque for a sum of `20,000/- bearing No.005330 drawn on the same Bank dated 15-12-2006 in favour of the plaintiff. In August-2006, the plaintiff approached the defendants and asked for repayment of the loan amount. It was only at that time, he came to know that the said Late Sri.S. Mahendrapandian was dead. However, defendant No.1 had promised that she would repay the loan borrowed from the plaintiff. Despite the plaintiff waiting for some more time and despite defendants getting the service benefits of Late Sri.S. Mahendrapandian, they failed to repay the loan amount with interest thereupon to the plaintiff. Therefore, having no other option, the plaintiff was constrained to institute a suit against the defendants for recovery of money.
3. In response to the summons served upon them, the defendants appeared through their counsel and filed their Written Statement, wherein they denied all the plaint averments including the two loan transactions of a sum of `5,00,000/- and a sum of `2,00,000/- respectively and Late Sri.S. Mahendrapandian said to have executed two On- Demand Promissory Notes and issuance of several cheques by him in favour of the plaintiff. They categorically denied that, at any point of time, Late Sri.S. Mahendrapandian and defendant No.1 had availed any loan from the plaintiff.
4. Based on the pleadings of the parties, the Trial Court framed the following issues for its consideration:-
1] Whether the plaintiff proves that the defendant by executing the on demand promissory notes with consideration receipts has received Rs.5,00,000/- from him on 19.7.2005 and issued a post dated cheque bearing No.005265 and also received Rs.2,00,000/- on 15.12.2005 and issued a post dated cheque bearing No.005269?
2] Whether the plaintiff proves that the defendant has agreed to pay the interest at the rate of 18% per annum?
3] What Order?”
The plaintiff got himself examined as PW-1 and got examined one Sri.C.J. Kanan as PW-2 and got marked documents from Exhibits P-1 to P-11. Defendant No.1 got herself examined as DW-1, but no documents were marked from defendants’ side as Exhibits.
5. After hearing both side, the Trial Court answered issue No.1 partly in the affirmative and issue No.2 in the negative and decreed the suit of the plaintiff. It is against the said judgment and decree of the Trial Court, the defendants have preferred this appeal.
6. The Lower Court records were called for and the same are placed before this Court.
7. Heard the arguments of the learned counsel for appellant and perused the material placed before this Court including the memorandum of appeal and the impugned judgment.
8. For the sake of convenience, the parties would be henceforth referred to with the ranks they were holding before the Trial Court respectively.
9. Learned counsel for the appellants/ defendants in his argument vehemently submitted that the plaintiff utterly failed to establish that any loan was taken either by Late Sri.S. Mahendrapandian or his wife as defendant No.1. Merely because the plaintiff is said to have been in possession of some of the cheques alleged to have been issued by Late Sri.S. Mahendrapandian, by that itself, it cannot be inferred that those cheques were issued by Late Sri.S. Mahendrapandian towards discharge of any loan liability.
He further submitted that, in view of the fact that the defendants have categorically denied that Late Sri.S.Mahendrapandian had executed either Promissory Notes or issued cheques in question, the plaintiff was required to establish that those documents were executed and delivered to him by none else than Late Sri.S. Mahendrapandian. Since the plaintiff has failed to establish it and even failed to examine the alleged witness to the Promissory Notes, it cannot be held that the Promissory Notes or cheques were executed and issued by Late Sri.S. Mahendrapandian in favour of the plaintiff.
In his support, learned counsel relied upon a judgment of the Madras High Court in the case of Rani Vs. Arokiyammal Reported in LAWS (Madras) 2014 11 330. The said judgment would be referred to at an appropriate stage herein afterwards.
10. Inspite of granting several and sufficient opportunities, learned counsel for the respondent/ plaintiff has remained absent. As such, no arguments were addressed on behalf of the respondent’s side. Since the respondent was given ample opportunity to address his arguments, which he did not make use of, the Court was constrained to proceed further in delivering its judgment in this case.
11. After hearing the learned counsel for the appellant and on perusal of the materials placed before this Court, the points that arise for my consideration are:
1] whether the plaintiff has proved that, Late Sri.S. Mahendrapandian had executed an On-Demand Promissory Note on 19-07-2005 for a sum of `5,00,000/- and another On-Demand Promissory Note for a sum of `2,00,000/- on 15-12-2005 and availed loan of a total sum of `7,00,000/- from the plaintiff and that defendant No.1 had also joined Late Sri.S. Mahendrapandian in availing the loan from the plaintiff?
2] whether the judgment and decree under appeal deserves to be set aside and the suit of the plaintiff deserves to be dismissed?
12. The admitted fact is that, Late Sri.S. Mahendrapandian is the husband of defendant No.1 and father of defendant No.2 and that he was working in Central Food Technological Research Institute (CFTRI), Mysore and after his death, his service benefits were released to the defendants.
13. In order to prove his case that said Late Sri.S. Mahendrapandian joined by his wife (defendant No.1) had availed a total loan of a sum of `7,00,000/- from him on two occasions, the plaintiff got himself examined as PW-1. In his affidavit evidence in the form of Examination-in-chief, the plaintiff has reiterated the contentions taken up by him in his plaint. In his support, he got marked two On-Demand Promissory Notes dated 09-07-2005 for a sum of `5,00,000/- and dated 15-12-2005 for a sum of `2,00,000/- respectively and contended that both those Promissory Notes were executed by Late Sri.S. Mahendrapandian in his favour promising to repay a total sum of `7,00,000/- with interest at the rate of `18% per annum thereupon towards the value received by him. He also produced and got marked four cheques drawn on the State Bank of Mysore, CFTRI Branch, Mysore, for a sum of `5,00,000/-, `2,00,000/-, `50,000/- and `20,000/- respectively and bearing two different dates in favour of the plaintiff to show that, Late Sri.S. Mahendrapandian had also issued cheques towards repayment of the loan. The plaintiff also got issued a copy of the legal notice said to have been sent on his behalf to the defendant No.1, calling upon her to repay the alleged loan amount. The postal acknowledgement and certificate of posting receipt were also marked by him at Ex.P-8. He also got produced and marked the reply notice sent by the defendants to him through her counsel at Ex.P-9. He also produced original Attendance Register and got marked at Ex.P-10. He produced a photocopy of Library cards issue Register and got it marked at Ex.P-11 and the alleged signature of Late Sri.S. Mahendrapandian therein at Ex.P-11(a).
14. The first defendant as DW-1 in her evidence has reiterated the contentions taken up by her in her Written Statement and denied that either herself or her husband Late Sri.S. Mahendrapandian joined by her, at any point of time, had availed any loan from the plaintiff, muchless a sum of `5,00,000/- on one occasion and another sum of `2,00,000/- on another occasion. She specifically denied that her husband was in any manner indebted to the plaintiff to repay the loan amount. She also denied that her husband Late Sri.S. Mahendrapandian had ever executed On–Demand Promissory Notes or issued any cheques to the plaintiff towards the alleged repayment of the loan.
15. The plaintiff in the plaint has stated that it was not just Late Sri.S. Mahendrapandian alone who had approached him for loan but he was joined by his wife - defendant No.1 also when they approached him, for the loan on both occasions, i.e. on 19-07-2005 and again on 15-12-2005. Thus, according to the plaintiff, the borrower is not just Late Sri.S. Mahendrapandian, but it was defendant No.1 also. The very same plaintiff in his cross-examination as PW-1 has stated that to avail first loan, it was Late Sri.S. Mahendrapandian alone who had approached him. Thus, his evidence is contrary to what his pleading is. Had really defendant No.1 also approached him, then, he would have necessarily stated in his cross-examination also that, defendant No.1 also had joined her husband, Late Sri.S. Mahendrapandian in availing the loan.
16. The very same plaintiff, in the cross- examination of DW-1 has suggested to the witness that at the time of her husband alleged to have executed the On-Demand Promissory Note for a sum of `5,00,000/-, the place was Hotel Airlines and defendant No.1 had gone out of the Hotel on some emergency work. Thus, the stand taken by the plaintiff at three different places, i.e. in his plaint, in his cross-examination as PW-1 and in suggestion to DW-1 gives three different versions of alleged execution of On-Demand Promissory Notes and availment of loan.
17. All these three stands taken by the plaintiff are contrary to one another. As already observed above, in the plaint, he has stated that both Late Sri.S. Mahendrapandian and defendant No.1 (wife of late Sri. S. Mahendrapandian) had approached him for availing the loan. If the same is believed, it amounts to a joint loan taken by Late Sri.S. Mahendrapandian and defendant No.1. However, in his cross- examination, the same witness has stated that it was defendant No.1 also who had been to him along with late Sri.S. Mahendrapandian requesting for loan. The same plaintiff in the cross-examination of DW-1 has once again brought back defendant No.1 to the place. However, he stated that she was also not present at the time when the Promissory Note was alleged to have been executed by Late Sri.S. Mahendrapandian. Therefore, the contrary versions taken by the plaintiff in his plaint and evidence which are inconsistent with each other, create a serious doubt in the case of the plaintiff.
Secondly, even according to the plaintiff, when the Promissory Notes were executed, one Sri. Nagaraj was present and he has subscribed his signature to the said document as a witness. Admittedly, the said Nagaraj was not examined as a witness from the plaintiff’s side. No doubt, it is not mandatory on the part of the payee under a Negotiable Instrument, particularly, On-Demand Promissory Note, that he should, in all cases, examine the witness to the instrument. However, in the case which leads to some suspicion or doubt as in the present case of the plaintiff and in the matter where the alleged executant of the Promissory Note himself has died and his legal representatives seriously dispute and deny the execution of the Promissory Notes by the deceased person, then, it is required of the plaintiff who banks upon the said suspected or disputed document to examine the witness who was said to be present and witnessed the execution of the document. The said observation in the similar circumstances has been made by the Hon’ble Madras High Court in the case of Rani Vs. Arokiyammal (supra) wherein also in a similar circumstance, the Madras High Court has observed that when a specific stand has been taken by the defendant that the consideration has not been passed, naturally, the plaintiff ought to have atleast examined the attesting witness of the pro-note. In the instant case also, when the defendant has specifically and categorically denied that the On-Demand Promissory Notes were ever executed by her husband and stated that the cheques were never issued by her husband in favour of the plaintiff, then, it was required of the plaintiff to examine the said witness.
For the reasons best known to him, the plaintiff did not examine the said witness.
18. On the other hand, he examined PW-2 – C.J. Kanan, who admittedly is only a colleague said to be working with the deceased in CFTRI, Mysore. The said witness has produced the original Attendance Register maintained at CFTRI, Mysore for the period from December 2004 to 2006, which was marked at Ex.P-10 and the alleged signature of deceased therein as Ex.P10(a) and also the certified copy of page 17 of the Library Cards Issue Register maintained at CFTRI, Mysore, which was marked at Ex.P-11 and marked the alleged signature of the deceased at Ex.P-11 as Ex.P-11(a).
19. Interestingly, the said witness also has nowhere stated that he identifies the signature at Ex.P- 11(a) as that of Late Sri.S. Mahendrapandian or that the said signature was made in his presence by the deceased Late Sri.S. Mahendrapandian.
20. However, the Trial Court, without noticing the said aspect that the alleged signature of Late Sri.S. Mahendrapandian upon both the Promissory Notes and the cheques had been seriously disputed by the defendants, and also of the fact that even PW-2 also has not specifically stated that the signature at Ex.P-11(a) is that of Late Sri.S. Mahendrapandian, held by its presumption that the signature at Ex.P-11(a) is that of Late Sri.S. Mahendrapandian and by itself compared the same with that of his alleged signatures in Exs.P-1 to P-6, and arrived at a conclusion that the Promissory Notes and the cheques were executed and issued by Late Sri.S. Mahendrapandian himself to the plaintiff.
21. Interestingly, the Trial Court further expected the burden of proving that Exs.P-1 to P-6 are not that of her husband, upon the defendant No.1. When the plaintiff has approached the Court with the specific averment that late Sri. Mahendrapandian had availed loan of a sum of `7,00,000/- from him, it was for him to prove the same. An issue was also framed as issue No.1 in that regard, causing burden of proving upon the plaintiff. However, in its reasoning, the Trial Court in the absence of the plaintiff primarily discharging his burden expected the said burden to be discharged even by the defendant No.1 also. Thus, the said finding of the Trial Court has to be necessarily held as an erroneous finding in the facts and circumstances of the case.
22. Even though the cheques at Exs.P-3 to P-6 are stated to be belonging to the account of Late Sri.S. Mahendrapandian, but in view of the fact that the defendants have specifically disputed the signatures on those four cheques and the plaintiff has not taken any pain in proving that those cheques were executed by late Sri.S. Mahendrapandian, presumption of benefit under the Negotiable Instruments Act, 1881, both under Section 118 and Section 139 also cannot be extended to the plaintiff.
23. On the other hand, apart from contesting the matter by filing a Written Statement and subjecting PW-1 to cross-examination, the defendant No.1 herself led the evidence as DW-1 and elicited few statements in their favour which are observed above, the defendants were able to successfully rebut the presumption if at all has arisen in favour of the plaintiff. Thus, the plaintiff though could able to produce the On-Demand Promissory Notes and cheques at Exs.P-1 to P-6, could not able to establish that those instruments were executed by Late Sri.S. Mahendrapandian and that deceased Late Sri.S. Mahendrapandian joined by his wife had availed a loan of a sum of `5,00,000/-, `2,00,000/-, in total a sum of `7,00,000/- from him as alleged in the plaint.
As such, even though the defendants have admitted that they have received service benefits of Late Sri.S. Mahendrapandian, still, the plaintiff has failed to prove that late Sri.S. Mahendrapandian had availed loan of a total sum of `7,00,000/- from him.
24. The Trial Court, without appreciating the evidence in its proper perspective, has solely relied upon Exs.P-1 to P-6 without ascertaining whether their executions have been established in law and proceeded to decree the suit of the plaintiff. Since the said finding is now proved to be erroneous, the said finding of the Trial Court deserves to be set aside and the suit of the plaintiff deserves to be dismissed by allowing this appeal.
Accordingly, I proceed to pass the following:-
O R D E R [i] The appeal is allowed;
[ii] The judgment and decree dated 30-03-2011 passed in O.S.No.555/2007 by the learned I Additional Judge, Court of Small Causes and Additional Senior Civil Judge at Mysore, is hereby set aside;
[iii] The suit of the plaintiff is dismissed;
[iv] There is no order as to costs.
Registry to transmit a copy of this judgment along with the Lower Court records to the concerned Trial Court, without delay.
Sd/- JUDGE BMV*