Kerala High Court
Joy Mathai @ Joy M Mathai vs Bainu M Joseph on 26 August, 2025
RFA 53/2017
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE C.PRATHEEP KUMAR
TUESDAY, THE 26TH DAY OF AUGUST 2025 / 4TH BHADRA, 1947
RFA NO. 53 OF 2017
OS NO.943 OF 2011 OF PRINCIPAL SUB COURT, ERNAKULAM
APPELLANT/DEFENDANT
JOY MATHAI @ JOY M MATHAI
S/O. MATHAI, MANGALATHUPARAMBIL HOUSE,
KOODAPUZHA, EAST CHALAKUDY,
THRISSUR DISTRICT - 680307.
BY ADVS.
SRI.PHILIP T.VARGHESE
SMT.ACHU SUBHA ABRAHAM
SMT.ANN MALU ALBI
SMT.K.R.MONISHA
SMT.K.M.SUNU
SRI.THOMAS T.VARGHESE
RESPONDENT/PLAINTIFF
BAINU M JOSEPH, S/O. M.V. JOSEPH, MATHIRAPILLY
HOUSE, MANJUMMEL P.O, ERNAKULAM 683 501.
BY ADVS.
SRI.ANOOP JOSEPH
SMT.K.K.DAJULA
SMT.ZERENE LINDA MITCHEL
SHRI.K.B.ARUNKUMAR
SMT.ASWANI THUVVAKKADAN
SMT.KRISHNA S.
THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY
HEARD ON 20.8.2025, THE COURT ON 26.08.2025 DELIVERED
THE FOLLOWING:
RFA 53/2017
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JUDGMENT
Dated : 26th August, 2025
The defendant in O.S.943/2011 on the file of the Sub Court, Ernakulam, is
the appellant. (For the purpose of convenience, the parties are hereafter referred
to as per their rank before the trial court.)
2. The plaintiff filed this suit for realisation of money. According to
the plaintiff, while he was an unemployed person, he had discussed his idea to
start a business with his close relative Mr.Poly Varghese. During August, 2010,
the defendant approached him, claiming that the plaintiff was referred to him by
Mr.Poly Varghese, while he was attending a business meeting in UAE. Mr.Poly
Varghese informed him that the plaintiff is also intending to start some business
in Cochin. On 15.8.2010, the plaintiff met the defendant in a hotel at
Palarivattom, Ernakulam and the defendant told the plaintiff that he had taken a
building on rent at Palarivattom to start an accountancy school and also that he is
in search of energetic young people like the plaintiff to associate with him in his
business which he intends to start in Kerala. After discussions, the defendant
promised to appoint the plaintiff as the working partner and manager of the
accountancy school on a monthly salary of Rs.25,000/-. During the last week of
January, 2011, the defendant told the plaintiff that if he is ready and willing to
pay a sum of Rs.3,50,000/- to the defendant, he will appoint the plaintiff as a
manager of the accountancy school on a monthly salary of Rs.25,000/-. Though
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initially the plaintiff was reluctant to accept the above proposal made by the
defendant, later on agreed to pay a sum of Rs.3,50,000/- to the defendant. On
10.6.2011, the defendant contacted the plaintiff and told that he immediately
requires a sum of Rs.5,00,000/- and also that he will refund Rs.1,50,000/- within
one month. Accordingly, the plaintiff transferred a sum of Rs.5,00,000/- into the
account of the defendant through the plaintiff's bank namely, State Bank of India.
From the said amount, the defendant repaid a sum of Rs.1,26,000/- to the
plaintiff in instalments. The defendant promised to pay the entire balance amount
on the date of opening the Accountancy school on 17.8.2011 which is the 1 st day
of Malayalam New year. On 16.8.2011, the defendant informed the plaintiff that
due to some unforeseen contingencies, the accountancy school could not be
started and that the school will be opened by 10 th October 2011. He also
instructed the plaintiff to look after the works being undertaken in the office at
Palarivattom and agreed to contact the plaintiff on 7 th October, 2011. Thereafter
he learnt that the defendant defaulted huge amount towards arrears of rent and
that the defendant had not even contacted the building owner for quite long time.
Thereafter, the plaintiff realised that he was cheated by the defendant. It was in
the above context that he filed the suit for realising the balance amount of
Rs.3,74,000/-.
3. The defendant filed a written statement contending that he had
never met the plaintiff in August 2010 as introduced by Mr.Poly Varghese. He
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also denied having offered business partnership to the plaintiff and the post of
manager of the accountancy school. According to the defendant, he, along with
three other persons, entered into a partnership deed on 23.1.2011 for running a
Manual and Computerized Accountancy and Management Training Institute
under the name and style "SPAN Worldwide". After the execution of the
partnership deed, two partners unofficially retired and two others were inducted
as partners and a memorandum of understanding (MOU) was executed between
the defendant, Poly Varghese Vazhappilly and two others. Mr.Poly Varghese
assured to invest 30% of the share capital and accordingly Poly Varghese
transferred a sum of Rs.5,00,000/- through his relative, the plaintiff on 13.6.2011
to the bank account of the defendant. On the same day, the defendant issued a
security cheque drawn on HDFC bank, Chalakkudy branch in the name of Poly
Varghese. The said arrangement was only to secure the money invested by Poly
Varghese. As instructed by Poly Varghese, the plaintiff was engaged for the
purpose of renovating and furnishing the entire premises obtained by the
defendant for starting the business and a cheque for Rs.75,000/- was issued to the
plaintiff on 16.6.2011. Subsequently Rs.50,000/- was also given to the plaintiff
for carrying out additional works in the premises. In the meanwhile, there arose
some dispute within the partners and Mr.Poly Varghese was willing to
discontinue the partnership. Subsequently the accounts of Poly Varghese was
settled and the security cheque issued by the plaintiff was returned to him on
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13.6.2011. The defendant never borrowed any amount from the plaintiff as
alleged and he never offered any employment to him. Therefore, the defendant
prayed for dismissing the suit.
4. The trial court framed three issues. The evidence in the case
consists of the oral testimonies of PWs1 and 2 and DWs1 and 2, Exts.A1, B1, B2
and X1 to X4. After evaluating the evidence on record, the trial court decreed the
suit. Being aggrieved by the above judgment and decree of the trial court, the
defendant preferred this appeal.
5. Now the points that arise for consideration is the following :
1. Whether the defendant received a sum of Rs.5,00,000/- from the
plaintiff after promising to make him a partner and Manager in the
proposed Accountancy school, on a monthly salary of Rs.25,000/-?
2. Whether the impugned judgment and decree of the trial court calls for
any interference, in the light of the grounds raised in the appeal ?
6. The specific case of the plaintiff is that the defendant received a
sum of Rs.5,00,000/- from him after promising to make him a partner and
manager in the accountancy school to be opened by the defendant and to pay a
monthly salary of Rs.25,000/-. However, the specific case of the defendant is that
he had no direct dealings with the plaintiff. But according to him, he entered into
a partnership arrangement with one Poly Varghese and two others and towards
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the share capital payable by Poly Varghese, Rs. 5,00,000/- was paid by him
through the plaintiff, who is a close relative of Poly Varghese.
7. At the time of evidence, the plaintiff admitted that Mr. Poly
Varghese is the husband of his cousin. In this case, the defendant admits that the
plaintiff has transferred a sum of Rs. 5,00,000/- into his account. He also admits
that he had paid a sum of Rs. 1,26,000/- to the plaintiff. However, the specific
case of the defendant is that the above Rs. 1,26,000/- was entrusted with the
plaintiff for conducting the interior work of the rented building taken by him for
conducting business and not towards repayment of the amount received. At the
time of evidence, the plaintiff had no case that the amount transferred by him to
the account of the defendant was the amount received by him from Poly
Varghese. Moreover, when during the cross-examination of the plaintiff as PW1,
a specific suggestion was put to him to the effect that the money transferred by
him to the defendant was the one entrusted with him by Mr. Poly Varghese, he
stoutly denied the same.
8. According to the plaintiff, the amount which was transferred into
the account of the defendant was the amount received by him from his provident
fund, gratuity, from his father as well as from his wife. However, he could not
produce any evidence to prove the above claim that the amount came into his
account was from his provident fund, gratuity, from his father and his wife.
However, when at the instance of the defendant, DW 1, the Manager, State Bank
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of India, North Puthiya Road branch was examined, it is revealed that the above
claim of the plaintiff is false. According to DW1, an account was opened in the
name of the plaintiff on 10.05.2011. According to DW1, on the date of opening
of the account itself, a sum of Rs. 25,00,000/- was transferred into the account of
the plaintiff from the account of Mr.Poly Varghese. Exhibit X1 is the extract of
the above account produced by him. He further deposed that Mr. Poly Vargese
had NRI account with his bank and Exhibit X3 is the statement of the above
account. Poly Varghese had a housing loan account in the said bank and Exhibit
X4 is the statement of the above account. According to DW1, on 10.05.2011, a
sum of Rs. 25,00,000/- was sanctioned to Poly Varghese in Exhibit X4 loan
account and on the same day, the above Rs 25,00,000 was transferred into
Exhibit X3 account of Poly Varghese and thereafter, on the very same day the
above Rs. 25,00,000 was transferred into the account of the plaintiff namely
Exhibit X1. It was from the above Rs. 25,00,000/- transferred by Mr. Poly
Varghese into the account of the plaintiff, on 13.06.2011 the plaintiff transferred
Rs.5,00,000/- into the account of the defendant.
9. As I have noted above, during the cross examination of the plaintiff
as PW1, he categorically denied the suggestion put to him by the learned counsel
for the defendant that the amount transferred by him to the defendant is the
amount transferred to his account by Poly Varghese. The above evidence of PW1
is proved to be false in the light of the evidence of DW1 and Exts.X1 to X4.
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10. From the evidence of PW1, it is revealed that his place of residence
is Manjumal while State Bank of India, North Puthiya road branch is about 30
kilometers away from his place of residence. When he was asked about the
reason for opening an account at North Puthiya road branch about 30 kilometers
away from his place of residence, his answer was that it was for the purpose of
availing agricultural loan from the bank. During the cross examination, the
plaintiff claimed that he had availed agricultural loan of Rs.3,00,000/- from the
said bank in the year 2011. However, when DW 1 was examined, he deposed that
the plaintiff availed only a loan of Rs. 1,00,000/-as agricultural loan and that too
was only on 28.04.2016. Therefore, the answer given by the plaintiff that he had
opened an account with State Bank of India, North Puthiya road Branch on
10.05.2011 for the purpose of availing agricultural loan was also proved to be
incorrect. The fact that the plaintiff opened an account at a distant place and on
the same day a sum of Rs.25,00,000/- was transferred by Poly Varghese and out
of which Rs.5,00,000/- was transferred to the account of the defendant are
circumstances probabilising the case of the defendant.
11. Exhibit B1 is the memorandum of understanding entered into by
the defendant along with Mr. Poly Varghese and two others. From Exhibit B1 it
can be seen that they have mutually agreed to carry on the business of Manual
and Computerized Accountancy and Management Training Institute and the
initial registered capital of the company was fixed at Rs. 30,00,000/-. Out of
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which, Mr. Poly Varghese agreed to pay 30% while the defendant's contribution
is 10%. Exhibit B2 is the cheque for Rs.5,00,000/- dated 13.06.2011 drawn on
HDFC Bank issued by the defendant in favour of Mr. Poly Varghese. The case of
the defendant is that, Ext. B2 cheque was issued to Mr. Poly Varghese as security
for Rs. 5,00,000/- paid by Poly Varghese through the plaintiff to him. According
to him, subsequently, the relationship with Poly Varghese got strained, the claims
of Poly Varghese were settled and thereafter, Exhibit B2 cheque leaf was
returned to the defendant.
12. The date of Exhibit B1 is 2.6.2011. In the impugned judgment, the
trial court assumed that the date on which the plaintiff transferred Rs.5,00,000/-
into the account of the defendant was on 10.05.2002, even before the formation
of Exhibit B1 MoU. However, the above finding of the trial court is incorrect as
the date of transfer of Rs. 5,00,000/- by the plaintiff to the account to the
defendant was on 13.06.2011, after the creation of Exhibit B1 and not before
Exhibit B1. It was in the above context that the trial court disbelieved the case of
the defendant that the above Rs. 5,00,000/- was transferred into his account in
pursuance to the execution of Exhibit B1.
13. As per the pleadings in the plaint, the defendant was not a close
friend of Mr. Poly Varghese. However, at the time of evidence, his version was to
the effect that the defendant is a close friend of Mr. Poly Varghese. At the time of
evidence, the plaintiff admitted that his basic qualification is only pre-degree and
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that he has not passed B.Com. In the above circumstances, his claim that the
defendant promised to appoint him as manager in the accountancy school of the
defendant was highlighted as an improbable claim by the learned counsel for the
defendant. The case of the plaintiff that the defendant promised a salary of Rs.
25,000/- per month to such a person in the year 2011 was also highlighted by the
learned counsel, to disbelieve the case of the plaintiff.
14. During the cross examination PW1 he admitted that he had
received Rs. 1,26,000/- from the defendant. According to him, the said amount
was received by him in several installments. When it was suggested that the
above Rs. 1,26,000/- was given by the defendant to him for the purpose of the
interior work of the rented building taken by the defendant at Palarivattom, he
stoutly denied the said suggestion. Though the plaintiff claimed that the
defendant promised to give the job of manager in the accountancy school to be
opened by him, he could not produce any documents to prove it. Though the
plaintiff claimed that he had worked in some companies as Site manager, he has
not produced any documents in that respect also. Though from the evidence of
DW 1 and from the documents produced by him, it is revealed an amount of
Rs.25,00,000/- was transferred by Poly Varghese to the account of the plaintiff,
he has not offered any explanation as to why Mr. Poly Varghese has transferred
so much amount into his account on 10.05.2011. The conduct of the plaintiff in
stoutly denying the transfer of the money into his account by Poly Varghese
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speaks volumes, in the light of the defendant's case that the actual transaction
was with Poly Varghese and not with the plaintiff. As I have already noted above,
the reason given by the plaintiff to open an account in a far off place was also
found to be incorrect.
15. The cumulative effect of the aforesaid circumstances are sufficient
to conclude that, the case put up by the defendant that the above Rs. 5,00,000/-
was transferred by the plaintiff into his account at the instance of Mr. Poly
Varghese is the probable one. It will further go to show that the contention of the
plaintiff that he had advanced Rs. 5,00,000/- to the defendant as he promised the
job of Exhibit B1 MoU and Ext.B2 cheque also substantiates the above
conclusion. Mr. Poly Varghese has not came up with any case that the amount
due to him from the defendant was not repaid. In the above circumstance, the suit
filed by the plaintiff claiming that the defendant owes a sum of Rs.3,74,000/- to
him is unsustainable and liable to be dismissed. Therefore, it can be seen that the
trial court has failed to appreciate the evidence on record in the correct
perspective, and as such, this appeal is liable to be allowed and the impugned
judgment and decree of the trial court is liable to be set aside and the suit O.S.
No. 943 of 2011 is liable to be dismissed. Points answered accordingly.
16. In the result, this appeal is allowed. The impugned judgment and
decree of the trial court are set aside. OS No. 943 of 2011 on the file of the Sub
Court, Ernakulam is dismissed with costs.
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All pending interlocutory applications in the appeal will stand dismissed.
Sd/-
C.Pratheep Kumar, Judge
Mrcs/21.8.
