Madras High Court
Kanagambaram Ammal vs Kakammal, Govindasamy, Pachammal, ... on 19 August, 2004
Equivalent citations: AIR2005MAD142, 2004(4)CTC596, (2004)4MLJ96, AIR 2005 MADRAS 142, (2004) 4 MAD LJ 96, (2004) 4 MAD LW 408, (2005) 1 CURCC 586, (2004) 4 CTC 596 (MAD)
Author: M. Karpagavinayagam
Bench: M. Karpagavinayagam
JUDGMENT M. Thanikachalam, J.
1. The unsuccessful plaintiff before the trial Court is the appellant.
2. The claim of the plaintiff/appellant in brief:
The husband of the first defendant and the father of defendants 2 to 6 had executed a registered mortgage deed dated 5.4.1972, in respect of the suit property, for himself and on behalf of his then minor sons, viz., the defendants 4 & 6 along with the second defendant, in favour of the plaintiff, for a sum of Rs.15,000/-, which was borrowed by the deceased Veerasamy Reddiyar, on a promissory note, for the purchase of the lands from one P.V. Raghava Reddy of Agaram Village. In pursuance of the mortgage deed dated 5.4.1972, pronote debt was discharged on the same day and after its discharge, the pronote was handed over to the deceased Veerasamy Reddiar and the second defendant. Neither the Veerasamy Reddiar, nor the defendants paid any amount, towards the mortgage deed, despite repeated demands made by the plaintiff. Veerasamy Reddiar died leaving the defendants, as his legal heirs, who are entitled to inherit the suit property, which is the subject matter of the mortgage and in this view, they are liable to answer the mortgage debt. The defendants are not entitled to the benefits of the Debt Relief Act. The effort of the plaintiff, to recover the amount, outside the Court, by repeated demands, ended in vain, resulting the suit, for the recovery of a sum of Rs.31,200/-, with subsequent interest.
3. Objections to the plaintiff's claim in brief.
Veerasamy Reddiar had not executed any pronote, as alleged in the plaint. The suit mortgage was executed without consideration and therefore, the defendants are not liable to pay the suit claim. Thiru Raghava Reddy offered to sell his lands, for a stated consideration of Rs. 45,000/-. Veerasamy Reddiar paid Rs.10,000/- and Rs.5,000/- on different dates obtaining agreements. For completing the transaction, a further sum of Rs.25,000/- was required urgently and because of this urgency and pressure given by Raghava Reddy, the mortgage deed was executed on the specific understanding, that money should be paid after registration, for procuring the sale deed. As per the undertaking, the husband of the plaintiff failed to pay the amount and the plaintiff is not at all known to the defendants. Since the suit mortgage is not supported by consideration and the defendants are entitled to the benefits of Debt Relief Acts 8/73, 40/79, 40/80 and 13/80 being agriculturists, the plaintiff is not entitled to claim, and recover any amount and the suit deserves to be dismissed.
4. The learned Additional Subordinate Judge, Vellore on the basis of the above pleadings, framing as many as six issues, proceeded with the trial of the suit. The plaintiff and her husband had been examined as P.Ws.1 & 2 and the scribe of the document viz., Ex.A1 had been examined as P.W.3. To claim the benefits of the Debt Relief Acts, producing three documents and to nullify the evidence adduced on behalf of the plaintiff, the first defendant alone had been examined as D.W.1.
5. The learned trial Judge, appreciating the pleadings, as well as scanning the materials, felt that the execution of Ex.A1, as well as the passing of consideration thereunder are not properly proved, since none of the attestors to the document has been examined. Further, the evidence brought to surface, that the defendants are not entitled to the benefits of the Debt Relief Acts1, as claimed. In view of the specific finding, that the plaintiff has miserably failed, to prove the passing of consideration under Ex.A1, the trial Court declined to decree the suit, resulting dismissal of the same, as per the Judgment dated 29.6.1989, which is under challenge in this appeal.
6. Heard the learned counsel for the appellant, Mr.G.K. Selvarayan and the learned counsel for the respondents, Mr. N. Subbarayalu.
7. Mr. G.K. Selvarayan, appearing for the appellant submits,
(i) that the trial Court had committed an error in concluding, that the non examination of the attestors to the mortgage deed is fatal and the plaintiff failed to prove the passing of consideration, ignoring the acceptable evidence of P.W.2, which is supported by a registered document, to which some of the defendants are parties,
(ii) that the learned trial Judge erroneously placed the burden of proof, throwing upon the plaintiff/appellant, forgetting the law on this point,
(iii) that the trial Court failed to take adverse inference, for the non examination of the second defendant, who was a party to the mortgage, thereby presuming that the mortgage is supported by consideration, which is supported by the oral evidence of P.Ws.1 & 2 and
(iv) that the trial Court had not properly appreciated the evidence, applying the trite law, thereby landed in an erroneous Judgment, warranting this Court to interfere in order to grant a decree, as prayed for.
8. Mr. N. Subbarayalu, the learned counsel appearing for the contesting respondents submits, as rightly held by the trial Court, the plaintiff had miserably failed to prove the passing of consideration, by producing the promissory note said to have been executed by the deceased, Veerasamy Reddiar, as well as the subsisting liability on the date of the execution of the mortgage. and the trial Court properly appreciating the evidence on record, had reached an unerring conclusion, which requires the seal of approval, by this Court. In this view, the learned counsel for the respondents fully supported the findings of the trial Court, praying for the dismissal of the appeal.
9. The pleadings and the submissions made by the learned counsel for the respective parties would suggest the following points for consideration.
(i) Whether the suit mortgage deed is supported by consideration?
(ii) Whether the plaintiff/appellant is entitled to a decree? If so, to what amount?
Points:
10. Ex.A.1 is the registered mortgage deed dated 5.4.1972 executed by one Veerasamy Reddiar for himself and on behalf of his then minor sons viz., the defendants 4 & 6 along with the second defendant, for a stated consideration of Rs.15,000/-. Though this document came into existence on 5.4.1972, it seems, no payment was made by the mortgagors. The plaintiff/appellant appears to have made repeated demands, though had not issued any legal notice, but the defendants failed to honour the undertaking given in Ex.A1, thereby compelling the plaintiff, to move the Court, for the realisation of the amount advanced. In this way, a suit came to be filed, on the basis of a registered mortgage, for a preliminary decree of Rs.31,200/- with subsequent interest. The contesting defendants, in a way admitting the execution of the document, questioning the passing of consideration, opposed the claim and in their claim, they were successful and the result is the dismissal of the suit, which is under challenge in this appeal, as aforementioned.
11. After the death of Veerasamy Reddiar, impleading all his heirs, the suit has been filed. The second defendant by name Govindasamy is a party to the document viz., Ex.A1. Only the second defendant had filed the written statement, which was adopted by the defendants 1, 4 & 6. Therefore, the proper person to speak about the execution of Ex.A1 as well as the passing of consideration thereunder, must be the second defendant, which should be remembered, while assessing the evidence and deciding the burden of proof.
12. Section 101 of the Indian Evidence Act commands, how the burden of proof should be discharged. Section 102 gives guideline on whom burden of proof lies. Section 102 reads:
"The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side".
It is pertinent to note, to decide the present case, illustration 'b', which reads:
"(b) A sues B for money due on a bond.
The execution of the bond is admitted, but B says that it was obtained by fraud, which A denies.
If no evidence were given on either side, A would succeed, as the bond is not disputed and fraud is not proved.
Therefore the burden of proof is on B".
As seen from the written statement filed by the second defendant, the execution of the mortgage deed is admitted which reads :
"The suit mortgage was executed without consideration under the circumstances stated below".
Therefore, the burden is upon the defendants, especially upon the second defendant, who is a party to Ex.A1, to prove that the mortgage came into existence, under the circumstances stated in the written statement, that too, without any consideration, though there are some recitals in the deed, regarding the passing of consideration. We are conscious of the fact, that Ex.A1 is not a negotiable instrument, armed with presumption, under the Negotiable Instruments Act. In this view, it could be said, the initial burden is upon the plaintiff, to prove the passing of consideration. In this case, in view of the admitted position the execution of Ex.A1 is admitted, in our considered opinion, the oral evidence of P.Ws.1 and 2, supported by the recitals in the registered document viz., Ex.A1, to which some of the defendants are parties, are sufficient to discharge the initial burden, thereby shifting the burden upon the defendants, to disprove the passing of consideration, or to disprove the recitals contained in Ex.A1, thereby to establish the fact, if it is a fact, that Ex.A-1 is not supported by consideration. In a mortgage deed, if there are recitals, that the mortgage money was given as loan to the mortgagor, either on that date, or previous to that date, affirming that the mortgagor received the amount, then the burden is on the mortgagor to prove, that no consideration was in fact paid. This proposition is laid down by the Apex Court of this land in R.S.Kothari v. Smt. Anar Dei (1968 1 SCWR 235).
13. In the case involved in the above decision, the plaintiff therein commenced the action, for a declaration that the deed of mortgage executed by him, in favour of another was void ab initio and not binding on him, because no consideration was paid to him. It was the further case of the plaintiff in that case, that under some stated circumstances, the mortgage deed came into existence. The defendant contended that full consideration for the mortgage was paid and the mortgage was not executed, as alleged by the plaintiff. The trial Court held that the mortgage deed was not supported by consideration and on appeal, the High Court reversed the decree and dismissed the plaintiff's suit, which was challenged before the Apex Court. The Hon'ble Judges of the Apex Court, considering the facts and circumstances of the case, came to the conclusion "the burden of proving that there was no consideration lay upon the plaintiff", which dictum is squarely applicable to the case on hand. This ratio, coupled with Section 102, prompts us to think, that the defendants have failed in their duty, to prove the defence. As stated in the illustration (b) to Section 102, since the execution of the bond is admitted, if no evidence was given on either side, certainly the plaintiff would succeed, in view of the fact, there is no evidence, to prove the circumstances, under which Ex.A1 came into existence or the recitals stated therein are false. The trial Court, without properly understanding, on whom the burden of proof lies, throwing the burden upon the plaintiff alone, that too not properly analysing the evidence, which we will discuss infra, had dismissed the suit erroneously, warranting our interference.
14. The submission of the learned counsel for the appellant, that for the non-examination of the second defendant, an adverse inference, and presumption against the defendants has to be taken, is of much force. In this case, the first defendant, who is the wife of the deceased- Veerasamy Reddiar, alone has been examined, who had exhibited her ignorance, regarding the execution, passing of consideration under Ex.A1. The proper person who could speak about the execution of the mortgage deed and passing of consideration thereunder should be only the second defendant, being the party to Ex.A1.
15. Section 114 of the Indian Evidence Act empowers the Court to draw certain kind of presumption, on the basis of certain established facts. Section 114(g) says, the Court may presume, that the evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it. Under this provision, an adverse inference could be drawn against the defendants, for failing on their part, to call the material witness viz., the second defendant. Further, when a party fails to call as his witness, the principal person involved in the transaction, who is competent to give a first hand account of the matters of controversy and throw light on them and who could rebut the allegations of the other side, it is legitimate on the part of the Court to draw adverse inference against the party, who failed to produce such principal witness or who failed himself to be examined as a witness, when he is a party, as ruled by the Apex Court in V.K.Saklecha v. Jagjiwan , Engu Lakshmamma v. Vennapuse Chinaa Malla Reddy and in Vidhyadar v. Mankikrao . In the above third cited decision, their Lordships of the Supreme Court has held as follows:
"Where a party to the suit does not appear into the witness box and states his own case on oath and does not offer himself to be cross examined by the other side, a presumption would arise that the case set up by him is not correct.
He did not state the facts pleaded in the written statement on oath in the trial Court and avoided the witness box so that he may not be cross examined. This, by itself, is enough to reject the claim that the transaction of sale between defendant No.2 and the plaintiff was a bogus transaction".
Admittedly, the second defendant abstained from entering into the box, which should give rise to an adverse inference against the defendants, to contend against the recitals in Ex.A1, in view of the admitted position, that the second defendant is the signatory i.e. an executant to Ex.A1.
16. In Enuga Lakshmamma's case, the question of non examination of the material witness was considered by the Apex Court. In that case, the plaintiff challenged the execution of the surrender deed, as if it was executed when he was a minor, in which, the father had signed as an identifying witness in the surrender deed. A question had arisen, whether the plaintiff in the suit was a minor on the date of the execution of the deed of surrender. The father had not been examined, who is a competent witness to speak about the date of birth of the son, as well as the identification made by him, before the Registrar as witness to the deed of surrender. Considering the non examination of the father, the Apex Court had observed as follows:
"In our view, the non examination of the plaintiff's father on the most material issue arising in the case, namely, the birth date of the plaintiff will have to be regarded as fatal to the plaintiff's case and High Court was right in drawing adverse inference against the plaintiff on this aspect".
By applying the above principle, it should be held, the non examination of the second defendant is fatal to the defence, thereby compelling the Court, to draw an adverse inference, as well as presumption under Section 114(g) of the Indian Evidence Act.
17. As submitted by the learned counsel for the respondents, the oral evidence of P.W.1 viz., the plaintiff is not so effective, strengthening Ex.A1. But, we do not find any reason, to discard the oral testimony of P.W.2, who is the husband of P.W.1. In fact, in the written statement itself, it is stated that the plaintiff's husband alone had taken the mortgage deed, in the name of his wife i.e. P.W.1. Law does not prohibit the husband from acting on behalf of his wife, or taking documents in the name of his wife, either advancing his amount or the wife's amount, as the case may be. In fact, Section 120 of the Indian Evidence Act, empowers the husband to be a competent witness, on behalf of the wife. To avoid adverse comments, in this case, both the husband and wife had been examined as P.Ws.1 & 2. The trial Court though reiterated the evidence of P.Ws.1 & 2 in the judgment, in our considered opinion, failed to give a clear cut finding, whether their evidence is worthy of acceptance or not. If the oral evidence of P.Ws.1 & 2 is not acceptable, then it is left to the discretion of the Court, to give a finding on that basis. Without giving a finding, whether the evidence is acceptable or not, in our opinion, the trial Court had given a finding, as if Ex.A1 is not supported by consideration, which fails to stand reasons.
18. The adverse comment made by the learned trial judge, which is sought to be supported by the learned counsel for the respondents, for the non examination of the attestors to Ex.A.1, is not warranted under the facts and circumstances of the case. Section 68 of the Indian Evidence Act mandates a party to examine at least one attesting witness, if alive, if a document is to be relied upon, which requires attestation. No dispute, mortgage deed requires attestation. In this case, none of the attesting witnesses had been examined, except the scribe, P.W.3, who cannot be described as an attesting witness ordinarily, and in view of the further fact, he has not claimed so also. On the above basis, the learned trial Judge has come to the conclusion, as seen from paragraph-6 of the Judgment, that the plaintiff not only failed to prove the execution of the document, by examining the attestor, but also failed to prove the passing of consideration. As far as the first part is concerned, it is not legally sound. Section 68, proviso relieves the party from the examination of the attesting witnesses, if the execution by the person by whom the document purports to have been executed, is not specifically denied. As already seen in paragraph-4 of the written statement, the execution of the mortgage is admitted. Therefore, the non examination of the attestor is immaterial in this case.
19. The learned counsel appearing for the respondents, placing reliance upon the decisions in Ganapathy v. Vaidyalingam (Vol 1984 L.W. 167) and Valliama v. Sivathanu would contend, that the mere acknowledgment of the earlier promissory note in the registered mortgage deed, is not sufficient to prove the passing of consideration, whereas it should be established that there was subsisting liability on the date of the execution of the mortgage deed, which is absent in this case and therefore, it should be held, as rightly held by the trial Court, that Ex.A1 is not supported by consideration.
20. By going through the above two decisions very carefully, as well as by evaluating the materials available on record, we are unable to persuade ourselves, to accept the above submission of the counsel. In Ganapathy v. Vaidyalingam, the question arose, about the acknowledgment of liability, in order to decide the claim, whether it is within the time or not. The same is the position in the case involved in Valliammal v. Sivathu also. In both the cases, it is held, mere admission of past liability is not sufficient, to constitute such an acknowledgment without proof of subsisting liability. The present suit is not based on the promissory note said to have been executed by the deceased Veerasamy Reddiar, treating Ex.A1 as acknowledgment, of liability. Therefore, the question, whether the recital in Ex.A1 about the promissory note would constitute an acknowledgment of liability or not, does not arise for consideration in this case.
21. The reference about the promissory note in Ex.A1 is for passing of consideration. It is the specific recital in Ex.A1, that in order to discharge the debt borrowed under the promissory note, a mortgage deed was executed, thereby extinguishing the promissory note debt. In other words, the passing of consideration under Ex.A1 is the discharge of the promissory note debt. Therefore, the reference regarding the promissory note in Ex.A1, will not come within the meaning of acknowledgment of the previous debt, whereas it should be taken as the consideration. As far as the passing of consideration, under a document is concerned, it may be outright payment, or for the discharge of the earlier debt or undertaking given by the lender to discharge the debt borrowed by the borrower, etc. When a document is executed, mentioning certain kind of consideration, we have to see, whether that consideration is correct and acceptable. If the parties have accepted the mode of passing of consideration, then it should be construed, that the document is supported by consideration. In the case on hand, it is not the case of the plaintiff, that she paid the consideration on the date of the mortgage. Whereas, it is the specific case that under Ex.A1, the previous debt, incurred by the deceased Veerasamy Reddiar elsewhere in the year 1971, was discharged. The mortgage came into existence in the year 1972. It is in evidence, that Veerasamy borrowed the debt, under the promissory note in the year 1971. It is also in evidence that Veerasamy paid interest for one year. Therefore, on the date of the execution of the mortgage deed, it is evident, if the evidence of P.Ws.1 & 2 is acceptable, that there was existing liability. In this view, we find no difficulty in concluding that Ex.A1 is supported by consideration, provided there is acceptable evidence, regarding the execution of the promissory note and the passing of consideration thereunder. Since the suit is one based on Ex.A1, not based on the previous liability, question of acknowledgment does not arise for consideration or question of limitation also does not arise for consideration and in this view, the rulings relied on by the learned counsel for the respondents, failed to come to his aid.
22. In paragraph-3 of the plaint, it is specifically stated, that for purchasing the land of one P.V. Raghava Reddy of Agaram Village, the said Veerasamy Reddiar borrowed a sum of Rs.15,000/- and executed a pronote in favour of the plaintiff. This case appears, to be in a way accepted by the defendants, in the written statement, though not directly. In paragraph-7 of the written statement, it is said, that Veerasamy Reddiar had negotiated to purchase the property from Veerasamy Reddiar for Rs.45,000/- and towards the sale consideration, a sum of Rs.15,000/- had been paid, first at Rs.10,000/-, later on Rs.5,000/- totally Rs.15,000/-. If we read the plaint allegations and the averments in the written statement coupled with the evidence of P.W.2, the irresistible conclusion that should arise, is that Veerasamy Reddiar should have borrowed a sum of Rs.15,000/- from the plaintiff, through her husband, P.W.2, to pay Rs.15,000/-, for the purchase of the property. True, no legal finding could be arrived on the basis of the surmises and conjectures alone and it should have the acceptable legal evidence. The above inference is fully supported by the oral evidence of P.W.2, strengthened by the recitals in Ex.A1, buttressed by the non examination of the second defendant, since though he had an opportunity to deny, having failed, allowed us to hold, that the case of the plaintiff must be true.
23. The plaint reads that the promissory note was discharged on 5.4.1972, and handed over to Veerasamy Reddiar and the second defendant. Paragraph-6 of the written statement denies the above allegation, wherein we find no specific denial, regarding the handing over of the promissory note to the second defendant, though it is specifically said, no pronote was handed over to the Veerasamy Reddiar. It may lead to the presumption or inference, that pronote might have been handed over to the second defendant, since it is not denied specifically, when it is said so. In this context, the non examination of the second defendant, to deny those allegations, looms large, thereby compelling us to draw adverse inference that the second defendant avoided the box only to evade the responsibility. If he had been examined, certainly truth as pleaded in the plaint, might have been brought to surface from the mouth of the second defendant also, and this opportunity is denied to the plaintiff. In this view alone, as hereinbefore mentioned, an adverse inference is an absolute one.
24. Thiru Nagaraj, the husband of the plaintiff as P.W.2 had stated that Veerasamy Reddiar requested a sum of Rs.15,000/- for the purchase of land in 1971, which was arranged by him, through his wife and in fact, amount was paid on bond. P.W.2 further deposed, that in order to discharge the promissory note, Ex.A1 was executed by Veerasamy and others in 1972 and at that time, bond was returned, thereby showing the previous debt was discharged by the execution of A-1. As seen from the cross examination of P.W.2, nothing is elicited, to eclipse the above evidence. In fact, the perusal of the evidence given by P.W.2 would indicate that the payment spoken by P.W.2 and discharged promissory note was handed over to the borrowers, have not been denied. The fact, P.W.2 has failed to give the exact date of promissory note, considering the distance of time, is not sufficient to erase his evidence as unworthy, though he is closely related to the plaintiff. If the oral evidence alone is available, then there is every possibility to ignore his testimony.
25. When there was no dispute between the parties, Ex.A1 came into existence. In Ex.A1, there is a recital about the discharge of the bond for Rs.15,000/-. We find no reason to ignore the recitals. The oral evidence of P.W.2 and the recital in Ex.A1 are read together, the irresistible conclusion that could be drawn by any judicial forum must be, that only to discharge the bond debt, mortgage deed was executed.
26. The case of the contesting defendants that P.W.2 promised to pay the amount after the registration of Ex.A1, failed to pay the same, remained as dead letters, in the absence of supportive evidence. D.W.1, the first defendant is incompetent to speak about Ex.A1, since she was not a party. D2 is a party. Assuming that the plaintiff or her husband failed to pay the amount, if that case is true, in the ordinary course, the defendants ought to have issued a notice, calling upon the plaintiff or her husband as the case may be, setting forth under what circumstances Ex.A1 came into existence, then demanding the amount also or questioning the genuineness of the document itself. The purpose of execution of A-1 is to complete the sale transaction. The position being so, if amount had not been paid, any prudent man ought to have demanded the amount orally, on failure, by issuing notice, which are not available in this case. This could have been well spoken by the second defendant, but he failed to enter into the box for the reasons best known to him. In this view, the non examination of the second defendant, takes its importance in probablising the case of the plaintiff, improbablising the case of the defendants. The first defendant, in her short oral testimony, had stated that her husband had not executed the mortgage for Rs.15,000/-. Even suggestively, she has not deposed that there was no promissory note and the discharge promissory note was not given to Veerasamy Reddiar or the second defendant. Thus, the oral evidence of D.W.1 fails to erase the oral evidence of P.Ws.1 & 2, which is supported by a registered document. The non issue of pre-suit notice and the suit filed on the verge of the limitation could not be the ground to accept the defence. Probably, since it is a secured debt, the plaintiff has not taken immediate action and therefore, the inaction on the part of the plaintiff, for the long period, in the absence of any evidence on the side of the defendants, fails to improve the defence.
27. On the basis of the evidence available on record and the settled position of law, as pointed out by us, we are of the considered opinion, that the plaintiff has proved the case regarding the passing of consideration under Ex.A1, which should follow the plaintiff is entitled to decree as prayed for. Though the defendants have claimed benefits under the Debt Reliefs Act, the same was negatived, not challenged before us.
28. The trial Court unfortunately without considering the case from its proper prospective on the legal position correctly, committed an error, in coming to the conclusion that Ex.A1 is not supported by consideration. In this view, the findings of the trial Court regarding Ex.A1 should be reversed and the suit should be decreed as prayed for. For that purpose, setting aside of the lower Court Judgment is an absolute one and the appeal deserves acceptance.
In the result, the appeal is allowed setting aside the Judgment and decree of the trial Court in O.S.No.78/84, thereby passing a preliminary in favour of the plaintiff as prayed for, with costs throughout. Time for payment three months.