High Court of KeralaSingle Judge2011-02-11Appeal is dismissed under RSA 905/09

Mathilakam Relief Company Ltd v. T. S. Viswanathan and Vilasini

Case / Petition Number:RSA 905/09

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: M. Sasidharan Nambiar
Judgment Date: 2011-02-11
Court Decision / Holding: Appeal is dismissed.
Final Disposition: Appeal is dismissed under RSA 905/09

Parties to the Case

Appellants / Petitioners

Mathilakam Relief Company Ltd

Respondents

T. S. Viswanathan
Vilasini

Legal Representation & Advocates

Counsels for Petitioners

• Sri. T. H. Abdul Azeez

Case Synopsis & Summary

The Mathilakam Relief Company Ltd filed RSA 905/09 as Regular Second Appeal against the decrees in O.S.1053/2001, pending in Kodungallur. The suit claimed Rs 83,008 realisable from the first respondent, who was the cashier-cum-clerk of the company from 1990 to 2001, alleging misappropriation after taking subscriber amounts but not properly recording them in the cash book, even though entries appeared in the pass books and personal ledger. Exts. A2 and A3, Special Audit reports by Mathew Salim Gopinathan & Company, were cited as evidence of misappropriation. The first respondent disputed misappropriation, noting that there were other employees and that he had undertaken to repay any misappropriated amount; the second respondent contended she purchased the property of the first respondent and wife and that the property should not be proceeded against. The trial court dismissed the suit for lack of proof that funds were collected and not accounted for; the first appellate court similarly dismissed the appeal, refusing to admit additional evidence under Rule 27 of Order XLI CPC. The appellant pressed that the courts below erred by discarding oral and documentary evidence without drawing an inference as per Vidhyadhar v. Manikrao. The High Court held there was no reliable evidence of collection or misappropriation, and without entrustment there could be no decree. Consequently, the regular second appeal was dismissed.

Provisions of Law Cited

Order XLI, Rule 27, CPCCode of Civil Procedure, 1908

Legal Doctrines & Maxims

Vidhyadhar v. Manikrao and another (1999) (3) SCC 573 - principle that misappropriation must be proved by evidence of entrustment; absence of evidence precludes decree.

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant contends Exts. A2 and A3 Special Audit Reports establish misappropriation of Rs. 83,008 by the first respondent, who functioned as cashier-cum-clerk during the relevant period (1990–2001). It is argued that he collected subscriber amounts and entries were made in the pass books and personal ledger, but not in the cash book, enabling misappropriation. The appellant asserts that the first appellate court refused to receive Exts. A2 and A3 as additional evidence under Rule 27 of Order XLI CPC, though these documents were produced before the appellate court. They submit that the audit reports prove the plaint claim and that a decree should be granted; they rely on Vidyaadhar v. Manikrao to contend that where records indicate misappropriation, an inference should be drawn in the plaintiff’s favor. It is urged that the first respondent, as cashier, was entrusted with funds; there were other employees and the evidence is sufficient to prove misappropriation, and the appellate court erred in not granting relief.

Contentions of Respondents

The respondents contend that there is no reliable evidence that the first respondent received or misappropriated any funds; other employees were involved, and the claim against him is unfounded. The first respondent had undertaken to repay any misappropriated amount, and the second respondent purchased his property; the asset cannot be attached. They argue that there is no proof of entrustment or personal misappropriation, and that Exts. A2 and A3 were not properly proven, with the evidence not showing that the funds were collected by the first respondent. The trial and appellate courts correctly found no misappropriation and no decree could be based on an inference that lacks solid evidence; the appellant’s demand for admission of additional documents under Rule 27 was rightly rejected.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Vidhyadhar v. Manikrao and another	1999 (3) SCC 573	Mentioned Only	Cited to frame the issue regarding drawing inferences, but the court does not apply it to grant relief given lack of evidence of entrustment.

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Extracted Judgment Text

Exact text extracted from official judgment records.

IN THE HIGH COURT OF KERALA AT ERNAKULAM THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR FRIDAY, THE 11TH FEBRUARY 2011 / 22ND MAGHA 1932 AS.202/2006 of ADDL.SUB COURT, IRINJALAKUDA OS.1053/2001 of MUNSIFF COURT, KODUNGALLUR .................... ## APPELLANT/APPELLANT/PLAINTIFF THE MATHILAKAM RELIEF COMPANY LTD, MATHILAKAM,PAPPINIVATTOM VILLAGE,KODUNGALLUR TALUK REPRESENTED BY ITS MANAGING DIRECTOR,O.T.DANIEL, AGED 84 YEARS,AGRICULTUIRIST,S/O.OLAPPURATH MASNIYAMAKKAL THOMAS,MATHILAKAM.P.O,PAPPINIVATTOM VILLAGE,KODUNGALLUR TALUK. BY ADV. SRI.T.H.ABDUL AZEEZ ## RESPONDENT(S): RESPONDENTS/DEFENDANTS 1. T.S.VISWANATHAN,AGED 43 YEARS, - S/O.SANKARANKUTTY,THAZHISSERY HOUSE,THRIPPEKULAM DESOM,PAPPINIVATTOM VILLAGE,KODUNGALLUR TALUK. 2. VILASINI,AGED 63 YEARS, - D/O.PAZHUPARAMBIL KUNJAYYAPPAN,P.O.PADINJARE VEMBALLUR,SREENARAYANAPURAM VILLAGE, KODUNGALLUR TALUK. THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON 11/02/2011, THE COURT ON THE SAME DAY PASSED THE M.SASIDHARAN NAMBIAR,J. --------------------------------------------- `R.S.A.NO.905 OF 2009` --------------------------------------------- `Dated 11[th] February, 2011` ## JUDGMENT Plaintiff in O.S.1053/2001 on the file of Munsiff's Court, Kodungallur is the appellant. Defendants are the respondents. Appellant is a company, registered under Indian Companies Act and engaged in conducting chitty. The suit was filed for realisation of Rs.83,008/- contending that first respondent who was the cashier-cumclerk of the company for the period from 2/5/1990 to 31/3/2001 received kurie amounts from subscribers and though made entries in the pass book, personal ledger, did not make entries in the cash book and misappropriated the money and therefore, appellant is entitled to realise the same. RSA 905/09 2 It was contended that to shield the property, first respondent transferred the property in favour of second respondent, the mother-in-law. It is contended that though first respondent used to receive the amount and made entries in kuri pass book of the subscribers and the personal ledger of the company, he did not enter the payment in the day book and that is how he misappropriated the amount and it came to light when Exts.A2 and A3 Special Audit reports were submitted by Mathew Salim Gopinathan and Company, Thrissur, the auditors. 2. First respondent resisted the suit contending that he has not misappropriated any amount and apart from the first respondent there were other employees also and he was faced to give Ext.A1 statement undertaking to pay the amount misappropriated and he has not RSA 905/09 3 committed any misappropriation and hence he is not liable. Second respondent contended that she has purchased the property of the first respondent and his wife, after paying valuable consideration and hence her property cannot be proceeded against. 3. Learned Munsiff on the evidence of PW1 and Exts.A1 to A5 dismissed the suit finding that appellant failed to establish that first respondent collected any amount and did not account for the same. Appellant challenged the judgment before Additional Sub Court, Irinjalakuda in A.S.202/2006. Before first appellate court appellant produced certain documents with a petition filed under Rule 27 of Order XLI of Code of Civil Procedure, to receive them as additional evidence. Learned Additional Sub Judge refused to receive them RSA 905/09 4 as additional evidence and finding that there is no evidence to prove that first respondent collected any amount and did not account for the same, dismissed the appeal. It is challenged in the second appeal. 4. Learned counsel appearing for the appellant was heard. 5. Substantial question of law formulated in the appeal memorandum is whether courts below were justified in discarding the oral and documentary evidence of the plaintiff without drawing the inference as held in **Vidhyadhar v. Manikrao and another (1999 (3) SCC 573)** . Argument of the learned counsel appearing for the appellant is that Exts.A2 and A3 Special Audit reports establish that there was misappropriation of Rs.83,008/and when it is admitted case that first RSA 905/09 5 respondent was cashier-cum-clerk during the relevant period and he was not examined, courts below should have granted decree. Learned counsel also argued that even though relevant records were not produced before the trial court, before the first appellate court they were produced and those documents establish the plaint claim. 6. As rightly found by the courts below there is no acceptable or reliable evidence to prove that first respondent received any subscription from any of the subscribers and entered the same in their pass books as well as personal register, but did not account in the cash book. Neither any pass book nor any personal register nor the cash book was produced before the trial court. It is admitted that there were other employees than the first RSA 905/09 6 respondent. In such circumstances, unless there is evidence to prove that any amount was collected personally by the first respondent or was entrusted to the first respondent, there cannot be a misappropriation by him. When there is no evidence whatsoever to prove that first respondent has collected any amount for the appellant company and did not account for the same, appellant is not entitled to get a decree for realisation of the amount. As there is no evidence to prove the entrustment, there cannot be a finding of misappropriation. Though it was argued that records were produced before the first appellate court, with a prayer to receive those documents as additional evidence, appellant has to satisfy the requirement provided under Rule 27 of Order XLI of Code of Civil Procedure. When the documents are RSA 905/09 7 necessary to get a decree and they were in the custody of the appellant and were not produced before the trial court, appellant cannot be heard to contend that with due diligence those documents could not be produced or that they are necessary to pronounce better judgment, as without proof no such document could have been admitted in evidence. In such circumstances, no substantial question of law arises for consideration in the second appeal. Appeal is dismissed. M.SASIDHARAN NAMBIAR, JUDGE. uj.