Karnataka High Court
Sri Ramesh B vs Sri .Hosamani on 22 December, 2020
Bench: Aravind Kumar, Shivashankar Amarannavar
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF DECEMBER, 2020
PRESENT
THE HON'BLE Mr. JUSTICE ARAVIND KUMAR
AND
THE HON'BLE Mr. JUSTICE SHIVASHANKAR AMARANNAVAR
R.F.A. No. 1732/2018
BETWEEN :
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1. Sri. Ramesh B.
Nyamagowdar
S/o. Basanagowda
Aged about 63 years
2. Sri. Hemanth
S/o. Sri. Ramesh B.
Nyamagowdar
Aged about 33 years
Appellant Nos.1 & 2
Residing at No. 310/312
2nd Cross, Viveknagar
West, Bijapura - 586109.
3. Smt. Deepthi
Nyamagowdar
Aged about 36 years
D/o. Ramesh B.
Nyamagowdar
2
Residing at House No. 15
1st Floor, 4th Stage
Akshaya Colony
Shirur Park Road
Vidyanagar
Hubli - 580 021.
Now at No. 310/312
2nd Cross, Viveknagar
West, Bijapura - 586109. ... Appellants
(By Sri. Kiran V. Ron Adv.,)
AND :
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Sri. Hosamani
Major
No.193, 5th Cross
G. K. W. layout
Vijayanagar
Bangalore - 560 040. ... Respondent.
(By Sri. K. V. Narasimhan Adv.,)
---
This RFA is filed under Section 96 of CPC against the
judgment and decree dated 01.08.2018 passed in O. S. No.
5031/1999 on the file of the 31st Additional City Civil and
Sessions Judge, Bangalore, decreeing the suit for recover of
money.
This RFA having been heard and reserved for orders this
day, SHIVASHANKAR AMARANNAVAR, J, delivered the
following;
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JUDGMENT
Legal representatives of deceased defendant Shobha Nyamagowdar have filed this appeal challenging the judgment and decree dated 01.08.2018 passed in O.S. No. 5031/1999 by XXXI Additional City Civil and Sessions Judge, Bengaluru, whereunder the suit filed by the respondent/plaintiff for recovery of money has been decreed.
2. The parties will be referred as per their rankings in the trial Court.
3. Case of the plaintiff in brief is as under:
During middle of May 1996 the defendant approached the plaintiff and sought for financial assistance to the tune of Rs.3.00 lakhs undertaking to repay the same with interest @ 24% p.a. The defendant further represented to the plaintiff that she had equal right in the family property situated at Shirur village, Bagalkot taluk and that she had also requested to partition the said lands and to give her, her legitimate share so that she can deal with the same as her own. The 4 plaintiff had lent the said amount to the defendant in the month of July 1996. On receipt of the said amount the defendant had executed a receipt-cum-undertaking on 03.07.1996 promising to refund the amount within one year.
In the said document the defendant had further recited that she had requested her father to partition the joint family properties measuring 19 acres 34 guntas comprised in survey Nos. 843/2, 848/2 and 70/2 of Shirur village, Bagalkot taluk and that she would dispose of the said property that may be allotted to her share and repay the amount to the plaintiff. Subsequently, defendant had not come forward to make payment. Therefore, plaintiff filed suit for recovery of the amount with interest. The suit of the plaintiff, initially, came to be decreed exparte by judgment dated 16.01.2003. The plaintiff filed execution petition No. 1172/2008 for executing the said decree passed in O.S. No. 5031/1999 against the legal representatives of defendant - Shobha Nyamagowdar who are the appellants herein. The legal representatives of defendant had filed Misc. Application No. 243/2009 for 5 setting aside the ex-parte judgment and decree passed in O.S. No. 5031/1999 and the same came to be allowed by order dated 03.04.2012 and the suit came to be restored. The present appellants who were brought on record as the legal representatives of the deceased defendant filed written statement taking up the following contentions.
- That the suit summons was served on the defendant by paper publication dated 21.11.2001 and she was placed ex-parte and an ex-parte judgment and decree dated 16.01.2003 was passed and the suit of the plaintiff came to be decreed.
- Plaintiff then filed execution petition No. 1172/2008 against the legal representatives of defendant for recovery of decretal amount.
- Legal representatives of defendant filed Misc. Application No. 243/2009 and challenged the judgment and decree dated 16.01.2003 passed in O.S. No. 5031/1999 and sought for setting aside the same which came to be allowed by order dated 6 03.04.2012 and suit came to be restored and execution No. 1172/2008 came to be dismissed.
- Defendant died on 12.03.2003 and right to sue did not survive to the plaintiff and hence, O.S. No. 5031/1999 abated.
- The defendant had not contracted with the plaintiff making her legal representatives liable for her personal and unsecured alleged loan of Rs.3.00 lakhs allegedly taken by her from the plaintiff on 03.07.1996 by executing undertaking-cum-receipt.
- The said undertaking-cum-receipt is false and frivolous and it was not within the knowledge of the legal representatives of deceased defendant.
- The defendant had not offered or pledged or mortgaged any of her own properties as security to the alleged loan.
- Legal representatives are totally ignorant of any financial transaction that allegedly took place on 7 03.07.1996 between the plaintiff and deceased defendant.
- Defendant had raised the alleged loan itself is unbelievable as she was a house wife without any income and entirely dependant on her husband.
- There was no need for the defendant to raise huge loan of Rs.3.00 lakhs from the plaintiff at an exorbitant rate of interest of 24% p.a.
- Plaintiff had no reason to lend the loan to the house wife without obtaining consent from her husband.
- There is no law or authority that a personal loan which is unsecured and unknown to the legal representatives creates any liability on them.
- The plaintiff was not a licensed money lender and defendant had no financial difficulties.
- It was denied that family of plaintiff and defendant were having such relationship as to enter into secret financial transaction with defendant.
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- Right to sue did not survive to the plaintiff on the death of defendant - Shobha Nyamagowdar on 12.03.2003.
On the basis of above pleadings, trial Court framed the following issues for its determination
1. Whether the plaintiff proves that he has advanced the financial assistance of Rs.3,00,000/- to the defendant and the defendant has undertook to pay the interest @ 24% p.a ?
2. Whether the plaintiff is entitle for the decree as prayed for ?
3. What order or decree ?
4. Plaintiff has been examined as P.W.1 and got marked Ex.P.1 to Ex.P.7. Defendant No.1 (a) has been examined as D.W.1 and got marked Ex.D.1 and Ex.D.2.
5. The trial Court answered issue Nos. 1 and 2 in the affirmative and decreed the suit of the plaintiff directing the legal representatives who are appellants herein to pay a sum 9 of Rs.3.00 lakhs with interest at the rate of 24% from the date of suit till the date of decree and 6% interest from the date of decree till realization within six months and on failure to pay within that time, to pay with interest at the rate of 18% p.a. Hence this appeal by legal representatives of defendant.
6. Heard arguments of Sri. Kiran V. Ron, learned advocate appearing for appellants and Sri. K.V. Narasimhan, learned counsel appearing for respondent and perused the records.
7. Learned counsel for appellants would contend that after the legal representatives of deceased defendant were brought on record the plaintiff had not amended the plaint and therefore there is no averment that defendant died leaving her estate and legal representatives have inherited the same. The plaint does not disclose what was the family necessity. He would further contend that P.W.1 had admitted in the cross-examination that plaintiff had not consulted the husband and children of defendant at the time of lending 10 money to her and therefore husband and children of defendant are not liable to pay the debt. It would be his further contention that suit came to be decreed only on the ground that there was no suggestion to P.W.1 in the cross- examination that Ex.P.1 receipt was not executed by the defendant. It would be his further contention that P.W. 1 had admitted in the cross-examination that he had not shown the money lent by him to the defendant in his I.T. returns and he was not a money lender and the transaction between the plaintiff and defendant is an oral transaction. It is his further contention that there was no signature of the plaintiff on the verification column in the plaint and the signature column was left blank. It would be his further contention that interest awarded at the rate of 24% p.a. is highly exorbitant.
8. Per contra learned counsel appearing for respondent plaintiff has contended that defendant who had borrowed a sum of Rs.3.00 lakhs from the plaintiff had executed receipt wherein Ex.P.1 the details of the property of the defendant's 11 family were mentioned. He would further contend that there was no suggestion in the cross-examination of P.W.1 regarding non-execution of the receipt - Ex.P.1. It would be his further contention that P.W.1 in his cross-examination has admitted the execution of Ex.P.1. It would be his further contention that defendant had purchased a plot under Ex.P.2
- sale deed dated 18.02.1997 along with one Smt. Suvarna for a sum of Rs.85,000/-. The legal representatives of defendant have inherited the property of defendant and therefore, they are liable to repay the amount borrowed by the defendant.
9. Having regard to the rival contentions raised we are of the considered view that following points would arise for our consideration:
(i.) Whether the judgment and decree passed by the trial Court suffers from any material irregularity either on account of non-appreciation of available evidence or erroneous appreciation of evidence?12
(ii.) Whether the interest awarded at the rate of 24% p.a. from the date of suit till the date of decree is exorbitant? (iii.) What order?
RE. POINT NO. (i)
10. It is the case of the plaintiff that original defendant Shobha Nyamagowdar had borrowed a sum of Rs.3.00 lakhs to meet her financial difficulties and had executed Ex.P.1 - receipt for a sum of Rs.3.00 lakhs undertaking to repay the same with interest at the rate of 24% p.a. Ex.P.1 - receipt has been marked in the evidence of P.W.1. The legal representatives of defendant were brought on record and have cross-examined P.W.1. There is no denial of execution of Ex.P.1 - receipt by the legal representatives of defendant in the cross-examination. There are signatures of defendant - Shobha Nyamagowdar on Ex.P.1 and same is also not denied in the cross-examination of P.W.1 Perusal of Ex.P.1 would disclose that defendant - Shobha Nyamagowdar had undertaken to repay the amount borrowed after herself and 13 her father enter into partition in respect of properties bearing survey No. 843/2 measuring 6 acres 23 guntas (Ex.P.5), survey No. 848/2 measuring 5 acres 13 guntas (Ex.P.6) and survey No. 70/2 measuring 7 acres 38 guntas (Ex.P.7). There is also no denial that above said properties belong to the parental family of defendant - Shobha Nyamagowdar which are situated in Shirur village of Bagalkot taluk. D.W. 1 in his cross-examination has admitted the suggestion that father of defendant Shobha Nyamagowdar is having properties in Shirur village Bagalkot taluk and she was having a share in them. D.W. 1 has shown his ignorance to the suggestion that during May 1996 defendant Shobha Nyamagowdar was having financial difficulties and therefore she had borrowed a sum of Rs.3.00 lakhs from the plaintiff. D.W.1 had stated that he came to know that Shobha Nyamagowdar had executed Ex.P.1 receipt for having borrowed the said amount only in the year 2016 when his advocate had shown it to him. Trial Court on appreciation of evidence which was available on record has rightly held that defendant - Shobha 14 Nyamagowdar had borrowed a sum of Rs.3.00 lakhs from the plaintiff and executed Ex.P.1 receipt and agreed to repay the same with interest at the rate of 24% p.a.
11. Learned counsel appearing for the appellants has contended that amount borrowed by defendant Shobha Nyamagowdar is not for family necessity and it is an unsecured loan and therefore her legal representatives are not liable to repay the same. Defendant No. 1(a) is the husband, 1(b) is the son and 1(c) is the daughter of deceased Shobha Nyamagowdar. If a person passes away before repaying an unsecured loan, the lender cannot claim unpaid dues from the surviving partners or legal heirs of the deceased. However, legal heirs are liable to the lender only to the extent of value of assets, if inherited, by the deceased. If no assets are inherited the surviving spouse or children have no liability towards the lender. For instance if the wife leaves behind movable or immovable assets which are inherited by 15 the husband, the creditor can claim all such claims from the surviving spouse in accordance with law.
12. The relationship between the borrower and lender is created by a contract under the Indian Contract Act, 1872. The promise made by a promisor is binding on his/her representatives in case of his/her death, unless contrary intention appears from the contract. The promise to perform an obligation under a contract is not personal to the contracting party but is also binding on his representatives. Legal representatives under law are liable for dues of predecessor to the extent of any property inherited by them from their predecessor in interest. Legal representatives are not personally liable for the liability but liability to the extent of estate of deceased inherited by them. Section 37 of the Indian Contract Act, 1872 reads as under:
37. Obligation of parties to contract.- The parties to a contract must either perform, or offer to perform, their respective promises, unless such 16 performance is dispensed with or excused under the provisions of this Act, or of any other law.
Promises bind the representatives of the promisors incase of death of such promisors before performance, unless a contrary intention appears from the contract.
Illustrations
(a) A promises to deliver goods to B on a certain day on payment of Rs.1,000. A dies before that day. A's representatives are bound to deliver the goods to B, and B is bound to pay Rs.1,000 to A's representatives.
(b) A promises to paint a picture for B by a certain day, at a certain price. A dies before the day. The contract, cannot be enforced either by A's representatives or by B. Salmond on Jurisprudence (12th edition, page No. 443) has examined the question of right and liabilities of a dead man and has observed as under:
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The rights which a dead man thus leaves behind him vest in his representative. They pass to some person whom the dead man, or the law on his behalf, has appointed to represent him in the world of the living. This representative bears the person of the deceased, and therefore has vested in him all the inheritable rights, and has imposed upon him all the inheritable liabilities of the deceased, Inheritance is in some sort a legal fictitious continuation of the personality of the dead man, for the representative is in some sort identified by the law with him whom he represents. The rights which the dead man can no longer own or exercise in propria persona, and the obligations which he can no longer in propria persona fulfil, he owns, exercises, and fulfils in the person of a living substitute. To this extent, and in this fashion, it may be said that the legal personality of a man survives his natural personality, until his obligations being duly performed, and his property duly disposed of, his representation among the living is no longer called for.
The representative of a dead man, though the property of the deceased is vested in him, is not 18 necessarily the beneficial owner of it. He holds it on behalf of two classes of persons, among whom he himself may or may not be numbered. These are the creditors and the beneficiaries of the estate. Just as many of a man's rights survive him, so also do many of his liabilities; and these inheritable obligation pass to his representative, and must be satisfied by him. Being, however, merely the representative of another, he is not liable in propria persona, and his responsibility is limited by the amount of the property which he has acquired from the deceased.
13. Ex.P. 2 is the certified copy of sale deed under which the deceased defendant Shobha Nyamagowdar and Smt. Suvarna had jointly purchased a plot on 18.02.1997 for sale consideration of Rs.85,000/- situated at Mallathhalli, Bengaluru. D.W.1 in the cross-examination has admitted the suggestion that in the year 1997 defendant Shobha Nyamagowdar and another lady Smt. Suvarna jointly purchased site at Mallathhalli, Bengaluru. The defendant Shobha Nyamagowdar is having half share in the said 19 property. D.W. 1 has admitted in his cross-examination that half share in the said property has been attached by the High Court in W.P. No. 35020/2010 which is disposed of on 10.12.2010. The legal representatives of Shobha Nyamagowdar who are appellants herein have inherited half share in the said property which belonged to the defendant Shobha Nyamagowdar. Therefore, the legal representatives of defendant Shobha Nyamagowdar who are appellants herein are liable to repay the amount borrowed from the plaintiff to the extent of property inherited by them on the death of deceased defendant Shobha Nyamagowdar.
14. Another contention of learned counsel for appellant is that there is no verification in the plaint and the plaintiff has not affixed his signature in the verification column and therefore the plaint is bad in law and requires to be rejected. The appellants who are the legal representatives of the deceased defendant have not taken the said contention in the written statement. They have taken the said contention for 20 the first time before the appellate Court. On perusal of the plaint it is clear that the plaintiff has affixed his signature at the end of each page and at the end of the plaint. The plaintiff has not affixed his signature in verification column. As per Rule 15 Order VI of Code of Civil Procedure every pleading shall be verified at the foot by the party or by one of the parties pleading or by some other person proved to the satisfaction of the Court to be acquainted with the facts of the case and the verification shall be signed by the person making it and shall state the date on which and the place at which it was signed. The person verifying it required to specify by reference to the numbered paragraphs of the pleading, what he verifies of his own knowledge and what he verifies upon information received and believed to be true. In the present case the plaint does not contain the signature of the plaintiff in the verification column which is at the foot of the plaint. There is an omission in that regard. Omission to verify or defective verification is a mere irregularity as it does not affect the merits of the case or jurisdiction of the Court 21 within Section 99 Code of Civil Procedure. A decree shall not be reversed or verified merely because there has been an error, defect or irregularity in any proceedings in the suit. But where an error, defect or irregularity is of such importance as to affecting the merits of the case or jurisdiction it becomes a material irregularity justifying the interference of the Court. Non-signing of a plaint by the plaintiff or signing of a plaint by a person not authorized is not a matter affecting the merits of the case or jurisdiction of the Court. As per Section 99 Code of Civil Procedure no decree shall be reversed or substantially varied, nor shall any case be remanded, in appeal on account of any misjoinder or non-joinder of parties or causes of action or any error, defect or irregularity in any proceedings in the suit, not affecting the merits of the case or the jurisdiction of the Court. There is an omission of verification in the present case and it does not affect the merits of the case or jurisdiction. Therefore, the decree shall not be reversed or varied nor shall the case be remanded in 22 appeal on account of such omission. Accordingly point No. (i) is answered in the negative.
RE. POINT NO. (ii)
15. The trial Court has awarded interest at the rate of 24% per annum from the date of suit till the date of decree. As per Ex.P.1 - receipt, agreed rate of interest is 24% per annum. The amount borrowed by the defendant from the plaintiff is to meet the domestic financial difficulties. The amount borrowed by the defendant from the plaintiff is not for any commercial purpose. Awarding of interest is provided under Section 34 of Code of Civil Procedure. It is extracted and it reads as under:
"34. Interest.- (1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the 23 institution of the suit, with further interest at such rate not exceeding six per cent, per annum as the court deems reasonable on such principal sum, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit. The aforesaid provision indicates that it is discretion of the Court to order interest at such rate from the date of suit to the date of decree which the Court deems reasonable. The trial Court awarded interest from the date of suit till the date of decree at the rate of 24% per annum. There is no reasoning assigned to award interest at the rate of 24% per annum from the date of suit till the date of decree. The suit has been filed on 01.07.1999 and came to be decreed on 01.08.2018. The suit was pending for a period of 19 years 1 month. If interest at the awarded rate is calculated it would be Rs.13,74,000/-. The delay in disposal of suit is not attributable to the defendant and her legal representatives. Earlier judgment has been passed ex-parte on 16.01.2003. The said ex-parte judgment came to be set aside by order dated 03.04.2012 passed in Misc. Application No. 243/2009. Thereafter 24 appellants were brought on record as legal representatives of deceased defendant on 29.04.2015 and they filed written statement on 27.09.2015. If the defendants are made to pay interest at the rate of 24% per annum from the date of suit till the date of decree the same would not be reasonable and it would definitely cause hardship to them. Therefore, we are of the view that interest awarded at the rate of 24% per annum from the date of suit till the date of decree is exorbitant. We are also of the considered view that if interest at the rate of 6% per annum is awarded from the date of suit till the date of realisation, it would be reasonable. For the aforesaid reasons we are of the considered opinion that appeal requires to be allowed in part and judgment passed by the Court below requires to be modified partly.
16. In view of the above, we pass the following;
ORDER Appeal is allowed in part. The judgment and decree passed in O.S. No. 5031/1999 dated 01.08.2018 by XXXI 25 Additional City Civil and Sessions Judge, Bengaluru, is modified as under:
i. The suit of the plaintiff is decreed with costs. ii. Defendant Nos. 1(a) to 1(c) (appellants herein) are directed to pay a sum of Rs.3,00,000/- along with interest at the rate of 6% per annum from the date of suit till the date of realization from out of the estate inherited by them from the deceased defendant Smt. Shobha Nyamagowdar.
iii. Parties are directed to bear their own costs in this appeal.
Sd/-
JUDGE.
Sd/-
JUDGE.
LRS.
CT. NI