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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF FEBRUARY 2020 BEFORE THE HON’BLE MR.JUSTICE NATARAJ RANGASWAMY
REGULAR SECOND APPEAL NO.62 OF 2013
BETWEEN:
SRI. R.C.MALLIKARJUNAIAH SON OF R.N.CHENNEGOWDA, AGED ABOUT 52 YEARS, RESIDING AT SHIVARAMANAHALLI VILLAGE, HONNAVALLI HOBLI, TIPTUR TALUK, TUMAKURU DISTRICT-572201. ...APPELLANT
(BY SRI. H.S.BUDDA MANDELA, ADVOCATE FOR SRI. P.M.SIDDAMALLAPPA, ADVOCATE)
AND:
SMT. B.M.SUDHAMANI WIFE OF B.E.MALLIKARJUNA, AGED ABOUT 47 YEARS, DATTATHREYA COMPOUND, LAXMIPURA, ARASIKERE, HASSAN DISTRICT-572201. …RESPONDENT
(BY SRI.UMESH MOOLIMANI, ADVOCATE FOR SRI. S.V.PRAKASH, ADVOCATE )
2 THIS REGULAR SECOND APPEAL IS FILED UNDER SECTION 100 OF CODE OF CIVIL PROCEDURE AGAINST THE JUDGMENT AND DECREE DATED 20.09.2012 PASSED IN R.A.NO.104/2010 ON THE FILE OF PRINCIPAL DISTRICT JUDGE, HASSAN, DISMISSING THE APPEAL AND CONFIRMING THE JUDGMENT AND DECREE DATED 23.04.2010 PASSED IN O.S.NO.1/2006 ON THE FILE OF SENIOR CIVIL JUDGE AND JMFC, ARSIKERE.
THIS REGULAR SECOND APPEAL IS COMING ON FOR ADMISSION THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
This appeal is filed by the defendant challenging the concurring Judgment and Decree of the Trial Court and the First Appellate Court decreeing the suit for recovery of a sum of `1,15,050/- with costs along with interest at the rate of 6% per annum.
The facts as stated in the plaint are that the plaintiff and the defendant are the relatives and known to each other. The defendant sought loan of a sum of `1,00,000/- to meet the expenses of his daughter’s marriage. On 01.08.2003, the defendant borrowed a sum of `1,00,000/- and agreed to repay the same with
3 interest at the rate of 18% per annum and executed an on demand Promissory Note. The said amount was agreed to be repaid within six months from the date of borrowing. However, the defendant failed to repay the amount. Thus, the plaintiff sought for recovery of the principal amount of `1,00,000/- and accrued interest of `15,050/- excluding the interest of `28,500/- paid by the defendant.
The defendant contested the suit and claimed that he had not executed the on demand Promissory Note and consideration receipt and that the signature of the defendant was forged thereon. He contended that the plaintiff was residing in a rented accommodation and was finding it difficult to lead his life. He claimed that it was improbable that the plaintiff could have paid a sum of `1,00,000/- as he had no source of income. The defendant also pressed into service the bar contained under the Karnataka Money
4 Lenders Act against lending money without licence and also Income Tax Act which prohibited transacting in cash of more than `5,000/-.
The plaintiff was examined as PW1 and PW2 was the witness to the promissory note and PW3 was the scribe of the promissory note. PW4 was the Second Division Assistant attached to the office of the Sub- Registrar, Tiptur who produced Exs.P6 which was a sale deed containing the signature of the defendant. PW5 was the Assistant Manager attached to State Bank of Mysore, Maranagere Branch, Tiptur who had produced the loan application form submitted by the defendant to raise the loan from the Bank and he also placed on record the RTC, Patta Book, hypothecation agreement, RC Book, Sale deeds and other documents. The signatures of the defendant were identified by PW5 at Exs.P9 and 10 which were the sale deeds under which the defendant had purchased the properties. The
5 PW5 also placed on record Ex.P11 which was the sale deed under which the defendant had purchased certain properties on 09.03.1995. PW6 deposed that the defendant had purchased certain properties from her in terms of the registered sale deed dated 01.10.2004. For the plaintiffs, Exs.P1 to P11 were marked. The defendant was examined as DW1.
The Trial Court noticed that during the course of cross examination of DW1, he admitted his signature found on demand Promissory Note. He admitted his signatures found on Exs.P8, P9, 10 and P11 which were the sale deeds under which the defendant had purchased certain properties. The Trial Court found that when PWs.1 to 3 were cross examined, the defendant did not even suggest to them that the signature found on the promissory note were not the signatures of the defendant. The Trial Court therefore in its wisdom under Section 73 of the Evidence Act held
6 that the disputed signature of the defendant on Ex.P1 was clearly comparable and tallied with the admitted signatures of the defendant found on Exs.P7, 8, 9, 10, 13 and Ex.P3. The Trial Court therefore drew the presumption under Sections 118 and 138 of the Negotiable Instruments Act and decreed the suit and directed the defendant to pay a sum of `1,15,050/- along with future interest at the rate of 6% per annum.
An appeal was preferred there from by the defendant before the First Appellate Court in RA No.104/2010. The First Appellate Court found that there was enormous evidence that indicated that the defendant had indeed raised a loan from the plaintiff in terms of Ex.P1 and thus, dismissed the appeal.
The defendant is therefore in appeal before this Court in this Regular Second Appeal.
7 8. A perusal of the Trial Court records would indicate that the plaintiff had indeed paid a sum of `1,00,000/- to the defendant. The cross examination of DW1 would disclose that the plaintiff and the defendant were related to each other. The plaintiff had placed the best evidence that was available with him in the form of examination of scribe and the attesting witnesses. Though it is extracted in cross examination of PW1 that out of `1,00,000/-, a sum of `80,000/- was paid by cash and `20,000/- was paid by cheque from the account of his brother-in-law, yet the fact remains that the defendant had received a sum of `1,00,000/- from the plaintiff. The Trial Court and the First Appellate Court have taken strenuous efforts to ascertain the truth of the transaction and have returned a finding that the plaintiff had proved the lawful execution of Ex.P1 and that the defendant was liable to repay a sum of `1,00,000/-.
8 9. Thus, I do not find any infirmity in the appreciation of evidence by the Trial Court and the First Appellate Court directing the defendant to repay the principal sum of `1,00,000/-.
The plaintiff has made a claim for interest at the rate of 18% per annum.
Admittedly, the transaction in question is purely a transaction of a hand loan that was raised by the defendant to meet the marriage expenses of his daughter. Therefore, the transaction in question cannot be labeled as a commercial transaction and therefore, the plaintiff cannot browbeat the defendant with interest at the rate of 18% per annum.
In this regard Section 3 of the Interest Act, 1978 mandates that in any proceeding for recovery of debt in which a claim for interest is made, the Court if it thinks fit may allow interest to the person entitled to the
9 debt at a rate not exceeding the current rate of interest. The transaction in question in terms of Ex.P1 was dated 01.08.2003 and the rate of interest on the fixed deposit during the relevant period was 9% per annum and I therefore, feel it appropriate to direct refund of a sum of `1,00,000/- with interest at the rate of 9% per annum from the date of the promissory note, till the date of the suit and at 6% per annum from date of the suit till the date of repayment. A sum of `28,500/- that is admittedly received by the plaintiff towards the interest from 02.08.2003 to March, 2005 shall be adjusted towards the interest payable by the plaintiff to the defendant as directed by this Court.
In view of the above, the Judgment and Decree of the Trial Court and the First Appellate Court insofar as directing the refund of a sum of `1,00,000/- is upheld. However, the rate of interest payable shall be at 9% per annum from 01.08.2003, till the date of the
10 suit and at 6% per annum from the date of the suit till realization. An amount of `28,500/- paid by the defendant towards the interest for the period 02.08.2003 till March 2005 shall be adjusted towards the interest payable as directed by this Court.
Subject to the above, this Regular Second Appeal stands disposed of.
Sd/- JUDGE