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Himachal Pradesh High Court · body

2020 DIGILAW 605 (HP)

Bal Krishan Rawat v. Gian Lal

2020-09-16

JYOTSNA REWAL DUA

body2020
JUDGMENT Jyotsna Rewal Dua, J. - A Civil Suit filed by the appellant against the respondent for recovery of Rs.4,08,000/- has been concurrently dismissed by both the learned Courts below. Hence, instant second appeal has been preferred. 2. Records of the case have been received. The appeal was admitted on following substantial questions of law:- 1. Once issuance of cheque is admitted, signatures thereon are not disputed and having regard to legal presumption under sections 118 and 139 of Negotiable Instrument Act, whether the findings of Ld. Courts below holding that plaintiff failed to prove the transaction between him and defendant are legally sustainable? 2. In the absence of specific evidence led by defendant qua maintainability of suit in terms of section 3 of Himachal Pradesh Registration of Money Lenders Act, Whether the findings of Ld. Court below holding that the suit is barred by section 3 of Himachal Pradesh Registration of Money Lender Act is legally sustainable? With the consent of Learned Counsel for the parties, the present appeal was taken up for disposal. Parties hereinafter are being referred to as they were before the learned trial Court. Succinctly put, facts of the case are:- 2(i) Plaintiff pleaded that during the year 2006 he had advanced a loan amount of Rs.3,00,000/- (Rupees three lacs) to the defendant. The loan was advanced to enable the defendant to meet the expenses incurred on his marriage. In lieu of this loan, the defendant had handed him a post dated cheque No. 143009 dated 31.8.2006. Plaintiff presented the cheque on 18.9.2006 for encashment in the bank, however, it was returned with the remarks 'insufficient funds'. Subsequent requests of the plaintiff to the defendant for making the payment went in vain. The legal notice issued by the plaintiff in this regard on 12.10.2006 also did not yield the desired result. Hence, the suit for recovery of a sum of Rs.3,00,000/- principal amount alongwith interest of Rs.1,08,000/-was instituted. 2(ii) In his written statement, the defendant denied taking any loan from the plaintiff in the year 2006 much less loan of Rs.3,00,000/-. Defendant also denied having issued any post dated cheque in favour of plaintiff in the year 2006. Hence, the suit for recovery of a sum of Rs.3,00,000/- principal amount alongwith interest of Rs.1,08,000/-was instituted. 2(ii) In his written statement, the defendant denied taking any loan from the plaintiff in the year 2006 much less loan of Rs.3,00,000/-. Defendant also denied having issued any post dated cheque in favour of plaintiff in the year 2006. The written statement was to the effect that there was no occasion for the defendant to obtain any loan from the plaintiff for meeting out his marriage expenses in the year 2006 as his marriage was solemnized in simple manner in the year 2003. It was also stated therein that in 2004 Shri Daulat Ram, father of the defendant had borrowed a sum of Rs.30,000/- from the plaintiff. Against this loan, a blank cheque signed by the defendant, which was lying in the house, was handed over by the defendant's father to the plaintiff as security. Entire borrowed amount was repaid by the father of the defendant to the plaintiff within a period of three months from the date of borrowing. Despite repeated demands, plaintiff did not return the blank cheque feigning excuse that the same was lost. However, with intention to illegally grab money from the defendant, the above mentioned cheque was mis-used by the plaintiff for instituting the civil suit. It was also submitted in the written statement that the plaintiff was a habitual litigant engaged in 42 civil and criminal proceedings against various persons for extorting money from them as his profession. A preliminary objection was also taken that plaintiff was not entitled to file the suit in view of provisions of The Himachal Pradesh Registration of Money Lenders' Act, 1976. 3. Evidence 3(i) Two witnesses in all were produced by the plaintiff in support of his claim including himself. Plaintiff appearing in the witness box as PW1 re-iterated his assertions in the plaint. During his cross-examination, plaintiff expressed his inability to disclose as to whether defendant's marriage had taken place in the year 2003 or not. Plaintiff also admitted in crossexamination that he had filed numerous cases in different Courts against different persons for recovery of different amounts. Plaintiff appearing in the witness box as PW1 re-iterated his assertions in the plaint. During his cross-examination, plaintiff expressed his inability to disclose as to whether defendant's marriage had taken place in the year 2003 or not. Plaintiff also admitted in crossexamination that he had filed numerous cases in different Courts against different persons for recovery of different amounts. He initially feigned ignorance about defendant's father having taken loan of Rs.30,000/- from him during the year 2004, however, later on admitted the factum of a civil suit in this regard having been decreed by the learned trial Court and pendency of appeal before the learned District Court. PW2 is the Ahlmed of the Court of learned Civil Judge (Senior Division), Rohru, District Shimla who had brought the original record relating to the cheque in question, on the basis of which, the plaintiff had also filed a complaint against the defendant under Section 138 of Negotiable Instruments Act. At the time of recording of the evidence in the instant civil suit, the complaint preferred by the plaintiff under Section 138 of Negotiable Instruments Act was pending adjudication before learned Civil Judge, Rohru, District Shimla. 3(ii) Defendant along with his father appeared in the witness box in support of his defence. Assertions made in the written statement were reiterated. While appearing as DW1 defendant in cross-examination admitted that cheque in question i.e. Ext.PW2/A bore his signatures. However, he further stated that the date and the amount on the cheque were not filled by him. He denied himself handing over the cheque to the plaintiff. Father of the defendant stepped in the witness box as DW2 and stated that marriage of his son (defendant) was solemnized in a simple manner in the year 2003. He further stated that his son had not taken any loan much less loan of Rs.3,00,000/- from the plaintiff rather he (father of defendant) had taken loan amount of Rs.30,000/- from the plaintiff and in lieu of that amount he had handed over to the plaintiff a blank cheque signed by his son(defendant). Regarding this loan, a case was decreed against him and an appeal was stated to be pending. He also stated that the loan amount had been repaid by him in entirety to the plaintiff. However, despite repeated demand, the plaintiff did not return the cheque in question. 4. Regarding this loan, a case was decreed against him and an appeal was stated to be pending. He also stated that the loan amount had been repaid by him in entirety to the plaintiff. However, despite repeated demand, the plaintiff did not return the cheque in question. 4. Both the learned Courts below held the suit as not maintainable for want of registration of plaintiff as a money lender and for his failure to produce license under the Himachal Pradesh Registration of Money Lenders Act, 1976. However, merits of plaintiff's claim was independently throughly examined by the learned Courts below. After analysing the pleadings and the evidence led by the parties, the suit was dismissed by learned trial Court vide judgment and decree dated 29.5.2012. This judgment and decree has been affirmed in appeal by learned Appellate Court on 12.9.2019. Feeling aggrieved, the plaintiff is in second appeal. 5. First point: Presumption available to the cheque admittedly signed by the defendant. 5(i) Learned Senior Counsel for the appellant urged that learned Courts below did not appreciate the legal presumption in respect to the execution of cheque in question available under Sections 118 and 139 of the Negotiable Instruments Act. Therefore, the findings of learned Courts below that the plaintiff failed to prove his transaction with the defendant, are not sustainable. Learned Senior Counsel contended that in the instant case, the defendant while appearing in the witness box as DW1 had admitted his signature on the cheque. Acknowledgment of signature on the cheque would mean due execution of the cheque. Since signature is not disputed, therefore, legal presumption available under Section 118 and 139 of the Negotiable Instruments Act gets attracted. It has to be presumed that the cheque was issued in lieu of a surviving loan and therefore, the findings of the learned Courts below holding that the plaintiff had failed to prove the transaction between him and defendant, are not legally sustainable. In support of his contention, learned Senior Court relied upon following paras of titled Bir Singh versus Mukesh Kumar, (2019) 4 SCC 197 : "38. In support of his contention, learned Senior Court relied upon following paras of titled Bir Singh versus Mukesh Kumar, (2019) 4 SCC 197 : "38. In the absence of any finding that the cheque in question was not signed by the respondent-accused or not voluntarily made over to the payee and in the absence of any evidence with regard to the circumstances in which a blank signed cheque had been given to the appellant-complainant, it may reasonably be presumed that the cheque was filled in by the appellant-complainant being the payee in the presence of the respondent-accused being the drawer, at his request and/or with his acquiescence. The subsequent filling in of an unfilled signed cheque is not an alteration. There was no change in the amount of the cheque, its date or the name of the payee. The High Court ought not to have acquitted the respondent-accused of the charge under Section 138 of the Negotiable Instruments Act. 39. In our considered opinion, the High Court patently erred in holding that the burden was on the appellantcomplainant to prove that he had advanced the loan and the blank signed cheque was given to him in repayment of the same. The finding of the High Court that the case of the appellant-complainant became highly doubtful or not beyond reasonable doubt is patently erroneous for the reasons discussed above." 5(ii) The above extracted observations of the Hon'ble Apex Court are in respect of a fact scenario where neither there was any evidence with respect to circumstances under which a blank signed cheque was handed by the accused to the complainant nor there was any change in the amount of the cheque, its date or the name of the payee. It was in this backdrop that the Hon'ble Apex Court while deciding a proceeding initiated under Section 138 of the Negotiable Instruments Act held that in such a case, burden could not be placed on the complainant to prove that he had advanced the loan and blank signed cheque was given to him towards repayment of the same. The factual position in the instant case is entirely different. Learned trial Court had the advantage of looking into the original cheque (Ext.PW2/A), which was brought alongwith the file of complaint instituted under Section 138 of The Negotiable Instruments Act by the Ahlmed as PW2. The factual position in the instant case is entirely different. Learned trial Court had the advantage of looking into the original cheque (Ext.PW2/A), which was brought alongwith the file of complaint instituted under Section 138 of The Negotiable Instruments Act by the Ahlmed as PW2. After perusing the original cheque, learned trial Court observed in the judgment that three different types of ink were used for signature, filling in account number, name, amount and date. It was also noticed that a zero after the amount of Rs.30,000/- appeared to have been added on the cheque with different ink. The observation of the learned trial Court in that regard being relevant are re-produced hereinafter: "....During the course of trial Ld. Counsel for the defendant has also moved an application under Section 151 CPC on 02.11.2011, for calling of the records of the said case i.e. complaint under section 138 of the N.I. Act, which was after consideration and after no objection from the opposite counsel, the said record was called and received in this court on 05.12.2011. As per the record of that case, a judgment has been passed in that case on 23.08.2011, whereby the accused i.e. defendant was acquitted by the court. Now coming to the cheque Ex.PW2/A. Cheque Ex. PW2/A is a photostat copy of the original cheque and the original was attached with the case file which was called vide order dated 01.11.2011 and exhibited in that case file as Ex.CW1/A. I have carefully gone through the cheque Ex. CW1/A. On the bare perusal of the said cheque, it is observed that three different type of ink has been used for filling the signature and account number as well as name, amount and date. The date upon the said cheque appears to be in Black ink, whereas signature appears to be with Blue gel pen and on the other hand rest contents of the cheque appears to be in blue ball pen it is further observed while perusing the said cheque, that one zero has been added on the cheque amount with different ink. It altogether create suspicious circumstances regarding the alleged cheque. It altogether create suspicious circumstances regarding the alleged cheque. Therefore, statement of the PW-1 as well as cheque Ex.PW2/A has failed to proved the alleged transaction between the plaintiff and defendant and the liability cannot be fastened on the mere statement of the plaintiff and suspicious cheque." The photocopy of the cheque is on the record. A bare perusal of the same does indicate that last 0' (zero) has been added subsequently in an attempt to change the amount figure from Rs.30,000/- to Rs.3,00,000/-. 5(iii) Defendant has though not disputed his signature over the cheque but he has explained the circumstances in which the cheque was handed over to the plaintiff. His defence is that his father in the year 2004 had borrowed an amount of Rs.30,000/- from the plaintiff and in lieu of this loan, a blank cheque, signed by him, was handed over by his father to the plaintiff. Though the loan amount of Rs.30,000/- was cleared by his father, however, the cheque was not returned by the plaintiff despite repeated demands. It is this cheque, which has been misused by the plaintiff in instituting the civil suit by filling-in wrong and manipulative details. In the facts of instant case where there are apparent manipulations on the cheque then due execution of a cheque would not only require proof of handing over of a blank signed cheque but the fact that the cheque was handed towards a legally enforceable liability also has to be proved. Plaintiff has failed to prove any legally enforceable liability of defendant towards him. The complaint instituted by him against the defendant under Section 138 of the Negotiable Instruments Act regarding the same cheque was dismissed by learned Judicial Magistrate Ist Class, Court No. 1, Rohru, District Shimla vide judgment dated 23.8.2011. There is no averment in the appeal about any challenge to the judgment dated 23.8.2011. On the basis of same cheque, present civil suit for recovery of amount has been instituted. There is difference in civil and criminal proceedings based on a cheque. In civil Court, plaintiff is required to prove his claim on the basis of evidence to be adduced in support of his claim for recovery of the amount due. In this regard, it will be apposite to refer following para of titled Uttam Ram versus Devinder Singh Hudan and another, (2019) 10 SCC 287 : "20. In civil Court, plaintiff is required to prove his claim on the basis of evidence to be adduced in support of his claim for recovery of the amount due. In this regard, it will be apposite to refer following para of titled Uttam Ram versus Devinder Singh Hudan and another, (2019) 10 SCC 287 : "20. The Trial Court and the High Court proceeded as if, the appellant is to prove a debt before civil court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries a statutory presumption of consideration. The holder of cheque in due course is required to prove that the cheque was issued by the accused and that when the same presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability." In the backdrop of facts of instant case as pleaded and the evidence led by the parties, both the learned Courts below were justified in holding that there were suspicious circumstances regarding the execution of the cheque. Plaintiff has failed to prove his alleged transaction with the defendant. Therefore, liability cannot be fastened on the defendant on mere statement of plaintiff when presumption attached to the cheque under Sections 118 and 139 of the Negotiable Instruments Act has been effectively rebutted by the defendant. Question is answered accordingly. 6. Second Point: Applicability of the Himachal Pradesh Registration of Money Lenders Act, 1976. Learned Senior Counsel for the appellant argued that there was no evidence before the learned Courts below to apply The Himachal Pradesh Registration of Money Lenders Act, 1976 (hereinafter referred to as the 'Act') to the facts of the case to hold that the suit was not maintainable. 6(i) In his written statement, the defendant had pleaded that plaintiff was engaged in 42 criminal and civil proceedings against various persons for recovery of money. Lending of money was alleged to be plaintiff's profession. A preliminary objection was also raised in the written statement that plaintiff was not entitled to file the suit in view of provisions of the Himachal Pradesh Registration of Money Lenders Act. Lending of money was alleged to be plaintiff's profession. A preliminary objection was also raised in the written statement that plaintiff was not entitled to file the suit in view of provisions of the Himachal Pradesh Registration of Money Lenders Act. In replication, but for one line denial, nothing else was stated. A specific issue was framed by learned trial Court in this regard as under: "6. Whether the plaintiff is not entitled to file the suit in view of provision of Himachal Pradesh Registration of Money Lender Act, 1976?....OPD" 6(ii) Learned Courts below took note of the fact that the plaintiff as PW1 had admitted instituting various cases in different Courts for recovery of loan amount. Learned first Appellate Court also noticed the submission made on behalf of the defendant that even on the day of hearing of appeal, plaintiff's 6 cases of similar nature were listed for hearing before that Court. More than 15 recovery cases of plaintiff were stated to be pending before the Ist Appellate Court. Additionally, 50-60 cases were statedly pending adjudication before different Courts in District Shimla. It was observed that plaintiff had not led any evidence to rebut the objection taken in the written statement about non-maintainability of recovery suit in view of provisions of Himachal Pradesh Registration of Money Lenders Act. It was held by the learned Courts below that this proved the plaintiff to be a 'moneylender'. Being a 'moneylender', plaintiff could not have instituted the instant suit for recovery of loan amount without satisfying the conditions of Section 3 of the Act. In terms of Section 3, plaintiff as a moneylender was required to possess his registration and license as a money lender under the Act. On failure of plaintiff to produce these certificates, it was concluded by the learned Courts below that suit for recovery was not maintainable. 6(iii) The object of the Himachal Pradesh Registration of Money Lenders Act, 1976 is to register money-lenders and to regulate their business in Himachal Pradesh. Section 3 of this Act provides that a suit inter-alia for recovery of loan, by a moneylender shall be dismissed unless the moneylender is registered and licensed as such under the Act. Section 3 runs as under: "3. Suits and applications by money-lenders barred, unless money-lender is registered and licensed. Section 3 of this Act provides that a suit inter-alia for recovery of loan, by a moneylender shall be dismissed unless the moneylender is registered and licensed as such under the Act. Section 3 runs as under: "3. Suits and applications by money-lenders barred, unless money-lender is registered and licensed. - Notwithstanding anything contained in any other enactment for the time being in force, a suit by a money-lender for the recovery of a loan, or an application by a money-lender for the execution of a decree relating to a loan, shall, after the commencement of this Act, be dismissed, unless the moneylender, at the time of the institution of the suit or presentation of the application for execution, or at the time of decreeing the suit or deciding the application for execution,- (a) is registered; and (i) holds a valid licence, in such form and in such manner as may be prescribed; or (ii) holds a certificate from a Commissioner granted under section 10, specifying the loan in respect of which the suit is instituted, or the decree in respect of which the application for execution is presented; or (b) if he is not already a registered and licensed money-lender, satisfies the court that he has applied to the Collector to be registered and licensed and that such application is pending: Provided that in such a case, the suit or application shall not be finally disposed of until the application of the money-lender for registration and grant of licence pending before the Collector is finally disposed of." Thus a money lender at the time of institution of the suit for recovery of loan amount should be duly registered as such under the Act and should hold a valid license of money lending as prescribed in the Act. In case a money lender is not registered and licensed under the Act then he should satisfy the Court that his such application in that regard is pending before the concerned authority, which should be disposed of before the disposal of recovery suit. In case a money lender is not registered and licensed under the Act then he should satisfy the Court that his such application in that regard is pending before the concerned authority, which should be disposed of before the disposal of recovery suit. Who is a 'money lender' has been defined in Section 2(9) of the Act as under: "2(9) "money-lender" means a person, or a firm, carrying on the business of advancing loans and includes the legal representatives and the successors-in-interest whether by inheritance, assignment or otherwise, of such person or firm, provided that nothing in this definition shall apply to- (a) a person who is the legal representative or is by inheritance the successor-in-interest of the estate of a deceased money-lender together with all his rights and liabilities if such person - (i) winds up the estate of such money-lender: (ii) realises outstanding loans; (iii) does not renew any existing loan, or advance any fresh loan; (b) a bonafide assignment by a money-lender of a single loan to any one other than the wife or husband of such assignor, as the case may be, or any person, who is descended from a common grandfather of the assignor;" The 'money lender' advances loans. Section 2(8) defines 'loan' in following manner:- "(8) "loan" means an advance whether secured or unsecured of money or in kind at interest and shall include any transaction which the court finds to be in substance a loan, but shall not include - (a) an advance in kind made by a landlord to his tenant for the purposes of husbandry: Provided that the market value of the return does not exceed the market value of the advance as estimated at the time of advance; (b) a deposit of money or other property in a Post Office Savings Bank, or any other Bank, or with a company, or with a co-operative society, or with any employer, as security from his employees; (c) a loan to or by, or a deposit with, any society or association registered under the Societies Registration Act, 1860 (21 of 1860) or under any other enactment; (d) a loan advanced by or to the Central Government or any State Government or by or to any local body or panchayat under the authority of the Central Government or any State Government; (e) a loan advanced by a bank, a co-operative society or a company, whose accounts are subject to audit by a certified auditor under the Companies Act, 1956, (1 of 1956) or under any other law for the time being in force; (f) a loan advanced by a trader to a trader, in the regular course of business, in accordance with trade usage; (g) an advance made on the basis of a negotiable instrument as defined in the Negotiable Instruments Act, 1881, (26 of 1881) other than a promissory note." 6(iv) Definition of 'loan' assumes significance in determining the applicability of Himachal Pradesh Registration of Money Lenders Act, to the facts of the case. Not all kinds of loans are covered under Section 2(8) of the Act. Reference in this regard can be made to following para from titled Gajanan and Others vs. Seth Brindaban, (1970) 2 SCC 360 where provisions of Central Provinces and Berar Moneylenders Act were being considered:- "5........"Moneylender" as defined in cl. (v) of S. 2 means a person who in the regular course of business advances a loan as defined in this Act and it includes his legal representatives and successors in interest. "Loan" as defined in cl. (v) of S. 2 means a person who in the regular course of business advances a loan as defined in this Act and it includes his legal representatives and successors in interest. "Loan" as defined in cl. (vii) means an actual advance whether of money or in kind at interest and it includes any transaction which the court finds to be in substance a loan. It does not include inter alia an advance made on the basis of negotiable instrument other than a promissory note.........." Advances/loans falling within the exceptions (a) to (g) of Section 2(8), fall outside the ambit of the Act. Advancing such kinds of loans, which fall within the exceptions carried out in Section 2(8) of the Act, would not make a person a moneylender in terms of the Himachal Pradesh Registration of Money Lenders Act. Such a person, who has advanced loans, which are covered within the exceptions of Section 2(8) of the Act is not required to be registered or licensed under the Act as a money-lender. Suit for recovery of loan amount, falling in the exceptions (a) to (g) of Section 2(8) of the Act, therefore, cannot be held as not maintainable for want of registration and license as moneylender under the Act. In the facts of the case, the concurrent factual findings of both the learned Courts below are that various recovery suits had been instituted by the plaintiff in different Courts. This fact had even been acknowledged by the plaintiff in his statement. However, there was no evidence either led by the defendant in support of issue No. 6 or available in any other form before the learned Courts below to conclude that various cases instituted by the plaintiff in different Courts were for recovery of that kind of loan, which was included in the definition of 'loan' under Section 2(8) of the Act. For want of specific evidence in that regard, there could be a possibility that all the recovery suits statedly preferred by the plaintiff were for recovery of those loans, which fell within the exceptions (a) to (g) of Section 2(8) of the Act and, therefore, were excluded from the applicability of the Act. It is also to be borne in mind that instant case for recovery of amount was based on loan advanced in lieu of a cheque. It is also to be borne in mind that instant case for recovery of amount was based on loan advanced in lieu of a cheque. 'Cheque' as per Section 16 of the Negotiable Instruments Act, is a bill of exchange and falls within the definition of 'Negotiable Instrument' as spelt out in Section 13 of the Negotiable Instruments Act. An advance made on the basis of a negotiable instrument as defined in the Negotiable Instruments Act falls in category (g) of the exceptions to the definition of 'loan' under Section 2(8) of Himachal Pradesh Registration of Money Lenders Act. In such a scenario, instant suit for recovery of amount cannot be held to be not maintainable for want of plaintiff's registration and license as a money-lender. Findings of learned Courts below to the contrary, therefore, are not sustainable. Point is answered accordingly. 7. The sum and substance of above discussion is that:- (a) Instant suit filed by the plaintiff cannot be held to be not maintainable under Section 3 of the Himachal Pradesh Registration of Money Lenders Act as the defendant failed to prove that plaintiff falls within the definition of 'money-lender' under the Act and also failed to prove that various recovery suits instituted by the plaintiff pertained to that kind of loan which is included under the definition of loan in terms of the Act ibid. Therefore, findings in that regard of both the learned Courts below holding the suit to be not maintainable are quashed and set aside. (b) However, separate findings recorded by both the learned Courts below in dismissing the suit of appellant on merits are based upon correct interpretation of law and facts. Plaintiff has not been able to prove that he had loaned Rs.3,00,000/- to the defendant or that towards satisfaction of this loan amount, the defendant had handed him the cheque in question. The defendant has explained the circumstances under which the blank cheque in question signed by him was handed over by his father to the plaintiff. Defendant has also highlighted various suspicious aspects regarding manipulations in the cheque including filling of the amount, account number, name and signature in different ink on the cheque besides apparent addition of zero in the amount mentioned therein. Defendant has successfully rebutted the presumption attached to the cheque under Sections 118 and 139 of the Negotiable Instruments Act. Defendant has also highlighted various suspicious aspects regarding manipulations in the cheque including filling of the amount, account number, name and signature in different ink on the cheque besides apparent addition of zero in the amount mentioned therein. Defendant has successfully rebutted the presumption attached to the cheque under Sections 118 and 139 of the Negotiable Instruments Act. There is no perversity or illegality in the concurrent judgments and decrees passed by learned Courts below in dismissing the suit of the appellant on merits. The second appeal is disposed of on above terms alongwith all pending application(s), if any.