The Commissioner of Income Tax (TDS) vs. M/s. Greater Hyderabad Municipal Corporation (HO)

?• IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI APPEAL SUIT NO: 150 OF 2016 R/o. ...Respondent/Plaintiff //TRUE COPY// TUESDAY, THE TWENTY SECOND DAY OF AUGUST TWO THOUSAND AND TWENTY THREE Aged 49 Years, Vasuvanipalem, I , Business, Pedawaltair, , Allipilli Yellaji, R/o.D.No.03.01.236, Visakhapatnam. PRESENT HONOURABLE SRI JUSTICE T MALLIKARJUNA RAO District. 2. Three CD Copies. VNA , A- Appeal under Section 96 of C.P.C aggrieved by the Judgment and Decree dated: 15/09/2014 made in O.S.No. 1687/2009 on the file of the VI Additional Senior Civil Judge at Visakhapatnam. This appeal corning on for. hearing and upon perusing the grounds of appeal, the Judgment of-'the/hqwer Court and the material papers in the suit and upon hearing the arguments of Sri. Aravala Rama Rao, Advocate for the Appellants and of Sri. P V Ramana, Advocate for the Respondent. This Court doth order and decree as follows: AND S/o. Late Lakshmayya, Jalari Yendada, 1. That the Appeal be and is hereby dismissed. 2. That the decree and judgment dated 15.09.2014, in O.S.No.1687 of 2009 . passed by the learned VI Additional Senior Civil Judge at Visakhapatnam, Visakapatnam District be and hereby is confirmed. 3. That there be no order as to costs. a ® -XI Between: 1. Amjuri Simhachalam, S/o. Late Lakshumu, Aged 60 years, R/o. Jagannadharajupuram Village, Ranasthalam Mandal, Srikakulam District. 2. Amjuri Lakshmi, W/o. Simhachalam, Aged 55 years, Jagannadharajupuram Village, Ranasthalam Mandal, Srikakulam District. ...Appellants/Defendants Sd/-VDIWAKAR DEPUTY REGISTRAR ^SEcVl^NOF^CER To. 1. The VI Additional Senior Civil Judge at Visakhapatnam, Visakapatnam

HIGH COURT DATED:22/08/2023 DECREE AS.No.150 of 2016 DISMISSING THE APPEAL SUIT WITHOUT COSTS X I OCT

PRESENT APPEAL SUIT NO: 150 OF 2016 i ...Respondent/Plaintiff I.A. NO: 2 OF 2016(ASMP. NO: 341 OF 2016) Counsel for the Respondents: SRI P V RAMANA The Court made the following: TUESDAY .THE TWENTY SECOND DAY OF AUGUST TWO THOUSAND AND TWENTY THREE Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay of all further proceedings including the execution proceedings O.S.No.1687/2009 on the file of the VI Additional Senior Civil Judge at Visakhapatnam. Counsel for the Appellants: SRI. ARAVALA RAMA RAO AND Allipilli Yellaji, S/o. Late Lakshmayya, Aged 49 Years, Business, R/o.D.No.03.01.236, Jalari Yendada, Vasuvanipalem, Pedawaltair, Visakhapatnam. Appeal under Section 96 of C.P.C aggrieved by the Judgment and Decree dated: 15/09/2014 made in O.S.No.1687/2009 on the file of the VI Additional Senior Civil J udge at Visakhapatnam. Between: 1. Amjuri Simhachalam, S/o. Late Lakshumu, Aged 60 years, R/o. Jagannadharajupuram Village, Ranasthalam Mandal, Srikakulam District. 2. Amjuri Lakshmi, W/o. Simhachalam, Aged 55 years, R/o. Jagannadharajupuram Village, Ranasthalam Mandal, Srikakulam District. ...Appellants/Defendants IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVAU^g^gs. THE HONOURABLE SRI J

THE HON’BLE SRI JUSTICE T.MALLIKARJUNA RAO APPEAL SUIT NO. 150 OF 2016 JUDGMENT: The Appeal, under Section 96 of the Code of the Civil Procedure, is 1. filed by the appellants/defendants challenging the decree-and Judgment dated 15.09.2014 in O.S.No,1687 of 2009 passed by the learned VI Additional Senior Civil Judge, Visakhapatnam (for short, ‘the trial O.S.No.1687 of 2009 seeking recovery of Rs.7,25,333/- with subsequent interest and costs from the defendants based on the promissory note. The parties will hereinafter be referred to as arrayed before the trial 2. Court. The facts leading to the present Appeal, in a nutshell, are as under: 3. (a) The defendants, who are husband and wife respectively, jointly borrowed Rs.5,00,000/- from the plaintiff on 12.02.2008 for the business purpose and to purchase lands, agreeing to repay the same with interest @ 24% p.a. jointly executed the promissory note in favour of the plaintiff. As the defendants did not choose to pay the due amount under the above promissory note. despite repeated demands and even after the issuance of legal notice dated 30.11.2009; hence, the plaintiff was constrained to file the suit. i i Courf). The Respondent is the plaintiff, who filed the suit in

2 4. wherein the defendants contended that during the year 2007, the the advance amounts shall be refunded to him. The 1st defendant expressed his inability and advised the plaintiff to pay the balance creditor and debtor relationship between them. 5. is a downfall in the real estate business. The land owners did not pay the amount as the plaintiff failed to perform his obligation. Therefore, the plaintiff insisted the 1st defendant to exercise his influence and see that Ac.8.00 cents @ Rs.4,900/- per cent. The plaintiff paid some amounts to the land owners towards advance from out of the sale consideration. Subsequently, the plaintiff did not pay the remaining sale consideration to various land owners and insisted them to refund the amount as there plaintiff approached the pt defendant (only a mediator) to acquire lands in NGR Puram village from various ryots by purchasing an extent of A.S.No.lSO of 2016 The 2nd defendant adopted the 1st defendant’s written statement. amount and obtain registration. Then, the plaintiff developed a grudge against the 1st defendant and fabricated not only the suit promissory note, but also other promissory notes by forging the defendants’ signatures and filed the suit. Subsequently, the defendants have been Based on the above pleadings, the trial Court framed the following issues: (1) Whether the plaintiff is entitled to recover the suit amount or not? (2) Whether the suit promissory note is true, valid and binding on the defendants or not? (3) To what relief? taking separate action for defamation etc., against the plaintiff. No consideration was passed and there is no

3 During the trial, on behalf of the plaintiff, P.Ws.l to 3 were 6. examined and got marked Exs.Al to A.4. On behalf of the defendants. D.Ws.l to 4 were examined and got marked Exs.C.l to C.12. 7. 1 and 2 with costs and subsequent interest @ 12% p.a., from the date of suit till the date of decree and thereafter @ 6% p.a., from the date of decree till the date of realization Rs.5,00,000/-. representing the 8. appellants/defendants put forth an argument asserting that the respondent/plaintiff has no capacity to lend amounts under 12 promissory notes and no consideration is passed. The trial Court failed to see that the 1st appellant acted as a mediator and obtained sale agreement from himself and other Ryots in favour of plaintiff and later. the plaintiff did not come forward to pay the balance sale consideration and insisted on returning the advance, but the Ryots did not accept the created the promissory notes by forged the appellants’ signatures. The defendants never executed any promissory note in plaintiffs favour and there was no necessity for them to borrow amounts and the Ex.A. 1 is a created document. The trial Court erred in holding that the plaintiff proved the execution of promissory note based on the expert opinion; the TMR.J. A.S.No.l50of2016 After the trial completion and hearing the arguments of both sides, the trial Court decreed the suit for Rs.7,25,333/- against the defendants same. Therefore, the plaintiff bore grudge against the defendants and on the principal amount of Sri Aravala Rama Rao, learned counsel

4 execution of promissory note is proved, the court shall presume that it is supported by consideration. The trial Court failed to see that the burden lies upon the plaintiff to prove the suit promissory note is duly supported evidence to show this promissory note amount in his audit to pay income tax and there are no income tax returns filed by the plaintiff. Per contra, Sri P.y.Ramana, learned counsel representing the 9. by the trial Court do not require any modifications. Having regard to the pleadings in the suit and the findings 10. ■recorded by the Trial Court, the following points would arise for determination: POINT NQs.l & 2: The plaintiff is examined as P. W. l, The pt defendant is examined 11. by consideration; the attestors and scribe are the followers of the plaintiff; PW.l is having Ac.2.00 cents of land and in fact, there is no respondent/plaintiff contends that the trial Court correctly appreciated the facts of the case and reached a correct conclusion. The reasons given 2) Whether the Judgment passed by the trial Court needs any interference? 1} Is the Trial Court Justified in holding that the execution of Ex.A.l promissory note bn receipt of consideration amount by the defendants in favour of the plaintiff? TMr'~' A.S.No. 150 of 20^6 1st defendant failed to prove the existence of the agreement; once the ■**• as D.W.l, The 2^^ defendant is the wife of pt defendant. To prove the

5 Bhaskara Rao/Attestor, and P.W.3-V.Gowreswara Rao. P.Ws. 1 to 3 consideration ainount thereunder. Evidently, the plaintiff got issued a legal notice [Ex.A2] to the defendants calling upon them to pay the amount payable under Ex.Al promissory note with interest. To show the receipt of the legal notice, the plaintiff relied on Ex.A3 and Ex.A4 acknowledgements. It is the defendants' stand that the plaintiff forged the defendants' signatures and fabricated Ex.Al promissory note. Evidently, P.W.l and D.W.l jointly carried on the coconut and cashew business for about 14 to 15 years as partners, and 1st defendant is an hnancial capacity to lend the amount covered under Ex.Al. The evidence of P.W.l shows that he owns Ac.2.00 of the land. According to his evidence, the suit transaction occurred at Lawsonsbay colony, Jalaripet, at his house. The record also discloses that the plaintiff filed suits against the defendants based on the other six promissory notes. 12. P.W.2 testified in cross-examination that the defendants borrowed amounts from the plaintiff twelve times in 2007-2008 within a gap of one . or two months. At eight times, the defendants borrowed amounts of Rs.5,00,000/- each and the remaining promotes concerned, D.l and D.2 deposed that both the defendants borrowed Rs.5,00,000/- from the plaintiff on 12.02.2008 and executed Ex.Al promissory note on receipt of TMR.J-. A.S.NO.1S0 of 2016 advocate by profession. P.W.l was cross-examined regarding his Ex.Al suit transaction, the plaintiff also got examined P.W.2-Ch. borrowed Rs.2,00,000/- each under two promissory notes and ■

6 of P.W.2 coupled with Ex.Al shows that he attested the promissory note. 13. P.W.3, the Scribe of the promissory note, also deposed that D.l and D.2 executed twelve promissory notes in 2007-2008. P.W.3 expressedignorance as to whether there are suits filed by the plaintiff other than six suits. The cross-examination of P.Ws. 1 to 3 appears to be regarding the other transactions also. It is not much relevant and proper to deal with the contentions regarding the other transactions. 14. It is the defendants case that during the year 2007, the plaintiff approached D.l to acquire lands in NGR Puram village from various ryots to the extent of Ac.8.00 @ Rs.4900/- per cent, and the pt defendant acted as mediator; the plaintiff paid sorrie amounts to land owners and subsequently there was a downfall in the real estate business; and the plaintiff was unable to pay the balance amount, and insisted the land owners refund the amount, but they did not pay the amount; plaintiff insisted defendant to exercise his influence and ptdefendant expressed his inability and the pt defendant advised the 15. To establish their case, the defendants got examined D.W,2-G. Chinna Rao and D.W.3-L.Appala Naidu. D.Ws.2 and 3 supported the plaintiff to pay the balance amount, the plaintiff developed a gmdge against D.l and fabricated the pronote by forging the defendant’s the signature. Having taken such pleas, defendants should not dispute the . financial capacity. A.S.No. ISO o/2t}?o Rs.4,00,000/- under the remaining two promissory notes. The evidence «===-

7 i TUR.J. A.S.N0.ISO of 2016 as noted correctly 16. Regarding the DW.3’s cross examination, he also affirmed that he lacked personal knowledge concerning the financial transactions involving the plaintiff and D.l. In contrast, the pt defendant failed to show that the plaintiff entered into sale transactions with the farmers of NGR Puram accompanied by an advance payment to those farmers. If there is truth in the defendant’s version; he could have examined the farmers, whoentered into agreement with the plaintiff. As such, this Court finds that the defendants failed to establish the plea of developing a grudge against him. Furthermore, the defendants have not provided a substantial basis for the alleged grudge against the plaintiff. Notably, the 1®* defendant has not asserted that he has undertaken the responsibility of collecting amounts from the farmers. It becomes difficult to accept the defendant's stand in the chief examination. However, by the trial Court, their accounts diverged during cross-examination. In contrast to the earlier version, D.W.2’s cross-examination revealed a completely different version. He testified that the transaction had occurred solely between himself and D.l with no sale transaction taking place between him and the plaintiff in 2007. DW.2’s testimony indicated that the plaintiff acquired approximately Ac.8.00 of the land from his six paternal uncles. Notably, D.l has raised questions regarding the plaintiffs failure to pay the remaining sale amount. Additionally, D.W.2 revealed he had often enquired with D.l due to the sale transaction between him and D.l. Upon cross examination, D.W.2’s testimony did not align with the defendants’ case as contended in the suit.

8 defendants’ contention that the plaintiff forged the promissory notes. Furthermore, there is no indication from the defendants that the disputes arose between them and the plaintiff concerning their coconut and cashew business. document, two remedies are open to him either to request the Court to compare the signatures or to file an application to send the document to the expert for comparison. No doubt, the Handwriting Expert's opinion is not the final word on the issue and is not conclusive, but it can be taken as a corroborative piece of evidence. As there is a serious dispute about the genuineness of signatures on the Ex.Al promissory note, the Expert opinion would go a long way in resolving the controversy. An Expert is not a witness of fact, and his evidence is advisory.The defendants recorded by an Advocate-Commissioner and Ex.Cl to Ex.C12 documents . were marked through the Expert. The Expert gave his opinion, stating that the disputed signatures of Q.l and Q.2. are quite similar to the admitted signatures available on Vakalat, Suit summons and specimen signatures obtained in open Court. In his opinion, the signatures were written freely in disputed signatures and do not show any sign of imitation or disguise. The similarities are seen in the formation of'S', ‘m’ 'h', T, and 'i', as well as habit of writing Simhachalam. The similar habit of the apex of h’, k’, execution of ‘m’, as well as combination of ka’, la’. ‘Si’. The Expert offered comprehensive reasoning to support his & X.S.M>.150o/2^ SSS* * examined D.W.4-Narendra Singh, an Expert, whose evidence was 17. Whenever ’ a party disputes the signature on the particular

9 the Expert’s testimony. 18. In Ram Narain v. State of Uttar Pradesh^, the Hon’ble Apex Court considered Section 45 of the Evidence Act and the circumstances under which the evidence of an expert can be accepted by the Court and concluded as under: 19. In Vadrevu Annapumamma v. Vadrevu Bhima Sankara Rao and Others^, the Composite High Court of Andhra Pradesh at Hyderabad observed thus: AIR 1973 sc 2200 ^1960 AIR (AP) 359 TMR.J. A.S.No.l50of2016 conclusion. No substantive evidence was brought forth to cast a doubt on "There are many factors which have to be taken into consideration in effecting a comparison of the two signatures, and although a Court could apply its own eyes and its own mind to determine . whether a particular signature is resembling another it would be going beyond the ordinary limits of the capacity of a Court to constitute itself as a Handwriting Expert and try to compare the signature without all the gadgets and devices which are available to a Handwriting Expert, besides the lack of expert knowledge which a Handwriting Expert possesses." The above legal position makes it clear that the expert's opinion is not excluded from the purview of examination and it was opined that it will help the Court “...But this opinion evidence, which is relevant, may be worthy of acceptance if there is internal or external evidence relating to the document in question supporting the view expressed by the expert. If after comparison of the disputed and admitted writings by the Court itself, when the presiding officer is familiar with that language, it is considered safe to accept the opinion of the expert then the conclusion so arrived at cannot be assailed on special leave on the mere ground that comparison of handwriting is generally considered as hazardous and inclusive and that the opinion of the handwriting expert has to be received with consideration caution.”

10 : Tjmr? »Z2Ko 21. 22. 20. At this stage, it is apposite to refer to State of Maharashtra v. Sukhdev Singh^, wherein it was held as follows: A.S.NO.1S0 of in exercising power of comparison under Section 73 of the Evidence Act." ’(1992) 3 see 700 *** *5^ The Expert opinion does not conflict with the evidence of P.Ws. 1 to 3 regarding the execution of the promissory note by the defendants. The reasons for the opinion are convincing, and there is no reliable evidence throwing doubt. The report of the Expert cannot be overlooked by taking into consideration that the science of identification of Handwriting is an imperfect and frail one. This Court finds no valid reason to differ the Expert opinion. There was no acceptable direct testimony which was In cases where the reasons for the opinion are convincing and there is no' reliable evidence throwing a doubt, the uncorroborated testimony of a handwriting expert may be accepted.” “It would, therefore, not be fair to approach the opinion evidence with suspicion but the correct approach would be to weigh the reasons on which it is based. The quality of his opinion would depend on the soundness of the reasons on which it is founded. But the court cannot afford to overlook the fact that the science of identification of Handwriting is ah imperfect and frail one. as compared to the science of identification of fingerprints.” “No hard and fast rule, can be laid down in this behalf but the Court has to decide in each case of .its own merits what weight it should attach to the opinion of the expert.“ In order to satisfy myself, I have seen the admitted and disputed signatures of the defendants. I have no reason to doubt the Expert’s opinion, as the signatures appear similar. The evidence of DW.4 - Expert, therefore, is duly corroborated by the evidence of PWs.2 and 3.

11 made the Expert’s opinion unreliable. 23. The evidence of PW. 1 to PW.3 clearly shows that the defendants have subscribed their signatures on the Ex.A. 1-promissory note and Instmments Act would corrie into play. High Court of Andhra Pradesh held thus : 25. In a decision Bonalaraju V. S. Sarupula Srinivas^, the composite High Court of Andhra Pradesh held that: / .‘'2003 (4) ALT 414 ® 2006(2) ALD 202 TMR.J. A-S.No.lSO 0/2016 destmctive of the Expert’s opinion. There were no features also which “Once the execution of the promissory note is admitted or proved, then it is presumed to be supported by consideration unless contrary is proved. The burden is on the defendant to rebut the same by adducing convincing evidence. Unless the defendant rebuts the presumption by adducing convincing rebuttal evidence, the evidential burden would not shift back to the plaintiff who has legal burden only after adducing such convincing rebuttal evidence, it can be held that thereafter the presumption under Section 118 does not come to the rescue of the plaintiff. ” “once execution is proved the presumption under Section 118 of N.I. Act that it is supported by consideration automatically applies and the contention that the plaintiff is not only to establish the execution but also establish passing on the consideration is rejected”. 24. In G. Venkata Rama Subbaiah Vs. D. RasoolNaik*, the composite naturally, the presumption under section 118 of the Negotiable received the- consideration. Once those materials were available,

12 r Abbisetti Krishnamoorthy decision V. Singasani 26. In a Raghuramaiah fdiet^ per L.R.s^, the composite High Court of Andhra Pradesh held that: 27. Having regard to the evidence, which is adverted to supra, this Court views that the defendants do not show satisfactory and reliable evidence or circumstance to disbelieve the evidence of PWs.l to 3 regarding, the execution of the Ex.A. l promissory note by the defendants and passing of consideration. The evidence of PWs. 1 to 3 is consistent regarding the execution of the Ex.A.l. promissory note by the defendants on receipt of the consideration amount. Though PWs.l to 3 were subjected to lengthy cross-examination, nothing was elicited to discredit their evidence. The plaintiff and his witness have no reason to fabricate the suit promissory notes. PWs.2 and 3 have no reasons to depose falsehood against the defendants’ interest. They gain nothing by supporting the plaintifPs case unless there is a truth. However, even the preponderance of probabilities. presumption, even by the preponderance of probabilities. The evidence of PWs.l to 3 establishes the execution of Ex.A.l promissory note. The V ■ ■’■S'".- "Section 118 of the N.I Act shows that the presumption attached to passage of consideration (as is the subject matter of this Appeal) just like other presumption also is clearly rebuttable and it is for the defendant to satisfy the Court that in a given case, the presumption cannot be drawn". ® 2011(5) ALT 143 rm . A.S.No.ISO of 2SVo 28. In the present case, the defendants have not rebutted the rebuttal could be given by direct . evidence or by proving the

13 ( burden lies on the defendants to prove the non-existence of consideration by bringing on record such facts and circumstances, which would lead the Court to believe the non-existence of the consideration. Suppose the defendants have discharged the onus of proof showing that the existence of consideration was improbable or doubtful and the execution of the promissory note, the onus would be shifted to the plaintiff. Then they will be obliged to prove the existence of the consideration. 29. On studied scrutiny, it is seen that the defendants have not produced any evidence to discharge the onus on him. The defence taken by the defendantsis not substantiated. The defendants have failed to prove their contention regardirig non-passing of consideration under Ex.A.l by leading cogent evidence. The presumption under section 118 of the Negotiable Instruments Act 1881 is a statutory one, and unless it is rebutted, it has to be presumed that consideration has passed. 30. For the reasons stated above, this Court is of the opinion that the plaintiff is able to establish the execution of the suit promissory note in his favour by the defendants after receipt of the consideration amount thereunder. 31. appreciated the evidence. There is no reason for this Court to arrive at a different conclusion than the one arrived at by the trial Court. I am of the opinion that the findings arrived at by the trial Court are absolutely correct. V TMR.J. A.S.No. ISO of 2016 After careful consideration, the trial Court had adequately and no justifiable reasons have been shown by the

14 and is passed by the //TRUE COPY// To, are answered in Court is justified in executed the suit promissory there under Given the favour of the plaintiff by holding that the defendants note and received the consideration amount preceding discussion, the view taken by the trial court does not caU for any interference and this Appeal falls hereby dismissed. The impugned Decree and Judgment trial court is upheld. Sd/-VDIWAKAR DEPUTY REGISTRAR » ^SEcS^^iilOFFICER ! 1. The VI Additional Senior Civil Judge at Visakhapatnam. Visakapatnam District (with records if any). 2. One CC to SRI. ARAVALA RAMA RAO Advocate [OPUC] 3. One CC to SRI. P V RAMAN A Advocate [OPUC] 4. The Section Officer, VR Section, High Court of Andhra Pradesh at Amaravat. 5. Three CD Copies. DPK VNA 33. AS a msult, the Appeal is hereby rfUnrissed without costs 1^ confirmmg the Decree and Judgment dated 15.09.2014 in o.S.No.l687 Of 2009, passed by the learned VI Additional Senior Civil Judge, Visakhapatnam. ; • j,', ii ?' • Consequently, miscellaneous petitions pending, if Appeal shall stand closed. --------------------- appenantsZdefendants for arriving at different conclusions. " the conclusion reached at by the trial Court. 32. Accordingly, the Points holding that the Trial

HIGH COURT DPK DATED:22/08/2023 JUDGMENT AS.No.150 of 2016 DISMISSING THE APPEAL SUIT WITHOUT COSTS m g )IOCT2«Z3 PATC^i^