M/S. Karimnagar Vipanchi ... vs P. Somaiah
2022 Latest Caselaw 6354 Tel

     THE HONOURABLE SMT. JUSTICE P.SREE SUDHA

                   APPEAL SUIT No.2122 of 2001

JUDGMENT:

This appeal suit is filed against the Judgment of the trial

Court in O.S.No.1 of 1999 dated 18.04.2001.

2. Plaintiffs filed suit for recovery of an amount of

Rs.1,37,764/- with interest at the rate of 12% per annum

against the defendant Nos.1 to 5. Defendant No.1 is the

Sarpanch of the Thorrur Gram Panchayat and defendant Nos.2

to 5 are the employees of Gram Panchayat, Thorrur. Defendant

No.5 is the Executive Officer who issued salary certificate.

Plaintiff is the Karimnagar Vipanchi Chit Funds (P) Ltd. Plaintiff

is examined as P.W.1 and marked Exs.A1 to A22. The

defendants D2 to D5 were examined as D.Ws 1 to 4 and no

documents were marked on their behalf. The trial Court decreed

the suit against the defendant No.1 with interest at the rate of

12% per annum from the date of suit till the date of decree on

the principal amount and 6% per annum from the date of

decree till realization, but the suit against defendant Nos. 2 to 5

was dismissed with costs. Aggrieved by the said dismissal of the

suit against defendant Nos.2 to 5 this appeal is preferred.

3. Appellant counsel mainly contended that the defendants

2 to 5 were excluded on the ground that they did not execute

the guarantee agreement. In fact in the evidence of P.W.1, it is

stated that salary certificates of defendants 2 to 5 were brought

by the 1st defendant himself, it does not mean that they have

not executed guarantee agreement. The signatures of

defendants 2 to 5 were available in the guarantee agreement i.e,

Ex.A3 dated 28.05.1997. Even in the Judgment it was observed

that request was made to compare the signatures of defendants

2 to 5 with the admitted signatures on their Vakalath, Written

Statement and also the served copies of the summons. But the

trial Court compared the signature of the Executive Officer on

the salary certificates i.e, Ex.A19 to A22 and found that there is

some difference in the letter 'a' appearing in his signature on

deposition and that on salary certificate and also refused to

compare the counter signature of defendants 2 to 5 with suit

pro note and guarantee agreement and wrongly held that salary

certificates were not issued by the concerned Executive Officer

but fabricated by defendant No.1 which was not even the case of

defendants 2 to 5. The suit was actually based on the

promissory note and the guarantee agreement executed by the

defendant No.1. Hence the trial Court ought to have compared

the signatures of defendants 2 to 5 appearing on Exs.A2 and A3

with the signatures appearing on the summons served to them.

The trial Court observed that Ex.A20 and A22 did not contain

the signatures of the concerned defendants but ignored the fact

that Exs.A19 and A21 were signed by the concerned defendants.

Under Section 73 of the Indian Evidence Act, the Court is

having power to compare the signatures. The word of caution

administered by the Supreme Court states that Judgment

should not be based solely on the Court's ability to compare,

but where other evidence was also available, it was perfectly in

order to compare the signature, and refusal on the part of the

Court is not permitted. In fact, comparing of the certificates is

one way of proving executing of documents. The trial Court

wrongly held that plaintiff did not prove execution of the said

promissory note and guarantee agreement of defendants 2 to 5.

The defendants 2 to 5 not only signed but also put the date

below the signature, which falsifies their defence that they never

signed the documents. Therefore, requested the Court to allow

the appeal by setting aside the order of the trial Court.

4. Admittedly, defendant No.1 obtained loan from M/s.

Karimnagar Vipanchi Chitfunds (P) Ltd., and he intend to

withdraw the prize money by furnishing defendants 2 to 5 as

guarantors. In the written statement filed by the defendants

they denied the signatures on the material document and stated

that defendant No.1 might have created the same in collusion

with plaintiff officials and they never guarantee the chit amount

nor signed in the chit transactions. They came to know about

guarantee only after service of plaint copy on their counsel, they

are not liable to pay any amount to the plaintiff and they did not

receive any legal notice. There is no privity of contract between

defendants and plaintiff company. These defendants are petty

employees of the Thorrur Gram Panchayat. Appellants also

stated that there is no territorial jurisdiction to entertain the

plaint as the defendants reside and carry their avocation at

Thorrur. Instead of transferring the suit to the appropriate

Court, it was wrongly allowed by the trial Court. Therefore,

requested this Court to set aside the same.

5. The defendant No.1 is the subscriber of the Chit of the

plaintiff, as such he executed the agreement of Chit under

Ex.A1 and he also furnished guarantee of defendants 2 to 5. All

of them signed on the document and also put the date as

24.05.1997. Ex.A3 is the agreement of guarantee for an amount

of Rs.1,60,000/- executed on the same day and receipt is filed

under Ex.A4 dated 30.05.1997 regarding issuance of chit. Ex.A5

is the legal notice issued on 12.08.1999 along with the postal

acknowledgment. Ex.17 is the letter addressed by the

Karimnagar Vipanchi Chit Fund (P) Ltd dated 27.01.1995 and

surety verification report filed under Ex.A18. Perusal of the

salary certificates shows that two certificates were not signed by

the defendants under Ex.A20 and A22 but it was signed by the

concerned employee under Ex.A19 and A21. Defendants 2 to 5

clearly stated in their evidence that they never went to the office

and signed before P.W.1. Even defendant No.1 stated in his

written statement that he himself furnished the signed copies of

the written agreement to the plaintiff. Admittedly, defendant

No.1 received loan from the Chit under Ex.A1 to A5 and they

also issued legal notice to all the defendants and filed the proof

of service to substantiate their version. It is not the case of the

defendants that their signatures were forged on Ex.A2, it seems

that defendant No.1 obtained signatures of defendants 2 to 5

and he himself submitted in the plaintiff's office. Ex.A17 is the

authorization given in favour of one Rajaveeru. They have not

given any complaint against defendant No.1 immediately after

obtaining the signatures on 24.05.1997 on the ground that he

obtained signatures by coercion or under undue influence, as

defendant No.1 is Sarpanch and they are his employees. When

legal notices were also served on them, they did not responded,

but later when the suit filed, they simply stated that they did

not have knowledge about their signatures on the agreement as

guarantors.

6. Perusal of the entire record shows that defendant No.1

obtained their signatures and produced the same before the chit

fund company. He has not paid the installments for longer

period, but he received the prize money. At the time of receiving

the said amount, he also filed the salary certificate issued by the

Executive Officer/D.W.5, in his evidence he stated that he will

issue salary certificates only after receiving application form

from the concerned persons. In this case, he has not received

any application and he has not issued Exs.A20 and A22. The

trial Court mainly relied upon the contention of the defendants

that they did not sign before the P.W.1, but it is an admitted

fact that defendant No.1 obtained their signatures in his office

and furnished the same to the P.W.1. As defendants 2 to 5

signed on Ex.A2 and not disputed their signatures as forged or

fabricated, the trial Court erred in excluding them, they are

jointly liable as they are guarantors of Ex.A1. They will step into

shoes of defendant No.1 and they have to pay the amount to the

plaintiff company. If at all they have any grievance they should

file case against defendant No.1 and recover the said amount.

Admittedly, the chit fund company will not give any prize money

without furnishing the guarantors, as such defendant No.1

obtained signatures on the guarantee bond from defendants 2

to 5, as such they are also joint sureties and are liable to pay

the amount to the plaintiff. The refusal of the trial Court to

compare their signatures with that of the available signatures

on record is patently erroneous. The trial Court failed to

appreciate the facts properly and decreed the suit only against

defendant No.1 and dismissed the same against defendant

Nos.2 to 5 and appeal is only preferred regarding the liability of

defendant Nos.2 to 5. Considering the evidence on record and

arguments of both sides, this Court finds that the Judgment of

the trial Court to that extent is to be set aside.

In the result, the appeal is allowed and it is held that

defendants No.2 to 5 are also jointly liable to pay the amount

along with defendant No.1.

Miscellaneous petitions pending, if any, shall stand

closed.

_________________________

JUSTICE P.SREE SUDHA

DATED: 02.12.2022

tri

THE HONOURABLE SMT. JUSTICE P.SREE SUDHA

APPEAL SUIT No.2122 of 2001

DATED: 02 .12.2022

TRI