Gujarat High Court
Punamchand Devchand vs Bharuch Textile Mill Limited on 7 February, 2017
Author: Rajesh H.Shukla
Bench: Rajesh H.Shukla
C/FA/3478/2012 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST APPEAL NO. 3478 of 2012
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE RAJESH H.SHUKLA : Sd/
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1 Whether Reporters of Local Papers may be NO
allowed to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the
fair copy of the judgment ? NO
4 Whether this case involves a substantial
question of law as to the interpretation
of the Constitution of India or any NO
order made thereunder ?
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PUNAMCHAND DEVCHAND....Appellant(s)
Versus
BHARUCH TEXTILE MILL LIMITED....Defendant(s)
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Appearance:
MR SHASHWAT SHUKLA, ADVOCATE for the Appellant(s) No. 1
MR HARSH N PAREKH, ADVOCATE for the Defendant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE RAJESH H.SHUKLA
Date : 07/02/2017
ORAL JUDGMENT
1 As it is First Appeal, R & P was ordered to be called for and the matter has been taken for final hearing with the consent of both sides.
2 The present appeal is directed against the
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impugned judgment and order passed in Special Civil Suit No.61/2005 by the Additional Sr. Civil Judge, Bharuch dated 31.08.2012 dismissing the suit filed by the appellantplaintiff. 3 The facts of the case briefly narrated and stated as under: 3.1 The plaintiff is a partnership firm duly registered under the Indian Partnership Act, 1932 and doing business of shroff and commission agent. The defendant is a Company registered under the Companies Act, 1956. It is averred that the defendantcompany as and when needed financial assistant used to approach the plaintifffirm. The defendant company approached in the year 2002 and presented the cheque in question. The cheque was duly signed by the authorized signatory and, hence, the plaintiff firm have discounted the cheque and paid the cash amount on the said date. It is also averred that the defendant has also signed the discount voucher duly stamped. However, the defendant company had requested not to deposit the cheque and, therefore, it was not Page 2 of 21 HC-NIC Page 2 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT deposited. However, when the defendant company failed to make the payment, suit came to be filed for recovery of the amount from the defendant company. It is also stated that the defendant company presented the cheque for encashment on 09.05.2002 and because of the action arose.
3.2 However in response to the summons and notice of the suit, written statement came to be filed at Exh.13 contending that the suit of the plaintiff is not maintainable as no cause of action has arisen. The suit of the plaintiff is barred by limitation as mis joinder and nonjoinder of the parties. It has been contended that the plaintiff has not produced necessary evidence of registration of the firm and is not holding the license under the Money Lenders Act. It is denied that the defendant company is facing financial crises and had approached the plaintiff company resulting in the transaction as stated above. It is contended that it is not true that the defendant company had given cheque of Central Bank of Page 3 of 21 HC-NIC Page 3 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT India dated 09.05.2002 of Rs.10.00 lacs signed by the authorized signatory of the defendant company and it was discounted as alleged. It is specifically contended that the management of the company consists of Managing Director and Director and employees of the defendant company is not falling within the category of management. It is also contended that the defendant company is likely to file criminal complaint against the related persons for any such steps taken for the company.
3.3 Therefore, the Court below framed the issues and proceeded with the trial.
3.4 On the basis of the appreciation of material and evidence, the Court below dismissed the suit which led to filing of the present appeal on the grounds stated in the memo of appeal.
4 Heard learned advocate, Shri Shashwat Shukla for the appellant and learned advocate, Shri Harsh Parekh for the respondent.
5 Learned advocate, Shri Shukla referred to the material and evidence from the R & P including the Page 4 of 21 HC-NIC Page 4 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT observations made in the judgment and also deposition of the witnesses. He pointedly referred to Exh.61, evidence of Shri Sunil Saini and submitted that the Court below has committed an error in believing the execution of the cheque signed by the office of the respondentCompany. He submitted that the court below has proceeded on the assumption. He submitted that the presumption could have been made as provided under Section 118 of the Negotiable Instrument Act. He referred to the provision of Section 118 of the Negotiable Instrument Act. He also submitted that though the defendant has denied the execution of the cheque, no other contention has been taken. He also referred to the affidavit at Exh.28 on behalf of the appellantoriginal plaintiff and submitted that the affidavit of the plaintiff has supported the averments in the plaint. He, therefore, submitted that the discussion about the pleadings is erroneous and the test would be whether the defendant is prejudice. He submitted that variance in the plaint and the poof is always fatal. For that purpose, he has referred to and relied upon the judgment of the Hon'ble Apex Court in case of Page 5 of 21 HC-NIC Page 5 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT Gian Chand and Brothers & Anr. Vs. Rattan Lal @ Rattan Singh, reported in (2013) 2 SCC 606, Paragraph No.27. He has also referred to judgment of the Hon'ble Apex Court in case of Celina Coelho Pereira (Ms) & Anr. Vs. Ulhas Mahabaleshwar Kholkar & Ors., reported in (2010) 1 SCC 217, Paragraph No.26. Learned advocate, Shri Shukla has also referred to Exh.66 and other documentary evidence to support his contention that the presumption could have been made referring to the provision of Negotiable Instrument Act read with Section 58 of the Evidence Act. He submitted that the Court below has failed in not raising presumption and calling the appellantplaintiff to prove by necessary evidence and thereby dismissing the suit. Learned advocate, Shri Shukla has referred to and relied upon the judgment of the Hon'ble Apex Court in case of Bharat Barrel & Drum Manufacturing Company Vs. Amin Chand Payrelal, reported in (1999) 3 SCC 35, Paragraph No.12 and in case of Mallavarapu Kasivisweswara Rao Vs. Thadikonda Ramulu Firm & Ors., reported in (2008) 7 SCC 655, Paragraph Nos.17 to 22. He also referred to and relied upon the judgment in case Page 6 of 21 HC-NIC Page 6 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT of Tarmahomed Haji Abdul Rehman Vs. Tyeb Ebrahim Bharamchari, reported in 345 Indian Law Reports (1950). Learned advocate, Shri Shukla has also referred to and relied upon the judgment of the Hon'ble Apex Court in case of S. Gopal Reddy Vs. State of A.P., reported in (1996) 4 SCC 596, Paragraph No.29 to emphasis his submission about the presumption under Section 47 of the Evidence Act. He, therefore, submitted that the judgment of the Court below dismissing the suit of the plaintiff based on the cheque is erroneous and the presumption should have been made on the basis of the cheque and suit ought to have been decreed. 6 Per contra, learned advocate, Shri Parikh referred to the plaint and submitted that the averment in the plaint itself is vague. He pointedly referred to the averment in the plaint that it is not stated on which date the money was given. He submitted that the cheque, which is referred to, is of the year 2002 presented on 06.05.2005 beyond the period of validity. He, therefore, submitted that the claim which is sought to be made based on the stale cheque after the expiry of the validity period, could not be believed and, therefore, the Page 7 of 21 HC-NIC Page 7 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT suit has been dismissed. He further emphasized that if the cheque was presented, it could have returned with memo of the bank, which is also not produced. Learned advocate, Shri Parikh submitted that averments in the plaint are made without any supporting document or evidence. Therefore, the claim is that the suit should have been decreed merely on the basis of the document like cheque, which is stale without any supporting evidence regarding transaction or having given money as averred in the plaint itself. He submitted that though it is claimed that the defendant company used to take advances in such a manner by discounted cheque on voucher, same books of accounts or vouchers could have been produced. Learned advocate, Shri Parikh submitted that admittedly no books of accounts or voucher or any supporting piece of evidence has been produced except bare word. Similarly he submitted that even the version in the plaint as well as in the affidavit in support of his evidence is different which he pointedly referred to. He submitted that the statement has been made about the advances to the defendantcompany without any details or Page 8 of 21 HC-NIC Page 8 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT without any supporting evidence. He also referred to Exh.18 and submitted that there are different versions. Learned advocate, Shri Parikh submitted that the transaction of the advances based on this cheque is said to have taken in the year 2002 and there is no communication, reminder or any correspondence from 2002 to 2005. He emphasized that even during the trial of the suit, no books of accounts, voucher etc. signed on behalf of the defendant to support the claim made by the plaintiff is brought on record. He submitted that the appellantoriginal plaintiff is a firm, which would be maintaining the books of accounts and it has not been produced, which would itself require adverse inference to be drawn. He, therefore, submitted that the plaintiff has not proved by any corroborating evidence about the transaction or financial assistance to the company and merely on the basis of the cheque, which is said to have been issued, suit is filed. He submitted that it is required to be noted as stated in the reply that because of some disgruntle elements in the defendant company, they were required to take steps and it is contended that the cheque is not Page 9 of 21 HC-NIC Page 9 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT signed by the authorized signatory. 7 Learned advocate, Shri Parikh submitted that the books of accounts of the defendantCompany has been produced and the defendant has placed on record to clarify that there is no entry with regard to any such transaction or borrowing. He pointedly referred to R & P and crossexamination of the plaintiff and submitted that it has been admitted in the crossexamination that he cannot say that it is signed by whom. It has been admitted that though the cheque was lying from 2002 to 2005, no notice or letter was addressed to the Company. He has also admitted that in the suit, the facts about Exh.3435 are not stated. He also emphasized that it has been admitted in the crossexamination that if the cheque, Exh.36 is presented after 2½ years in the bank, it would be returned by the bank. He submitted that no memo of the bank recording reasons for the return of the cheque has been produced. He submitted that it has been admitted that it was also not informed to the respondentCompany about the return of the cheque. Learned advocate, Shri Parikh, therefore, submitted that in absence of any evidence, suit Page 10 of 21 HC-NIC Page 10 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT has been filed on such stale cheque, which is again doubtful and, therefore, the Court below has on appreciation of material and evidence dismissed the suit. He, therefore, submitted that the present appeal may not be entertained. 8 Learned advocate, Shri Parikh submitted that the submissions regarding the presumption are misconceived. He submitted that the presumption regarding cheque cannot be made when the validity of the cheque has expired. He submitted that in fact, the defendant has proved on the basis of the books of account that no such transaction has taken place. He submitted that the defendant had also filed a police complaint for the misconduct of their own person.
9 Learned advocate, Shri Parikh has therefore referred to and relied upon the judgment of the Hon'ble Apex Court in case of G. Pankajakshi Amma & Ors. Vs. Mathai Mathwa (D) thr. L.R.s & Anr., reported in (2004) 12 SCC 83 and emphasized the observation in paragraph no.13 and submitted that similar contentions about the transactions were accepted in absence of any further evidence. He has also referred to the judgment of the High Page 11 of 21 HC-NIC Page 11 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT Court in case of Ramanlal Punjalal Shah Vs. Pari Bhulabhai Haribhai, reported in 1994 (2) GLR 1475. He submitted that as the appellantplaintiff is not having any licence as money landers as per the provision of Money Landers Act, 2012, any such submissions are misconceived. Similarly he submitted that on the aspect of presumption and burden of proof, it is for the plaintiff to establish his case based on the evidence and, thereafter, if it is proved prima facie, the burden may shift. He submitted that in the facts of the case, except bare averments, there is no supporting evidence and, therefore, suit has been rightly dismissed. Learned advocate, Shri Parikh has stated at the cost of repetition that even the averments are not consistent inasmuch the pleading and the statements in the affidavit refer to different version and, therefore, the present appeal may not be entertained. Referring to the burden of proof, he has referred to and relied upon the judgment of the Hon'ble Apex Court in case of Anil Rishi Vs. Gurbaksh Singh, reported in AIR 2006 SC 1971.
10 Learned advocate, Shri Shukla in rejoinder again Page 12 of 21 HC-NIC Page 12 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT referred to the papers and tried to submit that presumption under the Negotiable Instrument Act would arise. He referred to Section 84 of the Negotiable Instrument Act. He also submitted that as there was an oral contract, the cheque would be given for the purpose of financial assistance and, therefore, the execution of the cheque itself is sufficient to raise presumption about the transaction which has not been appreciated. 11 In view of these rival submissions, it is required to be considered whether the present appeal deserves consideration.
12 As could be seen from the background of the facts which has been referred to in detail by both the sides referring to R&P and other evidence, it is evident that the appellantoriginal plaintiff has not produced any documentary evidence in support of the socalled transactions with regard to the financial assistance or borrowing by the defendantCompany though it is claimed to be a usual practice. The appellantplaintiff has not given any explanation for not producing the books of accounts or even vouchers to support the averments in the plaint. Therefore much emphasis Page 13 of 21 HC-NIC Page 13 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT given on the execution of the cheque with the emphasis on the presumption under the provision of the Negotiable Instrument Act, requires to be considered. Chapter XIII of the Act provides "Special rules of evidence". Section 118 of the Act provides "Presumptions as to negotiable instruments". However proviso to section clearly provides that whether the instrument has been obtained from its lawful owner and from any person in lawful custody thereof. Thus though the Court is obliged to make presumption once the execution of the cheque is proved, the execution of the cheque validly by the competent person or authorized signatory, is required to be established. The provision of Section 119 to 122 referred to this aspect and though it is a special rule of evidence applicable to negotiable instrument, it is also necessary that the execution of the cheque or such instrument is validly by the person or authorized person is established. In the instant case, as could be seen from the evidence of the plaintiff at Exh.28 itself, there is no consistency and it has been clearly stated in the crossexamination that he Page 14 of 21 HC-NIC Page 14 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT cannot say who has executed or signed the said cheque. Admittedly there is no stamp on the cheque or voucher. There is no evidence about other transaction or earlier transaction though it is claimed that it was usual practice. On the contrary, it has been admitted in the cross examination that the cheque is required to be stamped and if it is not stamped, he would ask the person to stamp it. Therefore, when the cheque executed validly by the authorized person of the Company itself is not established, which does not bear the stamp of the Company, the plaintiff has failed to establish even from other documentary evidence like books of account, which would be maintained in ordinary course of business. 13 Again even if the burden is said to have been shifted in light of the statutory provision, the defendant is said to have discharged his burden by proving books of account that there is no such entry with regard to the transaction, which is claimed. Non acceptance of consideration or a transaction could be proved by preponderance or probability or by suggesting that it was improbable or doubtful. In the fact of the case Page 15 of 21 HC-NIC Page 15 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT when admittedly the plaintiff has not stated as to who has executed and who has signed as it was not in the presence coupled with the fact the cheque does not bear stamp, very execution is doubtful. Moreover there is no entry in the books of account produced by the defendant. It would be sufficient to discharge the burden even if it is shifted to the defendant. Moreover, it is the say of the defendant, the respondent herein that some disgruntle employee may have played mischief and they are likely to file complaint and in fact the Police complaint has been filed. This itself would be sufficient to meet with the submission regarding the presumption regarding the Negotiable Instrument Act that it was not validly executed negotiable instrument or cheque, which would give rise to any presumption. In ordinary course of the matter, it is for the plaintiff to prove his case with supporting evidence. In the facts of the case, as rightly submitted that though the averment is made in the plaint, there is no corroborative evidence to support such averments in the plaint. Admittedly no books of account, voucher etc. have been produced by the plaintiff Page 16 of 21 HC-NIC Page 16 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT to support the averment in the plaint regarding the borrower or financial assistances. Reference made to Section 84 of the Negotiable Instrument Act is also without any basis. Similarly the submissions which have been made referring to Section 58 of the Evidence Act, is misconceived. Though the submission has been made that no fact is required to be proved when the parties agree to admit, meaning thereby, it has reference to the admission either in the written statement or otherwise. However in the instant case, right from the written statement and pleadings, there is no such admission made by the respondentoriginal defendant. On the contrary, admittedly the appellantplaintiff has not explained the lack of any communication right from 2002 to 2005 about the non presentation of the cheque or such a late presentation of the cheque after the validity. 14 Though the submissions have been made with regard to the admission and presumption, the presumption under Section 118 of the Evidence Act could be made and, thereafter, it could be rebutted and the presumption would disappear. The provision of Section 106 of the Evidence Act states that when Page 17 of 21 HC-NIC Page 17 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT the fact is specially within the knowledge of any person, burden of proving that fact is upon him. Thus in the facts of the case, the person like the plaintiff must establish by positive evidence and the respondent cannot be called upon to give negative evidence. The Hon'ble Apex Court in a judgment in case of Narayan Vs. Gopal, reported in AIR 1960 SC 100 has observed, "The burden of proof is of importance only where by reason of not discharging the burden which was put upon it, a party must eventually fail, where, however, parties have joined issue and have led evidence and the conflicting evidence can be weighed to determine which way the issue can be decided, the abstract question of burden of proof becomes academic."
15 Further Section 118 of the Evidence Act does not mean that the respondent or other side must necessarily show that the document is not valid but other side or the defendant has the option to ask the Court to consider the very existence of the document and the consideration based on probability. A useful reference can be made to the observations made by the Hon'ble Apex Court in case of Bharat Barrel & Drum Manufacturing Company Page 18 of 21 HC-NIC Page 18 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT (supra), which has been referred to and relied upon by learned advocate, Shri Shukla. In fact referring to the presumption as well as the provision of the Negotiable Instrument Act, it has been observed about the approach of the Courts. Thus before the presumption could be made, foundation has to be led with regard to the valid execution of the document like cheque in the present case by the authorized person then, such question could arise or the presumption could be raised. In the facts of the case, as stated above, the plaintiff has failed to establish and also failed to produce any evidence including even the memo of the bank or the books of account to support the contention. Thereofre, The submissions made by learned advocate, Shri Shukla about the burden of proof and the presumption are misconceived.
16 Apart from the aforesaid aspect of merits whether the plaintiff has failed to prove its case, elaborate discussion on the aspect of provisions of provision of Money Landers Act are not made. In fact, if it was a practice of lending money, the plaintiff is required to establish and produce any Page 19 of 21 HC-NIC Page 19 of 21 Created On Sun Aug 13 10:43:52 IST 2017 C/FA/3478/2012 JUDGMENT such licence under the provision of the Money Landers Act. Reference could be made to the judgment of this High Court in case of Ramanlal Punjalal Shah (supra). Similarly as discussed, the aspect of burden of proof would shift provided the plaintiff has prima facie established the case based on its evidence. It is well settled that the plaintiff must prove its own case and cannot rely upon the weakness of the evidence or the case of the defence. It is for the plaintiff first to stand its on leg to support his case, thereafter only the burden could shift providing an opportunity to other side. In other words, as the law of evidence and the Civil Procedure Code requires for giving sufficient opportunity to the parties to put forward his case, the opportunity to the other side to explain is required to be followed. Though the Negotiable Instrument Act providing for presumption could be pressed into service, such document is required to be established to be genuine and properly executed. Therefore as discussed above, such submission relying upon the provision of the Negotiable Instrument Act are misconceived.
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17 Therefore as this Court is in agreement with the findings and conclusion arrived at by the Courts below, it does not call for any interference with the findings of facts and the conclusion arrive at.
18 The present appeal, therefore, deserves to be dismissed and accordingly stands dismissed.
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