Delhi District Court
Dr. S. K. Gupta vs M/S B. L. A. Chit Fund Private Limited on 17 March, 2011
IN THE COURT OF SH SUNIL KUMAR AGGARWAL:
ADDITIONAL DISTRICT JUDGE (CENTRAL) 10: DELHI
RCA No. 5/08
Dr. S. K. Gupta,
Son of late Sh. L. R. Aggarwal,
Resident of 24/35, Tilak Nagar,
New Delhi ......Appellant
Versus
1. M/s B. L. A. Chit Fund Private Limited.
Through its Director/Principal Officer,
50/10, Yusuf Sarai,
New Delhi
2. Dr. K. N. Shukla,
F157, First Floor,
Street No.5, Pandav Nagar,
Delhi - 110 091
3. Dr. G. L. Bakshi
(since deceased)
through his L.R.s
(a) Mrs. Sudesh Bakshi,
Wd/o Dr. G. L. Bakshi
(b) Sh. Praveen Bakshi,
S/o Late Dr. G. L. Bakshi
(c) Sh. Naveen Bakshi,
S/o Late Dr. G. L. Bakshi,
All residents of WZ2,
Mukherjeet Park, New Delhi
......Respondents
Appeal presented on 02.01.2008 J U D G M E N T. RCA No. 5/08 Page No. 1 of 10
1. This appeal under Section 96 of Code of Civil Procedure takes exception to the judgment and decree dated 29.11.2007 whereby money recovery suit filed by respondent no.1 against respondent no. 2 as the principal borrower/chit prize winner and respondent no. 3 and appellant as guarantors was decreed against latter two. The suit originally filed under summary procedure had already been decreed against respondent no.2 on 03.12.2001 under Order 37 Rule 2(3) CPC. Here itself it may be mentioned that an application under Order 37 Rule 4 CPC moved by respondent no.2 was dismissed on 17.01.2003.
2. Briefly stated, the crucial facts are that respondent no.1 as plaintiff had filed the suit for recovery of Rs. 2,08,200/ with interest and costs against respondent no.2, 3 and the appellant who were defendants no. 1, 2 and 3 respectively in the suit, alleging that respondent no.2 had become a subscriber of chit number GT93/7 for an amount of Rs. 3,00,000/ it was repayable in 30 monthly installments of Rs. 10,000/ each inclusive of the dividend payable by the respondent no.1. In the auction held on 24.10.1998 respondent no.2 was declared a successful bidder and the amount of chit was paid to him after necessary deductions. He had already paid two installments of Rs. 10,000/ each. The sum of Rs. 2,10,000/ equivalent to payable chit amount had been advanced to him by way of cheques for Rs. 1,00,000/ dated 13.08.1998 and another for Rs. 1,10,000/ dated 13.10.1998. The said amount was adjusted against prize money in consideration whereof respondent no.2 had executed promissory note. Respondent no.3 and appellant were offered as guarantors for fulfillment of the terms of chit agreement. RCA No. 5/08 Page No. 2 of 10 They executed guarantee agreement as well as pronote dated 24.10.1998 in favour of the plaintiff. On repeated defaults in payment of installments being committed by respondent no.2, respondent no.1 had called upon the borrower as well as guarantors to clear the account but they did not care. Plaintiff got legal notice dated 02.09.1999 issued to them which they failed to comply with.
3. While respondent no.2 did not enter appearance on being served with special summons and therefore, suffered decree, appellant and respondent no.3 had applied for leave to defend the suit which was granted on 03.03.2001. In his written statements, the appellant had questioned the competency of signatory on behalf of respondent no.1. It was alleged that the his signatures on documents have been forged and fabricated and therefore the same cannot form basis to rope him in this suit. It was further contended that the amount of chit had already been paid by respondent no.1 to respondent no.2 prior to the alleged execution of guarantee agreement. The same is without any consideration and legally unenforceable. It was stated that there is no privity of contract between appellant and respondent no.1 and the suit has been filed in conspiracy with respondent no.2. It was contended that the suit suffered from misjoinder of appellant.
4. In the impugned judgment all the contentions of appellant were disapproved by Ld. Trial Court and the suit was decreed against him.
5. The grounds of appeal are that Ld. Trial Court has failed to take note that the onus to prove issue no.1 was upon respondent no.1 RCA No. 5/08 Page No. 3 of 10 who had failed to discharge the same. No independent witness was examined to prove that appellant had stood guarantor for repayment of the loan amount. Moreover, the payment had already been made to respondent no.2 and the guarantee agreement and pro note were forged only to fasten liability on the appellant. No transaction between the parties had taken place on 24.10.1998. The execution of documents on that day is absolutely without consideration which the Ld. Trial Court omitted to appreciate. Respondent no.3 the other alleged guarantor was on death bed at that time and was being put on dialysis at LNJP Hospital. There was no question of his coming over to the clinic of appellant at Tilak Nagar only to sign the guarantee agreement. Further it is stated that the appellant is president of the Medical Association and his signatures are easily available due to which respondent no1 has been able to commit forgery with an object to black mail him. It is claimed that Ld. Trial Court failed to take into account that respondent no1 is carrying on money lending business without any lisence under Punjab Money Lending Act, extended to Delhi as such the suit was not maintainable. The respondent no.1 did not verify the paying capacity of respondent no.2 at the time of grant of loan therefore the impugned decree is bad in the eyes of law. The appellant has filed a criminal complaint against the respondent where a statement has been made that the documents was signed in the office of respondent no.1 at Yusuf Sarai, New Delhi. In the present case it was deposed that the documents were signed at the clinic of appellant which reflect that decree holder is not sure about the place of execution of documents. Appellant stated RCA No. 5/08 Page No. 4 of 10 that he is prepared to debt the documents and verified from CFSL and any other competent authority. Since the impugned judgment and decree has caused miscarriage of justice, it has been urged that the same be set aside.
6. I have heard Sh. C. P. Vig, Advocate, Ld. Counsel for the appellant, Sh. H. K. Tolani, Advocate, Ld. Counsel for respondent no.1 and carefully perused the relevant record including trial court file.
7. It has no where been disputed that at the time of transaction respondent no.1 was known by its previous name "Golden Trading Pvt. Ltd.". The claim of PW1 that he is one of the directors of company since 1974 has not been discounted. As principal officer of a juristic person, he was competent to sign and verify the pleadings on its behalf under Order 29 Rule 1 CPC. He had been specifically authorized to institute legal proceedings on behalf of the company vide resolution Ex. PW1/1 passed in the meeting of 28.10.1998 of the Board of Directors. The conclusion of Ld. Trial Court in favour of Respondent no. 1 on issue no. 2 does not suffer from any infirmity. Reliance in the context has been placed upon the ratio of Indian Oil Corporation Ltd. Vs. Union of India, 140(2007), DLT 571
8. During admission/denial of the documents appellant has denied his signatures on promissory note Ex. PW1/10 and guarantee agreement Ex. PW1/11. Throughout his stand is that his signatures on both documents have been forged and fabricated. PW2 Satish Kumar, clerk of respondent no.1, has been examined as one of the witness in RCA No. 5/08 Page No. 5 of 10 whose presence the documents were signed by the parties. He had also put his signatures on both the documents as witness. Despite his specific one paragraph version of the two documents having been signed by the guarantors in his presence, no suggestion of the signatures being forged and fabricated was given to him in crossexamination. It has been held in 17(1980) DLT 431 that where a witness has not been crossexamined on a point, inference is that the testimony of the witness to that extent is accepted by the opposite party. No suggestion was given to PWs that they alongwith respondent no.2 and Gopal Krishan had not visited the appellant on 24.10.1998 at his clinic for obtaining his signatures. No medical records of respondent no.3 were submitted either before Ld. Trial Court or even in appeal to perceive his weak physical condition on 24.10.1998 as to make him unable to under take journey to the clinic of the appellant. In his deposition as DW3, the appellant has described that respondent no.3 was on death bed as he was on dialysis. Such a conclusion coming from a medical practitioner can only be counted as selfserving.
9. The statement on behalf of respondent no.1 recorded in the criminal case filed by appellant, has not been produced. In any case that cannot form basis of a decision in this matter as the witness did not get opportunity to explain contradiction, if any. PW1 has categorically denied knowing the appellant prior to 24.10.1998. There was no reason for him to undertake a journey of about 20 Kms from his office with staff to the clinic of appellant only to target him in this case. Had it been a case of manufacturing of documents, instead of roping an RCA No. 5/08 Page No. 6 of 10 educated person like the appellant and situated at a long distance, respondent no.1 would have chosen a soft target.
10. The fact that PW1 and PW2 could not depose about some of the landmarks of area and building where his clinic was situated, does not dent their testimonies because perhaps they were not visiting that area in regular course and had deposed in Court after more than five years of their visit to the appellant. The human memory fades with time. The manner of deposition raises trust in the witnesses who corroborated each other in material particulars. The appellant seems to be trying hard to avoid the liability incurred on being ditched by respondent no. 2, his college friend.
11. I would concur with the appellant that initial onus to prove the valid execution of documents relied upon by respondent no.1 was upon itself. As the reasons recorded herein would reveal that the same was discharged by it. The onus had shifted to appellant who, on his part, failed to discharge and reshift it to the appellant. 12 No document of appellant as President of Medical Association has been filed. Merely easy availability of ones signatures is not sufficient to discern forgery of document. The appellant did not inform as to how many persons so far have set up claims against him on forging his signatures. Expert evidence about the signatures of appellant and respondent no.3 on Ex. PW1/10 and Ex. PW1/11 has not been led by the parties. In fact respondent no. 1 had moved an application for examining handwriting expert on 09.09.2005 when both parties had closed their respective evidence. Said application was RCA No. 5/08 Page No. 7 of 10 dismissed by Ld. Trial Court on 07.07.2006 observing that the exercise should have been completed when they were availing opportunity of leading evidence. The appellant apparently did not avail services of an expert even for his criminal case. In appeal he is only giving proposals. In any case the opinion of expert is for the assistance of Court which has ultimately to form an opinion about the handwriting and signatures by making comparison. Ld. Trial Court was fully justified in resorting to Section 73 of Indian Evidence Act in this behalf. I have also compared the disputed signatures on Ex. PW1/10 and Ex. PW1/11 with admitted signatures of appellant put at the time of admission/denial of documents, written statements, appeal, affidavits etc. and concur with the conclusion reached by Ld. Trial Court. The writing style, formation and joining of words, pen pressure, pen lifts and the flow in making the two types of signatures is exactly identical so as not to leave any doubt that the two documents actually bear the signatures of appellant. The issue no.4 thus was correctly decided by Ld. Trial Court against the appellant. He being one of the guarantors of respondent no.3 was a necessary party and so is the conclusion of issue no.3.
13. It has been stressed that the respondent no.1 had already paid loan of Rs. 2,10,000/ to respondent no.2 by way of two cheques dated 13.08.1998 and 13.10.1998. There was no transaction except of executing the documents on 24.10.1998. When the amount was already advanced without taking any security/surety, subsequent execution of guarantee agreement Ex. PW1/11 was without any consideration and thus cannot be enforced. The argument appears attractive but is RCA No. 5/08 Page No. 8 of 10 groundless. The amount already advanced to respondent no.2 by the chit fund company was adjusted against the prize amount on his being declared successful bidder on 24.10.1998 in which respect receipt Ex. PW1/9 was executed. In consideration thereof the two guarantors had signed demand promissory note and guarantee agreement. It has been held in ILR 1992 Karnataka 1053 that the word "done" in Section 127 of the Contract Act, 1872 shows that past benefit to the principal debtor can be good consideration for a guarantee bond. Logical conclusion to the same effect can also be drawn from the judgment in AIR 1943 PC 147 where it was held that acknowledgment of past liability of partnership firm by a newly admitted partner constitutes valid consideration for new contract. Adjustment of already taken loan by respondent no.2 in chit prize amount on 24.10.1998 on the same being auctioned in his favour vide receipt Ex. PW1/9 thus is held to be valid consideration for agreement of guarantee Ex. PW1/11. The appellant thus cannot shirk his liability thereunder.
14. The reservations that respondent no.1 could not have given loan to respondent no.2 without having license for money lending and without verifying his paying capacity, have no basis. Appellant have not cited other instances of respondent no.1 having given loan. Scant and occasional grant of loan does not call for ones registration under Punjab Money Lender's Act as extended to Delhi. Respondent no.2 is a Doctor. Per PW1 he has been recommended by the Registrar/ Superintendent of chit funds. He had offered his college friends, the RCA No. 5/08 Page No. 9 of 10 appellant and respondent no.3, both doctors as his guarantors. Although, PW1 testified that documents to satisfy about their repaying capacity were also taken but not produced on judicial record, yet there was no need given the general reputation and impression about earning of doctors. In any case it cannot be assessed that the respondent no.1 was totally oblivious of the factors which needed to be considered for judging repaying capacity of the borrower.
15. No other point has been urged. In view of the above findings, no irregularity or illegality has been revealed in the impugned judgment. The appeal fails. It is dismissed with costs. Trial Court Record is released. An attested copy of this judgment be sent to Ld. Trial Court for information. Decree sheet be prepared. Appeal file be consigned to Record Room.
Announced in the open court on 17th March, 2011 (Sunil K. Aggarwal) Addl. District Judge (Central)10 Delhi.
RCA No. 5/08 Page No. 10 of 10 RCA No. 5/08 17.03.2011 Present: Representatives of the parties
Vide separate judgment directly dictated on computer, the appeal has been dismissed with costs. Decree Sheet be prepared accordingly. Appeal file be consigned to Record Room.
(Sunil Kr. Aggarwal) Addl. District Judge (Central)10 Delhi: 17.03.2011 RCA No. 5/08 Page No. 11 of 10