Karnataka High Court
Smt. Sathyavathi V Shetty vs Karunakara Bangera on 4 June, 2025
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RSA No. 728 of 2020
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF JUNE, 2025
BEFORE
THE HON'BLE MR JUSTICE ASHOK S.KINAGI
REGULAR SECOND APPEAL NO. 728 OF 2020 (MON)
BETWEEN:
SMT. SATHYAVATHI V SHETTY
AGED ABOUT 62 YEARS
W/O B VENUGOPAL SHETTY
R/AT FLAT NO.306, LAND LINKS TOWNSHIP,
NAVANAGARA, 1ST CROSS,
KONCHADY, DEREBAIL
MANGALORE - 575 020.
...APPELLANT
(BY SRI. SACHIN B S., ADVOCATE)
AND:
Digitally KARUNAKARA BANGERA
signed by AGED ABOUT 49 YEARS,
SUNITHA K S S/O LATE KUNHAPPA BELCHADA,
Location: R/AT D.NO.23/82, "YASHODA NILAYA",
HIGH COURT KAPIKAD POST, ULLAL
OF MANGALORE TALUK D.K - 575 017
KARNATAKA
...RESPONDENT
(RESPONDENT SERVED)
THIS RSA IS FILED UNDER SEC.100 OF CPC, AGAINST
THE JUDGMENT AND DECREE DATED 24.10.2019 PASSED IN
RA NO.284/2015 ON THE FILE OF THE PRINCIPAL SENIOR
CIVIL JUDGE CJM, MANGALURU, DK., DISMISSING THE APPEAL
AND CONFIRMING THE JUDGMENT AND DECREE DATED
07.10.2015 PASSED IN OS NO. 498/2013 ON THE FILE OF THE
IV ADIDTIONAL CIVIL JUDGE AND JMFC, MANGALURU, DK.
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RSA No. 728 of 2020
HC-KAR
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE ASHOK S.KINAGI
ORAL JUDGMENT
This Regular Second appeal is filed by the appellant
challenging the judgment and decree dated 24.10.2019
passed in R.A.No.284/2015 by the learned Principal Senior
Civil Judge and CJM, Mangaluru, D.K., and the judgment
and decree passed in O.S.No.498/2013 dated 07.10.2015
by the IV Additional Civil Judge and JMFC, Mangaluru, D.K.
2. For convenience, the parties are referred to
based on their rankings before the trial Court. The
appellant was the plaintiff, and the respondent was the
defendant.
3. Brief facts, leading rise to the filing of this
appeal are as follows:
The plaintiff filed a suit against the defendant for
recovery of money of Rs.3,08,000/- with future interest at
the rate of 18% p.a. until the date of payment. It is the
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case of the plaintiff that the defendant is the close friend
of the husband of the plaintiff, and he borrowed a sum of
Rs.2,00,000/- on 12.07.2010 from the plaintiff, executed a
demand promissory note and agreed to return the said
amount by the end of December 2010 with interest. The
defendant failed to repay the said amount. The plaintiff
got issued a legal notice on 21.07.2011, calling upon the
defendant to repay the loan amount with interest. The
defendant replied to the legal notice on 01.08.2011
denying the transaction between the plaintiff and the
defendant. Hence, a cause of action arose for the plaintiff
to file a suit for recovery of money. Accordingly, prays to
decree the suit.
3.1. The defendant filed a written statement
contending that the suit filed by the plaintiff is barred
under the provisions of the Karnataka Money Lenders Act
and denied the averments made in the plaint. It is
contended that the plaintiff and her husband are in the
habit of filing frivolous litigations against the defendant. It
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is contended that the plaintiff has also filed another suit
against the defendant in O.S.No.548/2013 for recovery of
money, and the husband of the plaintiff has filed a
complaint against the defendant in C.C.No.4789/2012 for
the offence punishable under Section 138 of the
Negotiable Instruments Act (for short 'N.I.Act'). The
husband of the plaintiff had filed Arbitration Application in
A.A.No.2/2011 before the District Judge, Mangaluru. It is
contended that the plaintiff is a stranger to the defendant
and that the defendant at any point in time had any
financial transaction with the plaintiff, and it is denied that
the defendant had borrowed a sum of Rs.2 lakhs from the
plaintiff. It is contended that the husband of the plaintiff
was working as a Chief Manager at Canara Bank,
Mangaluru. During the relevant point of time, the husband
of the plaintiff was working as a Chief Manager; this
defendant had availed of a loan from Canara Bank, and
the husband of the plaintiff had secured a signature on the
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blank papers, and misused the blank papers. Hence, prays
to dismiss the suit.
3.2. The trial Court, based on the pleadings of the
parties, framed the relevant issues.
3.3. The plaintiff, to substantiate her case,
examined herself as PW.1, and marked 6 documents. In
rebuttal, the defendant examined himself as DW.1 and
marked two documents as Exs.D1 and D2. The trial Court,
after recording the evidence, hearing on both sides and on
assessing the verbal and documentary evidence, dismissed
the suit with costs, vide judgment dated 07.10.2015.
3.4. The plaintiff, aggrieved by the judgment and
decree passed in O.S.No.498/2013, preferred an appeal in
R.A.No.284/2015 on the file of learned Principal Senior
Civil Judge, Mangaluru, D.K. The first Appellate Court,
upon reassessing the verbal and documentary evidence,
dismissed the appeal vide judgment dated 24.10.2019.
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3.5. The plaintiff, aggrieved by the impugned
judgments, filed this Regular Second Appeal.
4. Heard the arguments of Sri. Sachin B.S.,
learned counsel, for the plaintiff.
5. Learned counsel for the plaintiff submits that
the plaintiff had advanced a hand loan to the defendant,
and executed the demand promissory note. He submits
that there is a presumption under Section 118 of the N.I
Act. Both the Courts below have committed an error in not
drawing a presumption under Section 118 of the N.I. Act.
Hence, on these grounds, he prays to allow the appeal.
6. Perused the records, and considered the
submissions of the learned counsel for the plaintiff.
7. The plaintiff, to substantiate her case,
examined herself as PW.1. She has deposed that she had
advanced a hand loan of Rs.2 lakhs to the defendant on
12.07.2010, and the defendant agreed to repay the loan
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amount, but the defendant failed to repay the loan
amount. The plaintiff got issued a legal notice to the
defendant calling upon him to repay the loan amount. The
defendant replied to the legal notice, denying the
allegations made in it. The plaintiff, to substantiate her
case, produced the documents Ex.P1 is the Demand
Promissory Note. Exs.P2 and P3 are the copies of the
legal notice, Ex.P4 is the reply notice, Ex.P5 is the RTC
extract and, Ex.P6 is the certified copy of the Arbitration
Application in A.A.No.2/2011.
8. During the course of cross-examination of
PW.1, it was elicited that the amount of Rs.1,85,000/- was
paid from the account of her husband, and she has not
paid the amount from her account. The said admission of
PW.1 is sufficient to hold that there is no privity of
contract between the plaintiff and the defendant regarding
the alleged loan transaction. Furthermore, it is also
elicited that the plaintiff has filed another suit in
O.S.No.548/2013 for the recovery of money, the husband
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of the plaintiff has filed a complaint against the defendant
in C.C.No.4789/2012 for an offence punishable under
Section 138 of the N.I Act, and the husband of the plaintiff
has also filed an Arbitration Application in A.A.No.2/2011.
9. Conversely, the defendant examined himself as
DW.1; he reiterated the written statement averments in
the examination-in-chief, and he also denied the alleged
transaction between the plaintiff and defendant. He also
deposed that the plaintiff and her husband are in the habit
of filing the suit after suit, and a complaint against the
defendant. He also deposed that the husband of the
plaintiff was working as a Chief Manager in Canara Bank,
Mangaluru, and the defendant had obtained the loan from
the Canara Bank and had affixed his signature on the
blank papers, and the husband of the plaintiff has misused
those blank signatures on the blank papers, and is filing
the suit after suit and a complaint. Furthermore, the
defendant also produced the document at Ex.D1 to
establish that the husband of the plaintiff had filed
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A.A.No.2/2011, and produced a copy of the complaint in
O.S.No.548/2013, marked as Ex.D2, which discloses that
the plaintiff had filed a suit for recovery of money against
the defendant.
10. From the perusal of the entire evidence on
record, the plaintiff has failed to establish that the plaintiff
had advanced a hand loan of Rs.2 lakhs to the defendant.
11. Further, the learned counsel for the plaintiff
submits that the Courts below have committed an error in
not drawing a presumption under Section 118 of the N.I.
Act. The plaintiff has produced the document at Ex.P1 -
Demand Promissory Note. In support of the said
document, the plaintiff has not produced any records to
establish that the amount of Rs.1,85,000/- was paid by
the plaintiff to the defendant. It is well settled that the
presumption is a rebuttal. The defendant, by producing
the documents, i.e., Ex.D1 and Ex.D2, has rebutted the
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presumption that the plaintiff has not paid the alleged
amount as mentioned in the plaint.
12. From the perusal of the records, it is clear that
the plaintiff and her husband are filing the suit after suit,
complaint and arbitration proceedings. The plaintiff has
abused the process of law, and filed a false case against
the defendant. The trial Court was justified in dismissing
the suit of the plaintiff with costs. The first Appellate
Court was justified in affirming the judgment and decree
passed by the trial Court. As the plaintiff abused the
process of law, the plaintiff is liable to compensate the
defendant.
13. In view of the above discussion, I do not find
any error in the impugned judgments or any substantial
question of law that arises for consideration in this appeal.
14. Accordingly, I proceed to pass the following:
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ORDER
i. The Regular Second Appeal is dismissed with
compensatory costs.
ii. The plaintiff is directed to pay the
compensatory cost of Rs.30,000/- to the
defendant within two months; failing which,
the defendant is at liberty to recover the same
by due process of law.
Sd/-
(ASHOK S.KINAGI)
JUDGE
SKS
