Madras High Court
Unknown vs Dr.T.D.Naidu
Author: N.Anand Venkatesh
Bench: M.M.Sundresh, N.Anand Venkatesh
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on
30.07.2018
Delivered on
02.08.2018
CORAM:
The Honourable Mr.Justice M.M.SUNDRESH
and
The Honourable Mr.Justice N.ANAND VENKATESH
Original Side Appeal No.58 of 2015
and
M.P.No.1/2015 & CMP No.12554/2017
The Royal Bank of Scotland NV,
1, KRM Towers, Harrington Road,
Chetpet, Chennai-600 031. ... Appellant
.Vs.
Dr.T.D.Naidu ... Respondent
Original Side Appeal is filed under Clause 15 of Letters Patent r/w Order 39 Rule 2 of O.S Rules and Section 96 of Code of Civil Procedure against the judgment and decree dated 19.11.2013 in C.S.No.47 of 2006.
For Appellant : Mr.AR.L.Sundaresan, Sr.counsel
for Ms.A.L.Ganthimathi
For Respondent : Mr.N.L.Rajah, Sr.counsel
for Mr.C.Ramesh
JUDGMENT
N.ANAND VENKATESH., J.
This intra Court Appeal has been filed by the defendant challenging the judgment and decree passed by the learned Single Judge in C.S.No.47 of 2006, dated 09.11.2013, decreeing the suit filed by the respondent for a sum of Rs.30 lakhs with interest.
2. The case of the respondent/plaintiff in brief:
2.1.The respondent who is running an Engineering College and Trust deposited a sum of Rs.20 lakhs on 23.01.1998, as a fixed deposit with the appellant Bank for a period of one month at the rate of 15%. The appellant Bank issued confirmation of deposit and allotted an account number. On 24.01.1998, the respondent deposited another sum of Rs.10 lakhs in the same manner with the appellant Bank and the appellant Bank allotted a separate fixed deposit number and issued confirmation of deposit. The respondent made a further deposit of Rs.30 lakhs on 24.01.1998, by way of cash in the fixed deposit for a period of two months with an interest rate of 18.5%. A separate fixed deposit number was allotted by the appellant Bank and the appellant Bank also issued confirmation of deposit.
2.2.The appellant Bank paid a sum of Rs.30,91,232.87/- [Rupees Thirty Lakhs ninety One Thousand Two Hundred and Thirty Two and Paise Eighty Seven Only] on 25.03.1998, on maturity of the fixed deposit made for a sum of Rs.30 lakhs. However, the earlier two fixed deposits for Rs.20 lakhs and Rs.10 lakhs were not paid even after the maturity period. The respondent sent a letter dated 26.08.2003, to the appellant Bank asking them to refund the two fixed deposits along with interest however the appellant Bank did not refund the amounts due under the fixed deposits. There was exchange of notice between the parties and ultimately the above said suit came to be filed by the respondent seeking for refund of the fixed deposits with interest.
3. The case of the defendant/appellant in brief :
3.1.The Bank has admitted the two deposits for Rs.20 lakhs and for Rs.10 lakhs made by the respondent. However since there was an advantage to consolidate these two fixed deposits and make it a single deposit for Rs.30 lakhs and increase the period of the deposit to two months, with an interest of 18.5%, the appellant Bank on request made by the respondent, consolidated the fixed deposit. On maturity, this amount was repaid with interest on 25.03.1998. The respondent never made any cash deposit as claimed by him and the additional Rs.30 lakhs fixed deposit claimed by the respondent was unsustainable.
3.2.The respondent raised this issue after a period of more than five years and gave a complaint to the Police, which was referred to the Central Crime Branch, Chennai, who after a thorough investigation found that there is no substance in the complaint filed by the respondent and closed the case as mistake of fact, which was also filed before the Competent Court.
3.3.The Reserve Bank of India also appointed their Officers to examine the documents in the appellant Bank and scrutinize the entire records of the appellant Bank during the relevant period. The Reserve Bank of India had given their findings to the effect that the Bank had not received the additional sum of Rs.30 lakhs, as claimed by the respondent. Therefore, the appellant Bank had taken the defense of total denial of the receipt of Rs.30 lakhs in cash from the respondent towards the fixed deposit.
4.The learned Single Judge based on the pleadings framed the following issues:
1.Whether the plaintiff on 23.01.1998 and 24.01.1998 made deposits with the Deposit Bank, who in turn, issued Fixed Deposit Receipts relating to such deposits or whether the deposit slip dated 24.01.1998 for Rs.30 lakhs is a fabricated document?
2.Whether the present suit is barred in view of the learned Additional Chief Metropolitan Magistrate accepting the final report of the investigating officer in the criminal case concerned as against the Defendant as a mistake of fact on 21.05.2005?
3.Whether the Plaintiff is entitled to recover a sum of Rs.30 lakhs from the Defendant?
4.Whether the Plaintiff is entitled to claim interest at 24% p.a. on the sum of Rs.30 lakhs?
5.Whether the Plaintiff is entitled to the suit amount of Rs.45,60,000/- with subsequent interest at 24% p.a. on Rs.30 lakhs from the date of the plaint till the date of realization?
5.The respondent/plaintiff examined himself as PW-1 and marked Exs.P-1 to P-9 in order to substantiate his case. The appellant/defendant examined itself Head-Retail Operations [Tamil Nadu and Andra Pradesh] on their side and marked Exs.D-1 to D-11 in order to defend themselves against the claim made by the respondent/plaintiff.
6.The learned Single Judge on examination of the pleadings, the oral and documentary evidence, came to a conclusion that the respondent/plaintiff has proved the case and answered all the issues in his favour and consequently decreed the suit as indicated herein above.
7. SUBMISSIONS:
7.1.Mr.AR.L.Sundaresan, learned Sr.counsel for Ms.A.L.Ganthimathi, learned counsel appearing for the appellant, made the following submissions:
The fixed deposit, even according to the respondent, matured on 25.03.1998, the claim was made for the first time only on 26.08.2003 [Ex.P-4] and therefore the suit filed by the respondent in the year 2005 is barred by limitation. Even though the limitation was not made an issue before the Trial Court, it can be made an issue at any point of time by virtue of Section 3 of the Limitation Act.
The respondent has taken the letter dated 28.08.2003 [Ex.P-5] written by the appellant Bank to be an acknowledgement of the liability and created a cause of action for filing the suit. This acknowledgement was admittedly not made within three years and therefore even assuming this letter to be an acknowledgement of liability, the same will not in any way save the limitation which came to an end in the year 2001 itself and acknowledgement has happened beyond three years.
The Statement of Accounts with certificate under Section 2-A of the Bankers' Books Evidence Act, 1891, which was marked as Ex.D-3, clearly shows that for the debit entry of Rs.20 lakhs and Rs.10 lakhs, there is a corresponding reversal credit entry made in the Books of Accounts which clearly shows that the first two fixed deposits were closed and was consolidated into the single fixed deposit of Rs.30 lakhs and that also gets reflected in the Books of Accounts. Therefore, the learned counsel submitted that there was a categorical evidence before the Court falsifying the claim made by the respondent.
The inspection that was conducted by Reserve Bank of India based on the complaint given by the respondent and the reply given by the appellant Bank, marked as Exs.D-4, D-5 and D-6 (series) and the ultimate findings of the Reserve Bank of India to the effect that the appellant Bank had not received the additional sum of Rs.30 lakhs as claimed by the respondent, will vindicate the defense of the appellant Bank.
The complaint given by the respondent before the Police and the Final Report filed by the Central Crime Branch, Chennai marked as [Ex.D-11] categorically strengthens the defense taken by the appellant Bank and falsifies the claim made by the respondent since the Central Crime Branch ultimately found that there was no substance in the complaint made by the respondent against the appellant Bank.
The learned Senior counsel also brought to the notice of the Court the evidence of PW-1 wherein he has clearly accepted that he is an income tax assessee and has also filed the income tax returns for the relevant assessment years. But, he did not produce before the Court the relevant income tax returns to prove the payment of Rs.30 lakhs to the appellant Bank. By pointing out to the evidence of PW-1, the learned senior counsel contended that no justifiable answer was given by the respondent for the delay of more than 5= years to make a claim for refund of the fixed deposit.
The learned senior counsel further contended that even if the fixed deposit is taken to be a negotiable instrument, the appellant Bank has discharged its onus by showing from the evidence of the respondent along with the documents filed before the Court, that the existence of the fixed deposit claimed by the respondent was improbable and the onus shifted on the respondent to prove his case on payment of Rs.30 lakhs by cash, which he failed to discharge and therefore the respondent is not entitled to make any claim in the above suit. To support his contention, the learned senior counsel relied upon the following judgments:
1) Kundan Lal Rallaram .Vs. Custodian, Evacuee Property, Bombay reported in [AIR 1961 SCC 1316 ]
2) M.S.Narayana Memon Alias Mani .Vs. State of Kerala and Another reported in [(2006) 6 SCC 39].
The learned senior counsel in order to substantiate his arguments on limitation relied upon the following judgments:
1) Valliamma Champaka Pillai .Vs. Sivathanu Pillai and Others reported in [(1979) 4 SCC 429].
2) V.S.Manickasundaram .Vs. V.S.Ramalinga Gounder & Co. by Partner, Palanivelu, Park Road, Erode and Others reported in [2004 (2) CTC 624].
3) State of Gujarat .Vs. Kothari and Associates reported in [(2016) 14 SCC 761].
7.2.Per contra, Mr.N.L.Rajah, learned senior counsel appearing for Mr.C.Ramesh, learned counsel for the respondent made the following submissions:
The appellant never raised the issue of limitation even in the written statement and no issue was framed in the suit on limitation and for the first time an attempt is made to raise the issue of limitation in the appeal and the same is not sustainable.
When a limitation is a pure question of law and from the pleading itself it becomes apparent that the suit is barred by limitation, only then the Court can deal with the said issue even when it is not raised, by virtue of Section 3 of the Limitation Act. In the instant case, the limitation is a mixed question of fact and law and Article 22 of the Limitation Act will apply in the present case and the limitation itself will start running only from the time when the demand is made and in this case admittedly the demand was made only on 26.08.2003. Therefore, the suit is well within the time. To substantiate this argument on limitation, the learned senior counsel relied upon the following judgments.
1) Narne Rama Murthy .Vs. Ravula Somasundaram and Others reported in [(2005) 6 SCC 614].
2) U.P.State Road Transport Corpn. .Vs. Omaditya Verma and Others reported in [(2005) 6 SCC 616] .
3) R.Kumar & Co., .Vs. Chemicals Unlimited reported in [2000 SCC Online Bombay 738] .
4) Basant Lal Agarwal .Vs. Lloyds Finance Ltd reported in [(2003) SCC On-line Bombay 1129].
The learned senior counsel further contended that Exs.P-1, P-2 and P-3 clearly shows that there are three independent fixed deposits totalling a sum of Rs.60 lakhs and if at all the first two fixed deposits had been consolidated, the same would have been cancelled and there was no reason for the respondent to have the original receipts of Rs.20 lakhs and Rs.10 lakhs which was paid by way of cheque. This itself shows that both these deposits remain with the appellant Bank.
The availability of Rs.60 lakhs paid by the respondent towards fixed deposit is evident from Ex.P-5 letter and also the evidence of DW-1 who was examined on behalf of the appellant Bank.
DW-1 in his evidence has categorically stated that Mr.Sivasubramanian who received the fixed deposit from the respondent on behalf of the appellant Bank continues to work in the appellant Bank. However, he was not examined by the appellant Bank for reasons best known to the appellant Bank. The best witness available who had personal knowledge about the fixed deposit made by the respondent, was not examined by the appellant Bank and therefore adverse inference must be drawn against the appellant Bank. To substantiate this argument, the learned senior counsel relied upon the following judgments:
1) Man Kaur (Dead) By Lrs. .Vs. Hartar Singh Sangha reported in [(2010) 10 SCC 512].
2) Grasim Industries Limited and Another .Vs. Agarwal Steel reported in [(2010) 1 SCC 83] .
The learned senior counsel further contended that the learned Single Judge has dealt with each and every issue based on the evidence available on record and there is no ground to interfere with the findings of the learned Single Judge and the appeal is liable to be dismissed.
8. POINTS FOR CONSIDERATION :
1.Whether the suit filed by the respondent/plaintiff is barred by the law of limitation?
2.What is the effect of the Statement of Accounts filed by the appellant Bank under the Bankers' Books Evidence Act, 1891 ?
3.Whether the appellant Bank has discharged the onus by disproving the claim made by the respondent and whether the respondent on the onus being shifted has established the claim?
4.Whether the judgment and decree of the learned Single Judge deserves to be interfered with in this appeal?
9. DISCUSSION:-
9.1.The moot question that needs to be unraveled in this appeal is whether the respondent apart from making a fixed deposit of Rs.20 lakhs and Rs.10 lakhs by way of cheque, also deposited a further sum of Rs.30 lakhs by way of cash with the appellant Bank? Admittedly in this case, the respondent initially made a deposit of Rs.20 lakhs by way of cheque and a further sum of Rs.10 lakhs also by way of cheque on 24.01.1998, for a period of one month with the maturity date on 23.02.1998 carrying an interest of 15%. It is the case of the respondent that these two fixed deposits were not repaid back with interest even after the maturity date. It is the further case of the respondent that Rs.30 lakhs that was paid by way of cash and which was a fixed deposit for a period of two months with the maturity date on 25.03.1998, carrying the interest of 18.5%, was repaid back by the appellant Bank with interest on 25.03.1998. The appellant Bank has taken a defense that Rs.20 lakhs and Rs.10 lakhs which was deposited by the respondent was consolidated and made into a single fixed deposit of Rs.30 lakhs for a period of two months, at the request of the respondent since it carried a higher interest rate of 18.5% interest.
9.2.Even though, the maturity date for the two fixed deposits fell due on 22.02.1998 and 23.02.1998, respectively, the respondent chose to remain silent for more than 5 = years and the first letter that was sent by him in this regard was on 26.08.2003. It is also important to note that on maturity of the fixed deposit for Rs.30 lakhs, the appellant Bank repaid back the entire deposit with interest on the due date. Even at this point of time, the respondent did not choose to ask the appellant Bank as to why the earlier two deposits for Rs.20 lakhs and 10 lakhs was not repaid even though they fell due on 22.02.1998 and 23.02.1998.
9.3.In the evidence, when the respondent was questioned about the same, he has stated that the Bank Officials had obtained his signature in the deposit renewal forms. If the deposits were renewed, the respondent would have had the receipt/acknowledgement for the renewal. However, the respondent did not have any material to support the so called renewal. In fact that was not even his case in the pleadings. At one stage in the evidence, the respondent even goes to the extent of saying that the deposits were renewed periodically by the appellant Bank and apparently this statement was made to save himself from limitation.
9.4.The respondent has attempted to create a cause of action for this suit through Ex.P-5. According to the respondent, Ex.P-5 is an acknowledgement of liability by the appellant Bank. A look at Ex.P-5 shows that it merely provides information on three fixed deposit numbers and amounts that stands in the name of the respondent. The moment the respondent started making claims against the appellant Bank for repaying the fixed deposit of Rs.30 lakhs with interest, the appellant Bank immediately issued a legal notice on 11.09.2003 [Ex.P-7] and categorically informed the respondent that he is trying to take advantage of a clerical mistake that has occurred in communication and is trying to unjustly enrich himself.
9.5.The respondent therefore started giving complaint to the Reserve Bank of India and parallely to the Police. A careful look at Ex.D-5 and D-6 (series) would disclose that the appellant Bank has specifically addressed the queries of RBI and have taken a consistent stand that the respondent did not make any cash deposit for Rs.30 lakhs and the fixed deposit of Rs.30 lakhs was due to the consolidation of the two fixed deposits made for Rs.20 lakhs and Rs.10 lakhs respectively. The appellant Bank also took a categorical stand that if the payment had been made by way of cash, there will be a cash deposit slip for Rs.30 lakhs with the stamp of the Bank and the fact that there was no such pay slip, shows that the respondent did not make any cash deposit. The Reserve Bank of India on scrutiny of all the documents and the reply given by the appellant Bank, closed the complaint.
9.6.Insofar as the Police Complaint is concerned, a thorough investigation was made by the Central Crime Branch, Chennai and a Final Report was also filed, which was marked as Ex.D-11. The Final Report has dealt with in detail about the claim made by the respondent and found that the respondent's complaint is not bonafide and he has made attempts to take advantage of a letter inadvertently issued by the staff of the Bank. This Final Report was filed before the Court and the case was closed as mistake of fact. It is true that the findings in the Final Report will not bind a Civil Court. However, it can be looked into as a relevant material since it was the respondent who was responsible for initiating proceedings against the appellant Bank both before the RBI and the Police. After through investigation, certain materials have come out on investigation and certainly this Court can take note of it even though they are not binding on this Court.
9.7.With the above discussion on facts, we will now proceed to answer the points for consideration.
Point No.1 :-
10.Insofar as the issue of limitation is concerned, this Court does not want to go into this question for the first time at the stage of appeal. It is true that the question of limitation can be gone into by a Court, even without the same being raised as an issue, where on a bare reading of the plaint, this Court finds that the claim is barred by limitation. In this case limitation was not taken as a defense in the written statement and was not made as an issue before the learned Single Judge. What will be the effect of Article 22 to the facts of this case will involve certain findings on fact. In other words in this case, the question of limitation is intertwined into a mixed question of fact and law. What will be the effect of Article 22 on mere deposit, on a fixed deposit for a specified period, whether the deposit is payable only on demand etc., requires findings on fact. The Appellate Court should not venture to undertake this exercise for the first time in appeal on a issue which involves a mixed question of fact and law. Therefore, there is no need to analyse the judgment relied upon by the learned senior counsel appearing on either side in this regard. The first point for determination is answered accordingly.
Point No.2 :-
11.The appellant Bank has marked the statement of accounts as Ex.D-3. The same has been also been certified under Section 2 (A) of the Banker's Books Evidence Act, 1891. These are books of accounts which are kept by the appellant Bank in their regular course of business.
Section 4 of The Banker's Books Evidence Act, reads as follows:
4.Mode of proof of entries in banker's books.- Subject to the provisions of this Act, a certified copy of any entry in a banker's book shall in all legal proceedings as 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 extent as, the original entry itself is now by law admissible, but not further or otherwise.
12.A copy of an entry in a Banker's Book is a prima facie evidence of such entry and all the matters, transactions and accounts therein recorded, provided the entry was made in the usual and ordinary course of business.
13.In the instant case, the statement of accounts shows that Rs.20 lakhs and Rs.10 lakhs had been reversed on the very same day and what remained in the debit balance was only one consolidated amount of Rs.30 lakhs. This entry is in line with the consistent stand taken by the appellant Bank before the RBI, Police and also before this Court in the Civil Suit. The respondent has not put any questions to DW-1 on this entry made in the books of accounts. In the proof affidavit, DW-1 has specifically made statements about the entries made in the books of accounts during the relevant period. Therefore, the entries made in the books of accounts were never questioned by the respondent. The appellant Bank runs under the control of RBI and it maintains the books of accounts in the regular course of business. Prima facie it establishes the actual amount that stood in the name of the respondent on 24.01.1998. This evidence carries more weight than the letter dated 28.08.2003 [Ex.P-5] relied upon by the respondent since the said letter merely provides an information signed by an authorised signatory. The information provided in this letter, is explained in the books of accounts [Ex.D-3]. The learned Single Judge did not consider the evidenciary value of Ex.D-3. Rather the learned Single Judge merely states that since DW-1 did not have the personal knowledge about the transaction, the entries made in the books of accounts cannot be relied upon. The statement of accounts speaks for itself and there is no requirement for DW-1 to have any personal knowledge on the entries made therein.
14.The conduct of the respondent assumes a lot of significance in this case. The respondent is not an illiterate person. Rather the respondent is a well known person in the society who runs Engineering and Medical Colleges. The respondent on his own admission, is an income tax assessee and for the relevant assessment year, he would have shown fixed deposit made for a sum of Rs.60 lakhs, if really he had deposited in the appellant Bank. If the respondent had produced the income tax returns, that would have clinched the entire case. However, the respondent had chosen not to reveal his income tax returns for the relevant period. The respondent rather wants to rely upon a letter given by some authorised signatory in the appellant Bank and take advantage of it. It is rather curious that the respondent waited for 5 = years and for the first time chose to write a letter on 26.08.2003 to the appellant claiming for the repayment of two fixed deposits which even according to the respondent matured on 22.02.1998 and 23.02.1998, respectively. When asked about the delay in claim, the respondent tries to cover it up by saying for the fixed deposits were renewed. That was not even his case in the plaint.
15.Admittedly the fixed deposit for Rs.30 lakhs matured on 25.03.1998 and on the very same day the appellant Bank repaid the amount with interest at the rate of 18.5%. There is no reason for the appellant Bank not to repay the other two fixed deposits paid by way of cheques, if really they were available at the relevant point of time. It does not stand to logic as to why the appellant Bank will not repay fixed deposit on maturity if it is really available, when the appellant Bank had chosen to repay Rs.30 lakhs (paid by way of cash) with interest right on the maturity date.
16.The conduct of the respondent becomes a very relevant factor in this case. Section 8 of the Evidence Act specifically provides for relevancy of conduct of a party to the proceedings. For the purpose of taking conduct to be relevant, the same must be referable to the fact in issue. The fact in issue in this case is whether the respondent had really paid a sum of Rs.30 lakhs by way of cash to the appellant Bank. If really the respondent had paid a sum of Rs.30 lakhs to the appellant Bank, his subsequent conduct would be to follow it up and get it repaid with interest. In the instant case, the respondent waits for 5 = years in order to make the first move. It is to be noted that the fixed deposits are for a very short term of one month and it matured on 22.02.1998 and 23.02.1998. No prudent person would remain silent for such a long time, more particularly when a substantial amount is involved and the respondent who runs Colleges will be expected to know about his rights and it is too artificial to believe the story of the respondent that he kept quite for 5 = years without making any claim.
17.This Court in exercise of Section 114 of the Indian Evidence Act, 1872, can also presume the existence of any fact, which it thinks likely to have happened, regard being had to the common course of the natural events, human conduct and public and private business, in their relation to the facts of the particular case. In the instant case, the presumption that can be drawn by this Court in relation to the facts of this case is that the respondent has tried to take advantage of the availability of two original fixed deposit receipts for Rs.20 lakhs and Rs.10 lakhs that was not collected from him by mistake by the Officers of the appellant Bank at the time of consolidating the fixed deposit. The conduct of the appellant in waiting for 5 = years and thereafter trying to take advantage of these original fixed deposit receipts, can be clearly seen in the facts and circumstances of this case.
Point No.3 :-
18.The appellant Bank had discharged the onus that was cast on them by relying upon the evidence of PW-1 and the documents marked on either side. The burden shifted on the respondent to prove the payment of Rs.30 lakhs by cash. The respondent could have easily marked the income tax returns and discharged his burden. However he chose not to reveal his income tax returns and therefore this Court has to necessarily draw an adverse inference on the conduct of the respondent.
19.Even if the fixed deposit receipt marked as Exs.P-1 and P-2 is taken to be a negotiable instrument and presumption under Section 118 of the Negotiable Instruments Act, is to be drawn against the appellant Bank, the appellant Bank is entitled to rebut the presumption by means of preponderance of probabilities and for the said purpose, evidence adduced on behalf of the plaintiff and the materials on record and also the circumstances upon which the defendant relies up can be taken into consideration for the purpose of rebutting the presumption.
20.The following extract from Kundan Lal Rallaram v. Custodian, Evacuee Property, Bombay reported in [AIR 1961 SCC 1316] will be more apposite :
4. To appreciate this argument it would be necessary to notice at the outset the scope of the presumption under Section 118 of the Negotiable Instruments Act and also the different methods available to a person against whom such a presumption is drawn to rebut the same. The relevant part of Section 118 of the Negotiable Instruments Act reads:
Until the contrary is proved, the following presumptions shall be made:-
(a) that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.
5. This section lays down a special rule of evidence applicable to negotiable instruments. The resumption is one of law and thereunder a court shall presume, inter alia, that the negotiable instrument or the endorsement was made or endorsed for consideration. In effect it throws the burden of proof of failure of consideration on the maker of the note or the endorser, as the case may be. The question is, how the burden can be discharged. The rules of evidence pertaining to burden of proof are embodied in Chapter VII of the Evidence Act, The phrase "burden of proof has two meanings-one the burden of proof as a matter of law and pleading and the other the burden of establishing a case; the former is fixed as a question of law on the basis of the pleadings and is unchanged during the entire trial, whereas the latter is not constant but shifts as soon as a party adduces sufficient evidence to raise a presumption in his favour. The evidence required to shift the burden need not necessarily be direct evidence, i.e., oral or documentary evidence or admissions made by opposite party; it may comprise circumstantial evidence or presumptions of law or fact. To illustrate how this doctrine works in practice, we may take a suit on a promissory note. Under Section 101 of the Evidence Act, "Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist". Therefore, the burden initially rests on the Plaintiff who has to prove that the promissory note was executed by the Defendant. As soon as the execution of the promissory note is proved, the rule of presumption laid down in Section 118 of the Negotiable Instruments Act helps him to shift the burden to the other side. The burden of proof as a question of law rests, therefore, on the Plaintiff; but as soon as the execution is proved, Section 118 of the Negotiable Instruments Act imposes a duty on the Court to raise a presumption in his favour that the said instrument was made for consideration. This presumption shifts the burden of proof in the second sense, that is, the burden of establishing a case shifts to the Defendant. The Defendant may adduce direct evidence to prove that the promissory note was not supported by consideration, and, if he adduced acceptable evidence, the burden again shifts to the Plaintiff, and so on. The Defendant may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling, the burden may likewise shift again to the Plaintiff. He may also rely upon presumptions of fact, for instance those mentioned in Section 114 and other sections of the Evidence Act. Under Section 114 of the Evidence Act, "The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case." Illustration (g) to that section shows that the Court may presume that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it. A Plaintiff, who says that he had sold certain goods to the Defendant and that a promissory note was executed as consideration for the goods and that he is in possession of the relevant account books to show that he was in possession of the goods sold and that the sale was effected for a particular consideration, should produce the said account books, for he is in possession of the same and the Defendant certainly cannot be expected to produce his documents. In those circumstances, if such a relevant evidence is withheld by the Plaintiff, Section 114 enables the Court to draw a presumption to the effect that, if produced, the said accounts would be unfavourable to the Plaintiff. This presumption, if raised by a court, can under certain circumstances rebut the presumption of law raised under Section 118 of the Negotiable Instruments Act. Briefly stated, the burden of proof may be shifted by presumptions of law or fact, and presumptions of law or presumptions of fact may be rebutted not only by direct or circumstantial evidence but also by presumptions of law or fact. We are not concerned here with irrebuttable presumptions of law.
6. We shall now notice some relevant decisions. The Privy Council in Murugesam Pillai v. Gnana Sambandha Pandara Sannadhi MANU/PR/0053/1916 : AIR 1917 PC 6 observed:
A practice has grown up in Indian procedure of those in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof, and failing, accordingly, to furnish to the Courts the best material for its decision. With regard to third parties this may be right enough-they have no responsibility for the conduct of the suit; but with regard to the parties to the suit it is in their Lordships' opinion, an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the Court the written evidence in their possession which would throw light upon the proposition.
7. The same rule was reaffirmed in Rameshwar Singh v. Bajit Lal MANU/PR/0107/1929 : AIR 1929 PC 95 and was approved by this Court in Hiralal v. Badkulal MANU/SC/0004/1953 : AIR 1953 SC 225. These three decisions lay down that it is the duty of a party to a suit in possession of important documents to produce them in court, and if that duty is not discharged the court may as well draw the presumption which it is entitled to do under Section 114 of the Evidence Act. A division bench of the Madras High Court in Narayana Rao v. Venkatapayya ILR (1937) Mad 299 : AIR 1937 Mad 182 considered the interaction of the provisions of Section 118 of the Negotiable Instruments Act and Section 114 of the Evidence Act in the matter of rebuttal of the presumption under the former section. After considering the earlier decisions, including those of the Privy Council, Varadachariar, J., summarized the law at p. 311 (of ILR Mad) : (at p. 187) of AIR) thus:
It has to be borne in mind that, when evidence has been adduced on both sides, the question of onus is a material or deciding factor only in exceptional circumstances, cf. Yellappa Ramappa Naik v. Tippanna 56 Mad LJ 287 : MANU/TN/0153/1928 : AIR 1929 Mad 8 and that even the onus under Section 118 of the Negotiable Instruments Act need not always be discharged by direct evidence adduced by the Defendant; Muhammad Shafi Khan v. Muhammad Moazzam Ali Khan MANU/UP/0548/1922 : 79 Ind Cas 464 : AIR 1923 All 214, Singar Kunwar v. Basdeo Prasad MANU/UP/0088/1930 : 124 Ind Cas 717 : AIR 1930 All 568 and Bishambar Das v. Ismail MANU/LA/0500/1932 : AIR 1933 Lah 1029. Not merely can the Court base its conclusion on the effect of the evidence taken as a whole but it may also draw adverse inferences against a party who being in a position to adduce better evidence deliberately abstains from doing so; MANU/PR/0053/1916 : AIR 1917 PC 6, Guruswami Nadan v. Gopalaswami Odayar ILR 42 Mad 629 : AIR 1919 Mad 444 and Raghavendra Rao v. Venkataswami Naicken MANU/TN/0316/1929 : 30 Mad LW 966 at p. 971 : AIR 1930 Mad 251 at p. 254.
We respectfully accept the correctness of the said observations.
The ratio in the above judgment of the Hon'ble Supreme Court directly applies to the facts of this case. The third issue on the points for consideration is answered accordingly.
Point No.4 :-
21.We are in agreement with the finding of the learned Single Judge with regard to the fact that the Final Report filed by the appellant's will not bind a Civil Court. However, the proceedings before the RBI and the proceedings before the Police, were initiated by the respondent. Therefore, the result of such an investigation done by Statutory Authorities will be a relevant fact for the purpose of deciding the fact in issue. The learned Single Judge has completely eschewed the investigation conducted by the RBI and the investigation conducted by the Police, which in our considered view is not correct. Both the Investigating Agencies are independent Statutory Authorities and therefore the result of such an investigation will also be a relevant fact for the purpose of deciding the fact in issue. The question is not whether the finding in the investigation is binding on the respondent or upon this Court. The correct way of approach will be to see if those findings are a relevant fact for the purpose of deciding the fact in issue in this suit. This Court is of the considered view that the investigation and the result of the investigation conducted by the RBI and the Crime Branch are relevant facts which will have a bearing in deciding the suit.
22.The learned Single Judge has drawn an adverse inference against the appellant Bank for not examining Mr.Sivasubramanian Ex.D-3 speaks for itself and there is no requirement for Mr.Sivasubramanian to come and explain about the entries made in the books of accounts and DW-1 himself was competent to explain the same. In fact, this Court is drawing an adverse inference against the respondent for not producing the books of accounts or the income tax returns in order to prove that he paid Rs.30 lakhs by way of cash towards the fixed deposit.
23.We are not in agreement with the findings of the learned Single Judge while allowing the suit filed by the respondent. Accordingly, we set aside the judgment and decree of the learned Single Judge made in C.S.No.47 of 2006, dated 19.11.2013.
24.The Original Side Appeal shall stand allowed with costs. Consequently, the connected miscellaneous petitions are closed.
[M.M.S., J.] [N.A.V., J.]
02.08.2018
Index:Yes/No
Internet: yes/No
Speaking Order/Non Speaking Order
Kp
Copy to:
The Sub. Asst. Registrar
Original Side,
High Court,
Madras.
M.M.SUNDRESH, J.
and
N.ANAND VENKATESH, J.
KP
Pre-Delivery Judgment
in
O.S.A.No.58 of 2015
and
M.P.No.1/2015 &
CMP No.12554/2017
02.08.2018