Punjab-Haryana High Court
State Bank Of India vs H. Satish Hosiery Factory And Anr. on 10 September, 2003
Equivalent citations: II(2004)BC223, (2004)136PLR337
Author: Hemant Gupta
Bench: Hemant Gupta
JUDGMENT Hemant Gupta, J.
1. The plaintiff is in second appeal aggrieved against the judgment and decree passed by the courts below whereby its suit for recovery was dismissed for the reason that the defendant cannot be burdened with liability on the basis of statement of accounts Ex.PX.
2. The plaintiff filed suit for the recovery of Rs. 6619.09 paise on 21.12.1976 on the ground that the defendant applied for finance assistance in the form of cash credit account for a sum of Rs. 40,000/-. On that request, limit of Rs. 40,000/- was granted to the defendant in July, 1969 and the agreement of loan was renewed on 23.8.1971. The defendant have also pledged their goods and machinery with the plaintiff bank to secure the payment of loan i.e. the amount drawn within the limits mentioned above. It is alleged that the defendant acknowledged their liability to pay the amount due vide their letter dated 15.11.1974. Plaintiff received a sum of Rs. 2,700/- on 13.12.1974 by sale of stocks of the defendant lying pledged with the plaintiff bank and also received a sum Rs. 2,800/- on 11.12.1975 by sale of machinery pledged by the defendant with the plaintiff bank. After adjustment of this amount a sum of Rs. 6,619.09 Paise was found due and payable by the defendant.
3. The defendant filed written statement dated 28.1.1978 wherein they admitted the pledge of goods with the bank but denied pledging of machines. It was stated that the plaintiff has got signatures of the defendant on blank form without explaining the contents in the year 1969. However, subsequently, the defendant have admitted the pledging of the machines under the mid-term machinery loan on 5.5.1970 which loan was repaid after a very short term. It is alleged that the bank sold the machines without any authority and sale price was also far below the price of machinery. The defendant alleged that 12 machines were lying outside the store which was never pledged with the bank but the bank had also taken delivery of these machines worth Rs. 3,000/-. The defendant further stated "that the defendant is certainly entitled to have the price of these goods appropriate in the loan in case it is held that there is some subsisting loan liable to be recovered from the defendant being within time. The defendant reserve their right to recover these goods or the price thereof from the bank.
4. In para No. 4 of the written statement, the defendant has admitted that the hosiery goods and yarn lying in the godown were in possession of the bank and the bank by their negligence did not see the bursting of a drain pipe which resulted in the flooding of the godown and a heavy loss to the goods. The defendant disputed the charge of increased rate of interest which was never agreed to. The defendant denied the liability said to be acknowledged. It is alleged that some part of the document has been fabricated. The defendant has also alleged that the suit is barred by time. Machinery and stocks were sold negligently and illegally and do not in any way extend the limitation. It is relevant to point out that before filing of the written statement, the defendant has moved an application under Order 11 Rule 14 and Order 12 Rule 5 of the Code of Civil Procedure for the production of documents on 29.9.1977. The defendant has inter-alia sought the production of agreement of loan of July, 1969, 23.8.1971 as well as statement of account starting from July, 1969 upto date. The plaintiff submitted his reply dated 12.12.1977 wherein the agreement of July, 1969 as well as the statement of account as sought for was produced. It was stated that there was no renewed agreement dated 23.8.1971 or documents pertaining to the sale of stocks. The learned trial court disposed of the application on 3.1.1978. It was thereafter that the defendant has filed written statement. It may further be noticed that the defendant has not disputed any entry in the statement of account so produced by the plaintiff although the document of acknowledgement was alleged to be fabricated and that the right of the bank to sell the machinery and that the grievance in respect of sale of machinery and stocks at lesser value was made.
5. In evidence the plaintiff has produced PW1 Sh. K.K. Parbhakar, Branch Manager of State Bank of India as well as Sh. S.S. Gill PW2, who was posted at Ludhiana from 29.8.1972 to 1.9.1976. The plaintiff has proved the execution of the agreement for cash credit limit Ex.P1 as well as other document. The dispute revolves around two docu-ments-Ex.P5, the alleged acknowledgement dated 15.11.1974 and the statement of account Ex.PX produced by the plaintiff.
6. The learned trial court has dismissed the suit holding that no liability upon the defendant can be fastened on the basis of statement of account Ex.PX and the suit is beyond the period of limitation. However, in appeal, it was held that the suit is within the period of limitation but the defendant cannot be made liable to pay the amount on the basis of statement of account Ex.PX.
7. In view of the respective contentions of the parties, the following substantial questions of law arise in this appeal for consideration:
1. Whether document EX.P5 dated 19.11.1974 is an acknowledgement of the liability on the basis of which a decree for the recovery of the amount can be passed against the defendant?
2. Whether the suit of the plaintiff is liable to be decreed on the basis of statement of accounts even though the evidence of the plaintiff has not been rebutted by the defendant.
8. Learned counsel for the appellant has vehemently argued that once the defendant has admitted the liability on 15.11.1974 as that of Rs. 9551.91 Paise therefore, the plaintiff is entitled to a decree independent of statement of accounts on the basis of such acknowledgement. It was argued that after the said date, there is no transaction except that of sale of machinery and that of goods. Therefore, on the basis of acknowledgement Ex.P5, itself the suit is to be decreed. However, I am unable to accept the contention of the learned counsel for the appellant. In the entire typed letter Ex.P5 dated 15.11.1974, there is no reference of the amount due, except on one corner where it is written in pen "present outstanding Rs. 9551.91". Learned counsel for the defendant has rightly argued that the said words are not proved to be written by the defendant and that is what the defendant has claimed in the written statement that part of the letter is forged. PW1 Sh. K.K. Prabhakar has deposed that the plaintiff has given consent to the sale of machinery vide letter Ex.P5. In cross-examination, he has stated that he has no idea who has written the writing in pen on letter Ex.P.5. He has further stated that he cannot recollect whether the writing as mentioned above was present when the letter was given to him for signing. He has further stated that the signatures were not made on this letter in his presence. On the other hand, PW2 Sh. S.S. Gill has stated that Satish and Harish partners of the defendant along with their father came to him with letter Ex.P5. There was no mentioned of any balance in the said letter. He asked the parties to find out the balance from the ledger keeper. Thereafter, the defendant brought this application. At that time, present outstanding were written as shown in circle in Ex.P5. In cross-examination, he has denied the knowledge to the effect that who has written the writing in ink on letter Ex.P5. He denied the knowledge as to where the letter was typed. He has further stated that Ex.P5 is a carbon copy and he has taken this letter in routine.
9. To rebut such evidence Harish Chander defendant has appeared as PW1 and stated that portion encircled in Ex.P5 is not in his hand nor in the hand of the any of the partner. It was written by some bank employee not in their presence.
10. In view of the evidence led by the parties, it is apparent that writing on Ex.P5 has been written subsequently and was not part of the original letter. The defendant has denied such writing in his handwriting in the pleadings as well as in the evidence. The plaintiff has not led any evidence to prove that the writing is in the hands of any of the defendant. Such writing is not even initialled by any person. There is no evidence that these words of acknowledgement were written in the hands of the defendant. In the absence of any such proof, I am unable to hold that the document Ex.P5 does not contain an acknowledgement of liability on behalf of the defendant. The first question is thus answered against the plaintiff.
11. However, the question remains, whether the suit can be decreed on the basis of the statement of account Ex.PX in view of the pleadings and the evidence of the parties. As mentioned in the preceding paragraphs, the defendant has got a copy of the statement of account before filing of the written statement. However, the defendant has not denied any entry in such statement of account in the written statement so filed. It is alleged that the bank has charged increased rate of interest, never agreed to. The defendant has disputed the claim of the plaintiff as not within time and that stocks were sold negligently and illegally or that the machinery was sold unauthorisedly. In the absence of any pleading, disputing any of the entries in the statement of account in the written statement, the question is whether the plaintiff was still obliged to produce the corroborative evidence to prove the transactions. Another aspect which requires consideration is that the fact that such statement of account does not contain any date of attestation will make such statement of account inadmissible in terms of Bankers Book Evidence Act.
12. Firstly, effect of omission of date in the statement of accounts.
The learned counsel for the defendant has argued that the statement of account does not contain the date on which such statement of account was prepared and thus such statement of account is not admissible. Such certificate is required to be dated and subscribed by the principal accountant, manager of the bank with his name and official title. Since the date on such certificate is not mentioned, therefore, it is not a certified copy within the meaning of Section 2(8) of the Bankers Books Evidence Act. Sections 2(8) and 4 of the Bankers Books Evidence Act read as under;
"2(8) certified copy means a copy of any entry in the books of a bank together with a certificate written at the foot of such copy that it is a true copy of such entry, that such entry is, contained in one of the ordinary books of the bank and was made in the usual and ordinary course of business, and that such book is still in the custody of the bank (and where the copy was obtained by a mechanical or other process which in itself ensured the accuracy of the copy, a further certificate to that effect, but where the book from which such copy was prepared has been destroyed in the usual course of the bank's business after the date on which the copy had been so prepared, a further certificate to that effect, each such certificate being dated and subscribed by the principal accountant or manager of the bank with his name and official title).
"4. Mode of proof of entries in bunkers' books.- Subject to the provisions of this Act, a certified copy of any entry in a bankers book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where and to the same extend as, the original entry itself is now by law admission, but not further or otherwise."
13. A perusal of the provisions of the Act shows that certified copy of any entry in a bankers book is to be received as prima facie evidence of the existence of such entry and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case as the original entry is now by law admissible but not further or otherwise.
14. As mentioned above, the defendant has moved an application for supply of statement of accounts. Such statement of account was attached with the reply of the application. The defendant has not raised any objection in the written statement that such certificate is not in accordance with the provisions of Section 2(8) of the Bankers Books Evidence Act. Written statement was filed in January, 1978. If this objection was taken, the plaintiff could very well produce another statement of account authenticated in the manner prescribed under Section 2(8) of the Bankers' Books Evidence Act. The defendant has not raised any such objection of date when the same was produced in evidence. Therefore, it is too late for the defendant to allege that since the date was not mentioned in the statement of account therefore, the same cannot be admitted in evidence.
15. Even otherwise, the date of attestation of the certificate is not an essential ingredient of the certificate. It is only a directory provisions. In Radheshyam G. Garg v. Smt. Safiyabai Ibrahi LIghtwalla, A.I.R. 1988 Bombay 361 also certificate was neither signed by the principal accountant nor bear the date of official seal. The Bombay High Court held as follows:
"14. In my judgment the aforesaid view of the learned judge of the lower appellate court was hypertechnical. The said extract of account was duly signed by the Agent of the bank. Implicit in it was a certificate that it was a true copy of an entry contained in one of the ordinary books of the bank and was made in the usual and ordinary course of business and that such book was in the custody of the bank. The detailed ingredients mentioned in the defining Clause 8 of Section 2 of the Bankers' Evidence Act, 1891 for qualifying to be 'certified copy' are not mandatory but merely directory. Sufficient compliance depending upon facts and circumstances of each case is enough to qualify a document to be certified copy."
16. In view of the said judgment, the mere fact that the date has not been mentioned is not fatal to the claim of the plaintiff. Such statement of account has been produced in Court in December 1977. Therefore, mere fact that the certificate does not contain the date would not be sufficient to non suit the plaintiff.
17. Now whether the plaintiff was bound to produce corroborative evidence to prove the entries in the ledger account.
18. The courts below have relied upon Chandradhar Goswami and Ors. v. Gauhati Bank Ltd., A.I.R. 1967 S.C. 1058 to hold that the entries in the statement of account in terms of Bankers Book Evidence Act is not admissible unless supported by corroborative evidence. Learned counsel for the appellant vehemently argued that such finding was recorded in the facts of that case where the defendant has disputed the entry in the statement of account dated 19.3.1937 wherein advance of Rs. 10,000/- was allegedly made. The defendant in the said case has disputed such advance in the written statement as well as in the evidence. In these circumstances, the court has held that the plaintiff could very well produce evidence to support that a sum of Rs. 10,000/- was advanced to the defendant on 19.3.1947. Learned counsel for the appellant submitted that in the facts and the circumstances of the present case, the defendant has not disputed any particular entry in the statement of account produced by the Bank. In the absence of any dispute about any entry, the plaintiff was not called upon to prove any entry by corroborative evidence. The statement of account is prima facie evidence of the existence of such entries and is admissible in respect of transaction and accounts as the original entry itself.
19. It was argued that the entire object of Bankers Evidence Act, 1891 is to make the entries in books of Bank admissible in evidence and for the use of the copies of entries of such books instead of compelling the bank to produce original entries. It is only in situation where a particular entry is disputed to show that books have not kept in ordinary course, the bank is obliged to produce corroborative evidence. The learned counsel for the appellant relied upon the following observations from the said report to contend that in view of the pleadings and evidence alone, it was held that plaintiff has to produce independent evidence to show that same was advanced. It was held in the cited case as under:
"The main appellant in whose name the account was, appeared as a witness and stated that so far as he remembered he only borrowed Rs. 8,000/- from the bank and nothing thereafter. He also stated that he did not remember to have borrowed any sum from the bank after the execution of the mortgage-deed. In the face of this pleading of the appellants and the statement of one of them, the bank had to prove that the sum of Rs. 10,000/- was in fact advanced on March 19, 1947 and could not rely on mere centries in the books of account for that purpose. This is clear from the provision in Section 34 of the Evidence Act, No attempt was made on behalf of the bank to prove by any evidence whatsoever that a sum of Rs. 10,000/- was advanced on March 19, 1947. The entry in the account books in that connection is to the effect. "To amount paid to Gauhati branch as per D/advice, dated 6th March 1947". If this amount of Rs. 10,000/- was paid by the bank on the order of the appellants or any one of them that order should have been produced in support of the entry, and then the entry would have been helpful to the bank as a corroborative piece of evidence. But the bank did nothing of the kind. The only witness produced on behalf of the bank was an officer who had nothing to do with the Tezpur branch where the transactions were entered into. We are, therefore, of opinion that in view of Section 34 of the Evidence Act the appellants cannot be saddled with liability for the sum of Rs. 10,000/- said to have been advanced on March 19, 1947 on the basis of a mere entry in the account. Section 34 says that such entry alone shall not be sufficient evidence and so some independent evidence had to be given by the bank to show that this sum was advanced."
20. The learned counsel for the appellant has also relied upon Allahabad Bank v. Bharat Vegetable Products Ltd. and Ors., A.I.R. 1979 N.O.C. 15 (Calcutta), wherein the court decreed the suit relying upon the claim of the bank on the basis of books of accounts supported by oral and other documentary evidence.
21. Learned counsel for the appellant contended that under Section 4 of the Bankers Books Evidence Act, statement of account certified in the matter prescribed under the Act is proof of original entry itself. Under Section 34 of the Evidence Act, entries in the books of account regularly kept in the course of business are relevant but such statement shall not alone be sufficient to charge any person with liability. The learned counsel for the appellant thus argued that the transactions in dispute are numerous and extend over a large number of years. The defendant has not disputed any entry in the written statement in respect of which the plaintiff could produce evidence. The defendant has not cross-examined the witnesses of the account books. Thus, the statements of witnesses produced by the plaintiff are sufficient to fix the defendant with liability. He has relied upon a judgment of Division Bench of this Court reported as Kaka Ram Sohanlal and Ors. v. Firm Thakar Dass Maihra Das and Anr., A.I.R. 1962 Punjab 27, wherein it has been held that in the facts of the case, the plaintiffs own statement on oath in support of the entries were sufficient to fix the defendant with liability. It was further held as under:
"In my opinion, where the transactions in dispute are numerous and extend over a large number of years, it is not necessary to prove each and every item in the account books but only the specific disputed entries are required to be proved. In such a case, the question to be determined is whether the account books are regularly kept and are genuine. In the present case, the plaintiff has made a definite statement that the account books are regular and he was not cross-examined with regard to the genuiness of these account books, as already mentioned above. I would therefore, hold that the plaintiffs own statement on oath in support of the entries was sufficient to fix the appellant with liability."
22. It may further be noticed that the defendant has admitted the sale of machinery and that of pledged stocks in the written statement. However, it disputed that the machinery was not pledged and the stocks have been sold at a lesser value. The defendant has not produced any evidence to rebut the evidence of plaintiff and to support its respective contention. The fact remains that the entries of such sale of machinery and that of pledged goods is mentioned in the statement of accounts.
23. In view of respective stand of the parties and the evidence led by the plaintiffs, the entries in the statement of account Ex.PX stand proved from the statement of PW1 K.K. Parbhakar Branch Manager and PW2 S.S. Gill. The defendants have failed to dispute any such entry and are thus liable to pay the amount found due on the basis of statement Ex.PX i.e. a sum of Rs. 6240.59P. The plaintiff is also entitled to interest at the rate of 12 per cent per annum as the agreement Ex.P1 contemplates interest at the rate of 12 per cent per annum on the amount due drawn by the defendants in terms of cash credit limit.
24. In view of my above findings, the appeal is accepted. The judgment and decree passed by the courts below is set aside and the suit of the plaintiff is decreed with costs for the recovery of Rs. 6240.59P along with interest at the rate of 12 per cent per annum.
from the date of the filing of the suit till realisation.