Andhra Pradesh High Court - Amravati
Ananthasetty Sambasiva Rao, vs Nuthikattu Siva Prasad, on 27 November, 2024
1
APHC010239452010
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3369]
(Special Original Jurisdiction)
WEDNESDAY, THE TWENTY-SEVENTH
SEVENTH DAY OF NOVEMBER
TWO THOUSAND AND TWENTY
TWENTY-FOUR
PRESENT
THE HONOURABLE SRI JUSTICE T MALLIKARJUNA RAO
SECOND APPEAL NO: 611/2010
Between:
Ananthasetty Sambasiva Rao, ...APPELLANT
AND
Nuthikattu Siva Prasad ...RESPONDENT
Counsel for the Appellant:
1. NIMMAGADDA SATYANARAYANA Counsel for the Respondent:
1. DAGGUBATI RAMASWAMY REDDY The Court made the following JUDGMENT:
1. This Second Appeal has been filed by the Appellant / Appellant / Defendant against the Decree and Judgment dated 20.04.2010,, in A.S.No. A.S.No.262 of 2009 on the file of II Additional District Judge, Guntur (for short, 'the 1st Appellate Court') confirming the decree de and Judgment dated 30.04.2009, 30.04.2009 in O.S.No.295 of 2008 on the file of Principal Senior Civil Judge, Guntur Gu (for short, 'the trial Court').
2. The Respondent/Respondent is the Plaintiff, who filed the suit in O.S.No.295 of 2008 seeking recovery of Rs.1,07,566/-
Rs.1, being the principal and interest from the Defendant based on the promissory note, dt.05.02.2006 dt.05.02.2006.
23. Referring to the parties as they are initially arrayed in the suit is expedient to mitigate any confusion and better comprehend the case.
4. The factual matrix, necessary and germane for adjudicating the contentious issues between the parties inter se, may be delineated as follows:
Defendant borrowed Rs.70,000/- from Plaintiff on 05.02.2006 for family expenses and executed a promissory note on the same date in favour of Plaintiff at Guntur. The Defendant agreed to repay the same with interest at 24% per annum, either to the Plaintiff or his order, on demand. Despite several demands personally and through mediators, Defendant failed to repay the amount. Consequently, the Plaintiff issued a registered legal notice on 07.02.2008, demanding payment of the outstanding debt. However, the Defendant refused to receive the notice.
5. In the written statement, Defendant refuted the averments in the plaint, asserting that no amount was borrowed nor any promissory note executed in favour of Plaintiff. Defendant acknowledges borrowing Rs.20,000/- from Plaintiff on 09.10.2006 under the condition to repay Rs.200/- per day within 100 days. As a money lender, Plaintiff obtained Defendant's signatures on a blank promissory note as security. The Plaintiff deducted Rs.2,000/- as interest, disbursing only Rs.18,000/- to the Defendant. The Plaintiff assured of the return of the blank promissory note upon full payment. Defendant repaid Rs.13,000/- to Plaintiff, which was noted in his pocket notebook. Due to financial constraints, Defendant defaulted on the remaining Rs.7,000/-to Plaintiff and requested more time for repayment. However, the Plaintiff, disregarding this request, filed the suit based on the blank promissory note. Defendant claims that Plaintiff fabricated the suit promissory note with the collusion of the attestors and scribe and that the promissory note is without consideration. Therefore, the Defendant requests the dismissal of the suit with costs.
36. Based on the above pleadings, the trial Court has framed the following issues:
i. Whether the suit promissory note is true, valid and binding upon the Defendant?
ii. Whether the suit promissory note is not fully supported by consideration?
iii. Whether the Plaintiff is entitled to the suit amount as prayed for?
iv. To what relief?
7. During the trial, PWs.1 to 3 were examined and marked Exs.A.1 to A.3 on behalf of the Plaintiff. Conversely, on behalf of the Defendant, DWs.1 to 4 were examined and marked Ex.B.1 and Exs.X.1 to X.6.
8. After completing the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs for Rs.1,07,566/- along with subsequent interest at 12% per annum from the date of suit till the date of decree and at 6% per annum from the date of decree till the date of realization on the principal amount of Rs.70,000/-.
9. Aggrieved by the same, the Defendant filed an Appeal in A.S.No.262 of 2009 on file of the 1st Appellate Court. The 1st Appellate Court, being the final fact-finding Court, framed the following points for consideration:
i. Whether the Defendant executed a promissory note? ii. Whether the Plaintiff is a professional money lender? iii. To what relief?
10. The 1st Appellate Court, after scrutinizing oral and documentary evidence adduced on behalf of both sides, dismissed the Appeal with costs by its Judgment and Decree dated 20.04.2010. Assailing the same, the Defendant preferred the present Second Appeal.
411. Heard Sri. Nimmagadda Satyanarayana learned Counsel representing the Appellant / Defendant and Sri. Daggubati Ramaswamy Reddy learned Counsel for the Respondent / Plaintiff.
12. The learned Counsel for the Appellant/Defendant asserts that the Courts below failed to consider the Chit book maintained by the Appellant, which records daily payments made to the Respondent and is crucial to the Appellant's defence. The Courts below should have invoked Section 73 of the Evidence Act to compare the Respondent's signatures with those in the Chit book, which was in the Appellant's possession. Additionally, the Counsel asserts that the trial Court placed undue weight on the legal notice sent by the Respondent despite the Appellant's claim of never refusing to receive it. He further asserts that the Respondent influenced the postman through monetary power, and the Courts below erred in concluding that the Appellant failed to examine the postman. Moreover, the Appellant disputes the trial court's findings regarding the police complaint, asserting that the Courts below wrongly concluded that there was no proof despite the submission of the complaint copy (Ex.X.6). The Courts below failed to appreciate the Appellant's evidence, including his testimony and Exs.X.1 to X.6, and erred in finding corroboration between PWs. 1 to 3, despite DW.4's lack of support. Finally, the Courts below overlooked the Appellant's defence that the Respondent has been conducting money-lending activities without a licence.
13. Per contra, learned Counsel for the Respondent / Plaintiff contends that both the trial Court and the 1st Appellate Court correctly evaluated the facts of the case and reached the correct conclusions. The reasons given by both the Courts do not require any modifications.
14. Based on the Appellant's contentions, the following substantial question of law is involved in this Second Appeal:
Whether, in the facts and circumstances of the case, the Courts below are justified in not exercising jurisdiction conferred under section 73 of the Evidence Act for 5 comparison of the disputed signatures of the Respondent in the chit book?
15. Before delving into the matter, since the Appeal is filed under Sec.100 of C.P.C., this Court must see the scope of Section 100 of C.P.C.
16. In H.P.Pyarejan V. Dasappa (dead) by L.Rs. and others 1 , the Hon'ble Supreme Court held that:
Under Section 100 of the Code (as amended in 1976), the jurisdiction of the High Court to interfere with the judgments of the Courts below is confined to hearing on substantial questions of law. Interference with the finding of fact by the High Court is not warranted if it involves re-appreciation of evidence (see Panchugopal Barua v. Umesh Chandra Goswami (1997) 4 SCC
713) and Kshitish Chandra Purkait v. Santosh Kumar Purkait (1997) 5 SCC 438)......
17. Considerations in Section 100 of C.P.C. arise only when there is a substantial question of law and not mere such questions of law or one based on facts. However, it has to be borne in mind that in case of misapplication of law and improper appreciation of evidence on record, particularly the documentary evidence, it is the bounden duty of the High Court sitting in Second Appeal to consider such questions which are substantial in terms of law.
18. In the Second Appeal, while exercising jurisdiction under Section 100 of the C.P.C., this Court must confine itself to the substantial question of law involved in the Appeal. This Court cannot re-appreciate the evidence and interfere with the findings of the Courts below, where the Courts below recorded the findings judicially by appreciating both oral and documentary evidence. Further, a substantial question of law is the sine qua non for the exercise of jurisdiction. This Court cannot substitute its own opinion unless the findings of the Courts below are manifestly perverse and contrary to the evidence on record.
12006 (3) ALT 41 (SC) 6
19. The Plaintiff, in support of his case, testified as PW.1, while the Defendant testified as DW.1. The Plaintiff's entire case hinges on Ex.A.1, a promissory note dated 05.02.2006, which he claims was executed by the Defendant after receiving a sum of Rs.70,000/- on the same date. Before initiating the suit, Plaintiff sent a legal notice (Ex.A.2) to Defendant, which was returned as "refused" (Ex.A.3). Defendant denies Plaintiff's allegations, asserting that Plaintiff is a money lender and that due to a financial crisis, he borrowed Rs.2,00,000/- from the Plaintiff on 09.10.2006. The Defendant claims that the loan was to be repaid in instalments of Rs.200/- within 100 days. The burden is on Plaintiff to prove the execution of Ex.A.1 by Defendant and to show that the Rs.70,000/- was paid. The Plaintiff examined PW.2 (S.V.Venkatapathy Raju) and PW.3 (S.V. Subba Rao) to substantiate his claim, who corroborated his events. Their testimonies remained unshaken during cross-examination, and nothing in their cross-examination cast doubt on their reliability or credibility.
20. PW.2's testimony reveals that he is the Ex.A.1 promissory note scribe, while PW.3 served as its attesting witness. The Defendant has admitted to his signature being on Ex.A.1, both in his written statement and testimony. However, the Defendant claims a personal enmity exists between him and PWs.2 and 3. The testimonies of PWs.1 to 3 reveal that Defendant and PWs.2, 3, and DW.4 (K. Kamala Kumar) visited the Plaintiff's house. In his defence, Defendant called DW.4, the second attestor of the promissory note, to assert that Plaintiff obtained his signature on a blank promissory note as security for a loan of Rs.20,000/-. However, DW.4 did not support the Defendant's version and was declared hostile. The Defendant's Counsel was allowed to cross-examine DW.4, but no evidence emerged that could discredit DW.4's testimony. During cross-examination, it was suggested to DW.4 that he had collected daily payments of Rs.200/- from Defendant on behalf of Plaintiff. It noted them in Ex.B.1 (the relevant page of the pocket book). DW.4 denied this claim. Further, the Ex.A.3 return cover shows that Defendant 7 refused to accept the legal notice sent to him. DW.1 admitted, during cross- examination, that he had no disputes with the postman or the postmaster from his village, Sangam, Jagarlamudi. He also acknowledged that Ex.A.3 contained his address but failed to examine the postman to challenge the authenticity of the endorsement on Ex.A.3.
21. To support his claim regarding chit transactions, Defendant relies on Ex.B.1 (relevant page in a pocket notebook), asserting that it contains Plaintiff's initials. Defendant also examined DW.2 (M.Siva Prasada) and DW.3 (M.Murali Krishna), who testified that Plaintiff conducts both private chit and money-lending businesses and that Plaintiff obtained blank promissory notes from subscribers and debtors as security. In support of his assertion, the Defendant presented Ex.X.1, Pocket notebook, Ex.X.2, served copy of plaint in O.S.No.1339 of 2008, Ex.X.3, served copy of the Xerox copy of promissory note, dated 01.06.2005 in O.S.No.1339 of 2008, Exs.X.4 and X.5, pocket notebooks and Ex.X.6 copy of police complaint. However, the trial court noted that Exs.X.1 to X.5 did not establish that the Plaintiff was engaged in chit business. Exs.X.4 and X.5 also did not even contain the Plaintiff's name. DW.3, while acknowledging that Exs.X.1, X.4 and X.5 pocketbooks did not include either his name or the Plaintiff's, claimed that Ex.X.4, Ex.X.5, and the slip attached to Ex.X.4 were written in the Plaintiff's handwriting. The Plaintiff denied this assertion. Defendant and his witnesses did not claim that when Plaintiff failed to return the promissory note, they issued a registered notice to demand its return, nor did they file a police report against him. Although Defendant relied on Ex.X.6, a copy of a police complaint, there was no receipt from the police acknowledging the filing of Ex.X.6. Moreover, the contents of Ex.X.6 did not show that the original complaint had been officially filed at the police station. The first appellate Court, however, rejected the Plaintiff's contentions, placing reliance on Section 20 and Section 42 of the Negotiable Instruments Act, 1881 (for short, 'N.I.Act'), along with the Judgment in the case of Duggineni Seshagiri Rao.
822. A perusal of the section 20 of the N.I. Act manifests that a paper stamped in accordance with the law, either wholly blank or written thereon an incomplete negotiable instrument, gives the holder prima facie authority to make or complete any amounts specified therein not exceeding the amount covered by the stamp. Accordingly, it is open to a person receiving a blank inchoate instrument to complete it in favour of anyone else.
23. The Division Bench of the Composite High Court of Andhra Pradesh dealt with this aspect in Duggineni Seshagiri Rao vs Kothapalli Venkateswara Rao2. As per the ratio laid down in the decision, it is clear that even if the name of the person who advanced the amount is kept blank and filled, there is no consequence when the execution of the note is duly established.
24. When one reads Section 4 in conjunction with Sections 20 and 42, this is the only interpretation that can be placed on the meaning of 'promissory note' under Section 4 of the Act. Section 20 states that when a person signs and delivers to another person a paper stamped in accordance with the law relating to a negotiable instrument, it becomes a negotiable instrument, even if it is wholly blank or written with incomplete particulars. Similarly, Section 42 even recognizes an instrument issued by a fictitious person as a valid instrument. Although Section 42 relates to bills, it also accepts that an acceptor of a bill of exchange, even if drawn in a fictitious name, would create a genuine claim in favour of the holder. Therefore, even if a negotiable instrument is incomplete, it would be legal, provided it satisfies the first three conditions.
25. The Judgment of the 1st Appellate Court reveals that the Appellant attempted to highlight discrepancies in the testimonies of PWs.2 and 3. However, the 1st Appellate Court addressed these discrepancies. It concluded that the evidence provided by PWs.2, 3, and DW.4 remained consistent 2 2001 6 ALT 95 9 regarding executing the suit promissory note by Defendant in favour of Plaintiff. Additionally, the 1st Appellate Court noted that the Defendant failed to send Ex.B.1 (the disputed document) for examination by a handwriting expert to compare the signatures of PW.1 and DW.4. This omission was pointed out as a significant shortcoming in the Defendant's defence.
26. Upon examination of the entire deposition of the witnesses as mentioned above, this Court concludes that Defendant has failed to present satisfactory and credible evidence or circumstances to contradict the testimonies of PWs.1 to 3 regarding the execution of the promissory note by Defendant and the passing of consideration. The version provided by PWs.1 to 3 exhibits a remarkable consistency in affirming the execution of the promissory note in conjunction with the receipt of the consideration amount. Despite the extensive cross-examination to which PWs.1 to 3 were subjected, no substantial discrepancies were unearthed to undermine their credibility. The Plaintiff and his witnesses possess no motive to fabricate the suit promissory note; similarly, PWs.2 and 3 have no compelling reason to testify falsely against the Defendant's interests, as they would derive no benefit from endorsing the Plaintiff's claim unless there exists a kernel of truth within it. The evidence adduced by the Plaintiff stands, by any measure, adequate to substantiate the veracity, legitimacy, and binding nature of the suit promissory note denoted as Ex.A.1. It is well-established that rebuttal may be proffered through direct evidence or by establishing a preponderance of probabilities. In this instance, however, the Defendant has not successfully rebutted the presumption, not even by a preponderance of probabilities.
27. The Defendant's version does not effectively rebut the presumption established under Section 118 of N.I.Act. In light of the defence presented and the evidence submitted, the trial Court and the 1st Appellate Court observed that the Defendant failed to discharge the initial burden of proof to demonstrate the non-existence of consideration. Moreover, no other evidence refutes the presumption provided under Section 118 of the N. I Act.
1028. Thus, on an overall consideration of the facts and evidence in juxtaposition, an inevitable and safe conclusion can be reached that the plaintiffs discharged the legal burden as well and, therefore, it can safely be held that the suit promissory note is true, valid and binding and is supported by consideration.
29. The Hon'ble Supreme Court, in several cases, has held that the exercise of powers under Section 100 of C.P.C. can interfere with the findings of fact only if the same is shown to be perverse and based on no evidence. Some of these judgments are Hajazat Hussain V. Abdul Majeed & others3, Union of India V. Ibrahim Uddin4, and Vishwanath Agrawal V. Sarla Vishwanath Agrawal5.
30. The findings of the trial Court and the 1st Appellate Court, which affirm that Plaintiff has successfully established the execution of the promissory note by Defendant after receiving the consideration amount, are neither perverse nor a result of misinterpretation of documents or misreading of evidence. After careful reading of the material on record, this Court finds that the trial Court and the 1st Appellate Court concurrently decreed the Plaintiff's suit by recording all the findings of facts against Defendant enumerated above, and the findings were neither against the pleadings nor evidence nor against any provisions of law. This Court considers that the conclusions of the trial Court and the 1st Appellate Court are not subject to interference under Section 100 of C.P.C. There is no question of law, let alone the substantial questions of law, involved in this Second Appeal, and therefore, the Second Appeal is liable to be dismissed.
31. Accordingly, the present second Appeal sans merit and is hereby dismissed without costs for the reasons indicated above. Consequently, 3 2011 (7) SCC 189 4 2012 (8) SCC 148 5 2012 (7) SCC 288 11 the Judgment dated 20.04.2010 passed by the learned II Additional District Judge, Guntur, in A.S.No.262 of 2009, is hereby affirmed.
Miscellaneous applications pending, if any, in this Appeal, shall stand closed.
_____________________________ JUSTICE T. MALLIKARJUNA RAO Date: 27.11.2024 SAK 12 THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO SECOND APPEAL NO.611 OF 2010 Date: 27.11.2024 SAK