Under Section 96 Of The Code Of The ... vs Unknown
2023 Latest Caselaw 1855 AP

    THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO


                 APPEAL SUIT No.435 OF 2010

JUDGMENT:

1. Under Section 96 of the Code of the Civil Procedure, the

appeal is filed by the plaintiff challenging the decree and

judgment dated 09.11.2009 in O.S. No.170 of 2008 passed

by the Principal Senior Civil Judge, Eluru (for short, 'trial

court').

2. The parties will hereinafter be referred to as arrayed before

the trial court.

3. The case of the plaintiff is that:

(a) The plaintiff is a Registered Firm carrying on finance

business. Defendants 1 and 2 are husband and wife. On

29.03.2005, the 1st defendant borrowed a sum of

Rs.2,60,000/- from the plaintiff to meet the expenditure

for house repairs, for which the plaintiff issued Cheque

No.982868 of Andhra Bank, Eluru, on the even date.

Having received the same, the 1st defendant executed a

promissory note in favour of the plaintiff agreeing to repay

the same with interest at 24% p.a. on demand with yearly

rests.

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(b) Subsequently, on 05.09.2005, the defendants borrowed

another sum of Rs.1,09,000/-, for which a cheque bearing

No.327639 has been issued by the plaintiff in favour of the

2nd defendant for consideration. Having received the same,

the 2nd defendant executed a promissory note in favour of

the plaintiff agreeing to repay the same with interest at

24% p.a.

(c) Despite repeated demands made by the plaintiff, the 1st

defendant gave a cheque for Rs.3,69,000/- drawn on the

joint account of defendants 1 and 2 held by them in ICICI

Bank, Eluru, towards part satisfaction of the debt due to

the plaintiff. But, when the same is presented for

collection, it is dishonoured. Then, the plaintiff got issued

a registered notice on 10.02.2006, but the defendants

evaded receiving the notice. However, the 1st defendant

made a part payment of Rs.5000/- for which receipt No.68

dated 10.02.2006 was issued. The defendants have not

discharged the debts.

4. Defendants 1 and 2 filed their written statements, denying all

the allegations made in the plaint. The defendant's case is

that the plaintiff is a registered company. Defendants 1 and 2

stood as guarantors to one Rudraraju Appalaraju of Vijayarai

TMR, J A.S.No.435 of 2010

for obtaining a loan for purchasing a lorry. The 1st defendant

was forced to give a blank cheque at that time. In addition,

the plaintiff obtained a blank pronote by stating that it is

their usual practice; they promised they would not use the

same for any other purpose against the defendants. But, the

plaintiff committed a breach of trust. The scribe of the

pronote is the same person who is the accountant of the

plaintiff company. The 1st defendant is working as Supervisor

in DCCB and has well-versed knowledge of bank

transactions.

5. Based on the above pleadings, the trial court framed the

following issues:

1) Whether the suit promissory note is true and valid?

2) Whether the suit pronote is supported by consideration?

3) Whether the plaintiff is entitled to the suit amount?

4) To what relief?

6. During the trial, the plaintiff examined P.Ws.1 and 2 and got

marked Exs.A.1 to A.3. On behalf of the defendants, he was

examined as D.W.1 and no documents got marked.

TMR, J A.S.No.435 of 2010

7. After the completion of the trial and hearing the arguments of

both sides, the suit was partly decreed by the trial Court for

an amount covered under Ex.A2 pronote for Rs.1,87,480/-

and dismissed the suit in respect of Ex.A1 pronote by holding

that the suit is barred by limitation.

8. I have heard Sri Gudapati Venkateswara Rao, learned counsel

for the appellant. The respondents have not engaged any

counsel despite service of notice, hence treated as heard.

9. Sri Gudapati Venkateswara Rao, learned counsel for the

appellant, submits the following contentions in support of the

judgment of the trial Judge:

(i) The trial Court failed to note that Ex.A1 pronote is

dated 28.03.2005, and the suit is filed on

25.03.2008, so the suit is well within the time and is

not barred by limitation.

(ii) The trial Court should have seen that for

computation of the period of limitation, the date of

Ex.A1 pronote, and the date of filing the suit before

the trial Court are to be considered. But not the date

of registration of the suit, i.e. 17.04.2008.

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(iii) The trial Court failed to note that it is not the case of

the 1st respondent that the suit is barred regarding

the claim due under Ex.A1 pronote.

10. Now, the point for determination is whether the trial Court

is justified in dismissing the suit partly by holding that

Ex.A1-promissory note is time barred ?

11. The record shows the suit is filed based on Exs.A.1 and A.2

promissory notes. The trial Court partly decreed the suit by

holding that the plaintiff firm is entitled to recover the sum

payable under Ex.A.2-promissory note. It seems the

defendants have not preferred appeal questioning the

judgment passed regarding Ex.A.2-promissory note. Given

the same, this Court finds that the evidence adduced

regarding Ex.A.2 transaction need not be discussed.

12. It is not disputed that defendants 1 and 2 are husband and

wife. The plaintiff is a registered firm carrying on a business.

According to the plaint averments and as per the evidence of

P.W.1-Maganti Nagabhushanam that D.1 borrowed a sum of

Rs.2,60,000/- from the plaintiff firm on 29.03.2005 and the

consideration was paid to the D.1 vide cheque bearing

No.982868 of Andhra Bank, Eluru. Having received the

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consideration, D.1 executed Ex.A.1-promissory note in favour

of the plaintiff firm agreeing to the terms and conditions.

13. The D.1 is examined as D.W.1. He stated in his cross-

examination that after receipt of the notice, they approached

the plaintiff and questioned him about the notice received by

D.W.1. The evidence of D.W.1 shows that he is a bank

employee. In the chief examination, D.W.1 deposed that the

plaintiff obtained a blank promissory note by stating that it is

their usual practice. As such, it can be held that D.W.1

admitted his signature on Ex.A1-promissory note. As already

observed, it is the specific case of the plaintiff that D.1

received the consideration amount through a cheque bearing

No.982868 of Andhra Bank, Eluru. D.W.1 admitted that he

had not filed his account copy to show whether he had

encashed the cheque. On the other hand, in further cross-

examination, D.W.1 admitted that he received the

consideration under Ex.A.1.

14. The evidence of P.W.2 also supports the evidence of P.W.1

about the execution of Ex. A1-promissory note by D.1 in

favour of the plaintiff. Had D.1 not received the consideration

amount payable under Ex.A1-promissory note, he would

have furnished his bank account to show that he had not

TMR, J A.S.No.435 of 2010

received the consideration amount under the cheque issued

by the plaintiff's firm. It is not the evidence of D.W.1 that the

cheque issued by the plaintiff towards the payment covered

under Ex.A1 is dishonoured. The trial Court has appreciated

the evidence on record properly and concluded that the

evidence of P.Ws.1 and 2 established the execution of the suit

promissory note and passing of the consideration. The said

finding of the trial Court is not challenged; it has attained

finality. This Court also accepts the said finding, which is

supported by reasons. However, the trial Court has not

accepted the case as pleaded by the plaintiff regarding the

part payment of Rs.5000/-. The said finding of the trial Court

is not challenged by the appellant/plaintiff in this appeal.

Simply because the plaintiff failed to establish the plea of

part payment, it cannot be concluded that the suit is barred

by limitation.

15. The plaintiff filed the suit based on Ex.A1-promissory note

dated 29.03.2005. The trial Court dismissed the suit by

holding that the suit was filed on 17.04.2008, i.e. after three

years of the execution of the suit promissory note. The said

finding of the trial Court is questioned in this appeal. As per

the appellant's contention, the suit was filed on 25.03.2008.

TMR, J A.S.No.435 of 2010

So, the suit is well within the time and not barred by

limitation. As rightly pointed out in the grounds of appeal,

the trial Court failed to notice that it is not the case of D.1

that the suit is barred regarding the claim due under Ex.A1-

promissory note. Had the suit been barred by limitation,

certainly, D.1 is expected to take such a plea in the written

statement. In such a case, the trial Court should have

cautiously verified on which date the suit is filed. It seems

that without proper verification, the trial Court observed that

the suit is filed on 17.04.2008. The Office Note clearly

shows that the suit is filed vide S.R.No.3115, dated

25.03.2008. The plaintiff paid the Court Fee while filing the

suit on 25.03.2008. The Office Note shows that the suit was

registered on 17.04.2008. Though the suit was filed on

25.03.2008, the trial Court had taken the registration date,

i.e. 17.04.2008, to compute the period of limitation. As such,

the trial Court has come to an erroneous conclusion that the

suit is barred by limitation in respect of Ex.A1-promissory

note.

16. As seen from the evidence on record, the 1st defendant has

borrowed the amount under Ex.A1-promissory note

transaction to meet the expenditure of house repairs. The

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plaintiff has calculated the interest @ 24% per annum from

the date of suit transaction to till the date of filing of the suit.

This Court is of the view that the private party, like the

plaintiff, was not justified in demanding interest at the rate of

24% per annum from the defendants and that too when the

amount is borrowed to meet the expenditure for his house

repairs but not for the business purposes. Therefore, it is

just and proper to award interest @ 12% per annum on the

principal amount of Rs.2,60,000/- from the date of Ex.A1-

promissory note transaction till the date of filing of the suit

and thereafter @ 9% per annum till the date of decree and

thereafter @ 6% per annum till the date of realization on

Rs.2,60,000/- with proportionate costs.

17. Given the preceding discussion, this Court holds that the

suit was filed within the period of limitation of three years. As

such, the trial Court has erroneously dismissed the suit in

respect of Ex.A1-promissory note by considering the

registration date, i.e. 17.04.2008, instead of the date of filing

of the suit, i.e. 25.03.2008.

18. Upon careful reading of the material on record, this Court

believes that the Trial Court has not considered the limitation

aspect correctly and is not supportable.

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19. In the result, the appeal is allowed, granting a decree with

proportionate costs against 1st defendant, for an amount

covered under Ex.A1-promissory note for Rs.2,60,000/-

together with interest @ 12% per annum from the date of

Ex.A1 suit promissory note transaction till the date of filing

of the suit and thereafter @ 9% per annum till the date of

decree and thereafter @ 6% per annum till the date of

realization on principal amount of Rs.2,60,000/- with

proportionate costs. The judgment passed by the trial Court

in decreeing the suit with costs regarding Ex.A.2-promissory

note shall remain intact.

Consequently, miscellaneous petitions pending, if any, shall

stand closed.

__________________________________ JUSTICE T.MALLIKARJUNA RAO

Date:11.04.2023 MS

TMR, J A.S.No.435 of 2010

THE HON'BLE SRI JUSTICE T. MALLIKARJUNA RAO

APPEAL SUIT NO.435 OF 2010

DATE: 11.04.2023

MS