Andhra Pradesh High Court - Amravati
Rajyalakshmi Financers, vs P. Vengayya, on 12 January, 2024
THE HON'BLE SRI JUSTICE V.GOPALA KRISHNA RAO
APPEAL SUIT No.624 of 2006
JUDGMENT:
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1. This Appeal, under Section 96 of the Code of Civil Procedure
[for short „the C.P.C.‟], is filed by the Appellants/1st and 2nd
Defendants challenging the Decree and Judgment, dated
13.10.2003, in O.S.No.57 of 1996 passed by learned Principal
Senior Civil Judge, Narasaraopet, Guntur District [for short „the trial
Court‟]. The Respondents herein are the Plaintiff and 3rd to 5th
Defendants in the said Suit.
2. 1st Respondent/Plaintiff filed the Suit for recovery of a sum of
Rs.96,504/- being the principal and interest due on a promissory
note dated 18.05.1994 for Rs.65,000/- executed by the
2nd Defendant agreeing to repay the same with interest at the rate of
24% per annum.
3. Both the parties in the Appeal will be referred to as they are
arrayed before the trial Court.
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4. The brief averments of the Plaint in O.S. No.57 of 1996 are as
under:
1st Defendant is partnership firm and 2nd Defendant is it‟s
Managing Partner and 3rd to 5th Defendants are kith and kin of
2nd Defendant and also other partners of 1st Defendant firm.
2nd Defendant represented to the Plaintiff that he was the Managing
Partner of 1st Defendant firm and that he got right and power to
borrow money for the purpose of the trade that was being carried on,
in the name of 1st Defendant firm. In that occasion, 1st Defendant
firm borrowed a sum of Rs.65,000/- for the purpose of its trade on
18.05.1994 from the Plaintiff. 1st Defendant firm represented by its
Managing Partner 2nd Defendant, received the amount from the
Plaintiff agreeing to repay the same with interest at the rate of 24%
per annum. Even otherwise, the Defendants are liable to pay
interest at the rate of 24% per annum as per the custom and usage.
The Defendants are the Income Tax assessees and Profession Tax
assessees and they are also paying House Tax and they are not the
agriculturists. Therefore, they are not entitled the benefits of Act 4
of 1938.
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5. 1st Defendant filed a Memo adopting the written statement filed
by 2nd Defendant. 2nd Defendant filed a written statement denying
the material allegations of the Plaint. 3rd to 5th Defendants were
remained ex-parte. The brief averments in the written statement
filed by 2nd Defendant, which was adopted by 1st Defendant are as
follows:
2nd Defendant either personally or on behalf of 1st Defendant
firm, never borrowed any amount nor suit amount, from the Plaintiff
and there is no need to 1st Defendant firm or to 2nd Defendant to
borrow money from the Plaintiff and the Plaintiff has no capacity to
lend such huge amount. The Plaintiff borrowed an amount of
Rs.50,000/- from 2nd Defendant on 18.02.1993 and executed a
promissory note on the same day in favour of 2nd Defendant
agreeing to repay the same with interest at the rate of 24% per
annum either to him or to his order. The Plaintiff issued a cheque in
favour of 1st Defendant on the request of 2nd Defendant,
inconsideration towards the discharge of the debt under promissory
note dated 18.02.1993 and the said promissory note was returned
to the Plaintiff on 18.05.1994 at the time when the cheque was
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issued in the name of 1st Defendant. The cheque was issued in the
name of 1st Defendant, but it was not the amount borrowed by 1st
Defendant firm. The wife of the Plaintiff was a member in
Suphalitha Chit Fund Private Limited, Narasaraopet and she was a
successful bidder of the said chit. The Plaintiff requested 2nd
Defendant and some others to stood as guarantors for the future
installments and the Defendants signed on the documents of
guarantee, which were brought by the Plaintiff. Later 2nd Defendant
learnt that the wife of the Plaintiff was not paying the installments to
the chit fund company. The chit fund company issued notice to this
Defendant and also to the other guarantors, demanding to pay the
amount due from the wife of the Plaintiff. Thus, disputes arose
between the Plaintiff and 2nd Defendant.
6. Based on the above pleadings, the trial Court framed the
following issues:
(i) Whether the cheque dated 18.05.94 issued in the name
of 1st Defendant by the Plaintiff was in consideration
towards the discharge of the debt under pronote dated
18.02.1993 with interest, executed by Plaintiff?
(ii) Whether the plaintiff is entitled for the suit amount from
the Defendants?
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(iii) To what relief?
7. During the course of trial in the trial Court, on behalf of the
Plaintiff, P.W.1 was examined and Ex.A1 was marked. On behalf of
the 1st and 2nd Defendants, D.Ws.1 and 2 were examined and no
documents were marked.
8. After completion of the trial and hearing the arguments of both
sides, the trial Court decreed the suit vide its Decree and Judgment
dated 13.10.2003, against which the present appeal is preferred by
1st and 2nd Defendants in the Suit.
9. Heard Sri Shaik Meeravali, learned counsel on behalf of
Sri T.Nagarjuna Reddy, learned counsel for the appellants and
Sri G.V.S.Mehar Kumar, learned counsel for the respondents.
10. Having regard to the pleadings in the suit, the findings
recorded by the trial Court and in the light of rival contentions and
submissions on either side before this Court, the following point
would arise for determination:
Whether the Decree and Judgment passed by the trial
Court needs any interference? If so, to what extent?
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11. Point:
The case of the Plaintiff is that 1st Defendant is a partnership
firm and 2nd Defendant is a Managing Partner and 3rd to 5th
Defendants are the other partners of 1st Defendant firm. The
Plaintiff further stated that 2nd Defendant represented 1st Defendant
firm, borrowed an amount of Rs.65,000/- from him on 18.05.1994
and the consideration was paid through a cheque bearing
No.896112, dated 18.05.1994 for Rs.65,000/- drawn on Agricultural
Development Bank, Narasaraopet and the said cheque was
encashed by 2nd Defendant. The material on record reveals that the
Plaintiff, to discharge his burden examined himself as P.W.1. To
prove the debt transaction, the Plaintiff relied on Ex.A1 bank pass
book. The evidence of P.W.1 coupled with Ex.A1 goes to show that
the consideration of Rs.65,000/- was paid by way of cheque to 2nd
Defendant who is the Managing Partner of 1st Defendant. It is not in
dispute that 3rd to 5th Defendants are the other partners of 1st
Defendant firm. There was a specific admission made by 2nd
Defendant about the receipt of the said cheque so also encashment
of the same by him. For the reasons best known to 3rd to 5th
Defendants who are the other partners of 1st Defendant firm, they
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remained ex-parte. The passing of consideration of Rs.65,000/- is
admitted by the Defendants, it is a fact that said amount is paid by
way of cheque and the same is encashed by 2nd Defendant as a
Managing Partner of 1st Defendant.
12. A specific plea was taken by 1st and 2nd Defendants in the
written statement that the Plaintiff borrowed an amount of
Rs.50,000/- from 2nd Defendant on 18.02.1993 and executed a
promissory note and the Plaintiff issued a cheque for Rs.65,000/-
with interest at the rate of 24% per annum on 18.05.1994 towards
discharge of the promissory note debt and that he returned said
promissory note to the Plaintiff, when the Plaintiff issued a cheque in
favour of 1st Defendant. Therefore, the burden shifted to the
Defendants to prove that the Plaintiff borrowed the amount of
Rs.65,000/- under the promissory note. It is a fact that no
promissory note or at least copy of promissory note is not yet filed
by the Defendants.
13. As per the evidence of P.W.1, there is an entry in Ex.A1 bank
pass book on 18.05.1994, which is reflecting about the withdrawal of
Rs.65,000/- under cheque bearing No.896112, the same is not at all
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disputed by the Defendants. D.W.1 admits that the said cheque
was encashed. As per the evidence of D.W.1, 1st Defendant firm is
maintaining accounts. It was denied by P.W.1 about the borrowing
of Rs.50,000/- under promissory note dated 18.02.1993 from 2nd
Defendant. The suggestion given to P.W.1 in cross-examination by
learned counsel for the Defendants about the alleged borrowing of
Rs.50,000/- from 2nd Defendant was denied by P.W.1. The Plaintiff
also denied the suggestion that he gave the cheque for Rs.65,000/-
towards the discharge of the said promissory note debt.
14. To prove the defence, 2nd Defendant was examined as D.W.1.
As per his evidence, 1st Defendant firm is an Income Tax assesse
and maintaining the accounts. But, D.W.1 failed to produce the
account books of 1st Defendant firm to support his case that the
amount withdrawn under the said cheque was related to the
discharge of promissory note amount, which was borrowed by the
Plaintiff. The material on record reveals that D.W.1 failed to
produce the account books of 1st Defendant firm before the trial
Court.
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15. In a case of Sri Venkateswara Oil Company Vs. Guduru
Jalaja Reddy and others1, decided by the composite High Court of
Andhra Pradesh held as follows:
"If a party in possession of best evidence which throws light
on the issue in controversy withholds it, the Court ought to draw an
adverse inference against him notwithstanding the fact that onus of
proof does not lie on him or because he was not called upon to
produce it, by relying on the abstract doctrine of onus of proof."
The ratio laid down in the aforesaid decision is squarely
applicable to the present facts of the case. It is a fact that
1st Defendant is a firm and the firm is used to maintain accounts, but
to support the defence taken by the Defendants, they failed to
produce the account copies of 1st Defendant firm. Even though,
P.W.1 was not cross-examined on the aspect of attestors and scribe
of alleged promissory note. It was not suggested by learned
counsel for the Defendants that whether he got enmity with the
attestors or scribe of promissory note. The Defendants also relied
on the evidence of D.W.2. As per the evidence of D.W.2, he worked
as a lorry driver belongs to P.W.1 at about 10 years ago and he
further deposed that the Plaintiff borrowed an amount of Rs.50,000/-
2002 (1) ALT 182
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about 10 years ago and executed a promissory note in favour of 2nd
Defendant agreeing to repay the same with interest at the rate of 24%
per annum to 2ndDefendant or to his order on demand and he is one
of the attestors in the said promissory note. Admittedly, the copy of
the alleged promissory note or copy of promissory note was not filed.
As per the own admissions of D.W.2, he had not received any
summons from the Court to give evidence. Another admission
made by him is that at about 10 years ago he discontinued his
service under the Plaintiff. The above admissions of D.W.2 clearly
go to show that he is having enmity with the Plaintiff. Therefore it is
not safe to rely on the evidence of D.Ws.1 and 2. The evidence of
D.Ws.1 and 2 failed to prove that the alleged promissory note was
returned to the Plaintiff on issuance of cheque of Rs.65,000/- by the
Plaintiff. The material on record reveals that the lending an amount
of Rs.65,000/- under a cheque by the Plaintiff to the 2nd Defendant,
who is a Managing partner of 1st Defendant firm, is proved by the
Plaintiff by exhibiting Ex.A1 bank pass book. In cross examination,
nothing was elicited from P.W.1 to discredit the testimony of P.W.1.
It is not the case of the Defendants that the said cheque was not
encashed. It was a clear admission by D.W.1 that the cheque given
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by the Plaintiff was encashed and he withdrawn the amount.
Therefore, it is for the Defendants to establish that to discharge the
money under promissory note alleged to be taken by the Plaintiff,
the said cheque was given by the Plaintiff but the Defendants failed
to do so. Moreover, there is no whisper in the evidence D.W.1 that
D.W.2 was present at the time of alleged borrowing of Rs.50,000/-
by the Plaintiff under the promissory note. There is also no whisper
in the evidence of D.W.1 that D.W.2 was present at the time, the
Plaintiff issued a cheque for Rs.65,000/- in the name 1st Defendant.
16. Therefore, for the foregoing reasons, I am of the view that the
trial Court is justified in decreeing the suit and there are no merits in
the appeal filed by 1st and 2nd Defendants and the Decree and
Judgment passed by the trial Court is perfectly sustainable under
law and it requires no interference.
17. In the result, the Appeal Suit is dismissed confirming the
decree and Judgment dated 13.10.2003, in O.S.No.57 of 1996
passed by the learned Principal Senior Civil Judge, Narasaraopet,
Guntur District. No order as to costs.
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As a sequel, miscellaneous petitions, if any, pending in the
Appeal shall stand closed.
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V.GOPALA KRISHNA RAO, J
Date: 12.01.2024
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THE HON'BLE SRI JUSTICE V.GOPALA KRISHNA RAO
APPEAL SUIT No.624 OF 2006
Date: 12.01.2024
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