Karnataka High Court
K Venkataramana Rao vs H Halappa Gowda on 24 July, 2019
Author: H.B.Prabhakara Sastry
Bench: H.B.Prabhakara Sastry
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF JULY 2019
BEFORE
THE HON'BLE Dr. JUSTICE H.B.PRABHAKARA SASTRY
R.F.A.No.1662 OF 2006
C/W
R.F.A.No.984 OF 2006
IN R.F.A.No.1662 OF 2006
BETWEEN:
K. Venkataramana Rao
S/o. Ramakrishnaiah @ Venkatakrishnaiah,
Aged about 48 years,
R/o. Kamalashile Village,
Kundapur Taluk,
Udupi District-576 101. .. Appellant
(By Sri Ramesh P. Kulkarni, Advocate )
AND:
1. H. Halappa Gowda,
S/o. Veerappa Gowda,
Aged about 48 years,
Occ: Agriculturist,
R/o. Jabagodu,
Dumma village,
Hosanagara Taluk-577 418.
RFA.No.1662/2006 c/w
RFA No.984/2006
2
2. K.P.Madhyastha
S/o. Srinivas Madhyatha,
Aged about 47 years,
Carpenter,
R/o. Koteshwar,
Kundapur Taluk,
Udupi District-576 101. ... Respondents
(By.Smt. Vijaya M.N.Adv. for Sri. Rajendra S
Ankolkoti Adv for R1, Sri. Narayan Mayyar, Adv
For Sri. S.R.Hegde Hudlamane, Adv for R2)
IN R.F.A.No.984 OF 2006
BETWEEN:
K.P.Madhyastha
S/o. Srinivas Madhyatha,
Aged about 47 years,
Carpenter,
R/o. Koteshwar,
Kundapur Taluk,
Udupi District-576 101. .. Appellant
(By Sri Narayan Mayyar, Advocate for Sri S.R. Hegde
Hudlamane, Advocate)
AND:
1. H. Halappa Gowda,
S/o. Veerappa Gowda,
Aged about 48 years,
Occ: Agriculturist,
R/o. Jabagodu village,
RFA.No.1662/2006 c/w
RFA No.984/2006
3
Hosanagara
Shimoga District -577 201.
2. K. Venkataraman Rao
S/o. Ramakrishna @ Venkatakrishna,
Aged about 48 years,
R/o. Kamalashile Village,
Kundapur Taluk,
Udupi District-576 101. .. Respondents
(By Smt. Vijaya M.N., Advocate for
Sri Rajendra S. Ankalkoti, Advocate for R-1
Sri H.H. Kaladgi, Advocate for R-2)
These Regular First Appeals are filed under Section
96 of CPC against the judgment and decree dated
21.02.2006, passed in O.S.No.44/1996, on the file of
the Civil Judge (Sr.Dn.), Sagar, partly decreeing the suit
for recovery of money.
These Regular First Appeals having been heard and
reserved for judgment on 03.07.2019, coming on for
pronouncement this day, the Court delivered the
following:
COMMON JUDGMENT
Both these appeals have arisen from the judgment
and decree dated 21.02.2006, passed by the learned
Civil Judge (Sr.Dn.) Sagar (hereinafter for brevity
RFA.No.1662/2006 c/w
RFA No.984/2006
4
referred to as 'trial Court'), in O.S.No.44/1996, wherein
the trial Court decreed the suit of the plaintiff, who is
the 1st respondent in both these appeals. The trial Court
has held that the plaintiff is entitled for a sum of
`1,31,995/-, with interest at the rate of 10% per annum
from the date of suit till the date of realisation from the
present appellants in RFA No.1662/2006 and
RFA.No.984/2006 respectively who were the defendants
in the trial Court.
2. The summary of the case of the plaintiff in the
trial Court is that on 5.11.1992, the plaintiff had agreed
to purchase a motor vehicle, which is a Mahindra Jeep
bearing Reg.No.AEV-7849 from the defendant No.1
(appellant in RFA No.1662/2006) for a consideration of
`1,56,995/- which seller in turn had purchased the said
vehicle from the 2nd defendant ( the appellant in
RFA No.984/2006). On the same day, the
RFA.No.1662/2006 c/w
RFA No.984/2006
5
plaintiff had paid a sum of `46,995/- to the 1st
defendant and the plaintiff was given delivery of the
possession of the said vehicle. Thereafter, the plaintiff
paid a sum of `14,000/- to the 1st defendant on
28.01.1993. Again on 14.07.1993 at the instruction of
the 1st defendant, the plaintiff purchased Demand Draft
in favour of B.D. Credit Corporation Finance, No.4,
Madras, and sent to the addressee. The remaining sum
of `50,000/-was paid in cash by the plaintiff on
14.07.1993. Thus, the entire consideration of money for
the sale of the said Jeep stood passed from the plaintiff
to the 1st defendant and agreement of sale also reduced
into writing on 14.07.1993 incorporating all the terms
of oral agreement and also payment made in respect of
the sale of vehicle. It was agreed that 1st defendant had
to obtain Hire Purchase Clearance Certificate from B.D.
Credit Corporation Finance, Madras and `No Objection
RFA.No.1662/2006 c/w
RFA No.984/2006
6
Certificate' from jurisdictional Regional Transport
Authority. The 1st defendant failed to furnish the
Registration Certificate and No Objection Certificate from
the Regional Transport Authority. However, he
requested the plaintiff to come to Udupi on 17.11.1993
stating that he would arrange for transfer of the vehicle.
Accordingly, the plaintiff went to Udupi on 17.11.1993
taking the vehicle with him. When the vehicle was taken
to Udupi, it was seized by the Udupi police on the
ground that the vehicle related registration certificate is
not the certificate of the vehicle bearing registration
No.AEV-7849, Mahindra Jeep, and that the registration
certificate pertains to a TVS Moped registered at
Vishakhapattana in Andra Pradesh. The vehicle was
seized on the complaint made by the RTO. The vehicle
was produced before the jurisdictional Magistrate,
Udupi in Cr.No.136/1993. Since, the plaintiff
RFA.No.1662/2006 c/w
RFA No.984/2006
7
did not possess any document of the vehicle, he did not
approach the Court for the release of the vehicle. On the
other hand, he asked the 1st defendant to arrange for
refund of the money paid by him towards sale
consideration of the vehicle. The 1st defendant by
approaching the Magistrate Court at Udupi, got the said
vehicle released in his favour since he was in possession
and control of the said vehicle.
It is further the case of the plaintiff that on
18.11.1993 both defendant Nos.1 and 2 approached him
in Hosanagar, representing him that the vehicle was
belonging to the 2nd defendant before its sale in favour
of 1st defendant and since the vehicle was seized, the
repayment of the amount to be made, if any, would be
made by the 2nd defendant. With such a representation,
both the defendants persuaded the plaintiff to accept a
sum of `25,000/- from 1st defendant and also two
RFA.No.1662/2006 c/w
RFA No.984/2006
8
cheques that is Cheque bearing No.44337, for a sum of
`1,15,000/- and another cheque bearing No.443372 for
`15,000/-, both drawn on Karnataka Bank issued by the
2nd defendant. The plaintiff was also requested not to
take any action for recovery of money in respect of
transaction and that they would see that the
commitment made by the defendants is honoured with
such an understanding, a tripartite oral agreement was
arrived at Hosanagar.
It is also the further case of the plaintiff that he
presented those two cheques given to him by the 2nd
defendant for their realisation with his banker. However,
both of them returned for want of funds. The plaintiff
initiated proceedings under Section 138 of Negotiable
Instruments Act, 1881, (hereinafter for brevity referred
to as `N.I. Act') in C.C.No.594/1994 and
C.C.No.595/1994, before the learned JMFC & Munsiff,
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RFA No.984/2006
9
Hosanagar, against the 2nd defendant. Since, the
defendants misrepresented and failed to repay the
consideration amount paid by him for the purchase of
Jeep, the plaintiff was constrained to institute a suit for
recovery of the balance amount of `1,15,000/- with
interest at 18% there on, which is a sum of `46,995/-,
thus in total `1,56,995/- from both the defendants
jointly and severally.
3. In response to the service of the summons,
the defendants appeared through their counsels and
filed their separate written statements. The 1st
defendant in his written statement denied the plaint
averments that he entered into an agreement to sell the
Mahindra Jeep vehicle to the plaintiff and received any
amount as consideration. He expressed his ignorance
that plaintiff sent Demand Draft to B.D.Credit
Corporation Finance, Madras, and contended that the
RFA.No.1662/2006 c/w
RFA No.984/2006
10
alleged sale deed dated 14.07.1993 is a forged and
fraudulent document. He denied that he has executed
said document. However, he admitted that the vehicle
was seized by the police. He further denied that he
approached the plaintiff at Hosanagar on 18.11.1993
and paid him a sum of `25,000/- and two cheques were
given by the 2nd defendant. He specifically stated that he
has never entered into a tripartite agreement as alleged
in the plaint. However, he again stated that defendant
No.2 delivered two cheques to the plaintiff. He also
admitted that the plaintiff had initiated criminal action
against the defendants after dishonour of two cheques
issued by the said defendants.
On the other hand, the 1st defendant contended
that the 2nd defendant represented to be absolute owner
of the vehicle had sold the same to him for a
consideration of `1,25,000/-. The 2nd defendant himself
RFA.No.1662/2006 c/w
RFA No.984/2006
11
had arranged for a loan of `65,000/- from B.D. Credit
Corporation, Madras. After purchasing the vehicle, the
1st defendant came to know that title of the 2nd
defendant was shrouded with mystery. Thereafter he
repudiated the sale transaction and returned the vehicle
to the 2nd defendant. The 2nd defendant promised to
discharge the loan granted by the B.D.Credit Corporation
and to return the money paid by 1st defendant within a
short time. Thereafter the 2nd defendant sold the said
vehicle to the plaintiff and obtained money from him. As
such, the 1st defendant has nothing to do with the said sale
transaction. He also contended that there is no privity of
contract between him and the plaintiff. The 1st defendant
also contended that after vehicle was seized by the police,
the 2nd defendant arranged for its release in the name of the
1st defendant as the R.C.book was still continued
in the name of 1st defendant. After the vehicle
RFA.No.1662/2006 c/w
RFA No.984/2006
12
was released, 1st defendant retained the possession of
the vehicle as the amounts returnable to him is still due
and R.C. was still standing in his name. As such, in order
to avoid any such risks or dangers, he retained the
possession of the said vehicle until his claims are settled
and the R.C. is changed. He further states that suit was
wholly misconceived and prays for dismissal of the suit.
4. The 2nd defendant in his written statement
apart from contending that the suit was barred by
limitation, has stated that he had never claimed
ownership over the jeep in question. He is not aware of
the seizure of the jeep by the Udupi police and its
subsequent release. He further stated that the alleged
sale transaction of the said jeep was between the
plaintiff and the 1st defendant.
RFA.No.1662/2006 c/w
RFA No.984/2006
13
He denied all the averments made in the plaint
which were against him. He denied that he had given
`25,000/- to the plaintiff as part of refund of the sale
consideration, though he has admitted that he has given
two cheques to the plaintiff, however, he contended that
he had not mentioned the amount in those two cheques
and they were not given with respect to alleged
transaction of Jeep vehicle, but, given in connection with
the timber transaction which he had with the plaintiff.
He denied that there was any tripartite agreement. He
admitted that the plaintiff had initiated criminal
proceedings under Section 138 of N.I. Act against him.
He denied that he had ever agreed to pay money to the
plaintiff on behalf of 1st defendant whom he never knew
earlier. He also denied that he had sold the said Jeep
to the 1st defendant for a value of `1,25,000/-
and also arranged for a loan of `65,000/- in
RFA.No.1662/2006 c/w
RFA No.984/2006
14
favour of 1st defendant. Denying all other averments
made in the plaint, the 2nd defendant prayed for
dismissal of the suit filed against him.
5. Based on the pleadings of the parties, the
trial Court framed the following issues :
1) Whether the plaintiff proves that, the first
defendant was entered into an oral
agreement for sale of the Jeep bearing
Reg.No. AEV-7849 for a sum of
`1,56,995/- and put the plaintiff in
possession of the said vehicle?
2) Whether the plaintiff proves that the first
defendant was received a sum of
`46,995/- on 05.11.1992 and a sum of
`14,000/- on 28.01.1993, a sum of
`50,000/- on 14.07.1993 and executed an
agreement of sale in his favour?
3) Whether the plaintiff is entitled the interest
at the rate of 18% per annum from
18.11.1993 to 15.07.1996?
RFA.No.1662/2006 c/w
RFA No.984/2006
15
4) Whether suit is bad for mis-joinder of
parties and cause of action?
5) Whether the suit is barred by limitation?
6) Is plaintiff entitled the relief sought for?
7) To what decree or order?
Additional Issue:
Whether the 2nd defendant proves that he
has issued two blank cheques signed by him in
favour of the plaintiff in connection with some
timber transaction with him and the plaintiff has
mis-utilised those cheques without his
knowledge?
6. In his support, the plaintiff got himself
examined as PW-1 and got examined two witnesses
namely, one Sri.Kalyanappa as PW-2 and one
Sri. Shekharappa as PW-3 and got marked the
documents from Exs.P-1 to P-31. The defendant Nos.1
and 2 got themselves examined as DWs-1 and 2
respectively and also got marked documents from
Exs.D-1 to D-6.
RFA.No.1662/2006 c/w
RFA No.984/2006
16
7. After hearing both side, the trial Court by its
impugned judgment and decree dated 21.02.2006,
partly decreed the suit of the plaintiff, holding both the
defendants jointly and severally liable to pay
`1,31,995/- together with interest at the rate of 10%
per annum from the date of suit till realisation from the
defendants. It is against the said judgment and decree,
both the defendants have preferred these two appeals.
8. The lower Court records were called for and the
same are placed before this Court.
9. After hearing the arguments from both side and
perusing the materials on record, the points that arise
for my consideration are:
1. Whether the finding of the trial Court holding
that plaintiff has proved that the 1st
defendant had agreed to sell the Jeep
bearing Reg.No. AEV-7849 to the plaintiff
for a sum of `1,56,995/- and
RFA.No.1662/2006 c/w
RFA No.984/2006
17
received entire consideration in installments
is an erroneous finding?
2. Whether the finding of the trial Court that
defendant No.2 had also joined the 1st
defendant and had issued two cheques in
favour of plaintiff towards repayment of sale
consideration of the Jeep is erroneous?
3. Whether the judgment and decree passed by
the trial Court deserves interference at the
hands of this Court?
10. The plaintiff in his evidence as PW1 has
reiterated the contents of his plaint in his
Examination-in-chief also. He has stated that on
05.11.1992, he had purchased Mahindra Jeep bearing
Registration No.AEV-7849 for a sum of `1,56,995/- from
the 1st defendant. He had given `46,995/- as advance
amount to the said defendant and on the same day the
possession of the Jeep was delivered to him. On
28.01.1993, he had paid another sum of `14,000/-. On
14.07.1993, after he gave the entire sale consideration
RFA.No.1662/2006 c/w
RFA No.984/2006
18
to the 1st defendant, he executed an agreement in his
favour. The witness has got marked counter-foil of bank
challan to show that he had purchased Demand Draft for
a sum of `46,000/- at Ex.P-1 and a Sale Agreement
dated 14.07.1993 at Ex.P-2 and has identified the
alleged signature of 1st defendant in Ex.P2 at Ex.P2(a)
and Ex.P2(b) and has also stated that Kalyannappa
Gowda and Shekarappa were also present at the time of
agreement and they have subscribed their signatures as
witnesses to the said document. He has identified their
signatures at Ex.P2(c) and Ex.P2(d) and the signature of
the scribe Sridhara Udupa at Ex.P2(e).
The witness has further stated that since the
vehicle was under hypothecation, the transfer of its
ownership could not be done immediately. As such, the
responsibility of clearing the loan was left upon the 1st
RFA.No.1662/2006 c/w
RFA No.984/2006
19
defendant. The said defendant had also executed Form
Nos.29 and 30 at Exs.P-10 and P-11.
The witness has further stated that he was
repeatedly requesting the 1st defendant to transfer RC
Book entry in his favour. However, it was getting
delayed. On 17.11.1993 along with 2nd defendant, he
went to RTO at Udupi where the police came and seized
the jeep stating that the said vehicle does not bear the
valid documentation. Since, there was no proper
documentation of the said vehicle, he did not attempt to
go to the Court, however, defendant No.1 got released
the vehicle from the Court.
The witness has further stated that on 18.11.1993
the defendants after coming to Hosanagar agreed to
return the amount of `1,50,000/- to him out of which 1st
defendant paid `25,000/- in cash and with respect to the
RFA.No.1662/2006 c/w
RFA No.984/2006
20
remaining sum of `1,25,000/-, 2nd defendant gave two
cheques. When presented for realisation, both the
cheques were dishonoured for insufficiency of funds in
which connection, he lodged two criminal cases of
cheque bouncing against 2nd defendant which were
pending as on the date of his evidence in the Court. The
witness has stated that 1st defendant had given him an
impression that he is the owner of the vehicle.
The witness in his further examination-in-chief has
stated that the RTO of Udupi had lodged a complaint
before the Udupi Police for improper documents in
respect of the subject matter of Jeep, a copy of the
complaint is marked at Ex.P-3. For getting the vehicle
released, the 1st defendant had executed some
documents including Indemnity Bond, copy of the which
was marked at Ex.P-4. The Udupi police had registered
a criminal case against the 1st defendant. The copies of
RFA.No.1662/2006 c/w
RFA No.984/2006
21
FIR in connection with the said case and charge sheet
were marked at Exs.P-5 and P-6. A copy of the Jeep
seizure panchanama drawn by the police was marked at
Ex.P-7.
The witness has further stated that, at his
insistence for refund of money, the 1st defendant had
paid a cash of `25,000/- to him as a part amount and 2nd
defendant had given him two cheques, one for `1,15,000/-
and another for `10,000/-. Stating that he had documents
executed by 1st defendant pertaining to the vehicle and
other related documents, the witness has produced and got
them marked at Exs.P-1 to P-14 and also stated that
defendant has executed two receipts in his favour as per
Exs.P15 and P16. He has identified the signature of witness
Kalyanappa on those receipts. He has also produced the
letter of correspondence made by him in this
connection at Exs.P-17 to P-22. Further he has also
RFA.No.1662/2006 c/w
RFA No.984/2006
22
stated that though the 2nd defendant has stated that he
has written a letter as per Ex.P7 and P23, but, said
letter did not have cheque as a enclosure.
PW1 was subjected to a detailed cross-examination
from both the defendants, wherein he adhered to his
original version. He has given many more details about
the alleged negotiation said to have been taken place in
connection with the sale of jeep in his favour and details
as to where negotiation took place and who were
present at the time of negotiation.
11. When Kalyanappa was examined as PW2 on
behalf of the plaintiff, he has stated that he knows both
the plaintiff and defendants in this matter and he was
present when the sale negotiation had taken place in
respect of the jeep in question. At that time, PW3
Shekarappa was also present. The witness has stated
RFA.No.1662/2006 c/w
RFA No.984/2006
23
that it was agreed that the said jeep was sold for a sum
of `1,56,995/- of which amount the plaintiff paid a sum
of `46,995/- as advance amount and took possession of
the Jeep. The witness has identified the agreement
entered into between the parties in Ex.P2 and signature
therein at Ex.P2(b) and also receipt said to have been
executed by the 1st defendant at Ex.P15 and his
signature as witness therein at Ex.P15(b).
The witness has further stated that after two and
half months thereafter, the 1st defendant collected some
more advance amount of `14,000/- from the plaintiff in
his presence, in which regard, one more receipt as per
Ex.P16 was executed by 1st defendant in favour of the
plaintiff. The witness has identified his signature as per
Ex.P16 (b) also. The witness has also stated that in the
second week of July, 1993 a Sale Agreement written
in his presence in the house of Sridhara Udupa.
RFA.No.1662/2006 c/w
RFA No.984/2006
24
At that time the plaintiff had drawn demand draft in
favour of B.D.Credit Corporation Finance, Madras for a
sum of `46,000/- and cash of `50,000/- was paid to 1st
defendant and 1st defendant gave duly signed Form
Nos.29 and 30 to the plaintiff and undertook to get loan
clearance certificate, No Objection Certificate and deliver
it to the plaintiff. The witness has stated that he has put
his signature as witness to the sale agreement, which he
has identified at Ex.P2(C).
The witness has further stated that four months
after the Sale Agreement when the plaintiff had taken
Jeep to the RTO office at Udupi, the police seized the
said Jeep stating that the documents of vehicle were
tampered. At that time, even defendant Nos.1 and 2
were present. On the next day, both the defendants
approached the plaintiff at Hosanagar and promised him
to refund the sale amount of `1,50,000/- to the plaintiff.
RFA.No.1662/2006 c/w
RFA No.984/2006
25
However, immediately 1 st defendant paid a cash of
`25,000/- to the plaintiff as a part of the refund of
the money to the plaintiff. This witness was
subjected to detailed cross examination, wherein he
adhered to his original version.
12. The plaintiff also got examined one
Shekarappa as PW3 who also deposed on the lines
similar to that of PW2. He also has stated that he too
was present when sale transaction, agreement of
sale and negotiation for refund of the money took
place. He identified the signatures in all those
documents, including Sale Agreement as per Ex.2. He
stated that he was also present when 1st
defendant refunded `25,000/- as a portion of
agreed refundable amount and the 1st
defendant gave two cheques for the balance amount.
RFA.No.1662/2006 c/w
RFA No.984/2006
26
This witness was also subjected to a detailed cross
examination wherein he adhered to his original
version.
13. On behalf of the defendants, 1st defendant
got examined as DW1. In his examination-in-chief filed
in the form of affidavit, he has reiterated the contention
taken up by him in his written statement. Apart from
denying that he had entered into an agreement of sale
of his vehicle with the plaintiff, he has denied that there
was any oral tripartite agreement between the plaintiff
and the defendants. However, he has admitted that 2nd
defendant had given two cheques to the plaintiff but
stated that those two cheques were given in connection
with the jeep transaction. He has also stated that he has
not given any blank forms duly signed by him to the
plaintiff.
RFA.No.1662/2006 c/w
RFA No.984/2006
27
He further stated that though he had purchased
the subject matter jeep from 2nd defendant for a sum of
`1,25,000/-, in which, a sum of `65,000/- was paid to
the seller, after availing loan from B.D. Credit
Corporation Finance, Madras, but, subsequently, he
came to know that the vehicle was not carrying a good
title. As such, he returned the jeep to the 2nd defendant
and requested for refund of money. It is thereafter the
2nd defendant had sold the said Jeep to the plaintiff and
collected money from him.
He further stated that after seizure of the jeep
since the entries in the RC Book was standing in his
name he got the said vehicle released and kept it with
himself to enable him to produce the same as and when
demanded. He got marked documents at Ex.D1 to D6.
RFA.No.1662/2006 c/w
RFA No.984/2006
28
14. The 2nd defendant who got examined himself
as DW2 also in his examination-in-chief filed in the form
of affidavit has reiterated the contentions taken up by
him in his written statement. Though he has admitted
issuance of two cheques to the plaintiff, but, stated that
those two cheques were issued in connection with
timber transaction which he had with the plaintiff.
However, thereafter due to some difference of opinion
that has arisen between them, the plaintiff has misused
the said cheques given by the 1st defendant. He also
stated that no transaction with respect to the sale of
jeep was ever made by him with the plaintiff.
He was also subjected to detailed cross
examination from the plaintiff's side as well 1st
defendant side, wherein he adhered to his original
version.
RFA.No.1662/2006 c/w
RFA No.984/2006
29
15. In the light of the above, it was the argument
of learned counsel for the appellant in RFA
No.1662/2006 that the plaintiff has failed to prove that
there was any transaction with respect to the sale. Ex.P2
was not signed by the 1st defendant. He also stated that
the evidence of PWs-2 and 3 with respect to the said
agreement is not believable. Learned counsel further
submitted that when the 1st defendant had disputed his
signature at Ex.P2, the trial Court was not justified in
comparing the disputed signature of the 1st defendant
with his admitted signatures by itself and without
sending the documents for expert's opinion.
16. In his support, he relied upon the judgment
of Hon'ble Apex Court in the case of Ajay Kumar
Parmar Vs State of Rajastan reported in 2012 AIR
SCW 5492 and a judgment of Co-ordinate Bench of this
Court in the case of B Nagarajappa Vs. Boramma
RFA.No.1662/2006 c/w
RFA No.984/2006
30
reported in LAWS (KAR) 2010 4 41, these Judgments
will be referred at the appropriate stage hereafterwards.
The learned counsel further submitted that by virtue of
2nd defendant giving two cheques to the plaintiff,
undertaking to refund the sale consideration of the jeep,
the alleged first contract at Ex.P2 stands substituted
with subsequent contract, as such, there is novation
which discharges 1st defendant from his alleged liability
towards plaintiff.
17. Learned counsel for the appellant in RFA
No.984/2006 in his argument submitted that the suit is
barred by limitation. He also submitted that the 1st
defendant in his written statement has stated that he
had no knowledge of loan taken from B.D.Credit
Corporation Finance, Madras. On the contrary, the same
defendant as DW1 in his examination in chief has stated
that 2nd defendant had promised to clear the said loan.
RFA.No.1662/2006 c/w
RFA No.984/2006
31
Thus, there is inconsistency in the case of 1st defendant.
Learned counsel further submitted that admittedly RC
book was not standing in the name of 2nd defendant as
on the date of Sale Agreement at Ex.P2. Therefore, the
question of either 2nd defendant agreeing to sell vehicle
to the plaintiff or issuing two cheques for the refund of
the alleged sale value of the jeep won't arise. He further
submitted that even though issuance of two cheques by
the 2nd defendant to the plaintiff is not in dispute,
however, those cheques were not issued as Indemnity
to the 1st defendant in respect of transaction, but, it was
given to the plaintiff in a timber business which has
been established in the evidence led by the parties. He
further submitted that merely because 2nd defendant
was known to the plaintiff and the 1st defendant, the 2nd
defendant has been falsely implicated by misusing the
cheques issued by him to the plaintiff.
RFA.No.1662/2006 c/w
RFA No.984/2006
32
18. Learned counsel for the plaintiff in her
argument submitted that from the date of oral
agreement to sell the jeep till the delivery date
admittedly he is in possession of the jeep. It is further
admitted by the 1st defendant in his written statement
itself that it was himself who got the said jeep released
when it was seized by the police. Therefore it cannot be
believed that he had not sold the jeep to the plaintiff but
it was 2nd defendant.
Learned counsel further submitted that admittedly
issuance of cheques in question was by the 2nd
defendant and it is also established that defendants No.1
and 2 and plaintiff had tripartite agreement wherein 2nd
defendant as indemnifier, issued cheque on behalf of 1st
defendant. As such, both defendants No.1 and 2 were
jointly and severally liable to the plaintiff and
RFA.No.1662/2006 c/w
RFA No.984/2006
33
recognising the same, the trial Court has decreed the
suit as against both the defendants.
19. PW1 apart from stating that 1st defendant
was the person who agreed to sell the jeep in question
to him for a consideration of `1,50,000/- has given more
details about the acquaintance with the 1st defendant in
his cross-examination. He has stated that prior to
05.11.1992, 1st defendant was not a known person to
him and it was only on that day for the first time, he
was introduced to him through one Sri. Venkatesh, a
driver of office at Taluk Panchayath and it was he who
had taken him to 1st defendant. The said statement has
not been specifically denied from the 1st defendant side.
20. Secondly, it is not in dispute that even before
1st defendant came in contact with the plaintiff,
defendants No.1 and 2 were known to each other. As
RFA.No.1662/2006 c/w
RFA No.984/2006
34
such 1st defendant claims to have purchased the said
jeep from 2nd defendant. Said 2nd defendant both in his
written statement, as well in his evidence, has not
denied the transaction with respect to the purchase of
jeep by the plaintiff from the 1st defendant. Therefore,
the contention of the 1st defendant that the plaintiff was
stranger to him is not acceptable.
21. The contention of the plaintiff that, on
05.11.1992 he agreed to purchase jeep bearing
registration No. AEV-7849 from the 1st defendant and in
that regard, on the very same day, he had paid an
advance amount of `46,995/- to the 1st defendant and
another sum of `14,000/-paid to him on 28.01.1993 and
that he also cleared the loan taken for said vehicle from
B.D. Credit Corporation Finance, Madras are all
corroborated by the evidence of PWs-2 and 3. Both
the witnesses have uniformly stated that both of
RFA.No.1662/2006 c/w
RFA No.984/2006
35
them were present when the sale transaction was
discussed and agreed in the house of 1st defendant in
the month of November 1992. In that regard both the
witnesses were subjected to detailed cross-examination
from the defendants' side. However, they adhered to
their original version even in their cross-examination
also.
22. On the other hand, they have given more
details as to how and when the negotiation took place and
when transaction had taken place. Both of them have
given details as to at what time they left the respective
places, how the negotiation took place, what was the
price demanded by the 1st defendant for the sale of jeep
and ultimately, what amount was agreed to be paid by the
plaintiff. These details are uniformly stated by both the
witnesses. Further, both these witnesses have also stated
as to how much advance amount was paid in
RFA.No.1662/2006 c/w
RFA No.984/2006
36
cash on the very same day from the plaintiff to the 1st
defendant and how the remaining amounts were paid.
All the details given by them tallies with what PW1 in his
evidence has stated.
Further, the plaintiff both in his pleadings, as well
in his evidence as PW1, has stated about the presence
of PWs-2 and 3 at the relevant point of time, when the
transaction with respect to sale of Jeep and payment of
money were said to have been taken place. Therefore,
merely because PW3 stated that it is shown that has has
not gone to Kamalashile which is the place of residence
of 1st defendant, by that itself the entire evidence of PW3
cannot be treated as unbelievable. Both PW2 and PW3 in
their evidence have clearly stated that 1st defendant
executed the agreement at Ex.P2 in favour of plaintiff when
the entire sale consideration was paid on 14.07.1993. They
have identified the said document as well as their
RFA.No.1662/2006 c/w
RFA No.984/2006
37
signatures in it, as such, the evidence of PW2 and PW3
fully corroborates the case of the plaintiff and gives no
scope to disbelieve the same.
23. The 1st defendant has specifically denied that
he had executed the sale agreement as per Ex.P2. The
said document gives the detailed account of agreement
for sale of suit subject jeep by 1st defendant to the
plaintiff for a total consideration of `1,56,995/-. It also
gives the details as to in how many installments and of
what amount, the said sale amount was paid by the
plaintiff to the 1st defendant. Those details tallies with
what PW2 and PW3 have stated in their evidence.
24. The plaintiff has, apart from identifying and
marking the said document at Ex.P2, has also identified
and marked the signature of 1st defendant therein at
Exs.P-2(a) and P2(b). However, the defendant has
RFA.No.1662/2006 c/w
RFA No.984/2006
38
denied those signature as of his. The trial Court after
comparing those signatures by itself, with the admitted
signature of the 1st defendant on written statement,
vakalath and signatures at Ex.Ps-15, 16, as well the
specimen signature at Ex.P8(a) and Ex.P14a() has come
to the conclusion that, as could be seen even with bare
eyes, those signatures appear to be similar and the style
and stroke of the signatures are also similar. In that
regard it even considered Form No.29 and 30 marked as
exhibits where the signature of the 1st defendant was
shown to have been obtained.
25. Learned counsel for the 1st defendant in his
argument seriously objected for the learned Judge of the
trial Court comparing the signature by itself. He
submitted that the learned trial Judge ought not to have
done that exercise by himself. In that regard, he relied
upon two judgments in his support. In the case of Ajay
RFA.No.1662/2006 c/w
RFA No.984/2006
39
Kumar Parmar (Supra), Hon'ble Apex Court at
paragraph 23 was pleased to observe as below:
The opinion of a handwriting expert is
fallible/liable to error like that of any other
witness, and yet, it cannot be brushed aside
as useless. There is no legal bar to prevent
the Court from comparing signatures or
handwriting by using its own eyes to
compare the disputed writing with the
admitted writing and then from applying its
own observation to prove the said
handwritings to be the same or different, as
the case may be, but in doing so, the Court
cannot itself become an expert in this
regard and must refrain from playing the
role of an expert, for the simple reason that
the opinion of the Court may also not be
conclusive. Therefore, when the Court takes
such a task upon itself, and findings are
recorded solely on the basis of comparison
of signatures or handwritings, the Court
must keep in mind the risk involved, as the
opinion formed by the Court may not be
conclusive and is susceptible to error,
especially when the exercise is conducted
by one, not conversant with the subject.
The Court, therefore, as a matter of
prudence and caution should hesitate or be
slow to base its findings solely upon the
comparison made by it. However, where
there is an opinion whether of an expert, or
of any witness, the Court may then apply its
RFA.No.1662/2006 c/w
RFA No.984/2006
40
own observation by comparing the signatures, or
handwritings for providing a decisive weight or
influence to its decision.
Relying upon the judgment of Boramma's case
(supra), the Apex Court, in the case of State (Delhi
Administration VS. Paliram) AIR 1979 SC 14 and
considering the fact that in the Second Appeal before it,
wherein the trial Court had held that signature do tally, but,
the First Appellate Court recorded that signatures do not tally,
was proceeded to hold that the act of the First Appellate Court
in remanding the matter to the trial Court was justified.
26. Section 73 of the Indian Evidence Act, 1872,
empowers the Court to compare the disputed signature and
handwriting with the admitted ones.
No doubt, as observed by the Hon'ble Apex Court in
Ajay Kumar Parmar's case (Supra), the Cout as a matter
RFA.No.1662/2006 c/w
RFA No.984/2006
41
of prudence and caution should hesitate or to base its findings
solely upon the comparison made by it, however, in the case
on hand the trial Court has not based its findings solely upon
the comparison made by it. As observed above, apart from the
trial Court comparing the admitted signatures of 1st defendant,
to that of disputed signatures at Ex.P2 and P2(b) has also
considered the evidence led by the parties on the execution of
Ex.P2 and more particularly, the evidence of PW2 and PW3,
who were the witnesses to Ex.P2, under which the 1st
defendant is shown to have executed the agreement of sale of
the jeep in favour of the plaintiff.
As such, taking stock of the entire facts and
circumstances of the case before it and not just
confining its comparison of the signatures of defendant,
the trial Court has arrived at the finding that 1st
RFA.No.1662/2006 c/w
RFA No.984/2006
42
defendant has executed the document at Ex.P4.
Therefore, when there is no prohibition for Court to
compare the signature by itself, however, since the trial
Court has taken all the precaution before arriving at a
opinion regarding the execution of Ex.P1 and P2 by the 1st
defendant by considering all materials before it, including
appreciating the evidence of PW2 and PW3, who are the eye
witnesses to the execution of the document by 1st
defendant, I do not consider the said act of trial Court in
comparing the signature of 1st defendant and arriving
at a conclusion that the disputed signature tallies and
that it is proved by the plaintiff that 1st defendant had
executed Ex.P2 in favour of the plaintiff, can be found fault
with. As such, the first point of argument of learned
counsel for 1st defendant that trial Court has
committed an error and that the 1st defendant had neither
RFA.No.1662/2006 c/w
RFA No.984/2006
43
executed agreement at Ex.P.2 nor received any amount
mentioned therein is not acceptable.
27. It is the case of the plaintiff that on
05.11.1992 i.e., on the very day of oral agreement for
purchase of the Jeep from 1st defendant, he had paid an
advance of a sum of `46,995/-. It is thereafter, a sum of
`14,000/- was paid on 28.01.1993 and once again
through Demand Draft, vehicle loan standing in his loan
at M/s. B.D.Credit Corporation Finance, Madras, was
also cleared. The remaining sum of `50,000/- was paid
in cash by him to the 1st defendant on 14.07.1993.
Thus, the entire consideration of money for sale of jeep
has been passed from him to the 1st defendant. The 1st
defendant has denied the same both in his written
statement as well in his evidence as DW1. However as
already observed above, since the execution of
document at Ex.P2 which is on 14.07.1993 has stood
RFA.No.1662/2006 c/w
RFA No.984/2006
44
proved against the 1st defendant and since all these
payments made to the 1st defendant has been
documented in the said agreement of sale, mere denial
by the 1st defendant about the alleged transaction would
not establish his defence.
On the other hand, the oral and documentary
evidence of plaintiff as PW1 and through Ex.P2 and
further corroboration of the plaintiff's case by PW2 and
PW3 who have stated that when the consideration was
passed to the 1st defendant by the plaintiff they were
also present, would go to establsh that sale
consideration towards the purchase of the jeep by the
plaintiff has been duly passed to the 1st defendant.
28. Even though, the 1st defendant has
contended that the alleged loan from M/s B.D.Credit
Corporation Finance, Madras, though was standing in his
name, but, it was the 2nd defendant who without his
RFA.No.1662/2006 c/w
RFA No.984/2006
45
knowledge has raised it, but, he has not denied the said
loan stands in his name. The 2nd defendant both in his
pleadings, as well in his evidence stated that, it was the
1st defendant who had availed the loan from said B.D.
Credit Corporation Finance, Madras. Further the
contention of the 1st defendant that the said loan was
not availed by him though it stands in his name, does
not inspire confidence to believe. One more reason for it
is that without the lonee appearing before it in person, a
banker or a financier would not generally release the
loan in his favour. As such, when necessary application
is filed by the applicant/lonee for sanction of loan
without being himself present before banker or through
his attorney, the banker would not have disbursed the
loan. For this reason also the contention that 1st
defendant is in no way related to the said transaction is
not acceptable.
RFA.No.1662/2006 c/w
RFA No.984/2006
46
29. Therefore, it is clear that 1st defendant in his
capacity as owner of the jeep and RC owner of the jeep
had sold the said jeep to the plaintiff under Ex.P.2 and
received consideration towards the same. ExsP.10, P11,
P13 and P14,which are the blank executed form for
transfer of ownership of vehicle executed by the 1st
defendant, also go to show that he had sold the vehicle
to the plaintiff.
30. The contention of the 1st defendant is that
though he had purchased the said vehicle from 2nd
defendant, but, after coming to know that there was
defect in the title and documentation of the vehicle, had
returned the said vehicle to the 2nd defendant. But the
said contention of the defendant has not been
established. There is no reason to believe that 1st
defendant had delivered back the Jeep to the 2nd
defendant. Even 2nd defendant had categorically
RFA.No.1662/2006 c/w
RFA No.984/2006
47
denied that at any point of time, the 1st defendant
delivered the said Jeep to him. The contention of the 1st
defendant that he being the R.C. owner got the said
vehicle released after its seizure by the police and
retained the same for his safety and for its production
before the Court as and when summoned is also not
acceptable for the reasons that had really he was not
happy with the title of the said vehicle, he would have
taken immediate steps for removal or cancellation of RC
book or transferring the said vehicle back to the name of
2nd defendant.
Admittedly, 1st defendant has not acted in that
direction rather he claims that he has only retained the
vehicle without taking any appropriate action against the
2nd defendant in that regard. As such, getting the vehicle
released after seizure and retaining the said vehicle with
himself by 1st defendant cannot be considered as for any
RFA.No.1662/2006 c/w
RFA No.984/2006
48
safety measure. As such, the very conduct of the 1st
defendant also contribute in disbelieving his contention.
31. The second stage in the transaction is the
refund of sale consideration said to have been made to
the plaintiff by defendant Nos.1 and 2 jointly. According
to the plaintiff, both defendant Nos.1 and 2 approached
him and defendant No.1 gave cash of `25,000/- as a
part amount of refund of the sale consideration and
defendant No.2 issued two cheques one for `1,15,000/-
and another for a sum of `10,000/- towards repayment
of the sale consideration of the Jeep. Both defendant
Nos.1 and 2 have denied the same. However, while 1st
defendant contended that said `1,15,000/- must have
been given by 2nd defendant but the 2nd defendant
contended that it was with respect to other transaction.
RFA.No.1662/2006 c/w
RFA No.984/2006
49
32. PW1 in his evidence has given the details as
to where the said refund of amount was made to him. He
has stated that on the next day of seizure of the Jeep
i.e., 18th day of the month, it was in an establishment by
name Shrusti Consultant at Hosanagar, the negotiation
took place and both defendant Nos. 1 and 2 were there
among whom the defendant Nos. 1 and 2 entered into an
agreement and it was decided that 1st defendant had to
refund a sum of `1,50,000/- to the plaintiff. As per the
said agreement, 1st defendant paid him a cash of
`25,000/- and obtained receipt in that regard. For the
remaining amount, 1st defendant got issued two cheques
from 2nd defendant to the plaintiff one for a sum of
`1,15,000/- another cheque for a sum of `10,000/-.
Thus, even according to PW.1, the issuance of two
cheques by 2nd defendant was not directly by 2nd
defendant in his independent capacity as a seller of the
RFA.No.1662/2006 c/w
RFA No.984/2006
50
vehicle but it was only at the request and on behalf of
the 1st defendant. PW.s 2 and 3 have stated that they
were also present when the transaction took place and it
was in their presence, 1st defendant gave a sum of
`25000 to the plaintiff in cash and got issued two
cheques in total for a sum of `1,25,000/-.
33. All these three witnesses were subjected to a
detailed and searching cross examination from
defendant side in which cross examination they could
successfully withstand without any scope for any doubt
creeping in their evidence. However, the 2nd defendant
both in his pleadings as well as in his evidence has
categorically contended that issuance of cheque by him
was not towards refund of sale consideration towards
Jeep, but it was in connection with timber business
which he had with the plaintiff and as a precaution the
plaintiff before participating in timber auction used to
RFA.No.1662/2006 c/w
RFA No.984/2006
51
collect money and in that direction two cheques were
given to him in blank however the amount was paid by
himself. The plaintiff has denied the same so also 1st
defendant.
In that direction, learned counsel for 1st defendant in
his argument, while relying upon the document at Ex.D2 to
D5, has stated that in the criminal cases filed by the plaintiff
in connection with bouncing of cheque issued by the 2nd
defendant, the complainant himself has stated that those two
cheques were issued in connection with refund of sale
consideration of the Jeep in favour of the plaintiff. As such it
is established that two cheques were given by the 2nd
defendant not towards any timber business, but it is towards
refund of sale consideration towards the sale of Jeep.
No doubt in Ex.D2, D3, D4 and D5, it is
shown that complainant has taken the contention
even before the criminal Court about
RFA.No.1662/2006 c/w
RFA No.984/2006
52
issuance of those cheques by the 2nd defendant/accused,
that the issuance of cheque was towards refund of
consideration towards Jeep sale transaction. However, it
cannot be forgotten that said contention has not been
admitted by 2nd defendant/accused. Ex.D2 to D5 are the
documents of the complainant(plaintiff) in the form of
complaint and his evidence which is not an admission on the
part of 2nd defendant (accused) in the criminal case. On the
other hand, 2nd defendant apart from reiterating his
contention that was taken in written statement even in his
evidence as DW2, also has subjected 1st defendant (DW1)
for cross examination on the said point. In the said cross
examination 1st defendant has clearly stated that he does
not know that the two cheques given by 2nd defendant to
the plaintiff were with respect to timber transaction.
1st defendant has not denied that those cheques were
given by 2nd defendant to the plaintiff
RFA.No.1662/2006 c/w
RFA No.984/2006
53
towards timber business. Therefore in the absence of
any admission to show that two cheques inquestion
which were given by 2nd defendant to the plaintiff was
a return of sale consideration with respect to the Jeep
and also since even according to the plaintiff , he has
established the sale transaction and the contract with
respect to the Jeep was only between plaintiff and 1st
defendant, mere issuance of two cheques by 2nd
defendant to the plaintiff cannot be considered as a part
of very same transaction and there was any tripartite
agreement between the plaintiff and defendant Nos. 1
and 2 in that regard.
34. Further, even according to the plaintiff, the
cheque dishonour, for the offences punishable under
Section 138 of Negotiable Instruments Act instituted by
him also, did not reach its logical end and came to be
dismissed for default of the complainant. Against the
RFA.No.1662/2006 c/w
RFA No.984/2006
54
same, he has not taken any appropriate steps. As such
also, the contention of the plaintiff that 2nd defendant
was jointly and severally liable along with the 1st
defendant, is not acceptable.
On the other hand, the arguments of learned
counsel for 2nd defendant that plaintiff has failed to
establish that there was any tripartite agreement
between the plaintiff, 1st defendant and 2nd defendant
and that 2nd defendant had issued those two cheques in
favour of the plaintiff not towards the refund of sale
consideration in connection with the Jeep has stood
established, and is acceptable. The trial Court without
appreciating the evidence on this behalf in a proper
perspective has erroneously held that along with 1st
defendant, even 2nd defendant is also jointly and
severally liable to the plaintiff.
RFA.No.1662/2006 c/w
RFA No.984/2006
55
35. The other argument of the learned counsel
for the appellant that there was a substitution of
agreement in the place of Ex.P2 is concerned, it has
to be considered that, even according to the plaintiff
they entered into a tripartite agreement and 2nd
defendant has issued two cheques in favour of the
plaintiff towards repayment of the amount, as such
the first agreement dated 14.07.1993 at Ex.P2
stands substituted when the subsequent alleged
oral agreement came into existence. However
the same was not proved by them. On the contrary,
2 nd defendant (appellant in RFA No.984/2006) could
able to prove that two cheques issued by him
for a sum of `1,15,000 and `10,000/- respectively
were not towards repayment of the sale
consideration of the Jeep but, the same
was towards the timber transaction business.
RFA.No.1662/2006 c/w
RFA No.984/2006
56
Thus the question of substitution of non existing
contract in the place of Ex.P2 or the novation does not
arise. As such arguments of learned counsel for the
appellant on the said aspect is not acceptable.
36. Lastly, learned counsel for the 2nd defendant
in his argument submitted that the suit filed by the
plaintiff was barred by limitation. The said issue was
decided in favour of the plaintiff holding that suit was
not barred by limitation by the trial court.
According to the 2nd defendant the oral agreement
as contended by the plaintiff was on 05.11.1992
whereas the suit is filed on 15.07.1996, therefore it is
barred by limitation.
37. In the analysis made above, it is noticed that
the plaintiff has proved that there existed an agreement
dated 14.07.1993 (Ex.P2) for the sale of suit subject
RFA.No.1662/2006 c/w
RFA No.984/2006
57
Jeep by defendant No. 1 to the plaintiff, as such, the
said date is giving cause of action to the plaintiff to
institute the suit. It is further established by the
plaintiff that 1 st defendant towards refund of Jeep
sale consideration to the plaintiff, out of the amount
of `1,50,000/-, had paid a sum of `25,000/- in cash
on 18.11.1993. The plaintiff stated that 13.07.1996
and 14.07.1996 were holidays, as such, suit was
filed on the next day i.e.,15.07.1996. The same is
not disputed by the defendants. As such, from the
first day of cause of action which has arisen on
14.07.1993 and subsequent days including
18.11.1993 since falls within three years as on the
date of filing of the suit, the contention of 2 nd
defendant that suit was barred by limitation, is not
acceptable.
RFA.No.1662/2006 c/w
RFA No.984/2006
58
38. Barring the above no other points of arguments
worth to be considered were addressed from the
defendants. As analysed above. 2nd defendant could able to
establish that the two cheques one for `1,15,000/- and
another `10,000/- were not given by him to the plaintiff
towards the alleged repayment of sale consideration of
Jeep. Further the suit is not based on those two cheques
issued by 2nd defendant to the plaintiff. More over, the
plaintiff could not able to establish that 2nd defendant in
any manner has stood as indemnifier for the acts of the 1st
defendant against the plaintiff. However, the trial court
without appreciating these facts appears to have been
carried away by the fact that 2nd defendant had issued two
cheques in favour of the plaintiff and concluded that those
two cheques were issued as a part of refund sale
consideration of the Jeep to the plaintiff. Since the said
finding of the court below now has proved
RFA.No.1662/2006 c/w
RFA No.984/2006
59
to be erroneous finding, the appeal of the 2nd defendant
in RFA No.984/2006 deserves to be allowed.
39. The impugned judgment and decree deserves
to be set aside and suit of the plaintiff deserves to be
dismissed as against 2nd defendant only. However, since
the findings of the Court below holding the 1st defendant
liable to the plaintiff to pay the decreed amount and
awarded interest there upon is a properly reasoned order
passed by the Court and appellant in RFA No.1662/2006
could not able to establish that the judgment and decree
passed in the said suit suffers with some error in holding
him liable to the plaintiff, I am of the view that RFA
No.1662/2006 filed by the 1st defendant in the original
suit does not deserves to be allowed.
Accordingly, I proceed to pass the following order:
ORDER
The Appeal in RFA No.1662/2006 is dismissed.
RFA.No.1662/2006 c/w RFA No.984/2006 60 The appeal in RFA No.984/2006 is allowed. The judgment and decree dated 21.02.2006, passed by the learned Civil Judge (Sr.Dn.), Sagar in O.S.No.44/1996, is set aside as against 2nd defendant therein. The suit in O.S.No.44/1996 against the 2nd defendant Sri. K.P.Madhyastha is dismissed. However, the said judgment and decree is confirmed as against 1st defendant Sri.K.Venkataramana Rao.
There is no order as to costs.
The Registry is directed to transmit a copy of this judgment along with lower Court records to the lower Court without delay.
In view of the disposal of the main appeals, IAs pending does not survive for consideration.
Sd/-
JUDGE JS/-