THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR
SECOND APPEAL No.50 of 2012
JUDGMENT:
The 1st defendant before the trial Court, who lost his defence before the Courts below, filed this appeal under Section 100 of C.P.C. questioning the correctness of concurrent judgments of the lower Courts.
2. The 1st respondent herein was the plaintiff before the trial Court. The 2nd respondent herein was the 2nd defendant in the suit. O.S.No.4 of 1996 was filed by the plaintiff as against two defendants. The suit was disposed of by the learned Senior Civil Judge, Gudivada. The suit was on a pronote and it sought for recovery of money. The pleaded case of the plaintiff was that on 01.01.1993 defendant Nos.1 and 2 together borrowed an amount of Rs.60,000/- from the plaintiff and executed a demand promissory note agreeing to repay the debt with 24% interest per annum as and when demanded. Thereafter, despite demands, there was no repayment and therefore, the suit.
3. The 2nd defendant did not choose to appear and contest and was set ex parte before the trial Court. Even thereafter, he never participated in the legal process. It was the 1st defendant, who raised a contest by filing a written statement and 2 Dr. VRKS, J S.A.No.50 of 2012 subsequently an additional written statement. His defence was that from the plaintiff, he never borrowed money and never executed the suit pronote and that the suit pronote was forged. According to him, it was Sri V.Nageswara Rao, who was behind the litigation and the plaintiff was only a puppet in his hands. It was pleaded that the said V.Nageswara Rao was the foreman of M/s. Sri Varsha Chit Fund Private Limited and in one of the chits run by it, both the defendants joined as members and their signatures were obtained on various blank papers and unfilled promissory notes. Out of disputes between V.Nageswara Rao and brother of the 1st defendant, the present suit came to be filed through the plaintiff. It is also pleaded that behind O.S.No.891 of 1993 and O.S.No.609 of 1995, also the said V.Nageswara Rao sued this defendant through his other henchman. In his additional written statement, he pleaded that the plaintiff was not coming forth to give evidence and so avoiding the witness box and plaintiff had no financial capacity to lend money and the plaintiff is represented by a General Power of Attorney Holder, who is the very wife of the earlier referred Sri V.Nageswara Rao. The suit is not maintainable without examining the plaintiff himself.
3
Dr. VRKS, J S.A.No.50 of 2012
4. On this rival contentions, learned trial Court settled the following issues:
"1. Whether the suit pronote dated 01.01.1993 is true, valid and binding on the defendants?
2. Whether the plaintiff is entitled to the suit amount?
3. To what relief?"
5. At the trial, Smt. V.Durga Rani, who has been holding G.P.A. on behalf of the plaintiff, testified as PW.1 and one of the attestors of the suit pronote testified as PW.2. The suit pronote was exhibited as Ex.A.1 and the G.P.A. was exhibited as Ex.A.2. As against this evidence, the 1st defendant himself gave evidence as DW.1 and he got exhibited Exs.B.1 to B.8, which are receipts and passbook concerning chit, which he pleaded in his written statement. The receipts pertain to the period between March, 1989 and April, 1992. The learned trial Court considered the entire evidence on record and considered the rival submissions. It took a view that PW.1 by her evidence showed her presence at the time of suit mentioned money transaction and her evidence established execution of pronote by the defendants and exchange of consideration. The evidence of PW.2 further supported that version and PW.2 was one of the attestors to the 4 Dr. VRKS, J S.A.No.50 of 2012 document and he spoke to all the relevant facts and established all the essential averments of the plaint and he was an independent and neutral witness. Thus, the trial Court believed the evidence of PWs.1 and 2 and concluded that Ex.A.1 was a pronote that was validly executed by the defendants and it was supported by consideration. While considering the contentions raised by the 1st defendant about the legal competence of G.P.A. holder/PW.1 and non-examination of the plaintiff himself, it observed that PW.1/G.P.A. holder is a close relative of the plaintiff and she is wife of the said Nageswara Rao and the plaintiff is aged 65 years suffering from Asthama and Rheumatism and that there was no legal impediment to consider the evidence of PW.1, who was a witness to the fact and so saying it negatived the contention of the 1st defendant. Coming to the other aspects raised by the 1st defendant about chit transactions and creation of documents, it considered Exs.B.1 to B.8 and stated that those receipts and passbook did not prove or disprove any material fact that was available at trial and the allegations raised in the written statement are so general in nature and they could not be believed and the 1st defendant also failed to examine his own brother so as to 5 Dr. VRKS, J S.A.No.50 of 2012 probablise his defence that the disputes between his brother and Nageswara Rao resulted in filiing of a false suit. It was for these reasons, it answered all the issues in favour of the plaintiff and against the 1st defendant and decreed the suit for Rs.1,14,397/- with 12% interest per annum on the original debt of Rs.60,000/-.
6. Aggrieved of it, the 1st defendant filed A.S.No.41 of 2010 and learned XI Additional District and Sessions Judge, Gudivada, on hearing both sides and on considering the material on record, dismissed the appeal and confirmed the trial Court's judgment and decree. Learned first appellate Court referred to the evidence that was available on record. Before the first appellate Court, the 1st defendant mainly contended about failure of plaintiff in giving evidence and also about other contentions he raised before the trial Court. Learned 1st first appellate Court fully considered all those submissions. It stated that the nature of dispute between the brother of the 1st defendant and the forman of the chit by name Sri V.Nageswara Rao was never explained by 1st defendant and was never sought to be proved by 1st defendant and it also reasoned that even for Nageswara Rao nothing prevented from filing a suit by himself 6 Dr. VRKS, J S.A.No.50 of 2012 or through his chit fund company and there was no need for him to have a third party to file a suit. It also observed that the 1st defendant failed to explain the reasons and circumstances forcing him to subscribe his signatures on empty papers and stated that the 1st defendant never contended about participating in the chit and becoming the prized subscriber and therefore, there was nothing like 1st defendant making any further payments to the chit fund company and in such circumstances, there was no occasion for signing any blank papers. Giving said reasons, it disbelieved the version of the 1 st defendant that the suit pronote was a fabricated document utilizing the signatures available on empty papers that were allegedly given to chit fund company. On the question of legal efficacy of PW.1 in giving evidence, it concurred with the trial Court's observation that PW.1, being a witness to the facts, was competent to give evidence in proof of facts she witnessed and simply because she was a G.P.A. holder do not allow the Court to discard her evidence. It then observed that there was no invariable rule in every suit that the plaintiff must depose. It stated that in a case where the plaintiff died that was not the end of the matter and anyone else, who witnessed the facts, was 7 Dr. VRKS, J S.A.No.50 of 2012 competent to give evidence. With those reasons, it stated that the evidence on record established the disputed transaction and non-examination of plaintiff had no bearing and saying so it negatived the contentions of the 1st defendant. It concurred with the trial Court's judgment and confirmed it. The 1st defendant was aggrieved and filed this second appeal.
7. On 09.02.2012 this Court admitted the second appeal on the following substantial questions of law:
1. Whether the suit on promissory note is maintainable in the absence of pre-suit demand notice and therefore, the judgments of both the Courts below are erroneous?
2. Whether the evidence on record though did not indicate that the suit pronote was supported by consideration, erroneously decreed the suit and that was confirmed in the first appeal?
8. Learned counsel appearing for the appellant submitted arguments and stated that no written notice earlier to institution of the suit was issued by the plaintiff and that itself indicates that the claim in the plaint was incorrect. Thus, the submission of the learned counsel is not based on a principle of 8 Dr. VRKS, J S.A.No.50 of 2012 law, but it is one to argue a particular circumstance in a suit on a demand promissory note/Ex.A.1.
9. The plaint averments indicate and the evidence of PW.1 shows that earlier to institution of the suit, the plaintiff orally demanded the defendants to repay the pronote debt and as they failed to repay the suit was laid. Thus, the necessary legal demand for repayment of a debt that was promised under Ex.A.1-pronote is available in the form of pleadings as well as in the form of sworn evidence. As per the record, a written notice was not given earlier to the suit. The substantial question of law framed is on that aspect of the matter. Learned counsel for the appellant has not shown either a statute or any precedent that in a suit on pronote a written pre-suit notice is a pre-requisite. One needs to see Section 93 of the Negotiable Instruments Act, 1881 (for short, 'the N.I. Act'). The same is extracted here:
"93. By and to whom notice should be given :-- When a promissory note, bill of exchange or cheque is dishonoured by non-acceptance or non-payment, the holder thereof, or some party thereto who remains liable thereon, must give notice that the instrument has been so dishonoured to all other parties to whom the holder seeks to make severally liable thereon, and to some one 9 Dr. VRKS, J S.A.No.50 of 2012 of several parties whom he seeks to make jointly liable thereon.
Nothing in this section renders it necessary to give notice to the maker of the dishonoured promissory note, or the drawee or acceptor of the dishonoured bill of exchange or cheque."
10. As above law indictes between the plaintiff and defendants, the transaction is on a promissory note and on failure to comply with the oral demand for repayment, the creditor is clearly entitled to sue him without a written pre-suit notice. Nothing contrary is brought to my notice by the learned counsel for the appellant. Therefore, the substantial question of law raised in point No.1 is a contention that is not supported by any law. This appeal on that ground cannot be allowed.
11. Passing of consideration, strictly speaking is a matter of evidence on record and that does not give rise to any particular question of law. However, since such a contention is already admitted, the same has to be answered. By the evidence of PW.2-attestor, the signature on Ex.A.1-promissory note was proved to have been subscribed by the defendant. The evidence on record did not indicate any hostility between the defendants and PW.2. Thus, the observation of the trial Court that PW.2 10 Dr. VRKS, J S.A.No.50 of 2012 was an independent neutral witness holds good. His evidence established that the signatues on pronote were that of the defendants. His evidence further proved, as he witnessed, the plaintiff paying money to defendants and defendants receiving money from the plaintiff. He stated that in his presence that transaction occurred and contents of pronote were filled up. The evidence of PW.1 also show her presence at the time of this transaction. Thus, it was found that both the Courts below accepted the proof of Ex.A.2 and held that it was supported by consideration. When once the signatures of defendants were proved, the presumption under Section 118 of the N.I. Act also come into force. However, even without the assistance of any such presumption, trial Court felt that sworn evidence on record duly established passing of consideration also. As against that what was required for the defendants was to show that the suit pronote did not bear their signatures or that no consideration passed under the pronote. To disprove the signatures, they did not put any effort and they did not even carry Ex.A.1 for the opinion of any handwriting expert. In fact in the impugned judgment, the trial Court at page No.7 observed that the 1st defendant seems to be in the habit of denying the signature 11 Dr. VRKS, J S.A.No.50 of 2012 unnecessarily and with evil motive since in his cross- examination when he was confronted with his own written statement and his own vakalat he denied his signatures on those documents also. Thus, the 1st defendant, who is the appellant herein, seems to have been fighting without any justifiable reason. When the evidence established his execution of the promissory note, the law makes a Court to presume that such a negotiable instrument is supported by consideration. Having taken up a plea that the plaintiff had no financial capacity to prove, there was no evidence adduced by the defendants in proof of that. His own pleadings in the written statement indicated several suits being filed against him on several promissory notes. All that indicated the financial needs of the appellant. Thus, the case of the plaintiff that the defendants borrowed money could be found in all probabilities. All these facts and circumstances were properly analyzed, both by the trial Court as well as by the first appellate Court. No infirmity could be pointed out by the appellant in this second appeal. Therefore, this Court finds no reason to disagree with the concurrent findings of the Courts below. For all these reasons, this Court finds no merit in this appeal. 12
Dr. VRKS, J S.A.No.50 of 2012
12. In the result, the Second Appeal is dismissed with costs.
As a sequel, miscellaneous applications pending, if any, shall stand closed.
_____________________________ Dr. V.R.K.KRUPA SAGAR, J Date: 20.10.2022 Ivd 13 Dr. VRKS, J S.A.No.50 of 2012 THE HON'BLE JUSTICE Dr. V.R.K.KRUPA SAGAR SECOND APPEAL No.50 of 2012 Date: 20.10.2022 Ivd