Allowed

Canara Bank v. M/S Indian Liner Pvt. Ltd. & Ors.

DRAT5 Jan 2024REGULAR APPEAL/31/2021

Case brief

AI extract

What is this about?

The DRAT allowed the appeal, directing the DRT to either conduct an inquiry into the loss of original documents or proceed with the trial if originals were never filed, permitting secondary evidence if conditions of Section 65 Evidence Act are met.

What did the court decide?

Directions to the Learned Presiding Officer, DRT Visakhapatnam, to conduct an inquiry regarding the fate of the original documents, allowing acceptance of secondary evidence if the inquiry reveals the

Canara Bank versus M/S Indian Liner Pvt. Ltd… — Contract and Commercial Disputes | DRAT (2024)

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Appeal No. 31 of 2021

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(Arising out of I.A. 716 of 2012 in OA 68 of 2004 in DRT- Visakhapatnam)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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05.01.2024

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Canara Bank Buckinghampet Branch, Vijayawada – 520002.

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… Appellant

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-Vs-

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	1. M/s. Indian Liner Pvt. Ltd. Rep. by its Managing Director Mr. G.C.M Banerjee, 27-6-29, Prakasham Road, Governorpet, Voijayawada – 520 022.
	2. G. C. M. Banerjee, S/o. Krishnaiah, Anjamma Street, Prajasakthi Nagar, Vijayawada – 520 010.
	3. G. Chandra Kumari W/o C.G.M. Banerjee, Director of M/s Indian Liner Pvt. Ltd. Anjamma Street, Prajasakthi Nagar, Vijayawada – 520 010.
	4. M/s. The New India Assurance Co. Ltd. 1^stFloor, Sundarsum Complex, Bunder Road, Labbipet, Vijayawada – 520 010.
	… Respondents
Counsel for Appellant : Ms.	Aparajita Ghosh, Learned Counsel
Counsel for respondent : Mr.	Nemani Srinivas, Learned Counsel

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THE APPELLATE TRIBUNAL :

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Instant appeal has arisen against the order dated 01.09.2020 passed in I.A. no. 716 of 2012 arising out of O.A. No. 68 of 2004 wherein learned DRT–Visakhapatnam declined to accept secondary evidence filed by the appellant bank.

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Learned counsel for the appellant bank submits that originally a suit being no. O.S. 242 of 1994 was filed before the Subordinate Judge Court, Vijayawada for recovery of outstanding dues. Later said Suit was transferred to DRT, Bangalore as per mandatory provision of RDDB Act, 1993 which was re-transferred to DRT-Hyderabad and ultimately transferred to DRT – Visakhapatnam. It is further submitted that after filing the Suit, documentary evidences were filed by the appellant bank before the Subordinate Judge Court, Vijayawada, but all the documents were not found when the matter was taken up before the DRTVisakhapatnam. Subsequent thereto an application was filed by the appellant bank with the prayer for accepting secondary evidence to prove their claim.

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Learned DRT–Visakhapatnam declined to accept the secondary evidences on the ground that bank is claiming that originals were filed before the Civil Court as it evident from the affidavit of the panel lawyer of the bank which could not be accepted and affidavit of the Advocate Commissioner Mr. R.B. Rajendra Prasad for recording evidence also could not be accepted and declined.

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In the judgement in Civil Appeal No. 4910 of 2023 in Vijay Vs. Union of India & Ors. Hon’ble Apex Court has laid down the law on the issue as to when secondary evidence can be accepted. Hon’ble Apex Court has held in Para 32 to 42 as under :

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Section 63 of the Evidence Act gives an exhaustive definition declaring that secondary evidence "means and includes" the five kinds of evidence mentioned therein. Section 65 of the Evidence Act allows secondary evidence to be given of the existence, condition, or contents of documents under the circumstances therein mentioned. It provides for the circumstances in which secondary evidence can be used when the original document is unavailable or inaccessible. It is imperative to adhere to the principles outlined in these sections, including the proper documentation and authentication, to successfully produce secondary evidence in legal proceedings.

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After perusing various judgments of this Court, we can deduce the following principles relevant for examining the admissibility of secondary evidence:

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33.1 Law requires the best evidence to be given first, that is, primary evidence.15

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33.2 Section 63 of the Evidence Act provides a list of the kinds of documents that can be produced as secondary evidence, which is admissible only in the absence of primary evidence.16

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33.3 If the original document is available, it has to be produced and proved in the manner prescribed for primary evidence. So long as the best evidence is within the possession or can be produced or can be reached, no inferior proof could be given.17

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33.4 A party must endeavor to adduce primary evidence of the contents, and only in exceptional cases will secondary evidence be admissible. The exceptions are designed to provide relief when a party is genuinely unable to produce the original through no fault of that party.18

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33.5 When the non-availability of a document is sufficiently and properly explained, then the secondary evidence can be allowed.19

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33.6 Secondary evidence could be given when the party cannot produce the original document for any reason not arising from his default or neglect.20

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33.7 When the copies are produced in the absence of the original document, they become good secondary evidence. Still, there must be foundational evidence that the alleged copy is a true copy of the original.21

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33.8 Before producing secondary evidence of the contents of a document, the nonproduction of the original must be accounted for in a manner that can bring it within one or other of the cases provided for in the section.22

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33.9 Mere production and marking of a document as an exhibit by the Court cannot be held to be due proof of its contents.23 It has to be proved in accordance with the law.24

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A reading of Section 65(a) of the Evidence Act displays the following:

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a. Secondary evidence can be presented as a substitute when the original document/ primary evidence is in the possession of the opposing party or held by a third party;

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b. Such a person refuses to produce the document even after due notice,

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c. It must be ensured that the alleged copy is a true copy of the original.

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Applying the constituents of Section 65 (a) of the Evidence Act to the present facts, in reference to the averments made, we find that the exact status of the documents in question could not be ascertained as one party claims that the other has the said documents and the other has allegedly stated that it was with her counsel. However, the said documents could not be recovered from the said counsel, as per records. In such a situation, therefore, the presentation of secondary evidence could be allowed, if other requirements are complied with.

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We may now consider Section 35 of the Stamp Act which forbids the letting of secondary evidence in proof of its contents. The section excludes both the original instrument and secondary evidence of its contents if it needs to be stamped or sufficiently stamped. This bar as to the admissibility of documents is absolute. Where

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a document cannot be received in evidence on the ground that it is not duly stamped, the secondary evidence thereof is equally inadmissible in evidence.

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In relation to secondary evidence of unstamped/insufficiently stamped documents, the position has been succinctly explained by this Court in Jupudi Kesava Rao (supra) wherein it dealt with an issue, i.e., whether reception of secondary evidence of a written agreement to grant a lease is barred by the provisions of Sections 35 and 36 of the Stamp Act and answered it in affirmative. It observed:

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"12. The Indian Evidence Act, however, does not purport to deal with the admissibility of documents in evidence which require to be stamped under the provisions of the Indian Stamp Act.

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The first limb of Section 35 clearly shuts out from evidence any instrument chargeable with duty unless it is duly stamped. The second limb of it which relates to acting upon the instrument will obviously shut out any secondary evidence of such instrument, for allowing such evidence to be let in when the original admittedly chargeable with duty was not stamped or insufficiently stamped, would be tantamount to the document being acted upon by the person having by law or authority to receive evidence.

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Proviso (a) is only applicable when the original instrument is actually before the Court of law and the deficiency in stamp with penalty is paid by the party seeking to rely upon the document. Clearly secondary evidence either by way of oral evidence of the contents of the unstamped document or the copy of it covered by Section 63 of the Indian Evidence Act would not fulfil the requirements of the proviso which enjoins upon the authority to receive nothing in evidence except the instrument itself.

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Section 25 is not concerned with any copy of an instrument and a party can only be allowed to rely on a document which is an instrument for the purpose of Section 35. "Instrument is defined in Section 2(14) as including every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. There is no scope for the inclusion of a copy of a document as an instrument for the purpose of the Stamp Act.

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If Section 35 only deals with original instruments and not copies, Section 36 cannot be so interpreted as to allow secondary evidence of an instrument to have its benefit."

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This Court, in Hariom Agrawal v. Prakash Chand Malviya25, reiterated the principle laid down in Judupi Kesava Rao (supra) and observed that:

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"10. It is clear from the decisions of this Court and a plain reading of Sections 33, 35 and 2(14) of the Act that an instrument which is not duly stamped can be impounded and when the required fee and penalty has been paid for such instrument it can be taken in evidence under Section 35 of the Stamp Act. Sections 33 or 35 are not concerned with any copy of the instrument and party can only be allowed to rely on the document which is an instrument within the meaning of Section 2(14). There is no scope for the inclusion of the copy of the document for the purposes of the Stamp Act. Law is now no doubt well settled that copy of the instrument cannot be validated by impounding and this cannot be admitted as secondary evidence under the Stamp Act, 1899."

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Thus, if a document that is required to be stamped is not sufficiently stamped, then the position of law is well settled that a copy of such document as secondary evidence cannot be adduced. The present facts, however, differ.

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The Trial Court and the High Court have relied on Jupadi Kesava Rao (supra) to hold that the Plaintiffs cannot lead secondary evidence as the document sought to be produced needed to be duly stamped. However, we find that Jupadi Kesava Rao (supra) is distinguishable on facts as the document which the Court was concerned with therein was one which was chargeable with duty, but in the case at hand, such is not the case, that is, the document to be produced is not one which was chargeable with duty at the time of its execution i.e., 04.02.1988. This being a material difference, the principle of law held in this case, correct as it may be, shall not apply to the instant case.

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It is a settled position of law that where the question is whether the document is liable to stamp duty and penalty, it has to be decided at the threshold even before marking a document. In the present case, in view of the discussions above, the document in question was not liable to stamp duty.

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Thus, keeping in view the above-stated principle as well as the above-discussed case law and facts of the case, we are of the opinion that in the instant case, the Plaintiff's prayer for leading the secondary evidence ought to be allowed in so far as the documents sought to be introduced as secondary evidence be taken by the concerned Court and exhibited, with its admissibility being decided independently, in accordance with law under the Evidence Act.

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Section 65 of the Evidence Act deals with acceptance of Secondary Evidence and when it can be accepted. Section 65 of the Evidence Act reads as under :

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Section 65 provides for the circumstances in which secondary evidence may be given without filing primary evidence. However, the party cannot seek Court’s permission for admitting the secondary evidence without exhausting Section 65 . In other words, the party should show the bonafide cause for filing the secondary evidence and it is the discretion of the Court to admit the same. Those circumstances are as follows:

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In cases where the original is with the opposite party or with a person who is out of reach or with a person who refused to give the original document after notice.

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In cases where the content of the original document has been admitted by the opposite party subsequently through another document.

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In cases where the original is lost or is a public document or the original cannot be moved easily. If a public document or any other document of which a certified copy can be obtained under law, then, that certified copy can be admitted as secondary evidence.

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When the original document consists of numerous accounts and high volume, then the portion of the document examined by a skilled person can be admitted as secondary evidence.

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As far as the issue whether documents were filed or it were lost / destroyed is concerned reliance is placed upon the letter written by the Registrar, DRT-Hyderabad to the Registrar, DRAT, Chennai wherein it is stated that some original documents which were requested to be traced out were missing from the file in O.S. 242 of 1994. It is stated in the letter that after thorough verification it was found that original documents which were filed are not traced out. On the basis of this letter learned counsel for

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the appellant bank submits that it may be treated as sufficient ground for accepting secondary evidence.

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As far as loss or destroying of documents is concerned there is no specific finding of the DRT. Accordingly, I am of the view that learned Presiding Officer, Visakhapatnam shall conduct an inquiry either himself or by the Registrar, DRT- Visakhapatnam to the effect as to whether original documents were filed by the bank in the Suit proceeding or thereafter in the O.A. proceeding or not, if the documents were filed then whether those documents were lost during transmission to concerned DRT or otherwise and if learned DRT arrived at a conclusion that original documents were filed, but the documents were lost or destroyed then secondary evidence so filed by the bank shall be accepted and DRT shall proceed to hear the O.A. in accordance with law.

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In case learned DRT arrived at a conclusion that original documents were not filed or not lost / destroyed from the Court custody then learned DRT shall decide the O.A. in accordance with law.

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O R D E R

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Appeal is disposed of with the directions in Para 7 and 8 above. Since it is an old matter, it is expected that necessary steps should be taken expeditiously and O.A. proceeding should be disposed of expeditiously. No costs.

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File be consigned to record room.

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Copy of the order be supplied to the appellant and the respondent and a copy be also forwarded to the concerned DRT.

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Copy of the judgement/Final Order be uploaded in the Tribunal’s website.

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Order dictated, signed and pronounced by me in the open Court on this the 05 day of January, 2024.

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(Anil Kumar Srivastava,J) Chairperson

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