Suvarapu Venkateswara Rao vs Addada Koteswara Rao
2022 Latest Caselaw 7996 AP

      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

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.

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

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

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

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

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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

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

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

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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

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.

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

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