Andhra Pradesh High Court - Amravati
G.Chenga Reddy Guthivaripalle ... vs N.Sugunamma Yerpedu Srikalahasti on 3 December, 2024
1
APHC010396542003
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3369]
(Special Original Jurisdiction)
TUESDAY, THE THIRD DAY OF DECEMBER
TWO THOUSAND AND TWENTY
TWENTY-FOUR
PRESENT
THE HONOURABLE SRI JUSTICE T MALLIKARJUNA RAO
SECOND APPEAL NO: 838/2003
Between:
G.Chenga
henga Reddy Guthivaripalle Tirupathi ...APPELLANT
AND
N Sugunamma Yerpedu Srikalahasti ...RESPONDENT
Counsel for the Appellant:
1. T C KRISHNAN Counsel for the Respondent:
1. P JAGADISH CHANDRA PRASAD The Court made the following JUDGMENT:
1. This Second Appeal, under section 100 of Code of Civil Procedure, 1908 (for short, 'C.P.C'), has been filed by the Appellant/Appellant/Defendant Appellant/Appellant/ against the Decree and Judgment dated 22.10.2002, in A.S.No.27 of 2000 on the file of Senior Civil Judge, Srikalahasti (for short, 'the 1st Appellate Court') confirming the decree and Judgment dated 06.07.2000,, in O.S.No. O.S.No.358 of 1997 on the file of Principal Junior Civil Judge, Srikalahasti (for short, 'the trial Court').
2. The Respondent/Respondent is the Plaintiff, who filed the suit in O.S.No.358 of 1997 seeking recovery of Rs.
Rs.47,565/- being the principal and interest from the Defendant based on the promissory note, dated 15.09.1994 15.09.1994.
23. Referring to the parties as they are initially arrayed in the suit is practical to mitigate confusion and better comprehend the case.
4. The factual matrix, necessary and germane for adjudicating the contentious issues between the parties inter se, may be delineated as follows:
Defendant, acting on his behalf and as the Manager of the joint family, borrowed Rs.35,000/- from Plaintiff on 15.09.1994, agreeing to repay the amount along with interest at 12% per annum and executed a promissory note in favour of Plaintiff on the same date. Despite multiple demands for repayment, the Defendant has failed to make any payments. As a result, the Plaintiff issued a legal notice to the Defendant on 11.01.1995. However, even after receiving the notice, the Defendant has not made any payment.
5. In the written statement, the Defendant denied executing the promissory note for Rs.35,000/- on 15.09.1994. He asserted that he borrowed Rs.25,000/- from Plaintiff on the same day, and Plaintiff had obtained Defendant's signature on blank papers with revenue stamps, assuring that the promissory note for Rs.25,000/- would be executed. The Plaintiff later fabricated a promissory note for Rs.35,000/- and filed the suit based on that. The Plaintiff issued a legal notice demanding Rs.35,000/-, despite only Rs.25,000/- being borrowed. The promissory note was a sham and nominal, and he had only borrowed Rs.25,000/-. The Defendant did not respond to the notice and admitted to paying Rs.25,000/- in the presence of mediators, which the Plaintiff acknowledged. He made subsequent payments totalling Rs.15,3000/- including cheques for Rs.5,000/- each. The Defendant further asserted that he is an agriculturist entitled to counter-interest on the payments made. Additionally, he asserted that he paid Rs.10,000/- earlier without a receipt, based on Plaintiff's oral assurance that the amount would be later endorsed on the promissory note. Therefore, Defendant asserted that the entire debt of Rs.25,000/- had been discharged and requested that the suit be dismissed with costs.
36. Plaintiff filed a rejoinder, asserting that Defendant borrowed Rs.35,000/- under the suit promissory on 15.09.1994, agreeing to repay with interest at 12% p.a. On the same day, Defendant also borrowed Rs.25,000/- and executed a separate promissory note for repayment with the same interest rate. Plaintiff denied the allegations in Defendant's written statement, asserting that Defendant has not repaid any amount as claimed. The Plaintiff further asserts that the Defendant discharged the Rs.25,000/- debt and its interest, and there is no outstanding balance for that amount. The Plaintiff also denied having obtained the Defendant's signature on any blank promissory note. Both promissory notes were executed on the same day, and the allegations in the written statement are fabricated. Plaintiff returned the discharged Rs.25,000/- promissory note to the Defendant. The Defendant did not make any payment of Rs.5,000/- on 20.03.1995 towards the suit promissory note debt, making the Defendant liable for the entire suit debt.
7. Based on the above pleadings, the trial Court has framed the following issues:
i. Whether the discharge pleaded by the Defendant is true and correct?
ii. Whether the Defendant is an agriculturist? iii. Whether the Defendant is liable to pay entire suit amount to the Plaintiff?
iv. To what relief?
The trial Court also framed the following additional issues:
i. Whether the suit promissory note is executed by the Defendant for a sum of RS.35,000/- in favour of the Plaintiff on 15.09.1994?
ii. Whether the Defendant received only Rs.25,000/- on 15.09.1994 from the husband of the Plaintiff and the same was discharged?
iii. To what relief?
48. During the trial, P.Ws.1 to 5 were examined and marked Exs.A.1 to A.9 on behalf of the Plaintiff. Conversely, on behalf of the Defendant, DWs.1 and 2 were examined and marked Exs.B.1 to B.7.
9. After completing the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs against the Defendant for Rs.47,565/- with interest at 12% per annum from the date of suit till the date of decree and thereafter at 6% per annum from the date of the decree till realization on Rs.35,000/-.
10. Aggrieved by the same, the Defendant filed an Appeal in A.S.No.27 of 2000 on file of the 1st Appellate Court. The 1st Appellate Court, being the final fact-finding Court, framed the following points for consideration:
i. Whether the Defendant has discharged the entire suit debt in favour of the Plaintiff?
ii. Whether the Defendant had executed the suit promissory note in the circumstances mentioned in the written statement? iii. Whether the Appeal can be allowed?
11. The 1st Appellate Court, after scrutinizing oral and documentary evidence adduced on behalf of both sides, dismissed the Appeal by its Judgment and Decree dated 22.10.2002. Assailing the same, the Defendant preferred the present Second Appeal.
12. Heard Sri. T.C. Krishnan learned Counsel representing the Appellant / Defendant, and none represented the Respondent / Plaintiffs.
13. Despite being granted several adjournments, no representation has been made on behalf of the Respondent / Plaintiff. Therefore, the matter is deemed to have been heard on behalf of the Respondent.
14. Based on the Appellant's contentions, the following substantial questions of Law is involved in this Second Appeal:
5i. Whether both the Courts below draw the inference erroneously under section 118 of the Negotiable Instrument Act and decreed the suit?
ii. Whether both the Courts below erroneously throw the burden on the Defendant instead of Plaintiff?
iii. Whether both the Courts below committed error under section 118 of N.I Act, "until the contrary is proved" suit can't be decreed on the basis of presumption under section 118 of N.I.Act?
iv. Whether both the Courts below failed to frame proper issues to decide the suit when the Defendant specifically pleaded that the suit promissory note was not executed by him and no consideration was passed on it?
v. Whether both the Courts below committed error in the application of mind on the evidence available on the record?
15. Before delving into the matter, since the Appeal is filed under Sec.100 of C.P.C., this Court must see the scope of Section 100 of C.P.C.
16. In H.P.Pyarejan V. Dasappa (dead) by L.Rs. and others 1 , the Hon'ble Supreme Court held that:
Under Section 100 of the Code (as amended in 1976), the jurisdiction of the High Court to interfere with the judgments of the courts below is confined to hearing on substantial questions of Law. Interference with the finding of fact by the High Court is not warranted if it involves re-appreciation of evidence (see Panchugopal Barua v. Umesh Chandra Goswami (1997) 4 SCC
713) and Kshitish Chandra Purkait v. Santosh Kumar Purkait (1997) 5 SCC 438)......
17. Considerations in Section 100 of C.P.C. arise only when there is a substantial question of Law, not mere such questions of Law or one based on facts. However, it has to be borne in mind that in case of misapplication of Law and improper appreciation of evidence on record, particularly documentary evidence, it is the bounden duty of the High Court sitting in 1 2006 (3) ALT 41 (SC) 6 Second Appeal to consider such questions that are substantial in terms of Law.
18. In the second Appeal, while exercising jurisdiction under Section 100 of the C.P.C., this Court must confine itself to the substantial question of Law involved in the Appeal. This Court cannot re-appreciate the evidence and interfere with the findings of the Courts below, where the Courts below recorded the findings judicially by appreciating both oral and documentary evidence. Further, a substantial question of Law is the sine qua non for the exercise of jurisdiction. This Court cannot substitute its own opinion unless the findings of the Courts below are manifestly perverse and contrary to the evidence on record.
19. The Plaintiff's husband testified as PW.1, while the Plaintiff herself was examined as PW.5. Additionally, the Plaintiff examined the attesting witnesses, PW.2 (N. Gopal Naidu) and PW.3 (P. Venkataramana Naidu), along with the scribe, PW.4 (S. Sambaiah Naidu). PWs. 2 to 4 corroborated the testimony of PWs.1 and 5.
20. PWs.1 and 5 assert that the Defendant borrowed Rs.60,000/- on 15.09.1994, executing two promissory notes, one for Rs.35,000/- and the other for Rs.25,000/-. The Defendant repaid the amount due under the Rs.25,000/- promissory note and took back the promissory note from the Plaintiff. According to Plaintiff, Defendant borrowed a sum of Rs.35,000/- under Ex.A.2 promissory note dated 15.09.1994, agreeing to repay it with interest at a rate of 24% per annum. Defendant, however, contends that the consideration of Rs.25,000/- was paid in cash and that he provided two cheques for Rs.10,000/- and Rs.15,000/- to cover the consideration for promissory note. Defendant claims to have paid these amounts through three cheques of Rs.5,000/- each, cash of Rs.1,000/-, and another cheque for the remaining balance. However, PW.5 (Plaintiff) testified that the cheque was dishonoured, and she returned it to Defendant. The Defendant then paid the 7 remaining amount in cash and retrieved the dishonoured cheque. Despite repeated demands, the Defendant failed to make any payment towards the Rs.35,000/- promissory note (Ex.A.2). As the Defendant was unable to repay the amount, Plaintiff, represented by her husband, acting as the General Power of Attorney (GPA) holder, filed the suit. Due to her illness (cancer), Plaintiff executed Ex.A.1 GPA in favour of her husband to file the suit on her behalf. The Defendant has not challenged the authenticity of Ex.A.1.
21. The Defendant, testifying as DW.1, denied borrowing any amount from the Plaintiff. He claimed that he requested PW.1 to lend him Rs.25,000/-, and at PW.1's request, he signed a revenue stamp affixed to Ex.A.2. However, DW.1 stated that he was unaware of the contents of Ex.A.2, and did not know who scribed or attested the document, nor when or where it was done. DW.1 further stated that he first became aware of the Plaintiff's claim regarding Ex.A.2 through the legal notice, Ex.A.3. He also asserted paying Rs.500/- per month as interest on the loan at the rate of 24% per annum, asserting instead that PW.1 demanded an interest rate of 60% per annum. DW.1 contended that three months after making a payment of Rs.10,000/-, he requested PW.1 to return Ex.A.2, but PW.1 insisted on maintaining the debt at 60% per annum and refused to return the promissory note. According to DW.1, he operates a rice mill in their village. Notably, DW.1 did not issue any reply to the legal notice, Ex.A.3, nor did he send any notice to PW.1 demanding the return of the promissory note after the debt of Rs.25,000/- was supposedly discharged. DW.1 also admitted to sending Exs.A.5 and A.6 letters to the Plaintiff.
22. It is undisputed that before filing the suit, Plaintiff issued a notice, as evidenced by Ex.A.3, and relied on Ex.A.4, the postal acknowledgement, to show service of the notice. Plaintiff further referenced Exs.A.5 and A.6, letters sent by Defendant acknowledging the repayment of Rs.25,000/- towards the debt. When questioned about the source of the Rs.60,000/- loaned to Defendant, Plaintiff explained that she had sold plots in Tirupati and used the proceeds to lend the amount. During cross-examination, it was revealed that 8 PW 4 had scribed both promissory notes and that PWs.2 and 3 had attested them. The Plaintiff, as PW.5, testified that she did not know the Defendant before the execution of the suit promissory note. However, she clarified that PWs.2 to 4, who were neighbours and from the same community, were acquainted with her, with PW 3 being a relative. PW.1, the Plaintiff's husband, admitted during cross-examination that the Plaintiff had operated a pawnbroker business with an initial investment of Rs.1,00,000/-. PW.3, the attestor, was PW.1's junior paternal uncle's daughter's son. Ex.B.1 (receipt dated 11.10.1995) and Exs.B.2 and B.3 (postal acknowledgements) were marked through PW.1. However, PW.1 denied the suggestion that he had a practice of taking promissory notes for amounts greater than what was lent. PWs.2 to 4 consistently supported the Plaintiff's case, providing detailed information about the suit transaction. Notably, PWs.2 and 4 are relatives of PW.3, and both PWs.3 and 4 admitted that they did not know the Defendant before the execution of Ex.A.2.
23. DW.2, the Manager of Andhra Bank, Yerpedu, K. Suresh Babu, testified that the Defendant encashed two cheques, one for Rs.15,000/- and another for Rs.10,000/-. Ex.B.4 is a Xerox copy of the cheque dated 15.09.1994 for Rs.15,000/-, while Ex.B.5 is a Xerox copy of the cheque dated 03.10.1994 for Rs.10,000/-. These amounts were recorded in the Plaintiff's ledger sheet, as evidenced by Ex.B.6, a copy of the ledger entry under the Plaintiff's name.
24. According to PW.5, Plaintiff, Defendant discharged the entire debt of Rs.25,000/- before the issuance of the legal notice Ex.A.3. The notice, dated 11.01.1995, was followed by Exs.A.5 and A.6, letters from Defendant to the Plaintiff, dated 21.04.1995 and 26.06.1995, respectively, in which the Defendant stated that he was sending payment by cheque towards the Rs.25,000/- debt. It is also undisputed that the dishonoured cheque was issued after the issuance of Ex.A.3, as evidenced by Ex.A.7 (Return advice dated 18.07.1995), Ex.A.8 (Debit advice from Andhra Bank, Yerpedu, dated 08.08.1995), and Ex.A.9 (Return advice from Andhra Bank, Tirupati). The 9 evidence on record indicates that the payments made by Defendant were related to the Rs.25,000/- promissory note. Despite the Defendant's written statement claiming that he was paying Rs.500/- per month towards interest on Rs.25,000/- at 24% per annum, no corroborating evidence was provided. Furthermore, Defendant failed to explain the mode or particulars of these payments. If the Defendant's contention were truthful, he would have issued a reply to Ex.A.3 or at least responded to the Plaintiff's legal notice. Having admitted his signature on Ex.A.2, it would have been reasonable for Defendant to have immediately issued a notice to Plaintiff after discharging the debt under the Rs.25,000/- promissory note or, at the very least, to have replied to Plaintiff's notice.
25. The material on record indicates that Defendant does not claim to have borrowed Rs.35,000/- from Plaintiff. Instead, he contends that PWs.2 and 4 did not testify that Defendant borrowed Rs.25,000/- on 15.09.1994 and executed the suit promissory note. It is important to note that the suit pertains to the Rs.35,000/- promissory note, and as such, the Plaintiff and her witnesses were not supposed to testify concerning the promissory note transaction for Rs.25,000/-. As Defendant raised the issue of Rs.25,000/- debt in relation to the suit transaction, Plaintiff was compelled to provide evidence concerning the promissory note transaction involving the Rs.25,000/-. Upon reviewing the evidence, the 1st Appellate Court concluded that the Defendant had indeed executed the suit promissory note (Ex.A.2) for Rs.35,000/-. However, to avoid liability for this debt, Defendant claimed he had only borrowed Rs.25,000/-, asserting that he signed blank papers and discharged the Rs.25,000 debt.
26. It is well-established in Law that a mere denial of the receipt of consideration does not constitute a valid defence. Defendant has failed to present any substantial reason or evidence to challenge the credibility of the testimonies of PWs.1 to 5 regarding executing the Ex.A.2 promissory note. The evidence of PWs.1 to 5 was consistent regarding executing the Ex.A.2 10 promissory note by the Defendant. Despite extensive cross-examination, nothing emerged to undermine the evidence of PWs.1 to 5 about executing the promissory note. The Plaintiff and her witnesses possess no motive to fabricate the suit promissory note; similarly, PWs.2 to 4 have no compelling reason to testify falsely against the Defendant's interests, as they would derive no benefit from endorsing the Plaintiff's claim unless there exists a kernel of truth within it. The evidence adduced by the Plaintiff stands, by any measure, adequate to substantiate the veracity, legitimacy, and binding nature of the suit promissory note denoted as Ex.A.2. Furthermore, the Defendant has executed a promissory note and failed to establish the circumstances under which he executed Ex.A.2 without receipt of consideration amount without payment. Furthermore, any rebuttal could have been based either through direct evidence or by proving the preponderance of probabilities. In this instance, the Defendant failed to rebut the presumption even by the preponderance of probabilities.
27. Even otherwise, the Defendant's contentions are liable to be rejected. A perusal of the section 20 of the N.I. Act manifests that a paper stamped in accordance with the Law, either wholly blank or written thereon an incomplete negotiable instrument, gives the holder prima facie authority to make or complete any amounts specified therein not exceeding the amount covered by the stamp. Accordingly, it is open to a person receiving a blank inchoate instrument to complete it in favour of anyone else.
28. The Division Bench of the Composite High Court of Andhra Pradesh dealt with this aspect in Duggineni Seshagiri Rao vs Kothapalli Venkateswara Rao2. As per the ratio laid down in the decision, it is clear that even if the name of the person who advanced the amount is kept blank and filled, there is no consequence when the execution of the note is duly established.
22001 6 ALT 95 11
29. When one reads Section 4 in conjunction with Sections 20 and 42, this is the only interpretation that can be placed on the meaning of 'promissory note' under Section 4 of the Act. Section 20 states that when a person signs and delivers to another person a paper stamped in accordance with the Law relating to a negotiable instrument, it becomes a negotiable instrument, even if it is wholly blank or written with incomplete particulars. Similarly, Section 42 even recognizes an instrument issued by a fictitious person as a valid instrument. Although Section 42 relates to bills, it also accepts that an acceptor of a bill of exchange, even if drawn in a fictitious name, would create a genuine claim in favour of the holder. Therefore, even if a negotiable instrument is incomplete, it would be legal, provided it satisfies the first three conditions.
30. The Defendant's version does not effectively rebut the presumption established under Section 118 of the Negotiable Instruments Act, 1881 (for short, 'N.I. Act'). In light of the defence presented and the evidence submitted, the Defendant failed to discharge the initial burden of proof to demonstrate the non-existence of consideration. Moreover, no other evidence refutes the presumption provided under Section 118 of the N.I. Act.
31. The Hon'ble Supreme Court, in several cases, has held that the exercise of powers under Section 100 of C.P.C. can interfere with the findings of fact only if the same is shown to be perverse and based on no evidence. Some of these judgments are Hajazat Hussain V. Abdul Majeed & others. 3, Union of India V. Ibrahim Uddin 4 , and Vishwanath Agrawal V. Sarla Vishwanath Agrawal5.
32. The findings of the trial Court and the 1st Appellate Court, which affirm that Plaintiff has successfully established the execution of the suit promissory note by Defendant after receiving the consideration amount, are neither 3 2011 (7) SCC 189 4 2012 (8) SCC 148 5 2012 (7) SCC 288 12 perverse nor a result of misinterpretation of documents or misreading of evidence. After careful reading of the material on record, this Court finds that the trial Court and the 1st Appellate Court concurrently decreed the Plaintiff's suit by recording all the findings of facts against the Defendant enumerated above, and the findings were neither against the pleadings nor evidence nor against any provisions of Law.
33. This Court discerns no perversity in the Judgments rendered by the learned trial Court and the 1st Appellate Court. The findings and reasoning provided by both the Courts are consistent with established legal principles. Both the Courts meticulously reviewed all the evidence available on record.
34. This Court considers that the conclusions of the trial Court and the 1st Appellate Court are not subject to interference under Section 100 of C.P.C. In these circumstances, upon consideration of the decrees and judgments of the trial Court as well as the 1st Appellate Court, this Court is satisfied that the arguments presented pertain solely to the factual matrix and do not involve any substantial questions of Law. The Appellant has not raised any legal issues in this Second Appeal that warrant consideration. There is no sufficient ground to interfere with the Judgment of the trial Court and the 1st Appellate Court. There is no question of Law, let alone the substantial questions of Law, involved in this Second Appeal, and therefore, the Appeal is liable to be dismissed.
35. As a result, this Second Appeal is dismissed without costs. Consequently, the Judgment dated 22.10.2002 of the learned Senior Civil Judge, Srikalahasti, in A.S.No.27 of 2000, is hereby affirmed.
Miscellaneous petitions pending, if any, in this Appeal, shall stand closed.
_____________________________ JUSTICE T. MALLIKARJUNA RAO Date: 03.12.2024 SAK 13 THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO SECOND APPEAL NO.838 OF 2008 Date: 03.12.2024 SAK