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2002 DIGILAW 83 (KER)

Muhammadkutty v. Varamangalath Yusuf

2002-02-04

R.BHASKARAN, S.SANKARASUBBAN

body2002
Judgement BHASKARAN, J. :-- Defendant in a suit for realisation of money is the appellant. Respondents are the legal heirs of the original plaintiff. Plaintiffs filed the suit for realisation of Rs.1,50,000/- with interest at 18% being the amount borrowed by the defendant from the plaintiff. The case of the plaintiffs is that the defendant is a contractor and for the purpose of contract work, he had obtained on various dates a total amount of Rs. 2, 10, 000/- from the plaintiff. The defendant had agreed to repay the amounts and 50% of the profits obtained by the defendant to the plaintiff. The further case of the plaintiffs is that when the defendant did not pay back the amount as agreed, the plaintiff demanded the amount and in the presence of mediators two cheques for Rs.75,000/- each with different dates were given to the plaintiff. It is also stated that the balance amount of Rs.60,000/- will be paid without further delay when one of the bills is presented for payment. The plaintiff further stated that he obtained Rs. 60,000/- as authorised by the defendant. However, when the plaintiff presented the two cheques for payment, the same were bounced for want of sufficient money in the account. It is stated that the defendant is liable to pay the amount as claimed in the plaint. Though a notice was sent claiming the amount, no reply was sent by the defendant. 2. In the written statement , the defendant admitted issuance of the two cheques for Rs.75,000/- each. It is stated that the plaintiff was a partner in the contract work and he had invested Rs. 50,000/- in it. Since it was the defendant who was to account for the income, the plaintiff had obtained two cheques as security for the due payment of the amount and the cheques were not issued for repayment of the amount as advanced by the plaintiff. 3. The trial Court found that though the plaintiff had issued a notice claiming the amount, the defendant did not send any reply. It was only after the suit was filed and the defendant"s property was attached that a reply was sent by the defendant. 3. The trial Court found that though the plaintiff had issued a notice claiming the amount, the defendant did not send any reply. It was only after the suit was filed and the defendant"s property was attached that a reply was sent by the defendant. The trial Court held that there is a presumption under S. 118 of the Negotiable Instruments Act that every negotiable instrument is supported by consideration and it is for the defendant to adduce evidence to rebut the presumption. The trial Court also believed the evidence of PW-1 who deposed in accordance with the case set up by the plaintiff. The trial Court also found that the case set up by the defendant is improbable. In view of the above finding, the trial Court decreed the suit allowing plaintiffs 2 to 9 to realise a sum of Rs. 1,54,835/- with future interest at the rate of 6% per annum for the principal amount of Rs.1,50,000/-. 4. In this appeal, it is contended that the suit was misconceived as the suit should have been for settlement of accounts and not for realisation of money on the basis of the cheques issued by the defendant. The evidence of PW-1 is relied on to show that the arrangement between the parties was one of partnership and not that of a debtor and creditor. It is also stated that non-production of the account books by the plaintiff disentitles him to get a decree as prayed for. At any rate, it is contended that after giving credit to the payment of Rs. 60,000/-, the plaintiff is entitled to get only Rs.90,000/-. 5. We heard counsel for the appellant and the counsel appearing for the respondents in detail. The learned counsel for the appellant argued that the plaintiff has not discharged the burden to prove that the amount claimed by the plaintiff is due from the defendant. 60,000/-, the plaintiff is entitled to get only Rs.90,000/-. 5. We heard counsel for the appellant and the counsel appearing for the respondents in detail. The learned counsel for the appellant argued that the plaintiff has not discharged the burden to prove that the amount claimed by the plaintiff is due from the defendant. He relied on the decision of the Supreme Court in Kundan Lal v. Custodian, Evacuee Property, AIR 1961 SC 1316 in which it is stated as follows at page 1319: "A plaintiff who says that he had sold certain goods to the defendant and that a promissory note was executed as consideration for the goods and that he is in possession of the relevant account book to show that he was in possession of the goods sold and that the sale was effected for a particular consideration, should produce the said account books, for, he is in possession of the same and the defendant certainly cannot be expected to produce his documents. In those circumstances, if such a relevant evidence is withheld by the plaintiff, S. 114 enables the Court to draw a presumption to the effect that, if produced, the said accounts would be unfavourable to the plaintiff. This presumption, if raised by a Court, can under certain circumstances rebut the presumption of law raised under S. 118 of the Negotiable Instruments Act. Briefly stated, the burden of proof may be shifted by presumption of law or fact, and presumptions of law or presumptions of fact may be rebutted not only by direct or circumstantial evidence but also by presumptions of law or fact. We are not concerned here with irrebuttable presumptions of law." According to the learned counsel, since the plaintiff has set up a case that the defendant had agreed to give 50% of the profit from the contract work the transaction is not that of mere debtor and creditor but one of partnership. It is also pointed out that since the plaintiff did not produce any account book showing the payment or receipt of money from the defendant an adverse inference has to be drawn against the plaintiff. 6. We find it difficult to accept the above-said contention. The original plaintiff died pending suit and his legal representatives have come on record as additional plaintiffs. 6. We find it difficult to accept the above-said contention. The original plaintiff died pending suit and his legal representatives have come on record as additional plaintiffs. Merely for the reason that the plaintiff has stated in the plaint that the defendant had agreed to give 50% of the profit to the plaintiff, it cannot be treated as partnership concern. Admittedly, no partnership deed was entered into between the parties and the defendant alone was doing the contract work. The plaintiff had only advanced certain amounts to enable the defendant to do the work. Even if there will be accounts of the contract work, the accounts can only be with the defendant and he has not produced any document in the trial Court to substantiate his case in the written statement. PW-1 has given evidence to the effect that he was a mediator in the transaction between the plaintiff and the defendant. He has stated that he was a common friend of the plaintiff and the defendant. He gave evidence to the effect that the plaintiff had told him that though the defendant received the amounts from the contract work, he has not repaid the amount due to the plaintiff and PW-1 also stated that he has enquired into the office at Palakkad whether defendant has been paid the amount due under the contract and he understood that the defendant received the amounts. Then he enquired to (with) the defendant and the defendant told him that since he had received certain amounts for exorbitant interest he has to pay the same first and explained the delay in payment. He also stated that the defendant gave two cheques apart from the payment of Rs.60,000/- which was to be obtained under a bill. In cross-examination, he has stated that the accounts between the parties have not been settled. He also stated that the understanding was only to give back the amount and 50% of the profit and there was no agreement by the plaintiff to suffer loss, if any, in the contract work by the defendant. He has also stated that the plaintiff had written the amounts paid to the defendant in a book. There was also a suggestion put to him that only Rs.90,000/- is due to the plaintiffs since an amount of Rs.60,000/- was already paid. He has also stated that the plaintiff had written the amounts paid to the defendant in a book. There was also a suggestion put to him that only Rs.90,000/- is due to the plaintiffs since an amount of Rs.60,000/- was already paid. In the written statement, there is no such contention that the defendant is liable to pay only Rs.90,000/- as suggested to PW-1 in the above cross-examination by the counsel for the defendant. 7. The defendant was examined as DW-1. According to him, himself and the plaintiff were partners in the contract work and it was only an oral arrangement. The contract was taken in his name and the plaintiff had invested Rs. 50,000/- and the understanding was that he will be paid a share of profit from the contract work. The handing over of two cheques for Rs. 75,000/- each is admitted in evidence. According to him, it was given only as security and there was no date put in the cheques. According to him, he has already paid Rs. 60,000/-towards the profit and capital. His further case is that as per the accounts, the plaintiff was to get only Rs. 90,000/. He was asked as to why he did not mention in the written statement that an amount of Rs. 90,000/- is due to the plaintiff as per the accounts between the parties and he stated that there is no particular reason for not mentioning the same. 8. This is not a suit for settlement of accounts filed by the plaintiff and what PW-1 stated in evidence was that the payment of the amount by the plaintiff was noted in a note-book. Therefore, merely because the note-book was not produced by the plaintiff, the plaintiff cannot be found fault with when we find that the defendant has an inconsistent case in his pleadings and in his evidence. He had not stated that an amount of Rs. 90,000/- was due to the plaintiff at the time of filing the written statement. He did not send any reply to the notice sent by the plaintiff claiming the amount till the attachment was made on his property after filing of the suit. Even in the reply sent after after filing of the suit, the defendant had not stated that an amount of Rs.90,000/- is due from the defendant to the plaintiff. He did not send any reply to the notice sent by the plaintiff claiming the amount till the attachment was made on his property after filing of the suit. Even in the reply sent after after filing of the suit, the defendant had not stated that an amount of Rs.90,000/- is due from the defendant to the plaintiff. He admitted in evidence that Rs.90,000/- more is payable to the plaintiff. 9. The case of the defendant in the written statement is that the two cheques were given as security for payment of the amounts invested and profits payable to the plaintiff. If it was given as security it was not shown as to why there should be two cheques given with different dates. The learned counsel appearing for the appellant relied on the decision of Krishna Iyer, J. in Chudala-madan Nadar Chellamuthu Nadar v. Padmanabha Pillai Balakrishna Pillai 1996 Ker LR 409, in which the learned Judge has stated that the initial presumption of consideration under S. 118 of the Negotiable Instruments Act can be rebutted by the defendant by producing definite evidence showing that the consideration has not passed on by relying on the facts and circumstances of the case and also by referring to the flaws in the evidence on the plaintiff"s side and the presumption may be ignored where there is serious inconsistency between pleadings and likelihood of the plaintiff having paid the money. We do not think that the abovesaid decision will help the appellant in any way as no inconsistency between the pleadings and proof is pointed out in the case of the plaintiff whereas there is serious inconsistency in the case set up by the defendant and the evidence set up by him. As held by another Division Bench of this Court in Ramachandran v. Velayudhan, 1986 Ker LT 647, all payments by cheques are prima facie indicative of the fact that they are issued to extinguish an existing debt and not to create a new one. It is always open to the plaintiff to establish that the payment of the amount by cheque was in fact a loan. We respectfully agree with the reasoning of the Division Bench and we further hold that the presumption available to the plaintiff in this case has not been successfully rebutted by the defendant by any evidence worth mentioning. It is always open to the plaintiff to establish that the payment of the amount by cheque was in fact a loan. We respectfully agree with the reasoning of the Division Bench and we further hold that the presumption available to the plaintiff in this case has not been successfully rebutted by the defendant by any evidence worth mentioning. In the light of the above discussion, we do not find any ground to interfere in appeal and the judgment and decree of the lower Court are confirmed and the appeal is dismissed with costs. Appeal dismissed.