High Court of KeralaSingle Judge2013-02-12Appellant's appeal allowed; lower appellate cou...

VASU, S/O. NELLIPARAMBIL APPUTTY; KARTHIKEYAN, S/O. KOONIYARA KOCHURAMAN; SULOJANA, W/O. IST APPELLANT v. PREMALATHA, W/O. MOOZHITHOTTIPARABIL PRABJAKARAN

Case / Petition Number:SA.No. 794 of 1999 (C)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: N.K. Balakrishnan, J.
Judgment Date: 2013-02-12
Court Decision / Holding: The appeal is allowed. The decree and judgment passed by the lower appellate Court are set aside. The parties are directed to suffer their respective costs. The suit stands dismissed without costs.
Final Disposition: Appellant's appeal allowed; lower appellate court's decree set aside; suit dismissed; costs to be borne by the parties as per the order (final line indicates dismissal without costs).

Parties to the Case

Appellants / Petitioners

VASU, S/O Nellipparambil Apputt y, Vekkod Desom, Sree Narayanapuram Village, Kodungallur Taluk
KARTHIKEYAN, S/O Koonyara Kochuraman, Sree Narayana Puram Village, Kodungallur Taluk
SULOJANA, W/O Ist Appellant, D/O Edachalil Krishnan Vaidyar, Sree Narayanapuram Village, Kodungallur Taluk

Respondents

Premalath a W/o Moozhithottiparabil Prabjakaran, Aala Desom, Sree Narayanapuram Village, Kodungallur Taluk

Legal Representation & Advocates

Counsels for Petitioners

• Adv. Sri. T.H. Abdul Azeez

Counsels for Respondents

• Adv. Sri. S.B. Premachandra Prabhu
• Adv(s). M/S. S.K. Brahmanandan & G.S. Prabhu

Case Synopsis & Summary

This second appeal arises from a money suit in which the plaintiff claimed to have lent Rs. 3,000 on 4 September 1982 to the three defendants, evidenced by Ext. A2, a promissory note. The defendants denied ever executing Ext. A2 and contended that the note was created from a blank signed paper handed over to Venugopal & Company for a chitty business; they alleged only one borrower was involved and that all three defendants could not have jointly borrowed such a sum. The trial court dismissed the suit; on appeal, the appellate court remanded the matter, and after further evidence, reversed the trial court and granted the decree in favor of the plaintiff. The present appellants argue that the lower appellate court erred in treating the defendants’ signatures on Ext. A2 as an admission of execution, since there is no clinching evidence of due execution and the plaintiff herself was not examined. They emphasize that Ext. A2 could have been created subsequently using a signed blank paper and that the signature on Ext. A2 does not prove payment by all three. They challenge the applicability of Section 118 of the Negotiable Instruments Act and rely on the reasoning in Vidhyadhar v. Manickkarao (AIR 1999 SC 1441) to stress that non-examination of the plaintiff can be significant. The High Court ultimately allows the appeal, sets aside the lower appellate decree, and dismisses the suit without costs, directing the parties to bear their own costs.

Provisions of Law Cited

Section 118 of the Negotiable Instruments Act, 1881

Legal Doctrines & Maxims

Presumption of due execution under Section 118 NI Act
Burden of proof on plaintiff to prove due execution when execution is denied
Non-examination of the plaintiff can be a relevant consideration in evaluating execution-claims (as discussed in related case law)

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellants contend that the lower appellate court erred in reversing the trial court’s findings. They assert there is no admission by the defendants that Ext. A2 was executed, since the plaintiff did not testify; Ext. A2 could have been created by misuse of a signed blank paper handed to Venugopal & Company; the ink and handwriting on Ext. A2 suggest later creation; the trial court had the opportunity to observe witnesses and thus its findings should be respected; reliance on Sec. 118 NI Act presumption requires clinching evidence of due execution, which is absent; the chitty business backdrop further weakens the plaintiff’s case; the lower appellate court failed to analyze the evidence in depth and should not have substituted its own assessment for that of the trial court; Vidhyadhar v. Manickkarao is distinguishable on facts but the principle that non-examination can impact the case remains relevant.

Contentions of Respondents

Premalatha’s position is that the signatures on Ext. A2 constitute admission of execution or, at minimum, that the promissory note is supported by the plaintiff’s claim and consideration. The plaintiff’s authority (P.W.1) was examined to support the transaction. The lower appellate court’s finding that Ext. A2 was proved by the defendants’ signatures is consistent with the evidence and the presumption under Section 118 NI Act should apply when execution is established; the non-examination of the plaintiff should not derail the plaintiff’s case given the surrounding documentary evidence and the admission of signatures.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Vidhyadhar v. Manickkarao and Others	AIR 1999 SC 1441	Distinguished	The court notes the facts in Vidyadhar differ; however, it cites the principle that non-examination can influence the assessment of execution, applying a similar consideration to the present case.

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Extracted Judgment Text

Exact text extracted from official judgment records.

# IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE N.K.BALAKRISHNAN TUESDAY, THE 12TH DAY OF FEBRUARY 2013/23RD MAGHA 1934 SA.No. 794 of 1999 (C) ---------------------AGAINST THE JUDGMENT IN AS.109/1993 of PRL.SUB COURT,IRINJALAKUDA AGAINST THE JUDGMENT IN OS.416/1985 of MUNSIFF COURT, KODUNGALLUR APPELLANT(S): - ----------- 1. VASU, S/O. NELLIPARAMBIL APPUTTY, VEKKOD DESOM, SREE NARAYANAPURAM VILLAGE, KODUNGALLUR TALUK 2. KARTHIKEYAN, S/O. KOONIYARA KOCHURAMAN, SREE NARAYANA PURAM VILLAGE, KODUNGALLUR TALUK 3. SULOJANA, W/O. IST APPELLANT, D/O. EDACHALIL KRISHNAN VAIDYAR, SREE NARAYANAPURAM VILLAGE, KODUNGALLUR TALUK BY ADV. SRI.T.H.ABDUL AZEEZ RESPONDENT(S): - ------------ PREMALATHA, W/O. MOOZHITHOTTIPARABIL PRABJAKARAN,. AALA DESOM, SREE NARAYANAPURAM VILLAGE, KODUNGALLUR TALUK ADV. SRI.S.B.PREMACHANDRA PRABHU, ADVS. M/S. S.K.BRAHMANANDAN & G.S. PRABHU THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 12-022013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## . **N.K.BALAKRISHNAN, J.** **................................................................. S.A. No. 794 of 1999 ....................................................................** ## **Dated: 12-02-2013** ## **JUDGMENT** The defendants in a suit for money are the appellants. The suit was filed by the plaintiff for recovery of a sum of Rs. 3000/- alleged to have been borrowed by the appellants on 4-9-1982 by executing Ext.A2 promissory note dated 4- 9-1982. As the amount was not paid, Ext. A3 notice was sent to the defendants which was acknowledged by them but the amount was not paid. 2. The defendants s denied the execution of Ext.A2 and also contended that they had not borrowed Rs. 3,000/as alleged by the plaintiff. It was further contended that a Chitty business was being conducted by P.W.1 and pertaining to the same a blank paper signed by the defendants was given to P.W.1 and misusing the same Ext.A2 was created. Originally the suit was dismissed by S.A. 794 of 1999 -:2:- the trial Court. The plaintiff filed appeal challenging the same. The appellate court remanded the matter with liberty to the plaintiff and defendants to adduce further evidence in the matter. 2. The plaintiff's husband who is the power-ofattorney holder of the plaintiff was examined as P.W.1 and the first defendant was examined as DW1. Exts. A1 to A6 were also marked on the side of the plaintiff. The appellate Court reversed the same and granted a degree as prayed for by the plaintiff. 3. The learned counsel for the appellant would submit that the lower appellate court was not justified in reversing the finding entered by the trial Court since the trial Court had the opportunity to watch the demeanor of P.W.1 and to assess the evidence correctly. The fact that the plaintiff was not examined and was kept back, persuaded the trial Court to hold against the plaintiff but without any acceptable reason the lower appellate court held that the execution of Ext.A2 was practically admitted S.A. 794 of 1999 -:3:- by the defendants when in fact, there was no such admission at all. The following substantial questions of law have been raised:- - 1) Whether proof of or admission of the signatures in the disputed document amounts to admission of execution of pro note and when the execution is denied by the defendants is not the burden on the plaintiff to prove due execution of Ext.A2 ? - 2) When execution was denied, was the lower appellate court justified in drawing the presumption under Sec. 118 of the N.I.Act. 4. It is vehemently argued by the learned counsel for the defendants s that in the peculiar nature of the case, plaintiff herself should have mounted the witness box to state when and from where and how the sum of Rs. 3,000/was lent by her to the defendants . It was also not stated to whom, among the defendants, the money was paid. It is not a case where all the three defendants could obtain a sum of Rs. 3000/- since the case is that only one transaction had taken place. The specific case advanced by the defendants is that the plaintiff was conducting a kuri business by name "Venugopal Company" of which P.W.1 S.A. 794 of 1999 -:4:- was the Manger. P.W.1 has stated that he was never a partner of Venugopal and Company. But at the same time, he has admitted that as the Manager of that Company he had filed suits against other persons. Therefore, the contention that he had nothing to do with the Venugopal and Company, the chitty business, cannot be accepted. 5. It is the admitted case that the plaintiff was not in the habit of lending money to other persons, if so, it is inconceivable what was the occasion for the plaintiff, a lady, to advance a loan of Rs. 3000/- to the three persons shown as the defendants s. The lower appellate Court misconstrued the contention raised by the defendants s and held that the execution of Ext.A2 was practically admitted. It is absolutely an incorrect statement. There was no admission on the part of the defendants that Ext.A2 was executed by them. Their specific case is that a blank signed paper was handed over by them to the chitty Company by name Venugopal & Company of which P.W.1 was the Manager. A very look at Ext.A2 should have S.A. 794 of 1999 -:5:- persuaded the appellate Court to hold that Ext.A2 was subsequently created by making use of the signed blank paper. It is quite evident that the signatures of the defendants were not put at the time when Ext.A2 was filled up. The very fact that Ext.A2 was filled up using a different ink at a different point of time would make it clear that it was subsequently created by P.W.1 making use of a signed paper. The lower appellate Court should have perused the document clearly to find that it was not executed in the manner alleged by P.W.1. 6. In such circumstances, the non-examination of the plaintiff also would assume importance in support of which the defendants s have relied upon the decision of the Apex Court in **Vidhyadhar v. Manickarao and Others - AIR 1999 SC 1441.** The facts dealt with therein are different,. But as held therein, in certain circumstances, the non-examination of the plaintiff would also assume importance. It would appear that the lower appellate court was persuaded to hold that Ext.A2 was proved merely S.A. 794 of 1999 -:6:- because the defendants s admitted that their signatures are seen on Ext.A2, the promissory note. But their contention that it was only a signed blank paper that was handed over by them to the chitty Company was ignored by the lower appellate Court. Usually, if the money was lent to one person, there was no necessity to obtain the signatures of two other persons also on the promissory note especially when the amount alleged to have been lent is only Rs. 3,000/-. It is worthwhile to note that the trial Court had dismissed the suit on an earlier occasion and also after remand taking note of certain salient features which cast a cloud of suspicion on the alleged execution of Ext.A2. 7. When the suit is to be decided on the credibility and acceptability of the oral testimony of the witnesses, that should not be simply or casually upset by the appellate court unless there are cogent reasons to do so. No witness was examined to prove that the defendants had executed Ext.A2, the promissory note. There is only the S.A. 794 of 1999 -:7:- self serving statement of P.W.1 who is only the power of attorney of the plaintiff. It was not stated that on behalf of the plaintiff the money was lent by P.W.1 or that Ext.A2 was obtained by P.W.1 on behalf of the plaintiff. That also would loom large in the analysis of the evidence adduced on the side of the plaintiff. The evidence given by P.W.1 would show that so many cases were filed by him on behalf of Venugopal Company and so many cases were decided against him also. There should be accounts relating to the lending of money and also regarding the amount received from the parties to whom money was lent. That was not produced. It is true that if the execution of Ext.A2 is proved, then presumption must necessarily follow and in that case the burden would be on the defendants to show that the promissory note was not supported by consideration and that the money if any due to the plaintiff was discharged. But that would arise only if there is clinching evidence to prove the due execution of the promissory note. When the execution of the document is S.A. 794 of 1999 -:8:- shrouded in mystery, the Court cannot simply assume the possibility of execution of a document, that too, in the given circumstance of the case. 8. The learned counsel for the appellant submits that according to P.W.1 all the three defendants s had together gone to his house only to borrow a sum of Rs. 3,000/-. P.W.1 even wants to say that he had no confidence in the first defendant and that was the reason why the other two persons were also asked to sign the document. But at the same time, P.W.1 admits that first defendant is a person having vast landed properties. If so, can it be believed that the plaintiff would obtain the signatures of two other persons only to ensure the payment of Rs. 3,000/-. It is also in evidence that the first defendant had mortgaged his properties in favour of Venugopal & Company. At another place P.W.1 has admitted that the first defendant had obtained the amount bid by him without creating any document by the sureties. These are tell-tale circumstances according to the appellant to S.A. 794 of 1999 -:9:- disbelieve the case suggested by the plaintiff. P.W.1 says that he does not remember who had written Ext.A2. That was necessary, because there was difference in the handwriting with that of the signature portions of the defendants . 9. As has been was pointed out earlier, there was specific denial of execution of Ext. A2. In the additional statement it was only clarified by the defendants that they had handed over a signed paper in favour of Venugopal & Company and that in connection with the kurry transaction which the first defendant had with that Chitty company that signed paper so given must have been misused to create a document. There is practically no admission of execution of Ext.A2. The observation and finding to the contrary made by the lower appellate court is unsustainable. 10. When the acceptability of the case depends upon the appreciation of evidence and when the trial Court which had the opportunity to watch the demeanor of the S.A. 794 of 1999 -:10:- witnesses and to assess the evidence correctly, the finding entered by the trial court should not have been easily set aside by the appellate Court. As such, I find that the decree and judgment passed by the lower appellate Court are unsustainable and it is liable to be set aside. In the result, this appeal is allowed. The decree and judgment passed by the lower appellate Court are set aside. The parties are directed to suffer their respective costs. The suit stands dismissed without costs. Dated this the 13th day of February, 2013. Sd/- **N.K.BALAKRISHNAN, JUDGE** ani/ /true copy/ P.S. to Judge