Uma Devi v. Vijayamma

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE K. BABU** **WEDNESDAY, THE 9[TH] DAY OF FEBRUARY 2022 / 20TH MAGHA, 1943** **RSA NO. 377 OF 2009** **AGAINST THE JUDGMENT IN AS 199/2004 OF II ADDITIONAL DISTRICT** ## **COURT, THIRUVANANTHAPURAM** **OS 827/2000 OF II ADDITIONAL MUNSIFF'S COURT, THIRUVANANTHAPURAM** ## **APPELLANT/APPELLANT/DEFENDANT:** UMADEVI, AGED 66 YEARS RESIDING AT SAISIVA, TILAK NAGAR, PAROTTUKONAM, NALANCHIRA.P.O, THIRUVANANTHAPURAM. BY ADV SRI.G.S.RAGHUNATH ## **RESPONDENT/RESPONDENT/PLAINTIFF:** VIJAYAMMA, AGED 68 YEARS, D/O. CHELLAMMA, RESIDING AT VIJAYAVILAS,KUNNUKUZHI,, THIRUVANANTHAPURAM. BY ADVS. SMT.JEENA JOSEPH SRI.G.D.PANICKER ## **THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON** **09.02.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** R.S.A No.377 of 2009 2 ## K.BABU, J. -------------------------------------- ## R.S.A.No.377 of 2009 --------------------------------------Dated this the 9[th] day of February, 2022 ## JUDGMENT The judgment dated 06.09.2008 in A.S.No.199/2004 passed by the II[nd] Additional District Court, Thiruvananthapuram is under challenge in this Regular Second Appeal. A.S.No.199/2004 arose from the judgment dated 17.12.2002 in O.S.No.827/2000 passed by the II[nd] Additional Munsiff's Court, Thiruvananthapuram. The defendant in the Original Suit is the appellant. The plaintiff is the respondent. 2. The plaintiff instituted the original suit claiming that she is the sole legal representative of late Sri.N.Krishnan Nair. The plaintiff pleaded that the defendant had borrowed a sum of Rs.40,000/- from Sri.Krishnan Nair on different occasions during the year 1997-1998. Sri.Krishnan Nair died on 09.04.1999. The defendant had not returned the amount due to late Sri.N.Krishnan Nair. Hence, the plaintiff instituted the suit for realising the amount with interest @ 18% per annum. The defendant resisted the suit R.S.A No.377 of 2009 3 denying the entire transaction alleged in the plaint. The defendant pleaded that Sri.Krishnan Nair had borrowed amounts from her and he had issued four cheques in discharge of the amounts due to her. 3. The present suit was tried along with two other suits. PWs 1 and 2 were examined and Exts.A1 to A4 were marked on the side of the plaintiff. The defendant gave evidence as DW1 and Exts.B1 and B2 were marked on the side of the defendant. 4. The Trial Court decreed all the suits by way of common judgment and decree dated 17.12.2002. In the present suit, the Trial Court granted a decree allowing the plaintiff to recover a sum of Rs.40,000/- with interest @ 18% per annum from 14.11.1998 till the date of the suit and thereafter @ 6% per annum from the date of the suit till realisation of the amount from the defendant and her assets. 5. The defendant challenged the decree and judgment passed by the Trial Court, filing A.S.No.199/2004 before the Additional District Court-II, Thiruvananthapuram. The Additional District Court-II confirmed the judgment and decree of the Trial Court. The defendant is in appeal before this Court under Sec.100 of the R.S.A No.377 of 2009 4 CPC. 6. After hearing both sides, this Court reformulated the substantial questions of law as follows: - (i) Have not the Courts below misconstrued the evidence in holding that the defendant failed to establish that the cheques referred to in the plaint were issued by late Sri.N.Krishnan Nair in favour of the defendant in discharge of an existing debt? - (ii) Have the Courts below drawn necessary inferences and presumptions that would apply on the facts and circumstances of this case? 7. Heard Sri.G.S.Reghunath, the learned counsel appearing for the appellant/defendant and Smt.Jeena Joseph, the learned counsel appearing for the respondent/plaintiff. 8. The learned counsel for the appellant/defendant contended that the Courts below wrongly placed the burden on the defendant to establish the alleged transaction. The learned counsel further contended that the plaintiff failed to establish that the defendant borrowed money as pleaded by the plaintiff from late Sri.Krishnan Nair. 9. Relying on Ramachandran v. Velayudhan (1986 KLT 647), R.S.A No.377 of 2009 5 the learned counsel for the defendant contended that no legal presumption arises when a sum is admitted to have been received, that it was meant to be repaid because the same may have been paid for various reasons. It is further contended that drawing and issuance of a cheque is prima facie evidence of the repayment of money owed by the drawer to the payee. The learned counsel also contended that all payments by cheques are prima facie indicative of the fact that they are issued to extinguish an existing debt and not to create a new one and that a cheque issued to a person by itself is not indicative of the fact that money was lent to him. 10. The learned counsel for the defendant strenuously contended that the burden is on the plaintiff to establish that the cheques referred to in the plaint were issued by late Sri.Krishnan Nair in favour of the defendant towards the money lent to her. 11. The case of the plaintiff is that on 19.05.1997, the defendant had borrowed a sum of Rs.10,000/- from late Sri.Krishnan Nair. On 13.08.1997 she had borrowed another sum of Rs.10,000/-. On 11.11.1998, the defendant had borrowed Rs.3,000/-, and on 14.11.1998, defendant borrowed another sum of Rs.17,000/-. According to the R.S.A No.377 of 2009 6 plaintiff, these payments were made by Sri.Krishnan Nair by issuing cheques bearing Nos.893022, 893026, 893030 and 696201. The plaintiff further pleaded that in addition to the above transactions, there was one more transaction between the parties for which the plaintiff would seek relief by way of separate litigation. 12. The challenge of the defendant is that late Sri.Krishnan Nair had borrowed money from her on several occasions, and in discharge of the debt, he used to issue post-dated cheques in her favour. According to the defendant, the cheques referred to in the plaint are such post-dated cheques issued by him in discharge of the existing debts. The specific case of the defendant is that she had not borrowed any amount from Sri.Krishnan Nair on the dates mentioned in the plaint. The defendant admitted that late Sri.Krishnan Nair had issued four cheques referred to in the plaint. 13. The crux of the dispute is whether those cheques were issued by Sri.Krishnan Nair for lending money to the defendant or whether those cheques were issued by him in discharge of the amount due to the defendant as pleaded by her. In Ramachandran's case (supra) a Division Bench of this Court on the legal R.S.A No.377 of 2009 7 ## presumption to be drawn in such circumstance held thus: “4. The burden of proving that the sum advanced to the 1[st] defendant was towards loan is on the plaintiff. Merely because 1[st] defendant admitted that he received the cheques it would not follow that he obtained a loan of the said amount. No legal presumption arises when a sum is admitted to have been received, that it was meant to be repaid because the same may have been paid for various reasons. It is for the plaintiff to substantiate his case that the amount covered by the cheques was really given to the 1[st] defendant as a loan. 5. All payments by cheques are prima facie indicative of the fact that they are issued to extinguish an existing debt and not to create a new one. A cheque issued to a person by itself is not indicative of the fact that money was lent to him. On the other hand, it is prima facie evidence of the repayment of money owed by the drawer to the payee. Of course, it is always open to the plaintiff to establish that the payment of the amount by cheque was in fact a loan to the 1[st] defendant. In this context, it is apposite to refer to Sangappa Basappa Gogi v. Chidananda Baswantraya Aski. (I.L.R. (1980) 2 Karnataka 1133) wherein it is held as follows: “A cheque drawn, presented and paid is by itself no evidence of any money lent or advanced by the drawer to the payee. It may be a prima facie evidence to extinguish an existing debt, however, not to create a new one. However, it is open to the drawer to show by other evidence that the cheque was in fact loaned to the payee. A mere issue of a Cheque in favour of the payee, by itself will not be evidence of a loan even if the cheque is encashed by the payee. That it was loaned to the payee must be proved by the drawer by other evidence. The burden is upon the person who sets up a case of loan based on the issuance of a cheque to establish by other evidence that it was a loan to the payee.” 14. The principles deduced from the decision of the Division Bench of this Court is that no legal presumption arises when a sum is admitted to have been received by way of a cheque and that all payments by cheques are prima facie indicative of the fact that they are issued to extinguish an existing debt and not to create a new one and that the burden of proving that the sum paid as per the R.S.A No.377 of 2009 8 cheque was towards a loan is always on the plaintiff. At the same time, it is always open to the plaintiff to establish that the payment of the amount by way of the cheque was in fact, a loan to the defendant. 15. This is a case in which there is an oath against oath. In the present case, both sides, in support of their rival pleadings, led evidence. The plaintiff gave evidence as PW1. She would depose that her brother late Sri.N.Krishnan Nair had paid a sum of Rs.40,000/- to the defendant during different dates as pleaded in the plaint. She would further depose that on 09.04.1999 Sri.Krishnan Nair died and he had demanded the amount due to him from the defendant. According to PW1, the defendant had borrowed money from Sri.Krishnan Nair with the aid of Sri.Surendran (PW2). 16. Sri.Surendran was examined as PW2. He would depose that he was familiar with Sri.Krishnan Nair through one Sri.Ramakrishnan Thambi. According to PW2, in 1997, on two occasions, the defendant had borrowed Rs.20,000/- and in 1998, on three occasions, she had borrowed Rs.40,000/-. R.S.A No.377 of 2009 9 17. The learned counsel for the defendant would contend that the oral evidence of PW1 is mutually inconsistent with the oral evidence of PW2 regarding the total amount borrowed. 18. The learned counsel for the plaintiff contended that PW2 was referring to a transaction that took place in 1998, which was not covered by the plaint, and that was why PW2 stated that in 1998 the defendant had borrowed Rs.40,000/- and therefore, it cannot be concluded that the oral evidence of PW1 is inconsistent with the evidence of PW2 regarding the amount actually borrowed by the defendant from late Sri.Krishnan Nair. 19. The defendant gave evidence as DW1. She deposed in tune with the pleadings in the written statement. According to the defendant, in December 1996, Sri.Krishnan Nair had borrowed Rs.50,000/-from her and he had returned Rs.10,000/- in December itself by cash. The rest of the debt was discharged by Sri.Krishnan Nair executing the cheques referred to in the plaint. In the written statement though the defendant had pleaded that late Sri.Krishnan Nair had borrowed money from her on different occasions, there is a lack of specific pleading regarding the sum of Rs.50,000/- R.S.A No.377 of 2009 10 allegedly borrowed. Moreover, while examined in cross, the defendant was unable to specify the date on which the amount of Rs.50,000/- was borrowed by Sri.Krishnan Nair. 20. The oral evidence of the plaintiff as PW1 supported by the evidence of PW2 led this Court to the conclusion that the defendant had borrowed money as pleaded by the plaintiff in the plaint, and therefore, the plaintiff has discharged the burden to establish that the cheques were issued towards the money lent to her. The oral evidence of the defendant is not reliable to enter into a different conclusion. The Trial Court, after appreciating the oral evidence of the plaintiff and PW2, recorded the finding that the defendant had borrowed money from Sri.Krishnan Nair as pleaded and the money was lent by Sri.Krishnan Nair through the cheques referred to in the plaint. The First Appellate Court confirmed the said finding. This Court finds no reason to interfere with the said findings. 21. The learned counsel for the appellant would further contend that the Courts below committed illegality in awarding 18% interest per annum for Rs.40,000/- from 14.11.1998 till the date of the suit. R.S.A No.377 of 2009 11 22. As per Sec.34 of the CPC, in so far as a decree is for the payment of money, the Court may order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding 6% per annum, as the Court deems reasonable. This Court is of the view that the award of interest for the sum of Rs.40,000/- @ 18% per annum from 14.11.1998 is not reasonable. The plaintiff is entitled to interest @ 8% per annum from 14.11.1998 till the date of suit and thereafter @ 6% per annum from the date of the suit till realisation. 23. The impugned decree and judgment are modified to the above extent. The Regular Second Appeal is disposed of as above. Pending Interlocutory Applications, if any, stand closed. Sd/- K.BABU, JUDGE KAS