Chuni Lal Anand vs Dr. Narendra And Anr.
2000 Latest Caselaw 1019 Del

JUDGMENT

A.K. Sikri, J.

1. The plaintiff, who is the appellant in the present appeal, had filed a suit for recovery of Rs. 26,500/- against the defendants/respondents herein. Suit was based on the averments that the plaintiff was a partner of M/s. Anand Metal Works carrying on business in C-143, Industrial Area, Naraina, New Delhi which was owned by the plaintiff and his sons Subhash Chander, Gulshan Kumar and Ashok Kumar in equal shares. Defendant No. 2 was having a garment manufacturing unit. He shifted his unit to C.143, Industrial Area, Naraina, New Delhi. During his continuance there the defendant No. 2 succeeded in having his own industrial plot No. C-31, Sector VI at Noida (U.P.). He wanted to construct his own industrial shed on this plot. He requested the plaintiff to advance him loan for this purpose so that after the construction he is able to shift his fabricating unit to Noida. The plaintiff agreed to his request and advanced him lean of Rs. 20,000/- provided the defendant No. 1, father of the defendant No. 2, stood guarantee for the repayment of the loan. Defendant No. 1 agreed to be a guarantor. The plaintiff advanced Rs. 20,000/- to the defendant No. 2 by means of the cheque No. MIT/SB 008627 dated 9th March, 1985 drawn on Union Bank of India, East Patel Nagar, New Delhi. An agreement dated 9th March, 1985 (Exhibit DW-1/1) stipulating terms and conditions of the loan transaction was also executed between the parties. As per this agreement, the defendant No. 2 had to repay the loan in twenty instalments of Rs. 1,000/- each. These instalments were to start after six months from the date of agreement. In para 3 of the agreement, it was mentioned that in case of default in payment by the defendant No. 2, the plaintiff would be entitled to recover the amount from defendant No. 1 with interest and expenses etc. and responsible for eviction of premises. As no instalment was paid by the defendant No. 2 even after the expiry of six months from the date of agreement, the plaintiff sent notice (Exhibit DW-1/4) dated 24th March, 1986 to defendants calling upon the defendants to pay the amount in question along with interest at the rate of 21 per cent per annum. Notice was duly received the defendants. However, neither any reply was given nor amount paid. Therefore, the appellant was compelled to filed suit for recovery of Rs. 26,500/-

2. Defendants contested the suit by filing the written statement. In the written statement, the main defense of the defendants was that defendant No. 2 did not take any amount from the plaintiff by way of loan. Receipt of the cheque dated 9th March, 1985 for Rs. 20,000/- from the plaintiff was admitted. However, it was alleged that the defendant No. 2 had given security in cash to the plaintiff at the time of taking premises No. C-143, Industrial Area, Naraina, New Delhi on loan from the plaintiff and the plaintiff had refunded this security to the defendant No. 2 at the time of vacation of the premises. Therefore, no amount was payable by the defendants.

3. After the pleadings following issues were framed by the learned trial Court:

1. Whether the cheque in question was issued towards refund of security as alleged in the written Statement? It so, its effect?

2. Whether the plaintiff is entitled to interest? If so, at what rate, for what period and what amount?

3. Relief

4. Plaintiff examined himself in support of his case. Defendants examined four witnesses which included defendants No. 1 and 2. After hearing, by impugned judgment and decree dated 12th July, 1989 the learned Additional District Judge dismissed the suit filed by the plaintiff. The trial Court did not believe the version of the plaintiff and accepted the defendants' case that the amount in question was repaid by the plaintiff which was given to him by the defendant No. 2 by way of security at the time of taking the premises i.e. C-143, Industrial Area, Naraina, New Delhi on rent. A perusal of the judgment of the trial Court shows that the trial Court was influenced by the following factors in arriving at this conclusion:-

a) Apart from agreement dated 9th March, 1985 (Exhibit DW-1/1), two more agreements were produced on record i.e. Exhibit DW-2/1 and Exhibit C-1. These agreements when read along with Exhibit DW-1/1 would show that the agreements were executed by the plaintiff with mala fide intentions of taking forcible possession of the demised premises, without adhering to the provisions of law. Exhibit DW-2/1 and Exhibit C-l, according to the learned Additional District Judge, were not simple agreements between the landlord and tenant but as per these agreements, plaintiff was to get commission equivalent to half per cent of sales.

b) Reading of the agreements showed that plaintiff and defendant No. 2 were partners and it was in credible that with a tenant instead of getting a rent note/deed executed such documents were got executed and this showed suspicion on the veracity of the plaintiffs case that he had given a sum of Rs. 20,000/- as loan to the defendants.

c) Exhibit DW-1/2 was executed which the plaintiff claimed to have been changed at places by the defendant. However, the very existence of this document gave rise to suspicion because when the plaintiff had already got an agreement dated 9th March, 1985 executed from the defendant there was no need to obtain a writing in the form of Exhibit DW-1/2. This showed that defendant signed the papers in good faith wherever plaintiff asked them to do so.

d) In the plaint, plaintiff had stated that after the defendant No. 2 constructed his own industrial shed at Noida, he shifted his garment fabricating unit there. However, as per defendants the plaintiff had forcibly evicted defendant No. 2 from the premises C-143, Industrial Area, Naraina, New Delhi and his articles, machinery were thrown out of the premises with the result that the defendant No. 2 had to shift to Shadipur slum area as he was left with no other alternative. This shows that defendant No. 2 was forcibly evicted by the plaintiff.

5. From the aforesaid circumstances, the learned Additional District Judge inferred that the case put up by the plaintiff did not inspire confidence and he accepted the version of the defendants that they signed the documents in good faith and not for the contents of the documents. Accordingly it was held that cheque in question was towards refund of security and not as a loan to the defendants and resultantly the suit of the plaintiff was dismissed.

6. We have heard Mr. O.P. Khadaria, learned counsel for the appellant. Nobody appeared on behalf of the respondents. The perusal of the order sheets revealed that Mr. A.K. Chhabra, Advocate had been appearing for respondents. He lastly appeared on 17th January, 2000 and thereafter he had not been appearing. On 27th March, 2000 an order was passed for hearing of this case on 11th September, 2000 at the end of 'After Notice Miscellaneous Matters'. Thus when there was no appearance on behalf of the respondents even on 11th September, 2000 we had no option but to proceed with the matter in the absence of respondents. Arguments of the appellant were therefore heard and the judgment reserved on that date.

7. From the narration of facts mentioned above, it is amply clear that the plaintiff/appellant had given cheque of Rs. 20,000/- to defendant/respondent No. 2. The receipt of this amount is admitted by the defendants/respondents. While the appellant claims it to be loan given to the defendant/respondent No. 2, plea of the respondents is that it was repayment of the security amount deposited by respondent No. 2 with the appellant. At this stage, it may be pointed out that the respondents have also admitted the execution of agreement dated 9th March, 1985. They have further admitted that the said document was signed by the respondents after going through its contents. It has also come in evidence of the respondents themselves that respondent No. 2 is B.Com. (Pass) and respondent No. 1 is a Homeopathic Doctor. Therefore, they clearly understood the implication of signing such an agreement. The agreement in categorical terms states that amount of Rs. 20,000/- given by the appellant to respondent No. 2 is by way of loan which is to be repaid in twenty instalments of Rs. 1,000/-each. The respondent No. 1 has stood guarantee for the said loan in case respondent No. 2 failed to repay the loan. In these circumstances, we fail to understand as to how the respondents could claim that it was not a loan transaction and that the said agreement was signed in good faith not for the contents of the document. When there is a written document evidencing the nature of transaction between the parties any oral plea contrary to the aforesaid document is not even admissible in law in view of the provisions of Section 91 of the Evidence Act.

8. There is yet another aspect of the matter which needs to be mentioned at this stage. The allegation of the respondents in the written statement was that the amount of Rs. 20,000/- was given by respondent No. 2 to the appellant as security in cash. However, the respondents have not been able to prove the payment of the security amount given to the appellant. In the cross-examination, respondent No. 2 admitted that he did not get any receipt from the appellant for this amount but stated that his father i.e. respondent No. 1 had obtained signatures of the appellant. However, no such receipt is produced evidencing the payment of Rs. 20,000/- allegedly given by the respondent No. 2 to the appellant by way of security money. Although the respondent No. 1 had also deposed as DW-2 but his testimony is totally silent about the alleged receipt. Since the receipt of the amount of Rs.20,000/- by way of cheque by respondent No. 2 from the appellant was admitted by the respondents, the onus was upon the respondents to prove that any amount was given by respondent No. 2 to the appellant by way of security and this cheque was for repayment of the security amount. On us of proof of issue No. 1 was clearly on the respondents. No evidence is led by them to discharge this onus. It is only as oral testimony of the respondents alleging deposit of security amount as against written agreement of loan dated 9th March, 1985 and there was no cogent reason to believe the same.

9. It may also be pointed out that when the instalment was not paid by respondent No. 2 to the appellant after six months of the agreement dated 9th March, 1985, appellant served notice upon both the respondents. The respondents have admitted the receipt of this notice also. Significantly, no reply to this notice was ever given by either of the respondents. This circumstance also goes against the respondents.

10. The entire approach adopted by the learned Additional District Judge is erroneous. In the teeth of aforesaid documentary evidence as well as admitted facts mentioned above, the learned Additional District Judge went wrong in taking into consideration totally irrelevant facts for believing the respondents and/or disbelieving the appellant. The suit is dismissed on totally opaque and obscure reasoning which is unsustainable in law. Merely because Exhibit DW-2/1 or Exhibit C-1 were executed between the parties as per which the appellant was to receive commission out of sales although the premises were given to the respondent No. 2 on rental basis has nothing to do with the loan transaction entered into between the parties. It is a common knowledge that many times, in their endeavour to show that the premises are not let out to the other person on lease basis, landlords execute such types of documents. Ultimately it is substance of the document and not the form which is to be seen when question arises as to what was the real nature of transaction. However, in the present case it is not the subject matter of dispute between the parties, and therefore, execution of Exhibit DW-2/1 or Exhibit C-l was totally irrelevant and alien to decide the controversy in the suit. Similarly, merely because Exhibit DW-1/2 was also written on the same date, one would not start suspecting the credibility of the loan transaction between the parties. Likewise whether the respondent No. 2 was forcibly evicted from the tenanted premises has also no relevance or causal connection with the transaction in question, which the subject matter of the suit.

11. The result of the aforesaid discussion is that this appeal succeeds. The findings of learned Additional District Judge on issue No. 1 are hereby set aside. It is held that cheque in question was issued by appellant by way of loan to the defendant/respondent No. 2 and it was not towards refund of any security. The appellant is held to be entitled to the amount in question given by him to defendant/respondent No. 2 by way of loan as defendant/respondent No. 2 failed to repay the same. Since, as per the agreement defendant/respondent No. 1 also undertook to repay the loan with interest in case of default by defendant/respondent No. 2, defendant/respondent No. 1 is also liable for repayment.

12. Appellant claimed interest at the rate of 21 per cent per annum on this principal amount of Rs. 20,000/-. However, we award interest at the rate of 12 per cent per annum on the principal amount w.e.f. 9th September, 1985 till the payment of the amount in question. Appellant shall also be entitled to the cost of the suit as well as the appeal. The suit is decreed in the aforesaid terms. Both the defendants/respondents shall be jointly and severally liable to pay the decretal amount and decree sheet be drawn accordingly.