Karnataka High Court
R Ramakrishna Reddy vs Pushpavathi on 26 June, 2024
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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RSA No. 1822 of 2013
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF JUNE, 2024
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
REGULAR SECOND APPEAL NO. 1822 OF 2013 (MON)
BETWEEN:
R RAMAKRISHNA REDDY
S/O LATE M RAMA REDDY
AGED ABOUT 65 YEARS
R/O NITHYANANDA NAGARA
BESIDE TALUK OFFICE,
HIRIYUR
CHITRADURGA DISTRICT 577 501
...APPELLANT
(BY SRI. RAVI H K &.,ADVOCATE)
AND:
1. PUSHPAVATHI
W/O LATE G JAYADEVA REDDY
AGED ABOUT 69 YEARS
(SINCE DECEASED REP BY LR's
RESPONDENT NO. 2 TO 6)
Digitally signed
by 2. J PAPESH KUMAR
NARAYANAPPA
LAKSHMAMMA S/O LATE G JAYADEVA REDDY
Location: HIGH AGED ABOUT 48 YEARS
COURT OF
KARNATAKA 3. J BASAVARAJ
S/O LATE G JAYADEVA REDDY
AGED ABOUT 44 YEARS
4. THILOTHAMME
W/O ANJANEYALU
AGED ABOUT 44 YEARS
5. J DHUSHYANTHA KUMAR
S/O LATE G JAYADEVA REDDY
AGED ABOUT 38 YEARS
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RSA No. 1822 of 2013
6. J SRINIVASA KUMAR
S/O LATE G JAYADEVA REDDY
AGED ABOUT 37 YEARS
ALL ARE R/O THOPARAMALIGE VILLAGE
CHITRADURGA TALUK AND DISTRICT 577 001
...RESPONDENTS
(BY SRI. M B CHANDRA CHOODA .,ADVOCATE
FOR R1, R3 & R5
V/O DATED 24.10.2016 R2, R4 & R6 NOTICE H/S)
THIS RSA IS FILED U/S. 100 OF CPC., PRAYING TO PLEASED
TO SET ASIDE THE JUDGMENT AND DECREE DATED: 14.08.2013 IN
R.A.NO.7/2012 PASSED BY THE LEARNED COURT OF SENIOR CIVIL
JUDGE AT HIRIYUR AND CONFIRM THE JUDGMENT AND DECREE
DATED 02.04.2012 IN O.S.NO.63/2007 PASSED BY THE LEARNED
COURT OF THE CIVIL JUDGE AND JMFC HIRIYUR, BY ALLOWING
THIS RSA WITH COSTS.
THIS RSA, COMING ON FOR DISMISSAL FOR NON-
PROSECUTION, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
1. The appellant who was the plaintiff in
O.S.No.63/2007 and respondent in R.A.No.7/2012 is
before this Court challenging the divergent findings
in the aforesaid two proceedings seeking for the
following relief:
Set aside the judgment and decree dated:
14.08.2013 in R.A.No.7/2012 passed by the
learned court of Senior Civil Judge at Hiriyur and
confirm the judgment and decree dated
02.04.2012 in O.S.No.63/2007 passed by the
learned court of the Civil Judge and JMFC Hiriyur,
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by allowing this RSA with costs, in the interest of
justice and equity.
2. The plaintiff had filed a suit in O.S.No.63/2007
contending that one G.Jayadeva Reddy who is the
husband of defendant No.1 and father of defendants
No.2 to 6 had borrowed a sum of Rs.4,75,000/- with
interest at the rate of 2% per month and in that
regard, had executed an on demand promissory note
and receipt in favour of the plaintiff. The said
Jayadeva Reddy having expired in the year 2007, the
above suit had been filed seeking for recovery of
Rs.4,75,000/- @ 2% interest per month. The
defendants entered appearance and denied the
transaction and had contended that Jayadeva Reddy
was 75 years of age without any income from any
avocation, there was no need for him to borrow any
money since his interests were taken care of by his
son with whom he was residing. They denied that
any such transaction of loan had occurred between
the plaintiff and Jayadeva Reddy.
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3. It was further contended that Jayadeva Reddy was
old and was unable to move freely, was even unable
to hold a pen or sign and as such, the entire
transaction came to be denied. It was further
contended that the plaintiff was a retired Sub-
Inspector, he did not possess such a huge amount of
Rs.4,75,000/- to lend to Jayadeva Reddy and as
such, put the plaintiff to strict proof of the same.
4. It is further contended that the witness to the said
promissory note was one who bore ill-will and had
enmity with the family of the defendants. He having
been accused by the defendants for having hijacked
the bus, robbery of cash and jewels as regards which
police complaints were filed. It was further alleged
that the police did not take any action against the
said witness for the reason that the said witness's
brother's son is also working in a police department
as a Circle Inspector of Police and it was further
contended that it is in this regard that they had set
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up plaintiff to file such a suit when in fact Jayadeva
Reddy has not borrowed any money from the
plaintiff.
5. The trial Court vide its judgment dated 02.04.2012
decreed the said suit and directed the defendants to
make payment of a sum of Rs.4,75,000/- with
interest at 2% p.a. till the date of realization of the
decreetal amount by coming to a conclusion that
Jayadeva Reddy had executed an on demand
promissory note and such execution of a promissory
note was sufficient proof of the amount being owed
by him in terms of Section 120 and 121 of the
Negotiable Instruments Act, 1881 (for short,
'N.I.Act'). The trial Court also accepted the
testimony of the witness G.Chidananda Reddy to be
true and proper.
6. Challenging the said judgment, the defendants filed a
first appeal in R.A.No.7/2012. The first Appellate
Court vide its impugned judgment and decree dated
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14.08.2013 set aside the judgment and decree of the
trial Court and dismissed the suit in
O.S.No.63/2007.
7. To arrive at such a conclusion, the first Appellate
Court on examination of evidence on record came to
a conclusion that the contention of the plaintiff that
he had made payment of monies to Jayadeva Reddy
from and out of his retirement benefits could not be
accepted since the retirement benefits were received
by him on 09.05.2006 whereas even according to the
plaintiff the amount had been paid by the plaintiff to
Jayadeva Reddy on 20.02.2006 which is three
months earlier. Therefore, the plaintiff has not
produced any documents to establish that he had the
amounts in his possession to make payment of a
sum of Rs.4,75,000/-.
8. The first Appellate Court also took exception to the
plaintiff having objected to the application filed by
the defendants for referring the promissory note and
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receipt for forensic examination to verify the veracity
of the signature of Jayadeva Reddy and took
exception to the trial Court not having allowed the
said application but having rejected the said
application. Apart from this, various other grounds
have been considered but these grounds being the
more important grounds, the first Appellate Court
passed the aforesaid order. It is challenging the
same, the appellant is before this Court seeking for
the aforesaid reliefs.
9. The above appeal was admitted on 12.09.2014 to
answer the following substantial question of law:
"When the trial Court decreed the suit of the
appellant herein holding that the promissory note-
Ex.P1 has been proved, by assigning its own
reasons in accepting the promissory note, whether
the first appellate Court was justified in reversing
the findings and in doing so, did not assign proper
and valid reasons to over-come the findings of the
trial Court and thereby committed an illegality in
the impugned judgment and decree?"
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10. Sri.H.K.Ravi., learned counsel for the appellant would
submit that:
10.1. the execution of the promissory note and the
receipt by late G.Jayadeva Reddy was itself
sufficient proof of the amount being owed by
G.Jayadeva Reddy.
10.2. By relying on Section 121 of Negotiable
Instruments Act, 1881, he submits that no
maker of a promissory note and no acceptor of
a bill of exchange shall in a suit thereon by a
holder in due course, be permitted to deny the
payee's capacity, at the date of the note or bill,
to endorse the same. Thus, he submits that
whether the plaintiff had the source of funds or
not, whether it is paid or not, there is a
statutory estoppel in terms of Section 121 of
N.I.Act insofar as the capacity to pay.
10.3. By relying on Section 120 of N.I.Act, he
submits that no maker of a promissory note,
and no drawer of a bill of exchange or cheque,
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and no acceptor of a bill of exchange in a suit
thereon by a holder in due course, be permitted
to deny the validity of the instrument as
originally made or drawn. By referring to both
the above provisions, he submits that there is a
presumption as regards the validity of a
promissory note and receipt as also the
capacity of the plaintiff to make payment of the
monies. These aspects ought to have been
properly looked into by the first Appellate
Court.
10.4. By referring to deposition of PW-3 i.e., witness
to the promissory note, he submits that the
defendants themselves have put suggestions to
the said witness that a promissory note issued
to one another person has been misused
thereby clearly admitting that G.Jayadeva
Reddy had issued a promissory note which had
allegedly been misused. Apart from the aspect
of misuse, there is no denial of the execution of
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the promissory note. Therefore, the first
Appellate Court ought to have taken this
admission into account by way of suggestions
to come to a conclusion that there is no denial
per se of the execution of the promissory note.
10.5. Insofar as the plaintiff's opposition to the
application for referring the promissory note
and receipt for forensic examination to
ascertain the veracity of signature, he submits
that this opposition was so made since there is
no admitted contemporaneous signature of
Jayadeva Reddy available for such reference
and in absence whereof, a signature which was
not contemporaneous could not be referred to
for forensic examination. In this regard, he
submits that this objection has been rightly
accepted by the trial Court. The trial Court
having rejected the application cannot be found
fault with and as such, he submits that the first
Appellate Court has erred on both the grounds
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and these grounds are not enough justification
for reversing the proper and correct findings of
the trial Court.
10.6. He submits that the execution of the
promissory note and receipt having been
established by the plaintiff by examining PW-3
who was the witness to the said execution, this
is sufficient compliance with Section 67 of the
Indian Evidence Act, 1872.
10.7. As regards the source, he submits that apart
from the plaintiff being in service as a Police
Inspector, he also possesses about 14 acres of
agricultural land where agricultural activities
had been carried out by the family. This
agricultural income was one of the sources for
having lent the money to Jayadeva Reddy. On
the above grounds, he submits that the appeal
is required to be allowed by setting aside the
judgment and decree of the first Appellate
Court.
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11. Sri.M.B.Chandrachouda, learned counsel for
respondents No.1, 3 and 5 - defendants would
submit that:
11.1. there is no transaction which has been entered
into by Jayadeva Reddy with the plaintiff. No
amount has been received during his lifetime
nor has any payment been made by the
plaintiff.
11.2. PW-3 is inimically disposed towards the family
of the defendants and therefore, he has given
false evidence in the matter. His further
submission is that until and unless the plaintiff
establishes the flow of consideration i.e., flow of
alleged loan to Jayadeva Reddy, the question of
the defendants being bound to make any
payment of any amounts would not arise.
11.3. He submits that insofar as suggestion which
had been put across to PW-3 was that in similar
manner as transaction entered into by
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Jayadeva Reddy with his sister's husband, a
promissory note has been prepared and
suggestion is not to the effect that the
promissory note issued in favour of the
husband of the sister of PW-3 has been
misused.
11.4. As regards the capacity of the plaintiff to
advance the amount, firstly, he submits that
the retirement benefits have been received by
the plaintiff only in the month of May 2006
whereas the amounts is stated to be advanced
in the month of February 2006. Therefore, it is
not believable.
11.5. As regards agricultural income, by referring to
Ex.P5 being the RTC extract, he submits that
even in respect of the lands said to belong to
the family of the plaintiff, the RTC extracts
reflects that there are no crops which have
been grown and further that a loan of
Rs.1,40,000/- had been borrowed. If at all
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there was an excess amount available, they
would not have borrowed any loan and as such,
this aspect cannot be believed is his
submission.
12. Heard Sri.H.K.Ravi, learned counsel for the appellant
and Sri.M.B.Chandrachouda, learned counsel for
respondents No.1, 3 and 5 and perused papers.
13. The contention of the plaintiff is that the plaintiff had
advanced an amount of Rs.4,75,000/- on 20.02.2006
to Jayadeva Reddy. The said Jayadeva Reddy is
stated to have expired on 27.08.2007. Shockingly,
the suit was filed on 03.09.2007 i.e., to say the suit
was filed within 7 days of the expiry of Jayadeva
Reddy. No notice had been issued by the plaintiff to
the legal representatives of Jayadeva Reddy i.e., the
defendants herein calling upon them to make
payment of aforesaid amount. Within seven days of
death of Jayadeva Reddy, a suit came to be filed by
the plaintiff seeking for relief of refund of the monies.
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14. Though the submission of Sri.H.K.Ravi, learned
counsel for the plaintiff is that there is estoppel in
terms of Section 120 and 121 of N.I.Act is
concerned, the estoppel firstly operates against the
drawer of the promissory note. Be that as it may,
the estoppel and/or presumption is a rebuttable one.
The defendants upon their appearance have
categorically denied that Jayadeva Reddy, husband
of defendant No.1 and father of defendants No.2 to 6
had any need to borrow any money and further had
gone on to say that Jayadeva Reddy in 75 years of
age neither had any avocation nor any ability of
earning to repay a loan of a sum of Rs.4,75,000/- let
alone with interest @ 2% p.m., that is to say 24%
p.a. Once such a statement was made it was but
required for the plaintiff to have established by
cogent evidence the manner in which the plaintiff has
made payment of monies to Jayadeva Reddy since
the presumption has already stood rebutted by the
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defendants by filing their written statement and
pleading to that effect. The plaintiff having been put
to notice of the said rebuttal did not lead any
evidence to establish the source of funds and/or the
payment of monies to Jayadeva Reddy except to
contend that the plaintiff derived the monies from his
retirement benefits and now before this Court to
contend that they derived the funds from agricultural
income.
15. Insofar as retirement benefits are concerned, the
first Appellate Court has come to a categorical
conclusion that the retirement benefits have been
received only in the month of May 2006 whereas the
loan is stated to be advanced in the month of
February 2006. Thus, if the retirement benefits have
been received subsequently, the question of earlier
payment from and out of retirement benefits cannot
be sustained.
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16. Insofar as the agricultural income is concerned, as
pointed out by Sri.M.B.Chandrachouda relying on
RTC extract, would indicate the loan taken by the
family of the plaintiff in respect of the said
agricultural land. This raises a presumption that
there is no excess money available with the plaintiff
to lend money to Jayadeva Reddy. If at all, there
was excess money or source of funds and/or flow of
funds to the plaintiff, the same was required to be
established by the plaintiff.
17. As regards the contention that PW-3 being the
witness to the promissory note and receipt as
deposed in favour of the plaintiff, the said deposition
cannot be accepted for the reason that there is a
categorical statement made in the written statement
that there is enmity between the defendants and the
said PW-3. It was therefore required for the plaintiff
to establish through independent evidence about flow
of monies.
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18. The defendants having denied the signature of
Jayadeva Reddy and themselves having filed an
application for reference of the promissory note and
receipt for forensic examination, shockingly, the said
application came to be opposed by the plaintiff
ofcourse now contending that the opposition was on
account of there being no contemporaneous
signature. It was indeed for the plaintiff to file such
an application seeking for reference of the disputed
documents for examination. The plaintiff having not
filed such an application but having chosen to oppose
an application filed by the defendants who had taken
the risk of referring the documents to the forensic
examination by denying that the signature was that
of Jayadeva Reddy, if at all plaintiff wanted
contemporaneous signature, he could have called
upon the defendants to produce any
contemporaneous signature of Jayadeva Reddy or
even sought for direction from the Court to do so.
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This not having been done and the plaintiff having
chosen to oppose an application for reference to
forensic examination also give raise to a situation
where the plaintiff cannot invoke on Section 120 and
121 of N.I.Act to raise a presumption or estoppel
when the defendants have categorically denied it.
19. These aspects going to the root of the matter, I am
of the considered opinion that the first Appellate
Court has rightly considered these aspects and
overturned the judgment of the trial Court and the
reasons given by the first Appellate Court are
sufficient justification for such overturning. Hence, I
answer the substantial question of law raised by
holding that the first Appellate Court was justified in
reversing the findings and in doing so, assigned
proper and valid reason to overcome the findings of
the trial Court. Therefore, there is no illegality
committed by the first Appellate Court. The appeal
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stands dismissed. The judgment of the first
Appellate Court stands confirmed.
Sd/-
JUDGE
PRS
