Andhra Pradesh High Court - Amravati
P.V.R.S. Mani Kumar vs K. Raghunath Reddy on 27 August, 2024
IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
TUESDAY, THE TWENTY SEVENTH DAY OF AUGUST
TWO THOUSAND AND TWENTY FOUR
PRESENT
THE HON'BLE SRI JUSTICE V.GOPALA KRISHNA RAO
I.A.NO.2 OF 2024
IN / AND
APPEAL SUIT No.489 OF 2006
Between:
P.V.R.S.Mani Kumar, S/o.Appa Rao,
Business, R/o.No.6, Jamila Nagar,
Perambur High Road, Chennai ... Appellant
AND
K.Raghunath Reddy, S.o.Gangireddy,
R/o.10/56, Maruthinagar, Tirupathi,
Chittoor District. ... Respondent
Counsel for the appellant:
Sri K.A.Narasimham
Counsel for the respondent
Sri D.Sheshasayana Reddy
The Court made the following:
JUDGMENT:
-
This Appeal, under Section 96 of the Code of Civil Procedure [for
short 'the C.P.C.'], is filed by the Appellant/defendant challenging the
Decree and Judgment, dated 13.02.2001, in O.S. No.154 of 1998 passed
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by the learned Additional Senior Civil Judge, Tirupati [for short 'the trial
Court']. The Respondent herein is the plaintiff in the said Suit.
2. The respondent/plaintiff filed a Suit for recovery of Rs.3,60,000/-
being interest due on principal of Rs.5,00,000/- said to have been
borrowed by the defendant on 10.02.1995 from the plaintiff agreeing to
repay with interest at 24% p.a.
3. Both the parties in the Appeal will be referred to as they are
arrayed before the trial Court.
4. The brief averments of the plaint, in O.S. No.154 of 1998, are as
under:
The defendant borrowed an amount of Rs.5,00,000/- from the
plaintiff on 10.02.1995 for his business purpose and executed a
promissory note in favour of plaintiff agreeing to repay the same with
interest at 24% per annum. On 27.01.1998, the defendant informed the
plaintiff to come to Madras with all the documents and to collect the entire
amount payable saying that he had ready money by sale of property.
When the plaintiff actually went to Madras with the promissory note and
cheques, the defendant with some of his men put the plaintiff in fear of
death and forced him to surrender the cheques and promissory note by
receiving a Demand Draft for Rs.5,00,000/-, plaintiff having no other go
surrendered the documents and took the D.D. unwillingly and un-
voluntarily under threat and then gave a report to the police at Tirupati
after returning to Tirupati. The C.C.S. police, Tirupati stated that they
have no jurisdiction and hence complaint was preferred by post to the
Commissioner of Police, Chennai.
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The plaintiff further pleaded that subsequently, the defendant
borrowed another sum of Rs.7,50,000/- from the plaintiff on 10.06.1997 at
Tirupati as a short term loan, promising to repay the same with interest at
36% p.a. within one month, but the defendant failed to repay the short
term loan as agreed. The defendant sent through post, on 10.12.1997,
four post dated cheques for a total sum of Rs.9,29,600/-.
5. The defendant filed a written statement denying all the contents of
the plaint and further contended as under:
The plaintiff, who wanted to be a millionaire overnight, proposed to
the defendant that he would like to be a partner in business and asked
the defendant to accept a sum of Rs.5,00,000/- towards plaintiff's
contribution in the business. The defendant, who is a good business man
doing lawful business, agreed to take him into his business and also
warned the plaintiff that in business, things could go wrong, in that
circumstances, the investment could be returned without any interest or
compensation.
The defendant further alleged that the plaintiff has no capacity to
lend money much less another sum of Rs.7,50,000/- on 10.06.1997.
The defendant further pleaded that he paid Rs.5,00,000/- by means
of D.D.No.077894 on 27.01.1998 drawn by the defendant on Syndicate
Bank along another sum of Rs.5,441/- in cash under a receipt duly
passed by him towards Maruthi car transaction.
The defendant further pleaded that in the promissory dated
10.02.1995, the rate of interest is mentioned as 6% p.a., while the plaintiff
is now claiming at 24% p.a. Infact, it was intended that no interest shall
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be payable by the defendant to the plaintiff as both of them have share in
the business.
6. Based on the above pleadings, the trial Court framed the following
issues:
(i) Whether the suit claim is true, valid and binding on the
defendant?
(ii) Whether the payment of Rs.5,00,000/- through D.D. by
the defendant is towards full and final settlement as
pleaded in the written statement?
(iii) Whether the Court has no jurisdiction to try the suit?
(iv) To what relief?
7. During the course of trial in the trial Court, on behalf of the Plaintiff,
PW1 was examined and Ex.A1 to Ex.A10 were marked. No oral or
documentary evidence was adduced on behalf of the Defendant.
8. After completion of the trial and on hearing the arguments of both
sides, the trial Court decreed the suit with costs vide its judgment, dated
13.02.2001, against which the present appeal is preferred by the
appellant/defendant in the Suit questioning the Decree and Judgment
passed by the trial Court.
9. The application in I.A.No.2 of 2024 is filed by the appellant/
defendant with a prayer to receive certain documents i.e., Photostat copy
of the pronote dated 10.02.1995, typed receipt signed by the
respondent/plaintiff dated 27.01.1998 pertaining to the suit mentioned
transaction and typed receipt pertaining to another transaction signed by
the plaintiff as additional evidence in A.S.No.489 of 2006.
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10. Heard Sri K.A.Narasimham, learned counsel for appellant and Sri
D.Sheshasayana Reddy, learned counsel for the respondent.
11. The learned counsel for appellant would contend that the decree
and judgment passed by the learned Additional Senior Civil Judge,
Tirupati is contrary to law and he would contend that the trial Court
gravely erred in decreeing the suit and the trial Court ought to have
dismissed the suit on the ground that the Court at Tirupati has no
jurisdiction to try the suit as no part of cause of action arose within the
jurisdiction of Tirupati Court. He would further contend that the learned
trial Judge ought to have come to conclusion that none of the documents
filed by the plaintiff to prove his case. He would further contend that the
decree and judgment passed by the trial Court may be set aside by
allowing this appeal.
12. Per contra, the learned counsel for respondent would contend that
on appreciation of the entire evidence on record, the learned trial Judge
rightly decreed the suit and the appeal may be dismissed by confirming
the decree and judgment passed by the trial Court.
13. Now, in deciding the present appeal, the points that arise for
determination are as follows:
1. Whether the appellant/petitioner in I.A.No.2 of 2024
in the appeal proceedings is entitled the relief as
sought for?
2. Whether the trial Court is justified in decreeing the
suit?
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14. Point:
Whether the appellant/petitioner in I.A.No.2 of 2024
in the appeal proceedings is entitled the relief as
sought for?
The appellant, who is the defendant in the suit proceedings filed
the petition under Section 151 of Civil Procedure Code with a prayer to
receive the photostat copies of the documents enclosed to the petition as
additional evidence. As seen from the petition filed by the appellant,
originally the petition was filed under Order 41 Rule 27 read with Section
151 C.P.C., later the provision under Order 41 Rule 27 read with was
struck off and that the petitioner filed the petition under Section 151 of
Civil Procedure Code, the same is visible with naked eye.
15. The general principle is that the appellate Court should not travel
outside the record of the trial Court and cannot take any evidence in
appeal. However, as an exception under Order 41 Rule 27 of Civil
Procedure Code, enable the appellate Court to take evidence in
exceptional circumstances only. The proviso under Order 41 Rule 27
C.P.C. permits the party to produce additional evidence before the
appellate Court provided it has to be come under the ambit of order 41
Rule 27 of Civil Procedure Code.
Order XLI Rule 27 of Civil Procedure Code reads as under:
27. Production of additional evidence in Appellate Court.-
(1) The parties to an appeal shall not be entitled to produce
additional evidence, whether oral or documentary, in the
Appellate Court. But if--
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(a) the court from whose decree the appeal is preferred
has refused to admit evidence which ought to have
been admitted, or
(aa) the party seeking to produce additional evidence,
establishes that notwithstanding the exercise of due
diligence, such evidence was not within his knowledge
or could not, after the exercise of due diligence, be
produced by him at the time when the decree appealed
against was passed, or
(b) the Appellate Court requires any document to be
produced or any witness to be examined to enable it to
pronounce judgment, or for any other substantial
cause, the Appellate Court may allow such evidence or
document to be produced, or witness to be examined.
(2) Whenever additional evidence is allowed to the produced,
by an Appellate Court, the court shall record the reason for its
admission.
In the case on hand, admittedly, no reasons for not filing the copies
of the aforesaid documents before the trial Court are mentioned in the
affidavit of the petition. The documents to be received as additional
evidence are Xerox copies of documents. Admittedly, the alleged original
documents are not filed. It is well settled that the Xerox copies are not
admissible in evidence. Once these documents are not admissible, the
petitioner/defendant cannot be permitted to rely on those inadmissible
documents.
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16. The contention of the petitioner/appellant is that he is a resident of
Chennai and the respondent/plaintiff is a practicing advocate at Tirupati
and the respondent/plaintiff instituted a suit in O.S.No.154 of 1998
claiming that he was indebted to him under a promissory note dated
10.02.1995 and that there was an interest due under the promissory note.
The petitioner further pleaded that the Court at Tirupati is not having any
jurisdiction to try the suit. The petitioner further contend that on
27.01.1998 when he received the Demand Draft, a receipt in token of
receipt of Demand Draft for an amount of Rs.5,00,000/- was issued by
the respondent and the said receipt duly contained to the effect that
towards full and final settlement, the said D.D. was received. Admittedly,
no reasons were assigned by the petitioner in his affidavit for not filing the
alleged copies of the documents to be received as evidence before the
trial Court.
17. As stated supra, all the documents said to have been received as
additional evidence are only Xerox copies. The first document said to
have been received as additional evidence is a Xerox copy of the pronote
alleged to have been executed by the petitioner/defendant. It is not the
specific case of the defendant that he borrowed Rs.5,00,000/- under the
promissory note from the plaintiff. The contention of the plaintiff is that on
27.01.1998, the petitioner herein informed the respondent/plaintiff to
come to Madras with all the documents and to collect the entire amount
payable saying that he had ready with money by sale of property and
when the plaintiff actually went to Madras with the promissory note and
the cheques, the defendant with some other men put the plaintiff in fear of
death and forced him to surrender the cheques and the promissory note
by receiving D.D of Rs.5,00,000/- and the respondent/ plaintiff having no
other go surrendered the documents and has taken the demand draft
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unwillingly. As noticed supra, the borrowing of Rs.5,00,000/- by the
petitioner herein under the promissory note is not at all pleaded in the
written statement itself. It was not explained by the petitioner that original
promissory note is in whose possession. The second document to be
received as additional evidence is copy of typed receipt signed by the
plaintiff dated 27.01.1998. As per the admitted case of the
petitioner/defendant, it is alleged to have been issued by the plaintiff, as if,
it is so, the original is with the petitioner/ defendant. But admittedly, the
alleged original receipt said to have issued by the plaintiff to the
defendant is not at all filed. As stated supra, the Xerox copies are
inadmissible in evidence. The alleged copies of documents are not
produced before the Court below by the petitioner for the reasons best
known to him. The suit is instituted in the year 1998 and the suit is
disposed of by the Court below on 13.02.2001. The appeal is filed in the
year 2006, the application is filed in the year 2024 and the reasons for
delay is not at all stated by the petitioner in his affidavit. However, as
stated supra, the documents said to have been filed as additional
evidence are only Xerox copies and those are inadmissible in evidence.
As stated supra, the appellate Court has to permit the party to adduce
evidence only if the conditions laid down under order 41 Rule 27 C.P.C.
exists. Admittedly, in the case on hand, the reasons for delay of
approximately 26 years for not filing these copies of documents is not at
all stated by the petitioner. There is no whisper in the affidavit of the
petition about the inordinate delay of 26 years for not filing the copies of
the documents as enclosed with the affidavit of the petition. Therefore, I
do not find any grounds to allow this application. Accordingly, point No.1
is answered.
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18. Point No.2:
Whether the trial Court is justified in decreeing the
suit?
The claim of the plaintiff is that the defendant borrowed an amount
of Rs.5,00,000/- on 10.02.1995 at Tirupati and executed a promissory
note. The case of the plaintiff is that on 27.01.1998 the
appellant/defendant informed the plaintiff to come to Madras with all the
documents and to collect the entire amount payable saying that he has
ready with money and the plaintiff went to Madras with promissory note
and cheques. The defendant and his henchmen put the plaintiff in fear of
death and forced him to surrender the promissory note and cheques by
receiving demand draft for Rs.5,00,000/- and he further pleaded that the
plaintiff having no other go surrendered the documents and has taken
away the demand draft unwillingly. By explaining the aforesaid reasons
the plaintiff claimed only interest on the aforesaid Rs.5,00,000/-. To prove
the case of the plaintiff, the plaintiff relied on his self testimony as PW1
and documents Ex.A1 to Ex.A10. The case of the plaintiff is that the
defendant borrowed Rs.5,00,000/- on 10.02.1995 and the defendant
executed a promissory note on the same day agreeing to repay the same
with interest at 24% p.a. Ex.A10 is the reply notice said to have been
issued by the defendant to the notice issued by the plaintiff. The
execution of the promissory note is not at all denied by the defendant. In
the written statement of the defendant, the defendant pleaded that the
amount was received from the plaintiff in the business transaction but not
under the original pronote. In the written statement, the defendant
pleaded that the rate of interest as mentioned in the pronote is at 6% p.a.
and the plaintiff is now claiming 24% p.a. The defendant also pleaded in
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the written statement that the plaintiff executed a receipt-cum-letter dated
27.01.1998, but no such receipt was filed before the Court below during
the course of trial. A specific plea of the defendant is that he received an
amount of Rs.5,00,000/- from the plaintiff in business transaction and with
an understanding that the interest need not be paid to the plaintiff if the
defendant sustained loss in the business, therefore, the burden is heavily
lies on the defendant to prove the said aspect that if he sustained loss in
the business there is no need to pay the interest. Admittedly, no evidence
is adduced by the defendant and the defendant did not enter into the
witness box to prove his defense. The aforesaid defense is not at all
supported by any evidence either oral or documentary. The law is well
settled that when a party to the suit does not appear into the witness box
and states his own case on oath and does not offer himself to cross
examine by the other side a presumption would arise that the case set up
by the defendant is not at all correct.
19. The Apex Court in a case of Vidhyadhar vs. Mankikrao1, held as
follows:
Where a party to the suit does not appear into the witness box and
states his own case on oath and does not offer himself to be cross
examined by the other side, a presumption would arise that the
case set up by him is not correct as has been held in a series of
decisions passed by various High Courts and the Privy Council
beginning from the decision in Sardar Gurbakhsh Singh v. Gurdial
Singh & Anr. This was followed by the Lahore High Court in Kirpa
Singh v. Ajaipal Singh & Ors. and the Bombay High Court in
Martand Pandharinath Chaudhari v. Radhabai Krishnarao
Deshmukh. The Madhya Pradesh High Court in Gulla Kharagjit
1999 0 AIR(SCW) 1129
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Carpenter v. Narsingh Nand-kishore Rawat also followed the Privy
Council decision in Sardar Gurbakhsh Singh's case (supra). The
Allahabad High Court in Arjun Singh v. Virender Nath & Anr. held
that if a party abstains from entering the witness box, it would give
rise to an inference adverse against him. Similarly, a Division
Bench of the Punjab and Haryana High Court in Bhagwan Dass v.
Bhishan Chand & Ors., drew a presumption under Section 114 of
the Evidence Act against a party who did not enter into the witness
box.
In the case on hand, the defendant failed to prove that the plaintiff
received Rs.5,00,000/- demand draft towards full and final satisfaction of
the debt and he is not supposed to pay anything to the plaintiff. It is the
case of the plaintiff that the agreed rate of interest is at 24% p.a. and now
he is claiming interest of 24% p.a. only on the principle amount of
Rs.5,00,000/- in the present case on hand. Admittedly, no document is
filed by the plaintiff before the Court below to show that the agreed rate of
interest in between both the parties is 24% p.a.
20. In a case of N.M.Veerappa vs. Canara Bank and others 2, the
Apex Court held as follows:
Before summarising the legal position, we shall refer to two other
rulings of this Court under Order 34 Rule 11. In Srinivasa
Vardachariar & Ors. v. Gopala Menon & Ors., this Court was
dealing not only with the substantive interest prior to suit (which
was reduced to 10 compound) but also with interest after suit. In
para 11 of the Judgment, this Court observed that the discretion
exercised by the High Court under Order 34 Rule 11 in that case
reducing the interest of 6% from date of suit to date of payment was
(1998) 2 SCC 317
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not liable to be interfered with even though the High Court had not
given reasons. It was said that it was obvious, on facts, that the
mortgages were executed as far back as 1936 and 1938 and the
creditor had waited till 1956 for filing the suit and would, in any
event, get interest substantially exceeding the principal amount of
the loans. K. Manickchand & Ors. v. Elias Saleh Mohamed Sait &
Anr also related to question of interest before suit and after suit. So
far as the interest after suit was concerned, the High Court had
granted interest at 6% from the date fixed for redemp-tion till date of
realisation. The date of suit was 10.1.1950, the date of decree of
the trial Court was 27.3.1952.
21. In a case of Central Bank of India vs. Ravindra and others3, the
constitutional Bench of Apex Court held as follows:
Though interest can be capitalised on the analogy that the interest
falling due on the accrued date and remaining unpaid, partakes the
character of amount advanced on that date, yet penal interest,
which is charged by way of penalty for non-payment, cannot be
capitalised. Further interest, i.e. interest on interest, whether simple,
compound or penal, cannot be claimed on the amount of penal
interest. Penal interest cannot be capitalised. It will be opposed to
public policy.
The Apex Court further held as follows:
Subject to the above we answer the reference in following terms:
(1) Subject to a binding stipulation contained in a voluntary
contract between the parties and/or an established practice or
usage interest on loans and advances may be charged on
(2002) 1 SCC 367
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periodical rests and also capitalised on remaining unpaid.
The principal sum actually advanced coupled with the interest
on periodical rests so capitalised is capable of being
adjudged as principal sum on the date of the suit.
(2) The principal sum so adjudged is 'such principal sum' within
the meaning of Section 34 of the Code of Civil Procedure,
1908 on which interest pendente lite and future interest i.e.
post-decree interest, at such rate and for such period which
the Court may deem fit, may be awarded by the Court.
22. In a case of Andhra Bank, Sultan Bazar, Hyderabad vs.
M/s.Manney Industries and others 4 , the composite High Court of
Andhra Pradesh held as follows:
This Bench is of the view that the discretion has to be exercised
judiciously and supported by reasons for granting interest at 6% p.a.
from the date of filing of the suit or rate higher than 6% p.a., and
below the contractual rate of interest. In this case the unit has
become sick immediately after its commencement and thereafter
they could not pay the due amount and another person has taken
over the unit and created an equitable mortgage and so under
these circumstances and taking into consideration that they have
not earned any yield or profit out of the transactions even from the
inception of the unit itself and in view of the fact that the unit had
become sick immediately after its commencement, the learned
judge thought it fit and granted interest at 6% p. a. , from the date of
suit till the date of realisation. Normally, this court would not
interfere with the discretion exercised by the lower court regarding
1993 0 AIR(AP) 53
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the rate of interest provided it satisfied the reasons that have been
given by it are sound and reasonable. We fortified our view even by
the decision reported in State of M. P. v. Nathabhai Desaibhai, AIR
1972 SC 1545, wherein the Supreme Court took into account the
conduct of the parties and the reasons given by them which are as
follows: "coming to the question of interest subsequent to the date
of the institution of the suit, it was found that the appellant had
unlawfully withheld the amount due to the respondent even after
coming to know that the collection made was an illegal one. Before
instituting the suit, the respondent had issued a notice to the
appellant, calling upon the appellant to pay the money illegally
collected from it; but despite that notice, the appellant failed to pay
back the amount illegally collected from the respondent. That being
so, in our opinion, the High Court was justified in awarding interest
on the principal amount from the date of the suit". In the special
circumstances of the case, as found by the Court below, which are
sound and well founded, granting interest at 6% p. a. from the date
of filing of the suit till the date of realization is perfectly justified and
does not warrant any interference by this Court.
Therefore, on considering the aforesaid case law and facts and
circumstances of the case, I am inclined to grant interest at 6% p.a. on
the principle amount of Rs.5,00,000/- instead of 24% p.a., therefore, the
plaintiff is entitled an amount of Rs.90,000/- with subsequent interest at 6%
p.a. on Rs.5,00,000/- from the date of suit till the date of realization.
Accordingly, the point No.2 is answered.
23. In the result, I.A.No.2 of 2024 is dismissed and the appeal suit is
partly allowed in modifying the decree and judgment passed by the trial
Court as the plaintiff is entitled an amount of Rs.90,000/- with subsequent
interest at 6% p.a. on Rs.5,00,000/- from the date of suit till the date of
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realization. Considering the facts and circumstances of the case each
party do bear their own costs in the appeal.
As a sequel, miscellaneous petitions, if any, pending in the Appeal
shall stand closed.
_________________________
V.GOPALA KRISHNA RAO, J
Date: 27.08.2024
sj
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THE HON'BLE SRI JUSTICE V.GOPALA KRISHNA RAO
I.A.NO.2 OF 2024
IN / AND
APPEAL SUIT No.489 OF 2006
Date: 27.08.2024
sj
