Punjab-Haryana High Court
M/S Khushal Chand Jagdish Rai Of Jalabad ... vs Hakam Singh on 14 January, 2014
Author: Rameshwar Singh Malik
Bench: Rameshwar Singh Malik
RSA No. 439 of 1986(O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
RSA No. 439 of 1986(O&M)
Date of Decision: 14.01.2014
M/s Khushal Chand Jagdish Rai of Jalabad (W) Tehsil Fazilka District
Ferozepur through its sole proprietor Shilpa Rani w/o Raman Kumar
.....Appellant
Versus
Hakam Singh
....Respondent
CORAM: HON'BLE MR.JUSTICE RAMESHWAR SINGH MALIK
Present: Mr. Harminder Singh, Advocate
for the appellant.
Mr. G.S.Bhatia, Advocate
for the respondent.
***
1.Whether Reporters of local papers may be allowed to see the judgment?
2. To be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
*** RAMESHWAR SINGH MALIK J.
The present appeal, at the instance of the plaintiff, is directed against the impugned judgment of reversal passed by the learned Additional District Judge, allowing the appeal of the defendant-respondent and dismissing the suit for recovery filed by the plaintiff-appellant, which was decreed by the learned trial court.
To unravel the controversy involved between the parties, brief narration of the essential facts would be required. The plaintiff- appellant filed suit for recovery against the defendant-respondent for Kumar Amit 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 2 an amount of `3,200/- as principal amount and `800/- as interest thereon, total being `4,000/-. It was the pleaded case of the plaintiff that on 2.8.1980, the defendant took a loan of `3,200/- from the plaintiff and agreed to pay interest @ 12% per annum. A writing was recorded in the bahi maintained by the plaintiff-firm, which was doing the business of money lending and having a requisite licence for the same. The defendant did not pay the loan amount thereby compelling the plaintiff-firm to file a suit for recovery.
Having been served in the suit, defendant appeared and filed the written statement denying the averments taken in the plaint. He pleaded that he never took the loan of `3,200/- from the plaintiff- firm, nor he put his thumb impression on the bahi entry. He further pleaded that about 11 years ago, he used to take agriculture produce to the shop of plaintiff-firm, who was doing the business of commission agent. It was also asserted on behalf of the respondent that bahi entry, if any, was a forged one. It was pleaded that Nihal Chand, who was brother of one of the partners of the petitioner-firm and father of another partner, was Sarpach of the village and defendant was member panchayat in the year 1980. The defendant being a simpleton and illiterate villager, Nihal Chand might have obtained his thumb impression and used it in creating bahi entry against him. Dismissal of suit was prayed for.
On completion of the pleadings of the parties, following issues were framed by the learned trial court:-
1. Whether the plaintiff firm is registered one? If so Kumar Amit who are the partners thereof? OPP 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 3
2. Whether the defendant took loan of Rs. 3200/-
from the plaintiff firm and thumb marked in entry in the bahi on 2.8.80? OPP
3. Whether the plaintiff is entitled to any interest? If so to what rate and to what amount?OPP
4. Relief.
To substantiate their respective stands taken, both the parties led their documentary as well as oral evidence. After hearing the parties and going through the evidence brought on record, the learned trial court came to the conclusion that plaintiff has proved his case and accordingly, suit for recovery was decreed but only for recovery of principal amount of `3,200/-. The defendant filed his appeal, which came to be accepted by the learned lower appellate court vide impugned judgment and decree dated 18.12.1985, holding that the plaintiff did not fulfill the requirement of Section 34 of the Indian Evidence Act, 1872 ('Act of 1872' for short). Appeal was allowed and the suit for recovery filed by the plaintiff was dismissed. Hence this regular second appeal at the hands of plaintiff.
It is pertinent to mention here that vide order dated 8.5.1995 passed in C.M. No. 1338-C of 1995, Mrs. Shilpa Rani was ordered to be impleaded as sole proprietor of the appellant firm.
Learned counsel for the appellant submits that plaintiff firm has duly proved its case by way of documentary as well as oral evidence, which has gone unrebutted on record. He further submits that learned trial court rightly decreed the suit whereas the learned Kumar Amit lower appellate court misdirected itself, while setting aside the cogent 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 4 findings recorded by the learned trial court and the impugned judgment was liable to be set aside. He prays for allowing the appeal by setting aside the impugned judgment.
On the other hand, learned counsel for the defendant- respondent submits that neither the plaintiff has taken any averment nor produced any evidence, so as to fulfill the requirement of Section 34 of the Act of 1872. He further submits that the bahi entry in dispute was the only entry in the bahi which would clearly establish that the book of accounts was not regularly kept in the course of business by the plaintiff-firm. None of the partners of the plaintiff- firms appeared in the witness box. Scribe of bahi entry was also not produced. PW1 stated in his cross-examination that he was not an attesting witness to the bahi entry. To buttress his submissions, learned counsel for the respondent relies upon the judgment of the Hon'ble Supreme Court in Chandradhar Goswami and others Vs. Gauhati Bank Ltd. AIR 1967 SC 1058 and a judgment of this Court in Ram Singh Vs. Rajiv Kumar and Company, 2012 (4) CCC 337. He prays for dismissal of the appeal.
Having heard the learned counsel for the parties at considerable length, after careful perusal of record of the case and giving thoughtful consideration to the rival contentions raised, this Court is of the considered opinion that since no substantial question of law has been found involved in the present case, no interference is warranted at the hands of this Court, while exercising its appellate jurisdiction under Section 100 of the Code of Civil Procedure, for the Kumar Amit following more than one reasons.
2014.02.13 14:12I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 5
It was undisputed fact on record that neither the plaintiff- appellant took any averment in his plaint, nor he led any evidence that entries in the books of accounts were being regularly kept in the course of business. During the course of hearing, when the learned counsel for the appellant was confronted with this material aspect of the matter, he had no answer and rightly so, because it was a matter of record. Thus, the plaintiff has miserably failed to fulfill the requirement of Section 34 of the Act of 1872. Having said that, this Court feels no hesitation to conclude that the plaintiff has failed to prove his case and the learned lower appellate court was fully justified in law as well as on facts, being final court on facts, in reversing the judgment of the learned trial court.
The petitioner-firm had two partners namely Jagdish Rai and Prem Kumar. Admittedly, none of them appeared in the witness box. PW2 Khushal Chand, who was brother of Jagdish Rai and father of Prem Kumar appeared as their general power of attorney. PW1-Mohan Lal, was claimed to be an attesting witness by the plaintiff-firm. However, in the very first sentence of his cross- examination, this witness stated that he was not an attesting witness between the parties. He also stated that he did not know the language in which bahi entry was recorded. Thus, PW1 did not support the plea of the plaintiff and the bahi entry could not be supported by any other independent witness.
Similarly, PW2 Khushal Chand, admitted in his cross- examination that there was no other entry on the paper Ex.P1, except Kumar Amit the entry in dispute. In this view of the matter, it is unhesitatingly held 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 6 that the petitioner-firm was not maintaining its books of accounts regularly, as required under Section 34 of the Act of 1872.
Further, few entries entered in the books of accounts would not be sufficient to fix liability on the person against whom the entries are produced. The entries so recorded are not substantive piece of evidence in itself, until and unless such entries are duly pleaded and proved by leading cogent evidence. In the present case, the bahi which at the most, can be said to be a ledger, cannot be accepted to be a book of accounts, as contemplated by Section 34 of the Act of 1872, particularly when it has neither been so pleaded nor proved by the plaintiff-appellant that it was being regularly kept in the course of business. In these circumstances, the irresistible conclusion is that the plaintiff failed to sufficiently plead and prove its case and the learned lower appellate court committed no error of law while passing the impugned judgment and decree which deserve to be upheld.
Besides the judgments cited by the learned counsel for the respondent, the above said view taken by this Court also finds support from the judgment of the Delhi High Court in L.K. Advani Vs. Central Bureau of Investigation, 1997 (4) RCR (Criminal) 26 interpreting the scope of Section 34 of the Act of 1872. The relevant observations made in para Nos. 69, 74, 75 and 77 of the judgment, which aptly apply to this case, are as under:
"69. Section 34 of the Evidence Act deals with entries in books of account and when the same would be relevant. It envisages "Entries in books of account regularly kept in the course of business are Kumar Amit relevant whenever they refer to a matter into which 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 7 the Court has to enquire but such statement shall not alone be sufficient evidence to charge any person with liability." Thus to make the entries relevant and admissible under Section 34 of the Evidence Act it must be shown : (a) that the said entries are in books of account; (b) the said books of account are being regularly kept in the course of business; (c) the said entries alone be not sufficient enough to charge any person with liability. Thus as per the requirement of law the prosecution in order to make the entries in the said diaries and the loose sheets admissible in evidence must show that the same fall within the ambit of an account book within the meaning of Section 34 of the Evidence Act.
xx xx xx xx
74. There is another aspect of the matter. It has been observed above that the entries in the books of account by themselves are not sufficient enough to fasten the liability on the head of a person against whom they are produced. They are not a substantive piece of evidence. The said entries in the books of account can be used only by way of corroboration to other pieces of evidence which is led by a party. Admittedly there is no evidence with the prosecution besides the alleged entries in the diaries and in the loose sheets as conceded by the learned counsel for the C.B.I. Thus the alleged entries in the books of account by themselves are of no avail to the prosecution.
75. I am fortified in my above view by the observations as reported in Mukandram v. Dayaram, AIR 1914 Nagpur 44 .. "An entry to be admissible in evidence under Section 34, Evidence Act, must be shown to be in a book, that book must Kumar Amit 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 8 be a book of account, and that account must be one regularly kept in the course of business... I think the term "book" in Section aforesaid 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."
xx xx xx
77. The above view was again expressed in Zenna Sorabji v. Mirabelle Hotel Co. (Pvt.) Ltd., AIR 1981 Bombay 446, . ."In order that a document could be relied upon as a book of account, it must have the characteristic of being fool-proof. A bundle of sheets detachable and replaceable at a moment's pleasure can hardly be characterized as a book of account. Moreover what Section 34 demands is a book of account regularly maintained in the course of business. A ledger by itself could not be a book of account of the character contemplated by Section 34."
An authoritative pronouncement by the Hon'ble Supreme Court on the scope and interpretation of Section 34 of the Act of 1872 came in the case of Central Bureau of Investigation Vs. V.C.Shukla, 1998 AIR (SC) 1406. The relevant observations made by the Hon'ble Supreme Court, which can be gainfully followed in the present case, contained in para Nos. 16,17, 27 to 30 and 35 of the judgment, read as under:-
16. "From a plain reading of the Section it is manifest that to 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 Kumar Amit 2014.02.13 14:12 account has been regularly kept in the course of I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 9 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, still, the statement made therein shall not along 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 park 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, fulfill 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.
17. 'Book' ordinarily means a collection of sheets of paper or other material, blank, written, or printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed as 'book' for they can be easily detached and replaced. In dealing with the work 'book' appearing in Section 34 in Mukundram vs. Dayaram [AIR 1914 Nagpur 44], a decision on which both sides have placed reliance, the Court observed:-
"In its ordinary sense it signifies a collection of sheets of paper bound together in a manner which cannot be disturbed or altered except by tearing apart. The binding is of a kind which is not intended to the moveable in the sense of being undone and put together again. A Kumar Amit 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 10 collection of papers in a portfolio, or clip, or strung together on a piece of twine which is intended to be untied at will, would not, in ordinary English, be called a book.............I think the term "book" in S. 34 aforesaid 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. It is easier however to say what is not a book for the purposes of S. 34, and I have no hesitation in holding that unbound sheets of paper in whatever quantity, though filled up with one continuous account, are not a book of account within the purview of S. 34."
xx xx xx
27. That brings us to the question whether it was 'regularly kept' so as to satisfy the last requirement of Section 34 to be admissible in evidence as a relevant fact. Mr. Altaf Ahamed submitted that the above question has got to be answered keeping in view the nature of business the Jain brothers were carrying on and that when MR 71/91 is Scanned in that perspective it is obvious that it was regularly kept. In refuting the above contentions Mr. Sibal relied upon $ 1550 of American Jurisprudence, proof of Facts (Volume 34, Second Series) wherein it has been observed that not merely regularity is required; the entry must have been fairly contemporaneous with the transaction entered. he also referred to $ 1526 of the same book which reads as under:
The entry should have been made at or near the time of the transaction recorded - not merely Kumar Amit 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 11 because this is necessary in order to assure a fairly accurate recollection of the of the matter, but because any trustworthy habit of making regular business records will ordinarily involve the making of the record contemporaneously. The rule fixes no precise time' each case must depend on its own circumstances."
(emphasis supplied) Mr. Sibal submitted that from a cursory glance of MR 71/91. It would be apparent that the entries therein were not contemporaneously made; and, on the contrary, they were made monthly which necessarily meant that those entries were made long after the dates the purported transactions of receipt and disbursement took place.
28, What is meant by the words 'regularly kept' in Section 34 came up for consideration before different high Courts; and we may profitably refer to some of those decisions cited at the Bar. In Ramchand Pitembhardar Vs. Emperor [19 Indian cases 534 it has been observed that the books are 'regularly kept in the course of business' if they are kept in pursuance of some continuous and uniform practice in the current routine of the business of the particular person to whom they belong. In Kesheo Rao vs. Ganesh [AIR 1926 Nagpur 407] the court interpreted the above words as under:
"The regularity of which S.34 speaks cannot possibly mean that there is no mistake in the accounts, as that would make the section a dead letter; no accounts could be admitted in evidence till they had been proved to be absolutely correct, which is in itself an Kumar Amit 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 12 impossible task and also cannot be begun till they have been admitted in evidence. Regularly or systematically means that the accounts are kept according to a set of rules or a system, whether the accountant has followed the rules or system closely or not. Nor is there any thing in the section that says the system must be an elaborate or reliable one. Both those matters, the degree of excellence of the system and the closeness with which it has been followed, affect the weight of the evidence of an entry, not it s admissibility. The roughest memoranda of accounts kept generally according to the most elementary system, though often departing from its, are admissible in evidence, but would of course have no weight."
29. The view expressed by the Kerala High Court in Kunjamman Vs. Govinda Kurukkal [1960 kerala Law Times 184] in this regard is that the words 'regularly kept' do not necessarily mean kept in a technically correct manner for no particular set of rule or system of keeping accounts is prescribed under Section 34 of the Evidence Act and even memoranda of account kept by petty shopkeepers are admissible if they are authentic While dealing with the same question the Punjab & Haryana High Court observe in Hiralal Mahabir Pershad Vs. Mutsaddilal Jugal Kishore [(1967) 1 I. L. R P &: H 435] that the entries should not be a recital of past transactions but an account of transactions as they occur, of course, not necessarily to be made exactly at the time of occurrence and it is sufficient Kumar Amit 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 13 if they are made within a reasonable time when the memory could be considered recent.
30. In our considered opinion to ascertain whether a book of account has been regularly kept the nature of occupation is an eminent factor for weighment. The test of regularity of keeping accounts by a shopkeeper who has dally transactions cannot be the same as that of a broker in real estates. Not only their systems of maintaining books of account will differ but also the yardstick of contemporaneity in making entries therein. We are, therefore, unable to subscribe to the view of Mr. Sibal that an entry must necessarily be made in the book of account at or about the time the related transaction takes place so as to enable the book to a pass the test of 'regularly kept'. Indeed the above Section ($ 1526) expressly lays down (emphasised earlier) that the rule fixed no precise time and each case must depend upon its own circumstances. Applying the above tests and the principles consistently laid down by the different High Court s(referred to above ) we find that Mr 71/91 has been regularly and systematically maintained. Whether the system in which the book has been maintained guarantees its correctness or trustworthiness is a question of its probative value and not of its admissibility as a relevant fact under Section 34.
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35. The same question came up for
consideration before different High Court on a number of occasions but to eschew prolixity we would confine our attention to some of the judgements on which Mr. Sibal relied. In Kumar Amit 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 14 Yesuvadiyan Vs. Subba Naicker [A. I. R. 1919 Madras 132] one of the learned judges constituting the Bench had this to say:
S.34, Evidence Act, lays down that the entries in books of account, regularly kept in the course of business are relevant, but such a statement will not alone be sufficient to charge any person with liability. That merely means that the plaintiff cannot obtain a decree by merely proving the existence of certain entries in his books of account even though those books are shown to be kept in the regular course of business. He will have to show further by some independent evidence that the entries represent real and honest transactions and that the moneys were paid in accordance with those entries. The legislature however does not require any particular form or kind of evidence in addition to entries in books of account, and I take it that any relevant facts which can be treated as evidence within the meaning of the Evidence Act would be sufficient corroboration of the evidence furnished by entries in books of account if true." While concurring with the above observations the other learned Judge stated as under:
"If no other evidence besides the accounts were given, however strongly those accounts may be supported by the probabilities, and however strong may be the evidence as to the honesty of those who kept them, such consideration could not alone with reference to s.34, Evidence Act, be the basis of a decree."
(emphasis supplied) While relying upon the judgment of the Hon'ble Supreme Kumar Amit 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 15 court in Chandradhar Goswami's case (supra), this Court in Ram Singh's case (supra), observed as under:-
"The Hon'ble Supreme Court in
Chandra Dhar Goswami and others Vs.
Gowahati Bank Limited AIR 1962 SC 1058 has held that no person can be charged with a liability merely on the basis of entries in books of accounts even though, such books of accounts may have been kept in the regular course of business. It was held that there has to be further evidence to prove payment of money, which may be in the books of accounts so that a person may be charged with liability thereunder. The only exception to such proposition would be, when a person fastening the liability accepts the correctness of the books of accounts and does not challenge them. It was accordingly held by the Apex Court that even though entries in the books of accounts regularly kept in the course of business are relevant but mere production and proof of these entries would not by themselves be seen to charge any person with liability and there has to be some independent evidence to prove the transaction."
Reverting back to the facts of the present case and respectfully following the law laid down by the Hon'ble Supreme Court, Delhi High Court as well as this Court in the judgments, referred to hereinabove, it is held that learned Additional District Judge proceeded on correct appreciation of law while passing the impugned judgment and the same deserves to be upheld.
Further, during the course of hearing, learned counsel for the appellant failed to point out any jurisdictional error or patent Kumar Amit 2014.02.13 14:12 I attest to the accuracy and integrity of this document RSA No. 439 of 1986(O&M) 16 illegality apparent on the record of the case. He also failed to put into service any substantive argument, so as to convince this Court to take a different view than the one taken by the learned lower appellate court while passing the impugned judgment and the same deserves to be upheld.
No other argument was raised Considering the peculiar facts and circumstances of the case noted above, coupled with the reasons aforementioned, this Court is of the considered view that the present regular second appeal is bereft of merit and without any substance. Thus, it must fail. No case for interference has been made out.
Resultantly, the instant appeal stands dismissed, however, with no order as to costs.
(RAMESHWAR SINGH MALIK) JUDGE 14.01.2014 AK Sharma Kumar Amit 2014.02.13 14:12 I attest to the accuracy and integrity of this document