K. Narayanan Nair v. Sree Krishna Tyres

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR FRIDAY, THE 22ND FEBRUARY 2008 / 3RD PHALGUNA 1929 SA.No. 39 of 1995() ------------------AS.150/1990 of SUB COURT, PAYYANNUR OS.126/1989 of MUNSIFF COURT, PAYYANNUR .................... ## APPELLANT/APPELLANT/DEFENDANT: ----------------------------------------- K.NARAYANAN NAIR, S/O.MAVILA CHINDAN NAMBIAR, KATTAMBATH HOUSE, CHEMMAD VILLAGE, KASARGOD TALUK BY ADV. SRI.KODOTH SREEDHARAN ## RESPONDENT/RESPONDENT/PLAINTIFF: --------------------------------------------- SREE KRISHNA TYRES, BY OWNER, K.BHASKARAN, S/O.GOPALAN AGED 37 YEARS, RESIDING AT VELLUR AMSOM, KANDOTH DESOM, PAYYANNUR ## BY ADV. SRI.SREEPRAKASH K.NAIR & ## K.T.SHYAMKUMAR THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 22/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON C.M.P.NO.107/95 IN SA 39/95 ## DISMISSED 22/2/2008 SD/-M.SASIDHARAN NAMBIAR,JUDGE. //True copy// PA to Judge. ## **M.SASIDHARAN NAMBIAR,J.** -----------------------------------------S.A .NO.39 OF 1995 -----------------------------------------Dated 22[nd] February 2008 ## **J U D G M E N T** Defendant in O.S.126/1989 on the file of Munsiff court, Payyannur is the appellant. Respondent is the plaintiff. Respondent instituted the suit for realisation of Rs.6,000/- due from the appellant. It was contended that the brother of the appellant was owning bus KLS-1188 and when he left for employment to Gulf countries, it was being managed by the appellant and resoling work was carried out by the respondent and in that account Rs.6,000/- was due. It was contended that towards security of that amount, appellant executed Ext.A1 agreement dated 12/1/1988 fixing a period of three months for payment and even though the agreed period expired, appellant did not pay the amount and finally Ext.A2 lawyer notice was sent, which was returned back to the respondent under Ext.A4. It was claimed that respondent is entitled to realise the amount. Appellant resisted the suit contending that his description in the SA 39/95 2 plaint is not correct and as per the description he is not the defendant and he has no acquaintance with the respondent and he did not entrust any resoling work to respondent and is not liable to pay any amount and he did not execute Ext.A1 and is not liable and suit is to be dismissed. 2. Learned Munsiff on the evidence of Pws.1 to 4, DW1, Exts.A1 to A4 and X1 found that Ext.A1 agreement was executed by the appellant and Ext.A1 is not a bond but an agreement and execution of Ext.A1 is proved by the evidence of PW1 the respondent and Pws.2 and 3 and granted a decree directing appellant to pay the amount claimed in the plaint with interest at 12% from the date of the suit. Appellant challenged the judgment before Sub court, Payyannur in A.S.150/1990. Learned Sub Judge on reappreciation of evidence confirmed the findings of learned Munsiff and dismissed the appeal. It is challenged in the second appeal. 3. Appeal was admitted formulating the following substantial questions of law. 1) Whether courts below were correct in construing Ext.A1 as an agreement and not a bond. 2) Whether the courts below were SA 39/95 3 justified in holding that the appellant executed Ext.A1 and that too by comparing the signature of the appellant with the disputed signature in Ext.A1 with the signature in the written statement especially when the courts did not have the advantage of the report of an expert after comparing the signature. 4. Learned counsel appearing for appellant was heard. There was no representation for respondent. 5. Learned counsel appearing for appellant vehemently argued that courts below should not have upheld Ext.A1, when Ext.A1 was disputed and its execution was not proved. True, appellant had in his written statement disputed the execution of Ext.A1 and when examined as DW1, he also denied the execution. But apart from the respondent who was examined the two attesting witnesses to Ext.A1 agreement were examined as Pws.2 and 3. Learned Munsiff had the advantage to see and appreciate the demeanour of the witnesses and appreciated the evidence and found that evidence of Pws.2 and 3 are credible and reliable. First appellate court re-appreciated the evidence and found that their evidence are reliable and their evidence establish execution of Ext.A1. There is nothing to show that appreciation of evidence by the courts below was perverse. The factual SA 39/95 4 findings of the courts below that Ext.A1 was executed by the appellant cannot be interfered in exercise of the powers of this court under Section 100 of Code of Civil Procedure. 6. Arguments of learned counsel is that though Ext.A1 was found to be an agreement and not a bond by the courts below, it is in fact a bond and courts below should not have relied on Ext.A1 which was not properly stamped. Sub Section (a) of Section 2 defines the bond as includes any instrument whereby a person obliges himself to pay money to another, on condition that the obligation shall be void if a specified act is performed, or is not performed, as the case may be and the instrument is attested by a witness and is not payable to order or bearer, whereby a person obliges himself to pay money to another. Learned Single Judge of this court had occasion to consider the difference between a bond and an agreement in **West Coast Electroplating Co. Ltd. v. Sreedharan** **(1971 KLT 383).** It was held that no document can be a bond within the relevant section unless by itself it creates an obligation to pay money. Learned Single Judge relied on the decision of a Division Bench of High Court of Lahore in **Dawan Chand v. Punjab and Kashmir Bank (AIR** SA 39/95 5 **1937 Lahore 220** ) where it was held that essential feature for construing a document as a bond is that it must create an obligation to pay and no such obligation can be inferred from a mere acknowledgment of a previous balance and implied obligation cannot therefore convert an acknowledgment into a bond. An agreement is not defined under the Stamp Act. It is defined under the Contract Act as every promise and every set of promises forming the consideration for each other. A Full Bench of the High Court of Delhi in **Hamdard Dawakhana (Wakf)** **Delhi’s case (AIR 1968 Delhi page No.1)** elaborately considered this question. The principles laid down by the **High Court of Calcutta in Gisborne and Co. v. Subal Bowri (1882 ILR 8 Calcutta 284** ) was reiterated as follows. Distinction of a bond and agreement is under the event of breach of party to the instrument who had obliged to pay money and is liable to pay the same stipulated under the agreement. In the case of agreement quantum of damages is to be fixed by the court. Another Single Judge of this court as his Lordship then was in **Mathai Mathew v. Thampi (1989 (1) KLT 138)** after analysing the settled legal position held that the document obliges to pay money and it shows that SA 39/95 6 obligation in so far as the debtor and the creditor are concerned is not a pre-existing one and so it is the agreement. 7. Ext.A1 shows that before the date of execution of Ext.A1 on 12/1/1988, appellant had the resoling work carried out by respondent. He was thus liable to pay Rs.6,000/-. Under Ext.A1 appellant had undertaken to pay that amount within three months. The agreement provides that if appellant fails to pay, respondent is entitled to take possession of the vehicle and the appellant is liable to pay damages. Therefore as distinguishable from a bond, Ext.A1 provides for payment of damages quantum of which is to be worked out separately, in the event of breach of condition provided therein. As rightly found by the courts below in such circumstances, Ext.A1 cannot be construed a bond. It is an agreement. Courts below rightly found that appellant is liable to pay Rs.6,000/- with interest. 8. Learned counsel appearing for appellant argued that rate of interest awarded by the courts below was excessive. Ext.A1 shows that there was no agreement to pay interest. It only provides for payment of Rs.6,000/which was the pre-existing liability, within three months SA 39/95 7 from the date of execution of the agreement. It also provides that on failure to pay the amount, respondent is entitled to take possession of the vehicle and also entitled to damages. In the suit respondent has claimed interest at 12% per annum from the date of the agreement. Courts below granted said interest not only till the date of the decree but till realisation. It is seen from the plaint that there is no allegation in the plaint that it is a commercial transaction and so respondent is entitled to interest at 12%. More over, when the agreement does not provide for interest at 12% courts below were not justified in granting interest at 12%. The decree granted by the courts below, is to be modified with regard to the future interest from the date of the decree till realisation at 6% per annum. 9. Appeal is partly allowed. Decree granted by the courts below are modified on the future interest awarded. Appellant is liable to pay interest from the date of institution of the suit till the date of decree and thereafter at 6% per annum till realisation. No costs. M.SASIDHARAN NAMBIAR, JUDGE. uj. SA 39/95 8 ============================= M.SASIDHARAN NAMBIAR,J. ## **JUDGMENT** S.A.NO.39 OF 1995 22[nd] February 2008 ============================