Bangalore District Court
Sri. M. Lakshmana Rao vs Smt. Shobha Bai M.S on 5 April, 2018
IN THE COURT OF THE XXX ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU CITY (CCH-31)
DATED THIS THE 5th DAY OF APRIL 2018
-: PRESENT: -
SRI. MAANU K.S., B,Sc., LL.B.,
XXX Addl. City Civil & Sessions Judge,
Bengaluru City.
O.S.NO.2880/2014
Plaintiff/s: 1. Sri. M. Lakshmana Rao,
S/o Manoji Rao,
Aged about 35 years.
2. Smt. Hemalatha,
W/o M. Lakshmana Rao,
Aged about 26 years.
Both are r/a No.2,
6th Cross, Cholur Palya,
Bengaluru -560 023.
[By Pleader Sri.Shanmukha
Sampige, Advocate]
/VS/
Defendants: Smt. Shobha Bai M.S.,
W/o Late Sri. Suresh Rao S.,
Major, No.47, 5th Cross,
Cholur Palya, Vijayanagar,
Bengaluru-560 023.
[By Pleader Sri.T.K. Rajagopal,
Advocate]
*****
2 O.S.No.2880/2014
Date of Institution of the suit : 10-04-2014
Nature of suit : Suit for recovery of
money.
Date of commencement of evidence : 24-01-2015
Date on which the judgment is : 05-04-2018
pronounced:
Duration taken for disposal: Years Months Days
03 11 25
(MAANU K.S.),
XXX ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU CITY.
3 O.S.No.2880/2014
J U D G M E N T
1. This is a suit filed by the plaintiffs for the relief of recovery of a sum of Rs.9,71,000/- together with interest at the rate of 18% per annum on the principal amount of Rs.8 Lakhs from the date of suit till the date of realization along with costs.
2. The brief facts of the case of the plaintiffs is that, the plaintiffs and defendant are known to each other as they lived in their neighbourhood and belonging to same community and that the defendant for her legal necessities had received a sum of Rs.8,00,000/- from them on 28-03- 2012 agreeing to mortgage the 1st floor of the property bearing no.47, 5th Cross, Cholur Palya, Vijayanagar, Bengaluru for a period of 5 years and by further agreeing to put the plaintiffs in possession of the said property within 2 months by executing a regular mortgage deed. The plaintiffs further contended that after the execution of the said agreement, the defendant failed to deliver the possession of the said property to the plaintiffs and did not came up to execute the necessary mortgage deed and as such they demanded the defendant to return the amount paid under the said agreement, for which the defendant represented to the plaintiffs that she has utilized the said money paid by them and further agreed that she will return the said money along with interest at the rate of 18% p.a. 4 O.S.No.2880/2014 within 3 months time by securing loan on the said property and as an additional security she further executed On Demand Promissory Note and Consideration Receipt dtd.22- 09-2012 in favour of the plaintiffs and plaintiffs agreed for the same and got the said Promissory Note and Consideration Receipt executed in their favour. They further contended that after waiting for a reasonable time after the due execution of the pronote and consideration receipt they again demanded the defendant to pay the said amount at which point of time, the defendant failed to repay the same and dodged the matter and as a result, the plaintiffs caused a legal notice on 23-02-2013 through their counsel demanding for payment of the above said amount with interest, for which the defendant at first stage got issued a reply seeking for a copy of the said Promissory Note and Consideration Receipt and after the same was complied by the plaintiffs, got issued an untenable reply dtd.20-03-2013 and as such, the plaintiffs left with no option have come up with the above suit seeking for recovery of the above said amount. They further contended that as on the date of filing of the suit, the defendant was in due a sum of Rs.8,00,000/- towards the principal amount and a sum of Rs.1,71,000/- towards interest at the rate of 18% p.a. on the principal amount of Rs.8 lakhs from 22-09-2012 and hence, sought for recovery of a sum of Rs.9,71,000/- with interest.
5 O.S.No.2880/2014
3. The defendant after service of summons entered appearance through her advocate and denied the above transactions said to have taken place between herself and the plaintiffs and sought for dismissal of the suit. She further contended that the signatures found on the said Promissory Note and Consideration Receipt are not at all her signatures and that she has not at all executed any agreement on 28-03-2012 as contended by the plaintiffs. She further contended that she was not at all in need of any such amount and has not received the said amount from the plaintiffs. She further contended that when she has not at all executed the said agreement dtd.28-03-2012 agreeing to mortgage the first floor of the said property bearing no.47, the question of she executing the mortgage deed and thereafter promising to execute regular mortgage deed and putting the plaintiff in possession of the said first floor by vacating a tenant who was already in possession of the same did not arise. She has further contended that her signatures have been forged by the plaintiffs and by creating false documents have filed the above suit to make quick money from the defendant. She further contended that the behaviour of the 1st plaintiff was not good and he was teasing her and torturing her mentally and the same was brought to the notice of the plaintiffs in her reply dtd.20-03-2013 and she had warned 6 O.S.No.2880/2014 the 1st plaintiff about the serious consequences in the event of he continuing with the said misbehaviour. The defendant further contended that the plaintiffs did not have the financial capacity to lend the said amount of Rs.8 lakhs to the defendant and therefore she sought for dismissal of the suit.
4. On the basis of the pleadings of both the parties, the following issues have been framed by my predecessor in office, for disposal of the case:
1. Whether plaintiffs proves that the defendant on 28-3-2012 has availed financial assistance of Rs.8,00,000/- and agreed to mortgage the first floor of her property bearing No.47, 5th Cross, Cholur Palya, Vijayanagar, and to delivered it's possession within two months by executing the agreement?
2. Whether they further proves that defendant has executed the DP note and Consideration Receipt on 22-9-2012 agreeing to repay the amount of Rs.8,00,000/- with interest of 18% per annum?
3. Whether they further proves that the defendant failed to execute the mortgage deed and repay the amount of Rs.8,00,000/- inspite of request demands and issuance of legal notice on 23/2/2013?
4. Whether they further proves that they are entitled for claim amount of Rs.9,71,000/- ?
5. What order or decree?7 O.S.No.2880/2014
5. In support of the plaintiffs' case, the plaintiff no.1 examined himself as P.W.1 and got marked the documents Exs.P.1 to P.9 and one witness as P.W.2. The defendant in support of her case examined herself as D.W.1 and got marked Ex.D1 to D4 and thereafter, the matter was posted for arguments.
6. Heard arguments on both sides. The Counsel for the defendant has filed the written arguments and the memo with decisions. Perused records, the written arguments submitted by the defendant's counsel and also the decisions.
7. My findings on the above issues are as under:
Issue No.1 : In the affirmative.
Issue No.2 :In the affirmative.
Issue No.3 : In the affirmative.
Issue No.4 : In the affirmative.
Issue No.5 : As per final order, for the following:
REASONS
8. ISSUE NO.1: The plaintiff no.1 has examined himself as P.W.1 and got marked Ex.P.1 to P.5 in support of his case and reiterated the plaint averments to prove his case that he along with his wife advanced a sum of Rs.8 lakhs to the defendant on 28-03-2012 with a view to get the 1st floor of 8 O.S.No.2880/2014 the property bearing No.47, 5th Cross, Cholur Palya, Vijayanagar, Bengaluru mortgaged for a period of 5 years. He further deposed that the defendant being the neighbour belonging to the same community had sought for the advancement of the above said amount of Rs.8 lakhs for the family legal necessities and had offered to put himself and his wife in possession of the above said property under mortgage for a period of 5 years and had executed Ex.P.1 agreement. He has also got examined one more witness as P.W.2 by name Basavaraju who is one of the attesting witnesses to the said Ex.P.1 agreement who has also stated that on 28-3-2012, the defendant had received a sum of Rs.8 lakhs from the plaintiffs and had executed the said agreement agreeing to put the plaintiffs in possession of the said property under the mortgage for a period of 5 years by executing a regular mortgage deed within two months from the said date. He has also identified the signatures of the plaintiffs, himself and the defendant found on Ex.P.1 agreement dtd. 28-3-2012 and has further contended that the defendant has put her signatures in front of him. Both the two witnesses P.W.1 and 2 have been cross-examined at length by the counsel for the defendant to disprove the contentions taken by the plaintiffs.
9 O.S.No.2880/2014
9. In addition to that, the defendant has also examined herself as D.W.1 and got marked Ex.D.1 to D.4 and contended that she has not affixed her signature to the alleged agreement dtd.28-03-2012 and the signatures found in the said Ex.P.1 are not her signatures and the same have been forged by the plaintiff. She has further stated that she has not at all received any amount as contended by the plaintiffs and there was no necessity for her to borrow the loan from the plaintiffs and she had never agreed to mortgage the above said property in favour of the plaintiffs as the said property had been tenanted to one Honnappa who was already in possession. She further contended that if at all she was in requirement of the said property, she could have mortgaged the said property and obtained the above said amount from the bank and there was no necessity for her to enter into an agreement as per Ex.P.1 with the plaintiffs. She has further contended that the 1st plaintiff had been indulged in teasing her on several occasions and was humiliating her mentally and the said act was brought to their notice by way of issuing a reply dtd.20-3-2013 to the notice sent by the plaintiffs on 23- 02-2013. She has further stated that plaintiffs did not have the financial capacity of advancing such a heavy amount of Rs.8 lakhs to her and the said documents marked at Ex.P.1 to P.3 have been concocted by the plaintiffs to gain wrongfully.
10 O.S.No.2880/2014
10. If the documents produced by the plaintiffs are perused, Ex.P.1 is the agreement dtd.28-03-2012 executed by the defendant on a stamp paper worth Rs.100/-. The recitals of the said agreement clearly goes to show that on 28-03- 2012 the defendant has executed the said agreement agreeing to mortgage the 1st floor portion of the property bearing no.47, 5th Cross, Cholur Palya, Vijayanagar, Bengaluru in favour of the plaintiffs for a period of 5 years by receiving a sum of Rs.8 lakhs from the plaintiffs. The recitals further goes to show that the said amount of Rs.8 lakhs does not carry any interest and the plaintiffs need not pay any rent for the use and occupation of the house after the same is handed over to the plaintiffs. It further goes to show that the defendant had further agreed to execute a regular mortgage deed within 2 months and put the plaintiffs in possession of the same.
11. A perusal of the above said document inspires the confidence of this Court that the defendant has executed the said agreement as per Ex.P.1 on 28-03-2012 and the signatures found on the said document are that of the defendant. In proof of the execution of said Ex.P.1, the witness named T. Basavaraju who was examined as P.W.2 has spoken before this court that in front of him at the house of the defendant the said Ex.P.1 was executed by the defendant by receiving the above said amount of Rs.8 lakhs. 11 O.S.No.2880/2014 If the cross-examination of P.Ws.1 and 2 are closely perused, the suggestions to the effect that Ex.P.2 pronote and P.3 consideration receipt were got executed by the defendant as an alternate document to Ex.P.1 clearly goes to show that the defendant has virtually admitted the execution of Ex.P.1. Hence, the very suggestions made to the P.Ws.1 and 2 by the counsel for the defendant clearly go to show that Ex.P.1 was executed by the defendant on 28-03-2012.
12. If the cross-examination of D.W.1 is perused, she has admitted that the signatures found in the suit summons issued by this Court which has been confronted to her at Ex.P.8 is her signature, wherein she has affixed her signature both in small letters and also in capital letters in English language as written in Ex.P.1. That apart, she has also admitted that the signatures found on the Zerox copy of the Pan Card which was got marked as Ex.P.9 by way of confrontation, wherein she has affixed her signature by writing her name in capital letters. These admissions clearly go to show that the defendant was in the habit of making her signature both in small letters as well as in capital letters in English language and that she has intentionally denied the execution of the Ex.P.1 and the signatures found on Ex.P.1. The documents produced by the defendant at Ex.D.1 to D.4 are of recent origin came into 12 O.S.No.2880/2014 existence after the filing of the suit and moreover, all those documents are not at all relevant to the facts of the case. If Ex.D.1 is perused, the same is a letter addressed to the Public at large by the Janatha Seva Co-operative Bank Ltd., Bengaluru on 22-09-2014, wherein it has been stated that the husband of the 1st defendant had availed a loan of Rs.6 lakhs by mortgaging the property bearing No.47, 5th Cross, Cholur Palya, K.P. Agrahara, Bengaluru and that the said Co-operative Bank has no objections to take over the liability by any other bank subject to closure of the said loan. Ex.D.2 is the loan sanctioned letter issued by The Bhavasara Kshatriya Co-operative Bank Limited on 12- 01-2015, wherein the defendant has raised a loan of Rs.20 lakhs by creating charge over the said house property belonging to the defendant and Ex.D.3 receipts are issued by the said The Bhavasara Kshatriya Co-operative Bank Limited in response to the payment of the installments made by the defendant. Ex.D.4 is the bank pass book of the defendant maintained in the said The Bhavasara Kshatriya Co-operative Bank Limited. All these documents only show that after filing of the above suit, the defendant has obtained the loan from the said The Bhavasara Kshatriya Co-operative Bank Limited and is repaying the installments. The said documents even though have been produced by the defendant to show that the signatures found on the said documents and the signatures found on Ex.P.1 to P.3 are all 13 O.S.No.2880/2014 different, the same is of no use as the same are all subsequent to the filing of the suit and there is a chance of the defendant intentionally changing the pattern of her signature just to defraud and mislead the Court. Hence, those documents cannot be considered for any purpose. The over all effect of the documents produced by both the parties and the depositions of both P.Ws. and D.W.1 clearly goes to show that the defendant had the legal necessity at given point of time and to meet those legal necessities, she had borrowed the above said amount of Rs.8 lakhs from the plaintiffs by executing Ex.P.1 agreement.
13. During the course of arguments, the learned counsel for the defendant vehemently argued that since P.W.1 has clearly admitted that the defendant has substituted the Ex.P.1 agreement by way of executing Ex.P.2 and P.3 promissory note and consideration receipt, the same amounted to novation of contract and therefore under Sec.62 of Indian Contract Act, the said terms of the contract as per Ex.P.1 has been rescinded and substituted and therefore the terms of the said Ex.P.1 cannot be performed as it is no more an executable agreement and in support of the same, he relied upon the provisions of Sec.62 of Indian Contract Act and also the decision reported in AIR 1959 SC 1362 in the matter between The Union of India V. Kishorilal Gupta & Bros.
14 O.S.No.2880/2014
14. On the other hand, the learned counsel for the plaintiff has contended that the said execution of Ex.P.2 and Ex.P.3 pronote and consideration receipt did not amount to substitution of Ex.P.1 as the said documents were executed in addition to Ex.P.1 agreement as an additional security to the said amount taken by the defendant under Ex.P.1 and therefore, the same did not amount to substitution and hence, the provisions of Sec.62 of Indian Contract Act is not applicable and he also contended that the decision relied by the defendant is also not applicable to the case on hand. He further contended that no where the plaintiffs and the defendant have voluntarily agreed to substitute the Ex.P.1 as could be seen from the very defence set up by the defendant, wherein she had at one stretch of time has denied the whole transaction of execution of Ex.P.1 and also the execution of Ex.P.2 and P.3 and at the another breadth, she contend that Ex.P.1 was substituted by executing Ex.P.2 and P.3. He further contended that the conduct of the defendant in taking such type of defence that the plaintiffs are not at all known to her and at another breadth making allegations against the 1st plaintiff that he used to harass her and further contending that she had not borrowed any amount and executed any documents clearly goes to show that she has executed the Ex.P.1 to P.3 and she is intentionally making false allegations just to gain wrongfully. He further argued that the suggestions made 15 O.S.No.2880/2014 by the counsel for the defendant to P.W.1 that Ex.P.1 was substituted by subsequent execution of Ex.P.2 and P.3 itself is sufficient to come to the conclusion that Ex.P.1 was duly executed by the defendant on the given date and therefore he prayed to decree the suit.
15. As discussed earlier, the suggestion made to P.W.1 by the counsel for the defendant that Ex.P.1 was substituted by Ex.P.2 and P.3 itself goes to show the existence of Ex.P.1 on the given date and that the defendant had executed the said Ex.P.1 agreement by receiving the amount of Rs.8 lakhs from the plaintiffs. The contention of the defendant that by way of executing Ex.P.2 and Ex.P.3, Ex.P.1 was substituted and therefore the said documents is not helpful and cannot be enforced is of no avail for the purpose of answering issue no.1. The validity or otherwise of the said Ex.P.1 and its enforceability is not relevant for the purpose of answering issue no.1 and the same needs to be considered while answering issue no.4. As such, at this point of time, in view of the indirect admission made by the defendant and her counsel and in view of the plaintiffs proving the due execution of Ex.P.1 by examining the attesting witness as P.W.2, this Court has no hesitation to answer issue no.1 in the affirmative. Accordingly, I answer issue no.1 in the affirmative.
16 O.S.No.2880/2014
16. ISSUE NO.2: While answering issue no.1, this Court has made observation that the learned counsel for the defendant himself has put suggestions to P.W.1 to the effect that Ex.P.1 was substituted by executing Ex.P.2 and P.3 and therefore Ex.P.1 is not enforceable. The said admission of the defendant's counsel itself is sufficient to come to the conclusion that the defendant had executed Ex.P.2 and P.3 promissory note and consideration receipt on 22-9-2012 promising to repay the amount of Rs.8 lakhs received by her along with interest at the rate of 18% p.a. Even though the defendant has specifically denied her signatures found on Ex.P.2 and P.3, if the same is compared with Ex.P.8 summons issued by this Court over which she has signed and the Ex.P.9 the signature found on pan card, the same clearly go to show that the signatures found in Ex.P.2 and P.3 are of the same person who is the defendant herein and that the defendant is intentionally refusing to admit the said signatures found on Ex.P.2 and P.3.
17. On the other hand, the plaintiffs have very specifically stated that after the expiry of two months from the date of entering into agreement as per Ex.P.1 the plaintiff demanded the defendant on various occasions to put them in possession of the said property as agreed and to execute the registered mortgage deed and when she failed to do so, they alternatively demanded to return the above said 17 O.S.No.2880/2014 amount advanced by them under Ex.P.1 along with interest, for which, the defendant admitted her liability has agreed to return the said amount by obtaining loan from any financial institution and got executed Ex.P.2 and P.3 on 22- 09-2012 as additional security for repayment of the said amount. If cross-examination of P.W.1 on this point is carefully observed, no admissions have been made by P.W.1 to the effect that the said documents are concocted documents which have been created by them. On the other hand, the very suggestions made by the learned counsel for the defendant that Ex.P.2 and P.3 were got executed as a substitute for Ex.P.1 itself clearly goes to show that defendant has executed Ex.P.2 and P.3.
18. The learned counsel for the defendant while addressing the arguments has vehemently argued that the said Ex.P.2 and P.3 pronote and consideration receipt have been executed on unstamped paper and as such, the said Ex.P.2 and P.3 have got no validity and cannot be looked into for any purpose and also relied upon the decision reported in 1970(2) Mysore Law Journal page No.48 in the matter between Rajamma V. G.C. Venkatareddy and also relied upon the provisions of Sec.35 of Indian Stamp Act and the provisions of Sec.4 of Negotiable Instrument Act and by relying on these rulings and provisions of law, the learned counsel for the defendant contended that since a 18 O.S.No.2880/2014 promissory note is governed under the Indian Stamp Act and Sec.35 of Indian Stamp Act clearly bars admission of unstamped promissory note, Ex.P.2 promissory note even if the execution of the same is admitted, cannot be looked into and therefore the said promissory note has got no evidentiary value. As early discussed while answering issue no.1, for the purpose of answering issue no.2 the validity or otherwise of the said Ex.P.2 and P.3 is not necessary at this juncture and the validity or otherwise of the said documents will be discussed while answering issue no.4. Now, the question before this Court while answering issue no.2 is whether the plaintiffs prove that the defendant had executed Ex.P.2 and P.3 promissory note and consideration receipt on 22-09-2012. Hence, from the very admissions made by the learned counsel for the defendant and from the evidence of both P.Ws.1 and 2, it can be safely concluded that defendant had executed Ex.P.2 and P.3 promissory note and consideration receipt on 22-09-2012 when the plaintiff demanded her to repay the amount taken by her under Ex.P.1. Accordingly, I answer issue no.2 in the affirmative.
19. ISSUE NO.3: After having answered issues no.1 and 2 in the affirmative by holding that the defendant had executed the suit documents marked as Ex.P.1 to P.3 on 28- 3-2012 and on 22-9-2012, now the question remains to be 19 O.S.No.2880/2014 answered is whether the defendant has failed to execute the mortgage deed and to repay the amount in spite of repeated demands made by the plaintiffs and whether the plaintiffs are entitled to recover the said amount covered under the said Ex.P.1 to P.3. The nature of the defence set up by the defendant itself clearly discloses that she has not paid even a single paisa to the plaintiffs towards the due discharge of her debt borrowed by her from the plaintiffs under Ex.P.1. The plaintiffs have caused legal notice apart from various oral demands seeking for repayment of the said debt as could be seen from Ex.P.4. The said notice has been duly served and reply as per Ex.P.5 has been issued by the defendant requesting the copy of the said documents which has been sent by the counsel for the plaintiffs as per Ex.P.6 and thereafter as per Ex.P.7 the defendant has replied denying the transaction and disowning her liability to pay the said amount. Hence, the non-payment of the above said amount by the defendant and the demand made by the plaintiffs have been proved. Apart from that, the oral evidence of P.W.1 and D.W.1 also clearly go to show that despite of demands made by the plaintiffs, the defendant has not paid the above said amount covered under Ex.P.1 to P.3. Hence, there is no hesitation for this Court to answer issue no.3 in the affirmative holding that despite many requests made by the plaintiffs, having failed to execute the mortgage 20 O.S.No.2880/2014 deed the defendant failed to return the amount received by her under Ex.P.1.
20. ISSUE NO.4: It is already proved by the plaintiffs that the defendant had taken a sum of Rs.8 lakhs from the plaintiffs on 28-3-2012 by executing Ex.P.1 agreement, where under she had agreed to execute a registered mortgage deed in favour of the plaintiffs and put the plaintiffs in possession of the 1st floor of her property bearing no.47, Cholur Palya, Vijayanagar, Bengaluru and that despite many demands made by the plaintiffs, she has not executed the registered mortgage deed and put them in possession of the same. It is further proved by the plaintiffs that when the defendant failed to execute the registered mortgage deed and put them in possession of the said property on demand made by them or alternatively for return of the said amount paid by them with interest, the defendant has executed Ex.P.2 and P.3 promissory note and consideration receipt as an additional security for the repayment of the said amount received under Ex.P.1 agreeing to repay the same. It is further proved that the defendant has not paid the said amount despite demands made by them. Now, the question is whether the plaintiffs are entitled for recovery of the said amount with interest as claimed in the plaint.
21 O.S.No.2880/2014
21. The learned counsel for the defendant has vehemently argued that since Ex.P.1 agreement is substituted by executing Ex.P.2 and P.3 promissory note and consideration receipt as a substitute to Ex.P.1 agreement, the said Ex.P.1 agreement is no more a valid agreement and as such, the said agreement cannot be enforced through the Court of Law in view of the specific bar under Sec.62 of the Indian Contract Act as the same amounted to novation of contract and relied on the said provisions as well as the decision reported in AIR 1959 SC 1362 in the matter between The Union of India V. Kishorilal Gupta & Bros., wherein it has been held as under:
(c) Contract Act (1872), S.62 - Contract stating that earlier contracts would be finally concluded in terms of the new.
Where the clause in a settlement in express terms declared that the earlier contracts should be finally concluded in terms of the settlement and no party would have any claim against the other.
HELD, that the substituted agreement gave a new cause of action and obliterated the earlier ones.
(d) Contract Act (1872), S.62 - - Substituted contract - Arbitration clause in old contact - Arbitration clause goes with the old contract.
22.The learned counsel for the defendant further argued that the said Ex.P.1 is no more a valid enforceable agreement and that if Ex.P.2 and P.3 are admitted to be duly executed by defendant, then also the said Ex.P.2 and P.3 promissory note and consideration receipt are not legally admissible in 22 O.S.No.2880/2014 evidence as they are not duly stamped as per the provisions of Article 49 of Schedule-I of Indian Stamp Act and therefore under Sec.35 of the said Act, there is a bar for admission of the said documents and those documents cannot be impounded by collecting duty and penalty and cannot be admitted in evidence in view of the bar under the said Section of Indian Stamp Act and in support of the said contentions, he relied upon the Article 49 of the Indian Stamp Act as well as Sec.35 of the Indian Stamp Act which stood earlier to amendment to Indian Stamp Act by Act-21 of 2004 and in support of the said contentions, he also relied upon the decision reported in 1970(2) Mysore Law Journal page No.48 in the matter between Rajamma V. G.C. Venkatareddy, wherein it has been held as follows:
Stamp Act (Central Act 2 of 1899), S.35- Promissory note insufficiently stamped -Admission-Mysore Stamp Act (34 of 1957), S.34.
Where the Court deliberately postpones decision of the question of admissibility to a subsequent stage, the document cannot be regarded as having been admitted in evidence so as to attract the provisions of S.36 of the Central Act.
The proviso to S.34 of the Mysore Act would operate only in the case of documents which are chargeable to duty under the Mysore Act. Since under Entry 91 of the Union List in the VII Schedule to the Constitution, the legislature competent to impose duty in respect of negotiable instruments is the Parliament, S.34 of the Mysore Stamp Act does not apply to the question of admissibility of promissory notes. The proviso to S.35 of the Indian Stamp Act applies.23 O.S.No.2880/2014
23.To the said arguments, the learned counsel for the plaintiffs has contended that the said execution of Ex.P.2 and P.3 promissory note and consideration receipt did not amount to substitution and as such, the provisions of Sec.62 of the Indian Contract Act cannot be invoked and it has been specifically stated in the pleading that as a security for the said amount borrowed under Ex.P.1, the defendant has further executed Ex.P.2 and P.3 promissory note and consideration receipt promising to repay the said amount and as such, the suit is not based only on Ex.P.2 promissory note and Ex.P.3 consideration receipt, but also on Ex.P.1 agreement under which the defendant has received the amount. He further argued that even in the absence of Ex.P.2 and P.3, then also the plaintiffs are entitled for return of the amount paid under Ex.P.1 agreement due to failure on the part of the defendant to execute the mortgage deed and put the plaintiffs in possession of the said property belonged to her and further contended that the suit is filed well within 3 years from the date of execution of Ex.P.1 and Ex.P.1 is still an enforceable document if not for the specific performance, but for refund of the earnest amount paid under Ex.P.1. He further contended that Ex.P.2 and P.3 would be considered for collateral purpose in addition to Ex.P.1 and prayed to decree the suit contending that the plaintiff is entitled for the amount as claimed under the plaint along with interest. 24 O.S.No.2880/2014
24. The contention of the defendant that by executing Ex.P.2 and P.3 promissory note and consideration receipt, the Ex.P.1 agreement came to be substituted and therefore, the same is not enforceable cannot be fully accepted by this Court. As per the decision relied by the defendant herself, for application of Sec.62 there must be express consent by both the parties not to act upon the previous contract and to rescind the previous contract entered into between them. Admittedly, in the present suit, it is the specific contention of the defendant that she has not at all executed either Ex.P.1 agreement or Ex.P.2 and P.3 as a security for repayment of the said amount received by her under Ex.P.1 agreeing to repay the said amount with interest at the rate of 18% p.a. Hence, it cannot be said that by executing Ex.P.2 and P.3, Ex.P.1 was completely substituted and therefore Ex.P.1 agreement is not enforceable. Having indirectly admitted the execution of Ex.P.1 under which document the defendant has received a sum of Rs.8 lakhs, even otherwise if the defendant could not put the plaintiffs in possession of the said property by executing registered mortgage deed, the defendant cannot retain the said amount with her and enrich herself unlawfully and therefore, the plaintiffs are entitled for refund of the earnest amount paid by them under the said agreement dtd.28-3-2012 even in the absence of Ex.P.2 and P.3.
25 O.S.No.2880/2014
25.The contention of the defendant that the said promissory note and consideration receipt marked at Ex.P.2 and P.3 cannot be looked into for any purpose in view of the specific bar under Sec.35 of the Indian Stamp Act is also not acceptable in view of the amendment made to Sec.35 of Indian Stamp Act by Act No.21 of 2006 now by virtue of the said amendment even the promissory note and other Negotiable Instruments could very well be impounded and admitted by collecting duty and penalty. At the time of marking the said documents, the defendant has not raised any objections nor has filed any application to impound the same. Now, those documents have already been marked as Ex.P.2 and P.3. Hence, the only course available for this Court is to impound the said documents. The plaintiffs have not come up with any application under Sec. 33 and 34 of Indian Stamp Act seeking for permission to pay the duty and penalty and have not paid any such stamp duty and penalty till today. Hence, the question that arise for consideration before this Court is whether the said documents could be looked into and is admissible without payment of proper stamp duty and penalty, for which, the answer would be no. Unless and until the plaintiffs pay the requisite stamp duty and penalty, the said documents are inadmissible in evidence as per Sec.35 of the Indian Stamp Act and hence, those documents cannot be considered for the purpose of above suit. This Court has already held that 26 O.S.No.2880/2014 the plaintiffs have established their right to recover the above said amount under Ex.P.1 even in the absence of Ex.P.2 and P.3 and it still remains enforceable. Hence, in view of the plaintiffs establishing the said due execution of Ex.P.1 and also non-performance of the duties casted under the said agreement, the said agreement executed under Ex.P.1 being still enforceable under law, the plaintiffs have opted for the second option to get the amount paid by them refunded instead of seeking for specific performance. As such, the plaintiffs are entitled for recovery of the amount paid by them under Ex.P.1 agreement along with interest.
26. The plaintiffs have claimed interest at the rate of 18% p.a. from 22-09-2012 till the date of filing of the suit and for future interest at the same rate till the date of recovery and have paid the Court Fees on the said amount. The claim made by the plaintiffs is not unreasonable and as such, the claim of the plaintiffs for interest at the rate of 18% p.a. till the date of filing of the suit is accepted. However, the claim of the plaintiffs for awarding interest at the rate of 18% p.a. from the date of filing of the suit till the date of recovery is not permissible and if the interest at the rate of 6% p.a. as per the provisions of Sec.34 of C.P.C. is granted, that will meet the ends of justice. Accordingly, I answer issue no.4 partly in the affirmative holding that the plaintiffs are entitled for recovery of a sum of 27 O.S.No.2880/2014 Rs.9,71,000/- with future interest from the date of passing of this judgment at 6% p.a. on the principal amount of Rs.8 lakhs.
27.ISSUE NO.5: In view of the discussions and reasons assigned by me while answering issue no. 1 to 4 in the affirmative, the suit filed by the plaintiff deserve to be decreed and accordingly, I proceed to pass the following:
ORDER The suit filed by the plaintiffs is hereby decreed with costs.
The defendant is hereby directed to pay a sum of Rs.9,71,000/- (Rupees Nine Lakhs Seventy One Thousand only) to the plaintiffs together with interest at the rate of 6% p.a. on the principal amount of Rs.8,00,000/- from the date of suit till the realization.
The defendant is further directed to pay the decree amount within three months from the date of this judgment.
Draw decree accordingly.
(Dictated to the Judgment Writer on computer, corrected, signed and then pronounced by me in the open Court on this THE 5thDAY OF APRIL 2018).
(MAANU K.S.), XXX ADDL.CITY CIVIL & SESSIONS JUDGE, BENGALURU CITY.28 O.S.No.2880/2014
ANNEXURE WITNESSES EXAMINED FOR THE PLAINTIFF/S:
P.W.1 : M. Lakshmana Rao. P.W.2 : Basavaraju T.
WITNESSES EXAMINED FOR THE DEFENDANTS/S:
D.W.1 : Shobha Bai.
DOCUMENTS MARKED FOR THE PLAINTIFF/S:
Ex.P.1 : Agreement.
Ex.P.2 : On Demand Promissory Note.
Ex.P.3 : Consideration Receipt.
Ex.P.4 : Copy of notice.
Ex.P.5 : Reply notice.
Ex.P.6 : Email notice.
Ex.P.7 : Reply notice.
Ex.P.8 : Summons.
Ex.P.9 : Voters card & Pan Card copy.
DOCUMENTS MARKED FOR THE DEFENDANTS/S:
Ex.D.1 : Letter dtd.22-9-2014 by Janatha Seva Co-
operative Bank Ltd.
Ex.D2 : Letter dtd.12-01-2015 by The Bhavasara
Kshatriya Co-operative Bank Ltd.
Ex.D3 : 6 Receipts.
Ex.D4 : Original Pass book.
(MAANU K.S.),
XXX ADDL.CITY CIVIL & SESSIONS JUDGE,
BENGALURU CITY.