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2015 DIGILAW 2054 (PNJ)

Tarsem Singh v. Teja Singh

2015-11-06

SURINDER GUPTA

body2015
JUDGMENT Mr. Surinder Gupta, J.: - By this common judgment the above captioned appeals are being disposed of as similar point for consideration arises in both the appeals. Plaintiff-Appellant (Tarsem Kumar) filed two separate suits under Order XXXVII of the Code of Civil Procedure (CPC) for recovery of Rs. 8,80,000/- (Rs. 6,00,000/- as principal and Rs. 2,80,000/- as interest) and Rs. 1,63,000/- (Rs. 1,15,000/- as principal and Rs. 48,000/- as interest). The suit for recovery of Rs. 8,80,000/- was filed against Teja Singh son of Kartar Singh while suit for recovery of Rs. 1,63,000/- was filed against Sukhdev Singh son of Bhan Singh. Both the suits were based on separate pronotes dated 20.09.2005 executed by Teja Singh and Sukdhev Singh in favour of Tarsem Singh. 2. In later part of judgment parties will be referred as plaintiff and defendants as per the civil suits. 3. Defendant-Teja Singh in his written statement denied execution of the pronote and took the plea that he had been selling his crops on the shop of Rakesh Kumar son of Shambhu Ram who was running the business of commission agent under the name and style of M/s Shambhu Ram Vijay Kumar, M/s Jishu Trading Company, M/s Durga Trading Company and M/s Shambhu Ram and sons. Plaintiff-Tarsem Kumar is a close relative i.e. real brother of Rakesh Kumar. As Rakesh Kumar was not paying due price of the crop to the defendant and evading full payment of the price of crop, the defendant stopped selling his crop to the above firms and squared off his account after making full payment. Thereafter, he never visited the shop of said firm nor had any occasion to meet plaintiff as he had started selling his crop through Pawan Kumar proprietor of M/s Parkash Chand Pawan Kumar, Bhucho Mandi since October, 2001. The defendant alleged that when he was selling the crop to Rakesh Kumar partner of the above mentioned firms he might have deceptively obtained his thumb impressions on blank printed performa on the pretext of crediting agricultural produce sold by defendant to him. The defendant being a rustic and illiterate person and not conversant with the procedural wriggles, was duped and the plaintiff in connivance with Rakesh Kumar his brother fabricated the pronote and receipt. The defendant being a rustic and illiterate person and not conversant with the procedural wriggles, was duped and the plaintiff in connivance with Rakesh Kumar his brother fabricated the pronote and receipt. Another reason for fabricating the pronote and receipt as given in the written statement was the association of defendant with Gurmail Singh and Natha Singh who had strained relations with Rakesh Kumar and plaintiff due to protracted civil and criminal litigation with them had fabricated the pronote and receipt. It was alleged that the defendant was never in need of money. He had no business or other terms with the plaintiff nor had any dealing or concern with him. There was no occasion for the plaintiff to advance the alleged loan. 4. The plaintiff is an advocate by profession and in no manner could get himself involve in business of money lending on profit against the provisions of Advocates Act and Bar Council Rules. The defendant who was having his account with M/s Parkash Chand Pawan Kumar of Bhucho Mandi had no occasion to borrow money from the plaintiff. The plaintiff had deliberately avoided to mention his profession, business and status in the plaint. He had also failed to produce material documents i.e. account books, return of income tax etc. alongwith the suit. In nutshell the defendant denied taking of loan and execution of the pronote and receipt in favour of plaintiff. 5. Defendant-Sukhdev Singh also contested the claim of plaintiff on similar grounds as taken by defendant-Teja Singh. 6. Learned Additional Civil Judge (Senior Division), Talwandi Sabo recorded the observations while dismissing the suit, as follows:- (i) Execution of pronotes and receipts stand proved. (ii) The plea of defendants that pronotes dated 20.03.2003 were result of forgery, fabrication and impersonation, was not accepted. (iii) The defendants had been able to prove that the pronotes and receipts were without consideration and the plaintiff had also not been able to prove the source of money with him while advancing loan of Rs. 6,00,000/- to Teja Singh and Rs. 1,15,000/- to Sukhdev Singh. 7. The Ist Appellate Court i.e. District Judge, Bathinda affirmed the findings of learned Civil Judge (Senior Division) and dismissed the appeal filed by the plaintiff. 8. I have heard learned counsel for the parties, perused the paper-book and lower Court record with their assistance. 9. 6,00,000/- to Teja Singh and Rs. 1,15,000/- to Sukhdev Singh. 7. The Ist Appellate Court i.e. District Judge, Bathinda affirmed the findings of learned Civil Judge (Senior Division) and dismissed the appeal filed by the plaintiff. 8. I have heard learned counsel for the parties, perused the paper-book and lower Court record with their assistance. 9. The star argument of learned counsel for the plaintiffappellant is that execution of the pronotes and receipts were duly proved. Both the Courts concluded that pronote(s) and receipt(s) were executed by the defendant(s). There is presumption of passing of consideration under Section 118 of the Negotiable Instruments Act, 1881. The plaintiff was not required to prove his capacity to advance loan of such a huge amount at the time of execution of the pronotes and receipts. He has relied upon the case of Jit Singh vs. Nachhatar Singh, 2007 (4) Civil Court Cases 44 (P&H). He has argued that both the Courts below have committed grave error of law while reaching the conclusion that for the lapse on the part of plaintiff in proving his source, the pronote(s) are held to be without consideration. The plaintiff was not required to mention the loan advanced to defendants Teja Singh and Sukhdev Singh in his income tax return, as such, non-production of return(s) of the relevant period could not weigh against the plaintiff to record a conclusion that the pronote(s) and receipt(s) were without consideration. The defendant(s) have though taken the plea that pronote(s) and receipt(s) were not executed by them and were result of fraud and fabrication, but failed to prove both the pleas and once the Court reaches the conclusion that pronotes and receipts were duly executed, the plea of defendants that these was without consideration in the absence of any substantive evidence could not be accepted. 10. Learned counsel for the defendant-respondents in both the appeals has argued that it is a case where a commission agent misused his dominance and status by fabricating pronote and receipt suggesting advancement of loan to an agriculturist. Defendants Teja Singh and Sukhdev Singh have though denied their thumb impressions on the pronotes and receipts yet have come with a specific plea that the pronotes and receipts were never executed by them for the loan alleged to have been advanced by the plaintiff. Defendants Teja Singh and Sukhdev Singh have though denied their thumb impressions on the pronotes and receipts yet have come with a specific plea that the pronotes and receipts were never executed by them for the loan alleged to have been advanced by the plaintiff. This fact is not disputed that after 2001, they had no occasion to meet the plaintiff and once they have stopped going to the shop of plaintiff there remained no occasion for the plaintiff to advance any loan. Moreover, the plaintiff is not a novice in the trade. Besides being a partner in the firm where defendants had been selling their crops, he is an income tax practitioner of a standing of 30 years. Despite directions by the Court he had avoided to prove on record his account books, income tax returns and the record of the commission agent firm. Both the Courts have rightly concluded that the documents were withheld by the plaintiff to tarnish the defence taken by the defendants. It is not believable that the plaintiff had not shown his loan of Rs. 7,15,000/- against Teja Singh and Sukhdev Singh in his income tax returns of relevant period but had reflected his debts of Rs. 3 lacs therein. In case the plaintiff had advanced loan of Rs. 7,15,000/- as alleged by him, he must have kept account of the same and had also shown this loan in the income tax return. He also failed to show the source of money available with him to advance such a huge amount of loan. The conclusion drawn by both the Courts below are based on evidence on record and calls for no interference. 11. As the facts in both the appeals are similar, reference will be made to the facts in case of Teja Singh (RSA No. 4966 of 2010). 12. The plea raised by learned counsel for the plaintiffappellant revolves around the presumption arising under Section 118 of the Negotiable Instruments Act, which reads as under:- “118. 11. As the facts in both the appeals are similar, reference will be made to the facts in case of Teja Singh (RSA No. 4966 of 2010). 12. The plea raised by learned counsel for the plaintiffappellant revolves around the presumption arising under Section 118 of the Negotiable Instruments Act, which reads as under:- “118. Presumptions as to negotiable instruments - Until the contrary is proved, the following presumptions shall be made: - (a) of consideration – that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; (b) to (g) xx xx xx xx Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.” 13. Hon’ble Apex Court while discussing object and scope of Negotiable Instruments Act in case Bharat Barrel and Drum Manufacturing Company vs. Amin Chand Payrelal, 1999 (2) CCC 535 (SC) observed as follows:- “...........Generally speaking, the law relating to negotiable instruments is the law of the commercial world which was enacted to facilitate the activities in trade and commerce making provision of giving sanctity to the instruments of credit which could be deemed to be convertible into money and easily passable from one person to another. In the absence of such instruments, the trade and commerce activities were likely to be adversely affected as it was not practicable for the trading community to carry on with it the bulk of the currency in force. The introduction of negotiable instruments owes its origin to the bartering system prevalent in the primitive society. The negotiable instruments are, in fact, the instruments of credit being convertible on account of the legality of being negotiated and thus easily passable from one hand to another. The source of Indian law relating to such instruments is admittedly the English Common Law. The main object of the Act is to legalize the system by which instruments contemplated by it could pass from hand to hand by negotiation like any other goods.....” 14. The source of Indian law relating to such instruments is admittedly the English Common Law. The main object of the Act is to legalize the system by which instruments contemplated by it could pass from hand to hand by negotiation like any other goods.....” 14. Section 118 of the Act deals with presumption as to negotiable instruments concerning consideration, date, time of acceptance, time of transfer, held in due course etc. The presumption relevant for the purpose of disposal of this appeal relating to the consideration provides that every negotiable instrument was made or drawn for consideration, and every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration. However, the presumption is rebuttable once the defendant by direct or circumstantial evidence proves on record that the promissory note was not supported by consideration in the manner stated therein. The defendant can rebut the presumption under Section 118 of the Act by showing preponderance of probability in his favour and against the plaintiff. While elaborating the scope to the extent of presumption attached to a negotiable instrument under Section 118 of the Act, Hon’ble Apex Court in the case of Bharat Barrel and Drum Manufacturing Company (Supra) observed as follows:- “12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument......” 15. A coordinate Bench of this Court has also observed in Jit Singh’s case (supra) that where the defendant had failed to prove that the pronote was forged and fabricated and was without consideration, the presumption under Section 118(a) of the Act is attracted and the plaintiff is not required to prove his capacity to make payment at the time of execution of pronote and receipt. 16. 16. In the instant appeals, it is evident that the plaintiffappellant is an income tax practitioner, having a long standing of over three decades. He is also partner of firm M/s Shambhu Ram Vijay Kumar, which was doing business of commission agency. The plaintiff had not denied that defendants were bringing their crops for selling through the above said firm and after 2001 they stopped bringing their crops and settled the accounts. The defendants came up with a specific plea that they have not taken any loan from plaintiff vide pronotes and receipts dated 20.03.2003. No doubt they have failed to prove that the pronotes are result of impersonation, fraud and fabrication, still this plea was available to them that the pronotes and receipts were without consideration. In order to advance their plea, the defendants moved an application calling upon the plaintiff to bring following documents/record at the time of his crossexamination:- “(i) The account books maintained by the plaintiff individually and firm M/s Shambhu Ram Vijay Kumar with effect from 2000-2001 till date; (ii) The returns of income tax for the financial year of 2001-2002 to 2007-2008; (iii) The diary/record of the cases handled by the plaintiff as an Advocate; (iv) The returns filed by the plaintiff as HUF with effect from 2001-2002 till date i.e. 2007-2008; (v) The PAN number, issued by department of Income Tax as individual and HUF; (vi) The list of the debtors of the plaintiff with amount due respectively w.e.f. 2000-2001; (vii) The list of the civil suits for recovery filed by the plaintiff from year 2000 till date; (viii) List of partners of firm M/s Shambhu Ram Vijay Kumar, Maur.” 17. The plaintiff in reply stated that he does not maintain his personal account books, as such, cannot produce the same. He admitted himself to be the partner of M/s Shambhu Ram Vijay Kumar. He stated that account books for the year 2000- 2001 were not available and that income tax returns for the financial year 2001-2002 to 2007-2008 were enclosed with reply but admittedly the income tax returns for the year 2000-2001 to 2002-2003 were not produced. The plaintiff contested the production of all the documents sought by the defendants inter alia alleging that he had filed suit in his individual capacity and he is not a money lender. 18. The plaintiff contested the production of all the documents sought by the defendants inter alia alleging that he had filed suit in his individual capacity and he is not a money lender. 18. Perusal of the interim order sheet shows that learned Additional Civil Judge (Senior Division) vide order dated 11.09.2008 directed the plaintiff to produce the record mentioned in the application of defendant-Teja Singh and adjourned the case for 25.09.2008, on which date the record was not produced and the case was adjourned for 16.10.2008. Again on 16.10.2008, the plaintiff did not produce the record and pleaded that he could not trace the same and the case was adjourned for 30.10.2008 on which date instead of producing the record he submitted reply and a consent order was passed, which reads as follows:- “Plaintiff witness is present but he has not brought the summoned record. There is difference of opinion as to what record should be produced or not. However, it is very strange that this objection is being raised by the plaintiff after availing 3 opportunities for production of record. Today detailed reply is filed. Therefore, counsel for parties are heard at length. On the basis of consensus, it is ordered that now the plaintiff shall produce the personal income tax returns for the financial year 2000-2001 to 2006-2007. Plaintiff shall further produce the account books of partnership M/s Shambu Ram Vijay Kumar from the period 2003-2004 to 2006-2007. The application is disposed off accordingly with the observation that adverse inference will be raised at the appropriate stage. Last opportunity granted to plaintiff to produce entire evidence on 15.11.2008 as last chance. It is clarified that no more opportunity will be given.” 19. It is evident that despite the above consent order, the plaintiff avoided to produce income tax returns for the financial year 2000-2001 to 2002-2003. The facts which weighed before the Courts below while reaching conclusion that the pronotes and receipts dated 20.03.2003 were without consideration are enumerated, as follows:- (i) The plaintiff has withheld the record summoned by the defendant. He is an income tax lawyer of 30 years of standing, well conversant with the law and practice. Failure to maintain and produce financial record of transaction, cannot be easily ignored. (ii) The plaintiff gave evasive replies to the questions put to him in the cross-examination which smell foul. He is an income tax lawyer of 30 years of standing, well conversant with the law and practice. Failure to maintain and produce financial record of transaction, cannot be easily ignored. (ii) The plaintiff gave evasive replies to the questions put to him in the cross-examination which smell foul. (iii) The plaintiff admitted that the defendants used to visit and sell crop through commission agency M/s Shambhu Ram Vijay Kumar of which he was a partner. The business of the firm was being looked after by Rakesh Kumar, his brother. He did not deny that the defendants had settled the accounts with the said firm. He had admitted that all the partners including himself were active partners of the firm in equal shares, as such, he could clearly disclose whether the defendants had settled the accounts and stopped visiting the firm since 2001. 20. The plaintiff had admitted that he is not only joint in business with his brother Rakesh Kumar but also joint in mess with him, as such, his evasive replies to the business transactions of M/s Shambhu Ram Vijay Kumar with defendants have made the defendants’ version probable and un-rebutted. 21. The plaintiff had not shown the loan amount as due against defendants in his income tax return. The plaintiff had failed to disclose his viable source of lending huge amount. The documents produced on file were discussed and it was observed by Additional Civil Judge (Senior Division) in para 24 of the judgment, as follows:- “24. Despite persistent questioning, plaintiff failed to disclose his viable source of such loan lending. He stated to have got rental income of Rs. 2 lacs per annum, agricultural income to the tune of Rs. 25,000/- per annum and income tax practice income from Rs. 1 lac to Rs. 1.25 lac per annum. He has not produced any proof or account books of such income. No doubt onus is not upon plaintiff to prove his capacity to lend yet he is supposed to produce the record and give clear reply when requisitioned or questioned by defendant. He claims to have withdrawn the loan amount from his Bank a day prior to the transaction but did not disclose the name of the bank. He stated that he did not maintain any account books of his loan transactions. All these assertions are not believable and make the passing of consideration improbable. He claims to have withdrawn the loan amount from his Bank a day prior to the transaction but did not disclose the name of the bank. He stated that he did not maintain any account books of his loan transactions. All these assertions are not believable and make the passing of consideration improbable. In Balbir Singh vs. Harbans Singh, [2009(2) Law Herald (P&H) 1490] : 2009 (3) RCR (Civil) 127 judgment supra Hon’ble Punjab and Haryana High Court treated the presumption under Section 118 of the Negotiable Instruments Act as rebutted inter alia on the grounds that plaintiff could not prove his source of money.” 22. The plaintiff admitted that as per his income tax return he himself is a debtor to the tune of Rs. 3 lacs. This circumstance makes a dent upon the capacity of plaintiff to lend huge amount. The non-production of record sought by the defendants has strengthened their defence in dislodging the presumption under Section 118 of the Act. This version of the plaintiff was not believed that loan of Rs. 6 lacs was advanced in the currency notes of denomination of Rs. 100/- each and the defendant, who is an illiterate person, within 15 minutes counted the entire money. 23. It is a specific and un-rebutted case of defendant-Teja Singh that he stopped selling his crop with the firm M/s Shambhu Ram Vijay Kumar since 2001 and settled his account. The plaintiff is one of the partner of that firm. He has not rebutted the above contention of defendant by producing any documentary evidence. The plaintiff has tried to take shelter of his plea that the loan was advanced by him to Teja Singh and Sukhdev Singh in his individual capacity. Here also he has failed to make out that he had capacity to advance such a huge loan. His plea was further shattered by the fact that the loan amount was never reflected in the income tax returns filed by him during the period subsequent to execution of the pronotes and receipts. There was no reason for the plaintiff to withhold the income tax return for the year 2000-2001 to 2002-2003 and relevant account book of the firm, despite the fact that in reply to the application filed by the defendant he had specifically stated that these income tax returns were enclosed and had consented to produce above record. There was no reason for the plaintiff to withhold the income tax return for the year 2000-2001 to 2002-2003 and relevant account book of the firm, despite the fact that in reply to the application filed by the defendant he had specifically stated that these income tax returns were enclosed and had consented to produce above record. Having regard to the circumstance as narrated above and in the absence of proof of money being available with the plaintiff, I find no illegality and infirmity in conclusion drawn by Court below that the pronotes and receipts dated 20.03.2003 were just paper transactions and that the defendant(s) had succeeded in proving that the pronotes and receipts were without consideration. 24. This submission of learned counsel for the plaintiffappellant that the plaintiff was not required to mention the loan advanced to defendants in his income tax returns, is not only erroneous but also not accepted from a person who himself is an income tax practitioner for the last three decades. Another factor which smack of falsity in above submission is the fact that the plaintiff had mentioned his liabilities of Rs. 3 lacs in the income tax return. In such circumstance, he would have mentioned the loan he had to recover and also attached a list of debtors with his return of relevant period. The facts and circumstances strongly suggest that purpose behind the pronotes and receipts dated 20.03.2003 was something else then advancement of loan of Rs. 6 lacs and Rs. 1,15,000/- to defendants Teja Singh and Sukhdev Singh, which the plaintiff has tried to conceal but ultimately he fell in his own trap without realizing that being an advocate and income tax practitioner, he may be called upon to produce documents relating to advancement of loan. 25. On perusal of judgments of both the Courts below, paper-books and lower Court record, I find no legal and factual infirmity therein calling for any interference. No question of law, what to talk of substantial question of law requiring determination, arises in these appeal, which have no merits. Dismissed. ---------0.B.S.0------------