Andhra Pradesh High Court - Amravati
Yakkali Venkataramana vs Gurram Rama Rao on 1 December, 2023
THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO
APPEAL SUIT NO. 20 OF 2015
JUDGMENT:
1. The Appeal, under Section 96 of the Code of the Civil Procedure, is
filed by the appellant/plaintiff challenging the decree and Judgment dated
20.10.2014 in O.S.No.23 of 2013 passed by the learned Senior Civil
Judge, Markapur (for short, 'trial court'). The appellant is the Plaintiff,
filed the suit in O.S.No.23 of 2013 seeking recovery of Rs.7,17,476/- with
interest and costs from the Defendant based on the cheque bearing
No.725108, dt.26.03.2010 for Rs.4,26,900/-.
2. The parties will hereinafter be referred to as arrayed before the trial
Court.
3. The facts leading to the present Appeal, in a nutshell, are as under:
On 26.03.2010, the Defendant borrowed Rs.4,26,900/- from
the Plaintiff through a cheque, agreeing to repay it with
interest @ 24% per annum. Despite repeated demands by the
Plaintiff, the Defendant failed to repay the amount. In 2010,
the Plaintiff inadvertently left a cheque (No.920144 from ING
Vysya Bank) on his table with the amount of Rs.33,770/-
mentioned, leaving other columns blank. The Defendant stole
the cheque, filled in the remaining details by adding '9' before
Rs.33,770/-. Plaintiff gave a legal notice to the Defendant
demanding him to pay Rs.4,26,900/- which was given on
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26.03.2010. The Defendant received the notice and kept
quiet.
4. In the written statement, the Defendant contended that the Plaintiff
issued cheques for business transactions, claiming indebtedness. The
Plaintiff issued three cheques: No.725108 dated 26.03.2010 for
Rs.4,26,950/- (honoured), No.244335 dated 02.04.2012 for
Rs.14,50,000/- (not presented per Plaintiff's request), and No.920114
dated 01.09.2012 for Rs.9,33,756/-. The last cheque was dishonoured,
leading to the filing of C.C.No.320 of 2012. The Defendant issued a legal
notice to the Plaintiff for the payment of Rs.14,50,000/-, and the Plaintiff
responded with false allegations. The Defendant denies borrowing any
amount from the Plaintiff and contends that the Plaintiff filed a false suit.
5. Based on the above pleadings, the trial Court framed the following
issues:
(1) Whether the Plaintiff is entitled for the suit amount?
(2) To what relief?
6. During the trial, on behalf of the Plaintiff, he was examined as
P.W.1, and Exs.A.1 to A.3 were marked. On behalf of the Defendant, he
himself was examined as D.W.1, and Exs.B.1 to B.3 were marked.
7. After completing the trial and hearing the arguments of both sides,
the trial Court held that the Plaintiff is not entitled to recover the suit
amount from the Defendant and is liable to pay the costs incurred by the
Defendant.
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8. Sri ChakkilamVenkateswarlu, the learned counsel representing the
appellant/plaintiff, contends that the appellant, trusting the respondent
as a relative, provided a hand loan of Rs.4,26,000/- through a cheque, a
common and acceptable practice in daily life. The absence of a formal
document does not disqualify the appellant from recovering the cheque
amount. He argues that the trial Court erred in placing the burden on the
appellant to prove the transaction, neglecting the statutory presumption
under Section 139 of the Negotiable Instruments Act, 1881, which
assumes that every cheque is supported by consideration unless proven
otherwise. The trial Court, according to the appellant, erroneously
concluded that the cheque was issued to settle the defendant's debt, not
as a hand loan. The appellant emphasizes that the question of the
appellant issuing cheques on 02.04.2012 and 01.09.2012 for business
transactions does not apply to the current case. The trial Court should
have drawn an adverse inference against the respondent for not
responding to the legal notice dated 19.01.2014. Moreover, the trial Court
exceeded its jurisdiction by providing findings on the validity and
enforceability of two irrelevant cheques, as the present suit pertains only
to cheque No.725108 dated 26.03.2010 for Rs.4,26,900/-, which the
respondent admittedly encashed. The findings without proper pleading or
issues are legally unsound, and the trial Court failed to consider the
respondent's admission to altering the cheque amount in cheque
No.920144, making it legally questionable to rely on such a materially
altered cheque.
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9. Per contra, Sri Nimmagadda Satyanarayana, learned counsel
representing the respondent/defendant, argued that the trial Court
correctly appreciated the case facts and reached a correct conclusion. The
reasons given by the trial Court do not require any interference.
10. Concerning the pleadings in the suit and the findings recorded by
the Trial Court, the following points would arise for determination:
1) Is the Trial Court justified in holding that Plaintiff
failed to lend money to the Defendant through cheque
and he is not entitled to recover the suit amount?
2) Does the Judgment passed by the trial Court need any
interference?
POINT NOs.1 & 2:
11. The Plaintiff's case is that on 26.03.2010, he lent Rs.4,26,900/- to
the Defendant by cheque bearing No.725108, and the Defendant failed to
repay the same. However, Defendant contends that he did not borrow any
amount from Plaintiff. The Plaintiff issued said cheque and two other
cheques concerning business transactions as he was indebted to him.
12. In Civil cases, the preponderance of probability constitutes a
sufficient ground for decision if the facts and circumstances are such that
no reasonable man would draw a particular inference from them or if the
degree of probability in the case is such that as to include any hypothesis
besides the one to be proved then the party who relies on a particular
theory cannot be said to have discharged the onus of proof of establishing
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that theory. But, if the evidence strongly preponders in favour of any of
the two theories set up, the Court is entitled to act on it.
13. In K.Mariappan V. M.P. Kumarasamy 1, the High Court of Madras
held that:
21. The standard of proof evidentially is principles of preponderance
of probability. Inference of preponderance of probability can be drawn
from the materials on record and by reference to the circumstances
upon which he relies.
14. In R.Puthunainar Alhithan V. P.H.Pandian 2, the Hon'ble
Supreme Court held that an inference from the proved facts must be so
probable that if the Court believes, from the proved facts, that the facts do
exist, it must be held that the fact has been proved. The inference of proof
of that fact could be drawn from the given objective, direct or
circumstantial.
15. The controversy will have to be decided based on the oral evidence
of PW.1 and DW.1. It would be a travesty of truth, justice and
reasonableness to throw overboard the entire evidence and reject the
claim lock, stock and barrel for the only reason that still better evidence
has not been placed before the Court. Absolute certainty is not the
requirement under Sec.3 of the Evidence Act. In a civil case, rival
contentions and rival evidence must be considered, assessed, evaluated
and weighed to conclude whether the burden on the Plaintiff has been
discharged.
1 2021 0 Supreme(Mad) 2367
2 (1996) 3 SCC 624
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16. In Pottem Subbarayudu and another V. Kothapalli Gangulu
Naidu and others3, the composite High Court of Andhra Pradesh held
that:
17. There can be no straightjacket formula for the appreciation of
oral evidence of the witnesses. The credibility of the witness is the
paramount consideration for the Court. After passing the three legal
tests viz., relevancy, admissibility, and competence of the witness,
while considering the credibility of the witness, the Court has to
consider various parameters so as to appreciate the oral evidence
on the point by testing the same on the touch stone of two important
yardsticks viz., the probabilities and surrounding circumstances
among various other parameters. Even when no rebuttal is adduced
by the adversary the ocular testimony of the witnesses examined on
the side of the party on whom the burden lies, cannot implicitly be
relied upon without testing the same with reference to the
probabilities and surrounding circumstances. The judgments of the
Apex Court in Govinda v. Champa Bat (AIR 1965 SC 354) and
Chaturbhuj Pande v. Collector, Raigarh, would lend support to my
above view.
17. If prudence is the real test, it prescribes differing standards of proof
in varying circumstances. Its requirements preclude any Procrustean bed
of uniformly rigid rules for each type of case.
18. In M.Narsinga Rao V. State of Andhra Pradesh4, the Hon'ble
Supreme Court held that:
15. The word "proof" needs to be understood in the sense it is
defined in the Evidence Act because proof depends upon the
admissibility of evidence. A fact is said to be proved when, after
considering the matters before it, the Court either believes it to exist
or considers its existence so probable that a prudent man ought,
under the circumstances of the particular case, to act upon the
supposition that it exists. This is the definition given for the word
"proved" in the Evidence Act. What is required is the production of
such materials on which the Court can reasonably act to reach the
supposition that a fact exists. Proof of the fact depends upon the
3 2000 (5) ALT 759
4 (2001) 1 SCC 691
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degree of probability of its existence. The standard required for
reaching the supposition is that of a prudent man acting in any
important matter concerning him. Fletcher Moulton L.J. in Hawkins v.
Powells Tillery Steam Coal Company, Ltd., observed this:
"Proof does not mean proof to rigid mathematical demonstration,
because that is impossible; it must mean such evidence as would
induce a reasonable man to come to a particular conclusion."
16. The said observation has stood the test of time and can now be
followed as the standard of proof. In concluding, the Court can use
the process of inferences to be drawn from facts produced or proved.
Such inferences are akin to presumptions in law. The law gives
absolute discretion to the Court to presume the existence of any fact
that it thinks likely to have happened. In that process, the Court may
have regard to the common course of natural events, human conduct,
and public or private business vis-a-vis the facts of the particular
case. The discretion is envisaged in Section 114 of the Evidence Act.
19. The Plaintiff, examined as PW.1, and the Defendant, examined as
DW.1, reiterated their respective pleas in their evidence during the chief
examination. The Plaintiff supported his case by presenting Ex.A.1, a legal
notice dated 19.01.2013. The service of this legal notice was confirmed
through Ex.A.2 and Ex.A.3, which includes the bank statement
illustrating that the Defendant encashed the cheque amount. In response,
DW.1 asserted that PW.1 issued the suit cheque along with two additional
cheques to settle the outstanding amount related to business
transactions. During cross-examination, DW.1 further mentioned that he
had withdrawn Rs.4,26,900/- from Andhra Bank using the Plaintiff's
account.
20. The Defendant, as per the contentions in the written statement, has
not contested the receipt of the amount mentioned in the cheque. During
cross-examination, PW.1 acknowledged not obtaining any promissory
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note, hand letter, or similar documentation when lending the substantial
amount. However, he did not provide a specific reason for lending such a
significant sum without securing any written agreement. The trial Court
noted that money transactions typically involve a promissory note, hand
letter, or other documentation, and a cheque is usually issued when there
is a liability to repay. Consequently, the Plaintiff failed to present either
oral or documentary evidence demonstrating the lending of the amount
covered by the cheque. In contrast, the Defendant substantiated his claim
regarding the Plaintiff's outstanding amounts with documentary evidence.
21. DW.1's testimony establishes that the Plaintiff issued three cheques
in connection with business transactions. The first cheque, No.725108,
dated 26.03.2010, for Rs.4,26,900/-, was honored. The Plaintiff requested
not to present the second cheque, No.244335, dated 02.04.2012, for
Rs.14,50,000/-, which was eventually presented, and the Plaintiff
promised to pay later. The third cheque, No.920144, dated 01.09.2012, for
Rs.9,33,750/-, was dishonored, leading to the filing of C.C.No.320 of
2012.
22. It is also the DW.1's evidence that he presented another cheque
bearing No.920144, dated 10.09.2012 on the ING Vysya Bank, Markapur
branch for Rs.9,33,750/- for collection and the said cheque was
dishonoured. In this regard, PW.1 admitted that DW.1 filed C.C.No.320 of
2012 on the file of Additional Judicial Magistrate of First Class, Markapur,
against him for dishonour of the cheque bearing No.920144, dated
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10.09.2012. To establish the said fact, Defendant has relied on Ex.B.2
cheque bearing No.244335 and also Ex.B.3 certified copy of the private
complaint. PW.1 also did not dispute the issuance of said cheque.
Admittedly, PW.1 issued three cheques as referred to above in the
evidence PW.1 and DW.1. After dishonour of the cheque bearing
No.920144, dated 10.09.2012, DW.1 filed C.C.No.320 of 2012.
23. It shall be presumed, unless the contrary is proved, that the holder
of a cheque received the cheque, of the nature referred to in Section 138
for the discharge, in whole or in part, of any debt or other liability. In view
of Section 139, it has to be presumed that a cheque is issued in discharge
of any debt or other liability. The presumption can be rebutted by
adducing evidence and the burden of proof is on the person who wants to
rebut the presumption.
24. In light of the above principles, Plaintiff is in agreement with the
Defendant in relating to business transactions that the presumption
mandated by Section 139 of the Act does indeed include the existence of a
legally enforceable debt or liability.
25. Since the Plaintiff did admit that the signature on the cheque was
his, the statutory presumption comes into play and the same has been
rebutted even with regard to the materials submitted by him.
26. Applying the definition of the word `proved' in Section 3 of the
Evidence Act to the provisions of Sections 118 and 139 of the Act, it
becomes evident that in a trial under Section 138 of the Act a
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presumption will have to be made that every negotiable instrument was
made or drawn for consideration and that it was executed for discharge of
debt or liability once the execution of negotiable instrument is either
proved or admitted. The presumptions will live, exist and survive and shall
end only when the contrary is proved, that is, the cheque was not issued
for consideration and in discharge of any debt or liability. A presumption
is not in itself evidence, but only makes a prima facie case for a party for
whose benefit it exists.
27. Once such rebuttal evidence is adduced and accepted by the court,
having regard to all the circumstances of the case and the preponderance
of probabilities, the evidential burden shifts back to the Plaintiff and,
thereafter, the presumptions under Sections 118 and 139 of the N.I Act
will not again come to the rescue.
28. It is useful to cite Bir Singh v. Mukesh Kumar5, wherein the
Hon'ble Apex Court held that:
"36. Even a blank cheque leaf, voluntarily signed and handed over
by the accused, which is towards some payment, would attract
presumption under Section 139 of the Negotiable Instruments Act, in
the absence of any cogent evidence to show that the cheque was not
issued in discharge of a debt."
29. As already noted, PW.1 has not disputed the issuance of three
cheques, but he offered in his evidence that DW.1 came to his house and
committed theft of his cheque bearing No.920144. PW.1 stated in cross-
examination that he did not give a police complaint when DW.1 committed
(2019) 4 SCC 197
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theft of cheques. Had the Plaintiff's contention been true regarding the
theft of cheques, indeed, he would have issued a complaint against the
Defendant, at least after filing the cheque dishonour case. The DW.1's
evidence, coupled with Exs.B.1 to B.3 documents, show that PW.1 issued
cheques, including the cheque in the discharge of debt in connection with
business transactions. Admittedly, PW.1 issued Ex.A.1 legal notice dated
19.01.2013. In the said notice, Plaintiff has stated that Defendant
borrowed Rs.4,26,900/- on 26.03.2010 through Andhra Bank and
encashed the same. It is also alleged that in the year 2010, Plaintiff's ING
Vysya Bank Cheque bearing No.920144 mentioning the cheque amount of
Rs.33,750/- and the remaining columns of it were not filled and the said
cheque was kept in the table drawer, but it was not found. It is also
alleged in the notice that the Defendant has stolen the cheque without his
knowledge and his consent. Even according to the contents of the notice,
the facts came to his understanding as of 19.01.2013. It is also alleged
that Defendant added figure '9' before the amount of 'Rs 33,750/-' to get
wrongful gain, but Plaintiff has kept quiet without issuing any legal
action. The Plaintiff probably issued three cheques in connection with the
business transactions. Had Plaintiff lent the amount as contended by him,
he is expected to have obtained documents in support of the said
transaction. The Plaintiff has admitted that the said three cheques also
bear his signature. When the plaintiff lent amount to the Defendant by
suit cheque, there would be reason to issue two cheques in Defendant's
favour.
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30. In terms of Section 139 of N.I Act, there was a presumption in
favour of the holder that the cheque was received by him in the discharge
in whole or in part of some debt or other liability. Moreso, when the
signatures on the cheque were admitted. In the present case, as per the
learned counsel, the said presumption could not be rebutted by the
Plaintiff and therefore, Defendant submits that the Plaintiff did not explain
as to the circumstances, in which the cheques had been issued to him.
Further, no attempt had been made to stop payments on the cheques by
issuing any communication to the bank. No doubt, the presumption under
section 139 of N.I Act is a rebuttable presumption and the onus is on the
Plaintiff to raise the probable version. It is open for the Plaintiff to rely on
the evidence led by him or the Defendant in order to raise probable
version to substantiate the issuance of cheques. As already observed, the
Plaintiff has not placed substantiable material to believe his version that
the said two cheques were stolen by the Defendant.
31. After careful consideration, the trial Court correctly appreciated the
evidence. There is no reason for this Court to arrive at a different
conclusion than the one arrived at by the trial Court. The findings arrived
at by the trial Court are correct, and the Appellant/Plaintiff has shown no
justifiable reasons for arriving at different conclusions. I agree with the
decision reached by the trial Court.
32. Accordingly, the Points are answered in favour of the Defendant.
Given the preceding discussion, the view taken by the trial court does not
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call for any interference, and this Appeal fails and is hereby dismissed.
The impugned Decree and Judgment passed by the trial court is upheld.
33. As a result, the Appeal is hereby dismissed without costs by
confirming the Decree and Judgment in O.S.No.23 of 2013, dated
20.10.2014, passed by the learned Senior Civil Judge, Markapur.
Miscellaneous petitions pending, if any, in this Appeal, shall stand
closed.
_________________________________
JUSTICE T. MALLIKARJUNA RAO
Date: 01.12.2023
SAK
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THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO
APPEAL SUIT NO.20 OF 2015
Date: 01.12.2023
SAK
