Madras High Court
R.Chinnasamy vs T.Ponnusamy on 12 April, 2018
Equivalent citations: AIRONLINE 2018 MAD 38
Author: S.S.Sundar
Bench: S.S.Sundar
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Dated: 12.04.2018
Reserved on: 16.03.2018
Delivered on: 12.04.2018
CORAM
THE Hon'ble MR.JUSTICE S.S.SUNDAR
Appeal Suit (MD) Nos.225 of 2009,
226 of 2009 and 227 of 2009
A.S.(MD) No.225 of 2009
R.Chinnasamy : Appellant / Plaintiff
-Vs-
T.Ponnusamy : Respondent / Defendant
Prayer: Appeal Suit filed under Section 96 of Civil Procedure Code, against
the Judgement and Decree of the Principal District Judge, Dindigul made in
O.S.No.37 of 2006 dated 24.03.2008.
!For Appellant : Mr.M.Palani
^For Respondents : Mr.M.P.Senthil
A.S.(MD) No.226 of 2009
R.Chinnasamy : Appellant / Plaintiff
-Vs-
S.Palanisamy : Respondent / Defendant
Prayer: Appeal Suit filed under Section 96 of Civil Procedure Code, against
the Judgement and Decree of the Principal District Judge, Dindigul made in
O.S.No.38 of 2006 dated 24.03.2008.
For Appellant : Mr.M.Palani
For Respondents : Mr.M.P.Senthil
A.S.(MD) No.227 of 2009
R.Chinnasamy : Appellant / Plaintiff
-Vs-
K.Ganesan : Respondent / Defendant
Prayer: Appeal Suit filed under Section 96 of Civil Procedure Code, against
the Judgement and Decree of the Principal District Judge, Dindigul made in
O.S.No.39 of 2006 dated 24.03.2008.
For Appellant : Mr.M.Palani
For Respondents : Mr.M.P.Senthil
:COMMON JUDGMENT
The plaintiff in the suit in O.S.Nos.37, 38 and 39 of 2006 on the file of the Principal District Court, Dindigul, is the appellant in these appeals.
2.The appellant filed the suit against the respondent in O.S.No.37 of 2006 for recovery of a sum of Rs.11,80,000/- with future interest at 18% p.a. The appellant also filed two other suits in O.S.No.38 of 2006 and O.S.No.39 of 2006 against two others who are also the partners of the respondent herein in relation to a business in textiles.
3.The case of the appellant in the suit in O.S.No.37 of 2006 is as follows:
3.1.The plaintiff, the defendant, Thiru.Ponnusamy and two other persons by name Thiru.K.Ganesan and Thiru.S.Palanisamy are good friends. The defendant Thiru.S.Palanisamy and K.Ganesan started a mill under the name and style of Kurinji Spinning Mills Private Limited at Idaiyankinar, Erode and for the said business they requested the plaintiff to lend a sum of Rs.30,00,000/- agreeing to repay the same with interest at the rate of 18% p.a. within a period of six months. The said amount of Rs.30,00,000/- was paid to the defendants, Thiru.K.Ganesan and Thiru.S.Palanisamy each Rs.10,00,000/- by way of two cheques of Rs.5,00,000/- each to all the three.
The defendant and other two persons encashed the cheque on 14.06.2005 and utilised the amount. The defendant did not repay the amount borrowed. Hence, the plaintiff through his lawyer issued a notice to the defendant on 30.01.2006 and notices were also issued to Thiru.Palanisamy and Thiru.K.Ganesan calling upon them to repay the amount borrowed by them with interest. The defendant and his two friends namely the other two borrowers through their Advocate issued a reply notice dated 15.02.2006. In the reply notice, it is admitted that the defendant, S.Palanisamy and K.Ganesan were doing textile business apart from other businesses. The receipt of Rs.10,00,000/- each from the plaintiff is also admitted. However, the contents in the said reply notice are false.
3.2.The plaintiff and Palanisamy / the respondent herein formed a partnership under the name and style of SRK Bus Services providing a capital of Rs.2,00,000/- each and entered into a partnership agreement on 25.05.1998. subsequently, the plaintiff's wife Tmt.Kannaki joined as a partner and a fresh partnership agreement was entered into on 18.06.2005. The defendant in the suit, namely, Thiru.T.Ponnusamy expressed his desire to retire from the partnership and accordingly on 22.06.2005 a retirement deed was executed. Thereafter, in the partnership business, plaintiff and his wife alone are partners and they are running the business. At the time of retirement of T.Ponnusamy settled his account from the firm and Form-V under the Indian Partnership Act, 1932 was also filed with the signature of all the partners on 24.06.2005. The contention of the defendant in the reply notice are contrary to the document signed by plaintiff. The profit and loss account of SRK Bus Services, Palani, for the assessment year 2005-06 and 2004-05 shows the capital accounts of defendant is only Rs.2,00,000/-. Hence, the plaintiff through his Advocate issued a rejoinder to the defendant's Advocate and there is no reply from the defendant to the rejoinder. Hence, the plaintiff is entitled to recover a sum of Rs.10,00,000/- along with interest from 14.05.2005 to 14.05.2006 for 12 months.
4.The suit was contested by the respondent in A.S.No.225 of 2009 in the following lines:
4.1.The defendant, his two partners one K.Ganesan and S.Palanisamy are good friends and all the three of them are in partnership among themselves, running several businesses in the field of textiles. The plaintiff also was a good friend of defendant and his partners. The defendant and his partners were not acquainted with transport business but the plaintiff was running transport and he was well acquainted and experienced in transport business. When the plaintiff wanted to purchase a new route between Palani and Coimbatore, he was in need of a huge amount as he was not possessed of sufficient funds. The plaintiff approached the defendant in the year 1998 and suggested that he would like to have the defendant and his partners in the new transport business, he wanted to start.
Due to the friendship and the trust reposed by the defendant in the plaintiff, the defendant and his friends obliged to the plaintiff and the defendant agreed to join in the new transport business to be started by the plaintiff in the name of SRK Bus Service. This defendant, his friends and the plaintiff talked over the matter and decided the defendants and his two partners would contribute 50% of the capital in the transport business and the balance of 50% would have to be paid by the plaintiff.
4.2.Even though the defendant's business partners Thiru.K.Ganesan and S.Palanisamy had contributed for the transport business, the partnership deed was written only in the name of plaintiff and this defendant for administrative purpose. The permit and registration certificate of the bus were obtained only in the name of plaintiff. As the partnership business was very prosperous, the plaintiff wanted to enjoy the income of the business and so he requested the defendant to retire from the partnership stating that he wanted to have the business as his family business. The defendant also readily obliged. Since the business was very successful and lucrative and prosperous, the assets and goodwill was valued at Rs.1,00,00,000/- even though it was really very much more than Rs.1,00,00,000/-. The plaintiff agreed to pay half of the amount to the defendant. Hence as per the agreement the plaintiff had to pay a sum of Rs.50,00,000/- to the defendant. At that time as the plaintiff did not have that much amount to pay the entire amount of Rs.50,00,000/- he paid Rs.30,00,000/- by issuing six cheques each for a sum of Rs.5,00,000/- in the name of defendants and his two other partners Thiru.K.Ganesan and S.Palanisamy.
4.3.The plaintiff is the proprietor of SRK Transport and the Managing Partner of SRK Bus Services. Even though the amount is paid for SRK Bus Services, he had given the cheques in the name of SRK Transport wherein he had funds then in the account. The statements in the so called retirement deed and From V are only self-serving and there was no detailed statement and there was no statement of account. Though the defendant retired from partnership, the accounts as admitted between the plaintiff and defendant was not settled. The plaintiff promised to pay the balance of Rs.20,00,000/- within a short span of time. Due to the friendship and mutual trust, nothing was obtained in writing regarding the liability of plaintiff to the defendant. When the plaintiff was evading the payment the defendant wanted to refer this dispute to respectable mediators known to both for settlement. Just to wriggle out of the situation and enrich himself the plaintiff has filed the suit as if the defendant and his two other partners borrowed a sum of Rs.10,00,000/- each. It is absolutely false to state that the defendant and his partners had borrowed Rs.10,00,000/-. There was no need for the defendant and his partners to borrow from the plaintiff for the purpose of their mill as the defendant had then availed loan from State Bank of India, Erode for the establishment of the mill and towards working capital. The amount paid by the plaintiff by way of cheques to the defendant and his two partners is only by way of settlement of accounts. Since the balance amount is not settled, the defendant and his partners reserved their right to make separate claim by way of separate suit for recovery of the amount.
5.O.S.No.38 of 2006 was filed by the plaintiff as against S.Palanisamy who is the respondent in A.S.(MD)No.226 of 2009, again O.S.No.39 of 2006 was filed by the plaintiff / appellant as against K.Ganesan who is the respondent in A.S.No.227 of 2009. It is relevant to point out that the pleadings in the plaint and defence taken in the written statement in all the three suits are identical and same counsel was engaged for the plaintiff in all the suits and the defendant in all the three suits also engaged the counsel in all the suits. Though there are common issues it is unfortunate that the trial Court after conducting simultaneous trial dismissed all the suits by separate judgments. This Court considering the fact that the plea of plaintiff and defendant in all the suits are identical is inclined to dispose of all the three appeals by this common judgment.
6.In O.S.No.37 of 2006, the plaintiff examined himself as P.W.1 and produced Ex.A1 to A13. The defendant examined himself as D.W.1 and marked Ex.B1 to B4. Similarly, the plaintiff examined himself as P.W.1 in the two connected suits namely O.S.No.38 and O.S.39 of 2006 and marked only the notice and reply and rejoinder. From bank statement which is marked as Ex.A1 in all the three suits. This document shows that the plaintiff has availed a loan of Rs.30,00,000/- from the bank which was credited to his account and that the entire amount of Rs.30,00,000/- was disbursed to the defendant in the three suits through the cheques as alleged in the plaint. In O.S.No.39 of 2006 the plaintiff examined one Mailsamy as P.W.2. Similarly, the defendant in the suit in O.S.No.39 of 2006 examined himself as D.W.1 and two others as D.W.2 and D.W.3. D.W.2 in O.S.No.39 of 2006 has spoken about the market value of the main bus route namely between Palani and Coimbatore. D.W.3 was examined with regard to the transaction pertaining to Kurinji Spinning Mills Private Limited, Dindigul. The Court documents were marked through D.W.3.
7.P.W.3 during evidence, has stated that he mortgaged his house for mobilising funds and denied that the money paid by him was towards settlement of accounts in relation to the partnership business under the name and style of SRK Bus Service. The trial Court after considering the dates and events and the admitted facts found that the money advanced to the defendant and his two partners was only by way of settling the amount due to the defendant and that the plaintiff would not have advanced such a huge loan without getting any document from the defendant. Ex.A6 in O.S.No.36 of 2006 is the partnership agreement dated 25.05.1998 between the plaintiff and defendant in O.S.No.36 of 2006. Ex.A7 dated 18.06.2006 is again a partnership agreement between the plaintiff, defendant and plaintiff's wife Tmt.Kannaki after the induction of plaintiff's wife as partner. On 22.06.2006 under Ex.A10 a deed of dissolution was executed evidencing the fact that the defendant retired from the partnership. From these facts and the oral evidence of plaintiff and defendant, the trial Court accepted the case of the defendant as probable. Since the defendant had already availed financial assistance from the bank and they have sufficient money for their business it was concluded by the trial Court that there was no necessity for the defendant to borrow money at the time when the cheques were issued to them by the plaintiff. Thus though the trial Court found that the respective defendant in the three suits received the money as per the cheque issued by the plaintiff in all the three cheques, it was held that the defendant had received money along with his other two partners from the plaintiff only by way of settlement of account and towards the share of defendant in O.S.No.37 of 2006 in the partnership business. As a result, the three suits were dismissed with costs. Aggrieved by the judgment and decree of the trial Court in O.S.No.37 of 2006, O.S.No.38 of 2006 and O.S.No.39 of 2006 on the file of the Principal District Court, Dindigul, the above appeals have been preferred by the plaintiff in the suits.
8.The learned counsel appearing for the appellant / plaintiff submitted that the findings of the trial Court by presuming that the defendant in all the three suits are partners is incorrect and perverse. When the defendant in O.S.No.38 of 2006 and O.S.No.39 of 2006 are not partners in the partnership firm ?SRK Bus Services?, it is submitted that the findings of the trial Court that the money paid under the cheques was towards settlement of accounts and in lieu of their share in the partnership business is illegal. Learned counsel for the appellant further submitted that the partnership agreement of a registered firm which is in writing cannot be ignored and the defendant in the three suits are estopped from pleading contrary to the recitals in Ex.A6, partnership agreement dated 25.05.1998. Relying upon the document Ex.A10, dated 22.06.2005 whereby the defendant in O.S.No.37 of 2006 retired from the partnership learned counsel for the appellant submitted that the accounts are fully settled between the two partners as per Ex.A9 namely the certified copy of Form-V showing the retirement of defendant. Since the partnership agreement in relation to SRK Bus Service between plaintiff and defendant in O.S.No.37 of 2006 has been dissolved and a new partnership has been reconstituted by the plaintiff and his wife as partners it was contended by the learned counsel for the appellant that the trial Court ought to have held that the defendant has no right to seek accounts. The learned counsel for the appellant submitted that admitted facts need not be proved. When the receipt of money by the defendant in three suits is admitted the burden lies on the defendant in the three suits to prove that the money was paid in relation to the settlement of accounts pursuant to the dissolution of the partnership firm ?SRK Bus Services?. In this case, the defendant failed to produce any document in connection with the partnership business to show that the accounts of the firm upon dissolution was not settled and that the money was paid by the plaintiff by cheques towards part settlement of the amount found due from him. It was further submitted that when defendant in O.S.No.38 of 2006 and O.S.No.39 of 2006 are not partners of SRK Bus Service, it is not open to the defendant to raise a plea that the amount which was given to the other two partners of defendant in O.S.No.37 of 2006 cannot be taken as a money paid in connection with the partnership business. It is also contended that it is not open to the strangers of firm, namely, the defendant in O.S.No.38 of 2006 and 39 of 2006 to say that the plaintiff owes money to them towards settlement of accounts in the partnership firm M/s.SRK Bus Service. Learned counsel further pointed out some of the reasonings of the trial Court which according to him is perverse and without an understanding of the elementary principles of law under the Partnership Act. When the cheque has been issued by the plaintiff from the accounts of M/s.SRK Transport which is a proprietary concern, the learned counsel pointed out that the cheques issued from the account of SRK Transport can never be towards settlement of accounts in respect of SRK Bus Service. Learned counsel further relied upon the document marked as Ex.B1 and B2 and demonstrated before this Court that these two documents were fabricated by the defendant for the purpose of this case. This Court also is convinced that the document Ex.B1 and B2 are not even pleaded and that they are not genuine documents. Further the learned counsel submitted that this Court should appreciate and consider the conduct of the defendant in O.S.No.37 of 2006 to come forward with the concocted documents. The conduct of the defendant to present his case on the basis of concocted document should be kept in mind while considering the oral evidence of defendants in the three suits.
9.Learned counsel appearing for the appellant relied upon the judgment of the Hon'ble Supreme Court in the case of Meghmala and others v. G.Narasimha Reddy and others reported in (2010) 8 SCC 383 for the proposition that fraud is an act of deliberate deception with an intention to secure something which is otherwise in issue and that therefore, the act of fraud with the Court should be viewed seriously. In the same line, the learned counsel for the appellant also relied upon another judgment of this Court by a learned Single Judge in the case of N.Natarajan v. The Executive Officer, Chitlapakkam Town Panchayat reported in 2015 (2) CTC 681. The learned counsel for the appellant submitted that there cannot be an agreement dehors the partnership agreement under Ex.A6 and that persons who are not partners of a partnership firm cannot enforce any claim against the partners regarding share of profits. He relied upon a judgment of a Division Bench of Kerala High Court in the case of Venkideswara Prabhu Ravindranatha Prabhu v. Surendranatha Prabhu Sudhakara Prabhu and others reported in AIR 1985 Kerala 265 where a suit was filed on the assumption that a provisional store business was not partitioned and it continued as a joint family business even after the dissolution of other partners. The plaintiff wanted dissolution of a partnership firm and settlement of account and realisation of his 1/20 share due to him. In defence it was contended that there was no joint family business. It was stated in the written statement that only a partnership business was conducted by defendants 1 to 5 under Ex.B2 and that the internal agreement between the 5th defendant and his children will not bind the other partners. Since the plaintiff is not a partner in the partnership firm it was contended that the plaintiff had no right to file a suit for dissolution of partnership or for settlement of accounts. It is in the said context, the Division Bench of Kerala High Court has analysed the legal aspect in paragraphs 17 to 22 in the said judgment which are extracted as below:
?17. Let us take the case of the 5th defendant. After Ext. A1, he is only a divided member. In the assets obtained by him under Ext. A1 his sons also may have birthright. In that way he may be representative of the joint family in the partnership firm. So far as the partnership firm is concerned, the 5th defendant alone is the partner even though he became a partner in his capacity as Manager or Kartha of his joint family. The other members of his joint family or the joint family as a unit do not become partners of the firm.
18. In Pichappa v. Chokalingam, AIR 1934 PC 192, it was held :
"Where a managing member of a joint family enters into a partnership with a stranger the other members of the family do not ipso facto become partners in the business as to clothe them with all the rights and obligations of a partner as defined by Contract Act. In such a case the family as a unit does not become a partner, but only such of its members as in fact enter into a contractual relation with the stranger; the partnership will be governed by the Act."
19. The fifth defendant may be accountable to the other members of his joint family for the profits of the partnership business but his rights and liabilities in the partnership will be governed by deed of partnership alone. That has nothing to do with his obligation towards strangers. The position will not change even if the strangers to the partnership towards whom he is having obligation are the members of his own joint family.
20. In Income-tax Commr. v. Bagyalakshmi and Co., AIR 1965 SC 1708 (at p. 1710), it was observed :
"A contract of partnership has no concern with the obligation of the partners to others in respect of their shares of profit in the partnership. It only regulates the rights and liabilities of the partners. A partner may be the Karta of a joint Hindu family; he may be trustee; he may enter into a sub- partnership with others; he may, under an agreement, express or implied, be the representative of a group of persons; he may be a benamidar for another. In all such cases he occupies a dual position. Qua the partnership he functions in his personal capacity; qua the third parties, in his representative capacity. The third parties, whom one of the partners represents, cannot enforce their rights against the other partners nor the other partners can do so against the said third parties. Their right is only to a share in the profits of their partner-representative in accordance with law or in accordance with the terms of the agreement, as the case may be."
21. Third parties whom the partner represents, even if they are members of his joint family cannot enforce their claims against the other partners or against the partnership. They can only claim their share of profits from the partner representative,
22. A Hindu joint family is not a juristic person for all purposes. As a joint family it cannot enter into a partnership. For the purpose of entering into a partnership, the joint family cannot be treated as a juristic person. All the individual members of a joint family could enter into a partnership with the members of another joint family or even with other individuals. In that case also, they will be treated in the eye of law only as individual partners and not as a joint family. That is also the case with representatives of the joint family even if they are karta or manager. For this purpose, it may be advantageous to extract the principles laid down in Kshetra Mohan Sannyasi Charan v. Commr. of Excess Profits Tax, 24 ITR 488 : (AIR 1953 SC 516 at p. 518) :
"When two kartas of two Hindu undivided families enter into a partnership agreement the partnership is popularly described as one between the two Hindu undivided families but in the eye of the law it is a partnership between the two kartas and the other members of the families do not ipso facto become partners. There is, however, nothing to prevent the individual members of one Hindu undivided family from entering into a partnership with the individual members of another Hindu undivided family and in such a case it is a partnership between the individual members and it is wholly inappropriate to describe such a partnership as one between two Hindu undivided families."
In all such cases, even where the partner is the karta or manager of a joint family, the partnership agreement is only between him and the other partners. No member of the family except the partner acquires right or interest in the partnership. The members who are not partners could only enforce their claims against their representative partner for share of profits treating the partnership profit as joint family asset.?
10.Ultimately, the conclusion was expressed in the following lines:
?Thus the provision store sought to be dissolved is not joint family concern, but only a partnership business. Plaintiff is not a partner and he was not admitted to the benefits of the partnership also. As such he is not competent to sue for the reliefs claimed. The suit is also bad for nonjoinder of a necessary party. The appeal is therefore allowed, the decree and judgment of the trial Court are set aside and the suit is dismissed with costs to the contesting defendants in both the Courts.?
11.Learned counsel for the appellant then relied upon a judgment of the Hon'ble Supreme Court in the case of Helper Girdharbhai v. Saiyed Mohmad Mirasaheb Kadri and others reported in AIR 1987 SC 1782 for the proposition that in the absence of any agreement between plaintiff and defendant in O.S.No.38 of 2006 and O.S.No.39 of 2006 to share the profits of business. The plea in the written statement that there was a partnership agreement between the plaintiff and the defendant in all the three suits cannot be accepted. He relied upon the following passage in paragraph 8 of the judgment:
?8.Whether there was a partnership or not may in certain cases be a mixed question of law and fact, in the sense that whether the ingredients of partnership as embodied in the law of partnership were there in a particular case or not must be judged in the light of the principles applicable to partnership. The first question, therefore, is what is a partnership? That has to be found in section 4 of the Indian Partnership Act, 1932, it says "Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all"
(Emphasis supplied). Section 6 of the said Act reiterates that in determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the par- ties, as shown by all relevant facts taken together. The following important elements must be there in order to establish partnership, (1) there must be an agreement entered into by all parties concerned, (2) the agreement must be to share profits of business; and (3) the business must be carried on by all or any of the persons concerned acting for all. ...?
12.The learned counsel for the appellant further submitted that the partnership agreement between the plaintiff and defendant in O.S.No.36 of 2006 cannot be construed as one enabling the persons who are not partners to the partnership agreement to lay a claim against the plaintiff. He further submitted that the partnership agreement between plaintiff and defendant in O.S.No.37 of 2006 is very clear that except the two no other person is a partner. He also relied upon a judgment of the Hon'ble Supreme Court in the case of State of Gujarat (Commissioner of Sales Tax, Ahmedabad) v. M/s.VAriety Body Builders reported in (1976) 3 SCC 500 for the proposition that the intention of the parties has to be gathered from the terms and conditions of the contract to determine the real nature of the transaction. The learned counsel for the appellant also relied upon a judgment of a learned Single Judge of this Court in the case N.A.Chinnasamy and another v. S.Vellingirinathan reported in 2013 (6) CTC 809 wherein it has been held that a person who is not an illiterate and a party to a registered sale deed cannot raise a plea that the sale deed was signed by him before the Sub- Registrar believing the document to be a mortgage deed. The learned counsel for the appellant also relied upon a judgment of a Division Bench of this Court in the case of S.P.Sakthi Devi v. The Collector of Salem and others reported in (1985) 98 Mad LW 105 wherein it has been held as follows:
?5.The next contention is that a caste certificate is not a public document and it is only a communication reflecting the statement of facts and hence, irrespective of whether the issuing authority or the Collector / District Magistrate in the District had cancelled it or not, it is open to the employer to hold an enquiry and decide about the correctness of the certificate, and further pursue with the disciplinary proceedings against the concerned personnel. The caste certificate is issued by a public authority authorised to issue it after holding an enquiry, as circumstances may warrant. It is a public duty to be discharged by a public servant, on authority conferred upon him to issue such a certificate. The contention on behalf of the fourth respondent and by the Central Government Standing Counsel is that a caste certificate is not conclusive of what is contained therein, and the employer has the jurisdiction to decide upon the correctness of the claim made therein, by calling upon the certificate holder to adduce evidence in support of the contents of the certificate, and failing which, suitable action could be taken against the certificate holder. In support of the claim that it is not a public document, it is stated that when certified copy could not be secured of the records relating to issue of caste certificate, it would not come within the definition of 'public document' under Section 74 of the Evidence Act. This contention lacks strength because Section 76 of the Evidence Act takes care of the nature of documents in respect of which alone certified copies could be obtained. Hence, this aspect cannot be a determinative factor to hold as to whether a caste certificate is a public document or not. What is paramount is to find out whether in the course of discharge of public duties, the concerned public authority is enjoined to discharge the public duty, and if so, then the document which comes into existence consequent to such public duties, issued with seal and authority of his office would be a public document. Once a caste certificate comes into existence in this form any other public functionary is duty bound to act upon the same. On being issued, it is a lawful and valid document. So long as it is not cancelled in the eye of law, it being a valid document, the holder of it, could rely upon it to establish his caste. Except the prescribed authority, no other authority or public bodies or undertakings, etc., having been conferred with powers to issue caste certificates, he cannot choose to declare in any proceeding and more so in disciplinary proceedings, that the valid caste certificate contains false particulars. Further in G.O.Ms.No.9, Social Welfare, dated 3rd January, 1983, instructions were given that records of local enquiry must be maintained, as permanent records for verification in future, which is also indicative of the fact that caste certificate is a public document. Hence, it is held that a caste certificate is a public document.
6.The next point taken is, when the power to cancel a caste certificate has not been conferred on empowered authorities, there is no need for the concerned employer to wait till the concerned authority cancels the certificate, and only thereafter take a decision about the correct caste of the correct caste of the candidate or employee or servant. Under Section 21 of the General Clauses Act, a power to make an order includes the power to rescind it. Hence, the empowered authority who had brought into existence the lawful and valid caste certificate or his higher authority alone could cancel a caste certificate. Unless and until it is done, all public authorities in Central Government and Public Sector Undertakings and bodies, etc., which h are under its control are bound to treat the contents of such certificate as correct.?
13.Referring to the above judgment, the learned counsel for the appellant submitted that the document produced by the plaintiff in this case namely the partnership deed of dissolution showing the retirement of defendant in O.S.No.37 of 2006 from the partnership and other documents are public documents as they are maintained by the Registrar of Firms and it was further contended that the findings of the trial Court are contrary to the public documents produced by the plaintiff and hence, unsustainable.
14.As against the submissions of the learned counsel for the appellant, Mr.M.P.Senthil, learned counsel appearing for the respondent in all the three appeals referring to the findings of the trial Court submitted that the findings of the trial Court are supported by evidence and the conclusions are inevitable in this case, having regard to the admitted facts and the sequence of facts which are not in dispute. It is submitted that the plaintiff has not produced any document to prove that partnership accounts between the plaintiff and the defendant in O.S.No.37 of 2006 has been settled when he retired from the firm. The learned counsel appearing for the respondent then relied upon Section 92 of the Evidence Act to explain that the defendant in the three suits are not prevented form raising the plea regarding the parallel agreement between the defendant in O.S.No.37 of 2006 and his two partners. Referring to Section 118 and Section 139 of Negotiable Instruments Act, the leaned counsel appearing for the respondent / defendant submitted that presumption in this case is in favour of the defendant to show that the cheque was issued only in relation to an existing debt and enforceable liability. Hence, it is submitted that the conclusion of the trial Court that the cheques were issued only towards the settlement of accounts in respect of the partnership firm ?SRK Bus Services? after the retirement of the defendant in O.S.No.37 of 2006 is inevitable.
15.Further, the learned counsel for the respondent in all the three appeals relied upon the following judgments to show that this Court should draw adverse inference against the defendant for the non-production of material documents. In the case of Gopal Krishna Ketkar v. Mohamed Haji Latif and others reported in AIR 1968 SC 1413 the Hon'ble Supreme Court has approved the view that even if the burden of proof does not lie on a party, the Court should draw an adverse inference if he withholds an important document in his possession which would throw light on the facts at issue. Even while dealing with a case where it has been argued that adverse inference cannot be drawn unless the person holding the document is called upon to produce the same, the Hon'ble Supreme Court quoted with approval the earlier precedents wherein the observation of the Judicial Committee was referred to. The following extract from the judgment of the Hon'ble Supreme Court has some relevance:
" The observations of the Judicial Committee do not support the proposition that unless a party is called upon expressly to make an affidavit of documents and inspection and production of documents is demanded, the Court cannot raise an adverse inference against a party withholding evidence in his possession. Such a rule is inconsistent with illustration (g) of S.114 of the Evidence Act, and also an impressive body of authority."
16.Learned counsel then submitted that neither the pleadings in the written statement filed in the three suits nor the evidence of defendant in the suits is contrary to any document relied upon by the plaintiff and that the defendant in O.S.No.38 of 2006 and O.S.No.39 of 2006 are not precluded from pleading a parallel agreement between defendant in O.S.No.37 of 2006 and others to share the profits gained by defendant in O.S.No.37 of 2006. It is submitted that the other two are not parties to Ex.A6 and that therefore, they are not precluded from letting in evidence contrary to Ex.A6.
17.In this context, it is worthwhile to refer to the following precedent in the case of Parattakath Mayan and others v. Palakkotanteakatte Mammad Kunhi reported in AIR (36) 1949 Madras 852 where this Court has considered the scope of Section 92 and ruled as follows:
?5. In this second appeal the only question for consideration is whether the Courts-below were justified in shutting out the oral and documentary evidence which the defendants wanted to adduce to establish the arrangement pleaded by them in paragraph 3 of the written statement. The fundamental mistake committed by the Courts below was to find that the first defendant was also an executant of the kanom deed Ex. P-5. Ex. P-5 was executed on behalf of defendants 2 to 5 who were then minors by the first defendant as guardian. He did not join in the execution of the deed in his individual capacity. The arrangement pleaded in paragraph 3 was in my view between the first defendant himself and Assan the kanomdar. It is not as contended by the learned advocate for the respondent an arrangement entered into by the first defendant both for himself and also on behalf of his minor children. Under Section 92of the Evidence Act the prohibition with reference to the proof of an oral agreement applies only as between parties to the instrument or representatives in interest and not between one of the parties to the instrument and a third party. The language of the section itself is clear and the Privy Council in Maung Kyin v. Ma Shwe La (1917) 33 M.L.J. 648 : L.R. 44 I.A 236 I.L.R. 45 Cal. 320 (P.C.) decided this question and pointed out that the section in terms applies only as between parties to the instrument or their representatives in interest and not between a party to the instrument and a stranger. In my opinion the arrangement of the discharge pleaded is also admissible on another ground, as it does not contradict, vary, add to or subtract from any terms of the mortgage. The mortgagor, it has been held, is entitled to establish by oral evidence discharge of a mortgage though he may be precluded from pleading an agreement to discharge, which is executory in its nature. An agreement to give a discharge in future may be, if it is oral, hit by Section 92 but there is nothing in Section 92 of the Evidence Act to preclude evidence being let in proof of an oral agreement which is otherwise valid and enforceable and in pursuance of which an amount somewhat less than the amount due under the mortgage was accepted by the mortgagee in full discharge of the mortgage. The cases on the point have been considered by Varadachariar and Horwill, JJ., in Krishnaswarni Rao v. Srinivasa Desikan (1937) 71 M.L.J. 850. In the present case what was pleaded was a discharge and not an executory contract to pay the amount in future. No doubt the discharge was as pleaded in the written statement in pursuance of an arrangement which was acted upon and accepted by both sides as discharging the mortgage debt by reason of the payments made by the first defendant in pursuance of the arrangement. On this ground also I think that the view of the Courts below that the defendants are not entitled to prove the arrangement pleaded in paragraph 3 of the written statement is erroneous.?
18.The learned counsel for the respondent relied upon a judgment of the Larger Bench of the Hon'ble Supreme Court in the case of Bai Hira Devi and others v. Official Assignee of Bombay reported in AIR 1958 SC 448 (V 45 C
69) wherein it has been held as follows:
?5. Section 92 excludes the evidence of oral agreements and it applies to cases where the terms of contracts, grants or other dispositions of property have been proved by the production of the relevant documents themselves under Section 91; in other words, it is after the document has been produced to prove its terms under Section 91 that the provisions of Section 92 come into operation for the purpose of excluding evidence of any oral agreement or statement, for the purpose of contradicting, varying, adding to or subtracting from its terms. The application of this rule is limited to cases as between parties to the instrument or their representatives in interest. There are six provisos to this Section with which we are not concerned in the present appeal. It would be noticed that Sections 91 and 92 in effect supplement each other. Section 91 would be frustrated without the aid of Section 92 and Section 92 would be inoperative without the aid of Section 91. Since Section 92 excludes the admission of oral evidence for the purpose of contradicting, varying, adding to or subtracting from the terms of the document properly proved under Section 91, it may be said that it makes the proof of the document conclusive of its contents. Like Section 91, Section 92 also can be said to be based on the best evidence rule. The two sections, however, differ in some material particulars. Section 91 applies to all documents, whether they purport to dispose of rights or not, whereas Section 92 applies to documents which can be described as dispositive. Section 91 applies to documents which are both bilateral and unilateral, unlike Section 92 the application of which is confined only to bilateral documents. Section 91 lays down the rule of universal application and is not confined to the executant or executants of the documents. Section 92, on the other hand, applies only between the parties to the instrument or their representatives in interest. There is no doubt that Section 92 does not apply to strangers who are not bound or affected by the terms of the document. Persons other than those who are parties to the document are not precluded from giving extrinsic evidence to contradict, vary, add to or subtract from the terms of the document. It is only where a question arises about the effect of the document as between the parties or their representatives in interest that the rule enunciated by Section 92 about the exclusion of oral agreement can be invoked. This position is made absolutely clear by the provisions of Section 99 itself. Section 99 provides that ?persons who are not parties to a document or their representatives in interest, may give evidence of any facts tending to show a contemporaneous agreement varying the terms of the document?. Though it is only variation which is specifically mentioned in Section 99, there can be no doubt that the third party?s right to lead evidence which is recognized by Section 99 would include a right to lead evidence not only to vary the terms of the document, but to contradict the said terms or to add to or subtract from them. If that be the true position, before considering the effect of the provisions of Section 92 in regard to the appellants? right to lead oral evidence, it would be necessary to examine whether Section 92 applies at all to the present proceedings between the official assignee who is the respondent and the donees from the insolvent who are the appellants before us.?
19.The learned counsel for the respondent then relied upon a recent judgment of this Court in the case of P.Vaidyanathan v. K.Sundaram reported in 2017 (1) MWN (Civil) 187 where it has been held that the plea in defence in the suit for specific performance to the effect that an agreement was not intended to be acted upon and that the agreement relied upon by the plaintiff in the suit was only a security for a loan transaction. It is also useful to refer to a judgment of the Privy Council in the case of Baijnath Singh v. Hajee Vally Mahomed Hajee Abba reported in AIR 1925 Privy Council 75 wherein it has been held as follows:
?The preamble to the Evidence Act, recites that ?it is expedient to consolidate, define and amend the Law of Evidence,? and Section 92 merely prescribes a rule of evidence; it does not fetter the Court's power to arrive at the true meaning and effect of a transaction in the light of all the surrounding circumstances.?
20.The above judgment of the Privy Council is also a guiding factor to administer law effectively and how the scope of Section 92 should be understood with certain limitations and it should be kept in mind that the power of Court to accept any fact is not ousted by Section 92 of Indian Evidence Act. The other judgment relied upon by the learned counsel for the respondent are with reference to proviso to Section 92 of the Act. In this case, we need not stretch too far to accommodate the defendant in the three suits as this Court is of the view that the plea of defendant in this case is governed by second proviso to Section 92 as the parallel arrangement / agreement between Ponnusamy and his two partners with the knowledge of the plaintiff is not contrary to partnership agreement.
21.The learned counsel appearing for the respondent further relied upon the judgment of the Division Bench of Andhra Pradesh High Court in the case of Habeeb Khan and others v. Valasula Devi and others reported in AIR 1997 AP 53 wherein it has been held as follows:
?23. The position of law that emerges from the dictum of the aforesaid cases is that overall evidence can be taken into consideration to find out the real nature of the transaction and S. 92 of the Evidence Act is not a bar to the admission of oral evidence to prove that the transaction was intended to be something other than what it purports to be. ?
22.The learned counsel appearing for the respondent mainly focussed his submissions by referring to Section 114 of Indian Evidence Act and submitted that the plaintiff in this case had the custody of partnership accounts in relation to SRK Bus Service and answerable to account as the person-in-charge of the accounts as Managing Partner, but failed to produce the accounts relating to the firm SRK Bus Service when it was dissolved pursuant to the retirement of defendant in O.S.No.37 of 2006. Similarly the learned counsel for the respondent also suggested that the plaintiff ought to have produced his income tax returns and his own accounts to prove his case that the money was paid to the defendant in all the three suits as a loan. He also relied upon several judgments of this Court and the judgment of the Hon'ble Supreme Court in support of his submissions.
23.Considering the rival submissions of the learned counsel appearing on both sides, the only issue that arise for consideration in this case is whether the plaintiff issued the cheque by way of loan as pleaded by plaintiff or by way of settlement of accounts in respect of the partnership firm ?SRK Bus Service? pursuant to the retirement of defendant in O.S.No.37 of 2006. It is not in dispute that the plaintiff and the defendant in O.S.No.37 of 2006 entered into a partnership agreement under Ex.A6 dated 25.05.1998. As per the partnership agreement, the plaintiff and the defendant in O.S.No.37 of 2006 agreed to contribute a sum of Rs.1,00,000/- towards capital. Even in the plaint, the plaintiff admitted that the plaintiff and Ponnusamy provided a capital of Rs.2,00,000/- each and entered into the partnership deed on 25.05.1998. As per the partnership agreement, it is the plaintiff who was in charge of the whole business and accounts of the partnership business. The defendant in O.S.No.37 of 2006 is only a dormant partner and it is admitted that the plaintiff alone was doing the entire business. It is the case of the defendant in the three suits that the partnership agreement was of course between the plaintiff and the defendant in O.S.No.37 of 2006. However, the further case of the defendant in the suits is that the defendant in O.S.No.37 of 2006 and his two other partners along with the plaintiff talked over the matter and decided that the defendant and his two partners would contribute 50% of the capital for the transport business and the balance of 50% would be paid by the plaintiff. It is further stated in the written statement that even though the defendant in O.S.No.37 of 2006 alone is the partner in the partnership deed, his business partners also had contributed for the transport business.
24.The defendant in all the suits have admitted that the partnership agreement was only between the plaintiff and the defendant in O.S.No.37 of 2006. However, it is their case that 50% share of the defendant in O.S.No.37 of 2006 has come from the defendant in O.S.No.37 of 2006 and his two other partners in the textile business who are the defendant in the other two suits. The suit is not by the plaintiff to enforce the right as a partner in the partnership firm. The defence taken by the defendant that the other two partners of the defendant in O.S.No.37 of 2006 had also contributed for the capital and that therefore, at the time of settlement of accounts a sum of Rs.10,00,000/- was paid by the plaintiff to the defendant in the three suits is neither barred nor contrary to any written document. In this regard, it is worthwhile to refer to Section 92 of Indian Evidence Act:
92. Exclusion of evidence of oral agreement.?When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms:
Proviso(1).?Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, 1[want or failure] of consideration, or mistake in fact or law: (1).?Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, 3[want or failure] of consideration, or mistake in fact or law\:"
Proviso (2).?The existence of any separate oral agreement as to any matter on which a document is silent, and which is not inconsistent with its terms, may be proved. In considering whether or not this proviso applies, the Court shall have regard to the degree of formality of the document:
Proviso (3).?The existence of any separate oral agreement, constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property, may be proved:
Proviso (4).?The existence of any distinct subsequent oral agreement to rescind or modify any such contract, grant or disposition of property, may be proved, except in cases in which such contract, grant or disposition of property is by law required to be in writing, or has been registered according to the law in force for the time being as to the registration of documents:
Proviso (5).?Any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description, may be proved: Provided that the annexing of such incident would not be repugnant to, or inconsistent with, the express terms of the contract:
Proviso (6).?Any fact may be proved which shows in what manner the language of a document is related to existing facts.?
25.The first proviso to Section 92 permits a party to a contract to raise a plea which would invalidate the document or transaction such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, failure of consideration or mistake of fact or law. The second proviso to Section 92 permits a party to the contract to prove, the existence of any separate oral agreement in respect of which the document is silent and which is not inconsistent with the terms of the contract. In this case, the case of the defendant in all the three suits is about the agreement between the defendant in O.S.No.37 of 2006 and his other two partners to the knowledge of plaintiff. Though the defendant in O.S.No.37 of 2006 is alone a partner, the arrangement was that he represent in fact his two other partners. This arrangement is only for the purpose of sharing the investment and profit without any legal obligation or liabilities involving the plaintiff in connection with the partnership business. In the present context where the suit is for recovery of money, the defendant in the suit has raised the plea regrading contribution by his partners only in the context of explaining why the money was paid to the defendant in O.S.No.37 of 2006 and his two partners. The plea of defendant is, neither contrary to the recitals in the partnership agreement nor barred under Section 92 of the Evidence Act. Hence, the contention of the learned counsel appearing for the appellant that the defendant's plea is contrary to the documents filed by the plaintiff, namely, partnership agreement, retirement deed, deed of dissolution, has no legal basis. In this case, Ex.A6 in O.S.No.37 of 2006 is the xerox copy of the partnership agreement between the plaintiff and Thiru.Ponnusamy, the defendant in O.S.No.37 of 2006.
26.Even as per this document, Clause 8 of the partnership agreement reads as follows:
?8.ne;j !;jhgdj;jpd; bjhHpiy 1-k; nyf;f Tl;lhspahd jpU.Mh;.rpd;dr;rhkp vd;gth; Bkyhz;ik Tl;lhspahf nUe;J bghWg;ghf elj;jp tu Btz;oaJ. ne;j !;jhgdj;jpd; md;whl tut[ / bryt[fis ftdpj;J tUjy; kw;Wk; kj;jpa khepy muR mYtyfA;fs;, Bfhh;l;Lfs; Mfpatw;wpw;F M$uhf 1-k; nyf;f Tl;lhspf;F mA;fPfhuk; mspf;fg;gLfpwJ/ Bkyhz;ik Tl;lhspfahd jpU.Mh;.rpd;drhkp vd;gtUf;F khjbkhd;Wf;F U.1000/- CjpaKk; tHA;fg;gLk;. Bkyhz;ik Tl;lhsp 25.05.1998 Kjy; eph;thf Tl;lhspahf bray;gl;lij Tl;lhspfs; Vw;Wf; bfhs;fpBwhk;.?
27.The cheque signing power was given only to the plaintiff in the suit. Similarly, Ex.A6 also contemplates further investment as per the decision of the partners and the partners are entitled to interest of 18% for their investment. The plaintiff has produced Ex.A7 which would show that after the induction of plaintiff's wife as a partner, a fresh partnership agreement was entered into on 18.06.2005. Ex.A8 is the fresh partnership agreement between the plaintiff and his wife after retirement of Ponnusamy from the partnership firm. This document is dated 22.06.2005. Ex.A9 also reveals the fact that the retirement of Ponnusamy the defendant in O.S.No.37 of 2006 on 22.06.2005 is informed to the Registrar of Firm. On 22.06.2005 a dissolution deed has been signed by all the partners and this document is filed by the plaintiff as Ex.A10. This document refers to the fact that the three partners were doing business with effect from 18.06.2005 pursuant to Ex.A7 and that the said partnership firm is dissolved by this document. In this document, the plaintiff has admitted that the settlement of accounts is not finalized and that the money which is due to Ponnusamy as on 31.03.2005 should be paid in cash after getting acknowledgment from him. There is no document produced to show how the accounts were settled before Ex.A7 as between the plaintiff and Ponnusamy at the time when plaintiff's wife was inducted as new partner. Though the xerox copy of the partnership agreements and dissolution deed are produced by the plaintiff, the plaintiff has not produced the statement of accounts of the partnership firm and the payment of money to Ponnusamy as per the finalized accounts either before the new firm was started by the induction of plaintiff's wife or after the dissolution of the firm under Ex.A10. The following clause in Ex.10 is relevant:
?1.ne;j !;jhgdj;jpypUe;J KjyPl;Lf; fzf;fpd; mog;gilapy; tpyFk; Tl;lhspf;F 31.03.2005 Bjjpapl;l Ie;bjhifg;go kw;w Tl;lhspfs; tpyFk; Tl;lhspf;F buhf;fk;
brYj;jp Mjut[ bgw;Wf; bfhs;s Btz;oaJ.?
28.Thus Ex.A7, A10 would only probablise the case of the defendant that the money due to Ponnuamy was not settled either at the time of retirement or at the time of dissolution of the firm. When the plaintiff was Managing Partner of the firm and it is admitted that he was handling the accounts, the burden lies on him to prove that the money due to the retiring partner was settled. It is not in dispute that the partnership business was carried on by the plaintiff and Ponnusamy for seven years. It is also admitted in this case that the partnership business was prosperous to earn profit. Having regard to the business prospects and the statement of D.W.2 in O.S.No.39 of 2006 that the value of the bus route between Palani and Coimbatore will be Rs.2,00,00,000/-, the case of defendant in all the three suits is probable especially when there is no material produced by plaintiff to show settlement of accounts upon retirement of T.Ponnusamy. Though the evidence of D.W.2 in O.S.No.39 of 2006 cannot be readily accepted, the fact that the partnership firm was earning a decent profit and the assets of the firm as on the date of dissolution of the firm by the retirement of T.Ponnusamy cannot be ignored. Hence, the case of defendant that the statement of accounts were settled between the plaintiff and Thiru.T.Ponnusamy by getting the cheques is acceptable. Apart from the profits that is due to the retiring partner a fair amount towards capital and assets must have been agreed to be paid to the retiring partner. When there is no accounts produced and no material is produced to show that some payment was made to Ponnusamy at the time of his retirement, this Court has to accept the case of the defendant as it is more probable and convincing. The trial Court has therefore concluded rightly.
29.The Hon'ble Supreme Court in the case of Union of India v. Ibrahim Uddin and another reported in 2012-4-L.W. 359. In this judgment, the Hon'ble Supreme Court has considered several judgments and expressed the position of law in paragraph 6 to 16 and they are extracted as follows:
?6. Generally, it is the duty of the party to lead the best evidence in his possession, which could throw light on the issue in controversy and in case such material evidence is withheld, the Court may draw adverse inference under Section 114(g) of the Evidence Act notwithstanding, that the onus of proof did not lie on such party and it was not called upon to produce the said evidence. (Vide: Murugesam Pillai v. Gnana Sambandha Pandara Sannadhi, AIR 1917 PC 6; Hiralal & Ors. v. Badkulal & Ors., AIR 1953 SC 225; A. Raghavamma & Anr. v. A. Chenchamma & Anr., AIR 1964 SC 136; The Union of India v. Mahadeolal Prabhu Dayal, AIR 1965 SC 1755; Gopal Krishnaji Ketkar v. Mohamed Haji Latif & Ors., AIR 1968 SC 1413; M/s. Bharat Heavy Electrical Ltd. v. State of U.P. & Ors., AIR 2003 SC 3024;Musauddin Ahmed v. State of Assam, AIR 2010 SC 3813; and Khatri Hotels Pvt. Ltd. & Anr. v. Union of India & Anr., (2011) 9 SCC 126).?
7. However, in Mt. Bilas Kunwar v. Desraj Ranjit Singh, AIR 1915 PC 96, a view has been expressed that it is open to a litigant to refrain from producing any document that he considers irrelevant; if the other litigant is dissatisfied, it is for him to apply for interrogatories/inspections and production of documents. If he fails to do so, neither he nor the Court at his suggestion, is entitled to draw any inference as to the contents of any such documents.
8. In Kamma Otukunta Ram Naidu v. Chereddy Pedda Subba Reddy & Ors., AIR 2003 SC 3342, this Court held that all the pros and cons must be examined before drawing an adverse inference against a party. In that case the issue had been, as to whether two persons had been travelling together in the vehicle and presumption had been drawn only on the basis that the bus tickets of both the persons were not produced. This Court held that presumption could not have been drawn if other larger evidence was shown to the contrary. (See also: Mohinder Kaur v. Kusam Anand, (2000) 4 SCC 214; and Takhaji Hiraji v. Thakore Kubersing Chamansing & Ors., AIR 2001 SC 2328).
9. In Municipal Corporation, Faridabad v. Siri Niwas, AIR 2004 SC 4681, this Court has taken the view that the law laid down by this Court in Gopal Krishnaji Ketkar (supra) did not lay down any law, that in all situations the presumption in terms of clause (g) of Section 114 of the Evidence Act must be drawn.
10. In Mahant Shri Srinivas Ramanuj Das v. Surjanarayan Das & Anr., AIR 1967 SC 256, this Court held that mere withholding of documentary evidence by a party is not enough to draw adverse inference against him. The other party must ask the party in possession of such evidence to produce the same, and in case the party in possession does not produce it, adverse inference may be drawn:
?It is true that the defendant-respondent also did not call upon the plaintiff-appellant to produce the documents whose existence was admitted by one or the other witness of the plaintiff and that therefore, strictly speaking, no inference adverse to the plaintiff can be drawn from his non- producing the list of documents. The Court may not be in a position to conclude from such omission that those documents would have directly established the case for the respondent. But it can take into consideration in weighing the evidence or any direct inferences from established facts that the documents might have favoured the respondent case.?
11. In Ramrati Kuer v. Dwarika Prasad Singh & Ors., AIR 1967 SC 1134, this Court held:
?It is true that Dwarika Prasad Singh said that his father used to keep accounts. But no attempt was made on behalf of the appellant to ask the court to order Dwarika Prasad Singh to produce the accounts. An adverse inference could only have been drawn against the plaintiffs-respondents if the appellant had asked the court to order them to produce accounts and they had failed to produce them after admitting that Basekhi Singh used to keep accounts. But no such prayer was made to the court, and in the circumstances no adverse inference could be drawn from the non-production of accounts.? (See also: Ravi Yashwant Bhoir v. District Collector, Raigad & Ors., AIR 2012 SC 1339).
12. In Smt. Indira Kaur & Ors. v. Shri Sheo Lal Kapoor, AIR 1988 SC 1074, the lower courts drew an adverse inference against the appellant- plaintiff on the ground that the plaintiff was not ready and willing to perform his part of the contract. The question arose as to whether the party had the means to pay. The court further held that before the adverse inference is drawn against a particular party, the conduct and diligence of the other party is also to be examined. Where a person deposed that as he had deposited the money in the Bank and the other party did not even ask as on what date and in which Bank the amount had been deposited and did not remain diligent enough, the question of drawing adverse inference against such a person for not producing the Pass Book etc. cannot be drawn.
13. In Mahendra L. Jain & Ors. v. Indore Development Authority & Ors., (2005) 1 SCC 639, this Court held that mere non-production of documents would not result in adverse inference. If a document was called for in the absence of any pleadings, the same was not relevant. An adverse inference need not necessarily be drawn only because it would be lawful to do so.
14. In Manager, R.B.I., Bangalore v. S. Mani & Ors., AIR 2005 SC 2179, this Court dealt with the issue wherein the Industrial Tribunal directed the employer to produce the attendance register in respect of the first party workmen. The explanation of the appellant was that the attendance registers being very old, could not be produced. The Tribunal, however, in its award noticed the same and drew an adverse inference against the appellants for non-production of the attendance register alone. This Court reversed the finding observing:
?As noticed hereinbefore, in this case also the respondents did not adduce any evidence whatsoever. Thus, in the facts and circumstances of the case, the Tribunal erred in drawing an adverse inference.
The initial burden of proof was on the workmen to show that they had completed 240 days of service. The Tribunal did not consider the question from that angle. It held that the burden of proof was upon the appellant on the premise that they have failed to prove their plea of abandonment of service? (See also: A. Jayachandra v. Aneel Kaur, AIR 2005 SC 534; R.M. Yellatti v. Assistant Executive EngineerAIR 2006 SC 355; and Pratap Singh & Anr. v. State of M.P., AIR 2006 SC 514).
15. Order XI CPC contains certain provisions with the object to save expense by obtaining information as to material facts and to obtain admission of any fact which he has to prove on any issue. Therefore, a party has a right to submit interrogatories relating to the same matter in issue. The expression ?matter? means a question or issue in dispute in the action and not the thing about which such dispute arises. The object of introducing such provision is to secure all material documents and to put an end to protracted enquiry with respect to document/material in possession of the other party. In such a fact-situation, no adverse inference can be drawn against a party for non-
production of a document unless notice is served and procedure is followed. Under Rule 14 of Order XI, the court is competent to direct any party to produce the document asked by the other party which is in his possession or power and relating to any material in question in such suit. Rule 15 Order XI provides for inspection of documents referred to in pleadings or affidavits. Rule 18 thereof, empowers the court to issue order for inspection. Rule 21 thereof provides for very stringent consequences for non-compliance with the order of discovery, as in view of the said provisions in case the party fails to comply with any order to answer interrogatories or for discovery or inspection of documents, he shall, if he is a plaintiff, be liable to have his suit dismissed for want of prosecution and if he is a defendant, to have his defence, if any, struck out and to be placed in the same position as if he had not defended, and the party interrogating or seeking discovery or inspection may apply to the court for an order to that effect. Thus, in view of the above, the suit may be dismissed for non-compliance of the aforesaid orders by the plaintiff and the plaintiff shall also be precluded from bringing a fresh suit on the same cause of action. Similarly, defence of the defendant may be struck off for non-compliance of such orders.
16. Thus, in view of the above, the law on the issue can be summarised to the effect that, issue of drawing adverse inference is required to be decided by the court taking into consideration the pleadings of the parties and by deciding whether any document/evidence, withheld, has any relevance at all or omission of its production would directly establish the case of the other side. The court cannot loose sight of the fact that burden of proof is on the party which makes a factual averment. The court has to consider further as to whether the other side could file interrogatories or apply for inspection and production of the documents etc. as is required under Order XI CPC. Conduct and diligence of the other party is also of paramount importance. Presumption or adverse inference for non-production of evidence is always optional and a relevant factor to be considered in the background of facts involved in the case. Existence of some other circumstances may justify non-production of such documents on some reasonable grounds. In case one party has asked the court to direct the other side to produce the document and other side failed to comply with the court?s order, the court may be justified in drawing the adverse inference. All the pros and cons must be examined before the adverse inference is drawn. Such presumption is permissible, if other larger evidence is shown to the contrary.?
30.The learned counsel appearing for the respondent relied upon a judgment of the Hon'ble Supreme Court in the case of Hiralal and others v. Badkulal and others reported in AIR 1953 SC 225 wherein it has been held as follows:
?4. .... The defendants had written the accounts in their own books from which the true balance could be ascertained. An inference from the statement of Hiralal can easily be raised that the balance entry of Rs. 34,000 also existed in his own books. Mr. Bindra tried to get out of this situation by urging that it was no part of the defendants' duty to produce the books unless they were called upon to do so and the onus rested on the plaintiffs to prove their case. This argument has to be negatived in view of the observations of their Lordships of the Privy Council in Murugesam Pillai v. Manickavasaka Pandara(1), which appositely apply here. This is what their Lordships observed:
"A practice has grown up in Indian procedure of those in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof, and failing, accordingly, to furnish to the courts the best material for its decision. With regard to third parties this may be right enough they have no responsibility for the conduct of the suit; but with regard to the parties to the suit it is, in their Lordships' opinion, an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the court the written evidence in their possession which would throw light upon the proposition."
This rule was again reiterated in Rameshwar Singh v. Rajit Lal Pathak (AIR 1929 P.C. 95 (B)).?
31.In the case of M.S.Narayana Menon alias Mani v. State of Kerala and another reported in (2006) 6 SCC 39, the Hon'ble Supreme Court has held as follows:
?29.In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words 'proved' and 'disproved' have been defined in Section 3 of the Evidence Act (the interpretation clause) to mean: -
"Proved A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. Disproved A fact is said to be disproved when, after considering the matters before it the Court either believes that it does not exist, or considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist."
30.Applying the said definitions of 'proved' or 'disproved' to principle behind Section 118(a) of the Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.?
32.The learned counsel for the respondent relied upon Section 139 of the Negotiable Instruments Act and contended that the presumption in this case also is in favour of the defendant. Section 139 read as follows:
?139. Presumption in favour of holder.?It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.?
33.Thus when the cheque is issued by the plaintiff in favour of the defendant, it can be presumed that the defendant had issued the cheque towards discharge of debt or liability. The learned counsel for the respondent also relied upon a judgment of the Hon'ble Supreme Court in the case of K.N.Beena v. Muniyappan and another reported in 2001 (4) CTC 382 wherein it has been held as follows:
?6.In our view the impugned Judgment cannot be sustained at all. The Judgment erroneously proceeds on the basis that the burden of proving consideration for a dishonored cheque is on the complainant. It appears that the learned Judge had lost sight of Sections 118 and 139 of the Negotiable Instruments Act. Under Sections 118, unless the contrary was proved, it is to be presumed that the Negotiable Instrument (including a cheque) had been made or drawn for consideration. Under Section 139 the Court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the Court has to presume that the cheque had been issued for a debt or liability. This presumption is rebutable. However the burden of proving that a cheque had not been issued for a debt or liability is on the accused. This Court in the case of Hiten P. Dalal vs. Bratindranath Banerjee reported in (2001) 6 S.C.C. 16 has also taken an identical view.?
34.In the case of Hiten P. Dalal v. B ratindranath Banerjee reported in 2001 (3) CTC 243 the Hon'ble Supreme Court had an occasion to consider Section 118, 138 and 139 of Negotiable Instruments Act in the following lines:
?20.That the four cheques were executed by the appellant in favour of the Standard Chartered Bank (hereafter referred to as the Bank), has not been denied nor was it in dispute that the cheques were dishonoured because of insufficient funds in the Appellants' account with the drawee, viz. Andhra Bank. Because of the admitted execution of the four cheques by the appellant, the Bank was entitled to and did in fact rely upon three presumptions in support of its case, namely, under Sections 118, 138 and 139 of the Negotiable Instruments Act. Section 118 provides, inter-alia, that until the contrary is proved it shall be presumed that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration. The presumption which arises under Section 138 provides more specifically that where any cheque drawn by a person on an account for payment of any amount of money for the discharge in whole or in part of any debt or other liability, is returned by the drawee bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque, such persons shall be deemed to have committed an offence and shall be punished with imprisonment for a term which may extend to twice the amount of the cheque, or with both. The nature of the presumption under Section 138 is subject to the three conditions specified relating to presentation, giving of the notice and the non payment after receipt of notice by the drawer of the cheque. All three conditions have not been denied in this case.
21.The appellant's submission that the cheques were not drawn for the 'discharge in whole or in part of any debt or other liability' is answered by the third presumption available to the Bank under Section 139 of the Negotiable Instruments Act. This section provides that "it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability". The effect of these presumptions is to place the evidential burden on the appellant of proving that the cheque was not received by the Bank towards the discharge of any liability
22.Because both Sections 138 and 139 require that the Court "shall presume"
the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in State of Madras vs. A. Vaidyanatha Iyer AIR 1958 SC 61, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established.
35.The learned counsel appearing for the appellant and respondent have drawn the attention of this Court to almost several portion of the evidence of plaintiff and defendant in all the three suits. The case of the defendant in this case is consistent in the reply notice, in the written statement and in the evidence. Though the defendant in O.S.No.37 of 2006 admit that he retired from the partnership firm, the deed of dissolution suggest that partnership firm consisting of plaintiff and his wife and Ponnusamy was dissolved by a deed of dissolution under Ex.A10. As pointed out earlier, there is no whisper in the evidence of P.W.1 about the quantum of money that was paid to Ponnusamy either at the time of retirement or at the time of dissolution. This is crucial in this case. As pointed out earlier, the plaintiff has not come forward with any material as to the manner by which the money which was due to Ponnusamy from the partnership firm towards the share of capital and profit and assets of the firm was settled. No evidence adduced to prove any payment to the defendant in the first suit. The case of plaintiff that the accounts were settled at the time of Ex.A10 is contrary to the document itself as the parties to Ex.A10 agreed to pay the amount in future. Hence, the case of plaintiff is falsified by his own document. The plaintiff, who was in the custody of the partnership accounts and business, has purposely avoided filing any document pertaining to the firm during the relevant period. Hence, it is inevitable in this case that adverse inference must be drawn against the plaintiff.
36.It has been held by the Hon'ble Supreme Court in the case of M.S.Narayana Menon alias Mani v. State of Kerala and another reported in (2006) 6 SCC 39 that standard of proof evidently is preponderance of probabilities. It is further held that inference of preponderance of probabilities can be drawn not only from the material on record but also by reference to the circumstances upon which he relies. Learned counsel appearing for the respondent relied upon a judgment of the Hon'ble Supreme Court in the case of Anil Rishi v. Gurbaksh Singh reported in 2006 (4) CTC 524 wherein the Hon'ble Supreme Court has held as follows:
?18.There is another aspect of the matter which should be borne in mind. A distinction exists between a burden of proof and onus of proof. The right to begin follows onus probandi. It assumes importance in the early stage of a case. The question of onus of proof has greater force, where the question is which party is to begin. Burden of proof is used in three ways :
(i) to indicate the duty of bringing forward evidence in support of a proposition at the beginning or later;
(ii) to make that of establishing a proposition as against all counter evidence; and
(iii) an indiscriminate use in which it may mean either or both of the others. The elementary rule is Section 101 is inflexible.
In terms of Section 102 the initial onus is always on the plaintiff and if he discharges that onus and makes out a case which entitles him to a relief, the onus shifts to the defendant to prove those circumstances, if any, which would disentitle the plaintiff to the same.?
37.Again the Hon'ble Supreme Court in the case of R.V.E.Venkatachala Gounder v. Arulmigu Viswesaraswami & V.P.Temple reported in 2004-1-L.W. 728 has dealt with the standard of proof required in civil cases as against the proof that is required in criminal cases:
?28.Whether a civil or a criminal case, the anvil for testing of 'proved', 'disproved' and 'not proved', as defined in Section 3 of the Indian Evidence Act, 1872 is one and the same. A fact is said to be 'proved' when, if considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of a particular case, to act upon the supposition that it exists. It is the evaluation of the result drawn by applicability of the rule, which makes the difference. "The probative effects of evidence in civil and criminal cases are not however always the same and it has been laid down that a fact may be regarded as proved for purposes of a civil suit, though the evidence may not be considered sufficient for a conviction in a criminal case. BEST says : There is a strong and marked difference as to the effect of evidence in civil and criminal proceedings. In the former a mere preponderance of probability, due regard being had to the burden of proof, is a sufficient basis of decision: but in the latter, especially when the offence charged amounts to treason or felony, a much higher degree of assurance is required. (BEST, S. 95). While civil cases may be proved by a mere preponderance of evidence, in criminal cases the prosecution must prove the charge beyond reasonable doubt." (See Sarkar on Evidence, 15th Edition, pp.58-59) In the words of Denning LJ (Bater Vs. B, 1950, 2 All ER 458,459) "It is true that by our law there is a higher standard of proof in criminal cases then in civil cases, but this is subject to the qualification that there is no absolute standard in either case. In criminal cases the charge must be proved beyond reasonable doubt, but there may be degrees of proof within that standard. So also in civil cases there may be degrees of probability." Agreeing with this statement of law, Hodson, LJ said "Just as in civil cases the balance of probability may be more readily fitted in one case than in another, so in criminal cases proof beyond reasonable doubt may more readily be attained in some cases than in others." (Hornal V. Neuberger P. Ltd., 1956 3 All ER 970, 977).
29.In a suit for recovery of possession based on title it is for the plaintiff to prove his title and satisfy the Court that he, in law, is entitled to dispossess the defendant from his possession over the suit property and for the possession to be restored with him. However, as held in A. Raghavamma & Anr. Vs. Chenchamma & Anr., AIR 1964 SC 136, there is an essential distinction between burden of proof and onus of proof: burden of proof lies upon a person who has to prove the fact and which never shifts.
Onus of proof shifts. Such a shifting of onus is a continuous process in the evaluation of evidence. In our opinion, in a suit for possession based on title once the plaintiff has been able to create a high degree of probability so as to shift the onus on the defendant it is for the defendant to discharge his onus and in the absence thereof the burden of proof lying on the plaintiff shall be held to have been discharged so as to amount to proof of the plaintiff's title.?
38.Considering the over all circumstances in this case, this Court is unable to accept the plea of plaintiff that he advanced a sum of Rs.30,00,000/- by issuing two cheques at the value of Rs.5,00,000/- each to the defendant in the three suits. Since the plaintiff who was supposed to have the custody of the partnership accounts at the relevant point of time has not produced any document, it is inevitable that adverse inference ought to be drawn against the plaintiff in this case. The plaintiff at least could have produced his income tax returns to show that he paid such a huge amount to the defendant only as a loan. The defendant in O.S.No.37 of 2006 has successfully established the fact that he is entitled to receive substantial amount from the partnership firm by way of his share towards his capital contribution, profit and assets of the firm and that the money which Mr.T.Ponnusamy is entitled to receive from the firm and other partners of the firm should be shared by the defendant in the three suits.
39.The submissions of learned counsel for appellant that the defendant in all the three suits claimed themselves to be partners of ?SRK Bus Services? is misconceived and ignoring the specific plea in the written statement. Hence, the judgments relied upon by the counsel for appellant reported in AIR 1985 Ker 265 and AIR 1987 SC 1782 are not helpful to the plaintiff / appellant. Having regard to the scope of Section 92 with reference to the second proviso to Section 92 of Evidence Act and the case of respondents the judgment relied upon by counsel for appellant and reported in 1976 (3) SCC 500 and 2013 (6) CTC 809 are not applicable to this case. Similarly, the contention of counsel for appellant that the findings of trial Court are contrary to public documents has no legal basis. In this case, no other document except Ex.A9 is a public document. Even in Ex.A9, except the fact that the defendant in O.S.No.37 of 2006 retired from the partnership, there is nothing to show that the accounts of partnership was settled at the time of retirement of T.Ponnusamy. As a matter of fact, Ex.A10 disproves the case of plaintiff / appellant. The judgment of Hon'ble Supreme Court in the case of Meghmala and other v. G.Narasimha Reddy and others reported in 2010 (8) SCC 383 has no application in this case. It is a well settled proposition that an act of fraud vitiates any solemn transaction. It is only in that line, the Hon'ble Supreme Court has given the judgment and it has no application in this case. Merely because the defendant has filed two documents which are concocted, the whole case of defendant cannot be discarded especially having regard to the peculiar facts and circumstances of the case. The documents are among the defendant in the three suits and not intended to deceive the plaintiff. As a matter of fact, this Court is able to see that the plaintiff has come forward with a false case contrary to Ex.A10.
40.From the entire evidence on record and the submissions of the learned counsel appearing on both sides, this Court hold that the money which was paid by the plaintiff to each of the defendant in the three suits is only by way of and towards settlement of accounts pursuant to the retirement of Ponnusamy from the partnership firm and that the plaintiff did not lend any amount as loan to the respondents in these appeals.
41.As a result, though the reasonings of the trial Court are not proper, this Court uphold the conclusions of the trial Court to dismiss the three suits filed by the plaintiff. Accordingly, the above appeals are dismissed and the judgment and decree passed in O.S.Nos.37, 38 and 39 of 2006, dated 24.03.2008, on the file of the Principal District Court, Dindigul, is confirmed. However, there is no order as to costs.
To
1.The Principal District Court, Dindigul.
2.The Record Keeper, Vernacular Records, Madurai Bench of Madras High Court, Madurai.
.