Bangalore District Court
Smt.Lata Devi Gandhi vs Mr. A. Abdul @ Kader Basha on 16 October, 2020
IN THE COURT OF THE XIX ADDL. CITY CIVIL &
SESSIONS JUDGE AT BANGALORE CITY : (CCH.18)
Dated this 16th day of October, 2020
Present
SRI.DINESH HEGDE, B.A.,LL.B.,
XIX ADDL. CITY CIVIL & SESSIONS JUDGE,
BANGALORE CITY.
O.S.NO.8216/2011
PLAINTIFF : Smt.Lata Devi Gandhi,
W/o Sri. Sampath Raj Gandhi,
Aged about 43 years,
Proprietor of M/s Lata S. Gandhi and
Mahaveer Jewellers,
No.3/1,Magadi Road,
Bangalore - 560 023.
(By Sri.N.Sridhar, Advocate)
-VS-
DEFENDANT : Mr. A. Abdul @ Kader Basha,
S/o Sri. Abdul Wahab,
aged about 42 years,
No.1, A/5, Behind Minerva Mills,
Gopalapura, Magadi Road,
Bangalore-560 023.
( By Sri. Gopal P., Advocate)
Date of Institution of the suit : 21/11/2011
Nature of the Suit : Recovery of
money
Date of commencement of recording
of evidence : 20/11/2012
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O.S.No.8216/2011
Date on which the Judgment was
pronounced : 16/10/2020
Year/s Month/s Day/s
Total Duration : 08 10 25
(Dinesh Hegde)
XIX Addl.City Civil & Sessions Judge,
Bangalore City.
JUDGMENT
The plaintiff has filed this suit against the defendant for recovery of Rs.4,68,000/- along with interest at the rate of 24% p.a. from the date of suit till its realization along with court costs.
2. The case of plaintiff in nutshell:-
The defendant has approached the plaintiff seeking financial assistance of Rs.4,00,000/-. Considering his request, the plaintiff has paid a sum of Rs.3,25,000/- to the defendant who acknowledged the receipt of the same by executing an on demand promissory note dtd:21/1/2010 in her favour. At the 3 O.S.No.8216/2011 time of receiving the said amount, the defendant has under taken to repay the same on or before 30 th September 2011 and till such time, he has under
taken to pay monthly interest at the rate of 2% on Rs.3,25,000/- to the plaintiff which fact finds a place in the pro-note. After receipt of the said amount on 21/1/2010, the defendant has not paid any amount towards payment of principal amount or towards the monthly interest at the rate of 2% as agreed till date. As such, the defendant has committed default with regard to payment of principal amount of Rs.3,25,000/- as well as payment of monthly interest. Hence, plaintiff got issued a legal notice dtd:12/10/2011 calling upon the defendant to pay Rs.3,25,000/- along with accrued interest within 10 days from the date of receipt of the legal notice. After receiving the legal notice, defendant has sent his reply dtd:19/10/2011 by denying the suit transaction by saying that plaintiff is a stranger to him and he has lost some negotiable instruments in his scooter and one B.Mahaveer has issued notice under Section 139 4 O.S.No.8216/2011 of N.I.Act and he might have colluded with the plaintiff.
3. It is further averred that Mr.Mahaveer is also related to plaintiff and after receipt of the defendant's reply dtd:19/10/2011, she met Mahaveer personally and shown the copy of the reply dtd:19/10/2011. He informed the plaintiff that the defendant's father has purchased articles from his shop by issuing cheques. Since defendant's father did not honoured the cheque, he had issued the legal notice to him. He also informed the plaintiff that the defendant's father has also taken hand loan from him and since he did not paid the amount to him, he has taken steps to recover the said amount from him. He also informed the plaintiff that he has not filed any case against the defendant since he had no transaction with the defendant at any point of time and he has not secured any documents from the defendant.
4. It is further averred that no prudent men will keep a blank promissory note or a cheque in a scooter 5 O.S.No.8216/2011 and from this, it is clear that defendant is trying to loom a false case against the plaintiff in order to avoid repayment of the amount which he has received from the plaintiff by saying that he has lost documents in the year 2007. The plaintiff has maintained periodical accounts and the suit transaction is also being reflected in her annual accounts. In spite of issuance of notice, defendant failed to repay the amount taken from the plaintiff. Hence, plaintiff was constrained to file this suit for recovery of the outstanding amount from the defendant and prays to decree the suit.
5. After service of suit summons, defendant appeared through his counsel and filed his detailed written statement by contending that the suit of the plaintiff is not maintainable either in law or on facts and liable to be dismissed in limine. The plaintiff by suppressing the real facts, has filed the above suit with an oblique intention to recover the alleged dues of Rs.4,68,000/- along with future interest and cost of the proceedings. He has contended that there is 6 O.S.No.8216/2011 absolutely no necessity for him to seek financial assistance from any body much less the plaintiff. The plaintiff is totally a stranger to him and he has not seen the plaintiff as on today and as such, question of himself borrowing the alleged loan of Rs.3,25,000/- does not arise at all. The defendant at any point of time approached the plaintiff for any financial assistance much less on the alleged date 21/1/2010 and executed an on demand promissory note and consideration receipt on the alleged date. The suit pro-note is a created, forged and concocted document and by creating the same, the plaintiff by inventing a story had foisted the above suit. Hence, the plaintiff is not entitled for the alleged sum of Rs.3,25,000/- with the alleged interest.
6. The defendant has further contended that the plaintiff had produced the money lending at subsequent stage of the case i.e., at the time of her evidence, for the best reasons known to her. Without there being any pleading in the plaint, now, the 7 O.S.No.8216/2011 plaintiff cannot urge by producing certain documents and it is unsustainable in law. Money lending licence stands in her name. She is claiming that she is doing money lending business as per the provisions of the Karnataka Money Lender Act,1961 and Rules 1965 and that apart, she has also produced an alleged pawn broking licence which goes to show that she is doing business of pawn broking also. Even though, the plaintiff is doing alleged money lending business, she has not complied the provisions of Section 20 & 11 of the Karnataka Money Lenders Act and Rules and the plaintiff has not given the statement of accounts signed by her to the defendant within 30 days. The plaintiff had no money and capacity to lend the money to the defendant on the alleged date of loan. There are material alterations in respect of on demand promissory note with that of consideration receipt are concerned. But, no valid endorsement is not forthcoming. Hence, the suit itself is not maintainable and liable to be dismissed. 8
O.S.No.8216/2011
7. The defendant has further contended that the stamp duty paid on the pro-note is insufficient if her pleading is taken in to consideration and therefore,the alleged document is not a promissory note and it is a bond. The alleged pro-note is insufficiently stamped and as such, it cannot be marked as an exhibit in evidence. The plaintiff herein or the person Mahaveer referred in the above suit is totally a stranger to the defendant. His father during the year 2007 had lost some negotiable instruments like cheques, pro-notes etc., which were kept in his scooter Honda Activa. After noticing the same, firstly he had informed his Banker Andhra Bank, SJR Extension Counter, Rajajinagar, Bangalore to stop payment of the instruments if presented by the miscreants. During September, 2009, i.e., on 15/9/2009 one B.Mahaveer s/o Bheralal Gandhi court/o Mahaveer Jewellers, issued a legal notice to his father Abdul Wahab by misusing one of the cheques. Subsequent to the receipt of the said notice, his father replied the said notice on 23/9/2009. Mahaveer who is also residing 9 O.S.No.8216/2011 in the same address as that of the plaintiff, in collusion with the plaintiff has made the plaintiff to file this false suit on false and frivolous documents in order to harass the defendant. The court fee paid by plaintiff is insufficient and suit is barred by law of limitation. The defendant had already initiated the criminal action against the plaintiff herein and others for having created pro-note. Hence, prays to dismiss the suit of the plaintiff with exemplary costs.
8. Based on the above pleadings, the following issues were framed:-
ISSUES
1. Whether the plaintiff proves that on 21.01.2010 the defendant has borrowed a hand loan of Rs.3,25,000/-
from her on executing on demand promissory note and consideration receipt as alleged?
2. Whether the plaintiff proves that the defendant is also liable to pay the interest as claimed?
3. Whether the suit is barred by limitation?
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O.S.No.8216/2011
4. Whether plaintiff is entitled for a judgment and decree as prayed for?
5. To what order or decree?
ADDITIONAL ISSUE
1. Whether the plaintiff proves that the plaintiff has complied with the provisions of Section 20 and 21 of the Karnataka Money Lenders Act, 1961 and further proves that suit is maintainable?
2. Whether plaintiff proves that she was and is having valid money lending licence as on the date of transaction and also as on the date of filing the suit?
9. In order to prove her case, plaintiff is examined as PW-1 and marked Ex.P.1 to Ex.P.15 and examined other 2 witnesses as P.W.2 & 3. Defendant himself is examined as D.W.1 and marked Ex.D.1 to Ex.D.19.
10. Heard the arguments and perused the records and the written arguments filed by both the counsels.
11. My findings on the above issues are :- 11
O.S.No.8216/2011 Issue No.1:- In the Negative;
Issue No.2:- In the Negative;
Issue No.3:- In the Negative;
Issue No.4:- In the Negative;
Addl. Issue No.1:- In the Negative; Addl. Issue No.2:- In the Negative;
Issue No.5:- As per the final order for the following:-
REASONS
12. ISSUE No.1, ADDL.ISSUE NO.1 & 2:- These issues are taken up together for consideration as they require common discussion.
13. It is the specific case of the plaintiff that she has lent a sum of Rs.3,25,000/- to the defendant on 21/1/2010 by obtaining on demand promissory note and consideration receipt. In spite of the time, the defendant failed to repay the loan. Hence, she filed suit for recovery of money.
14. To prove her case, she has been examined as P.W.1. In her evidence by way of affidavit, she has reiterated the facts averred in the plaint. In support 12 O.S.No.8216/2011 of her oral evidence, she has relied upon Ex.P.1 to Ex.P.15. Ex.P.1 is a on demand promissory note dtd:21/1/2010 reveal that on demand, Abdul @ Khadar Pasha s/o Abdul Wahab who is the defendant herein promised to pay a sum of Rs.3,25,000/- together with interest at the rate of 2% per month for the value received. One Mr.Lalith Kumar is mentioned as scribe.
15. The signature of the person executed Demand Promissory Note is marked as Ex.P.1(a). Ex.P.2 is the consideration receipt dtd:21/1/2010 reveal that a sum of Rs.3,25,000/- was received from Lathadevi Gandhi w/o Sampathraj Gandhi who is the plaintiff herein. Signature of the person executed the consideration receipt is marked as Ex.P.2(a). One Mr.A.Sheffi is mentioned as a witness and his signature is marked as Ex.P.2(b). He has been examined as P.W.3. This consideration receipt is shown as written by Lalith Kumar.
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O.S.No.8216/2011
16. Ex.P.3 is the demand notice dtd:12/10/2011 reveal that the plaintiff issued a notice through her advocate to the defendant calling upon her to pay Rs.3,25,000/- along with accrued interest within 10 days from the date of receipt of the notice. Ex.P.4 is the postal acknowledgment shows that the notice was served upon the defendant. Ex.P.5 is the reply notice dtd:19/10/2011 shows that defendant through her advocate issued a reply to the plaintiff's counsel. In the reply notice, it is stated that plaintiff is a utter stranger to the defendant and he never received any loan from the plaintiff for a sum of Rs.3,25,000/-.
17. He also denied the execution of on demand promissory note agreeing to repay with interest at the rate of 2% per month. It is further mentioned in the reply notice that defendant had lost some negotiable instruments which were kept in his scooter Honda Activa during the year 2007. Upon notice of the same, he had informed his bankers to stop payment. However, one Mr.B.Mahaveera had caused a notice to 14 O.S.No.8216/2011 the defendant for the offence punishable under Section 138 of the N.I.Act. According to the defendant, the plaintiff has forged the document and filed frivolous suit.
18. Ex.P.6 is the money lender's licence dtd:12/2/2008 reveal that the Registrar of Money Lenders, Bangalore Urban District issued a licence to the plaintiff for money lending up to 31/3/2013 to run the money lending business at the address No.3/1, Magadi Main Road, Bangalore-560 023. A sum of Rs.5,000/- is shown as fee has been paid and the licence has been renewed from 1/4/2008 to 31/3/2013. The next page of Ex.P.6 reveal that the plaintiff has also obtained pawn broker's licence on 20/2/2008 to run her business at the same address. The said licence is shown as valid from 1/4/2008 to 31/3/2013.
19. Ex.P.7 to Ex.P.14 are the copy of the statement of income for the year 2009-2010, profit and loss account for the year 2009-2010, capital account for 15 O.S.No.8216/2011 the year 2010-11, profit and loss account for the year 2010-2011, I.T.Return for the year 2010-2011, capital account for the year 2011-2012, profit and loss account for the year 2011-2012 and I.T.Return for the year 2011-2012. He also produced a photo marked at Ex.P.15. This photo was produced during the cross- examination of D.W.1 and D.W.1 has admitted his identity in Ex.P.15 and P.W.2 in the said photo.
20. Based on the above oral and documentary evidence, the plaintiff has contended that she is entitled for recovery of money. The learned advocate appearing for the plaintiff has contended that on the date of suit transaction the plaintiff has possessed the valid money lending licence and there is no restriction forthcoming in the licence with regard to the limit of advancing the amount during the course of business.
21. He has further submitted that when the original licence is being surrendered to the statutory authorities, they will renew the same by issuing a new licence indicating its renewal. He has further 16 O.S.No.8216/2011 submitted that original licence will be with the authority when it is sought for renewal and the plaintiff cannot hold the original licence as well as renewed licence simultaneously and no production of original licence when she produced renewed licence and the defendant cannot say that Rs.10,000/- is not paid and the lending limit is to the extent of Rs.One Lakh.
22. The learned advocate appearing for the plaintiff has also contended that since the defendant has denied the execution of Ex.P.1 and Ex.P.2 and in order to prove the case of the plaintiff, she filed an interlocutory application to appoint a Hand Writing Expert as Court Commissioner to verify the admitted and disputed signatures of the defendant in Ex.P.1 & Ex.P.2. The said application was allowed by the court. In pursuance of the orders passed by this court, the defendant has suggested the name of the 3 Hand Writing Experts. The disputed document was sent to the Director of FSL, Hyderabad. But, it was sent back 17 O.S.No.8216/2011 with expressing their inability to compare the signatures. Thereafter, the document was sent to Director, FSL, Chennai and this authority has also sent back the document with a request to submit admitted signatures of the defendant of the year 2011-2012. The court directed the defendant's counsel to produce any admitted original document containing the admitted signature of the defendant. But, the defendant did not comply the order and this conduct of the defendant reveal that he has not furnished his admitted signature.
23. Under these circumstances, the learned advocate appearing for the plaintiff contended that an adverse inference has to be drawn against the defendant for non-compliance of the order dtd:16/2/2017. Since the defendant has not furnished the admitted signature, the FSL was not in a position to compare the signature of the defendant in the disputed document.
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O.S.No.8216/2011
24. He has further contended that since the defendant did not comply the orders of this court, another attempt was made to send the document to the Director, State Forensic Science Laboratory, Thiruvanathapuram. But, that authority vide its letter dtd:23/9/2019 has informed this court that it will not undertake the examination of cases from other states and returned the documents without examination. The advocate for plaintiff has further contended that the plaintiff has taken all necessary steps to appoint a Hand Writing Expert to secure a opinion of Hand Writing Expert as per orders dtd:13/6/2016.
25. He has further submitted that he had requested the court for appointment of Forensic Laboratory, Bangalore as Court Commissioner for carrying the afore said work. The defendant had filed his objections. As per the orders of this court, the Memo filed by the plaintiff for referring the disputed document to Govt.Forensic Science Lab, Bangalore, 19 O.S.No.8216/2011 without furnishing the admitted signatures of the defendant for the contemporary year was rejected.
26. The advocate for plaintiff has further contended that without production of admitted signatures of the defendant for the contemporary year, it is not possible to appoint any other court commissioner. He has further contended that plaintiff is not in possession of the admitted signatures as required by the Director of FSL. He has further contended that since no admitted signatures of the defendant was furnished, the court observed that the dispute between parties to the suit can be adjudicated on the available evidence on record.
27. The appointment of an Expert to examine the Handwriting of the defendant in Ex.P.1 & 2 and subsequent events is not in dispute. The records reveals all these facts. On perusal of the Commissioner's Report, it is clear that the Director of Forensic Science Department, Chennai required admitted signatures of the defendant for the 20 O.S.No.8216/2011 contemporary year. No such admitted signatures of the defendant furnished either by the plaintiff or by the defendant. Under such circumstances, the court vide its order dtd:30/11/2019 held that in the absence of such admitted signatures, the Hand Writing Expert is not in a position to compare the document and therefore, sending the document to an Expert without admitted signatures does not serve any purpose. Therefore, this court held that, again sending the document for Hand Writing Expert without required admitted signatures of the defendant does not serve any purpose. Therefore, it is clear that though the disputed document was sent to an Expert, its purpose was not served.
28. It is the case of the defendant that he never borrowed loan from the plaintiff. On the other hand, he has contended that he had lost some signed blank cheques except signatures of his father, contents of the cheque were blank in nature and on demand promissory note which were blank and empty and not signed by the defendant were kept in scooter and 21 O.S.No.8216/2011 those cheques and promissory notes were reached some miscreants and mis-utilised by Mr.Mahaveer and the promissory note was reached to the plaintiff through Mr.Mahaveer. He has contended that by misusing the promissory notes, the plaintiff has filed the false suit.
29. According to the defendant, the plaintiff is also claiming that she is doing money lending business, but, the plaintiff is not complied the provisions of Section 20 & 21 of Karnataka Money Lenders Act & Rules and the plaintiff has not given the statement of account signed by her to the defendant within 30 days from the date of the loan and also the plaintiff has not delivered the statement of account or pass book to the Asst.Registrar of Money Lenders and not maintained cash book and ledger as per the provisions of the Karnataka Money Lenders Act. It is the case of the defendant that since the plaintiff has not complied the provisions of Section 20 & 21 of Karnataka Money Lenders Act, no presumption could 22 O.S.No.8216/2011 be drawn under Section 118(A) of the N.I.Act with respect of issuance of on demand promissory note.
30. In support of the contention of the defendant, he has been examined as D.W.1. He has relied upon Ex.D.1 to Ex.D.12. Ex.D.1 is the notice dtd:15/9/2009 reveal that one Mr.B.Mahaveer s/o Beharalal Gandhi issued notice to one Mr.P.Abdul Wahab s/o Peersab. According to the defendant, the said Abdul Wahab is none other than the father of the defendant. On perusal of the plaint cause title also, the father of the defendant is shown as Abdul Wahab.
31. In the Ex.D.1, B.Mahaveer through his advocate has stated that he provided hand loan of Rs.One Lakh to P.Abdul Wahab during February 2009 and on demand to be paid, he issued a cheque No.851326 dtd:25/8/2009 drawn on Andhra Bank. The said cheque was returned for 'insufficient funds' on 27/8/2009. Hence, he called upon Mr.P.Abdul Wahab to return Rs.One Lakh within 15 days. Ex.D.2 is reply notice dtd:23/9/2009 shows that P.Abdul Wahab sent a 23 O.S.No.8216/2011 reply notice to Ex.D.1 stating that he kept certain cheques in his scooter and he lost the cheques stolen by some miscreants and he issued a letter to the Bank for stop payment. Under such circumstances, he denied the claim made by B.Mahaveer under Ex.D.1.
32. Ex.D.3 is the information furnished by the Income-Tax Officer under Information Act 2005 in pursuance to the application dtd:30/8/2015. Under Ex.D.3, it is mentioned that for the year 2009-10 to 2010-11 Smt.Lathadevi Gandhi submitted income-tax returns through electronic central processing unit. Since the returns are not filed physically, the details regarding supporting documents cannot be furnished from the office of the Income-Tax.
33. Ex.D.4 is the copy of the interlocutory application filed by the plaintiff in the present suit under Order 3 Rule 2 of CPC to permit the plaintiff to prosecute the suit with the assistance of her husband as her power of attorney. Ex.D.5 is the notice dtd:27/2/2012 in which the defendant issued notice to 24 O.S.No.8216/2011 Smt.Lathadevi Gandhi and others calling upon them his right to initiate criminal action against them. Ex.D.6 to Ex.D.8 are the postal acknowledgment and receipt.
34. Ex.D.9 is the notice dtd:23/9/2009 shows that advocate for the defendant herein issued a notice to the Manager, Andhra Bank, Rajajinagar, Bangalore stating that the cheques belonging to him was stolen and a letter was sent to the Bank. In spite of stop payment request, the Bank has issued an endorsement stating that 'funds insufficient' in the account maintained by A.Abdul.
35. Ex.D.10 is the postal receipt reveal that said notice was served upon the Bank Manager. Ex.D.11 is the unserved postal envelop and Ex.D.12 is the postal acknowledgment shows that notice sent to Wahid was duly served.
36. During the cross-examination of P.W.1 dtd:20/3/2013, the P.W.1 has stated that the 25 O.S.No.8216/2011 defendant approached her for a loan or about 19/1/2010 for the purpose of his daughter's marriage. She has denied the suggestion that the defendant do not have any daughters who have attained the age of marriage. To rebut the same, the defendant has produced 3 birth certificates marked at Ex.D.14 to Ex.D.16. Ex.D.14 is the birth certificate of Salina.A d/o A.Abdul Khadar reveal that she was born on 7/7/1996. Ex.D.15 is the another birth certificate of Rubina.A, d/o A.Abdul Khadar reveal that she was born on 11/4/2000. Yet another birth certificate marked at Ex.D.16 reveal that Zaffer Sadiq s/o Abdul Khadar.A was born on 4/9/2004. Ex.D.17 is the Aadhar card of Salina.A reveal that her birth year is 1996 as mentioned in the birth certificate marked at Ex.D.14. Therefore, all these birth certificates of the children of defendant shows that they were born only after the year 1996.
37. It is the case of the plaintiff that defendant borrowed the loan from her on 21/1/2010. Therefore, 26 O.S.No.8216/2011 it is clear that the children of defendant were under the age of less than 14 years as on the date of the said transaction. Hence, the evidence of P.W.1 that the defendant borrowed the money from the plaintiff for the purpose of marriage expenses is doubtful.
38. Ex.D.13 is a reply notice dtd:8/3/2012 reveal that the plaintiff issued a notice through his advocate stating that the plaintiff has already instituted a suit for recovery of money and hence forth, not to issue notice to the plaintiff .
39. In the cross-examination, P.W.1 has stated that she is the house wife and she also assists her husband in his business. She is the native of Gujarath. She knew the defendant as he was a tenant in her own building for 10 years. The defendant approached her for a loan. Brother-in-law of the plaintiff by name Mahaveer recommended for loan to the defendant. Mahaveer was also present when she paid money to the defendant. At that time, Mr.Lalith who is working in their shop was also present.
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40. She has further stated that she is not doing any business and she is a house wife. She gave power of attorney to her brother-in-law Mahaveer. She has further stated that she is not doing money lending or pawn broking and jewelery business. She has further stated that she obtained licence to run the jewelery shop. She has also stated that she paid an amount of Rs.3,25,000/- in cash to the defendant. The amount was with her in her house. She has further stated that Ex.P.1 & Ex.P.2 i.e., on demand promissory note and consideration receipt were handed over to her by her brother-in-law Mr.Mahaveer.
41. She has further stated that she do not know the previous year and assessment year. In the Ex.P.8 the amount of Rs.25,000/- towards the loan of defendant is shown as Rs.31/3/2009. She denied that Ex.7 to 10 are created for the purpose of this suit. She has admitted that Ex.P.7 to 10 have not been certified by Chartered Accountant. As per Ex.P.8, the cash on 28 O.S.No.8216/2011 hand on 31/3/2009 is shown as Rs.1,34,891/- and cash in bank shown as Rs.2,144/- and in S.B.I., it is shown as Rs.2577/-. She do not know the contents of Ex.P.7 to Ex.P.10 since she is the house wife. She denied the suggestion that defendant never borrowed Rs.3,25,000/- and agreed to pay interest at the rate of 2% per month.
42. P.W.2 is Mr.B.Mahaveer who is none other than the brother-in-law of P.W.1. In his evidence by way of affidavit he has stated that defendant has requested the plaintiff to advance loan and accordingly, Rs.3,25,000/- was paid to the defendant on 21/6/2010 by way of cash and on receipt of the amount, the defendant executed on demand promissory note in favour of the plaintiff. He has further stated that he can identify the signature of defendant in Ex.P.1. [
43. In his cross-examination, P.W.2 has stated that he is running jewelery and pawn broker business i.e., Mahaveer Jewelery, Magadi Road, Bangalore. The licence of the shop standing in the name of plaintiff 29 O.S.No.8216/2011 and the licence was issued in the year 1989. He has stated that his signature does not find place in Ex.P.1 & Ex.P.2. He do not know as to whether Ex.P.7 to Ex.P.11 are certified by Chartered Accountant.
44. He has further stated that no documents produced to show that defendant came to the office on 19/1/2010 and requested to advance loan for the marriage of his daughter. He has further stated that no documents were produced to show that plaintiff was having Rs.3,25,000/- at that time. Neither himself nor the husband of the plaintiff have assisted the plaintiff to accumulate Rs.3,25,000/-. He do not know as to whether Ex.P.7 to Ex.P.12 and Ex.P.13 are the balance sheets pertains to money lending business. He has further stated that Mahaveer Jewelery is Hindu Undivided Family concern. He denied the suggestion that plaintiff was not having any money with her on the date of execution of promissory note. He has further stated that plaintiff 30 O.S.No.8216/2011 has not produced the books of accounts to show the transactions mentioned in Ex.P.7, 8, 10, 12 & 13.
45. P.W.2 has further stated that the returns to be filed for having carried money lending business every year before the Asst.Registrar of money lending. He has further stated that, plaintiff filed returns from 2008 to 2013 before the Asst.Registrar of money lending. He do not know as to whether the plaintiff has intimated the lending of loan to the defendant to Asst.Registrar.
46. P.W.3 is Sheffi who is an attestor of Ex.P.2. In his examination-in-chief, he has stated that on 21/1/2010 he went to the shop of Sampathraj and Mahaveer and he saw the defendant was asking for loan from Samapthraj's wife and she paid Rs.3,25,000/- to the defendant in his presence. The defendant has acknowledged the receipt of money by executing on demand promissory note and on the same, he affixed his signature as a witness. 31
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47. In his cross-examination, P.W.3 has stated that he do not know what is promissory note and he do not know what does the "execute" means. He do not know how many parts are there in the document signed by him. The defendant has not requested him to sign Ex.P.2. He do not know what do mean by 'acknowledged receipt'. He do not know what is meant by "in my presence". His mother tongue is Urdu. He studied up to 8th Standard. The contents of affidavit were explained to him in Kannada and not in Urdu. Witness admitted that he knows Kannada.
48. D.W.1 in his cross-examination, has stated that he studied 2nd year B.A. and he can read and write English language and he has verified the documents produced by the plaintiff in this suit. About Rs.2,000/- to Rs.2,500/- cash, Rs.5 to 6 cheques, 4 to 5 promissory notes, washing machine purchased bill were there in his scooter which were lost during the year 2007. He lost the articles on 27/2/2007. So far he did not get back the documents or cash. On 32 O.S.No.8216/2011 28/8/2007 he sent an intimation to the Bank not to honour the cheques. He gone to the police station to lodge the complaint regarding missing of document in his scooter. But police required some procedures which might cause delay. Hence, he came back and not lodged the complaint.
49. Though Ex.P.1 & 2 reflects the signature of the borrower of money, the defendant has denied the borrowing of money from the plaintiff and denied the signature in Ex.P.1 & Ex.P.2. Therefore, the burden heavily lies upon the plaintiff to prove that defendant borrowed a sum of Rs.3,25,000/- from the plaintiff and it is a legally payable debt. No doubt, under Section 118 of N.I.Act, 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, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration. However, this presumption is rebuttable in nature. 33
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50. In support of the case of the defendant, the learned advocate appearing for the defendant has relied upon the following decisions:-
1. AIR 2013 Madhya Pradesh 134 between "Jagdish Singh v/s Puranla", wherein, it was held that "a licenced money lender was required to maintain accounts of the loan, if any extended to the defendant as has been done by him in the case of other borrowers. The court below have held that as the plaintiff failed to demonstrate that he has made any entries in the register regarding the loan extended to the defendant, no presumption can be drawn regarding execution of the promissory note, more so, when the transaction was specifically denied by the defendant."
2. Kar.L.J.1988(1) Page No.24 between "Gowthamchand.M v/s Kempaiah @ Thammaiah, since dead by LR's., wherein, it was held that "the plaintiff has not produced any accounts or documents to show that he is independently doing business in fertilizers. The defendant by filing memo directed the plaintiff and his father to produce accounts books to know whether the plaintiff is doing independent 34 O.S.No.8216/2011 business or whether he is doing the joint-family business. Neither plaintiff nor his father produced any account books."
On such facts, the Hon'ble High Court of Karnataka held that the plaintiff being a money lender has not produced account books and it can be inferred that it is a joint-family and non-production of account books that he is not actually lending the money from out of his own earnings.
3. AIR 1992 Madras 132 - Madras High Court between "A.S.Duraisami Chettair sons v/s S.Rathanswami Gounder", wherein, it was held that "the plaintiff has deliberately withheld the production of account books since production would disprove his case that he advance a sum of Rs.5,000/-. His evidence shows that he is maintaining the account books and that on 12/4/1973 the sum of Rs.5,000/- has been entered in his accounts and that he can produce that account books within 4 hours. But, he did not produce so."
4. AIR 1957 Manipur 9 - Manipur High Court between "Kangabam Bira Singh v/s Manipur Driver's Union Co.Op.Assn.Ltd.," 35
O.S.No.8216/2011 wherein, it was held that "the mere identification of signatures of the witnesses of any document does not amount to proving the execution of the document."
5. ILR 2020 KAR 227 between "Mr.Manjunath.S. v/s B.K.Subbarao.", wherein, it was held that "except denying that he had no financial capacity to lend, has not produced any document or corroborative evidence to show that he had such a huge balance in his bank account and he has withdrawn the same and kept the cash in his house. He has not even produced any evidence to show that without drawing any amount from his bank accounts also, he had retained such huge cash in his house. All these evidence clearly creates a serious doubt in the alleged financial capacity of the plaintiff ." On such facts, the Hon'ble High Court of Karnataka held that the presumption arising out of Section 118 of the N.I.Act stands successfully rebutted.
6. ILR 2003 KAR 773 between "Narasimha Murthy v/s Janakirama" wherein, it was held that "in the absence of any proof by the plaintiff that he has money to lend to defendant and 36 O.S.No.8216/2011 failed to establish his case. The dismissal of the suit by the trial court does not give scope for any interference."
7. ILR 1996 KAR 3351 between "K.Lakshmipathy v/s Channaiah." wherein, it was held that "under the Karnataka Money Lenders Act, Section 11, the Section uses the word 'valid' and not merely the word 'licence' which pre-suposes the fact that the court has to be satisfied about the validity of that document. It means that mere production is not sufficient. In addition to this, the scheme of the law is that the document must be on record when the decree is passed and it is also equally necessary that the licence must be tendered in evidence giving the opposite party an opportunity of challenging it."
8. ILR 1985 (Karnataka) 912 between "Basappa & others v/s Garemane Kamnna"
wherein, it was held that "money lender should have the valid licence on the date of advances the money as also on the date suit is filed." 37
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9. 2010 Cri.L.J. (NOC) 646 (Bom) between "Smt.Nanda Dharam Nandanwar v/s Nandkishor Talakaram Thaokar", wherein, it was held that "complaint filed by money lender without production of valid and operating money lending licence is not maintainable."
10. 2000 SCC Online Kar 208 = 2000 (5) Kant.L.J. 166 between "M/s.Prasanna & Company, Bengaluru v/s Prasana Kumar & another", wherein, it was held that "the money lender must have the valid licence and he should satisfy the court that he had valid money lending licence under the Act at the time of advance of the loan."
11. AIR 2014 NOC 577 (Madras) between "Rabinson v/s Ramachandran", wherein, it was held that "it was the duty of the plaintiff to establish his case. Plaintiff cannot take advantage of the fact that court has compared the signature of the defendant and found his signature to the same with the signatures on his pan card."
12. (2004) 12 Supreme Court cases 83 between "G.Pankajakshi Amnma & Ors. V/s 38 O.S.No.8216/2011 Matha Mathew (Dead) Through Lrs and another" wherein, it was held that "by virtue of Section 9 of Kerala Money Lenders Act, 1958, to maintain books of account is the statutory duty. His statement that he has not maintained the records which could be produced in court is very significant. That statement coupled with further statement that both the parties had agreed that these were to be unaccounted transactions required the court to draw an adverse inference against him. Of course, u/s 118 of N.I.Act the court is to presume that a negotiable instrument has been executed for consideration. However, in this court it has been established that there were chit fund transactions between the parties. It is also established that in respect of those chit fund transactions, a sum of approximately Rs.25,000/- was due and payable."
13. AIR 1976 Goa, Daman and Dieu 60 -
Goa High Court Visvonata Raghunath Audi v/s Mariano Colaco and another", wherein, it was held that "it is true that there is a presumption attached to negotiable instrument, but, before this presumption can be drawn, execution of the instrument must be admitted or proved. There is no presumption about 39 O.S.No.8216/2011 execution of negotiable instrument and in case of denial by the opposite, the party basing its claim on such instrument, must fully prove its execution".
14. AIR 1938 Nagpur 464 - Nagpur High Court between "Narbada Prasad Ajodhyaprasad v/s Mt.Sunki Wife of Kedernath Roy", wherein, it was held that "document not showing payee or not being payable to bearer is not a pro-note." 15. AIR 1986 Andhra Pradesh 120 between "Jayantilal Goel v/s Smt.Zubda Khnum" wherein, it was held that "negotiable instrument void on account of material alteration".
16. AIR 1961 Supreme Court 1316 between "Kundan Lal Rallaram v/s Custodian, Evacuee Property, Bombay", wherein, it was held that "S.118 of the N.I.Act lays down a special rule of evidence applicable to negotiable instrument. The presumption is one of law and there under a court shall presume inter-alia, that the negotiable instrument or the endorsement was made or 40 O.S.No.8216/2011 endorsed for consideration. In effect, it throws the burden of proof of failure of consideration on the maker of the note or the endorsor as the case may be. The phrase "burden of proof" has 2 meaning - One, the burden of proof as a matter of law and the pleading and the other the burden of establishing a case; the former is fixed as a question of law on the basis of pleading and it is unchanged during the entire trial whereas the later is not constant, but shifts as soon as a party adduces sufficient evidence to raise a presumption in his favour. The evidence required to shift the burden need not necessarily be direct evidence. It may comprise circumstantial evidence or presumption of law or fact. ...... If such a relevant evidence is withheld by the plaintiff, S.114 of Evidence Act enables the court to draw a presumption to the effect that if produced the said accounts would be unfavourable to the plaintiff . This presumption if raised by a court can under certain circumstances rebut the presumption of law raised under section 118 of N.I.Act."
17. 2016(1) DCR 147 - Delhi High Court between "Devender Kumar v/s Khem Chand", wherein, it was held that "if alleged loan has not shown in income-tax return, an 41 O.S.No.8216/2011 adverse inference could be drawn against complainant. "
18. (2014) 10 Supreme Court Cases 473 between "Anvar PV v/s PK Basheer & Others", wherein, it was held that "admissibility of secondary evidence of electronic record depends of satisfaction as prescribed u/s 65(B) of the Indian Evidence Act."
19. KAR.L.J.1992(1) Page No.1 between "M/s.Mankichand Motilal & others v/s State of Karnataka", wherein, it was held that "the Karnataka Money Lenders Act and Karnataka Pawn Brokers Act, requiring to make deposit as a condition for grant of licence on the basis of quantum of business. Amount of deposit to be computed on the basis of the amount invested and not on the basis of the aggregate of the same amount advanced more than once by way of short term loans. Further, if any licence comes under thee next higher slab for purpose of deposit in a subsequent year, only balance over and above the amount already deposited should be collected. "
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51. On perusal of the above decisions, it is clear that when the plaintiff is a money lender as admitted by the plaintiff in the present suit, it is his primary duty of the plaintiff to keep accounts and furnish copies as per S.20 of the Karnataka Money Lenders Act, 1961. Under Section 28 of the said Act, there is limitation on rate of interest also. Under Rule 15 of Karnataka Money Lenders Rules, 1975, it is the duty of the money lender to maintain the cash book and ledger under sub-section(1) of S.20 shall be either in Forms 4 & 5 respectively or in Forms 4A & 5A respectively. The statement under clause(a) of sub- section(2) of Section 20 shall be in Form No.6.
52. Under Rule 16 of Karnataka Money Lenders Rules, 1965, the Annual statement of accounts to be delivered by a money lenders to each of his debtors under sub-section(1) of S.21 shall be in Form No.7. The statement shall be furnished to each of the debtors within 60 days after the close of the year for which the accounts of money lenders are ordinarily maintained.43
O.S.No.8216/2011
53. None of the above provisions of the Karnataka Money Lenders Act, 1961 and the Rules framed thereunder were complied by the plaintiff. Under Section 114 of the Indian Evidence Act, the court may presume existence of certain facts, the court may presume the existence of any fact which it thinks likely to have happen, regard being had to common course of natural event, human conduct, public and private business in their relation to the fact of the particular case.
54. Under Section 114, illustration (g) that evidence which could be and is not produced would , if produced, be unfavourable to the person who withholds it. In spite of the defendants request to produce the accounts maintained by the plaintiff, he has not produced any such accounts or registers maintained by the plaintiff as a money lender. Therefore, the defendant has successfully rebutted the presumption arising out of Section 118 of the N.I.Act.44
O.S.No.8216/2011
55. It is the case of the plaintiff that she has paid a sum of Rs.3,25,000/- to the defendant as a loan by cash. Absolutely, there is no such explanation by the plaintiff as to how she has accumulated such a huge amount so as to lend. She has not produced any bank statement to show that she had amount kept in her bank account and it was withdrawn by her and paid to the defendant. The plaintiff has not adduced any evidence to show that she had financial capacity to lend the loan of Rs.3,25,000/-.
56. On perusal of Ex.P.7 to Ex.P.10, Ex.P.12 & Ex.P.13 are all the computer print outs and it was produced as electronic evidence. These documents are not supported with certificate as required under Section 65(B) of the Indian Evidence Act. Therefore, none of these documents will be taken in to consideration.
57. So far as the licence produced by the plaintiff marked at Ex.P.6 is concerned, u/s 6 of the Karnataka Money Lenders Act, 1961, every money lender shall 45 O.S.No.8216/2011 make an application in the prescribed form for grant of licence to the Asst.Registrar of the area within the limits of which the place he intends to carry the business of money lending. Under Section 6(f) of the said Act, the total amount of the capital with such person intends to invest in the business of money lending in the year for which the application has been made and such application shall be accompanied by a licence fee at the following rate:-
(a) if the place at which the business of money lending is to be carried is not more than one Rs.5,000/-;
(b) if the business of money lending is to be carried on more than one place within the limit of area of Registrar, for the principal place of business is Rs.5,000/- and Rs.2,500/- for each of the other places in the area. A licencee who invests less than One Lakh rupees in the year shall pay Rs.5,000/-. A licensee who invests One Lakh rupees and above and less than five Lakh rupees in a year shall pay Rs.10,000/-. A licensee who invests 5 Lakhs rupees and above but less than 10 Lakhs rupees in a year shall pay RS.25,000/-. A licensee who invest 10 Lakhs 46 O.S.No.8216/2011 rupees and above in a year shall pay Rs.50,000/-
as security.
58. On perusal of the Ex.P.6, the payment of license fee is Rs.5,000/-, whereas, the suit transaction is above Rs.One Lakh. Therefore, it is clear that Ex.P.6 is not in compliance of the provisions of Karnataka Money Lenders Act, 1961.
59. Considering facts and circumstances of the case, the plaintiff has failed to prove that defendant has borrowed Rs.3,25,000/- from her by executing demand promissory note and consideration receipt. Hence, I answer Issue No.1, Addl.Issue No.1 & 2 in the Negative.
60. ISSUE No.2:- According to the plaintiff, she is entitled for interest at the rate of 2% per month i.e., 24% per annum. No doubt, in Ex.P.1 on demand promissory note, it is mentioned that the rate of interest is 2% per month for the value received. Under Section 28 of the Karnataka Money Lenders Act, 1961, the State Government may from time to time by notification fix the maximum rates of interest for any 47 O.S.No.8216/2011 local area or clause of business of money lending in respect of secured and unsecured loans. No courts shall in any suit to which this Act applies award interest exceeding the said rates.
61. The plaintiff has failed to prove that the defendant borrowed a sum of Rs.3,25,000/- from her. Therefore, awarding interest at the rate of 2% per month does not arise. Therefore, I answer the above Issue in the Negative.
62. ISSUE No.3:- According to the defendant, suit of the plaintiff is barred by the law of limitation. On perusal of the on demand promissory note, it is shown as executed on 21/1/2010. The plaintiff issued notice to the defendant calling upon him to repay the loan on 12/10/2011. Since the defendant has not repaid the loan, the plaintiff filed the present suit for recovery of money on 21/11/2011 i.e., within a period of 3 years. Therefore, suit of the plaintiff is well within the period of the law of limitation. Hence, I answer this issue in the Negative.
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63. ISSUE No.4:- The plaintiff has failed to prove that defendant has borrowed a loan of Rs.3,25,000/- from her on executing on demand promissory note and consideration receipt. Therefore, the plaintiff is not entitled for the relief of recovery of money. Hence, I answer Issue No.4 in the Negative.
64.ISSUE No.5:- In view of my findings on Issue No.1 to 4 and Addl.Issue No.1 & 2, I pass the following:-
ORDER Suit of the plaintiff is dismissed with costs. Draw decree accordingly.
(Dictated to the Judgment Writer, transcribed and computerized by her, corrected and then pronounced by me in the open Court on this the 16th day of October, 2020.) (Dinesh Hegde) XIX ADDL.CITY CIVIL & SESSIONS JUDGE, BANGALORE CITY.
ANNEXURE I. List of witnesses examined on behalf of : 49
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(a) Plaintiff's side :
P.W.1 - Smt. Lata Devi Gandhi P.W.2 - B. Mahaveer P.W.3 - A. Shafee
b) Defendant's side :
D.W.1 - A. Abdul @ Kader Bhasha II. List of documents exhibited on behalf of :
(a) Plaintiff's side :
Ex.P.1 On Demand Promissory Note
Ex.P.2 Consideration receipt dt:
21.01.2010
Ex.P.3 Copy of legal notice dt:
12.10.2011
Ex.P.4 Postal acknowledgement
Ex.P.5 Defendant's reply notice
Ex.P.6 Money lender's licence
Ex.P.7 Copy of the statement of income
for the year 2009-2010
Ex.P.8 Copy of the profit and loss
account for the year 2009-2010
Ex.P.9 Copy of the capital account for
the year 2010-2011
Ex.P.10 Copy of the profit and loss
account for the year 2010-2011
Ex.P.11 Copy of IT return for the year
2010-2011
Ex.P.12 Copy of capital account for the
year 2011-2012
Ex.P.13 Copy of P & L A/c for the year
2011-2012
Ex.P.14 Copy of IT return for the year
2011-2012.
Ex.P.15 Photograph
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(b) Defendant's side : -
Ex.D.1 Legal notice dt: 15.09.2009
Ex.D.2 Reply notice dt: 23.09.2009
Ex.D.3 Letter dt: 01.10.2013
Ex.D.4 Certified copy of in
O.S.No.8216/2011
Ex.D.5 Legal notice dt: 27.02.2012
Ex.D.6 Postal acknowledgement
Ex.D.7 Registered postal document
Ex.D.8 Copy of letter given by D.W.1
Ex.D.9 Legal notice dt: 23.09.2009
Ex.D.10 Postal acknowledgement
Ex.D.11 Unserved postal cover
Ex.D.12 Postal acknowledgment
Ex.D.13 Reply notice dtd:8/3/2012
Ex.D.14 to Birth certificates
Ex.D.16
Ex.D.17 to Aadhar cards
Ex.D.19
(Dinesh Hegde)
XIX ADDL.CITY CIVIL & SESSIONS JUDGE, BANGALORE CITY.
GVU/-
51
O.S.No.8216/2011 Judgment pronounced in open court vide separate detailed judgment with the following operative portion:-
ORDER Suit of the plaintiff is dismissed with costs.
Draw decree accordingly.
(Dinesh Hegde) XIX ADDL.CITY CIVIL & SESSIONS JUDGE, BANGALORE CITY.