Bindumol S. v. Margit Schubert (RFA No.814 of 2010)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **WEDNESDAY, THE 24TH DAY OF JULY 2019 / 2ND SRAVANA, 1941** ## **RFA.No.814 of 2010** **AGAINST THE JUDGMENT AND DECREE IN OS 138/2007 of SUB COURT,NEYYATTINKARA DATED 16-12-2009** **----------** **APPELLANT/DEFENDANT:** **BINDUMOL.S., D/O.DEVAKI,SINDU SADANAM, HOUSE NO.V.P.255/1, MURINGAVILA, KOVALAM MAIN BEACH, THIRUVANANTHAPURAM DISTRICT.** **BY ADVS. SRI.R.GOPAN SRI.G.S.REGHUNATH** ## **RESPONDENT/PLAINTIFF:** **MARGIT SCHUBERT, D/O.MARGRET SCHUBERT,PERMANENTLY RESIDING AT VIENNA, TROSTRASSE 98/2/37, A-1100, VIENNA, AUSTRIA AND PRESENTLY RESIDING AT BEACH CASTLE, KOVALAM, THIRUVANANTHAPURAM-695 031, KOVALAM P.O.** **BY ADV. SRI.P.C.SASIDHARAN** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 23.07.2019, THE COURT ON 24.07.2019, DELIVERED THE FOLLOWING:** ## **SATHISH NINAN, J. = = = = = = = = = = = = = = = = = = RFA No.814 of 2010** **= = = = = = = = = = = = = = = = = = Dated this the 24[th] day of July, 2019** ## **J U D G M E N T** The suit for recovery of money was decreed by the trial court, against which this appeal by the defendant. 2. The plaintiff is a foreigner. The defendant conducts an Ayurvedic Beach Resort and Research Centre at Kovalam. The plaintiff had stayed at the defendant's resort and availed the facilities. According to the plaintiff, on the request of the defendant a total amount of `17,34,000/- was advanced to the defendant on two occasions of 17.02.05 and 15.03.05 respectively. Agreeing to repay the amount, Ext.A1 promissory note dated 26.01.06 was executed by the defendant in favour of the plaintiff. The suit is filed for recovery of the said amount. 3. The defendant denied the execution of Ext.A1 promissory note. The signature in Ext.A1 was RFA No.814 of 2010 :- 2 :- denied. The alleged borrowal was denied. However, the receipt of amounts on 17.02.05 and 15.03.05, totalling to `17,34,000/- was not disputed. According to the defendant, the amounts paid by the plaintiff were towards the treatment charges due from the plaintiff to the defendant. 4. On appreciating the evidence, the trial court upheld the plaintiff's claim and granted a decree. 5. Heard learned counsel on either sides. 6. Three contentions are urged by the learned counsel for the appellant: (1) The suit is not maintainable by virtue of Regulation 3 of the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000; (2) In view of Ext.A7 document alleged to have been executed by the defendant in favour of the plaintiff postponing the right to sue under Ext.A1, the suit is premature and not maintainable; and (3) The alleged borrowal is disproved by the evidence on record. 7. Regarding the arguments based on Regulation 3, there is no such plea in the written statement. RFA No.814 of 2010 :- 3 :- No issue was framed. However, it is seen that the said contention was argued before the trial court, but was negatived. ## 8. Regulation 3 reads thus:- ## **“3. Prohibition to borrow or lend in foreign** **exchange** . **—** Save as otherwise provided in the Act, rules or regulations made thereunder, no person resident in India shall borrow or lend in foreign exchange from or to person resident in or outside India.” 9. In terms of Regulation 3, residents in India are prohibited from borrowing or lending in foreign exchange except as provided under the Act, Rules or Regulations. If in violation of the said regulation, the defendant has received any amount from the plaintiff, she will be liable for the consequences as provided for under the Act. The plaintiff has filed the suit seeking return of the amounts advanced by her to the defendant. The prohibition is on the defendant, in borrowing. If the defendant contends the said transaction to be void, then the benefits received by the defendant RFA No.814 of 2010 :- 4 :- thereunder is liable to be restored to the plaintiff. This is because the prohibition is on the defendant and the plaintiff-a foreigner, cannot be imputed with knowledge of the prohibition. On finding the contract to be void, under Section 65 of the Indian Contract Act, the benefits received is to be restored. That apart, the suit is for recovery of the amounts advanced to the defendant. The consideration is not an illegal one or prohibited under the law. The procedure to be followed for the said transaction, if not complied with by the defendant, the plaintiff cannot be faulted with. However, that does not make the consideration or the object unlawful under Section 23 of the Contract Act. The plaintiff is entitled to get back amounts advanced to the defendant. Accordingly I concur with the finding of the trial court that the suit is maintainable. 10. The execution of Ext.A1 promissory note is denied by the defendant. The trial court noticed that the signature in Ext.A1 appears different from the admitted signature of the defendant as seen in RFA No.814 of 2010 :- 5 :- the vakalath. Ext.A7 is an agreement alleged to have been executed by the defendant in favour of the plaintiff, with regard to the repayment of the debt wherein, execution of the promissory note is admitted and acknowledged. The signatures of the defendant in Ext.A1 and Ext.A7 tallies. However, both the signatures are disputed by the defendant. Ext.A5 is the acknowledgment card regarding receipt of Ext.A3 advocate's notice by the defendant. The trial court noticed that the signature of the defendant as seen in Ext.A3 is similar to that as seen in Exts.A1 and A7. The trial court has noticed that a conscious attempt was made by the defendant to have the signature in the vakalath and written statement affixed in a manner at variance from the signature in Ext.A5 acknowledgment card. 11. To prove the execution of Ext.A1 promissory note, PW2 is examined. He is a witness in Ext.A1 promissory note. It is the allegation of the defendant that it is at the instance of PW2 that Exts.A1 and A7 documents are fabricated and the plaintiff is made to file the suit. On the face of RFA No.814 of 2010 :- 6 :- such allegation, I do not propose to enter a finding on the merits of the disputed claim on the basis of the evidence of the said witness. I proceed to consider the merits of the plaint claim on the basis of the other evidence. 12. The fact that payments were made by the plaintiff to the defendant on 17.02.05 and 15.03.05 are not in dispute. The amounts were transferred by the plaintiff to the defendant's account through Bank. While the plaintiff claims that it is a loan, the contention of the defendant is that it is the charges payable for the treatment of the plaintiff at the defendant's Ayurvedic Resort. 13. Ext.A9(i) is an e-mail communication by the defendant to the plaintiff. It is dated 16.06.05 i.e. after the alleged borrowal. Therein the defendant has requested the plaintiff not to worry about sending money to the defendant as that could be the reason for the issues/problems between the plaintiff, her son and sister. The following sentence in the said e-mail is much significance. RFA No.814 of 2010 :- 7 :- “I never says anybody, you give money to me. Some people asked to me how you paid the loan, I told took another loan”. 14. There is an admission that the plaintiff had advanced money to the defendant. A reading of the said e-mail further shows that the defendant was in great financial stringency. Ext.A9(l) is yet another e-mail send by the defendant to the plaintiff. Certain portions of the said e-mail are also of significance. “..... When I stared this hospital, I took nearly 500000 INR from the central bank; I paid 200000 INR before you are helping me. After they put the case to court for 1700000 INR. At last you come here like God and you help for keeping this Hospital. .....” “My Mamma I never tell anybody about your money you send to me, that money I paid already to bank for closing the Loan. In any way if you are helping me I never tells anybody, this is my guarantee. You and me only knows about it.” 15. The above statements leaves no room of doubt that amounts were advanced by the plaintiff to the defendant. RFA No.814 of 2010 :- 8 :- 16. Now coming to the defendant's version that the amounts paid by the plaintiff to the defendant were payments for treatment charges, no scrap of paper is produced by the defendant to prove the same. The trial court noticed that admittedly, the plaintiff stayed in the resort of the defendant for the period from 17.12.04 to 08.01.05, from 01.12.05 to 12.03.06 and from 07.12.06 to 05.01.07, thus making the total duration of stay of 148 days. Ext.A2 pamphlet relating to the defendant's resort shows the treatment charges at `3,000/-. Ext.B10 registration card shows the room rent per day at `1,500/- plus tax. The trial court noticed that by any stretch of imagination, the total amount payable by the plaintiff for the stay will not be more than a maximum limit of `3 lakhs. Therefore, the contention of the defendant that the amount of `17,34,000/- was paid by the plaintiff towards treatment charges, is belied. Definitely accounts and other books would be maintained by the defendant regarding functioning of the resort. The RFA No.814 of 2010 :- 9 :- said documents would have evidenced the amounts payable by the plaintiff. However, no documents in the said regard are produced. Though the learned counsel for the appellant-defendant would submit that the records were taken by the police, no such contention was put forward earlier. Moreover, the defendant could have taken up appropriate steps calling for the documents or seeking production of copies of the same. No such steps are taken by the defendant. Suffice to notice that there is total lack of material to find that the amounts paid by the plaintiff to the defendant were towards treatment charges. The emails produced as Ext.B series will only show that the parties were having a very good relationship and were having some money transactions. The nature of the transaction is not evident therefrom. On evaluating the evidence adduced by both sides and on balancing the probabilities, I have no hesitation to concur with the trial court that the amounts were advanced by the plaintiff to the defendant and were not payments towards treatment charges. RFA No.814 of 2010 :- 10 :- 17. To prove the genuineness of the transaction and execution of Ext.A1 promissory note, the plaintiff relied on Ext.A7 agreement alleged to have been executed by the defendant to the plaintiff. The execution of Ext.A7 is also denied by the defendant. Ext.A7 acknowledges Ext.A1 promissory note. It further recites that the defendant is to repay the loan amount with interest in three years. Ext.A1 is dated 26.01.06 and Ext.A7 is dated 02.02.06. According to the learned counsel for the appellant, in terms of Ext.A7, the defendant has three years for repayment of the alleged loan; but the suit is filed on 07.09.07. The suit is premature and hence not maintainable. Admittedly, the amount payable to the plaintiff has not been paid even after expiry of the three year period fixed in Ext.A7. On non-payment of the amount, the cause of action has accrued to the plaintiff, though pending the suit. There is no plea of discharge subsequent to filing of the present suit. Applying the law as laid down by this court in Vijaya Bank v. K. Shanawas & Ors , [2019 RFA No.814 of 2010 :- 11 :- (3) KLJ 343] I hold that, even assuming that the cause of action has accrued pending the suit, the same could be taken into consideration, and the suit is maintainable. I do not find any error on law or facts, with the judgment of the trial court, warranting interference. The appeal fails and is accordingly dismissed. No costs. **Sd/SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge