PREM LATA MEHTA v. J. S. SOD — 1994 DIGILAW 530 (DEL)

( 1 ) THIS appeal is directed against the Judgment and Decree in Suit no. 637 of 1984. The appellants, Mrs. Prem Lata Mehta and ms. Arti Mehta are the defendants and are the wife and daughter of Sh. J. L. Mehta, of Bombay. The respondent, Mr. J. S. Sood is the plaintiff and is proprietor of M/s Globe films, Delhi. The suit was filed on the original side of this Court and was decreed. After service of summons a written statement was filed, a replication was filed and evidence adduced in the case. The Plaintiff examined two witnesses and for the appellants (defendants) none went into witness-box. The suit was for recovery of Rs. 2,36,000/ -. ( 2 ) THE suit was initially filed under Order 37, Rule 1 Civil Procedure Code and by an order dated 28. 8. 94, a learned Single Judge of this court came to the conclusion that the facts of the case did not fit into Order 37 as amended in 1976 and held that the best course was to try the suit as an ordinary suit and issued fresh summons. An appeal FAO (OS 146/84 was carried against the said order and was dismissed by a division Bench of this Court on 2. 1. 1986. ( 3 ) THEREAFTER, P. W. I ah employee Of the plaintiff was examined on 24. 11. 93 and on succeeding dates. The plaintiff himself was examined on 28. 2. 94. Defend ants/appellants did not examine themselves or any other person on their side. Arguments were heard on 12. 4. 94 and the Judgment was pronounced on 13. 5. 94 decreeing the suit in the sum Rs. 1,40,000 with pendente life interest at 1 5% per annum from the date of institution of the suit till the date of payment and costs. ( 4 ) IN the plaint, the respondent-plaintiff stated that he was a financier and exhibitor of motion pictures and that the appellants/ defendants were partners of a firm which was producing a motion picture called "nadaniyan" and that the appellants approached the plaintiff for financial assistance for the purpose of production of their aforesaid picture. The plaintiff further contended that he agreed to make available the requisite finance and as such the defendants were given from time to time various amounts for the purposes of the production of the aforesaid picture. The plaintiff further contended that he agreed to make available the requisite finance and as such the defendants were given from time to time various amounts for the purposes of the production of the aforesaid picture. According to the plaintiff, the whole picture was completed with the funds of the plaintiff. The plaintiff stated that there was nothing in writing in respect of the amounts advanced by him and the parties had complete confidence in each other. Husband of the first defendant (father of the second defendant) was also under the employment of the plaintiff. However, in July, 1983 the plaintiff requested the appellants to go into the accounts and confirm the payments received by them so that the plaintiff could have an exact idea of his investments. This was also necessary for the purpose of keeping the accounts for income tax and other allied purposes. The plaintiff contended that initially the defendants hesitated and tried to put off the plaintiff on one pretext or the other. Thereafter, the plaintiff made further demands from the appellants and also told the appellants that the had made many payments by cheques and drafts and if the appellants insisted, the plaintiff could, with a little effort find out the amounts paid to the appellants from time to time,. Thereafter, the plaintiff with what-ever little bank accounts he had at the moment in Delhi, went through the same along with the appellants and was able to trace a sum of rs. 2,08,000 as having been paid to the appellants by means of cheques etc. It-is stated that the plaintiff explained to the appellants that besides these amounts the plaintiffs also paid them by bearer cheques and cash and that actually the whole picture had been completed with the funds of the plaintiff. It is stated that on being so confronted, the appellants agreed that they borrowed acknowledging only a round figure of Rs. 2 lakhs and agreed to repay the same. It is stated that on being so confronted, the appellants agreed that they borrowed acknowledging only a round figure of Rs. 2 lakhs and agreed to repay the same. When the defendants were asked to acknowledge the same, the second defendant acknowledged this fact by a letter in the writing of the second defendant on the letter-head of the plaintiff which read as follows:- "j. S. SOOD GLOBE FILM DELHI Regarding :- NADANIYAN This is to certify that you have paid a sum of Rs 2 LAKH in completion of picture Nadaniyan till date which will be repaid to you before release of the picture "nadaniyan". ( 5 ) THEREAFTER, the plaintiff made demands for repayment of the said amount and as no amounts were paid, he filed the present suit claiming R. s. 2 lakh plus interest at the rate of 24% per annum which is the least minimum in the film trade as interest worked our in a sum of Rs. 36,000. the plaintiff claimed a total sum of Rs. 2,36,000. ( 6 ) THE defendants filed a written statement on 5. 11. 86. a joint written statement was filed for both the defendants. It was stated therein that the defendants were carrying on the business of producing motion pictures in the name of a partnership firm and that the said firm produced the film "nadaniyan". It was, however, denied that the defendants ever approached the plaintiff for financial assistance for making the film "nadaniyan" as alleged, It was admitted that the husband of the first defendant (and father of the second defendant) was employed by the plaintiff after his retirement and before his death. It was stated that there was no question of any accounts being rendered by the defendants as they had received no payments from the plaintiff it was denied that a sum of Rs. 2,08,000 was admitted as contended by the plaintiff. In so far as the document said to be in the writing of the second defendant and written on the letter-head of the plaintiff is concerned, it was stated in the written statement at para graph No. 10 as follows :- "the document now sought to be relied upon by the plaintiff in this regard is a forged one, and in any event is unsigned. It is denied that any of the defendants ever executed the said document. It is denied that any of the defendants ever executed the said document. There was no question of the defendants giving any acknowledgement in writing about any other advance as alleged in paragraph 10. " ( 7 ) THE defendants contended that the husband of the first defendant had advanced a sum of Rs. 60,000 as loan and the same had been admitted by the plaintiff in a suit filed by him against the defendants in the Bombay High Court and has to be given credit to. On these grounds the defendants stated that the suit deserved-to be dismissed with costs. ( 8 ) THE plaintiff filed a replication dated 8. 11. 86 reiterating the contentions raised in the plaint. He further stated that it was most unfortunate and dishonest on the part of the 2nd defendant to deny the execution of the document which waswritten "in her own hand". He also pointed out that the 2nd defendant in an application filed by them in this very suit under Order 38. Rule 5 read with Order 39, Rule 4. C. P. C. had herself admitted that "the writing was hers". ( 9 ) AT the time when the appeal came up on an earlier occasion, We directed the relevant documents to be placed before us. Accordingly, the suit file was placed before us and we have gone through the same. ( 10 ) WE shall first advert to the documentary evidence. We have already referred to the document (Ex P/1) written on the letter-head of the plaintiff, which according to the plaintiff was in the handwriting of the second defendant. If the handwriting could be said to be that of the second defendant, it would show that the second defendant had admitted that the plaintiff had paid Rs. 2 lakh for completion of the picture "nadaniyan" and she further agreed that it would be repaid to the plaintiff before the release of the picture. At the end of the document, there is some writing in the same handwriting which, according to the plaintiff-respondent, is either the signature or initials of the 2nd defendant. It was stated in the plaintiffs replication that earlier the defendants had admitted the writing though they contended that there no signature or initial below the document the second defendant endorsed on 9. 12. It was stated in the plaintiffs replication that earlier the defendants had admitted the writing though they contended that there no signature or initial below the document the second defendant endorsed on 9. 12. 1986 on this very document as follows:- "only the handwriting of D-2 is admitted. There is no signature or initial of either D-a or D-2. " ( 11 ) WE also have on record the diary of the plaintiff wherein there is an entry (Ex. P3 (A) in the first page on 10. 6. 83 which reads as follows:- "dear Mr. Sood, As I need money tocomplete my film "nadaniyan" therefore 1 need some money for the same. Total money required is 44,000 (Forty four thousand) only which may be adjusted as follows. Rs. 5,000 (Five thousand) in two months July 83 and August 83, total of Rs. 10,000/- (Ten thousand), while the balance of 34,000 may be given to me as friendly loan which 1 will repay as early as possible. " ( 12 ) BELOW this document there is the signature of "arti" and the word "arti" is clear enough, Arti Mehta being the name of the second defendant. Even on this page of the diary of the plaintiff, there is an endorsement made by the second defendant - "admitted except the writing of the date on top of the letter and below the signature". This would mean that so far as this entry in the diary is concerned, the signature is admitted by the second defendant. The only thing that is not admitted is the handwriting relating to the dates at the top and the bottom of the document. ( 13 ) HAVING referred to the crucial documents in the case. We shall now come to the evidence. So far as P. W. I is concerned, he is one Mr. Swaran Singh. In his cross-examination he stated that he was now living in Bombay; he was employed under the plaintiff for 10 years and he was employed with him from 1980 Upto 1985 or 1986. He was employed to make payments to or collect payments from the parties, he claimed to be a broker. In our view, much does not turn upon his evidence. ( 14 ) THE main evidence is that of P. W. 2, the plaintiff himself. He stated in his evidence on 28. 2. He was employed to make payments to or collect payments from the parties, he claimed to be a broker. In our view, much does not turn upon his evidence. ( 14 ) THE main evidence is that of P. W. 2, the plaintiff himself. He stated in his evidence on 28. 2. 94 that he is in the business of film distribution and finance. He has filed his affidavit which is Ex Px. The document Ex P-1 was written and initialed at the foot of the writing by the second defendant in his presence. This has reference to the letter-need of the plaintiff containing the admission of receipt of Rs. 2 lakh, and the plaintiff says that it was initialled. The plaintiff also stated that Ex P-3a is the writing in a diary in the handwriting of the second defendant. It was also stated that it was written on the date indicated on the top i. w. 10. 6. 83 and it was duly signed by her. Both the dated on the top and the bottom are in the handwriting of the second defendant. In his cross- examination, he stated that his main business is that of film distribution. He is the proprietor of Globe films. He maintains day book, general ledger arid party ledger and has bank accounts. He has-been an income tax payee since 1965. He does not remember whether in the balance sheet he was showing the names of all the parties who owed him money and to whom he owed money, shri J. L. Mehta was his agent from the year 1975 onwards. He was his representative and used to take his films out of Delhi and thereafter the became the plaintiffs employee and used to do business with him at Bombay. He deposed that mr. Mehta gave him deposit. A question was put to him and he answered that no payment in black money was made by him. He cannot say for sure whether the amounts which are received from the Mehta family were shown in his balance sheet for the years 1981-82, 1982-83 and 1983-84. There was no one else present when defendant No. 2 gave him writing Ex P-1. The writing Ex P-1 is in ball pen. He cannot say for sure whether the amounts which are received from the Mehta family were shown in his balance sheet for the years 1981-82, 1982-83 and 1983-84. There was no one else present when defendant No. 2 gave him writing Ex P-1. The writing Ex P-1 is in ball pen. He stated that it was incorrect to suggest that the writing was not signed he stated further "in fact, the initials on Ex, P-1 were treated by him as signatures". ( 15 ) AS stated earlier, the defendants did not come into the witness box. ( 16 ) IN view of the aforesaid evidence, the learned Single Judge came to the conclusion that Ex P-1 Amounted to an acceptance of receipt of Rs. 2 lakh by the defendants and that suit could be decreed on that basis. An argument was raised before the learned single judge that Ex P-l if it amounted to an acknowledgement, it was inadmissible as it was not stamped as required under the Stamp Act. By virtue of Punjab Amendment in Section 35 of the Stamp Act, the said document could not be read in evidence nor could it be impounded. Certain decisions were cited before the learned. Single Judge in that behalf. Learned single Judge, however, relied upon 33 Indian appeals 165 at l72 to the effect that an acknowledgement of a debt is not a mere acknowledgement, but also contains a promise to repay. Learned Single Judge also relied upon the decision of the Lahore High Court in Fatch Chand Vs. Ganga singh (I. L. R. 10 Lahore 748) in which the decision of the Privy council was followed, he, therefore, held that Section 35 of the Stamp Act was not applicable. Learned Judge, therefore, held the document contained a promise to pay and was, therefore, admissible in evidence, apart from being a mere acknowledgement, it also contained a promise to pay the amount so advanced and could be read in evidence. On this basts, the learned Judge held that Rs. 2 lakh was dye, but he deducted Rs. 60,000, which the plaintiff admitted as having been advanced by the second defendant father and granted a decree in the sum of rs. 1,40,000 with pendente lite interest at the rate of 15% per annum from the date of institution of the suit till the date of payment and costs. 2 lakh was dye, but he deducted Rs. 60,000, which the plaintiff admitted as having been advanced by the second defendant father and granted a decree in the sum of rs. 1,40,000 with pendente lite interest at the rate of 15% per annum from the date of institution of the suit till the date of payment and costs. ( 17 ) IN our opinion, the learned Judge was right in coming to the conclusion that Ex. P-l apart from the question whether it contains an acknowledgement or not, it contains a promise to pay. We have already referred to the document earlier. It will benoticed in Ex P-1 which is in handwriting of the second defendant, the following words are there towards the end :- "will be repaid to you before the release of the picture. " So far as this part of the Ex P-l is concerned, it is a clear promise to repay Rs. 2 lakhs. As referred to above, even the first part of Ex P-1 could be treated as an acknowledgement, or might come within Section 35 of the Stamp Act, the second part of the document stands independently and contains a clear promise to repay Rs. 2 lakhs. Therefore, the case comes 1422 squarely within the ruling of the privy council reported in 35 I. A. 1655 referred to above. In this context another legal principle has also to be borne in mind. a letter containing an admission as to correctness of accounts so that the defendant may not in future dispute the correctness of the same, is not an acknowledgement requiring the stamp duty under the Stamp Act. In fact, a statement not intended to be an acknowledgement of debt but merely a statement to extend limitation, has been held not to require stamp duty. Admission of correctness of account by debtor so that he might not subsequently dispute its correctness is not an acknowledgement to supply evidence of debt and does not require stamp duty under the Stamp act. The case of the plaintiff before us in that the parties looked into the accounts of the various payments made by the plaintiff to the defendants from time to time and arrived at the figure of Rs. 2 lakh as mentioned in a P-1. The case of the plaintiff before us in that the parties looked into the accounts of the various payments made by the plaintiff to the defendants from time to time and arrived at the figure of Rs. 2 lakh as mentioned in a P-1. In this context, reference may be made to the following rulings - AIR 1956 Rajasthan 12, AIR 1958 Punjab 216, AIR 1947 Bombay 337, AIR 1947 Nagpur 145, AIR 1941 Nagpur 70, AIR 1924 Madras 352. AIR 1936 Madras 936 and ILR 39 Calcutta 789. ( 18 ) FROM ex P-1, read with Ex P-3a wherein the signature of second defendant is admittedly there, it is clear that the defendants obtained money from the plaintiff for the purpose of producing a picture and that these amounts were paid by the plaintiff to the defendants for the said purpose. ( 19 ) THE fact that the defendants did not go into the witness box is a very significant aspect of the case further having taken the stand in the written statement that ex P-1 was a forged document, the defendants took a different stand at the time of the trial by accepting the handwriting of the second defendant in Ex P-1 and only denied that it was signed by her. So far as the signature below Ex P-l is concerned, a look at the original shows that there is a clear lengthy writing below Ex P-1 and is in the same handwriting of the person who write the document, and having regard to the position of the said writing below the document. It prima facie, appears to us to be a brief identification of the person, who wrote the document. The document cannot be treated as an unsigned document in the fact of what we find towards the bottom of the document. Further, when the body of the document is accepted to be in the writing of the second defendant, one can easily find out the circumstances under which the second defendant had so written of the letter-head of the plaintiff. The document was intended not only to be an admission of receipt of Rs. 2 lakh, but also a promise to pay Rs. 2 lakh. The document was intended not only to be an admission of receipt of Rs. 2 lakh, but also a promise to pay Rs. 2 lakh. Even assuming that the first part of the document is inadmissible in evidence as amounting to a document requiring stamp, there is no difficulty in treating the latter part of the same as being admissible in evidence in the light of the decision of the Privy Council as curtaining a promise to repay. ( 20 ) IT is now well settled that as long as the debtor s name has been fixed to the document in question wither by the debtor or by his authorised agent, in such a way as to make it appear that the letter is his, and that he is the real author of it does not matter what is the form of the signature (AIR 1940 Patna 6. and AIR 1935 Rangoon 160 ). The full signature of the party is not necessary to constitute signing. Initials are enough (AIR 1957 Madras 8, AIR 1942 Madras 68 ans AIR 1933 Madras 115 ). Similarly, the actual name of the alleged signatory need not be written. It is enough, if any words or letters by which a person usually authenticates documents as being his own are written (1985 Kerall Law Times 402. AIR 1925 Allahabad 85 and AIR 1915 Madras 506 ). ( 21 ) FOR the aforesaid reasons, we are in agreement with the entire reasoning of the learned Single Judge and the appeal is dismissed in limine. --- *** --- .