Delhi High Court
Hemant Kumar Singhal vs Indian Overseas Bank & Anr on 10 December, 2019
$~36
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 10th December, 2019
+ CM(M) 1457/2019 and CM APPL. 44339/2019, 44340/2019
HEMANT KUMAR SINGHAL ..... Petitioner
Through: Mr. H.S. Gautam, Advocate (M:
9818203060).
versus
INDIAN OVERSEAS BANK & ANR ..... Respondents
Through: Mr. Prem Chhetri, Mr. Promod
Kumar and Ms. Sebika Lama,
Advocates (M: 7908547433).
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J(Oral)
1. The Petitioner/Defendant No. 2 - Mr. Hemant Kumar Singhal
(hereinafter „Defendant No.2) is aggrieved by the impugned order dated 17 th
August, 2019 passed by the ld. ADJ allowing the application under Order
XVIII Rule 3 CPC for leading evidence in rebuttal and evidence of an expert
witness.
2. The Respondent No. 1/Plaintiff - Indian Overseas Bank (hereinafter
„Bank‟) filed a suit for recovery of Rs.5,71,920/- along with interest against
Respondent No.2/Defendant No.1 - Mr. Praveen Kumar Jain who had
allegedly taken a loan vide application dated 2nd March, 2006 for a sum of
Rs.6 lakhs. The same was for the purpose of purchase of a car - Ford Fiesta.
It is the case of the Bank that the Defendant No.2 had stood guarantor for
the said loan and that both the Defendants are therefore jointly and severally
liable.
3. In the written statement, the case of Defendant No.2 was that he had
taken a loan for purchase of a Honda City car in February, 2006 and had
CM(M) 1457/2019 Page 1 of 14
fully repaid the loan by 2009. When he had sought a No Dues Certificate in
respect of the said loan, the same was not issued by the Bank. Defendant
No.2 thereafter served notice dated 21st January, 2011 upon the Bank. In
reply to the said notice dated 21st February, 2011, it was alleged by the Bank
that Defendant No.2 had stood guarantor for the loan of Defendant No.1
which was denied by the Defendant No.2. The stand of Defendant No.2 was
that Defendant No.1 may have produced forged signatures of Defendant
No.2 and that he had never stood guarantor for any loan of Defendant No.1.
4. The following issues were framed in the suit:
"1. Whether the plaint is liable to be rejected under
order 7 rule 11 of CPC? OPD.
2. Whether the plaintiff is entitled for decree of
recovery of the suit amount? OPP.
3. Whether the plaintiff is entitled for pendentelite and
future interest on decreetal amount? if so, at what
rate? OPP.
4. Relief."
5. Defendant No.1 - the principal borrower, was proceeded ex-parte in
the suit. The Bank led the evidence of its Senior Manager - Mr. Vijay
Kumar Mehra, PW-1. Defendant No.2 thereafter led evidence. He himself
appeared as DW-1 and he also led the evidence of handwriting expert as
DW-3. DW-2 was a witness who appeared from the Police Station who was
investigating the complaint of forgery. DW-3 - Deepak Jain, in his
evidence, stated that he is a handwriting expert since 1990. He submitted a
report after comparing the signatures of Defendant No.2. DW-3 was not
cross-examined initially by the Bank. At that stage an application was
moved by the Bank seeking permission to cross-examine the said witness. In
the said application, the Bank also sought permission to lead evidence in
CM(M) 1457/2019 Page 2 of 14
rebuttal. The said application was rejected by the Trial Court vide order
dated 28th March, 2018. The said order reads as under:
"Arguments heard on the applications of the plaintiff
pending on record.
In its application u/o 18 rule 17 CPC, the plaintiff is
seeking opportunity to cross-examine DW2 Deepak Jain,
the handwriting expert as the opportunity was closed on
25.01.2017. Keeping in view the totality of the
circumstances, one last opportunity is granted to the
plaintiff to cross-examine DW2 Deepak Jain subject to
costs of Rs.4,000/- payable to defendant No. 2 and the
diet money shall also be paid by the plaintiff.
In the remaining application u/o 18 Rule 3 CPC,
the plaintiff is seeking to produce its own handwriting
expert in rebuttal to the examination of DW2 Deepak
Jain, handwriting expert by the defendant No. 2. The way
plaintiff is trying to examine its own handwriting expert
is not rebuttal evidence but is an endeavor to fill the
lacunae of the case. The defendant No. 2 had always
been defending the case on the ground that his signatures
on the alleged loan documents were forged by defendant
No. 1. Meaning thereby, it was always within the
knowledge of the plaintiff that the defendant No. 2 is
disputing his signatures whereby the plaintiff ought to
have examine its own handwriting expert at the very first
instance instead of waiting for an opportunity to fill the
lacunae of the case once the defendant No. 2 has
examined his own handwriting expert favouring his
contentions. This sort of liberty cannot be granted
whereby the application is dismissed.
Issue fresh summons to the DW2 Deepak Jain as
per the particulars on record on filing PF returnable for
25.07.2018."
6. Thereafter, the Bank again moved an application for leading rebuttal
evidence which was permitted by the Trial Court by the impugned order.
7. Ld. counsel for Defendant No.2 has submitted that the rebuttal
CM(M) 1457/2019 Page 3 of 14
evidence by the Bank could not have been permitted as this very prayer of
the Bank was rejected vide order dated 28th March, 2018. The Ld. ADJ
could not have taken a different view than what was earlier decided by the
Court. The said order dated 28th March, 2018 being unchallenged and having
attained finality, there was no permissibility to permit rebuttal evidence once
again. Reliance is placed on Suman Kapoor v. Rakesh [CM(M) 181/2015,
decided on 29th June, 2015].
8. On the other hand, it is submitted by ld. counsel for the Bank that
under Order XVIII Rule 3 CPC, evidence in rebuttal can be permitted even
without the right being reserved. One of the issues which is to be
adjudicated is an issue on which onus is on the Defendant. Thus, on this
issue, rebuttal evidence ought to be permitted by the Court. Reliance is
placed on Wazirpur Small Industries Association v. Union of India
[CM(M) 718/2007, decided on 27th January, 2010].
9. A perusal of the pleadings on the record clearly shows that since
inception i.e. since the issuance of the notice itself, the case of Defendant
No.2 has been that he has cleared the loan which he had taken from the
Bank. In reply to the said notice, the Bank took a stand that there is another
loan for which Defendant No.2 had stood guarantor. This was denied by
Defendant No.2 at the initial stage itself. The plea in the written statement
reads as under:
"G. That the melafide intention of the plaintiff bank is
also clear from the contents of reply of notice dated 21-
02-11. It is submitted that it is admitted facts according
to reply of notice also that answering defendant had
took loan in the month of Feb. 2006 and defendant no.
1 had took loan in the month of March 2006. Further
from the contents of para no.4 and 5 of reply on merits
CM(M) 1457/2019 Page 4 of 14
of reply of notice dated 21-02-11, it is very much clear
that intention of plaintiff, bank is melafide and the
plaintiff bank wants to recover the loan amount from
the answering defendant in an illegal manner, however
answering defendant neither stood guarantor for the
defendant no. 1 nor he is liable to make payment of the
loan amount allegedly exist against the defendant no.1.
H. That, plaintiff also admitting that defendant no. 1 is
a cheater and has cheated several other bank by
forging and fabricated documents and in bogus name
and presently he is absconder and not traceable and
answering defendant already submitted that he never
stood guarantor for defendant no.1 and defendant no.1
might have produce forged documents by making
forged signature of the answering defendant, despite
plaintiff filed the above said suit against answering
defendant.
I. That in the above said suit answering defendant
received notice in the above said case without
documents for 02-02-11 and on 02-02-11 counsel for
the answering defendant appeared and filed his
Vakalatanama and requested to this hon'ble court to
direct to the plaintiff to supply copy of documents
annexed with the suit and this hon'ble court was also
pleased to direct to the plaintiff to supply documents
annexed with the suit and plaintiff on 15-02-11
supplied the documents to the counsel of the answering
defendant and answering defendant after gone through
the documents again shocked and surprised seeing
forged signature of the answering defendant not only
number of documents, but also alleged revival letter
dated 28-01-09. That from the documents it is clear
that not only defendant no. 1 liable for making forged
signature of the answering defendant, but the bank is
also liable for forging signature of the answering
defendant on the revival letter dated 28-01-09."
10. The above pleadings clearly show that Defendant No.2's case has
CM(M) 1457/2019 Page 5 of 14
always been that he has never stood guarantor to Defendant No.1 and that
there has been a forgery. A perusal of the issues shows that the Bank had a
positive obligation to prove that it is entitled to seek recovery from
Defendant No.2. Defendant No.1, is clearly absconding and has also been
proceeded ex-parte. The Bank, on the basis of the pleadings had an
obligation to establish that the documents relied upon by it were genuine,
were not fraudulent and were not forged. These documents were in the
exclusive possession of the Bank. The only witness produced by the Bank is
PW-1 who is a Senior Manager at the Pitampura Branch. His cross-
examination is very telling. He admitted that none of the documents were
executed in his presence. He was also not aware about the person who had
filled the loan documents. He also admitted that Defendant No.1 was guilty
of producing forged documents and taking loans from several banks. He also
admitted that Defendant No.2 had cleared the loan in respect of the Honda
City car. Thus, both the Bank and the witness were fully aware of Defendant
No.2's case, not only from the pleadings, but also from the cross-
examination conducted on PW-1.
11. PW-1 had also perused the expert report of Mr. Deepak Jain who was
produced as DW-2 to establish that the signatures were forged. Thus, in the
evidence which was led by the Bank, the Bank had adequate opportunity to
deal with the question of forgery and fraudulent nature of documents as
alleged by Defendant No.2. The cross-examination of PW-1 is set out
below:
"...
I am posted at Branch B-155, Lok Vihar, Pitampura,
Delhi since August, 2010.
CM(M) 1457/2019 Page 6 of 14
...
It is correct that Document Ex. PW-1/2 has not been
executed in my presence.
...
In the present case, I do not know the person who has
filled the loan documents like agreement, revival letter,
demand promissory note, guarantee deed,
consent/hypothecation letter etc.
...
It is correct that we have not filed any proof regarding
service of notices Ex. PW-1/12 & 1/13 to defendant
no.2.
...
It is correct that defendant no.1 had took loan from
several banks by producing forged documents. The
said fact has also been mentioned by my counsel at the
time of replying legal notice of defendant no.2. It is
correct that defendant no.1 is not traceable. It is
correct that defendant no.2 has already cleared the
loan which he had took to purchase Honda City Car
bearing No., DL 4CAB 7592.
...
It is correct that we have not given NOC to defendant
no.2 in respect of loan given to defendant no.2
regarding his Honda City car bearing
No.DL4CAB7592.
...
It is correct that defendant no. 2 with the permission of
this hon'ble court already got expert opinion from one
hand writing expert regarding his forged signatures on
number of documents produced by bank with the
present suit and said expert Sh. Deepak Jain already
filed expert opinion regarding hand writing of
defendant no. 2 alongwith his evidence by way of
affidavit.
...
It is wrong to suggest that Ex. PW1/6, Ex. PW1/7 are
also forged and fabricated documents and signatures
of defendant no. 2 have been forged to release car loan
to defendant no. 1. It is wrong to suggest, that Ex.
PW1/11 are also forged and fabricated and signatures
of defendant no. 2 are forged to create grounds to file
the present suit.
...
1 know that defendant no. 1 has also cheated some
other, banks on the basis of forged and fabricated
documents, it is correct that defendant no. 1 has also
cheated by forging and fabricating documents as well
as using bogus name of Sanjeev Mittal. It is wrong to
suggest that I am deposing falsely."
12. In the first application filed under Order XVIII Rule 3 CPC dated 29 th
March, 2017, the case of the Bank is that Mr. Deepak Jain - the expert,
could not have been cross-examined as the counsel was not available on 25th
January, 2017. In the said application, it is stated that the Bank has obtained
an opinion from M/s. Truth Labs, who are experts in comparing
handwriting. Thus, the prayer in the first application is as under:
"It is therefore most respectfully prayed that this
Hon'ble Court may graciously be pleased to allow the
plaintiff to lead evidence in rebuttal and call/summon
the witness namely Shri S.C. Gupta from Truth Labs, in
the interest of justice."
13. In reply to this application, Defendant No.2 clearly pleaded that
sufficient opportunity has been given to the Bank to lead evidence and the
only intention is to keep Defendant No.2 entangled in litigation. On this
application, the Trial Court passed the following order:
"Arguments heard on the applications of the plaintiff
pending on record.
In its application u/o 18 rule 17 CPC, the plaintiff is
seeking opportunity to cross-examine DW2 Deepak
Jain, the handwriting expert as the opportunity was
closed on 25.01.2017. Keeping in view the totality of
the circumstances, one last opportunity is granted to
the plaintiff to cross-examine DW2 Deepak Jain
subject to costs of Rs.4,000/- payable to defendant No.
2 and the diet money shall also be paid by the plaintiff.
In the remaining application u/o 18 Rule 3 CPC,
the plaintiff is seeking to produce its own handwriting
expert in rebuttal to the examination of DW2 Deepak
Jain, handwriting expert by the defendant No. 2. The
way plaintiff is trying to examine its own handwriting
expert is not rebuttal evidence but is an endeavor to fill
the lacunae of the case. The defendant No. 2 had
always been defending the case on the ground that his
signatures on the alleged loan documents were forged
by defendant No. 1. Meaning thereby, it was always
within the knowledge of the plaintiff that the defendant
No. 2 is disputing his signatures whereby the plaintiff
ought to have examine its own handwriting expert at
the very first instance instead of waiting for an
opportunity to fill the lacunae of the case once the
defendant No. 2 has examined his own handwriting
expert favouring his contentions. This sort of liberty
cannot be granted whereby the application is
dismissed.
Issue fresh summons to the DW2 Deepak Jain as
per the particulars on record on filing PF returnable
for 25.07.2018."
14. A perusal of the above order reveals that the Trial Court granted an
opportunity to the Bank to cross-examine Mr. Deepak Jain, DW-3.
However, on rebuttal evidence, the Court held that the Bank had an
obligation to examine its own handwriting expert in the first instance instead
of waiting to fill up lacunae in its evidence after Defendant No.2 had led his
evidence. Thus, the permission to cross-examine was granted, however, the
request for rebuttal evidence was rejected. Thereafter, DW-3 was cross-
examined by the Bank. However, the Bank then moved a second application
under Order XVIII Rule 3 CPC for the same very relief which was earlier
rejected. In the said application, the Bank sought a right to produce evidence
in rebuttal. This has been allowed by the Trial Court by the impugned order
which reads as under:
"An application U/O 18 Rule 3 CPC filed by the
plaintiff for leading evidence in rebuttal filed on
10.01.2019 is subject matter of this order. The prayer
in the application is that the plaintiff may be allowed
to lead evidence in rebuttal by producing witnesses
from plaintiff bank / Indian Overseas bank as well as
expert witness in rebuttal.
The application is vehemently opposed by D2.
D2 is the only contesting defendant. Very briefly
stated, the plaintiff bank seeks recovery from the two
defendants based on the case that D1 took certain
vehicle loan from the plaintiff in which D2 stood as
guarantor. D2 is contesting the suit on the ground that
he never stood guarantor for D1 in the loan
transaction involved in this case. D2 claims that infact
D2 had taken another loan in February 2006 for
Honda City Car and that loan had already been repaid
to the plaintiff but he never stood guarantor for D1 in
the loan transaction involved.
After conclusion of plaintiff evidence, the D2
examined one expert witness namely Deepak Jain who
has been examined as DW3. The said witness has been
examined by D2 to prove the point that the questioned
signatures as guarantor on the loan documents does
not belong to D2.
The application of the plaintiff is opposed by
D2 on the ground that earlier also similar application
was filed by the plaintiff which was dismissed on
28.03.2018 by the Court observing that the attempt by
the plaintiff to examine its own hand writing expert is
not infact rebuttal evidence but is an endeavor to fill
up the lacunae. Despite the fact that the plaintiff knew
right from the stage of defence of D2 that D2 was
disputing the signatures.
The evidence of DW3 namely Deepak Jain was
concluded on 18.10.2018. The question of rebuttal
evidence by the plaintiff would of course arise after the
conclusion of evidence by the defendant which
concluded on 18.10.2018. In the present matter the
dispute between the plaintiff and D2 would be entirely
based on the evidence whether D2 stood as guarantor
and signed the loan documents/ guarantee documents
as guarantor for D1. Once the D2 has examined an
expert witness to disprove the signature the plaintiff
must get a fair opportunity to disprove the said fact.
Declining such an opportunity to the plaintiff at this
stage would tentamount to throwing out the case of the
plaintiff against D2 without giving the plaintiff a fair
chance of proving its case. No prejudice shall be
caused to D2 if the plaintiff is allowed to lead evidence
to rebut the fact claimed by DW3. Merely because
earlier such an application was dismissed does not
come in the way of allowing this application for the
reason that the plaintiff has a right to rebut the
evidence of the defendant, which right would have
approved only upon conclusion of the evidence of D2
which concluded subsequent to the dismissal of earlier
application.
Accordingly, application U/O 18 Rule 3 CPC
filed by the plaintiff is allowed. The plaintiff is given
an opportunity to lead evidence in rebuttal and also
lead evidence of an expert witness qua the signatures
of D2. Let appropriate steps in this regard be taken by
the plaintiff.
Put up for plaintiff evidence in rebuttal on
13.12.2019"
15. A perusal of the impugned order shows that the only reason given by
the Trial Court is that the question of rebuttal evidence arises after the
Defendant's evidence is concluded and that the Bank must get a fair
opportunity to disprove the facts.
16. The approach of the Trial Court is clearly erroneous. The Bank has
been aware of the case of Defendant No.2 right from inception i.e. from the
written statement as also the expert report of Mr. Deepak Jain which was
placed on record. The Bank's witness clearly admitted that Defendant No.1
was guilty of forgery of documents with various other banks. With such
knowledge at hand, the primary obligation to prove that the documents are
genuine is that of the Bank and not of Defendant No.2. The onus of the main
issue i.e. the issue to prove that the Bank is entitled for recovery, is on the
Bank and not on Defendant No.2. Under Order XVIII Rule 3 CPC, the
Plaintiff would only be entitled to rebuttal evidence if the onus is on the
opposite side. The onus in respect of issue framed under Order VII Rule 11
CPC is on Defendant No.2, however, the said issue is a general issue - that
there is no cause of action. The Bank has to first discharge the onus that the
documents which form the basis of the suit are genuine and the signatures
are not forged. For that purpose, the Bank always had the opportunity to,
produce the documents relating to the first Honda City loan availed of by
Defendant No.2 and compare the same with the signatures on the second
application to see if the signatures on the second set of documents were
forged or were genuine. Even when PW-1 appeared in the witness box, he
had already perused the report of Mr. Deepak Jain. At that stage, the Bank
knew that Defendant No.2 is leading the evidence of an expert. There was
no reason as to why the Bank could not have adduced evidence of an expert
at that stage. Clearly, the Bank waited for the expert of Defendant No.2 to be
cross-examined and lead his evidence. In fact, even DW-3 - Deepak Jain
was initially not cross-examined, but vide order dated 28th March, 2018,
upon costs being imposed, leave was granted. The first application seeking
the same relief was already rejected on 28th March, 2018. A fair chance
cannot mean that the Bank can have an indefinite chance to prove its case.
There is no doubt that even without reserving right to lead rebuttal evidence,
the Plaintiff could have been permitted to lead rebuttal evidence provided
the basic onus was on Defendant No.2. However, in this case, the onus to
prove that the loan was availed of and that recovery can be sought by the
Bank was on the Bank and not on Defendant No.2. The question of granting
permission to lead rebuttal evidence thus, does not arise. As held in Suman
Kapoor (supra), rebuttal evidence can be permitted only if the onus is on the
opposite side on a particular issue. The observation of the Court is as under:
"6. Perusal of the Rule 1, 2 and 3 of Order XVIII CPC
would show that the plaintiff has a right to begin
unless defendant admits the fact, hence state his case
and produce his evidence in support of the issues he is
bound to prove. Under Rule 3 out of the several issues
if the burden to prove some issue lies on other party,
then the party can begin at his option, either produce
his evidence on these issues or reserve it by way of
answer to the evidence produced by the other party
and I the latter case, the party beginning may produce
the evidence. However, there is no provision in the
CPC which permits the party to lead evidence later on
even on an issue onus of which lies on it."
17. Under these circumstances, for the reason that the Bank has utterly
failed in leading evidence in the first place and is only trying to fill up
lacunae by seeking rebuttal evidence and also due to the fact that a similar
relief was sought earlier and was rejected by the Trial Court on 28th March,
2018, the impugned order is not sustainable and is liable to be set aside. The
petition is allowed in the above terms.
18. All pending applications are also disposed of.
PRATHIBA M. SINGH
JUDGE
DECEMBER 10, 2019
Rahul
