10. The defendants have put forth common defense in
these suits. In para 6 of their written statement filed in
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transfer from his wife and daughter respectively. This sale
transaction was oral one because, my Sister and Brother
agreed to execute the written sale agreement with a
stipulated condition that if the 50% of the sale value is paid
i.e., Rs.90.5 lakhs by Sri. Venkatanaidu, on that day the
written sale agreement shall be executed in favour of either
Sri. Venkatanaidu or the plaintiffs or his nominees.
Subsequently, due to his personal personal inconvenience he
could not arrange the remaining balance of sale amount and
upon his request the oral sale transaction was cancelled the
money advanced by him and through the plaintiffs were
returned and repaid by 8.3.2011 which is acknowledged by
the plaintiffs and their Manager of the M/s. Sai Automobiles,
Bellary."
11. During her evidence, Plaintiff No.1 in O.S
No.189/2013 reiterated the averments of the plaint and stated
that as the 1st defendant was in need of financial assistance, she
had sought loan from her and her daughter. She further stated
that at that time she had requested for security, for which the
original title deeds of the property standing in the name of 1st
defendant were handed over to her husband. Then, they had
lent money through two cheques for Rs.10,00,000/- each, which
was encashed on 30.12.2010. She also stated that thereafter,
she and her daughter were demanding the defendants to repay
the borrowed amount along with agreed rate of interest but the
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defendants delayed and postponed the repayment on one or the
other pretext.
12. The materials on record belie this assertion. This is
evident from Plaintiff No.1's categorical admissions during cross
examination, which are extracted below:
"... I don't know both the defendants. Witness voluntarees
that I know Mr.Mahesh. My daughter 2nd plaintiff also does
not know both the defendants. I have been residing in
Bengaluru since 10 years before that I was residing at
Ballari. I saw the 2nd defendant. But, not the 1st
defendant. I don't know the details of the loan transaction I
have narrated in a para No.1 of the plaint. Witness
voluntarees that but I was present in the house and saw
the conversations between them.
... I am not remembering the exact the date of said
conversation/transaction. I do not know the quantum of loan
lent. I don't know how the original documents/title deeds of
the cantonement property came to the hands of my
husband. On 30.12.2010, I had handed over the cheque to
the Mahesh.
Q: Then first defendant did not come and asked the loan?
A: No. It was Mr. Mahesh who approached me. ..."
Added to the above, PW-1 unequivocally admitted that as on
30.12.2010, Plaintiff No.2 was in America. These admissions
establish that Defendant No.1 neither approached Plaintiff No.1
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nor Plaintiff No.2 for financial assistance and that Plaintiff No.1
has no personal knowledge about the loan amount or how the
original title deeds of the property at Cantonment, Ballari, came
to the hands of her husband. In this suit, the plaintiffs have not
examined any other witness in support of their case. Thereby, it
is evident that the plaintiffs herein failed to discharge the initial
burden of proving their case.
13. The Trial Court acknowledged this glaring
discrepancy in paragraph 19 of the impugned judgment.
Nevertheless, it erroneously presumed that Plaintiff No. 1's
husband managed the entire loan transaction with Sri Mahesh R.
Agiwal, and concluded that the plaintiffs discharged their burden
of proof on a preponderance of probabilities. This finding is
wholly unsupported by any pleading or evidence on record.
14. The suit in O.S. No.186/2013 is based on pronote.
Pronotes, attract a statutory presumption of validity and
consideration under Section 118 of the Negotiable Instruments
Act, 1881 (NI Act). It is a rebuttable presumption. Once the
plaintiff proves execution, pronote is presumed made or drawn
for consideration. Then, the burden shifts to the defendant to
disprove it with cogent evidence, not mere denial. We need to
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re-appreciate the materials on record, in the light of this well
settled legal position of both question of fact and law, being the
First Appellate Court.
15. The plaintiff herein namely Sri G.P. Venkata Naidu, in
his deposition as PW-1, contended that Defendant No.1 - Sri
R.Shyamsunder Agiwal had approached him seeking financial
assistance to a tune of Rs.30,00,000/- and after receipt of the
said amount in cash, executed an on demand pronote in his
favour on 05.12.2012, agreeing to repay the same with interest
at 24% per annum. In order to substantiate this contention, he
produced a pronote at Ex.P1 and examined one more witness i.e,
PW-2.
16. It is the definite case of the plaintiff that after receipt
of Rs.30,00,000/- in cash, first defendant executed an on
demand pronote in his favour on 5.12.2012, as per Ex.P1.
However, during his cross examination, he stated that it was on
5.11.2012, the first defendant came to his residence at Sahakara
Nagar, Bengaluru to receive the money as he was in urgent need
of amount. Thus, the above statement of the plaintiff gives an
impression that the payment of money and execution of pronote
did not take place on the same day.
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17. The plaintiff has further stated that at the time of
handing over the amount, the driver of the first defendant and
PW-2 namely Sri Satish were present. Initially, during his cross
examination PW-2 stated that the driver of the first defendant
was outside the house. Later on, he stated that the car driver
and the wife of the plaintiff were also present at the time of the
transaction along with them. However, pronote marked at Ex.P1
bears the signature of PW-2 as its sole attesting witness.
Thereby, the materials on record do not probabilise the presence
of the car driver or the wife of the plaintiff as claimed by the
plaintiff and PW-2.
18. PW-2, Sri Satish, testified in examination-in-chief
that Defendant No.1 executed the pronote in his presence after
receiving Rs.30,00,000/- in cash from the plaintiff. However,
during cross-examination, he expressed his ignorance about
details of suit transaction as well as from where the plaintiff
brought the money to handover it to the first defendant. These
self-contradictory statements of PW-2 coupled with his
employment under the plaintiff, shows that he is an interested
witness, which render his testimony unreliable. The Trial Court
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erred in relying on such inherently deficient evidence to invoke
the statutory presumption against the first defendant.
19. At this stage, it requires to bestow our attention to
one more specific contention of the plaintiffs. In both these
suits, it is contended that the suit transactions were secured by
deposit of title deeds. The plaintiffs have even failed to
substantiate this contention. It is because as per the averments
of the plaint the loan transactions pertaining to the suits in O.S.
Nos.189/2013 and 186/2013 took place in the year 2010 and
2012 respectively. The case of the plaintiffs in O.S. No.189/2013
is that before lending the money, they had requested the first
defendant - Smt. Sunita Tapadia to give security, pursuant to
which the original title deeds were handed over to the husband,
who is the plaintiff in O.S. No.186/2013. Whereas, the plaintiff in
O.S. No.186/2013 has also claimed (in para 4 of the plaint) that
at the time of borrowing the loan amount the first defendant had
produced the original title deed of the second defendant, for the
purpose of availing loan facility from him. If this version is
believed, then it should be held that the plaintiff herein received
the original title deeds only in the year 2012.
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20. On the other hand, the defendants contended that
they received Rs.30,00,000/- as an advance from Sri G.P.
Venkata Naidu for a proposed sale transaction, which they fully
repaid upon its cancellation. To substantiate this, they produced
Ex.D1 in O.S. No.189/2023, a document purporting to be an
acknowledgment/receipt from Smt. G.P. Lakshmi Narasamma
confirming receipt of the entire Rs.30,00,000/- from them. This
Court finds no valid basis to accept the contention of the
defendants particularly in so far as alleged repayment of the
amount concerned. Admittedly, the defendants received
Rs.20,00,000/- via cheques from the plaintiffs in O.S.
No.189/2013. Yet, it is contended that the defendants repaid
entire amount of Rs.30,00,000/- in cash. Notably, Ex.D1
explicitly records payment of Rs.15,00,000/- only with an
endorsement ratifying receipt of the total Rs.30,00,000/-. During
their evidence, DW-2 and DW-3 have stated that Sri G.P.
Venkata Naidu was present when Ex.D1 was obtained. However,
the defendants offered no explanation for failing to obtain a
separate acknowledgment/receipt from Sri G.P. Venkata Naidu
himself despite the payment ostensibly refunding the advance
received from him. The defendants offered no explanation for
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failing to take back the original title deeds with Sri G.P. Venkata
Naidu even after alleged repayment of entire advance amount.
21. It is true that the defendants admit receiving
Rs.20,00,000/- through cheques issued by the plaintiffs in O.S.
No.189/2013. However, this admission cannot sustain any
presumption in the plaintiffs' favour. The record unequivocally
shows that the defendants, Smt. Sunita Tapadia and Sri R.
Shyamsunder Agiwal, never approached the plaintiffs for
financial assistance. Further, the plaintiff in O.S. No.186/2013
failed to prove lending Rs.30,00,000/- to Sri R. Shyamsunder
Agiwal, especially in cash. Consequently, the defendants' bare
admission of receiving Rs.30,00,000/- from the plaintiffs,
coupled with their unproven repayment claim, does not entitle
the plaintiffs to the suit reliefs.
22. It is trite law that the plaintiff must prove his case
independently and succeed on merits of the case rather than
relying on the weakness of the defendant's case. As such, the
initial burden is always on the plaintiff to prove his case and to
establish his claim with sufficient proof. In the cases on hand,
the pivotal issue is whether any loan transaction occurred
between the plaintiffs and defendants, followed by the latter's
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default in repayment. Upon re-appreciating the record, this Court
conclusively holds that the plaintiffs failed to establish the
alleged loan transactions. The defendants' admission of receiving
Rs.20,00,000/- neither strengthen the plaintiffs' claim nor the
defendants' inability to fully prove repayment, warrants a
direction to make payment to the plaintiffs. For the foregoing
reasons, the point for consideration is answered in the negative.
23. In the result, this Court proceeds to pass the
following:
ORDER
i) The Appeals are allowed with cost.
ii) The judgment and decree dated
17.04.2017 passed in O.S. Nos.186/2013
and 189/2013 by learned Principal Senior
Civil Judge and CJM, Ballari is set aside
and consequently the said suits are
dismissed.
iii) The amount in deposit in both the appeals,
if any, is ordered to be released to the
appellants, on proper identification.
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iv) Draw a decree accordingly and send back
the record to concerned Trial Court,
forthwith.
Sd/-
(H.P.SANDESH)
JUDGE
Sd/-
(B. MURALIDHARA PAI)
JUDGE
RKM/YAN
CT-CMU
