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2020 DIGILAW 377 (AP)

Y. Ramachandrareddy v. M. Chandrasekhareddy

2020-05-21

CHEEKATI MANAVENDRANATH ROY

body2020
JUDGMENT : This appeal is directed against the judgment and decree dated 05-8-1999 passed in O.S.No.343 of 2017 on the file of the Principal Senior Civil Judge, Narasaraopet, Guntur District, whereunder the suit for recovery of money was decreed against the 3rd defendant represented by defendant No.15 and defendants 6 and 7. 2. The appeal is preferred only by the 6th defendant. 3. Factual matrix of the suit may briefly be stated as follows: (a) It is the case of the plaintiff, as per the case pleaded by him in the plaint, that he is an agriculturist by profession and during the year 1983-84 he raised cotton in his lands. The defendants 6 and 7 are the brokers doing business in sale of cotton. They introduced the 3rd defendant M/s. Dhanalakshmi Traders, represented by its Managing Partner, defendant No.15, to the plaintiff and arranged for sale of cotton by the plaintiff to the 3rd defendant. Accordingly, the plaintiff sold cotton to the 3rd defendant. The total cost of the cotton that was sold by the plaintiff to the 3rd defendant is Rs.1,28,310=40 ps. The 3rd defendant paid initially Rs.300/-to the plaintiff on 04-12-1984 and obtained a cash voucher from the plaintiff. He promised to pay the balance amount to the plaintiff within ten days. He also agreed to pay interest at the rate of 18% per annum from 04-12-1984 on the said amount as per custom, trade and usage. (b) While so, the plaintiff went to Guntur due to his ill health and stayed in Guntur for four months. Thereafter, when he went to his native place, the 6th defendant (the appellant herein) met him and informed him that uncrossed cheque for Rs.85,681=10 ps. in the name of the plaintiff was given to him by one of the defendants 1 to 3. When the plaintiff requested the 6th defendant to handover the said cheque to him, the 6th defendant represented that the cheque was at his native place Paluvai and he would get the same within couple of days and handover the same to the plaintiff. However, the 6th defendant did not handover the cheque to the plaintiff. So, he went to the bank and met the 8th defendant and informed him about the cheque issued by the plaintiff in his name and that it was not handed over to him. However, the 6th defendant did not handover the cheque to the plaintiff. So, he went to the bank and met the 8th defendant and informed him about the cheque issued by the plaintiff in his name and that it was not handed over to him. So, the 8th defendant asked him to submit a letter stating that the cheque was lost. Accordingly, he has issued a letter to that effect. The 8th defendant promised that he would see that the cheque is not encashed. (c) Thereafter, the plaintiff got issued registered legal notice to the defendants 3, 6 and 7. Some of the defendants have given reply notice to him. (d) Subsequently, the plaintiff learnt that the defendants forged his signature and have encashed the cheque. No amount was paid to him which is due to him by the 3rd defendant. The said sum of Rs.1,23,310=40 ps. is still outstanding. Therefore, the defendants are liable to pay the said money with interest at the rate of 18% per annum to him. As the defendants 6 and 7 indulged in forgery of the cheque that they are also liable for payment. The defendant, who is the employee of the bank, is a co-conspirator with the 8th defendants and he is also liable for the suit amount. (e) Therefore, he has prayed to pass a decree in his favour and against the defendants for the suit amount. (f) The said suit was resisted by the defendants. The 1st defendant filed his written statement opposing the claim of the plaintiff. It is stated that the 1st defendant is a private limited company of which the 5th defendant is the Managing Director and the 1st defendant has nothing to do with the defendants 2 and 3 or other defendants. The plaintiff did not supply any cotton to the 1st defendant and as such the 1st defendant is not a necessary party to the suit and thereby prayed for dismissal of the suit against the 1st defendant. (g) The defendants 2 and 4 filed their written statement stating that there was no privity of contract between the plaintiff and the defendants 2 and 4. The plaintiff did not sell any cotton to the defendants 2 and 4. Therefore, they are not liable for the suit claim and they are unnecessarily arrayed as parties to the suit and thereby prayed for dismissal of the suit. The plaintiff did not sell any cotton to the defendants 2 and 4. Therefore, they are not liable for the suit claim and they are unnecessarily arrayed as parties to the suit and thereby prayed for dismissal of the suit. (h) The 6th defendant (the appellant) filed his written statement denying that he and the 7th defendant introduced the 3rd defendant to the plaintiff and arranged for sale of cotton. It is pleaded by him that he is not aware of the alleged sale transaction between the plaintiff and the rd defendant and he is no way concerned with the said sale transaction. It is pleaded by him that he did not receive any cheque in the name of the plaintiff from the defendants for Rs.85,681=10 ps. It is denied that he has informed the plaintiff that the cheque was issued to him in the name of the plaintiff in his absence and that it was at his native place and that he would give him the same within a couple of days. It is also denied that subsequently the signature of the plaintiff was forged and that the cheque was encashed by him and other defendants in collusion. It is stated that he was unnecessarily added as a party to the suit by the plaintiff on account of their family disputes and thereby prayed for dismissal of the suit against him. (i) The 8th defendant, who is the Senior Manager of the Bank, filed written statement stating that the defendants 1 to 3 are holding accounts in their bank. It is stated that a cheque bearing No.346228 was presented in the bank on 08-12-1984 and that the said cheque is in the name of the plaintiff which is for a sum of Rs.85,681=10 ps. It is not an account payee cheque. So, as the person who presented the cheque is not known to him that he asked for his identification. Later, the said person brought one Gottipati Prasada Rao, who is the partner in Dhanalakshmi Cotton Traders and he identified the signature of the person who presented the cheque. Therefore, he has honoured the cheque and paid the amount. No fraud was played by him in paying the cheque amount as alleged by the plaintiff. Therefore, he prayed for dismissal of the suit against him. Therefore, he has honoured the cheque and paid the amount. No fraud was played by him in paying the cheque amount as alleged by the plaintiff. Therefore, he prayed for dismissal of the suit against him. (j) The defendants 3 and 15 filed written statement stating that the plaintiff and defendants 6 and 7 are friends and associates and they are in trade as brokers for the last several years as suppliers of cotton to the mills. It is pleaded that the defendants 1 to 3 are no way concerned with each other and they are individual entities. (k) It is submitted that the plaintiff sold cotton to the 3rd defendant for the value of Rs.1,28,310=40 ps as pleaded in the plaint. It is also admitted that the 15th defendant as the proprietor of the 3rd defendant issued cheque bearing No.346228 dated 07-12-1984 in favour of the plaintiff. However, it is denied that this 3rd defendant managed the other defendants including the defendants 6 and 7 and encashed the said cheque by forging the signature of the plaintiff and that the 15th defendant managed the 8th defendant, Senior Manager of the Bank and got the amount withdrawn by encashing the cheque. It is pleaded that the said allegations are absolutely false. (l) It is stated that since the plaintiff received the cheque towards the amount payable in respect of sale of cotton by him and encashed the same that defendants 3 and 15 are not liable for the said amount and thereby prayed for dismissal of the suit. (m) The defendants 9 to 15 filed memo adopting the written statement of defendants 2 and 4. (n) On the basis of the above pleadings, the following issues were framed in the trial Court at the time of settlement of issues for trial: 1. Whether the suit claim is true and correct ? 2. Whether the plaintiff is entitled for recovery of suit amount from all or any of the defendants and whether there is any joint and several liability over the defendants in respect of the suit claim ? and 3. To what relief ? (o) During the course of trial, the plaintiff was examined as P.W.1 and he got examined P.Ws.2 to 4 and got marked Exs.A-1 to A-16 and Exs.X-1 to X-3 documents to substantiate his case. and 3. To what relief ? (o) During the course of trial, the plaintiff was examined as P.W.1 and he got examined P.Ws.2 to 4 and got marked Exs.A-1 to A-16 and Exs.X-1 to X-3 documents to substantiate his case. As against the said evidence, D.Ws.1 to 4 were examined and Ex.B-1 was marked in proof of the case of the defendants. (p) Eventually, after considering the facts of the case and the evidence on record, the trial Court decreed the suit against the defendants 3, 6, 7 and 15 for the suit amount with subsequent interest at the rate of 9% per annum on Rs.1,28,010=40 ps. The trial Court dismissed the suit against the defendants 1, 2, 4 and 5. Also dismissed the suit against the defendants 8 to 14 who are the legal representatives of other deceased defendants. (q) Therefore, aggrieved by the impugned judgment and decree, the 6th defendant alone filed this appeal assailing the legality and validity of the impugned judgment and decree. 4. When the appeal came up for hearing before this Court, heard Smt. T.V. Sri Devi, learned counsel for the appellant and Sri M.Ravindranath Reddy, learned counsel for the 1st respondent. 5. Now, the points that emerge for determination in this appeal are: 1. Whether there is a privity of contract between the plaintiff and the 6th defendant in respect of the sale of cotton by the plaintiff ? 2. Whether Ex.A-11 cheque for Rs.85,681=10 ps. was issued by the 15th defendant in the name of the plaintiff to the appellant 6th defendant) and whether the 6th defendant and other defendants including the 15th defendant colluded together and forged the signature of the plaintiff and encashed the same without paying the same to the plaintiff towards the amount due to him in respect of sale of cotton to the 15th defendant ? 3. Whether the appellant (6th defendant) is liable to pay the suit amount to the plaintiff ? and 4. Whether the impugned judgment and decree of the trial Court against the 6th defendant are sustainable under law and whether they warrant interference in this appeal and whether the same are liable to be set aside ? 6. 3. Whether the appellant (6th defendant) is liable to pay the suit amount to the plaintiff ? and 4. Whether the impugned judgment and decree of the trial Court against the 6th defendant are sustainable under law and whether they warrant interference in this appeal and whether the same are liable to be set aside ? 6. Point No.1:-It is the admitted case of the plaintiff as can be seen from his pleadings and also the admitted case of the 15th defendant representing the 3rd defendant that the plaintiff has sold the cotton in question to the 3rd defendant. It is not case of the plaintiff that he has sold the said cotton on credit basis to the 6th defendant, who is the appellant herein. The case of the plaintiff is only that the 6th defendant along with the defendant acted as brokers and he introduced the plaintiff to the 3rd defendant for sale of cotton and accordingly the plaintiff sold cotton to the 3rd defendant. So, it is now evident that the cotton was not sold to the 6th defendant by the plaintiff and it was only sold to the 3rd defendant. Therefore, it is now clear from the said pleadings and evidence of both the parties that there is absolutely no privity of contract between the plaintiff and the 6th defendant regarding supply or sale of any cotton by the plaintiff to the 6th defendant. The 6th defendant also did not receive any cotton by way of sale from the plaintiff. Therefore, the 6th defendant is personally not liable for the suit amount which is filed towards recovery of the cost of cotton that was sold by the plaintiff to the 3rd defendant. Therefore, the point is answered accordingly in favour of the appellant. 7. Point No.2:-Even though the plaintiff did not supply or sell the cotton to the 6th defendant and the plaintiff has only sold the cotton to the 3rd defendant represented by the 15th defendant, the plaintiff laid the suit claim against the 6th defendant also on the sole ground that the cheque that was issued by the 15th defendant in favour of the plaintiff towards payment of balance sale consideration of Rs.85,681=10 ps. in respect of sale of the cotton, to the 6th defendant during the absence of the plaintiff in the town and the 6th defendant did not handover the said cheque to the plaintiff and he and the other defendants 7 and 15 etc., colluded together and forged the signature of the plaintiff and encashed the same and they did not pay the said money to the plaintiff. Therefore, the plaintiff made the 6th defendant also liable for the suit amount along with the 15th defendant. Precisely this is the case set up by the plaintiff against the 6th defendant. 8. Therefore, it is to be now seen whether the 15th defendant issued Ex.A-11 cheque in the name of the plaintiff to the 6th defendant to handover the same to the plaintiff and whether the 15th defendant colluded with the 15th defendant and others and forged the signature of the plaintiff and illegally encashed the said cheque with the connivance of the 8th defendant or not, so as to make him also liable for the suit claim. 9. The appellant, who is the 6th defendant, stoutly denied the allegation that Ex.A-11 cheque which stands in the name of the plaintiff was issued to him by the 15th defendant and that he did not handover the same to the plaintiff and that he colluded with the 15th defendant and others and encashed the said cheque by forging the signature of the plaintiff. So, in view of the categorical denial of the said material fact as pleaded by the plaintiff to make the 6th defendant also liable for the suit claim, the burden is on the plaintiff to prove and establish that Ex.A-11 cheque which admittedly stands in his name was in fact given to the 6th defendant by the 15th defendant and he played fraud and forged his signature and encashed the same in collusion with the other defendants. 10. The plaintiff has miserably failed to prove the said material fact as per the case pleaded by him against the 6th defendant and failed to discharge his burden. To substantiate the said case of the plaintiff, he himself was examined as P.W.1 and he got examined P.Ws.2 to 4. P.Ws.2 to 4 are only examined for the limited purpose of proving that the plaintiff is a signatory in English language. To substantiate the said case of the plaintiff, he himself was examined as P.W.1 and he got examined P.Ws.2 to 4. P.Ws.2 to 4 are only examined for the limited purpose of proving that the plaintiff is a signatory in English language. Since Ex.A-11 cheque was signed in the name of the plaintiff in Telugu language, he has examined P.Ws.2 to 4 only to prove that he is a signatory in English language. So, the evidence of P.Ws.2 to 4 is not of any useful to the plaintiff to prove that the th defendant issued Ex.A-11 cheque to the 6th defendant and that he presented the cheque before the bank and he has forged the signature of the plaintiff and unlawfully encashed the cheque in collusion with the other defendants. 11. So, there remains only the sole testimony of P.W.1, who is the plaintiff. Though P.W.1 stated in his evidence that Ex.A-11 cheque was given to the 6th defendant by the 15th defendant and he did not handover the same to him and he forged his signature and encashed the cheque amount, the said evidence, which is the self-interested testimony of the plaintiff, is not sufficient to prove the said material fact against the 6th defendant. Admittedly, the plaintiff was not present at the time of encashment of the cheque. He did not have personal knowledge of the fact that the 15th defendant entrusted the cheque to the 6th defendant. Similarly, he also did not have any personal knowledge of the fact as to who has presented the cheque and who forged his signature. So, he is not competent to speak to prove the said material fact relating to the wild allegation that Ex.A-11 cheque was presented by the 6th defendant and that he forged his signature and encashed the same. In this context it is significant to note that the plaintiff did not state in his pleadings in the plaint specifically that the 15th defendant gave or entrusted the said cheque in his name to the 6th defendant. He stated in a vague manner in the plaint that one of the defendants 1 to 3 gave the said cheque. Therefore, there is no factual foundation in the pleadings regarding the said vital plea. 12. On the other hand, the material on record and the evidence available on record belies the said contention. He stated in a vague manner in the plaint that one of the defendants 1 to 3 gave the said cheque. Therefore, there is no factual foundation in the pleadings regarding the said vital plea. 12. On the other hand, the material on record and the evidence available on record belies the said contention. In this context, it is significant to note that the 15th defendant, who is examined as D.W.4 who has admittedly issued the said Ex.A-11 cheque in the name of the plaintiff, is the best person to speak as to whom he has given Ex.A-11 cheque in the name of the plaintiff. As can be seen from his written statement and also from the evidence given by him as D.W.4, he did not state anywhere that he has given Ex.A-11 cheque in the name of the plaintiff to the 6th defendant to handover the same to the plaintiff. He deposed in the evidence that he is the sole proprietor of the 3rd defendant and he paid the money payable to the plaintiff to him by way of cheques and cash. No doubt, his evidence establishes that the bargain relating to the said sale of cotton by P.W.1 was settled with him through the defendants 6 and 7 as brokers. Except establishing the said fact, nothing can be culled out from his evidence to arrive at a conclusion that he has handed over Ex.A-11 cheque to the 6th defendant. On the other hand, he has deposed in his cross-examination that he has paid the entire sale consideration to P.W.1 only i.e. the plaintiff. 13. Now, it is relevant to consider the evidence of D.W.3, who is the Deputy Manager of State Bank of India. He deposed categorically in his evidence that on 08-12-1984, the plaintiff has presented Ex.A-11 cheque. So, it is evident that the 6th defendant did not present the said cheque to encash the same. He further deposed that as it is not an account payee cheque and as P.W.1 has no account in their bank, he asked for his identification and P.W.1 brought Gottipati Prasada Rao to identify him and after Prasada Rao identified P.W.1 and signed on Ex.A-11 that he passed the cheque for payment. He further deposed that as it is not an account payee cheque and as P.W.1 has no account in their bank, he asked for his identification and P.W.1 brought Gottipati Prasada Rao to identify him and after Prasada Rao identified P.W.1 and signed on Ex.A-11 that he passed the cheque for payment. He also stated that he has verified the signature of Prasada Rao, who is an account holder in their bank and satisfied regarding its correctness and stated that there is no irregularity committed in passing Ex.A-11 cheque for payment. He also stated that Ex.A-11 cheque was issued by the 15th defendant i.e. D.W.4 and it is a Pay on Order Cheque. So, his evidence clinchingly establishes that the plaintiff himself as P.W.1 has presented the said Ex.A-11 cheque and as he is not an account holder in the said bank and as the cheque was not an account payee cheque that after he got him identified by one Gottipati Prasada Rao that this D.W.3, Deputy Manager of the Bank, passed the cheque for payment. So, the said evidence proves that the plaintiff himself has encashed the cheque. This evidence falsifies the contention of the plaintiff that the 6th defendant presented the said cheque and encashed the same after forging the signature of the plaintiff. Nothing was elicited in the cross-examination of this D.W.3 to discredit the testimony given by him that P.W.1 presented the said cheque and encashed the same. 14. The 6th defendant, who was examined as D.W.2, vehemently denied in his evidence that the 15th defendant issued cheque to him in the name of the plaintiff and he has colluded with other defendants and presented the cheque and forged the signature of the plaintiff and encashed the same. Though he was subjected to lengthy cross-examination, nothing was elicited in his cross-examination by the plaintiff to prove that Ex.A-11 cheque was issued to him and he presented the said cheque by forging the signature of the 6th plaintiff. This defendant also clearly denied the said allegation in his earlier reply notice given under Ex.A-6. Though he was subjected to lengthy cross-examination, nothing was elicited in his cross-examination by the plaintiff to prove that Ex.A-11 cheque was issued to him and he presented the said cheque by forging the signature of the 6th plaintiff. This defendant also clearly denied the said allegation in his earlier reply notice given under Ex.A-6. So, there is absolutely no acceptable and valid legal evidence on record adduced by the plaintiff to prove that Ex.A-11 cheque was in fact issued to the 6th defendant to handover the same to the plaintiff and he retained the same and he has presented the cheque in the bank and forged the signature of the plaintiff in collusion with the other defendants and encashed the same. 15. Even though the evidence of P.Ws.2 to 4 establishes the fact that the plaintiff is a signatory in English language whereas Ex.A-11 cheque was signed in Telugu language that by itself is not sufficient to prove that it is the 6th defendant who has forged his signature with certainty. So, in the absence of any valid legal evidence against the 6th defendant to prove with certainty that he has presented the cheque and forged the signature of the plaintiff and encashed the same, it is difficult to fix liability on him for the suit claim in this regard as pleaded by the plaintiff. 16. The trial Court grossly erred in appreciating the evidence on record and in arriving at a finding that the 6th defendant presented the cheque and encashed the same and in fixing the liability for the suit claim against him also. The trial Court erroneously held at para-27 of the judgment that the evidence of P.W.1 and admission of D.W.4 i.e. the 15th defendant clearly establish that Ex.A-11 cheque was entrusted to the 6th defendant i.e. D.W.2. D.W.4 did not admit in his evidence that he has entrusted the cheque to the 6th defendant. So, it is an erroneous finding. Similarly, the trial Court also erroneously held at the end of para-31 of the judgment that it is not the evidence of D.W.3 i.e. the Deputy Manager of the Bank that P.W.1 is the person who encashed Ex.A-11 cheque. In fact, D.W.3 clearly and unequivocally stated in his evidence that the plaintiff presented Ex.A-11 cheque and one Gottipati Prasada Rao identified him, then he passed the cheque for payment. In fact, D.W.3 clearly and unequivocally stated in his evidence that the plaintiff presented Ex.A-11 cheque and one Gottipati Prasada Rao identified him, then he passed the cheque for payment. Therefore, it is also an erroneous finding recorded by the trial Court. Similarly, the finding of the trial Court at para-32 of the judgment that since D.W.4 is not certain that the cheque was handed over to P.W.1 that the evidence of P.W.1 along with the evidence of D.W.4 shows that the cheque was delivered to the 6th defendant, who is examined as D.W.2 and it was encashed by him, is also an erroneous finding. It would be beyond the comprehension of any reasonable and prudent man to hold that simply because D.W.4 did not state that he issued cheque to the plaintiff that it can be held that it was issued to the 6th defendant. The said finding stands for no reason. Finally, the trial Court also clearly erred in para-37 of the judgment that since the defendants 6 and 7 acted as brokers and they played fraud on the bank and withdrawn the amount, that they are liable for the suit amount. The said finding has no basis at all. Simply because they acted as brokers for the alleged sale transaction of cotton, when the cotton was sold to the 3rd defendant, it cannot be said that the 6th defendant as a broker got any liability for the suit amount in the absence of any proof to show that he played fraud by encashing Ex.A-11 cheque as alleged by the plaintiff. The facts of the case clearly show that the cotton was sold by the plaintiff only to the 3rd defendant. Therefore, if at all there is any liability, it is on the 3rd defendant to pay the sale proceeds to the plaintiff. As already held supra, as it is not proved in this case with acceptable legal evidence that the 6th defendant played a role in encashing Ex.A-11 cheque by forging the signature of the plaintiff, no liability can be fastened against him for the suit amount. The trial Court failed to see that the criminal case filed by the plaintiff against the defendants regarding forgery of his signatures on the cheque ended against him. Therefore, the point is answered accordingly in favour of the appellant. 17. The trial Court failed to see that the criminal case filed by the plaintiff against the defendants regarding forgery of his signatures on the cheque ended against him. Therefore, the point is answered accordingly in favour of the appellant. 17. Point No.3:-In view of the finding recorded on point No.2, the appellant is not liable to pay the suit amount. 18. Point No.4:-The trial Court did not properly appreciate the evidence on record. It is obvious that the trial Court based its findings against the 6th defendant only on surmises and hypothetical views. Sans acceptable legal evidence against the 6th defendant in proof of the allegations made against him by the plaintiff, he cannot be made liable for the suit claim. The trial Court totally misdirected itself in arriving at the said finding. The trial Court completely failed to see that there is absolutely no evidence to show that Ex.A-11 cheque was in fact entrusted to the 6th defendant and that the 6th defendant retained the same. It also completely failed to see that there is no evidence to show or prove that the 6th defendant has presented the cheque before the bank and forged the signature of the plaintiff and encashed the same. The trial Court did not at all properly appreciate the evidence of D.W.4, who is the 15th defendant and D.W.3, who is the bank employee who passed the cheque for payment. So, the findings arrived at by the trial Court against the 6th defendant are based on erroneous appreciation of evidence on record and they are legally not sustainable under law. Upon reappraisal of the said evidence on record, this Court found that there is absolutely not even iota of evidence against the 6th defendant to prove that the cheque was entrusted to him by the 15th defendant and he retained the same and he presented the said cheque in the bank and encashed the same. Therefore, no liability can be fastened against him in respect of the suit claim. So, the impugned judgment and decree of the trial Court against the 6th defendant bristles with legal infirmities and it warrants interference in this appeal. Therefore, the impugned judgment and decree against the 6th defendant are clearly unsustainable under law and they are liable to be set aside. Hence, the point is answered in favour of the appellant. 19. So, the impugned judgment and decree of the trial Court against the 6th defendant bristles with legal infirmities and it warrants interference in this appeal. Therefore, the impugned judgment and decree against the 6th defendant are clearly unsustainable under law and they are liable to be set aside. Hence, the point is answered in favour of the appellant. 19. Resultantly, the appeal is allowed with costs setting the impugned judgment and decree against the appellant, who is the 6th defendant. Pending applications, if any, shall stand closed.