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2023 DIGILAW 1300 (AP)

Duvvuru Siva Kumar Reddy v. Tunga Bhaskar Reddy

2023-09-14

T.MALLIKARJUNA RAO

body2023
JUDGMENT 1. The Appeal, under Sec. 96 of the Code of the Civil Procedure, is filed by the appellant/defendant challenging the decree and Judgment dtd. 16/7/2009 in O.S.No.81 of 2006 passed by the learned Principal Senior Civil Judge, Nellore (for short, 'trial court'). Respondent is the plaintiff who filed the suit in O.S.No.81 of 2006 seeking recovery of Rs.4, 30, 000.00 with interest and costs from the defendant based on the promissory note. 2. The parties will hereinafter be referred to as arrayed before the trial Court. 3. The facts leading to the present Appeal, in a nutshell, are as under: The defendant borrowed Rs.2, 50, 000.00 from the plaintiff on 15/2/2003 and executed the suit promissory note in his favour, agreeing to repay the same with interest @ 36 % per annum. Despite repeated demands made by the plaintiff, the defendant failed to repay the said amount. The defendant is not an agriculturist; he is not entitled to the benefits under the Agriculture Debt Relief Acts and the Usurious Loan Act. Hence, the plaintiff claimed the interest at 24% per annum. 4. In the written statement, the defendant refuted the plaint averments and admitted the borrowing amount from the plaintiff and affirmed the execution of a suit promissory note and asserted that at the time of execution of the suit promissory note, no witnesses had affixed their signatures to the document; the signatures of attestors were subsequently appended; the claiming of interest at 36% per annum is unjust and the plaintiff is not entitled to the same. It is submitted that unforeseen financial setbacks had led to losses to his business rendering it impossible to repay the debt; a mediation by D.Udayabhaskar Reddy and Chitti Babu was held, in their presence, the defendant transferred ownership of an Ambassador Car bearing registration No.AP26-E-4555 (hereinafter be referred to as 'the car') to the plaintiff as a settlement towards the outstanding debt stipulated in the promissory note; the defendant asserted that the plaintiff after taking possession of the aforementioned vehicle, informed the defendant that the promissory note had been misplaced and if traced, it would be returned; relying on this assurance, the defendant remained passive believing the matter to be settled; the plaintiff motivated by dishonesty, had initiated legal proceedings as if no payment had been made; the plaintiff, having acquired the possession of the car in question, had received the entire amount due, thus, the suit debt is discharged; the plaintiff had deliberately concealed the pertinent facts and filed a baseless suit. 5. Based on the above pleadings, the trial Court framed the following issues: (1) Whether the plaintiff is entitled to the entire suit amount? (2) To what relief? 6. During the trial, on the plaintiff's behalf, he was examined as P.W.1 and marked Ex.A1. On behalf of the defendant, D.Ws.1 to 3 were examined and marked Exs.B.1 to B.7. 7. After completion of the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs against the defendant for Rs.4, 30, 000.00, with interest @ 12% p.a., from the date of suit, till the date of decree on principal amount of Rs.2, 50, 000.00, and with future interest @ 6% p.a. from the date of decree till the date of realization. 8. 8. Sri Rama Chandra Rao Gurram, learned counsel representing the appellant/defendant, contends that a careful examination of Exs.B.1 to B.4 documents would unequivocally revealed that the car, registered in the name of Sudheer Reddy and belonging to the appellant, shows that mediation and discharge pleaded by the appellant is correct; as the documents relating to the car were in bank by that time and as pronote was not given back and the documents pertaining to the car were not given; the trial Court failed to notice the absence of any substantial inconsistencies in the testimonies of the defence witnesses; there were no justifiable reasons to discredit their evidence concerning the discharge of the debt; he underscores that the evidence given of DWs.2 and 3 should not be discarded merely on the basis of the familial or social associations with the appellant. 9. Per contra, Sri Ch. C. Krishna Reddy, learned counsel representing the respondent/plaintiff, argued that the trial Court correctly appreciated the case facts and reached a correct conclusion. The reasons given by the trial Court do not require any interference. 10. Having regard to the pleadings in the suit, the findings recorded by the Trial Court and in light of the rival contentions and submissions made on either side before this Court, the following points would arise for determination: 1) Is the Trial Court justified in holding that the execution of Ex.A.1 promissory note on receipt of consideration amount by the defendant in favour of the plaintiff? 2) Is the Judgment passed by the trial Court needs any interference? POINT NOs.1 and 2: 11. The plaintiff, as PW.1 and the defendant, as DW.1, steadfastly maintained in their evidence consistent with the stances articulated in their respective pleadings. Notably, the defendant had asserted a plea of discharge; thereby the burden is on him to establish it. DW.1 in his testimony deposed that as the plaintiff is a powerful person, he put a lot of pressure on him to settle the outstanding amount stipulated in the promissory note; when he expressed his inability to pay, there was a mediation facilitated by D.Udaya Bhaskar Reddy and Chitti Babu, and in their presence, he delivered possession of the car to the plaintiff for the discharge of debt due under the suit promissory note. 12. The defendant admitted in the written statement that he executed the suit promissory note on receipt of the consideration. 12. The defendant admitted in the written statement that he executed the suit promissory note on receipt of the consideration. Still, at the time of execution, no witness was signed as an attestor in the promissory note and the attestor's signature was obtained. 13. In Chandabolu Bhaskar Reddy V. Betha Saidi Reddy, 2006 (4) ALT 245 . the Composite High Court of Andhra Pradesh observed as follows: Since a promissory note is not a compulsorily attestable document, even if the signatures of the attestors are taken after its execution, it does not amount to material alteration, so it does not get vitiated. Therefore, whether there were attestors or not at the time of its execution is immaterial, more so when its execution is admitted. 14. DW.1 testified in the cross-examination that on 9/4/2008, he availed the loan in the name of Sudheer Reddy (DW.3), who happens to be his elder sister's son, employed in Hyderabad to purchase a car, and the car was purchased in the name of DW.3; as per the record, DW.3 is the owner of the car. Importantly, this aspect was not pleaded in the written statement. The defendant had also not taken a plea in the written statement regarding the pressure made by the plaintiff in the presence of alleged elders. 15. In the case Vinod Kumar Arora Vs. Smt. Surjit Kaur, AIR 1987 SC 2179 . the Hon'ble Apex Court observed that: "The pleadings of the parties form the foundation of the case and it is not open to them to give up the case set out in the pleadings and propounded a new and different case." 16. In the case Kondaviti Francis Vs. M.Ludramma and others, 2000(3) ALT 433 . the composite High Court of Andhra Pradesh observed that: "It is an established and expected principle that pleadings form the foundation of the case, and the pleadings bind the parties. They cannot travel beyond the pleadings or set up a new issue which is not propounded in the pleadings, and any amount of evidence contrary to the pleadings cannot be looked into ( AIR 1987 SC 2179 ). 17. The factual consensus, as confirmed by the testimonies of both DWs.1 and 3, is that the car in question was registered in the DW.3's name, establishing him as the legal owner of the vehicle at the time of the alleged compromise. 17. The factual consensus, as confirmed by the testimonies of both DWs.1 and 3, is that the car in question was registered in the DW.3's name, establishing him as the legal owner of the vehicle at the time of the alleged compromise. Consequently, it becomes evident that the defendant, in actuality, did not possess a legal entitlement or right over the said car. The defendant has sought to convince the Court that he procured a loan in the name of Sudheer Reddy and subsequently purchased the vehicle in Sudheer Reddy's name, asserting possession of the car as a result. To substantiate this claim, the defendant has referenced Ex.B.6, a letter issued by the Senior Branch Manager of the Bank of India in Nellore, dtd. 18/9/2007, and addressed to the defendant. The trial Court has not given credence to the said letter on the ground that it came into existence after filing the suit. 18. To prove the mediation, the defendant examined one J.Chitti Babu as DW.2. According to his evidence, the plaintiff took the car towards a full and final debt settlement. The DW.2's testimony indicates that he had a working relationship with the defendant, primarily involved in transporting materials from the defendant's quarry, and in that connection, he got acquainted with him. DW.2 also testified that the interest was calculated at the time of mediation, but could not specify the precise amount calculated for interest; he acknowledged that he lacked knowledge of the car's determined value. It is noteworthy that DW.2 deposed that one Ram Mohan Reddy calculated the amount payable under promissory note and also estimated the car's value; he also instructed the Advocate at the time of preparation of his chief affidavit about the car's estimation and calculation of interest. As seen from DW.1's deposition, he didn't indicate that the elders had undertaken the calculation of interest or that the terms of mediations had been formally reduced to writing. The DW.2's evidence contradicts the defendant's earlier stance in the written statement. It is not the defendant's stand in the written statement, nor in his testimony that the terms of mediation were reduced to writing. The defendant seems to want to strengthen his version by introducing a new theory through DW.2's evidence concerning the interest calculation and the document preparation in terms of mediation. 19. It is not the defendant's stand in the written statement, nor in his testimony that the terms of mediation were reduced to writing. The defendant seems to want to strengthen his version by introducing a new theory through DW.2's evidence concerning the interest calculation and the document preparation in terms of mediation. 19. DW.3 testified that the defendant is his mother's cousin; the defendant purchased the car by using his name by obtaining a loan from the Bank of India; the defendant does not have the car; he never sold the car to anybody, and even now, the car is in his name. Though the Ex.B.7 document relied on by the defendant to prove his case, it does not disclose the payments covered under Ex.B.7 were made by DW.1. 20. The standard of proof is evidentially based on the principles of preponderance of probability. Inference of preponderance of probability can be drawn from the materials on record and by references to the circumstances upon which reliance is placed. 21. The DW.1's evidence shows that he has not obtained any acknowledgement from the plaintiff after the delivery of the car as part of the compromise, no acknowledgement was obtained from the plaintiff; the documents relating to the car are still in his possession; had the transaction taken place, it would be expected that the necessary legal formalities, including a transfer of ownership would be executed. The absence of such formalities including the transfer of the car into the plaintiff's name, raises questions about the authenticity of the compromise. Additionally, DW.1 categorically testified in crossexamination that he had not issued any notice to the plaintiff demanding the return of the promissory note. Even otherwise, if the car was delivered to the plaintiff in the presence of mediators in pursuance of the compromise, at least, it is expected to obtain a document in writing evidencing the same. 22. Indeed, there are substantial grounds for questioning the credibility of DW.1's testimony, and these factors further compound the complexity of the case. One crucial aspect that raises doubts about DW.1's account is the absence of any material or evidence indicating the value of the car as of the date of the alleged mediation. 22. Indeed, there are substantial grounds for questioning the credibility of DW.1's testimony, and these factors further compound the complexity of the case. One crucial aspect that raises doubts about DW.1's account is the absence of any material or evidence indicating the value of the car as of the date of the alleged mediation. In a situation where a vehicle is a significant component of a debt settlement, it would be expected that the parties involved would have clear knowledge of the car's value at the time of the compromise. The failure to provide this essential information raises doubts about the veracity of the mediation and the terms associated with it. Moreover, the absence of any discussion or clarity regarding the transfer of ownership of the car is a notable omission. Typically, in a scenario where a car is handed over as part of a settlement, the transfer of ownership and related legal formalities would be addressed. The fact that this crucial detail is not mentioned in the testimony is cause for skepticism. Additionally, the concern regarding potential liabilities arising from the car, particularly if it were to be involved in an accident, is a valid point. Without clear and documented transfer of ownership, it becomes challenging to accept that the defendant, in this case, would have simply handed over the car without taking precautionary measures or ensuring that the legal aspects were properly addressed. Furthermore, the continued possession of the car's registration certificate in the name of DW.3, combined with the absence of any documented transfer of ownership, raises significant doubts about the legitimacy of the car's alleged transfer as part of the mediation. 23. PW.1 admitted in the cross-examination that the building in which he resides appears in the photographs, i.e., Exs.B.1 to B.4 and the car appearing in Ex.B.1 is in his possession. According to PW.1, he purchased the said car from one Sudheer Reddy (DW.3) and again, he says one Sohar Venkata Rao purchased the car from Sudheer Reddy; he used to keep the car in his building; the record relating to the car is not available with him; he was informed that the records are not available in the car and further says that he is not using the said car. As per the DW.3's evidence, the defendant does not have the car; he never sold the car to anybody, and even now, the said car is in his name; there is no documentary proof with him to show that the defendant is paying loan instalment. 24. Based on PW.1's testimony in the cross-examination, it becomes difficult to conclude that he purchased the said car from one Sudheer Reddy (DW.3). The mere presence of the car at his premises does not necessarily establishing him as the legal owner and he received the car through mediators towards a final settlement of the debt under Ex.A.1. It is the plaintiff's stand through the suggestions made to DW.1 that the vehicles from the neighbourhood were often parked at the premises of Lakshmi Kanthamma Ashram. DW.1 further deposed that he doesn't know whether Sohar Venkata Rao used to park his vehicle at the premises of Ashram. The DW.1's cross-examination, which revealed details about his purported occupation as a contractor, his status as an income tax assessee, and his involvement in running a stone-crushing factory, raises questions about the circumstances surrounding the alleged delivery of the car as part of the settlement. The defendant's handing over the car without obtaining any receipt or acknowledgment further raises doubts about the authenticity of the alleged settlement. 25. The trial Court has rightly placed upon the defendant to establish the plea of discharge. The defendant has failed to establish the plea of discharge. The burden of proving discharge heavily rests upon him. In his attempts, he has singularly failed as both parties have let in evidence and as the plaintiff's evidence is more worthy of belief, and the trial Court rightly didn't accept the defendant's plea of discharge. 26. After careful consideration, I am of the view that the trial Court had adequately appreciated the evidence. There is absolutely no reason for this Court to arrive at a different conclusion than the one arrived at by the trial Court. The findings arrived at by the trial Court on the appreciation of evidence in this case is, therefore, correct and does not call for interference. I agree with the conclusion arrived at by the trial Court. 27. There is absolutely no reason for this Court to arrive at a different conclusion than the one arrived at by the trial Court. The findings arrived at by the trial Court on the appreciation of evidence in this case is, therefore, correct and does not call for interference. I agree with the conclusion arrived at by the trial Court. 27. Accordingly, the Points are answered in favour of the plaintiff by holding that the Trial Court is justified in holding that the defendant failed to establish the plea of discharge by placing cogent and convincing material before the Court. Given the preceding discussion, the view taken by the trial court does not call for any interference. The impugned Decree and Judgment passed by the trial court is upheld. 28. As a result, the Appeal is hereby dismissed without costs by confirming the Decree and Judgment in O.S.No.81 of 2006, dtd. 16/7/2009, passed by the learned Principal Senior Civil Judge, Nellore. 29. Miscellaneous petitions pending, if any, in this Appeal shall stand closed.