Sree Gokulam Chit and Finance Co. (P) Ltd. v. Xaviour V.X.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **&** **THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN WEDNESDAY, THE 15[TH] DAY OF MARCH 2023 / 24TH PHALGUNA, 1944 RFA NO. 774 OF 2014** **AGAINST THE ORDER/JUDGMENT IN OS 42/2009 OF SUB COURT /** ## **COMMERCIAL COURT, THODUPUZHA** ## **APPELLANT/PLAINTIFF:** SREE GOKULAM CHIT AND FINANCE CO.(P) LTD. 356, ARCOT ROAD, KODAMBAKKOM, CHENNAI-600024, REP. BY POWER OF ATTORNEY HOLDER, MR. RAJEEV M.B., AGED 44 YEARS, S/O.LATE PADMANABHAN NAIR, MANAGER (BUSINESS), MUVATTUPUZHA BRANCH, YAS COMPLEX, VELLOORKUNNAM VILLAGE, MUVATTUPUZHA TALUK, ERNAKULAM (DT.), NOW REPRESENTED BY POWER OF ATTORNEY HOLDER MR.JOMY M.C., S/O. CHACKO M.M., AGED 30 YEARS, SENIOR BUSINESS MANAGER, THODUPUZHA BRANCH, CHARUPUZHA TOWER, PALA ROAD, THODUPUZHA, IDUKKI DISTRICT. BY ADV SRI.MAHESH V RAMAKRISHNAN ## **RESPONDENT/DEFENDANT:** XAVIOUR V.X., S/O.XAVIOUR AROMA INDUSTRIES, ADIMALI, IDUKKI (DT.), VILLAMTHANATH, MANNAMKANDOM VILLAGE, ADIMALY. BY ADVS. SRI.T.R.HARIKUMAR SRI.ARJUN RAGHAVAN THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 15.03.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **RFA774/2014** **- 2 -** **K.VINOD CHANDRAN & C.JAYACHANDRAN, JJ. ----------------------------------------------------------R.F.A.No. 774 of 2014 --------------------------------------------------------Dated this 15[th] March, 2023** ## **JUDGMENT** ## **K.Vinod Chandran, J.** A suit for money based on a promissory note was dismissed by the trial court, against which the appeal is filed by the plaintiff. According to the plaintiff the defendant joined in five chitties, with sala of Rs.10 lakh each. He bid successfully and received Rs.7,50,000/- each in all the said chitties. Having disbursed the amounts the defendant was obliged to pay the balance instalment @ Rs.50,000/- which as per the original agreement was for a period of twenty months. The defendant paid some amounts and then defaulted. The defendant issued cheques for the balance amounts which were dishonoured. The plaintiff initiated prosecution proceedings in which the trial court convicted the defendant, but the appellate Court acquitted him. Admittedly the order of acquittal is challenged before this Court. The plaintiff sought for recovery of an amount of Rs.46,62,427/- from the defendant which includes the dues of Rs.43,75,812/- and 18% future interest till 31.03.2009. The plaintiff also prayed for 18% future interest. **RFA774/2014** **- 3 -** 2. The defendant admitted that he had joined the chitty and had obtained the amounts on a successful bid. It was the contention of the defendant that he had subscribed to the five chitties for the purpose of purchasing a metal crusher unit; which however did not fructify since the plaintiff delayed the disbursal of the bid amounts in two chitties. The defendant asserted that he had not executed a promissory note or chitty agreement dt. 04.04.2005 or 27.10.2005 and claimed that the documents produced are forged and fraudulently prepared by the plaintiff company. The defendant also asserted that he had defaulted only a few instalments and disputed the part payment shown in the plaint. 3. The learned trial court found that in the context of the defendant having disputed execution of the documents based on which the plaint was filed, the plaintiff ought to have examined some one who was acquainted with the signature of the defendant or the person in the company who had seen the execution of the document. PW1, the Branch Manager who was examined on behalf of the plaintiff was not the person who accepted the promissory note or the agreement from the defendant and his testimony was very casual. The trial court also found that the amounts due as seen from the cheques issued does not tally with the plaint claim and that the issuance of the cheque would be a satisfaction **RFA774/2014** **- 4 -** and discharge of the liability. It was also found that after having presented the cheques and initiated prosecution, the plaintiff is not entitled to file a suit based on Ext.A1 and A2 documents. Except the two grounds of a proper testimony regarding the execution having not been made and the different amounts claimed as arrears; due in the criminal proceedings and the civil proceedings, we find the other grounds to be preposterous. Even with respect to the grounds we find favourable we cannot but notice that the learned trial court went overboard by referring to various provisions in the Evidence Act and citing decisions without specifying as to how the provision or the dictum applies to the facts of the case. As far as the provisions are concerned the learned Judge refers to S.47 of the Indian Evidence Act to say that PW1 cannot come within the scope and ambit of the provisions since he has no acquaintance of the signature of the applicant. We are afraid that the said provision would not have application since PW1 is the Manager of an institution which accepted the document in the course of the business of the institution, from the defendant. The mere fact that he was not the person who saw the defendant execute the document or lack of acquaintance with the signature of the defendant would not disable him from proving the document if he testifies it to have been accepted in the course of the **RFA774/2014** ## **- 5 -** business and he having retrieved it from the records maintained by the plaintiff, in the ordinary course of business. However such a testimony is not forthcoming from the witness; which is not to say that the reference to S.47 made by the trail Judge was correct. As far as the cited decisions _**Mobarik Ali Ahmed v. State of Bombay [AIR 1957 SC857]**_ and _**Nar Singh v. State of Uttar Pradesh [AIR1954 SC457]**_ are decisions in criminal prosecutions filed; which have no bearing on the issue agitated herein. The other two decisions referred to in the judgment could not be traced out since the citation is wrongly noted. 4. Be that as it may, we have independently considered the issue raised in the suit. In the plaint, it was claimed that the five chitties were subscribed by the defendant which were bid successfully by the defendant; the three chitties on 10.05.2005 and two chitties on 24.09.2005. The amount of Rs.7,50,000/- each were released on 04.04.2005 and 27.10.2005; the amounts in the first three chitties on the first date and that in the two chitties on the second date. It is claimed that the defendant furnished sufficient security and guaranteed regular payment of the instalments, for which at the time of receipt of amounts he had executed chitty agreement, Ext.A1 and promissory note, Ext.A2. It is based on this that the dues were quantified at Rs.43,75,812/- after giving **RFA774/2014** **- 6 -** credit to the part payment of Rs.18,21,500/-. However contrary to the statements made as above the plaintiff claimed the cause of action having arisen on 26.05.2007, when the promissory note was executed and on 20.11.2008 when Ext.A5 notice was issued to the defendant. 5. Interestingly we find from Ext.A2 promissory note that it is dated 26.05.2007 and the amount specified is Rs.31,78,513/-. The plaintiff's specific case was that the promissory note was executed when the amounts in the successful bid were disbursed on 04.04.2005 and 27.10.2005. If that be so, there ought to have been two promissory notes for the disbursals made, the first in the three chitties and the second in the two chitties. As we see from Ext.A2 all the five chitties are referred to and the blanks in the printed form is filled up using a type writer. There are also two witnesses to the alleged promissory note who have not been examined or their absence satisfactorily explained. The plaint averments hence do not support the promissory note produced and _vice versa_ for reason of the difference in the amounts claimed and expressed to be paid on demand. There is also further disparity in the amounts claimed in the two prosecutions launched under Section 138. PW1, the Manager of the plaintiff, in cross-examination, deposed that he does not know the quantum of dues of the defendant and also deposed that the promissory **RFA774/2014** **- 7 -** note was executed and received without showing the amounts. In reexamination, the absence of the amount in the promissory note was sought to be clarified and the witness answered that he was referring to the promissory note-deed, which is ambiguous in itself and not capable of explaining the earlier testimony in cross-examination. 6. The learned Counsel for the appellant strenuously argued for a remand on the ground that there is a clear admission of the receipt of the bid amounts by the defendant. We have looked at the written statement where he admits that the amounts were paid as claimed by the plaintiff, but disbursal of amounts in two chitties being delayed. However the execution of promissory note is clearly denied and so is the part payment shown in the plaint. In fact the defendant's specific case was that he had defaulted only a few instalments. It was the bounden duty of the plaintiff to prove the exact dues as per the account, in which event, even if the promissory note is disbelieved there could have been a successful case set up. We also have to notice that Ext.A5 notice merely speaks of the amounts due and does not at all put forth the contention of a promissory note having been executed for the amounts disbursed; which again puts Ext.A2 under cloud. 7. We do not at all subscribe to the findings of the trial court **RFA774/2014** **- 8 -** but however we are of the opinion that the suit was rightly dismissed. Hence, on the findings herein above we uphold the dismissal of the suit and reject the appeal filed. The parties shall bear their respective costs in the appeal. Ordered accordingly. Sd/- ## **K.VINOD CHANDRAN, JUDGE** Sd/- ## **C.JAYACHANDRAN, JUDGE** jma