Thangathai vs Poolpandian
2021 Latest Caselaw 12091 Mad

                                                                      S.A.(MD)Nos.785 & 786 of 2013

                        BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

                                               DATED: 22.06.2021

                                                      CORAM:

                             THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN

                                         S.A.(MD)Nos.785 & 786 of 2013
                                                     and
                                           M.P.(MD)Nos.1 & 1 of 2013

                   In S.A.(MD)No.785 of 2013 :-

                   Thangathai                             ... Appellant/Appellant/Defendant
                                                      -Vs-


                   Poolpandian                              ... Respondent/Respondent /Plaintiff

PRAYER: Second Appeal is filed under Section 100 of the Civil Procedure Code, against the Judgment and Decree passed in A.S.No.24 of 2010, dated 18.12.2012 on the file of the Principal District Court, Tuticorin reversing the Judgment and decree passed in O.S.No.12 of 2004, dated 24.08.2010 on the file of the Sub Court, Kovilpatti.

                                      For Appellant         : Mr.H.Arumugam
                                      For Respondent         : Mr.Nalla Thambi
                   In S.A.(MD)No.786 of 2013

                   Thangathai                      ... Appellant/1st Respondent/ Plaintiff
                                                      -Vs-


                   1.Ramakrishnan

https://www.mhc.tn.gov.in/judis/



                                                                    S.A.(MD)Nos.785 & 786 of 2013

                   2.Parthasarathy               ... Respondent 1 & 2/Apellants/ Defendants 1& 2
                   3.Poolpandian              ... 3rd Respondent/ 2nd Respondent / 3rd Defendant

PRAYER: Second Appeal is filed under Section 100 of the Civil Procedure Code, against the Judgment and Decree passed in A.S.No.22 of 2010, dated 18.12.2012 on the file of the Principal District Court, Tuticorin reversing the Judgment and decree passed in O.S.No.63 of 2008, dated 24.08.2010 on the file of the Sub Court, Kovilpatti.

                                        For Appellant       : Mr.H.Arumugam
                                        For R3           : Mr.D.Nalla Thambi
                                        For R2          : Mr.K.Rajeswaran


                                             COMMON JUDGMENT

These second appeals arise out of a common Judgment pronounced

by the Sub Court, Kovilpatti in O.S.Nos.12 of 2004 and 63 of 2008.

O.S.No.12 of 2004 was filed by Poolpandian on the file of the Sub Court,

Kovilpatti against the appellant Thangathai for recovering a sum of

Rs.2,11,183/- with subsequent interest. Thangathai filed her written

statement denying the suit transaction. According to her, she had financial

dealings only with Ramakrishnan and that the said Ramakrishnan had

misused the documents and filed the instant suit through his friend

Poolpandian. In the mean while, Thangathai came to know that on the

strength of the power of attorney executed by her in favour of

https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

Ramakrishnan on 21.02.2002, Ramakrishnan had executed a sale deed in

favour of his son on 27.06.2003 and also got it registered. She therefore

filed O.S.No.99 of 2003 on the file of the District Munsif Court, Kovilpatti

seeking the relief of declaration that the said sale deed was null and void.

She also sought the relief of permanent injunction restraining the

defendants from alienating the suit property. Since the plea putforth by her

was common to both the proceedings, Thangathai filed a petition for

transferring the suit filed by her to the file of the Sub Court. In the said

transfer petition, neither Poolpandian nor Ramakrishnan entered

appearance. The suit filed by Thangathai was transferred to the file of the

Sub Court, Kovilpatti and re-numbered as O.S.No.63 of 2008. The suits

were jointly tried. Poolpandian examined himself as P.W.1. He marked

Ex.A1 and A2 promissory note dated 20.04.2003 and 22.06.2003. He also

marked Ex.A3-suit notice. Ex.A4 is the acknowledgment card signed by

Thangathai. P.W.2-Ravichandran was the attestor of Ex.A2. Ganesan

another attestor was also examined, but since he did not turn up for cross

examination, his evidence was eschewed. Ramakrishnan examined himself

as P.W.4 and his son Parthasarathy in whose favour the suit sale deed was

executed was examined as P.W.5. The defendant examined herself as D.W.1

and one Velladurai as D.W.2. Ex.B1 to Ex.B14 were marked on her side.

The learned trial Judge, after a consideration of the evidence on record, https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

decreed both the suits. Aggrieved by the same, Thangathai filed A.S.No.24

of 2010, while Ramakrishnan and Parthasarathy filed A.S.No.22 of 2010.

In the first appeal, Poolpandian filed I.A.No.66 of 2011 for adducing

additional evidence. Both the appeals were heard together by the first

Appellate Court. By Judgment and decree dated 18.12.2012, the First

Appellate Court allowed A.S.No.22 of 2010 filed by Ramakrishnan and

Parthasarathy and dismissed A.S.No.24 of 2010 filed by Thangathai.

Questioning the same, Thangathai filed the aforesaid second appeals.

2.S.A.(MD)No.785 of 2013 is directed against the Judgment and

decree made in A.S.No.24 of 2010. S.A.(MD)No.786 of 2013 is directed

against the Judgment and decree made in A.S.No.22 of 2010.

3.S.A.(MD)No.785 of 2013 was admitted on the following

substantial questions of law:-

“a. Whether the Courts below have failed to consider that Ex.A1 and Ex.A2 are not valid promissory notes as contemplated under Section 4 of Negotiable Instruments Act, 1881?

b. Whether the appellant had rebutted the presumption as to passing of consideration under the promissory note as contemplated under Section 118 of Negotiable Instruments Act, 1881? ”

https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

4.S.A.(MD)No.786 of 2013 was admitted on the following

substantial questions of law:-

“a. Whether the lower Appellate Court has wrongly interpreted Section 92 of Indian Evidence Act, 1872 and held that the appellant is not entitled to take any plea against registered document in Ex.B7 without considering the proviso, which enables the parties to prove the nature of transaction?

b. When there is no pleading in the written statement that consideration was paid for the power of attorney in Ex.B.7 and also it is not case of the first respondent that he paid any amount whether the Lower Appellate Court is right in giving a finding that Ex.B.7 was supported by consideration?

c. When the sale deed in Ex.B.10 is not supported by consideration whether the Lower Appellate Court is right in accepting the same as a valid sale?

d. Whether the Lower Appellate Court erred in not considering Sections 213 and 218 of Indian Contract Act, 1872 since the first respondent has not pleaded and proved the settlement of accounts pursuant to Ex.B.10 sale deed executed in favour of his own son?”

5.The learned counsel appearing for the appellant contended that the

defendant Thangathai did not borrow any money from Poolpandian and that

she did not execute any promissory note in his favour. She was running a

matriculation school and she wanted to start a teacher education college and

for that purpose, she had borrowed money from the various persons. She

https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

admits that she took a loan of Rs.2,60,000/- from Ramakrishnan.

Ramakrishnan asked her to execute Ex.B7 dated 21.02.2002 in his favour as

security towards the said loan. She alleged that on the said date, an un-

registered receipt-Ex.B11 was obtained by Ramakrishnan as if the sale

amount was received. In Ex.B11, Poolpandian is figuring as an attesting

witness. According to Thangathai, Ramakrishnan began to demand

exorbitant interest. She claimed that she paid interest upto February 2003.

Towards interest-Liability, for the period from March to June 2003, she

executed Ex.A1-Pro-note for a sum of Rs.44,000/-. She would further

claim that Poolpandian and Ramakrishnan often came to the School campus

and interfered with her administration leading to lodging of Ex.B6-police

complaint against them. His core argument is two fold :

(a) A mere perusal of the evidence on record would indicate the close

proximity between Poolpandian and Ramakrishnan. Ramakrishnan apart

from grabbing her property had also set up Poolpandian to file a money suit

on the strength of Ex.A1 and Ex.A2. According to the plaintiff, she had no

transaction whatsoever with Poolpandian and the said documents fail for

want of consideration.

(b) Ex.A1 and Ex.A2 have admittedly been insufficiently stamped.

Their nomenclature is immaterial. At the time of marking them in evidence,

the appellant's counsel had raised objection. The objection as regards the https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

inadmissibility of Ex.A1 and Ex.A2 was not at all gone into or determined.

Since O.S.No.12 of 2004 is anchored entirely on inadmissible documents,

the suit itself is not maintainable.

6.As regards the claim in O.S.No.63 of 2008, the learned counsel

would point out that Ramakrishnan had originally pleaded that the power of

attorney was voluntarily executed by Thangathai in his favour and that

Parthasarathy purchased the said property for valuable consideration.

Parthasarathy claimed to be a bonafide purchaser for value. Poolpandian

who was shown as the third defendant in O.S.No.63 of 2008 also filed his

statement supporting the stand of Ramakrishnan. The learned counsel for

the appellant submitted that the manner in which Poolpandian and

Ramakrishnan had conducted the case would clearly indicate that they were

hand in glove.

7.The learned counsel for the appellant relied on the decision

reported in (1971) 1 MLJ 214 (Thenappa Chettiar Vs. Andiappa Chettiar)

for the proposition that an insufficiently stamped negotiable instruments is

utterly inadmissible in evidence. The said decision was subsequently

followed in the decision reported in (2006) 2 MLJ 379. He also pointed out

that what was originally permitted by the trial Court was only marking of

the document and that cannot be said to mean that Ex.A1 and Ex.A2 were https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

admitted in evidence. He therefore contended that Section 36 of the Stamp

Act will not have any application. He also took me through the evidence of

the other witnesses and contended that the power of attorney was originally

executed only for the purpose of security and that parties never intended to

use it for effecting conveyance. He would point out that the sale deed came

to be executed in the name of the son of Ramakrishnan. He also drew my

attention to the fact that the original parent deeds are very much lying with

the appellant and she marked the same as Ex.B1. For a very long time, even

revenue records also stood in the name of the appellant. He also would

point out that the sale consideration has been mentioned as Rs.71,000/- and

witnesses themselves admitted that they later paid the deficit stamp duty by

valuing the document at Rs.4,00,000/-. He would also point out that if

really Ramakrishnan was appointed as the appellants's power agent,

certainly, Ramakrishnan would have rendered accounts. There is absolutely

no evidence to show that Ramakrishnan ever rendered accounts. The

deposition of Ramakrishnan was completely contrary to what was pleaded

by him. Ramakrishnan, while in the box, would claim that he had paid the

entire sale consideration of Rs.2,60,000/- to the appellant even at the time

of executing the power of attorney. The testimony of Parthasarathy does not

really advance the case of the respondents herein. It is apparent that he was

really not in the know of things.

https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

8.Per contra, the learned counsel appearing for Thiru.Poolpandian,

would place heavy reliance on the decision reported in (1980) 2 MLJ 234

(Kanhailan Chandak Vs. R.Mohan). In the said decision, two earlier

decisions of the Supreme Court reported in AIR 1961 SC 1655 (Javer

Chand Vs. Pukhraj Surana) and (1978) 3 SCC 236 (Ram Rattan Vs.

Bajrang lal) were referred to for the proposition that when an insufficiently

stamped promissory note had been admitted in evidence, in view of the

Section 36 of the Stamp Act, its admissibility cannot be later questioned. He

would also point out that Poolpandian had nothing to do with

Ramakrishnan and that the signatures attributed to Thangathai in Ex.A1

and Ex.A2 have not been disputed. He would therefore submit that

presumption under Section 118 of the Negotiable Instruments Act will

come into play and that Thangathai had not at all rebutted the said

presumption. He pressed for dismissal of S.A.(MD)No.785 of 2013.

9.Thiru.Ramakrishnan respondent in the other second appeal had

passed away. However, there is no need to bring the legal heirs on record

as his son Parthasarathy is already one of the respondents in the second

appeal. The learned counsel appearing for Parthasarathy would submit that

the first Appellate Court had correctly came to the conclusion that when the

power of attorney is a valid document, the suit sale deed executed on its https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

basis cannot be nullified. He pressed for dismissal of S.A.(MD)No.786 of

2013.

10.I carefully considered the rival contentions and went through the

evidence on record. O.S.No.12 of 2004 was filed by Poolpandian on the

strength of Ex.A1 and Ex.A2. They have not been drafted in the usual

manner. The learned counsel appearing for the appellant would state that

Ex.A1 and Ex.A2 are promissory notes payable otherwise than on demand.

Thiru.Nalla Thambi, learned counsel appearing for Poolpandian would

submit that Ex.A1 and Ex.A2 would fall under the category of bills of

exchange. However, there is a consensus on either side that Ex.A1 and

Ex.A2 are insufficiently stamped documents. Whether they are considered

as promissory notes or as bills of exchange, the undisputed fact is that they

are insufficiently stamped documents.

11.According to the learned counsel appearing for Poolpandian,

record would indicate that the trial Court rejected the objection of

Thangathai's counsel and permitted them to be marked on 08.02.2010.

Therefore, Section 36 of the Indian Stamp Act would come into play. He

relied on the decision reported in (1980) 2 MLJ 2349 (Kanhailan

Chandak Vs. R. Mohan).

https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

12.If I conclude that Ex.A1 and Ex.A2 had been admitted in

evidence, Section 36 of the Indian Stamp Act would come into play and the

issue of admissibility would stand foreclosed.

13.I carefully perused the original record. There can be no dispute

that when Poolpandian wanted to mark Ex.A1 and Ex.A2, the counsel for

Thangathai raised his objection. It has also been duly noted. But then, on

08.02.2010, the learned trial Judge had endorsed that the documents can be

marked and permitted their marking. The expression used by the Court

below is “me;j Mtzq;fs; FwpaPL nra;aj;jf;fit vd;W cWjp

nra;J me;j Mtzq;fs; FwpaPL nra;a mDkjpf;fg;gLfpwJ.”

14.There is a fundamental distinction between marking the

documents and admitting the same in evidence. The Hon'ble Supreme

Court in the decision reported in (2006) 11 SCC 331 (Shyamal Kumar Roy

Vs. Sushil Kumar Agarwal) had held that when the sufficiency of stamp

duty paid on an instrument has not been determined, the document can be

taken in evidence with an endorsement that “objected, allowed subject to

objection”. That would only be a tentative marking. In such a situation,

Section 36 of the Act would not be attracted. Of-course, in the case on

hand, the documents were allowed to be marked by over-ruling the https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

objection raised by Thangathai. Unfortunately, the trial Court has not spelt

out as to how the objection raised by the opposing counsel was liable to be

over-ruled.

15.When the counsel for a party raises a specific objection and if

without proper judicial determination, the document is allowed to be

marked in evidence, that would only amount to a tentative marking.

Otherwise, the very purpose of Section 35 will be defeated. If by a

reasoned order, the objection is overruled and the contestant fails to

challenge the same before the higher forum immediately thereafter, then,

Section 36 of the Stamp Act would come into play. The case on hand is not

one such. When Exs.A1 and A2 were tendered in evidence, the counsel for

the defendant/appellant herein objected. Without assigning any reason, it

was subsequently allowed to be marked. Hence, it will only amount to

tentative marking. The admissibility of the said documents can be gone into

in this appeal also. Exs.A1 and A2 stipulate that the amount covered by

them must be paid within one month and six months respectively.

Therefore, they have to be treated as pro-notes payable otherwise on

demand. Hence, stamp duty must be under Article 49 (b) and the proper

duty is Rs.26.40 and Rs.180/- respectively. The documents have stamped at

Rs.5 and 6/- respectively. It is beyond dispute that Exs.A1 and A2 are https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

insufficiently stamped. The defect goes to the root of the matter and cannot

be cured as Section 35 excludes pro-notes. In view of the decision reported

in (1971) 1 MLJ 214 (Thenappa Chettiar vs. Andiappa Chettiar), I have to

hold that since Exs.A1 and A2 have been insufficiently stamped, they

cannot be validated by payment of penalty and hence inadmissible for any

purpose. Therefore, I answer the substantial questions of law formulated in

S.A.(MD) No. 785 of 2013 in favour of the appellant. Once Ex.A1 and

Ex.A2 are eschewed from consideration, the entire case of Poolpandian

will have to go. Therefore, the impugned Judgment and decree passed by

the Court below are set aside. S.A.(MD)No.785 of 2013 stands allowed.

16.Coming to the other second appeal, it is obvious that Ex.B7 power

of attorney was executed only for security purpose. Ramakrishnan was

engaged in money lending and the same has been established in evidence.

Though power of attorney was executed, the title deed was not handed over

to the power agent. It was produced by the appellant Thangathai and

marked as Ex.B1. Ramakrishnan eventually sold the property in favour of

his son Parthasarathy. But even thereafter patta stood only in the name of

Thangathai and she was paying kist in her name (Exs.B2, B3, B11 and

B12). Thangathai had also given police complaint in this regard and the

same is not in dispute. Neither Ramakrishnan nor Parthasarathy (D1 and https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

D2) have spoken about the actual sale consideration. Ramakrishnan would

claim in evidence that he paid Rs.2,60,000/- on the date of execution of

power of attorney. But in his written statement he pleaded that the power

deed was executed on the basis of trust. The trial court had given a specific

finding that the accounts were not settled. If Ramakrishnan was really an

agent who was authorised to sell the property, then, he would have taken the

original title deed and handed over the same to the purchaser. He would

have also set out the details as to how he settled the accounts with the

principal. The written statement is completely silent. Ex.B7 stamp paper

for power of attorney is in the name of Ramakrishnan. Even though such

strong circumstances were brought out in evidence to prove that at the time

of availing loan, Thangathai was made to sign the power of attorney

without there being any intention to authorise Ramakrishnan to sell the

property and the trial court sustained the said contention and nullified the

sale deed (Ex.B10), the first appellate court non-suited Thangathai by

invoking Section 92 of the Indian Evidence Act, 1872.

17.Section 92 of the Indian Evidence Act cannot be a bar to the

admission of evidence to show what was the true nature of the transaction.

In D.Ananda Moorthy v. P.Chandrakala (2010) 5 Mad LJ 899, it was held

that if one party has taken a definite stand that particular document is not https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

the document for which it has been executed, in reality it has been executed

for some other purpose, the bar created under Sections 91 and 92 of the

Evidence Act, is not applicable and in that circumstances, oral evidence is

permissible so as to prove the intention of the parties with regard to

execution of the document in question. This proposition has been

followed in V.S. Alamelu vs. Thavamani and Ors. (2013) 3 MWN (Civil) 71

and Pappammal vs. P. Ramasamy (2012 (4) CTC100). Following the

aforesaid ratio, I hold that the first appellate court erred in holding that

Section 92 of the Indian Evidence Act, 1872 will bar the appellant from

impeaching Ex.B7 power of attorney. The trial court rightly came to the

conclusion that Ex.B7 was misused by Ramakrishnan by executing sale

deed in favour of his son Parthasarathy. I answer the substantial questions

of law in favour of the appellant and set aside the impugned Judgment and

decree passed by the Court below and restore the judgment and decree

passed by the trial court. S.A.(MD)No.786 of 2013 stands allowed.

18.The matter cannot rest there. Thangathai had admitted that she

had borrowed a sum of Rs.2,60,000/-. She would further admit that right

from March 2003, she had not paid any interest on the borrowed amount.

The learned counsel for the appellant, on instructions, states that the

appellant can be directed to pay a sum of Rs.2,60,000/- together with https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

interest at the rate of 12% per annum with effect from March 2003. The

Apex Court in Srinivas Ram Kumar Vs. Mahabir Prasad and others

(AIR 1951 SC 177) had held that even if there is no prayer sought for, if it

is found on the admitted case of the party, it is open to the Court to pass a

decree to that effect. Therefore, the appellant Thangathai is directed to pay

a sum of Rs.1,30,000/- together with interest @ 12% p.a to Poolpandian

and a sum of Rs.1,30,000/- together with interest @ 12% p.a to

Parthasarathy from March 2003 till date of payment. It is stated that the

appellant had already deposited a sum of Rs.1,67,000/- to the credit of

O.S.No.12 of 2004 on 18.01.2014. The same will be given due credit and

Poolapandian and Parthasarathy can withdraw the same in equal shares.

For the balance amount, there will be a charge on the suit property. The

second appeals are allowed with the aforesaid direction. No costs.

Consequently, connected miscellaneous petitions are closed.

22.06.2021

Internet : Yes/No Index : Yes/No rmi

To

1.The Principal District Judge, Tuticorin.

2.The Sub Judge, Kovilpatti.

https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

3.The Section Officer, Vernacular Records, Madurai Bench of Madras High Court, Madurai.

https://www.mhc.tn.gov.in/judis/

S.A.(MD)Nos.785 & 786 of 2013

G.R.SWAMINATHAN, J.

skm

Judgment made in S.A.(MD)Nos.785 & 786 of 2013

22.06.2021

https://www.mhc.tn.gov.in/judis/