Punjab-Haryana High Court
Dhup Singh vs Pheru And Others on 9 January, 2014
Author: Paramjeet Singh
Bench: Paramjeet Singh
RSA No.1892 of 1986 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
RSA No.1892 of 1986
Date of Decision: January 09, 2014.
Dhup Singh
... Appellant
Versus
Pheru and others
... Respondents
CORAM: HON'BLE MR. JUSTICE PARAMJEET SINGH
1) Whether Reporters of the local papers may be allowed to see the
judgment ?. YES
2) To be referred to the Reporters or not ?. YES
3) Whether the judgment should be reported in the Digest ? YES
Present: Mr. Kabir Sarin, Advocate,
for the appellant.
None for the respondents.
Paramjeet Singh, J.
This second appeal arises from a suit for recovery of ` 11,000/- filed by plaintiff-Dhup Singh on account of 'bahi' entries made by father of defendants' for taking a loan of ` 6,300/- which was decreed by the Court of first instance and appeal preferred by defendants no.1 to 3 has been accepted by the lower Appellate Court and judgment and decree of the Court of first instance have been set aside. Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 2
The detailed facts are already recapitulated in the judgments of the courts below and are not required to be reproduced. However, the brief facts relevant for disposal of this regular second appeal are that plaintiff-Dhup Singh approached the Court of first instance seeking a decree for recovery of ` 11,000/- on the allegations that on miti Jyesth Sudi 13, Samwat 2032, Rehamu alias Rama Nand, father of the defendants, borrowed a sum of ` 6,300/- from him and executed a 'bahi' entry in this regard after appending his signatures in Urdu script. Thereafter on miti Jyesth Sudi 13, Samwat 2035 corresponding to 19.06.1978, Rehamu @ Ramanand got his account settled with the plaintiff admitting that a sum of ` 8,100/- (` 6300/- as principal amount and ` 1800/- as interest) was due against him. Thereafter, three 'bahi' entries of ` 2,700/- each were executed by Rehamu @ Ramanand in favour of the plaintiff and he also agreed to pay interest @ 1% per mensem. Since Rehamu @ Ramanand died and defendants inherited his estate being his heirs, they are liable to pay the aforesaid amount of ` 11,000/- (principal amount as well as interest).
Upon notice, defendants no.1 to 3 put in appearance and filed written statement denying all the averments made in the plaint. It was pleaded that neither Rehamu had taken any loan from the plaintiff, nor executed any 'bahi' entry agreeing to pay three installments of ` 2700/- each. It was, inter alia, pleaded that the suit was not within time, 'bahi' entries of the plaintiff were fabricated.
On the basis of pleadings of parties, the Court of first instance Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 3 framed the following issues:
"1. Whether the father of the defendants borrowed Rs.6300/- from the plaintiff on miti jeth Sudhi, 13, Samwat 2032?OPP
2. Whether the defendants' father acknowledged his liability of Rs.6300/- on 19.6.78 total amounting to Rs.8100/-?OPP
3. Whether the father of the defendants agreed to pay Rs.8100 in three instalments by way of entry on 19.6.78 each amounting to Rs.2700/- in the bahi of the plaintiff and thumb marked in token of its correctness?OPP
4. Whether the defendant's father agreed to pay interest at the rate of Rs.1% p.m. If so at what rate and to what effect?OPP
5. Whether the suit is time barred?OPD
6. Whether the bahi entry dated 19.6.78 is fictitious and inadmissible in evidence due to material alteration?OPD
7. Whether the plaintiff is a money lender. If so to what effect?OPD
8. Relief."
Parties were afforded opportunity to lead their evidence. After perusal of the evidence available on the file, the Court of first instance decreed the suit with costs and future interest @ ` 6% per annum, vide judgment and decree dated 02.11.1985. Feeling aggrieved, defendants no.1 and 3 preferred an appeal which has been allowed and judgment and decree of the Court of first instance have been set aside, vide judgment and decree dated 13.03.1986. Hence, this regular second appeal.
When the appeal was admitted, no substantial question of law was framed, however, during the pendency of this appeal, following Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 4 substantial questions of law have been placed on record.
1. Whether the lower Appellate Court was legally justified in reversing the detailed and well considered issuewise judgment and decree of the trial Court without dealing with all the reasons given therein?
2. Whether the lower Appellate Court could dismiss the plaintiff-appellants suit for recovery when the defendant-respondents did not produce an iota of evidence to prove that the entries i.e. Ex.PW 7/A, Ex.PW 8/A, PW 8/B & PW 8/C were false or fabricated in any way?
3. Whether the findings of the lower Appellate Court regarding the liability of the defendant-
respondents to pay the borrowed amount plus interest are completely untenable and misdirected as the same are based upon illegal, erroneous and conjectural grounds?
4. Whether the lower Appellate Court acted illegally, arbitrarily and without jurisdiction in giving contradictory findings upon issue nos.1 to 4 after having confirmed the trial Court findings upon issue nos.5 to 7?
5. Whether the lower Appellate Court was manifestly wrong and beyond its jurisdiction in allowing the defendant-respondents appeal on illegal, erroneous and insufficient grounds?
I have heard learned counsel for the appellant and perused the record.
Learned counsel for the appellant has vehemently contended that entries in 'bahi' are admissible in evidence and the same were thumb Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 5 marked by the father of defendants. The scribe of 'bahi' entries and hand writing expert had proved the signatures/thumb impressions of the father of the defendants on the 'bahi'. The judgment and decree of the court of first instance has been erroneously set aside.
None has appeared on behalf of the respondents.
I have considered the contentions of learned counsel for the appellant.
To appreciate the controversy involved in present case in proper perspective, following points are required to be considered.
1. The relevancy and evidentiary value of an entry in 'bahi'.
2. The nature of an entry executed in 'bahi' and consequential application of provisions of Stamp Act, 1899 and Negotiable Instruments Act, 1881.
In so far as the first point relating to relevancy and admissibility of 'bahi' entry in evidence is concerned, undoubtedly, as per section 34 of the Evidence Act, 1872 (in short "the Act") the entries in account books regularly kept in course of business are relevant piece of evidence and admissible. However, such entries cannot be the sole basis of fixing liability on any person. Section 34 of the Act reads as under:
"Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability".
Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 6
An entry to be admissible in evidence under Section 34 of the Act, must be shown to be in a book, that book must be a book of accounts and that account must be one regularly kept in the course of business. The term book may properly be taken to signify ordinarily a collection of sheets of paper bound together with the intention that such binding shall be permanent and the papers used collectively in one volume. A book which merely contains entries of items of which no account is made at any time, is not a book of account for the purpose of Section 34. The legislature did not intend to include in that category any record in which there is no process of reckoning. Reference in this regard may be made to Central Bureau of Investigation v. V.C. Shukla 1998(3) SCC 410, Mukundram v. Dayaram AIR 1914 Nag 44 and Mahasay Ganesh Prasad Ray and another v. Narendra Nath Sen and others AIR 1953 SC 431.
Whereas, Section 34 of the Act specifically renders admissible, the entries in account books, which would include 'bahi', nevertheless, the law insist on corroborative evidence of the same in order to charge a person with liability. The provision in itself ensures that a creditor may not have undue advantage over the debtor by forging or tampering with the entries in the 'bahi' especially when significant proportion of debtors is illiterate. However, if the entry in a 'bahi' is corroborated with other independent evidence, liability can be safely imposed on the debtor. In this context it would be useful to quote from the judgment of Hon'ble Supreme Court in V.C. Shukla (supra), wherein the court held as under:
"From a plain reading of the Section it is manifest that to Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 7 make an entry relevant thereunder it must be shown that it has been made in a book, that book is a book of account and that book of account has been regularly kept in the course of business. From the above Section it is also manifest that even if the above requirements are fulfilled and the entry becomes admissible as relevant evidence, still, the statement made therein shall not alone be sufficient evidence to charge any person with liability. It is thus seen that while the first part of the section speaks of the relevancy of the entry as evidence, the second part speaks, in a negative way, of its evidentiary value for charging a person with a liability. It will, therefore, be necessary for us to first ascertain whether the entries in the documents, with which we are concerned, fulfil the requirements of the above section so as to be admissible in evidence and if this question is answered in the affirmative then only its probative value need be assessed".
Reference can also be made to Ishwar Dass Jain (Dead) through LRs v. Sohan Lal (Dead) through LRs 2000 (1) RCR (C) 168 SC, Chandradhar Goswami and Ors. V. Gauhati Bank Ltd. AIR 1967 SC 1058, Hiralal-Mahabir Pershad v. Mutsaddilal-Jugal Kishore 1967 (1) ILR (Punjab) 435 and Abdul Haq and Ors. v. Firm Shivji Ram- Khem Chand AIR 1922 Lah 338.
Recently in Gian Chand Brothers and Another v. RattanLal @ Rattan Singh 2013 (1) RCR (C) 961, the Hon'ble Supreme Court in Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 8 view of the admitted fact that books of account were regularly kept in course of business held that they should not have been rejected without any kind of rebuttal or discarded without any reason. This case however, cannot be said to be laying down a universal rule of correctness of account books in all circumstances; rather considering the peculiar facts of the case, the court came to a conclusion that mere denial of signatures by defendant and consequential non examination of handwriting expert by the plaintiff is not sufficient to rebut the presumption of correctness of entries in account book.
Thus the explanation to first point raised above is found in Section 34 of the Act, 1872 itself which has been interpreted by the court in consistent manner as discussed herein above.
Coming to the second point, to determine the nature of entry as to whether it is merely a balance of account, bond, agreement, acknowledgement or a promissory note is another significant aspect involved in cases of recovery based on entry in 'bahi'. Once nature of entry is determined then it has to be seen whether it was required to be stamped or not. In case yes, then it has to be properly stamped as per the Stamp Act, 1899 or else it is rendered inadmissible in evidence. Primarily nature of the entry has to be decided on the basis of intention of the parties gathered from phraseology used and surrounding circumstances. It has been observed by Full Bench of Lahore High Court in Firm Shiv Ram Punnan Ram through Shiv Ram and Punnun Ram v. Faiz AIR 1942 Lah 50 that, the question whether the various entries with respect to balances struck by the defendant in plaintiff's 'bahi' from Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 9 time to time are to be classed as acknowledgments, agreements or bonds for the purposes of duty chargeable under the Stamp Act has to be decided on the basis of the language used. As pointed out in the Full Bench ruling Nanak Chand v. Fattu A.I.R. 1935 Lah. 567, it is the phraseology used and not the legal implications following from it that determines the duty chargeable on such cases. In Ganga Jal v. Lal Chand, 1970 PLR 28, this High court came to conclusion that the entry in dispute was not required to be stamped as it was made only as an acknowledgment of the correctness of account and was not intended to supply an evidence of debt so as to fall within the mischief of Article 1, Schedule 1 of the Stamp Act. The court drew support from judgment of Andhra Pradesh High Court in Dadi Musali Naidu v. Budda Veeru Naidu, AIR 1958 AP 88, wherein it was held that a mere signature in a running account is not evidence of the debt of which there is already evidence in the account book and is in fact just an acknowledgment of the correctness of the account not required to be stamped.
In Udey v. Ram Kishan 2000(2) PLR 179, the question before this High Court was whether the 'bahi' entry was a bond. Considering the material before it the court observed:
The Bahi entry though is attested by two witnesses but there is no express obligation to pay the amount mentioned therein. The definition of bond in clause (b) of sub-section (5) to Section 2 of the Act requires that a person should oblige himself to pay money to another. In other words, there must be an express obligation to pay. No instrument Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 10 can be a bond within the meaning of Section 2(5)(b) of the Act unless it is one which itself creates an obligation to pay money. The document admitting receipt of money in absence of express promise to pay, may be held to be a receipt but not a bond. The writing in question does not show that the defendant had undertaken any obligation to pay. More so, no such obligation can be inferred from mere acknowledgement of the receipt of the amount.
Thus, where an entry is merely a balance of account and signatures of defendant thereon are only intended to accept correctness of such balance then no stamp duty is required to be affixed. Such entry is relevant as per Section 34 of the Act. On the other hand if the entry is executed in nature of bond, acknowledgment of debt etc, it has to be stamped as per the Stamp Act, 1899.
Besides this, the question as to whether the 'bahi' entry qualifies to be a promissory note under the Negotiable Instruments Act, 1881 has also arisen before the courts. Needless to say that once a 'bahi entry' qualifies being a promissory note it will attract the presumptions attached to a negotiable instrument under the Act most important being that it is made, drawn, accepted or endorsed for consideration. In such scenario the burden of proof shifts to the debtor. In this way if a 'bahi entry' is accepted to be promissory note, then it would tend to dilute the effect of Section 34 of the Act, that an entry in account book by itself is not sufficient to charge a person with liability. Thus whenever, a person seeks to recover an amount on the basis of 'bahi entry' which is Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 11 purported to be shown as a promissory note court must ensure that it satisfies the test of being a promissory note and it is properly stamped as per the Stamp Act. Most importantly, the parties involved must be shown to have intended it to be as such. Satisfaction of court to this effect is very crucial in the prevailing social conditions where unscrupulous moneylenders are often found to be exploiting unfortunate debtors. The issue whether a 'khata' involved in the case was a promissory note came up before Division Bench of Rajasthan High Court, in Chiranjilal and Ors. v. Ramnath and ors. AIR 1953 Raj 211. The court after considering various English authorities and judgments of other Hon'ble High Courts observed as under:
"Thus, on the authorities cited by the learned counsel for the appellants, we need not be embarrassed by the portion of document containing a promise to pay. It is permissible to consider carefully every part of the document and also to examine surrounding circumstances in order to find out whether the document is a promissory note or not. *** It would appear from the language of the document given above that it was primary intention of the parties that a balance of previous account be struck in the khata of the debtor in the account books of the creditor. A certain rate of interest was also recorded in order to save any dispute about the rate. This khata was stamped with one anna stamp, which, according to the law prevailing in Jaipur at Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 12 that time, was chargeable on acknowledgment. A promissory note for an amount above Rs. 250/- was chargeable with a stamp duty of /2/-. Neither in the khata nor in the plaint is the document described to be a promissory note. The parties cannot be said to have intended that the document would be negotiable. On a careful consideration of the language of this document and the authorities cited on behalf of the plaintiffs, we are of opinion that the parties did not intend that the document in question should operate as a promissory note. All that they intended was to furnish an evidence of the balance due against the debtor with stipulation to pay interest at a certain rate. Considering the entire circumstances of the case, we are not prepared to hold the document to be a promissory note simply on account of the words about payment having found place towards the end of the document."
In Raghunath Prasad v. Mangi Lal AIR 1960 Raj 20, an entry in 'bahi khata' was not accepted to be a promissory note for reasons that it did not specify the rate of interest; therefore was not certain as required under section 4 of the Negotiable Instrument Act, 1881 and being executed in 'bahi' it was not 'Negotiable'. The court observed:
"By virtue of definition of the negotiable instruments contained in Section 13 a promissory note payable to order or to bearer is a negotiable instrument. If the defect of non- Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 13 specification of rate of interest in the document in question is ignored it should have been negotiable to be a promissory note.
But being executed in a Bahi, it cannot be taken out of it without tearing the leaf and it cannot be transferred in order to be negotiable under Section 14 of the Negotiable Instruments Act. Here then is a document which satisfies all the ingredients of the definition of promissory note under Section 4 of the Negotiable Instruments Act but which the parties never intended to be negotiable by delivery. Such document cannot be a promissory note within the meaning of the Negotiable Instruments Act."
Thus, an entry executed in 'bahi'cannot per se be a promissory note as it does not fulfil the criteria of 'Negotiability' which is the essence of any Negotiable Instrument.
Having considered the legal scenario relating to the nature and admissibility of 'bahi' entry, I would now proceed to examine whether in the instant case the judgment and decree of Lower Appellate Court requires interference in this regular second appeal.
The lower Appellate Court considered the testimony of expert witness and righly come to the conclusion that testimony of PW4 Som Nath Aggarwal does not inspire confidence because in his cross- examination, he admitted that he knows very little Urdu and could not write the same fluently and he could write some words of Urdu, but not typical words. The lower Appellate Court has also come to the Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 14 conclusion that when this witness does not know Urdu, it would be very difficult for him to give perfect opinion with regard to the signatures of a particular person. The lower Appellate Court has also come to the conclusion that if Rehamu @ Ramanand had appended his signatures on 'bahi' entries Ex.PW 6/A and Ex.PW 7/A in a different manner, then both the signatures cannot be identified properly. The lower Appellate Court has also come to the conclusion that on looking to both these bahi entries, it would come out that the writer who wrote BAKALAM KHUD (written with own pen) etc. and appended his signatures on Ex.PW6/A seems to be a person who can write Urdu fluently and in a proper manner, but on looking at bahi entry (Ex.PW 7/A), it would come out that the person who appended his signatures thereon, was not so perfect in writing Urdu language and it seems that he could not write Urdu fluently. On that basis, expert evidence and signatures on bahi entries were doubted by the lower Appellate Court and it was held that otherwise also, science of handwriting comparison is not a perfect science, therefore, reliance could not be placed on the testimony of PW4 Som Nath Aggarwal, handwriting expert. Besides the statement of PW 4 Som Nath Aggarwal, there is only the statement of plaintiff-Dhup Singh (PW 1) with regard to the payment of amount of ` 6300/- to Rehamu and his executing bahi entry in his favour. The lower Appellate Court has come to the conclusion that PW 1 Dhup Singh stated in his examination-in-chief that at the time of execution of this bahi entry one Zile Singh was also present there, but the said Zile Singh has not been examined. The lower Appellate Court has recorded the finding that Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 15 perusal of documents and stamps show that only words "Rehamu Bakalam Khud" appear on the four revenue stamps and no part of the writing appears on the leaf underneath these four revenue tickets. The lower Appellate Court has come to the conclusion that these have been pasted on each other and when no part of the writing and signatures of Rehamu appears on the leaf of the bahi entry, no reliance can be placed upon such bahi entry (Ex.PW 7/A) in order to hold that after taking the loan of ` 6300/- from the plaintiff, Rehamu executed the said bahi entries. The bahi entries have not been believed by the lower Appellate Court.
As discussed above entry in 'bahi' alone is not sufficient evidence to charge any person with liability. The value of mere 'bahi' entries is not sufficient when they are not corroborated by other evidence. It was the case of the plaintiff that firstly, balance of ` 8100/- was struck on the 'bahi' entry Ex.PW 7/A, itself and then three 'bahi' entries for ` 2700/- each i.e. Ex.PW8/A to 8/C were executed by Rehamu after appending his thumb impressions on it. So far as 'bahi' entry ` PW7/A is concerned, the lower Appellate Court has recorded a finding that where balance of ` 8100/- was struck, there is neither any signatures nor thumb impressions of Rehamu. If actually balance would have been struck in the presence of Rehamu and he admitted the same as correct, then in the normal course either his signatures or thumb impressions would have been obtained below this balance. The lower Appellate Court has also rightly recorded the finding that it is not Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 16 understandable as to why after striking this balance of ` 8100/-, three 'bahi' entries of ` 2700/- each were executed by Rehamu. An attempt was made by the plaintiff in his statement to show that Rehamu and his three sons got three 'bahi' entries executed so that each one of them could pay ` 2700/- each to the plaintiff, however, the lower Appellate Court has held that this assertion is not sustainable as there is no such pleading. Since the balance has not been struck of, the entries have been disbelieved by the lower Appellate Court.
Finding has also been recorded that PW 2 Ram Phal and PW 3 Hazari Lal claimed themselves to be present, when balance was struck and when Rehamu had executed these 'bahi' entries, but the same do not bear the signatures or thumb impressions of these witnesses. The lower Appellate Court has disbelieved the statement of PW 8 Moolchand, who happens to be scribe of these entries, and held that these entries do not inspire confidence and accordingly reversed the findings of the Court of first instance.
The lower Appellate Court has also rightly recorded a finding that it is nowhere mentioned in the 'bahi' entries (Ex.PW 7/A and Ex.PW 8/A to 8/C) that Rehamu had agreed to pay interest on the loan amount @ 1% per month. Only the solitary statement of the plaintiff on this point does not carry any weight. Otherwise also, no interest is chargeable either under the Interest Act or as damages under Section 73 of the Contract Act on a 'bahi' entry which makes no mention of interest, and no notice has been given that interest would be charged. By Division Bench of Lahore High Court in Ranjit Singh vs. Karim Baksh A.I.R. Kumar Parveen 2014.03.10 17:39 I attest to the accuracy and integrity of this document RSA No.1892 of 1986 17 1922 Lahore 475 (1), it was held that no interest is chargeable either under the Interest Act or as damages under the Contract Act on a ruqqa which made no mention of interest and where no notice had been given that interest would be charged.
No other point has been urged.
Learned counsel for the appellant could not show that the findings recorded by the lower Appellate Court are perverse or illegal or based on misreading, non-reading or misappreciation of the material evidence on record. No question of law, much less substantial question of law, arises for adjudication in this second appeal.
Dismissed with costs throughout.
January 09, 2014 (Paramjeet Singh)
parveen kumar Judge
Kumar Parveen
2014.03.10 17:39
I attest to the accuracy and
integrity of this document