Andhra Pradesh High Court - Amravati
Penki Krishnam Naidu vs Majji Srinivasarao on 11 October, 2023
THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO
APPEAL SUIT NO.318 OF 2014
JUDGMENT:
1. The Appeal, under Section 96 of the Code of the Civil Procedure, 1908 (for short, 'C.P.C') is filed by the appellant/defendant challenging the decree and Judgment dated 21.04.2014 in O.S.No.58 of 2010 passed by the learned Judge, Family Court-cum-Additional District Judge, Vizianagaram (for short, 'the trial court'). Respondent is the plaintiff, who filed the suit in O.S.No.58 of 2010 seeking recovery of Rs.14,20,000/- with interest and costs from the defendant based on the promissory note.
2. Referring to the parties hereinafter as arrayed in the suit is expedient to mitigate potential confusion and better comprehend the case.
3. The factual matrix, necessary and germane for adjudicating the contentious issues between the parties inter se, may be delineated as follows:
The defendant borrowed Rs.10,00,000/- from the plaintiff for his business purpose, agreeing to repay the same with the interest rate of 24% p.a., and executed a promissory note on the same day at Cheepurupalli village. The plaintiff orally demanded the defendant to repay the due amount covered under the suit promissory note, but the defendant did not refund the promissory note amount owed.2
T.M.R., J A.S. No.318 of 2014
4. (a) In the written statement, the defendant refuted all the plaint averments and contended that he neither borrowed the alleged amount nor signed the alleged suit promissory note; the suit promissory note was fabricated by the plaintiff with the help of his henchman at the instance of his brother Sathyam Naidu; the signature on the alleged promissory note was a clear forgery; he had no necessity to borrow any amounts as alleged in the plaint; the plaintiff cannot advance such huge amounts.
(b) The defendant further contended that he is an agriculturist, having some mango tope lands and serves as secretary for A.I.T.U.C; his wife owns lands in Sathivada village of Therlam Mandal; his wife had obtained permission from the Government for stone quarrying (metal) on 21.08.2008 for her land; upon learning this, the plaintiff's brother (Majji Sathyam Naidu), approached the plaintiff and convinced him to enter into a joint venture for the quarrying business; trusting his words, the defendant handed over the entire operation to him; Sathyam Naidu managed the quarry for some time, but later continued it, due to disputes with neighbouring land owners; all records related to the quarry and the materials sold were in Sathyam Naidu's possession; Sathyam Naidu proposed that they invest in a stone crusher adjacent to the earlier stone quarry of one S.Thirumala Rao, who happened to be the leaseholder of the sand quarry of Maruvada, the defendant agreed for the same and allowed to him to use the said compressor, tractor and trailer for it; meanwhile, the plaintiff's brother and his coterry impressed the defendant that they 3 T.M.R., J A.S. No.318 of 2014 will install stone crusher in the defendant's lands at Amiti village adjacent to the stone quarry stands in the defendant's wife's name, for which the defendant agreed to give all the amounts of the stone quarry share in the above said sand quarry; though the plaintiff's brother decided to pay all the amounts, he failed to deliver even single pie to the defendant, as such, the defendant insisted him to settle all his account and handed over the above machinery, tractor and trailer to him; thereby, he made false allegations and complained at International Human Rights Association, Visakhapatnam against the defendant's wife.
5. Based on the above pleadings, the trial Court framed the following issues:
(1) Whether the plaintiff is entitled to recover the suit amount as prayed for?
(2) Whether the suit promissory note is a rank forgery, thereby, the plaintiff is liable for prosecution.
(3) To what relief?
6. During the trial, on behalf of the plaintiff, P.Ws.1 and 2 were examined and marked Exs.A.1. On behalf of the defendant, D.W.1 was examined and marked Exs.B.1 to B.5 documents.
7. After completing the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs for Rs.14,20,000/- with subsequent interest at the rate of 12% p.a., on the principal amount of Rs.10,00,000/- from the date of suit till the date of decree and after that at the rate of 6% p.a., from the date of decree till the date of realization on the principal amount of Rs.10,00,000/-.
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T.M.R., J A.S. No.318 of 2014
8. I have heard learned counsel appearing on behalf of the respective parties at length and have gone through the Judgment and findings recorded by the learned trial Court while dismissing the suit. I have also re-appreciated the entire evidence on record, including the deposition of relevant witnesses examined by both sides.
9. Sri Satyanarayana Nimmala, learned counsel representing the appellant/defendant, put forth an argument that the trial Court grossly erred in decreeing the suit by ignoring the evidence adduced by both the parties and by ignoring the facts elicited in the PW.1's cross-examination; Additionally, he asserts that the trial court erred by not giving due consideration to a notice dated 09.06.2013, which the defendant had issued to the plaintiff under Order 12 Rule 8 of C.P.C'; this notice requested the production of the plaintiff's bank passbook and account statement, original records, patta passbooks, and title deeds related to the suit promissory note transaction; according to the defendant's counsel, the plaintiff's failure to provide this evidence undermined his claim of having the financial capacity to lend the substantial amount in question. Furthermore, it was pointed out that the defendant did not take steps to send the disputed promissory note, Ex.A.1, to a handwriting expert for signature comparison, which could have shed light on the Ex.A.1's authenticity. He further asserts that the trial court misapplied Section 73 of the Indian Evidence Act, suggesting that this was another error in the judgment.
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T.M.R., J A.S. No.318 of 2014
10. Per contra, Sri Majji Suri Babu, learned counsel representing the respondent/plaintiff, argued that the trial Court appreciated the case facts and reached a correct conclusion. The reasons given by the trial Court do not require any interference.
11. Having regard to the pleadings in the suit, the findings recorded by the Trial Court and in light of the rival contentions and submissions made on either side before this Court, the following points would arise for determination:
1) Is the Trial Court justified in holding that the defendant executed the Ex.A.1 suit promissory note on receipt of the consideration amount from the plaintiff?
2) Does the trial Court judgment need any interference?
POINT NOs.1 & 2:
12. In support of the plaintiff's case, he examined as PW.1 and the 1st attestor of the Ex.A.1 promissory note as PW.2 (Robbi Ramana). PWs.1 and 2 testified that the defendant borrowed Rs.10,00,000/- from the plaintiff for his business and development purpose and executed Ex.A.1 suit promissory note in favour of the plaintiff (PW.1) on 10.02.2009, agreeing to repay the same with interest @ 24% per annum. The defendant, who was examined as DW.1, testified that he never borrowed any amount from the plaintiff; Ex.A.1 suit promissory note is a created, concocted and fabricated one by the plaintiff with the help of his henchmen, at the instance of his brother by name Sathyam Naidu. It is 6 T.M.R., J A.S. No.318 of 2014 not in dispute that Sathyam Naidu is the plaintiff's brother. It is not the DW.1's evidence that he had any conflicts with the scribe and attestors of Ex.A.1 suit promissory note. Though the defendant has specifically disputed the signature on the Ex.A.1 suit promissory note, when he was cross-examined, he testified that he had to consult his advocate whether he send the Ex.A.1 suit promissory note to a handwriting expert or not. It is born out from the record that both parties did not opt for referring the disputed signatures to the expert opinion.
13. The defendant relied on Exs.B.1 to B.5 in support of his case. Ex.B.1 is an order dated 08.09.2009 issued by the Principal Junior Civil Judge, Bobbili. It pertains to an affidavit filed in a different case (O.S.No.___ of 2019 in I.A.No.__ of 2019), where Bankapalli Ramakrishna and others filed a suit against the State of Andhra Pradesh, represented by the District Collector, Vizianagaram, and three others. This affidavit alleges that defendant No.4, Penki Aruna Kumari (wife of Krishnam Naidu), intended to conduct illegal quarry operations using explosives, posing a danger to lives and livestock. The plaintiff and defendant were not parties to this proceeding. The defendant presented Ex.B.1 to demonstrate that he is an agriculturist and that his wife had obtained permission for a stone quarry. Ex.B.2 contains proceedings from the Government of Andhra Pradesh, Department of Mines and Geology, dated 21.08.2008. It confirms that Smt. P.Aruna Kumari (the defendant's wife) was permitted to commence quarry operations in Sathivada village, 7 T.M.R., J A.S. No.318 of 2014 Terlam Mandal, Vizianagaram District, for a ten-year period starting from 21.08.2008. Ex.B.3 proceedings, dated 27.07.2009, are from the Government of Andhra Pradesh, Department of Mines and Geology. They indicate that Sri S.Tirumala Rao was the highest bidder/tenderer for quarry operations in Maruvada village, Vangara Mandal, Srikakulam District, and he was declared the successful bidder. Ex.B.4 is a notice from the International Human Rights Association, dated 21.09.2010, addressed to the defendant's wife. It mentions that one Majji Sathyam Naidu had filed a complaint against her, alleging fraud and cheating in connection with the Jenny Stone Crusher business in Amati village, Therlam Mandal, Vizianagaram District. Ex.B.5 is a letter addressed to S.Tirumala Rao, indicating that he was permitted to participate in an auction for a sand quarry in Maruvada, from the Assistant Director of Mines and Geology, Srikakulam-I.
14. According to the plaintiff's case, the suit transaction held on 10.02.2009, Exs.B.1 to B.5 documents do not show that the defendant had any disputes or misunderstandings with the plaintiff's brother as on the date of the suit transaction; thereby, it cannot be contended that the plaintiff has no reason to lend such a considerable amount when the defendant had disputes with the plaintiff's brother. The plaintiff is not a party to Exs.B.1 to B.5 documents. The documents relied on by the defendant show that the plaintiff's brother and defendant had disputes regarding mining operations. A plain reading of the aforesaid documents 8 T.M.R., J A.S. No.318 of 2014 shows that conflicts emerged between them six months after the suit transaction. The trial court observed that except for self-contradictory evidence, there is no evidence adduced by the defendant to establish the plea of forgery of the signatures on the suit promissory note. Furthermore, the defendant did not take steps to send the Ex.A.1 suit promissory note to the handwriting expert. Still, the trial Court compared the disputed signatures on the suit promissory note with his admitted signatures.
15. Section 73 of the Evidence Act expressly enables the Court to compare the disputed writings with admitted or proved writings to ascertain whether the writing is that of the person by whom it purports to have been written. The Hon'ble Supreme Court in Murarilal V. State of M.P.1, observed that the duty of the Court to compare the writings and to come to its own conclusion cannot be avoided by recourse to the statement that the Court is not an Expert. It is thus clear from the above observation of the Apex Court that under section 73 of the Evidence Act, the Court can compare the disputed and admitted handwriting or signature to come to its own conclusion. However, provisions of Section 73 of the Evidence Act have been interpreted by various Courts as to how the signatures or handwritings are to be compared when there is no assistance from the Expert.
16. A reading of the trial Court Judgment shows that it compared the documents by invoking the powers under Section 73 of the Indian 1 A.I.R. 1980 SC 531 9 T.M.R., J A.S. No.318 of 2014 Evidence Act, 1872. The trial Court compared the disputed signatures of the defendant on Ex.A1 with the admitted signatures on vakalath, chief affidavit, and Court summons and opined that they are similar. When the parties to the proceedings have not chosen to refer the disputed signatures to the Expert, this Court finds that the comparison of signatures by the trial Court is permissible and cannot be found fault with. The defendant failed to point out any glaring dissimilarities to contend that the observation made by the trial Court was incorrect.
17. The evidence of PWs.1 and 2 manifestly establishes the execution of Ex.A.1 suit promissory note by the defendant. The defendant has not taken steps to show that Ex.A.1 do not contain his signature.
18. In Duggineni Seshagirirao V. K.Venkatarao2, the composite High Court of Andhra Pradesh held that:
"the plaintiff has been able to prove the execution of the document. If the document was disputed or doubted the onus was on the defendant to show that the document was forgery because the presumption in favour of the plaintiff under Section 118 of Negotiable Instrument Act".
19. In Bonalaraju V. S. Sarupula Srinivas3, the composite High Court of Andhra Pradesh held that:
"once execution is proved the presumption under Section 118 of N.I. Act that it is supported by consideration automatically applies and the contention that the plaintiff is not only to establish the execution but also establish passing on the consideration is rejected".2
2001(6) ALT 95 3 2006(2) ALD 202 10 T.M.R., J A.S. No.318 of 2014
20. In G. Vasu V. Syed Yaseen Sifuddin Quadri4, the composite High Court of Andhra Pradesh held that:
"Once the defendant shows either by direct evidence or circumstantial evidence or by use of other presumptions of Law or the fact that the promissory note is not supported by consideration in the manner stated in the promissory note or the manner stated in the suit notice or the pleading, the evidential burden shifts to the plaintiff and the legal burden of the plaintiff is revived, i.e., to prove that the promissory note is supported by consideration and at that stage. The presumption of Law covered by S.118"
disappears and no longer subsists".
"It is further held that once both parties have adduced evidence the Court has to consider the same and the burden of proof loses all its importance".
21. In Abbisetti Krishnamoorthy V. Singasani Raghuramaiah (died) per L.R.s5, the composite High Court of Andhra Pradesh held that:
"Section 118 of the N.I Act shows that the presumption attached to passage of consideration (as is the subject matter of this Appeal) just like other presumption also is clearly rebuttable and it is for the defendant to satisfy the Court that in a given case, the presumption cannot be drawn".
In light of the principles laid down in the above decisions, I now consider the facts of the case.
22. Such being the position of Law, the burden lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances, which would lead the Court to believe the non- existence of the consideration. If the defendant discharges the onus of proof showing that the existence of consideration was improbable or doubtful and also the execution of the promissory note, the onus would be 4 AIR 1987 AP 139 Full Bench 5 2011(5) ALT 143 11 T.M.R., J A.S. No.318 of 2014 shifted to the plaintiff. Then, he will be obliged to prove the existence of the consideration.
23. As seen from the evidence on record, the defendant contested the the plaintiff's financial capacity to lend such a huge amount. PW.1 during cross-examination stated that he owned landed property of about Ac.18.00 to Ac.20.00, but he did not provide documentation relating to his land. It is also elicited from the cross-examination that he is doing business in Mangoes. No substantial effort was made during cross examination to challenge or discredit the PW.1's testimony. The PW.2's evidence also supported the fact that the plaintiff was engaged in mango and fruit business. It is also revealed that the defendant and his wife owned land approximately between Ac.25.00 cents to Ac.30.00 cents. The evidence of PWs.1 and 2 establish that the plaintiff has a sufficient source of income. Though PW.1 has categorically stated in his evidence about his business particulars and land holdings, even the defendant in his evidence as DW.1 has not disputed the said evidence of PW.1.
24. Though there is no cross-examination with regard to the income tax particulars of the PW.1, and no ground is taken in the grounds of Appeal. Learned counsel for the appellant contended that the plaintiff had not shown the said debt in the income tax returns.
25. Merely because the transaction in question has not been shown in the Income Tax returns, it would not be rendered void. If the plaintiff has 12 T.M.R., J A.S. No.318 of 2014 advanced a certain amount, which ought to have been reflected in the tax returns, but he failed to disclose the same in his returns, that would not exonerate the borrower from the liability to repay. The default committed by the plaintiff may attract penal action from the department. But, his right to recover the amount from the defendant cannot be extinguished. The right to recover the money lent is a valuable civil right that is recognized both by Common Law as well as a statute. It can be made unenforceable only by statutory intervention. For instance, the Law of limitation can render a claim otherwise valid unenforceable. The Government of the day can bring in legislation offering succour to debtors. If the suit transaction falls within the scope of debt relief legislation, the plaintiff cannot maintain an action outside its framework. But, failure to disclose in the tax returns cannot render the amount irrecoverable. It cannot extinguish the right of the creditor. A civil remedy can be stifled only by a statutory provision rather than judicial innovation.
26. The same question came for consideration before the High Court of Judicature at Bombay, Nagpur Bench, in the case of Prakash Madhukarrao Desai V. Dattatraya Sheshrao Desai in Criminal Appeal NO.795 of 2018, wherein it has made reference to the Division Bench for being answered reads as under:
"Whether in case the transaction, is not reflected in the Books of account and/or the Income Tax Returns of the holder of the cheque in due course and thus is in violation to the provisions of Section 269 SS of the Income Tax Act, 1961 whether such a transaction, can be held to be "a legally enforceable debt" and can be permitted to be enforced, by 13 T.M.R., J A.S. No.318 of 2014 institution of proceedings under Section 138 of the Negotiable Instruments Act ?"
*************************** In view of the aforesaid discussion, it is held that a transaction not reflected in the books of accounts and/or Income Tax returns of the holder of the cheque in due course can be permitted to be enforced by instituting proceedings under Section 138 of the Act of 1881 in view of the presumption under Section 139 of the Act of 1881 that such cheque was issued by the drawer for the discharge of any debt or other liability, execution of the cheque being admitted. Violating Sections 269-SS and/or Section 271-AAD of the Act of 1961 would not render the transaction unenforceable under Section 138 of the Act of 1881.
27. On studied scrutiny, it is seen that the defendant has not produced any evidence to discharge the onus on him. The defence taken by the defendant is not substantiated. The presumption under section 118 of the Negotiable Instruments Act 1881 is a statutory one, and unless it is rebutted, it has to be presumed that consideration has passed.
28. Regarding the evidence, which is adverted to supra, this Court views that the defendant does not show satisfactory and reliable evidence or circumstance to disbelieve the evidence of PWs.1 and 2 regarding the execution of the promissory note by the defendant and passing of consideration. The evidence of PWs.1 and 2 is consistent regarding the execution of the promissory note by the defendant on receipt of the consideration amount. Though PWs.1 and 2 were subjected to lengthy cross-examination, nothing was elicited to discredit their evidence. The plaintiff and his witness have no reason to fabricate the suit promissory note. PW.2 has no reason to depose falsehood against the defendant's 14 T.M.R., J A.S. No.318 of 2014 interest, and he would gain nothing by supporting the plaintiff's case unless there is a truth in it. The defendant places no evidence to show his hostility with PW.2 to depose falsehood against his case. However, even the rebuttal could be given by direct evidence or by proving the preponderance of probabilities on record. In the present case, the defendant has not rebutted the presumption, even by the preponderance of probabilities.
29. Thus, once it is proved that the defendant has signed the promissory note, his liability cannot be denied. It becomes evident that once it is pleaded and proved that the defendant signed the suit promissory note, the presumption would arise, and the same has to be rebutted by the defendant.
30. I am of the opinion that the defendant failed to prove his case. To rebut the presumption raised under section 118 of the Negotiable Instrument Act, 1881, the defendant has not produced any relevant evidence to show that the suit promissory note is not upon due consideration. For the reasons stated above, this Court is of the view that the plaintiff can establish the suit promissory note in his favour by the defendant after receipt of the consideration amount.
31. After careful consideration, I am of the view that the trial Court had adequately appreciated the evidence. There is no reason for this Court to arrive at a different conclusion than the one arrived at by the trial Court. I 15 T.M.R., J A.S. No.318 of 2014 think that the findings by the trial Court are correct, and no justifiable reasons have been shown by the appellant/defendant for arriving at different conclusions. I agree with the conclusion reached by the trial Court.
32. Accordingly, the Points are answered in favour of the plaintiff by holding that the Trial Court is justified in holding that the defendant executed the suit promissory note and received the consideration amount. Given the preceding discussion, the view taken by the trial court does not call for any interference, and this Appeal fails and is hereby dismissed. The impugned Decree and Judgment passed by the trial court is upheld.
33. As a result, the Appeal is hereby dismissed without costs by confirming the Decree and Judgment in O.S.No.58 of 2010, dated 21.04.2014, passed by the learned Judge, Family Court-cum-III Additional District Judge, Vizianagaram.
Miscellaneous petitions pending, if any, in this Appeal, shall stand closed.
___________________________________ JUSTICE T. MALLIKARJUNA RAO Date: 11.10.2023 SAK 16 T.M.R., J A.S. No.318 of 2014 THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO APPEAL SUIT NO.318 OF 2014 Date: 11.10.2023 SAK