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2020 DIGILAW 222 (AP)

G. Lingaiah @ Peda Lingaiah v. G. Saraswathi

2020-03-11

M.VENKATARAMANA

body2020
JUDGEMENT : 1. This is a defendant’s appeal. Respondent was the plaintiff. 2. The respondent laid the suit for recovery of Rs.3,44,000/-on the foot of two promissory notes dated 21.08.1999 alleged to have had been executed by the appellant in favour of the respondent for Rs.1,00,000/-each agreeing to repay with interest at 24% p.a. and for costs. 3. The appellant resisted the claim mainly contending that he and the respondent are closely related and that he had borrowed Rs.2,00,000/-on 26.08.1996 from the husband of the respondent at which time, the husband of the respondent had obtained two promissory notes for Rs.1,00,000/-each, one in his name and another in the name of his wife, mentioning the rate of interest at 18% p.a. It was further claimed that being an agriculturist, he stood entitled for benefits under Act 4 of 1938 and Act 7 of 1977. He further claimed that he had discharged the amount due on 19.08.1999 and at that point of time, the respondent and her husband demanded him a higher rate of interest, to which he expressed inability. The appellant also contended that there was a cinema hall, in which he as well as the husband of the respondent and his brother had shares and that there were disputes in relation to managing this cinema theatre and in respect of income therefrom. Ultimately, the appellant contended that because of this dispute relating to cinema theatre, the suit promissory notes were fabricated, forging his signatures. 4. Basing on the above pleadings, the following issues were settled for trial: 1. Whether the two suit pronotes are true? 2. Whether the defendant is entitled for the benefit of Act IV of 1938? 3. To what relief? 5. At the trial, the respondent examined as PW.1 and attestor to the suit promissory notes as PW.2 while relying on Exs.A1 to A4, to support her version. 6. The appellant examined himself as DW.1 and DW.2 to support his defence, while relying on Exs.B1 to B3. 7. Considering the pleadings and evidence as well as material on record, the trial Court held Exs.A1 and A2 promissory notes being true, valid and binding on the defendant and further held that the appellant is not entitled for the benefit under Act IV of 1938. 7. Considering the pleadings and evidence as well as material on record, the trial Court held Exs.A1 and A2 promissory notes being true, valid and binding on the defendant and further held that the appellant is not entitled for the benefit under Act IV of 1938. Ultimately recording such findings, the suit was decreed awarding future interest at 12% p.a. from the date of suit till the date of decree and thereafter at 6% p.a. till realisation on the principal amount of Rs.2,00,000/-. 8. Aggrieved, the appellant has preferred this appeal. 9. Sri G.Pedda Babu, learned counsel for the appellant strenuously contended that the trial Court did not properly appreciate the plea raised in the defence particularly, based on Exs.B2 and B3 promissory notes and that PW.2 examined by the respondent to prove the suit promissory notes, is a close relation of the respondent. Thus, the evidence of PW.2 is sought to be questioned as highly interested. It is further contended for the appellant that there is no proof offered by the respondent that on the date of the suit promissory notes, she had sufficient income to lend such amount and in the absence of any material in respect thereof, the respondent is not entitled to rely on a presumption under Section 118 of the Negotiable Instruments Act. Ultimately, the contentions of the appellant boiled down to issue No.2, while referring to admission of the respondent as PW.1 in cross examination that the appellant had about Ac.10.00 of agricultural land. Thus, the emphasis is laid for the appellant to scale down interest in terms of Act 4 of 1938 considering him as an agriculturist. 10. Smt.K.Anuradha, learned counsel representing Sri Venkateswarlu Sanisetty, learned counsel for the respondent, supported the decree and judgment of the trial Court, basing on the material available and calling for no interference. 11. Now, the following points arise for determination: 1. Whether Exs.A1 and A2, the suit promissory notes are true, valid and binding on the appellant? 2. Whether the appellant proved himself being an agriculturist and thus entitled for scaling down of interest in terms of Act 4 of 1938? 3. To what relief? 12. Point No.1 As seen from the specific defence set up by the appellant, there is any amount of inconsistency. It is true that the defendant is entitled to set up inconsistent pleas, while questioning the claim of the plaintiff. 3. To what relief? 12. Point No.1 As seen from the specific defence set up by the appellant, there is any amount of inconsistency. It is true that the defendant is entitled to set up inconsistent pleas, while questioning the claim of the plaintiff. However, such inconsistencies shall not be of such nature, which cuts at the root of another and completely destroying the effect of each other. 13. In effect, the defence of the appellant at the trial was one of the denial of Exs.A1 and A2, promissory notes referring to a dispute relating to management of a cinema theatre in which, according to his version not only he, but also the husband of the respondent and his brother were partners. At the same time, the appellant referred to earlier transactions between him and the husband of the respondent including an instance, where he had admittedly borrowed Rs.2,00,000/-on 26.08.1996 from the husband of the respondent. The defence of the appellant further reflects that the amount due under the aforesaid promissory notes was repaid and thus discharged, at which time Exs.B2 and B3, promissory notes were obtained from him by the respondent and her husband in their respective names. The reasons set out was also that there was a ruckus among them in this respect relating to quantum of interest demanded. 14. Thus, when the later defence is considered, it is rather hard to believe that Exs.A1 and A2 are an outcome of fabrication on the part of the respondent and her husband. 15. In fact, as seen from the material, no firm foundation was laid relating to the dispute on account of management of the cinema theatre in between appellant and the respondent’s family. In the absence of failure to prove and establish such fact particularly, when the defence stood, as to denial of execution of the suit promissory note, it has a lot of bearing. 16. The background of the case also makes out that both parties are closely related and there were money transactions in between them earlier to the date of Exs.A1 and A2. 17. The contention of the appellant that in this backdrop, evidence from PWs.1 and 2 to prove the suit promissory notes, is not sufficient. 16. The background of the case also makes out that both parties are closely related and there were money transactions in between them earlier to the date of Exs.A1 and A2. 17. The contention of the appellant that in this backdrop, evidence from PWs.1 and 2 to prove the suit promissory notes, is not sufficient. PW.1, though an interested witness in the outcome of the suit, the status of PW.2 as an attestor to both these promissory notes cannot lead to such an interference. The very position of an attestor to any document takes within itself that he is disinterested and the parties reposed faith on him in as much as both of them called the attestor to vouch the transaction. In the sense, an attestor holds a prime position in relation to a document being a witness, who is not a party to the document but to the transaction therein, whose presence and role is always invited by the parties to the document. Thus, he holds the trust and faith reposed by the parties. 18. When such situation of an attestor is considered in relation to Exs.A1 and A2 along with their intrinsic worth, it cannot be stated that the testimony of PW.2 has to be rejected. His version at the trial completely supported and corroborated the version of the respondent as PW.1, apart from the contents of Exs.A1 and A2. 19. Attempt of the appellant is to call the other attestor to Ex.A1 and Ex.A2 as an independent witness and his non-examination at the trial. It is contended that it would adversely affect the contention of the respondent. This contention is advanced, taking advantage of the fact that the respondent did not choose to examine other attestor. Even otherwise, no material was laid at the trial to make out credentials of other attestor to these documents and as a disinterested witness. Therefore, this contention of the appellant is rather difficult to accept. 20. DW.2 was examined at the trial to support the transactions in relation to Exs.B2 and B3. The appellant failed to substantiate his defence that Exs.B2 and B3 were an outcome of an instance as referred to in his written statement and that they were so executed in the circumstances to account for the rate of interest. Hence, the evidence of DW.2 can have no bearing in this case. 21. The appellant failed to substantiate his defence that Exs.B2 and B3 were an outcome of an instance as referred to in his written statement and that they were so executed in the circumstances to account for the rate of interest. Hence, the evidence of DW.2 can have no bearing in this case. 21. Added to it, when once execution of Exs.A1 and A2 is proved and established by the respondent in all respects, presumption under Section 118 of the Negotiable Instruments Act gets attracted. In view of it’s effect, both these promissory notes should be presumed that they are supported by consideration. This presumption is rebuttal. It is for the appellant to place such material in rebuttal in preponderance of probabilities and to establish that both these promissory notes came to be executed in such circumstances, to the satisfaction of the Court by reliable and acceptable evidence. The evidence offered by the appellant in this context is not meeting all these requirements of law. Therefore, this is another circumstance that drives the last nail into contention of the appellant. 22. In the above circumstances, accepting the version of PWs.1 and 2 as well as the contents of Exs.A1 and A2, the inference to draw is that both the promissory notes were validly executed by the defendant for consideration. Thus, they are proved being true, valid and binding on the defendant. 23. Another important circumstance to consider in this context is want of reply by the appellant to the demand notice issued by the respondent under Ex.A3, before filing the suit. Ex.A4 proves that this notice was served on the appellant. If at all the defence set up by the appellant is true, it remained unexplained why he did not choose to reply to Ex.A2 on similar lines. Thus, his silence and failing to respond to Ex.A3 is a strong point or to reject his defence. Cumulative effect of these circumstances including the conduct of the appellant leads further to hold and support the inference already drawn against the appellant in respect of execution of Exs.A1 and A2 by him and the transactions covered by these two promissory notes. Thus, the liability of the appellant stands. Thus, this point is answered. 24. Point No.2: Strenuous contentions are advanced for the appellant in respect of application of Act 4 of 1938 and to scale down the rate of interest. 25. Thus, the liability of the appellant stands. Thus, this point is answered. 24. Point No.2: Strenuous contentions are advanced for the appellant in respect of application of Act 4 of 1938 and to scale down the rate of interest. 25. The suit promissory notes reflect that the appellant had agreed to repay interest at 24% p.a. Now, the contention is that interest could be reduced to 18% p.a. Except the testimony of the appellant as DW.1, no material was placed at the trial in this respect. 26. Merely because the respondent as PW.1 stated in cross examination that the appellant has agricultural lands and being an agriculturist, it would not be determinative factor by itself in this direction. 27. The very nature of defence set up by the appellant in the written statement as well as at the trial that he has certain business interest in a cinema theatre cuts at this claim, as an agriculturist. 28. In fact, the burden is on the appellant to prove that he is entitled for the benefits under Act 4 of 1938. He cannot rely upon an isolated statement of PW.1 without laying a foundation to make out such parameters to apply the beneficial provisions in terms of Act 4 of 1938. Possessing Ac.10.00 of land as such, is not a circumstance in this context and in fact, the appellant denied that he owned such an extent of land. 29. Therefore, on account of failure of the appellant to discharge the burden to prove application of Act 4 of 1938 and having regard to the nature of the transaction in between the parties, the findings recorded by the learned trial Judge on issue No.2 have to be confirmed. 30. Point No.3: In view of the findings on point Nos.1 and 2, this appeal should necessarily fail. Consequently, the decree and judgment of the trial Court shall be confirmed. 31. In the result, this appeal is dismissed with costs of the respondent. The judgment and decree of the trial Court stand confirmed. No costs. 32. Interim order granted earlier if any, shall stand vacated. 33. Pending miscellaneous petitions, if any, shall stand closed.