IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD
PRESENT
THE HON'BLE SRI JUSTICE K.C.BHANU
A.S.No.685 OF 2011
Date:09.09.2011
Between:-
N.Govardhan Reddy
..Appellant
And
Maruthi Hire Purchase and Financers, Hanamkonda and another
.. Respondents
JUDGMENT:-
This appeal, under Section 96 of the Code of Civil Procedure, 1908, is directed against the judgment and decree, dated 31.03.2003, in O.S.No.352 of 1995 on the file of the Principal Senior Civil Judge, Warangal.
2. Heard.
3. The case of plaintiff is that it is doing money lending business. Defendant No.1 borrowed a sum of Rs.2,50,000/- from plaintiff agreeing to repay the same with interest at 30% p.a. and executed a promissory note, dated 04.09.1995, in favour of the plaintiff. Defendant No.2 stood as guarantor and executed a guarantee bond in favour of the plaintiff. On demand, defendant No.1 issued two post dated cheques, dated 11.11.1995 and 09.12.1995, for Rs.1,50,000/- and Rs.1,00,000/- respectively.
At request of defendant No.1, first cheque was not presented at the given date and both the cheques were presented for clearance on 10.12.1995, but both the cheques were returned as bounced.
The plaintiff issued a notice to defendant No.1 and reserves its right to initiate criminal prosecution under Section 138 of the Negotiable Instruments Act, 1881. As defendant No.2 also failed to respond on the demands of the plaintiff, plaintiff issued legal notice, dated 18.12.1995, to both the defendants, but there was no response. Hence, the suit.
4. Defendant No.1 filed a detailed written statement denying all the averments made in the plaint. It was stated that the plaintiff did not furnish the statement of account intimating the alleged liability before filing the suit. He had no occasion to reply the plaintiff’s alleged demand at any time. The plaintiff did not choose to submit the accounts into Court, which belies the suit transaction. Defendant No.2 is not concerned with him in any transaction. Father of defendant No.2 has been the partner along with defendant No.1 in M/s.Radhakrishna Traders. At the instance of father of defendant No.2, defendant No.2 has been allowed to work in the firm as a Gumastha but defendant No.2 has no independent authority to transact on behalf of the firm. On account of unauthorized activities of defendant No.2 in the said firm, the business suffered heavy loss and the firm was closed. So, availing of loan by defendant Nos.1 and 2 and executing the documents does not arise. As defendant No.2 started abusing the affairs of the firm, defendant No.1 addressed their banker on 04.09.1995 not to honour any cheque of their firm since defendant No.1 is not operating the business and management affairs. Even if defendant No.1 availed any loan from plaintiff in the name of the firm, the same is unauthorized and it is not by defendant No.1. Defendant No.1 did not avail any amount from plaintiff firm at any point of time and it is false that defendant No.1 executed the pronote on 14.09.1995 binding himself for and on behalf of firm M/s.Radhakrishna Traders for a sum of Rs.2,50,000/-. Similarly, the alleged issue of two cheques by defendant No.1 is not true and correct. He does not owe any amount to the plaintiff in any capacity. The alleged pronote and cheques are outcome of collusion between defendant No.2 and plaintiff and hence, prays to dismiss the suit with compensatory costs to defendant No.1.
5. Defendant No.2 filed his written statement denying the averments in the plaint and stated that the plaintiff is a stranger and imposter and there was no relation at any point of time pertaining to money lending business between himself and plaintiff. The plaintiff, in collusion with defendant No.1, forged and fabricated the document through which the speculative suit was filed. He never approached the plaintiff nor borrowed a sum of Rs.2,50,000/- and agreed to pay the same with interest at 30% p.a. and executed a pronote on 14.09.1995 and he stood as guarantor and executed a guarantee bond in favour of the plaintiff. He does not know about the alleged borrowal and whether defendant No.1 issued any post dated cheques for Rs.1,50,000/- and Rs.1,00,000/- as alleged in the plaint, that they were bounced and a notice was issued. No notice was served on him and hence, the question of responding does not arise. He came to know about the alleged suit claim through the summons. He worked under defendant No.1 from 1985 to 1996 in his shop-Sri Radhakrishna Traders at Grain Market, Warangal as a Gumastha on salary basis and there were some disputes between him and defendant No.1. Defendant No.1, in collusion with plaintiff, hatched a plan on false grounds and might have forged his signature to fulfil their desires. The suit was filed for wrongful gain and liable to be dismissed with costs.
6. Basing on the above pleadings, the following issues have been framed for trial:
1. Whether the suit pronote, dated 14.09.1995, is true, valid and supported by consideration?
2. Whether defendants 1 and 2 issued post dated cheques, dated 11.11.1995 and 09.12.1995, in favour of plaintiff?
3. To what relief?
7. On behalf of the plaintiff, P.Ws.1 and 2 were examined and marked Exs.A-1 to A-13. On behalf of the defendants, D.Ws.1 and 2 were examined and Exs.B-1 to B-3 were marked.
8. The trial Court, after considering the oral and documentary evidence available on record, decreed the suit with costs. Challenging the same, defendant No.1 filed this appeal.
9. Learned counsel for the appellant/defendant No.1 contended that the plaintiff is not having a valid license for doing money lending business; that no corresponding documents were filed viz., statement of account to show that the amount covered by the pronote was being paid to defendant No.1 by the plaintiff, and therefore, he prays to set aside the impugned judgment.
10. Learned counsel for the respondent No.1/plaintiff contended that Ex.A-11 is the certified copy of the certificate of registration of firm issued by the Registrar of Firms, which clearly shows that plaintiff is having a valid license to do the money lending business; that execution of Ex.A-1-pronote, dated 14.09.1995, was not denied or disputed by the defendant and therefore, the presumption is that it is supported by consideration and hence, there are no grounds to interfere with the impugned judgment and prays to sustain the same.
11. Now the points for determination are:
1)Whether the suit pronote, dated 14.09.1995, is true,
valid and supported by consideration? and
2) Whether the plaintiff is having a valid license to do
money lending business?
12. Point No.1:- P.W.1, who is the Managing Partner of plaintiff firm, has categorically stated that he lent an amount of Rs.2,50,000/- to defendant No.1 on 14.09.1995 and thereafter, defendant No.1 executed the promissory note. The plaintiff also examined P.W.2, who is the attestor to Ex.A-1. The evidence of attestor would also go to show that defendant No.1 executed the promissory note. Nothing has been elicited in their cross examination to disbelieve the evidence of P.Ws.1 and 2. Their evidence leave no room to doubt about execution of Ex.A-1 promissory note by defendant No.1 and receipt of consideration thereon. Therefore, the trial Court placed an implicit reliance on the evidence of P.Ws.1 and 2.
D.W.1 did not dispute or deny about the execution of Ex.A-1 promissory note. Therefore, once the execution of pronote is admitted, the presumption under Section 118 of the Negotiable Instruments Act, 1881 would be drawn. If it is drawn, the presumption is that it is supported by consideration.
Of course, it is a rebuttable presumption. The defendants can rebut the said presumption by adducing necessary evidence that Ex.A-1 was not supported by consideration. No such evidence was adduced by the defendants to rebut the burden placed on them. Therefore, the point is answered accordingly.
13. Point No.2:- Coming to the second point as to
whether the plaintiff is having valid license to do money lending business or not, Ex.A-11 is the certified copy of Certificate of Registration issued by the Registrar of Firms in the name of ‘Maruthi Finance Corporation’.
Later, it was changed as ‘Maruthi Hire Purchase and Financiers’ with effect from 01.10.1995.
The plaint was filed in the changed name of the plaintiff.
P.W.1, in the cross examination, also stated that they have money lending license under the name and style of the plaintiff. Ex.A-12, license, is valid upto 04.10.1995. Execution of Ex.A-1 is prior to Ex.A-12. Hence, this ground is not available to defendant No.1. Therefore, the contention of learned counsel for defendant No.1 on this aspect is untenable. Hence, there are no grounds to interfere with the impugned judgment, and the appeal is devoid of merit is liable to be dismissed.
14. The Appeal Suit is, accordingly, dismissed. There shall be no order as to costs.
______________________
JUSTICE K.C.BHANU
09th September, 2011
AMD
THE HON'BLE SRI JUSTICE K.C.BHANU
A.S.No.685 OF 2011
Date:09.09.2011
AMD
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