H. S. NANJUNDAPPA v. C. V. SHASHIDHARA MURTHY — 1995 DIGILAW 370 (KAR)

H. N. TILHARI, J. ( 1 ) THIS is defendant's second appeal from the judgment and decree dated 3-12-1984 by civil judge, hassan (Sri S. R. Venkatesha Murthy), delivered in regular appeal No. 31 of 1983 arising out of judgment and decree dated 28-2-1983 in o. s. No. 315 of 1979 of the court of munsiff, arsikere, dismissing the defendants appeal and affirming the judgment of the trial court decreeing the plaintiff-respondent's suit for recovery of a sum of Rs. 3,930/- with interest at 6 per cent per annum. ( 2 ) THE plaintiff's case in brief is that the defendant-appellant took a loan of rs, 2,000/- on interest at the rate of 1 1/2% per mensum on 10-6-1976 and executed pronote thereof. The plaintiffs further case has been that on 26-6-1976 the defendant-appellant further took a sum of Rs. 500/- as a loan and executed a receipt of the said sum and thereafter on 7-8-1976 the defendant again procured a sum of Rs. 350/- as loan from the plaintiff-respondent and executed a receipt in plaintiffs favour. The interest accrued in respect of the subsequent item was also 1 1/2% per mensum. The plaintiffs case is that defendant did not pay that amount and according to the plaintiffs case, a sum of Rs. 1,080/- became due as interest on the sum of Rs. 2,000/- which was the subject-matter of pronote and further a sum of Rs. 270/- and Rs. 180/- became due as interest under the transaction exhibited by receipts dated 26-6-1976 and 7-8-1976. The plaintiff further contended that the defendant did not pay the above mentioned advances to the defendant-appellant as loan nor did he pay anything towards the interest. So the cause of action for filing the suit for recovery of the above mentioned sums arose and the plaintiff claimed a decree for recovery of money in total amounting to Rs. 4,380/-, in the light of the facts and transactions mentioned above. ( 3 ) THE defendant-appellant put in appearance. He admitted to have taken a sum of rs, 2,000/- as a loan and to have executed promissory note dated 10-6-1976 and also admitted the rate of interest accrued. The defendant-appellant further took the plea that so far as this amount of Rs. 2,000/- and interest thereon is concerned, there had been an account and about Rs. He admitted to have taken a sum of rs, 2,000/- as a loan and to have executed promissory note dated 10-6-1976 and also admitted the rate of interest accrued. The defendant-appellant further took the plea that so far as this amount of Rs. 2,000/- and interest thereon is concerned, there had been an account and about Rs. 2,945/- became due on account of principal and interest due thereon i. e. , due with respect to the transaction covered by the promissory note and that out of that sum he paid a sum of Rs. 2,800/ -. The defendant submitted that Rs. 145/- was no doubt due and was payable. With respect to the two transactions dated 26-6-1976 and 7-8-1976, defendant denied that defendant-appellant did take these sums from the plaintiff in cash or towards the loan transaction or that any interest accrued upon in respect of these amounts. The defendant's plea is that really in all total quantity of 1000 coconuts were supplied by the defendant-appellant to the plaintiff-respondent and thus these two sums of Rs. 500/- and Rs. 350/- were paid towards the price of the coconuts supplied and the receipt was issued in respect of these two sums i. e. , in regard to the transaction of supply of coconuts to the plaintiff. So the defendant denied any liability to pay any amount as due or as loan or interest thereon. According to defendant only a sum of Rs. 145/- has been payable by defendant-appellant to the plaintiff-respondent. ( 4 ) THE trial court after framing the issues tried the suit and held that as regard to the transaction under promissory note dated 10-6-1976 the defendant has admitted the taking of money by loan but defendant has failed to prove his case that he made payment of a sum of Rs. 2,800a. The trial court further held that the defendant failed to prove his case that the two receipts pertains to the consideration that was paid towards the supply of coconut by defendant to the plaintiff. The trial court after recording these findings decreed the plaintiff-respondent's suit but refused to grant interest on the amount of Rs. 500/- and Rs. 350/-, while it allowed on principal amount of Rs. 2,000/- which was the transaction of the pronote dated 10-6-1976. Thus the trial court decreed the plaintiffs claim for Rs. 3,930a. The trial court after recording these findings decreed the plaintiff-respondent's suit but refused to grant interest on the amount of Rs. 500/- and Rs. 350/-, while it allowed on principal amount of Rs. 2,000/- which was the transaction of the pronote dated 10-6-1976. Thus the trial court decreed the plaintiffs claim for Rs. 3,930a. Having felt aggrieved from the judgment and decree of the trial court the defendant-appellant preferred the regular appeal under Section 96 of the C. P. C. , namely regular appeal no, 31 of 1983. ( 5 ) THE aforesaid regular appeal No. 31 of 1983 has beendismissed by the lower appellate court and the lower appellate court affirmed the findings recorded by the trial court. That having felt aggrieved from the judgment and decree of the courts below and particularly the appellate court affirming the trial court decree, the defendant-appellant has come up in second appeal before this court. ( 6 ) I have heard Sri A. V. Gangadharappa, the learned counsel for the appellant as well as Sri K. S. Gowrishankar, learned counsel for the respondent, at length. The learned counsel for the appellant submitted before me that the learned courts below had committed error of law in recording the finding that defendant-appellant failed to discharge the burden. The learned counsel submitted that the finding recorded by the courts below did suffer from error of law of substantial nature. Elaborating his contention the learned counsel for the appellant submitted that the dispute relates to the money transaction and no doubt defendant-appellant admitted to have taken the loan of Rs. 2,000/- from the plaintiff-respondent and to have executed promissory note and to have agreed to pay the interest thereon. The defendant-appellant submitted that after having paid a sum of Rs. 2,800/-, the plaintiff had not received the receipt. The learned counsel further submitted that as regards the two transactions, it is the case of the defendant that coconuts were supplied in respect of the prices and that two receipts for Rs. 500a and Rs. 350/- were given for the purpose of business transaction and income-tax matters, etc. , as stated in the written statement. The learned counsel submitted that in support of their respective cases, the parties deposed an oath supporting their respective cases and that defendant examined one more witness. In these circumstances, the oral evidence was balanced one. 500a and Rs. 350/- were given for the purpose of business transaction and income-tax matters, etc. , as stated in the written statement. The learned counsel submitted that in support of their respective cases, the parties deposed an oath supporting their respective cases and that defendant examined one more witness. In these circumstances, the oral evidence was balanced one. He submitted, here it is the circumstantial evidence which had not been considered particularly adverse presumption arising under Section 114 of the Indian Evidence Act. The learned counsel for the appellant submitted that the plaintiff as P. W. 1 has admitted that he maintains the accounts. He has maintained the accounts of the transactions entered into. The account books of the plaintiff could have been an important piece of evidence which would have thrown light on the question involved in this case, namely, whether the defendant-appellant had paid the sum of Rs. 2,8007- and whether the sum of Rs. 500/- and Rs. 350/- paid to defendant-appellant. The defendant-appellants' counsel submitted that the plaintiff has without any reason not produced his accounts books and therefore the lower appellate court, from the failure of the plaintiff to produce the relevant account books, ought to have raised adverse presumption under Section 114 of the Indian Evidence Act. But the learned courts below erred in law in not raising the same. Along with the presumption if the evidence would have been considered, the findings would have been different. But the courts below did not raise that adverse presumption under Section 114 and as such, the finding recorded by the courts below that money has not been paid of or defendant's case has not been established in vitiated by substantial error of law. The learned counsel submitted that failure to raise presumption under Section 114 amounts to an error of law and in a case when it has substantial effect on the decision of the case, it can be said to be error of law of substantial nature and as such the decree passed by the courts below is illegal and has to be set aside. He invited my attention to ground No. 7 of the second appeal. ( 7 ) ON behalf of the respondent, Sri K. S. Gwri Shankar, first ly submitted that when defendant had admitted that he had taken loan and executed receipt for Rs. 500/- and Rs. He invited my attention to ground No. 7 of the second appeal. ( 7 ) ON behalf of the respondent, Sri K. S. Gwri Shankar, first ly submitted that when defendant had admitted that he had taken loan and executed receipt for Rs. 500/- and Rs. 350a and admitted in that document that he had received the money, there was no need for him to produce the accounts. But the burden of proof, that defendant had paid of the entire amount, was on the defendant. So on account of the failure of the plaintiff to produce his accounts books, it should be presumed that payment is not proved. He further submitted that from the non-production of the receipt, presumption under Section 114 arose. No other contention has been made. ( 8 ) I have applied my mind to the contentions made by the learned counsel for the defendant-appellant and for the plaintiff-respondent. Having applied my mind to the contentions made by the learned counsel for the parties, I proceed. ( 9 ) NO doubt, ordinarily the findings of fact recorded by the courts of fact particularly concurrent finding of fact is not liable to be challenged in second appeal howsoever erroneous a finding of fact may be on the simple ground of misappreciation of evidence or on the ground that particular evidence is unreliable. But if a finding of fact has been arrived at in a manner not in accordance with law or it has been arrived at on the basis of conjecture and surmises or on the basis of no evidence or the like, in those cases the finding may be said to be vitiated by error of law and a finding of fact when it is arrived at by ignoring or by failure to raise the presumption under law which ought to have been raised but which has not been raised or by raising an adverse presumption which does not arise but illegally raised, then in those cases also the finding may be said to be vitiated by error of law. ( 10 ) IN the present case, the plaintiff and defendant placed their respective case and in support of their cases did appear in witness box. On behalf of defendant no doubt one more witness D. W. 1 has been produced regarding supply of coconuts. Before I proceed further, I will deal with the respondent-counsel's one contention. ( 10 ) IN the present case, the plaintiff and defendant placed their respective case and in support of their cases did appear in witness box. On behalf of defendant no doubt one more witness D. W. 1 has been produced regarding supply of coconuts. Before I proceed further, I will deal with the respondent-counsel's one contention. The respondent's counsel contended that failure to produce the receipt by the defendant should lead an adverse presumption to the effect that the defendant did not pay off the amount. The presumption in such a case could arise only when plaintiff would have positively asserted and stated on oath that he had given the receipt of the payment. When no receipt had been given by plaintiff, there is no question of adverse presumption being drawn against the defendant's. So there is no question of raising a presumption to that effect. But where the plaintiff himself admits that he is maintaining the accounts of his income and expenditure, the accounts maintained by the plaintiff would have been the best evidence to throw light on the subject-matter of decision or point in disputes in the case when the plaintiff is maintaining the accounts properly then entries should have been there about payments. The accounts would have thrown the best light. The best evidence which is in possession of the plaintiff himself has been really not produced and it has been kept aback from the court and has not been brought to the notice of the court. When a party has got some document or evidence which could have thrown light on the subject-matter in dispute in the case and that party does not produce the document without any rhyme or reason and relies on the doctrine of burden of proof, then in the case, it is open to the court to raise adverse presumption against the own case of the party without the best evidence from court. The doctrine of burden of proof that whether burden was on him or not to prove certain thing is not relevant in cases where an important piece of evidence which would have thrown light on the subject-matter in dispute is in possession and control of one of the parties to the case. The doctrine of burden of proof that whether burden was on him or not to prove certain thing is not relevant in cases where an important piece of evidence which would have thrown light on the subject-matter in dispute is in possession and control of one of the parties to the case. Really it is their duty to produce their evidence and if that evidence is not produced without any rhyme or reason, it is the duty of the court to raise adverse presumption against such failure and along with the presumption when the evidence is to be appreciated then evidence finding support from that presumption should no doubt be relied. When I so observe, I find support from the decision of their lordships of the privy council in the case of T. S. Murugesam Pillai v. M. D. Gnana Sambandha. Pandara Sannadhi and others. Their lordships of the privy council in that case has condemned such practices where parties in possession of the document do not produce the document and has observed as under:" there is, it may be added, one element in the case to which their lordships attach great weight. There is a certain body of evidence that the loan was made for the purposes of the mutt; there is none to the contrary; but a more important question than even the balance of the oral evidence appears to be: what do the books of the mutt disclose upon the subject ? It is the habit of the heads or managers of these institutions to have books kept, and the entries are usually made in much detail and with much elaboration. They form a current record, on the financial side, of the history of the institution. A practice has grown up in Indian procedure of those in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof, and failing accordingly to furnish to the courts the best material for its decision. They form a current record, on the financial side, of the history of the institution. A practice has grown up in Indian procedure of those in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof, and failing accordingly to furnish to the courts the best material for its decision. With regard to third parties, this may be right enough; they have no responsibility for the conduct of the suit; but with regard to the parties to the suit it is, in their lordship's opinion, an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the court the written evidence in their possession which would throw light upon the proposition. The present is a good instance of this bad practice". ( 11 ) THESE observations of their lordships of the privy council have been followed with approval with the lordships of the Supreme Court in the case of Hiralal and others v. Badkulal and others. As per para 4 in the similar circumstances as of the present case, their lordships observed as follows:"the defendants had written the accounts in their own books from which the true balance could be ascertained. An inference from the statement of hiralal can easily be raised that the balance entry of Rs. 34,000 also existed in his own books. Mr. Bindra tried to get out of this situation by urging that it was no part of the defendants' duty to produce the books unless they were called upon to do so and the onus rested on the plaintiffs to prove their case. This argument has to be negatived in view of the observations of their lordships of the privy council in t. s. murugesam pillai's case, supra, which appositely apply her. . . . . . . . . . . This Rule was again reiterated in Rameshwar Singh and Another v. Bajit Lal Pathak and Others ". ( 12 ) FAILURE to raise presumption under law which ought to have been raised, no doubt amounts to a substantial error. Adverse presumption, that arises from the failure of the plaintiff-respondent to produce his accounts book to the effect that the amount of Rs. ( 12 ) FAILURE to raise presumption under law which ought to have been raised, no doubt amounts to a substantial error. Adverse presumption, that arises from the failure of the plaintiff-respondent to produce his accounts book to the effect that the amount of Rs. 2,800/- had been paid by the defendant-appellant to the plaintiff-respondent and a further presumption arises that for purchase of coconuts the amounts were paid to the defendant-appellant. This adverse presumption goes to support the evidence led by the defendant-appellant and when the evidence of both the sides looked into in the light of the presumption, then definitely it had to be held by the courts below that so far as these two sums are concerned i. e. Rs. 500/- and Rs. 350/-, the receipts pertain to the price of the coconuts and so far as the transaction relating to loan under pronote, towards that a sum of Rs. 2,800/- had been paid and what had remained to be paid as a balance was only Rs. 145/- as admitted by the defendant-appellant. Thus consideration of the entire matter in the light of the presumption that ought to have been raised, in my opinion, the decree passed by the courts below requires to be modified. ( 13 ) I have been informed that only Rs. 145/- remains due and payable by the defendant-appellant to plaintiff-respondent. The defendant is liable to pay for that amount of Rs. 145/- along with interest at the rate of interest accrued i. e. , 1 1/2% per mensum on that amount from the date of the suit upto date. ( 14 ) AS in this case the findings of fact had been vitiated by error of law on account of the failure of the courts below to raise the adverse presumption, the findings of fact in my opinion could not be said to be binding and then the evidence led by the parties had to be considered in the light of the presumption arising from the failure and as such it is open to this court to interfere with the findings and this court comes to the conclusion that only a sum of Rs. 1457- remained due and payable. ( 15 ) THIS second appeal is allowed. 1457- remained due and payable. ( 15 ) THIS second appeal is allowed. The decree of the courts below is modified to the extent that it is set aside with respect to all amounts except the sum of Rs. 1457- that admittedly remains due and payable plus interest thereon and the suit is hereby decreed only for that amount and interest thereon. The costs of the case have to be borne by the parties themselves. --- *** --- .