Madras High Court
S.Babu vs M/S.J.K.Industries Ltd on 28 February, 2008
Author: G.Rajasuria
Bench: G.Rajasuria
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 28/02/2008 CORAM THE HONOURABLE MR.JUSTICE G.RAJASURIA A.S.No.157 of 2007 and M.P.No.1 of 2007 S.Babu ... Appellant/Defendant Vs. M/s.J.K.Industries Ltd., Madurai, represented by its Assistant Area Manager, No.82, Aruppukkottai Road, Madurai, (Now at) No.175, Kamarajar Salai, Madurai. ... Respondent/Plaintiff Prayer Appeal filed under Section 96 of the Code of Civil Procedure, against the judgment and decree dated 16.08.2007 in O.S.No.21 of 2005 on the file of the Additional District and Sessions Judge, (F.T.C.No.I), Madurai. !For Appellant ... Mr.S.V.Jeyaraman Senior Counsel for Mr.A.Jayaramachandran ^For Respondent ... Mr.C.Ramachandran :JUDGMENT
This appeal has been filed as against the judgment and decree dated 16.08.2007 in O.S.No.21 of 2005 on the file of the Additional District and Sessions Judge, (F.T.C.No.I), Madurai.
2. The parties, for convenience sake, are referred to hereunder according to their litigative status before the trial Court.
3. The facts in nutshell which are absolutely necessary and germane for the disposal of this appeal would run thus.
4. The gist and kernel of the case of the plaintiff could be portrayed thus:
There were business transactions between the plaintiff and the defendant. The goods were supplied at intermediate intervals and payments were also made and regular accounts were maintained in the course of such business transactions. Subsequently, it so happened that there was default in payment of dues by the defendant. Thereupon, in acknowledgement of the liability to the tune of Rs.4,22,056/- (Rupees Four Lakhs Twenty Two Thousand and Fifty Six only), the defendant issued cheque on 23.05.1995. The last entry in the book of account was made on 12.01.1995. Since there was default, the plaintiff filed the suit for recovery of the amount due.
5. Per contra, denying and disputing the allegations/averments, the defendant filed the refutatory written statement, the nitty-gritty of it would run thus:
The accounts relied on by the plaintiff are not revealing the true state of affairs and the defendant only issued a blank cheque by way of security. Accordingly, he prayed for the dismissal of the suit.
6. The trial Court framed the appropriate issues.
7. During trial, P.W.1 was examined and Ex.A.1 was marked on the side of the plaintiff. Neither oral nor documentary evidence was let in on the side of the defendant.
8. Ultimately, the trial Court decreed the suit.
9. Being aggrieved by and dissatisfied with, the judgment and decree of the trial Court, this appeal has been filed by the defendant on the grounds inter alia thus:
The trial Court committed error in relying upon Ex.A.1 which is nothing but a copy of the accounts and as per Section 34 of the Indian Evidence Act, it was inadmissible in evidence. P.W.1 was not the competent person to speak about such accounts as admittedly he was a new entrant under the plaintiff's service. Ignoring the well settled proposition of law based on the Honourable Apex Court's judgment, the trial Court decreed the suit.
10. The point for consideration are:
(i) Whether the trial Court was justified in relying upon Ex.A.1, the copy of the statement of accounts and the deposition of P.W.1 in decreeing the suit?
(ii) Whether there is any infirmity in the judgment and decree of the trial Court?
11. Both the points are taken together for discussion as they are interlinked and interwoven with each other.
Point Nos:(i) and (ii)
12. The learned Senior Counsel for the defendant would draw the attention of this Court to Ex.A.1 and develop his argument to the effect that mere Ex.A.1, the statement of accounts should not have been taken for gospel truth by the trial Court for rendering its judgment. There should have been independent evidence in support of Ex.A.1. By way of fortifying and buttressing his plea, he cited the following decisions:
(i) Chandradhar v. Gauhati Bank reported in AIR 1967 Supreme Court 1058.
An excerpt from it, would run thus:
"6. ... No person can be charged with liability merely on the basis of entries in books of account, even where such books of account are kept in the regular course of business. There has to be further evidence to prove payment of the money which may appear in the books of account in order that a person may be charged with liability thereunder, except where the person to be charged accepts the correctness of the books of account and does not challenge them. The original entries alone under S.34 of the Evidence Act would not be sufficient to charge any person with liability and as such copies produced under S.4 of the Bankers' Books Evidence Act obviously cannot charge any person with liability."
(ii) Deluxe Road Lines v. S.K.Palani Chetty reported in 1992-1-L.W-262. An excerpt from it, would run thus:
"9. Significantly, the person who wrote the accounts has not been examined. The person who is said to have made the payments mentioned in the accounts has not been examined. It is only the Manager, who had nothing to do with either the payment or the writing of the accounts, who has been examined. There is no explanation for not examining the others. It is a well settled proposition of law that mere production of accounts will not be sufficient to charge any person with any liability. The requirements of S.34 of the Evidence Act will not be satisfied by the production of accounts simplicitur. In Chandi Ram Deka v. Jamini Kanta Deka (AIR 1952 Assam 92), it has been held that where the books produced are merely the ledger not supported by any book or containing no entries of transactions as they took place, the books do not fulfil the requirements of S.34 of the Evidence Act. In Chandradhar Goswami and others v. Gauhati Bank Ltd (AIR 1967 S.C 1058), it is held that no person can be charged with liability merely on the basis of entries in books of account, even where such books of account are kept in the regular course of business and there has to be further evidence to prove payment of the money which may appear in the books of account in order that a person may be charged with liability thereunder, except where the person to be charged accepts the correctness of the books of account and does not challenge them. In V.K.Abraham v. N.K.Abraham (1990 L.W 686 = AIR 1978 Madras 56), a Division Bench of this Court has, after referring to all the authorities on the subject, held that the accounts books by themselves are not sufficient to charge any person with liability and the party has to show by some independent evidence that the entries in his books represented real and honest transactions and that the moneys paid or the transactions took place, in accordance with those entries. In Zonna Sorabji and others v. Mirbella Hotel Co. (Pvt) Ltd., and others (AIR 1981 Bombay 446.), the Bombay High Court held that in order that a document could be relied upon as a book of accounts, it must have the characteristic of being fool-proof, and the ledger by itself could not be a book of account of the character contemplated by S.34 of the Evidence Act. The learned Judge held that the corresponding journal or Rojmal or day-book should be produced in order to place reliance on the ledger."
(iii) Mettur Beardsell Limited v. Salem Textiles Limited reported in 2001 (2) CTC 736.
13. The perusal of the aforesaid three decisions would leave no doubt in the mind of the Court that even if the original account books are produced, it would not constitute reliable evidence within the meaning of Section 34 of the Indian Evidence Act. In support of the statement of accounts, there should be some evidence to prove that the entries are reflecting the genuineness and honesty of the transactions concerned.
14. Whereas the learned Counsel for the plaintiff would strenuously canvass the case of the plaintiff by drawing the attention of this Court to paragraph No.7 of the written statement which is to the effect that the cheque was issued by the defendant in recognition and by way of acknowledging his liability as set out in the plaint and that over and above that no more evidence is contemplated.
15. The learned Senior Counsel for the defendant would draw the attention of this Court to the deposition of P.W.1 who would candidly without any reservation, depose that he entered the service of the plaintiff only three years anterior to the date of his deposition before the Court, whereas the suit transactions are anterior to three years. In other words, he had no personal knowledge about those entries of account.
16. In such a case, I am of the considered opinion that the decision of this Court in Deluxe Road Lines v. S.K.Palani Chetty reported in 1992-1-L.W-262 is squarely applicable in the facts and circumstances of this case. In fact, in the said decision, this Court specifically contemplated this contingency which is involved in this case. A person who wrote the entries or a person who have knowledge of them, should appear and depose before the Court. Then only, it could be held to have been proved. But, in this case, it was not done so.
17. Coming to the question of alleged admission in paragraph No.7 of the written statement, I would like to point out that the admission as per the Indian Evidence Act as contemplated under various Sections thereof, must be clear and categorical one.
18. Here, the averments in paragraph No.7 of the written statement can only be taken as an admission that the defendant issued a blank cheque. Whether that much piece of evidence would prove the entries as found set out in Ex.A.1. The answer is at once an emphatic 'no'.
19. The learned Senior Counsel for the defendant would submit that not even a certified copy of the cheque was produced before the trial Court and based on that, evidence should have been adduced that it was issued only on a particular day for a particular sum of money.
20. Hence, considering all these facts, I am of the firm view that the plaintiff owing to some misconception of evidentiary value of Ex.A.1, the plaintiff refrained from adducing further evidence. As such, one more opportunity could be given to the plaintiff to prove his case. It is not the case of filling up the lacuna, but it is a case where there is misconception on the part of the plaintiff about Ex.A.1.
21. Adhering to the ratio decidendi of the decisions cited supra, the plaintiff will have to adduce proper additional evidence.
22. The learned Counsel for the plaintiff submitted his argument that in the absence of defendant's evidence so to say, in view of the defendant having not got himself examined as a witness, adverse inference could be drawn.
23. I am of the view that since the burden did not get shifted on the defendant, the non-examination of the defendant cannot be taken as a significant flaw on his part.
24. In view of my discussions supra, at present I need not decide on the limitation point. On proving such entries, the question of analysing and adjudicating the issue of limitation would arise.
25. I am fully aware of the fact that Order 41 Rule 23-A of the Code of Civil Procedure contemplates that there should not be any unnecessary remand of the matter, but here, the remand is necessitated, because owing to misconception of the evidentiary value of Ex.A.1, the plaintiff could not process his claim. Hence, one more opportunity should be given to the plaintiff.
26. Accordingly, both the points are decided.
27. In the result, this appeal is allowed, setting aside the judgment and decree of the trial Court and the matter is remitted back to the trial Court for taking additional evidence and the learned trial Judge shall dispose of the matter in accordance with law untrammelled and uninfluenced by the observations made by this Court while disposing of this matter. Consequently, connected Miscellaneous Petition is closed. No costs.
rsb To The Additional District and Sessions Judge, (F.T.C.No.I), Madurai.