Karnataka High Court
Tallam Banu S/O. Tallam Ramaswamy vs J Gopinath S/O. Achaiah Shetty on 28 July, 2017
Bench: A.S.Bopanna, H.B.Prabhakara Sastry
R.F.A.No.4144/2013
:1:
IN THE HIGH COURT OF KARNATAKA
DHARWAD BENCH
DATED THIS THE 28TH DAY OF JULY, 2017
PRESENT
THE HON'BLE MR.JUSTICE A.S.BOPANNA
AND
THE HON'BLE DR.JUSTICE H.B. PRABHAKARA SASTRY
REGULAR FIRST APPEAL NO. 4144/2013 (MON)
BETWEEN:
Mr. Tallam Babu
S/o. Tallam Ramaswamy
Aged about 48 years
Occ: Transport business
R/o. Angadi Marappa Compound
Beside Raghavendra Theatre Bellary
...APPELLANT
(By Sri. Ravi Hegde, Advocae)
AND:
J. Gopinath, S/o. Achaiah Shetty
Aged about 51 years
R/o. Angadi Marappa Compound
Beside Raghaendra Theatre
Bellary.
...RESPONDENT
(By Sri. Phaniraj Kashyap & S. S. Bawakahn, Advocates)
THIS RFA IS FILED UNDER SECTION 96 OF CPC, AGAINST
THE JUDGMENT AND DECREE DATED 31.01.2013 PASSED IN
O.S.NO.348/2007 ON THE FILE OF THE FIRST ADDL. SENIOR
CIVIL JUDGE AT BELLARY, DECREEING THE SUIT FILED FOR
RECOVERY OF MONEY.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT AND COMING ON FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY, DR.H.B. PRABHAKARA SASTRY J.,
DELIVERED THE FOLLOWING:
R.F.A.No.4144/2013
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JUDGMENT
The appellant was the defendant in the Court below. The present respondent as plaintiff had instituted a suit against him in O.S.No.348/2007 for recovery of money of a sum of `20,24,000/- with interest thereupon.
2. The summary of the case of the plaintiff was that, he was running a business in food grains under the name and style of M/s. Vaibhava Traders at APMC yard, Ballari. The defendant approached him for supply of food grains on credit basis as per which the plaintiff supplied him with food grains on credit basis amounting to `19,95,000/-. Towards payment of the said amount, the defendant issued him a cheque bearing No.039505 dated 7.7.2007 drawn on State Bank of Mysore for a sum of `19,95,000/-. On presentation, the cheque got dishonoured. Alleging that the defendant with an intention to defraud the suit R.F.A.No.4144/2013 :3: claim, was trying to alienate his property, the plaintiff had instituted the suit.
3. During the pendancy of the appeal, the appellant has filed I.A.1/2014 under Order VI Rule 17 read with Section 151 of CPC, seeking permission to amend the written statement filed in the Court below by insertion of paragraph 1(a) after para No.1.
4. The defendant after entering appearance, filed his written statement categorically denying all material plaint averments. The defendant denied the alleged transaction regarding sale and supply of food grains to him by the plaintiff. He also stated that the bills referred and produced by the plaintiff were all fabricated and concocted documents. He also stated that he is running a transport office and has transportation contract with Food Corporation of India for transportation of food grains. For the smooth conduct of his business, he used to keep few duly R.F.A.No.4144/2013 :4: signed blank cheques in his office. One such duly signed blank cheque has been misused by the third parties. Some how the said cheque has gone into the hands of plaintiff, who misused the said cheque and presented the same to the bank.
5. Based on the pleadings of the parties, the Court below framed the following issues:
i. Whether the plaintiff proves that, the defendant has purchased food grains worth `19,95,000/- under different invoices on credit basis?
ii. Whether plaintiff proves that, the
defendant for the discharge of said
amount gave a cheque dated 7.7.2007?
iii. Whether defendant proves that, said
cheque has been misused as pleaded in
para 14 of the written statement?
iv. Whether the frame of suit is incorrect?
v. Whether plaintiff is entitled to recover
`20,24,000/- from the defendant with
R.F.A.No.4144/2013
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future interest at the rate of 18% per
annum?
vi. What order or decree?
In support of his suit, the plaintiff got himself examined as PW1 and examined one Sri. B. R. Bante Gouda as PW2. He also got marked documents at Exs.P1 to P26. The defendant got himself examined as DW1 and got marked documents at Exs. D1 to D6.
After hearing both sides, the Court below answered issue Nos.1, 2, 4 and 5 in the affirmative and issue No.3 in the negative and decreed the suit with cost directing the defendant to pay a sum of `20,24,000/-
with interest at the rate of 18% p.a. on `19,95,000/-
from the date of suit till realization, to the plaintiff. It is the said judgment and decree, the defendant in the Court below has assailed in this Regular First Appeal.
6. The appellant in his memorandum of appeal has taken a contention that the plaintiff has R.F.A.No.4144/2013 :6: conveniently suppressed the detail regarding the nature of M/s.Vaibhava Traders, as to whether it is a firm and that it has not been impleaded it as a party. Due to non-compliance of Section 84 of the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966 (henceforth for brevity referred to as 'the APMC Act'), the Court below ought not to have entertained the suit. The plaintiff also failed to examine the lorry owners or the persons who have delivered the goods to the defendant and who have endorsed on the bills relied upon by the plaintiff. Further, stating that the reliance of the Court below upon the alleged issuance and subsequent dishonour of the cheque in favour of M/s. Vaibhava Traders, has led to a wrong conclusion, the appellant has prayed for allowing the appeal by setting aside the judgment and decree under appeal.
R.F.A.No.4144/2013:7:
7. Heard argument from both sides and perused the materials placed before this Court including the pleadings filed in the Court below, evidence recorded, documents produced and the impugned judgment and decree.
8. For the sake of convenience, the parties would be referred to with the ranks they were holding before the Court below.
9. It was the argument of the learned counsel for the appellant/defendant that the plaintiff has suppressed the nature of the establishment of M/s. Vaibhava Traders and instituted a suit in his individual name. The suit was not maintainable in view of Section 84(4) of the APMC Act. He also submitted that the alleged transaction is a created story of the plaintiff.
10. Learned counsel for the respondent/plaintiff in his argument submitted that M/s. Vaibhava Traders was a proprietorship concern on the date of institution R.F.A.No.4144/2013 :8: of the suit, which has come up in the evidence. He also submitted that the contention of alleged non- maintainability of the suit under Section 84(4) of the APMC Act, was not taken by the defendant in the Court below, as such, at a belated stage, taking up such a contention is not maintainable. He further submitted that the evidence led and the documents produced as exhibits clearly establish the occurrence of the transaction as pleaded in the plaint.
11. In the light of the above, the points that arise for our consideration are:
i. Whether I.A.1/2014 deserves to be
allowed?
ii. Whether the Original Suit was not
maintainable in view of Section 84(4) of the Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966?
R.F.A.No.4144/2013:9: iii. Whether the plaintiff has proved the alleged transaction that the defendant has contended in his plaint?
iv. Whether the judgment and decree under appeal deserves to be set aside?
Re: Point No.1
12. During the pendancy of this appeal, defendant/appellant has filed I.A.1/2014 under Order VI Rule 17 read with Section 15 of CPC, seeking permission to amend his written statement filed in the Court below by addition of para 1(a) after para 1 in the written statement. The proposed para 1(a) reads as below:
"Para 1(a): The suit filed by the Respondent is not maintainable as there was no prior permission of APMC to institute the suit on hand and the provision of Sec.84 of the A.P.M.C. Act and Rules made there under were not followed, which contemplates reference of disputes and its resolution. Hence in view of the non-compliance of that Section, the suit one R.F.A.No.4144/2013 : 10 : presented is not maintainable before the Hon'ble Court and it is liable to be dismissed inlimine"
13. In the affidavit accompanying the application, the applicant/defendant had stated that, though he had stated in his written statement that the suit was not maintainable, but it was not stated by him that the same was in view of non-compliance of Section 84 of the APMC Act, as such, now to elaborate his defence, he intends to amend his written statement. The respondent/plaintiff, though has not filed his statement of objection to the said application, his learned counsel in his argument has seriously objected to the said application. It was his contention that, allowing the said application would result in taking away a right, which has already accrued to the plaintiff.
14. The plaintiff in his plaint has stated that he has been carrying business in food grains under the name and style of M/s. Vaibhava Traders at Ballari. R.F.A.No.4144/2013 : 11 : However, the documents produced by him, more particularly, the alleged certified copies of bills from Exs. P3(a) to P16(a) shows that the place of business is in APMC yard, Ballari. Section 84 of the APMC Act reads as below:
84. Provision for settlement of disputes.- (1) For the purpose of settling disputes between producers, buyers and sellers, or their agents, including any disputes regarding the quality or weight of, or payment for, any agricultural produce, or any matter in relation to the regulation of marketing of agricultural produce in the market yard, market sub-yard or sub-market yard, as the case may, the market committee of that area shall appoint a panel of arbitrators periodically consisting of agriculturists, traders and commission agents, and constitute a Disputes Committee from among its members in such manner as may be prescribed.
(2) Rules shall be made regulating the procedure for settlement of disputes, the authority or authorities for settling the disputes and appeals from the decisions of such authorities, payment of fees by parties for settlement of disputes, by an arbitrator or arbitrators and all other matters connected with such settlement including the extent to which the provisions of the Arbitration Act, 1940, shall be applicable to arbitrations under this section.
R.F.A.No.4144/2013: 12 : (3) Subject to the rules made under sub-section (2), a market committee may make bye-laws regulating the details in respect of settlement of disputes relating to transactions in notified agricultural produce in the market area.
(4) Notwithstanding anything contained in any law, no suit or other legal proceeding shall be entertained by any court in respect of disputes referred to in sub- section (1), without the previous sanction of the market committee.
In view of the said Section, more particularly Section 84(4) of the APMC Act, the defendant, as the appellant in this appeal, is intending to take a contention regarding maintainability of the suit. As such, he has filed the said I.A.1/2014.
15. It cannot be ignored that, except taking a general defence in his written statement, stating that the suit filed by the plaintiff was not maintainable either under law or on facts, the defendant has not taken any specific plea about the non-maintainability of the suit in view of Section 84(4) of the APMC Act. On the other R.F.A.No.4144/2013 : 13 : hand, he actively contested the suit in the Court below without even suggesting the plaintiff, who was examined as PW1, in his cross-examination about the alleged non- maintainability of the suit in view of Section 84(4) of APMC Act. Therefore, as contended by the learned counsel for the respondent herein, the filing of said I.A.1/2014 seeking permission to amend the written statement is definitely an after thought by the defendant/appellant. Furthermore, the act of the defendant in the Court below is not taking any specific plea regarding non-maintainability of the suit under Section 84(4) of the APMC Act and actively contesting the matter, has resulted in accrual of a right in favour of the plaintiff therein. As such, allowing of the application under consideration would result in causing prejudice to the interest and rights of the plaintiff, which has already been accrued to him.
16. The learned counsel for the respondent R.F.A.No.4144/2013 : 14 : brought to our notice the judgment dated 18.01.2013 passed by the learned Single Judge of this Court (as his Lordship then was) in RSA No.7305/2010 (Govind Traders Vs. Amrutlal Shantilal Shah), wherein, apart from observing that there was nothing on record to show that the panel of arbitrators was appointed periodically by Agricultural Produce Market Committee, the learned Judge was also pleased to observe that point of law on jurisdiction was not raised by the defendant before the trial Court as well as before the first Appellate Court. With the said finding, the contention of alleged non-maintainability of the suit was not accepted by the Court. Even in the instant case also, as already observed above, specific plea regarding non-maintainability of the suit in view of Section 84(4) of the APMC Act was not taken at the earliest and proper time by the defendant. Therefore, we do not find any reason to allow I.A.1/2014.
R.F.A.No.4144/2013: 15 : Re: Point No.2:
17. The learned counsel for the appellant in his argument regarding maintainability of the suit vehemently contended that, without obtaining sanction from the Market Committee under Section 84(4) of the APMC Act, the suit of the plaintiff was not maintainable, as such, the Court below committed an error in entertaining such a suit. In his support, the learned counsel relied upon a reported judgment of the Hon'ble Apex Court, reported in 2015(1) Scale 685 in the case of B.K.S. Marulasiddaiah and Company Vs. Madras Pakku Mandy and two unreported order/judgment of two learned Single Judges of this Court in CRP No.1043/2011(M/s. Shekarappa Kalakappa Shreegiri Vs. Devalappa) disposed of on 19.01.2015 and RSA No.407/2005 (S. C. Yalagi and Another. Vs. M/s. A. S. Yalagi and Ors.) disposed of on 07.1l.2016. R.F.A.No.4144/2013 : 16 :
In B.K.S.Marulasiddaiah and Company Vs. Madras Pakku Mandy (2015(1) Scale 685), originally a suit for recovery of money, which ultimately went to the Hon'ble Apex Court, the Hon'ble Apex Court was pleased to observe that, prior sanction as required under Section 84(4) of the APMC Act, was applied for and obtained after a period of about 11 years from date of cause of action and that the plaintiff had not even applied for such sanction from the Market Committee at the time of filing of the suit. Further, the suit was delayed by a period of about 11 years and as such, barred by limitation. With this, the civil appeal was allowed and the judgment and order under appeal was set aside.
In M/s. Shekarappa Kalakappa Shreegiri Vs. Devalappa (Civil Revision Petition No.1043/2011 disposed of on 19.01.2015) and in S. C. Yalagi and Another Vs. M/s. A. S. Yalagi and Ors. (RSA R.F.A.No.4144/2013 : 17 : No.407/2005 disposed of on 07.11.2016), the learned Single Judges of this Court were pleased to recognize the necessity of compliance of Section 84(4) of the APMC Act. While in CRP No.1043/2011, the learned Single Judge upheld the order of dismissal of the suit by the trial Court for the reason of renewal of grant sanctioned by the Market Committee under the APMC Act, RSA No.407/2005 upheld the judgment of the lower First Appellate Court, which had set aside the decree of the trial Court passed in favour of the plaintiff therein.
18. On the other hand, learned counsel for the respondent in his argument submitted that Section 84 of the APMC Act is applicable only between the traders who carry on their trade in APMC yard. Admittedly, the appellant/defendant not being a trader, the said Section is not applicable. We are not inclined to accept the said argument for the reason that a bare reading of Section 84 of the APMC Act does not mandate that both the R.F.A.No.4144/2013 : 18 : parties to the dispute must be the traders. On the other hand, it deals with the settlement of disputes between the producers, buyers or sellers or their agents. The word 'buyer' 'seller' and 'Trader' are defined under Section 2(5), 2(40) and 2(48) of the APMC Act respectively, which in it encompass the parties to the litigation also. However, as already observed, the plea regarding alleged non-maintainability of the suit in view of Section 84(4) of the APMC Act, since has not been taken up by the defendant at the earliest point of time, now he cannot say that the suit was not maintainable. The argument of the learned counsel for the respondent that, even under Section 8 of the Arbitration and Conciliation Act, 1996, the party who takes the defence of existence of Arbitration clause, in a civil suit, is required to take such a plea at the earliest point of time i.e., before filing written statement, also cannot be ignored.
R.F.A.No.4144/2013: 19 :
19. For all these reasons, we are of the view that the contention of the defendant that the suit is not maintainable for non-obtaining prior sanction under Section 84(4) of the APMC Act, is also not acceptable.
20. It is also the contention of the appellant/defendant that the plaintiff has suppressed the nature of establishment M/s. Vaibhava Traders. He has not disclosed whether it was a partnership firm or a proprietorship concern, as such also, the suit was not maintainable. In that regard, it may be noticed that, the writ has been filed by the plaintiff in his personal name. However, in the opening paragraph in the plaint, he has stated that he has been carrying on business in food grains under the name and style of 'M/s. Vaibhava Traders', Ballari. Thus, he has identified him as the owner of the said business establishment. Though the defendant in his written statement has stated that the nature of M/s. Vaibhava Traders has not been R.F.A.No.4144/2013 : 20 : specifically disclosed, however, he has not denied the alleged ownership of the plaintiff on the establishment M/s. Vaibhava Traders. The plaintiff as PW1 in his cross-examination has stated that M/s. Vaibhava Traders was a partnership concern, thereafter has continued as a proprietary concern. He has categorically stated that he is the sole proprietor of that concern. The said evidence has not been denied or disputed either in his further cross-examination or in the evidence of defendant/DW1.
Furthermore, in Ex.P17 which is produced by the plaintiff as a copy of his legal notice issued to the defendant, the plaintiff is described as the proprietor of M/s. Vaibhava Traders. The defendant has not objected or denied the same. On the contrary, in Ex.D5, which is a document produced by the defendant as his letter to the Income Tax Department, Ballari, requesting for a copy of assessment made by the department with respect to M/s. Vaibhava Traders, he has described the R.F.A.No.4144/2013 : 21 : plaintiff as the proprietor of M/s. Vaibhava Traders. Therefore, even though the transaction is said to have been taken place in the name of M/s. Vaibhava Traders, Ballari, since the said establishment being a proprietary concern, the plaintiff identifying him as the proprietor of the said business, has instituted the suit. Thus, the contention of the appellant/defendant that in the absence of clear description of M/s. Vaibhava Traders, the suit was not maintainable is also not acceptable. Re: Point No.3
21. The plaint averment that the plaintiff has been carrying on business in food grains under the name and style of M/s. Vaibhava Traders at Ballari is not in dispute. However, the defendant has seriously disputed the alleged supply of goods by the plaintiff's concern to him on various occasions. According to the plaint averments as well the evidence of PW1, he has R.F.A.No.4144/2013 : 22 : supplied goods to the defendant and raised bills as shown below:
Sl. Bill Date Particulars of Amount No. No. Foodgrains 1 208 22-04-07 Jawar ` 1,80,000/- 2 210 28-04-07 Jawar ` 1,80,000/- 3 212 03-05- Jawar & Maize ` 1,71,250/- 2007 4 214 04-05-07 Jawar & Bajra ` 1,63,750/- 5 217 10-05-07 Maize & Jawar ` 1,38,750/- 6 218 11-05-07 Maize and Jawar ` 1,55,000/- 7 221 15-05-07 Bajra ` 1,30,000/- 8 223 25-05-07 Bajra ` 65,000/- 9 225 07-06-07 Maize ` 1,01,250/- 10 228 15-06-07 Jawar ` 1,70,000/- 11 231 19-06-07 Navani ` 1,30,000/- 12 234 21-06-07 Jawar ` 1,60,000/- 13 236 23-06-07 Jawar ` 1,60,000/- 14 238 25-06-07 Bajra ` 90,000/- Total ` 19,95,000/- Interest as per the trade and usage at ` 29,000/- ` 18% p.a. from 07-07-2007 to 13-08- 2007 Total ` 20,24,000/-
22. The plaintiff has also stated that, towards the payment of above sum, the defendant issued to him a cheque bearing No.039505 dated 7.7.2007 draws on R.F.A.No.4144/2013 : 23 : State Bank of Mysore for a sum of `19,95,000/-. However, when presented for realization, the said cheque returned dishonoured. As such, he filed the suit for recovery of money.
23. PW1 in his evidence has reiterated plaint averments and to corroborate his statement, has got produced documents at Exs. P1(a) to P19(a) and Exs. P24 to P26. Exs. P3(a) to P16(a) are the certified copies of the bills raised by M/s. Vaibhava Traders, Ballari. Those are shown as cash/credit bills under different dates giving the description of the food grains supplied and also showing the registration number of the lorry through which the goods are said to have been supplied. It is also shown that all those goods were supplied to Mr. T. R. Babu of Ballari, who is defendant in the case. The defendant has objected to these documents and DW1 has denied of he entering into any such transaction with the plaintiff.
R.F.A.No.4144/2013: 24 :
The plaintiff has also produced the account books as the Bill Book, Cash Book and Ledger Book at Exs. P24 to P26. Ex.P24 shows the certified copies of the bills at Ex.P3(a) to P16(a). Reference to those bills and the supply of goods/transaction are reflected at several pages in the Cash Book and Ledger Book at Exs.P25 and P26. More particularly, bill numbers 208, 210, 212, 214, 217, 218, 221, 223, 225, 228, 231, 234, 236 and 238 are mentioned in Ex.P24, which are mentioned as Ex.P24(a). Similarly, in the Cash Book at Ex.P25 also, at entry page Nos.7, 10, 12, 13, 16, 17, 19, 22, 27, 30, 31, 33, 34 & 35, there are entries with respect to the suit transaction, which are marked as Ex.P25(a). Ex.P26 is the Ledger Book of the year 2007-08, wherein at page No.32 marked as Ex.P26(a), the amount matching the outstanding amount from the defendant are shown, which in total amounts to `19,95,000/- and those sums with respective dates are entered in a page showing as the account of Mr. T. R. Babu, the R.F.A.No.4144/2013 : 25 : defendant in the case. Except making general denial suggestions with respect to those entries, the defendant could not weaken the evidence with respect to those exhibits P3(a) to P16(a) and Exs. P24 to P26.
PW2 - B. R. Bante Gouda was examined from the plaintiff's side. He has stated that he has been working as accountant in plaintiff's shop since 1995 and that regularly he writes Cash Book and Ledger. Stating that he has written Cash Book for the period 2007-08 and on seeing the Ledger and Cash Book, he has identified the entries at Ex.P24(a), P25(a) and P26(a), as authored by him and in his handwriting. In his cross- examination, he has given some more details as to in how many firms he works as an accountant and how he writes account books. A suggestion was made to this witness in his cross-examination, which he has admitted as true. The same is reproduced hereinbelow:
"¤.¦.24jAzÀ 26gÀ°ègÀĪÀ JAnæU¼ À £ À ÀÄß £Á£Éà §gÉ¢gÀÄvÉÛãÉ.
CAzÀgÉ ¸Àj."R.F.A.No.4144/2013 : 26 :
Similarly, one more suggestion was made in his cross-examination, which is reproduced hereinbelow:
"¤.¦. 24£ÀÄß £ÉÆÃr ¤.¦.24 jAzÀ 26 EªÀÅUÀ¼À£ÀÄß vÀAiÀiÁgÀÄ ªÀiÁrzÉÝÃ£É CAzÀgÉ ¸Àj."
Thus, suggestions to and admissions on the part of PW2 makes it clear that the bills in Ex.P24 are the details of transaction and based on those bills, the ledger entries were made at Ex.P25 and Ex.P26.
Thus, the evidence of PW1 regarding the suit transaction is corroborated by PW2 and further supported by Ex.P3(a) to P16(a) and Ex.P24 to Ex.P26.
24. According to the plaintiff, the cheque bearing No.039505 dated 7.7.2007 for a sum of `19,95,000/-, drawn on State Bank of Mysore, was delivered to him by the defendant towards the sale price due by the defendant to the plaintiff. The said cheque came to be dishonoured when presented for realization. The plaintiff, apart from reiterating the same in his evidence R.F.A.No.4144/2013 : 27 : as PW1, has also produced the certified copy of the said cheque at Ex.P19 and certified copy of endorsement at Ex.P2(a). The original of Ex.P1 to P20 are recorded to have been marked in C.C.No.1036/2007 on the file of Principal Civil Judge and JMFC, Ballari. This endorsement is made in the annexure portion of the judgment itself, which is not in dispute. However, the defence of the defendant, regarding issuance of the cheque as taken in his written statement is that, since he will be on business tours to various places and goes out of Ballari, it is a business practice to keep few signed blank cheques in the office for the purpose of said transport business. He was shocked to know that one such cheque seems to have been misused by third parties. It appeared to him that cheque No.039505 was some how in the hands of the plaintiff, who subsequently filled up the cheque and presented it. DW1 has reiterated the same in his examination-in- chief also. However, the said witness in his cross- R.F.A.No.4144/2013 : 28 : examination has stated that, every month he receives account statement from the bank. He also admitted a suggestion as true that bankers told him that cheque books must be kept in a safe and secured places. He further admitted a suggestion as true that nobody should keep cheques signed in blank. In this way, he has shown himself to be a diligent person knowing the importance of preserving the cheques and requirement of being careful in not keeping the blank cheques duly signed.
The defendant no where in his written statement or in his examination-in-chief has stated as to how come the said cheque No.039505 went into the hands of the plaintiff, but has for the first time in his cross- examination stated that the plaintiff went to his office and stolen the said cheque. However, he admitted that he has not taken such a defence in his written statement. Despite specific question, he did not give the day, month and year when the said cheque was stolen R.F.A.No.4144/2013 : 29 : by the plaintiff. He has only stated that it is only after institution of this case and a criminal case against him, he came to know about the said cheque. The said evidence of DW2 about the alleged theft of cheque by the plaintiff and he coming to know about that cheque, admittedly are only his statements, which does not inspire any confidence in the mind of an ordinary person, that too particularly when the defendant himself claims to be a diligent business man knowing the importance of cheque. His statement for the first time made in the cross-examination that the cheque was stolen by the plaintiff is without any basis. Being a prudent businessman, he was expected to regularly or periodically verify his statement of accounts, which he claims to be getting regularly from his banker. In such an event, had really the unissued cheque found to be presented and dishonoured, he would have definitely lodged a police complaint regarding theft of the cheque. No effort in this regard has ever been made by the R.F.A.No.4144/2013 : 30 : defendant. Furthermore, he has not even issued any instruction to his banker asking them to stop payment of the said cheque. Therefore, a presumption which can be drawn under Section 118 of the N.I.Act has to be necessarily formed in favour of the plaintiff. Further, the said presumption crystallize in view of the above analysis of the evidence of PW1, PW2 and DW1.
It can also be observed that, DW1 in his cross- examination has stated that, while doing business, he will give cash if he possesses, otherwise he makes payment through cheques. By such statement, he admits that he uses cheque in his business transaction also and makes payment through cheque. He has further stated that, in his office generally he scrutinize the cheque books and that he also operated the cheques which are subsequent in serial numbers to the cheque in question and all those cheques have been passed by the banker. This further strengthens the doubt as to how come he did not notice the missing of the cheque in R.F.A.No.4144/2013 : 31 : question, while issuing the subsequent cheque leaves in his business transaction. The more catching aspect in the evidence is the suggestion made from the defendant's side in the cross-examination of PW1, which is reproduced hereinbelow:
"¥Àw æ ªÁ¢ PÉÆlÖAvÀºÀ ZÉPÀÌ£ÀÄß zÀÄgÀÄ¥ÀAiÉÆÃUÀ¥Àr¹PÉÆAqÀÄ DvÀ£À «gÀÄzÀÞ ¸ÀļÀÄî Qæ«Ä£À¯ï PÉøÀÄ zÁR°¹zÉ J£ÀÄߪÀÅzÀÄ ¸ÀjAiÀÄ®è."
By making the above suggestion to the plaintiff in his cross-examination, the defendant has clearly admitted that he himself had issued the cheque in question to the plaintiff.
25. Therefore, the evidence of PW1, PW2 and DW1 corroborated by the documents from Exs. P1 to P16(a) and Exs. P24 to P26 clearly establish that the plaintiff as a part of his business had supplied goods to the defendant, who as a consideration for those goods, had issued the cheque bearing No.039505 dated R.F.A.No.4144/2013 : 32 : 7.7.2007 drawn on State Banik of Mysore, Ballari for a sum of `19,95,000/-, to the plaintiff. Undisputedly, the said cheque, copy of which is at Ex.P1(a), when presented for realization, was dishonoured by the banker as could be seen from Ex.P2(a).
26. The Court below after appreciating the evidence has decreed the suit of the plaintiff by directing the defendant before it to pay a sum of `20,24,000/- with future interest at the rate of 18% p.a. on `19,95,000/- from the date of suit till realization. Though the cheque amount was for `19,95,000/-, but the suit claim including interest as on the date of filing of the suit was `20,24,000/-. As such, the decree was passed for the said total sum of `20,24,000/-. Apart from an amount of `19,95,000/- the Court below has also awarded a future interest on the said amount at the rate of 18% p.a. R.F.A.No.4144/2013 : 33 :
27. The learned counsel for the appellant/defendant while concluding his argument submitted that the said rate of interest be reduced as per Section 34 of the Code of Civil Procedure. No doubt Section 34 of the Code of Civil Procedure empowers the Court decreeing the suit to award interest and to confine the future interest at the rate of 6% p.a. only. However, in the instant case, both plaintiff and defendant are businessmen. The goods under bills at Ex.P3(a) to P16(a) are proved to have been supplied to the defendant in a gap of a period of two months. Thus, a large quantum of different food grains would not be purchased by the defendant for his self use in the said period of 2 months. As such, the defendant must have purchased those goods for the commercial purpose only. Since the suit transaction is a commercial transaction, the rate of interest would be as prevailing in the market or as per the terms of agreement. Admittedly, there is no evidence either to show the agreed rate of interest or R.F.A.No.4144/2013 : 34 : the rate of interest prevailing in the market. The rate of interest claimed was at 18% p.a. As such, without much discussion upon it, the Court below has awarded the same rate.
28. In the facts and circumstances of the case, we are of the view that the said rate of interest, in the absence of any material to substantiate, is on the higher side. As such, the said rate of interest requires to be reduced. Keeping the normal rate of interest prevailing as on the date of suit transaction and the current rate of commercial interest, we are of the view that reducing the said rate of interest and confining it to 9% p.a. would be just and appropriate in the case. It is only to the said extent, the judgment and decree under appeal deserves interference at the hands of this Court. Accordingly, we proceed to pass the following order:
ORDER The appeal is allowed in part.R.F.A.No.4144/2013 : 35 :
The judgment and decree dated 31.01.2013 passed by the I Addl. Senior Civil Judge at Ballari in O.S.No.348/2007 is modified only to the extent that rate of future interest directed at 18% p.a. on `19,95,000/- is reduced and fixed at 9% p.a. Barring this, the remaining portion of the judgment and decree under appeal is confirmed.
No order as to costs.
Draw the modified decree accordingly.
Sd/-
JUDGE Sd/-
JUDGE gab/-