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NC: 2024:KHC:32325 RFA No. 679 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR JUSTICE V SRISHANANDA REGULAR FIRST APPEAL NO.679 OF 2015 (MON) BETWEEN:
THIMMADAS S/O ERAPPA AGED ABOUT 52 YEARS R/AT NO.26/08, QAW ASSEMBLY H.M.T WATCH FACTORY-IV TUMKUR-572106 …APPELLANT (BY SRI MANJUNATH B R, ADVOCATE)
AND:
HEMALATHA R P W/O THEERTHAKUMAR K AGED 39 YEARS 1ST MAIN, 1ST CROSS MANJUNATHANAGAR NAGASANDRA POST BANGALORE-560073
ACCOUNTS OFFICER WAGES SECTIONS H.M.T. WATCH FACTORY-IV TUMKUR -572 106 …RESPONDENTS (BY SRI N SURESHA, ADVOCATE FOR R1; VIDE ORDER DATED 14.12.2015 NOTICE TO R2 IS DISPENSED WITH)
THIS RFA IS FILED UNDER SECTION 96 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 30.03.2015 PASSED IN O.S.No.7076/2013 ON THE FILE OF THE VII ADDL.
Digitally signed by MALATESH K C Location: HIGH COURT OF KARNATAKA
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NC: 2024:KHC:32325 RFA No. 679 of 2015
CITY CIVIL AND SESSIONS JUDGE, BANGALORE (CCH NO.19), DECREEING THE SUIT FOR RECOVERY OF MONEY.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE V SRISHANANDA
ORAL JUDGMENT
Heard Sri Manjunath B.R., learned counsel for the appellant and Sri N. Suresha, learned counsel for the respondent No.1. 2. Appeal is filed by defendant No.1 challenging the judgment and decree passed in O.S.No.7076/2013, dated 30.03.2015, on the vile of VII Additional City Civil and Sessions Judge, Bengaluru City.
Facts in brief which are utmost necessary for disposal of the present appeal are as under: Plaintiff filed a suit contending that first defendant barrowed a sum of Rs.4,50,000/- in the month of April 2013 and a cheque bearing No.993684, dated 23.07.2013 came to be issued towards the repayment of the said amount, drawn on Allahabad Bank, J.C. Road Branch, Tumakuru.
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NC: 2024:KHC:32325 RFA No. 679 of 2015
It is further contention of the plaintiff that the said cheque on presentation came to be dishonored with an endorsement ‘account closed on 29.08.2013’.
The fact of dishonor of the cheque was intimated to the first defendant and demanded the payment and when the first defendant failed to make payment, the plaintiff filed the suit.
Upon receipt of the suit summons, first defendant appeared before the Trial Court and filed the written statement denying the plaint averments except para 2 of the plaint.
Based on the rival contentions of the parties, the Trial Court raised following issues: “1. Does the plaintiff proves that defendant No.1 had availed a hand loan of Rs.4.5 lakhs from her on 10.4.2013 for his family necessities agreeing to repay the said amount along with interest @ 12% p.a? 2. Does she further proves that for the repayment of the Hand Loan availed from her defendant No.1 had issued a cheque for Rs.4.5 lakhs dt.20.7.2013 and the same was returned dishonoured when presented for encashment with shara - 'Account closed'?
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NC: 2024:KHC:32325 RFA No. 679 of 2015
Whether defendant No.1 proves that a lost cheque has been misused by the plaintiff to make wrongful gain and a false suit has been filed against him for recovery of the suit claim amount? 4. Whether the suit of the plaintiff is bad for mis- joinder and non-joinder of necessary parties? 5. Whether the plaintiff is entitled for Judgment and decree as prayed under the suit against the defendant? 6. What order or decree?”
In order to prove the case of the plaintiff, plaintiff got examined herself as P.W.1 and placed on record five documents namely; dishonored cheque, bank endorsement, memorandum issued by the bank, statement of account, which were exhibited and marked as Exs.P.1 to P.5.
In the detail cross-examination, suggestions were put to the plaintiff with regard to lending capacity as well as opening of the account.
Plaintiff in her cross-examination has categorically stated that she had not produced any documents to show that she had the lending capacity, but she has answered that her father had retired from the service and from the retirement benefits, the loan was paid.
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NC: 2024:KHC:32325 RFA No. 679 of 2015
She also admitted in the cross-examination that she does not remember when she has opened the account in Karnataka Bank, CMM Court Branch.
She denied the suggestion that she is a stranger to the first defendant.
As against the evidence placed on record by the plaintiff and to rebut the presumption available to the plaintiff under Section 118 of the Negotiable Instruments Act, first defendant got examined himself as D.W.1.
In his examination in chief, the defendant reiterated the contents of the written statement and contended that plaintiff is a stranger to the defendant and when he had been to his relatives house in Pavagada, he lost a cheque book containing several cheque leaves of Allahabad Bank and in that regard, he had filed a complaint before the Pavagada Police on 27.04.2011 and the cheque in question is also part of the said complaint and therefore, the cheque has been misused with the help of one Lokesha and sought for dismissal of the suit.
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NC: 2024:KHC:32325 RFA No. 679 of 2015
In his cross-examination, D.W.1 admits that he was working as an operator in HMT watch factory. He has further answered that the cheque in question has been dishonored is false.
He admits that the plaintiff is not aware of the complaint lodged by the defendant vide Ex.D.3 with Pavagada Police.
Based on the above evidence, learned Trial Judge decreed the suit of the plaintiff as under: “The suit of the plaintiff is decreed with cost. The defendant No.1 is liable to pay a sum of Rs.4,50,000/- along with interest at 12% per annum from the date of suit till its realization. The suit against defendant No.2 is dismissed. Draw decree accordingly.”
Being aggrieved by the same, first defendant is in appeal on following grounds: The impugned judgment and decree passed by the court below is not sustainable either in law or on facts and the same is liable to be set aside. The impugned judgment and decree passed by court below is not sustainable as the respondent is a
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NC: 2024:KHC:32325 RFA No. 679 of 2015
stranger to the appellant. The respondent though in her evidence states that she knows the appellant for the past 10 years, she is not aware of his residential address and she is not even aware the place and department in which he is working. Under the circumstance the court below ought to have disbelieved the version of the respondent. Hence, the impugned judgment and decree is liable to set aside. The appellant submits that at no point of time the appellant had borrowed a sum of Rs.4,50,000/- from the respondent as he had not even seen her and for the first time the appellant saw the respondent before the court below on 12/03/2015 when she had come for cross examination. In the absence of no relationship between the appellant and respondent, there is no question of appellant seeking hand loan from the respondent to meet his family necessities. Hence, the impugned judgment and decree is liable to set aside. The appellant submits that if really the respondent had paid huge sum of Rs.4,50,000/- to the appellant, nothing prevented her pay through a account payee cheque or she could have transferred to the account of the appellant. In view of violating the provisions of Income Tax Act, the amount which the respondent is claiming cannot be claimed as it amounts to illegal transaction. The court below has over looked this aspect. Hence, the impugned judgment and decree is liable to set aside.
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NC: 2024:KHC:32325 RFA No. 679 of 2015
The appellant submits that it is the case of the respondent that she approached the appellant seeking return of the hand loan of Rs. 4,50,000/- together with interest on 20/07/2013. It is the further case of the respondent that the appellant issued cheque in question to the respondent for sum of Rs,4,50,000/-. The respondent did not even choose to seek return of the interest on the principal amount. The court below has overlooked this aspect. Hence, the impugned judgment and decree is liable to set aside. The appellant submits that the cheque in question is a joint account cheque. The appellant and his brother E.Jayarama are the joint account holders of the cheque in question. Though the brother of the appellant is not even made party to the proceedings and though the appellant had contended the same in his written statement, the court below has brushed the contention of the appellant and decreed the suit of the appellant. In this connection the appellant had even letter dated 01/06/2009 given to Manager, Allahabad bank and the account statement and the same were marked as Ex D1 and 2, the court below has not considered said documents. Hence, the impugned judgment and decree is liable to set aside. The appellant submits that, the appellant and his brother E.Jayarama had closed the account by giving Ex.D-1 letter dated 01/06/2009 to the Manager. Allahabad Bank, Tumkur and with effective from 01/06/2009 itself of the account of the appellant and his brother closed by the said bank. The court below
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has failed to consider this aspect and inspite that the court below has decreed the suit of the respondent. Hence, the impugned judgment and decree is liable to set aside. The appellant submits that the court below has failed to consider the fact the appellant had lost the disputed cheque during transit and in this connection he had lodged a complaint to jurisdictional police on 27/04/2011 who inturn has acknowledged the complaint and had registered a case C.Misc.No.44/2011. Though the appellant had produced said documents before the court below as Ex D.3 and 4, court below has failed to consider the same. Hence, the impugned judgement and decree is liable to set aside. The appellant submits that though the respondent had failed to prove her financial capacity as she has not even produced a single document before the court below in order to show that as on the date of lending the money to the appellant, she had sufficient funds with her. In the absence of the same the court below ought to have dismissed the suit of the respondent. Hence, the impugned judgement and decree is liable to set aside. The appellant submits that the interest awarded by the court is also contrary to the principles of law and the same is exorbitant and court below ought not to have awarded such a high interest while decreeing the suit.
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NC: 2024:KHC:32325 RFA No. 679 of 2015
The appellant has got a good case on merits and he is not liable to pay the amount to the respondent as alleged in the plaint. Hence, the impugned judgement and decree is liable to set aside.”
Sri Manjunatha B.R., learned counsel for the appellant reiterating the grounds urged in the appeal memorandum vehemently contended that the plaintiff is a total stranger to the first defendant and therefore, the question of plaintiff lending sum of Rs.4,50,000/- to the first defendant would not arise.
He also pointed out that the cheque in question has been misused by the plaintiff with the help of one Lokesha and therefore, the Trial Court ought not to have decreed the suit.
He further contended that the Trial Court misdirected itself in not noticing that the cheque is dated 23.07.2013, but the account of the defendant was closed by giving a letter to the bank at Ex.D.1 on 01.06.2009 itself. Therefore, there was no legally recoverable debt under Ex.P.1 cheque and the Trial Court misdirected itself in decreeing the suit based on Ex.P.1 and sought for allowing the appeal.
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NC: 2024:KHC:32325 RFA No. 679 of 2015
Per contra, Sri N. Suresha, learned counsel for the respondent supports the impugned judgment. He further contended that when once the cheque is dishonored and that is the suit document, the plaintiff enjoys the presumption under Section 118 of the Negotiable Instruments Act. Therefore, no further proof is necessary in respect of Ex.P.1 and it is for the first defendant to rebut the presumption by placing cogent evidence on record which has not been done by the first defendant. Therefore, sought for dismissal of the appeal.
Having heard the parties, following points would arise for consideration: 1) Whether the plaintiff has successfully established that the plaintiff is due in a sum of Rs.4,50,000/- with interest as prayed for under Ex.P.1.? 2) Whether the first defendant has proved that the cheque at Ex.P.1 has been misused by the plaintiff in active collusion with one Lokesha? 3) Whether the impugned judgment is suffering from legal infirmity and perversity and thus calls for interference? 4) What order
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NC: 2024:KHC:32325 RFA No. 679 of 2015
Regarding point Nos.1 to 3 : In the case on hand, the plaintiff has discharged the initial burden cast on her by examining herself and producing the documents at Exs.P.1 to P.5.
Admittedly, the cheque has been dishonored with an endorsement ‘Account Closed’.
The fact of the cheque being issued and the signature of the defendant No.1 in the said cheque is not in dispute.
According to the first defendant, as per Ex.D.3 - complaint, he has lost the cheques when he had been to Pavagada.
A complaint came to be lodged on 27.04.2011 and the case came to be registered in C.Mis.No.44/2011. Endorsement is also issued in that regard. But, no further action has been taken by the first defendant in that regard.
Admittedly, after filing the suit and after receipt of the suit summons, the defendant came to know that one of the
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cheques mentioned in Ex.D.3 is in the hands of the plaintiff and she has presented the same to the Bank. Therefore, it is incumbent on the part of the defendant to go back to the Pavagada police Station and sought for further action in pursuance of Ex.D.3. No prudent person would keep quiet, if he has come to know that there is a misuse of the cheque.
Further, according to the first defendant, the plaintiff has misused the cheque in active collusion with one Lokesha. Defendant has not chosen to examine said Lokesha on his behalf or at least taken the witness summons to summon him before the Court.
Except suggesting to the plaintiff that she has come to the Court along with one Lokesha, which has been denied by the plaintiff, no other evidence is forthcoming on record.
If it is definite case of the first defendant, he would have a plea in the written statement that it is Lokesha, who has come into contact with the plaintiff and handed over the signed cheque of the first defendant, nothing prevented the first defendant to file a private complaint before the jurisdictional
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Magistrate, arraigning the present plaintiff and Lokesha as the accused for misuse of the cheque.
Under such circumstances, the evidence placed on record by the first defendant simply denying the plaint averments and also contending that the plaintiff is a stranger to the first defendant would not be sufficient enough to rebut the presumption available to the plaintiff under Section 118 of the Negotiable Instruments Act. Accordingly, the Trial Judge was justified in decreeing the suit of the plaintiff.
In view of the foregoing discussion, point No.1 is answered in the affirmative and point Nos.2 and 3 in the negative.
Regarding Point No.4: In view of finding of this Court on point Nos.1 to 3 as above, following order is passed: ORDER (i) Appeal is meritless and hereby dismissed.
(ii) No order as to costs.
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(iii) Amount in deposit is ordered to be withdrawn by the plaintiff, under due identification.
Sd/- (V SRISHANANDA) JUDGE
MR List No.: 1 Sl No.: 73