Karnataka High Court
S A Srivatsa vs S R Srivatsa on 4 August, 2023
Author: V Srishananda
Bench: V Srishananda
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NC: 2023:KHC:27504
RFA No. 2584 of 2007
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 04TH DAY OF AUGUST, 2023
BEFORE
THE HON'BLE MR JUSTICE V SRISHANANDA
REGULAR FIRST APPEAL No.2584 OF 2007(MON)
BETWEEN:
S A SRIVATSA
AGED ABOUT 49 YEARS
S/O LATE N.S.SHASTRY
NO.110/4, PAMALAYA
WEST OF CHORD ROAD
I STAGE, VI MAIN
BANGALORE - 560 044.
...APPELLANT
(BY SRI B PRAMOD, ADVOCATE)
AND:
S R SRIVATSA
AGED ABOUT 47 YEARS
S/O LATE N.S. SHASTRY
PROPRIETOR OF PADMA BUILDERS
Digitally
signed by R No.110/4, PADMALAYA,
MANJUNATHA
Location:
WEST OF CHORD ROAD
HIGH COURT
OF
I STAGE, 6TH MAIN,
KARNATAKA BANGALORE - 560 044.
...RESPONDENT
(BY ASHOK G.V, SENIOR COUNSEL FOR
SRI G.K.V MURTHY, ADVOCATE)
THIS REGULAR FIRST APPEAL IS FILED UNDER SECTION
96 OF CIVIL PROCEDURE CODE AGAINST THE JUDGMENT AND
DECREE DT.11.10.2007 PASSED IN O.S.NO.2057/2001 ON THE
FILE OF THE III ADDL. CITY CIVIL JUDGE, BANGALORE,
DISMISSING THE SUIT FOR RECOVERY OF MONEY.
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RFA No. 2584 of 2007
THIS REGULAR FIRST APPEAL, COMING ON FOR
HEARING, THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
JUDGMENT
Heard Sri B. Pramod, learned counsel for the appellant and Sri Ashok G.V., learned Senior Counsel appearing on behalf of Sri G.K.V. Murthy, learned counsel for the respondent through Video Conferencing.
2. Appeal is filed by the unsuccessful plaintiff challenging the validity of the judgment and decree passed in O.S.No.2057/2001 dated 11.10.2007 on the file of III Additional City Civil Judge, Bengaluru City.
3. Parties are referred to as plaintiff and defendant for the sake of convenience as per their original ranking before the Trial Court.
4. Brief facts of the case are as under:
The suit filed by the plaintiff against the defendant for recovery of sum of Rs.82,000/- with interest at the rate 12% per annum on the principal amount in a sum of Rs.60,000/-
from the date of suit till realization with costs.-3-
NC: 2023:KHC:27504 RFA No. 2584 of 2007
5. It is contended that defendant is a Civil Engineer and Contractor and plaintiff is a practicing Advocate. It is further contended that defendant approached the plaintiff for hand loan in a sum of Rs.60,000/- for his business purpose on 20.09.1997 with a promise to repay the same as early as possible and not later than six months and he also agreed to pay interest at the rate of 18% per annum.
6. Plaintiff has lent Rs.60,000/- in cash to the defendant on 20.09.1997. A cheque was issued by the defendant bearing No.138006 inserting the date as 22.03.1998 in a sum of Rs.60,000/- to the plaintiff and he directed the plaintiff to encash the cheque on the due date of the cheque. In other words, a post dated cheque was given at the time of lending the hand loan. The said cheque on presentation came to be dishonoured with an endorsement that 'drawer's signature differ'.
7. Plaintiff said to have demanded the money from the defendant which has been refused and therefore a legal notice was caused on 08.03.2001 calling the defendant to pay the -4- NC: 2023:KHC:27504 RFA No. 2584 of 2007 amount covered under the cheque. It is further contended by the plaintiff that even though initially the defendant agreed to pay the amount with interest at 18% p.a., the plaintiff restricted his claim to 12%. Despite the service of legal notice, there was no compliance. As such, suit was necessitated.
8. The defendant on receipt of suit summons, appeared and engaged the services of counsel and filed a detailed written statement denying the plaint averments in toto and has taken up a contention that the said cheque was issued when the relationship between the plaintiff and defendant was cordial and the same has been misused by the plaintiff and the theory of hand loan is totally denied.
9. He also contended that the cheque was given in some other circumstances and the same has been misused and the defendant has closed the transactions with the State Bank of Hyderabad, Rajajinagar Branch, much earlier to the cheque, he presented to the Bank and therefore, there is no liability under the cheque.
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NC: 2023:KHC:27504 RFA No. 2584 of 2007
10. Defendant also contended that the cheque was given in blank and the same has been misused by the plaintiff by forging the signature of the defendant and also filling up the blanks in the cheque and therefore, there are material alterations with respect of disputed cheque and sought for dismissal of suit with costs.
11. Based on the rival contentions of the parties, the Trial Court raised the following issues:
"1. Whether plaintiff proves that defendant has borrowed a sum of Rs.60,000/- on 22.03.1998 by issuing post dated cheque dated 22.03.1998 bearing No.138006 as referred to in the plaint?
2. Whether plaintiff is entitled to recover the interest at the rate claimed?
3. Whether the suit is not maintainable as contended?
4. Whether the suit is barred by law of limitation?
5. Whether the plaintiff is entitled for recovery of the suit claim?"
12. In order to prove the case of the plaintiff, plaintiff got examined himself as P.W.1 and relied on 5 documents which were exhibited and marked as Exs.P.1 to P.5 comprising of original cheque Ex.P.1, office copy of legal notice - Ex.P.2, -6- NC: 2023:KHC:27504 RFA No. 2584 of 2007 postal acknowledgement and bank endorsements - Exs.P.3 to P.5.
13. Per contra, on behalf of the defendant, defendant got examined himself as D.W.1 and he also examined Sri Amarnath as D.W.2. Fourteen documentary evidence were placed on record on behalf of the defendant which were exhibited and marked as Exs.D.1 to D.14. Among them, Ex.D.1 is letter to Bank, Ex.D.2 is order of Commercial Tax Office, Ex.D.3 is letter given by Rudresh Associates, Ex.D.4 is letter issued by Tumkey Constructions limited, Ex.D.5 is letter issued by Navaras Heavy Constructions, Ex.D.6 is certificate issued by Bank of India, Ex.D.7 is certificate issued by State Bank of Hyderabad, Ex.D.8 is letter, Exs.D.9 and D.10 are postal acknowledgement and Receipt, Ex.D.11 is service contract letter, Ex.D.12 is letter of appointment, ExD.13 is certificate issued by State Bank of Hyderabad, Ex.D.14 is account statement extract.
14. After conclusion of the recording of evidence, learned Trial Judge heard the parties in detail and dismissed the suit of the plaintiff. The only issue that went in favour of the plaintiff is the question of limitation in holding that suit was not barred by limitation.
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15. Being aggrieved by the said judgment and decree, the plaintiff has filed the above appeal on the following grounds:
The impugned judgment and decree of the court below is illegal and arbitrary.
The reasons assigned by the court below for dismissing the suit of the plaintiff are unsustainable in law.
The court below committed an error of law in not appreciating the evidence on record.
The court below committed an error of law in holding issue No.1 in the negative /vis., whether the plaintiff proves that defendant has borrowed a sum of Rs.60,000/- on 22-3-1998 by issuing post-dated cheque dated 22-3-1998 bearing No.138006 as referred to in the plaint. In holding so, the court below failed to appreciate the evidence on record properly.
The court below ought to have noticed that it is the case of the plaintiff that he lent a sum of Rs.60,000/- to the defendant on he being approached by him as loan for his business purpose. This was on 20-9-1997. On the said date the defendant received the said sum of money and issued a posted dated cheque to the plaintiff dated 22-3-1998 drawn on the State of Bank of Hyderabad, III Block, Rajajinagar, Bangalore. He -8- NC: 2023:KHC:27504 RFA No. 2584 of 2007 asked the plaintiff to encash the said cheque on the due date for the repayment of the loan.
The court below ought to have noticed that interest was agreed to be paid on the said sum of Rs.60,000/- by the defendant at the rate of 18% p.a. to the plaintiff. As per law, the said cheque was presented for collection by the plaintiff. It was returned with a memo 'Drawer's Signature differ'. The Memo was dated 26-8-98 of the defendant's bank and 27-8-98 of the plaintiff's bank viz., Canara Bank, III Block, Rajajinagar, Bangalore-10.
The fact of dishonour of the said cheque was brought to the notice of the defendant but he did not react. On 8-3-2001, a legal notice was got issued to the defendant, duly served upon him, calling upon him to pay Rs.60,000/- and interest on it at 12% per annum. No action ensued from the defendant. Though the defendant had initially agreed to pay interest at 18% per annum on the sum of Rs.60,000/-, the plaintiff restricts his claim only to 12% per annum from the defendant.
The plaintiff has not got the dues till date from the defendant. The defendant is due Rs.82,000/- as on the date of the suit to the plaintiff. The plaintiff has filed five documents in support of his case viz., Ex.P.1 to p.5. The defendant denied the plaintiff's case bit is evasive denial. He alleged that the conduct of the plaintiff is not good. In a civil case, conduct of the plaintiff is not relevant but it is very relevant on the -9- NC: 2023:KHC:27504 RFA No. 2584 of 2007 defendant who pleads false grounds and does not prove the same (2005(2) Civil Court Cases (s.c).
The defendant further alleges that the cheque is a stale one and the suit is liable to be dismissed. The word 'stale' in Negotiable instructs Act means that the cheque is time-barred or outdated. But the cheque in question is dated 22-3-98 and was presented for collection within six months as per Bank Rules and hence it is not a stale cheque. The defendant alleges about the family matter which is not relevant in this case. He also alleges that his mother executed a will but the same is not produced in this case.
In para 9 of the written statement, he alleges that the plaintiff was not doing any business but it is not the case of the plaintiff that he was doing business at any point of time.
The defendant further alleges that he did not have the said account with his banker but he has not surrendered cheque leaves and obtained any receipt from his banker. He alleges that the plaintiff has misused the cheque but he has not initiated any action against the plaintiff as per law. It in fatal to the defendant's case vide the decision of the Supreme Court reported in AIR 1999 S.C. 2222 at para 5 (L.C. GOYAL v. Mrs.SURESH JOSHI AND OTHERS).
Character of the plaintiff is brought into picture by the defendant in this case but it is not relevant as per Section 53 of the Evidence Act.
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NC: 2023:KHC:27504 RFA No. 2584 of 2007
16. Reiterating the above grounds, Sri B. Pramod, learned counsel representing the plaintiff contended that the Trial Court has grossly erred in appreciating the material evidence placed on record, especially the presumption available to the plaintiff under Section 118 of the Negotiable Instruments Act and wrongly dismissed the suit of the plaintiff.
17. He Further contended that this Court being the Court of First Appeal, can revisit both factual aspects as well as the legal aspects by exercising the powers under Section 96 of Code of Civil Procedure and decree the suit of the plaintiff.
18. Per contra, learned counsel representing for the defendant/respondent vehemently contended that the Trial Court has properly construed the material evidence on record and has rightly dismissed the suit of the plaintiff.
19. He further contended that even though the presumption is available in respect of cheque in question under Negotiable Instruments Act, since the bank has dishonored the cheque on the ground that 'drawer's signature differ' and the
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NC: 2023:KHC:27504 RFA No. 2584 of 2007 writings in the cheques are not that of the defendant, the Trial Court was justified in holding that there is a material alteration of the cheque. Therefore, the presumption that the cheque carried that it is issued for valuable consideration stood rebutted by placing the necessary evidence on record, not only by examining the defendant and one witness who is examined as D.W.2 and the documentary evidence placed by the defendant under what circumstances the cheque came to be parted away by the defendant to the plaintiff and therefore, sought for dismissal of the appeal.
20. In view of the rival contentions of the parties, this Court perused the material on record meticulously. On such perusal of the material on record in the light of the arguments advanced before the Court, following points would arise for consideration:
1) Whether the finding recorded by the learned Trial Judge that the plaintiff has failed to prove that the cheque was issued for a valuable consideration and the same got dishonored and therefore, the defendant is liable to pay the amount covered under the cheque with interest at 12% p.a., is suffering from legal infirmity, perversity and thus, calls for interference?
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2) What order?
21. In the case on hand, the plaintiff is examined as P.W.1. He has reiterated the contents of the plaint in the affidavit which is filed in lieu of examination in chief. He has relied on 5 documents as referred to supra which was marked as Exs.P.1 to P.5.
22. In his cross-examination, it is specifically elicited that Ex.P.1 cheque came to be dishonored with variation in the signature. However, the plaintiff has denied the specific suggestion that defendant has parted away a blank cheque to the plaintiff. Since the signature of defendant is differing in the cheque, the probative value with regard to the cheque which is marked at Ex.P.1 as is contemplated under Section 118 of the Negotiable Instruments Act is reduced to considerable extent inasmuch as it is the plaintiff who has to explain how the signature in Ex.P.1 stood differed and what was the effort made by him to prove the signature found on Ex.P.1.
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23. Admittedly, P.W.1 did not choose to send the disputed cheque for handwriting examination to an expert. Further, P.W.1 did not choose to examine any other witness to establish that there was a hand loan that was paid by him to the defendant.
24. The Trial Court while appreciating the evidence of the plaintiff, has also come to the conclusion that it is unbelievable that the plaintiff who is a practicing Advocate would part away the amount without there being any document whatsoever.
25. The said finding of the Trial Court assumes importance especially in view of the fact that P.W.1 is a practicing Advocate. What transpired between the plaintiff and defendant when exactly the hand loan was paid and what was the necessity for the defendant to borrow the hand loan only in a sum of Rs.60,000/- are all factors that are to be probabilised by the plaintiff by placing cogent material evidence on record.
26. On perusal of the plaintiff's evidence on record, no such possible or plausible material is placed on record except
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NC: 2023:KHC:27504 RFA No. 2584 of 2007 producing the cheque and dishonored note and copy of the legal notice. These aspects of the matter have been cumulatively considered by the learned Trial Judge while arriving at a finding that the plaintiff has failed to prove that the consideration amount was carried in respect of dishonored cheque and therefore, plaintiff's suit was dismissed.
27. On re-appreciation of the material evidence on record, this Court does not find any legal infirmity or perversity in reaching out such finding in the absence of material proof with regard to Ex.P.1 which would prima-facie establish that there was a hand loan transaction and the cheque was issued in blank towards repayment of the amount.
28. Further, if the defendant has agreed to pay interest at the rate of 18% on Rs.60,000/- for a period of 6 months, the amount in cheque could not have been Rs.60,000/- only and it should have been Rs.60,000/- + 18% interest on Rs.60,000/- for a period of 6 months.
29. It is also pertinent to note that plaintiff and defendant are the brothers. Under what circumstances the
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NC: 2023:KHC:27504 RFA No. 2584 of 2007 disputed cheque came to be issued is known to the plaintiff and defendant themselves. When the plaintiff failed to establish that the cheque was issued by the defendant for the purpose of discharging the hand loan by placing cogent and convincing evidence on record, in view of foregoing discussion, this Court is of the considered opinion that the impugned judgment does not require any interference at the hands of this Court.
30. All these factors when viewed cumulatively, this Court does not find any compelling reasons to interfere with the well reasoned order of the learned Trial Judge in dismissing the suit of the plaintiff.
31. Taking note of these aspects of the matter even after re-appreciation of the material evidence on record, this Court does not find any grounds, whatsoever, much less good grounds to interfere with the impugned judgment. Accordingly, point No.1 is answered in Negative.
32. Regarding Point No.2: In view of the finding on point No.1 as above, following order is passed:
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NC: 2023:KHC:27504 RFA No. 2584 of 2007 ORDER Appeal is dismissed.
In the facts and circumstances of the case, no order as to costs.
Sd/-
JUDGE MR