Allowed

Smt Sowbhagyamma v. Smt Prema Venkatesh

Karnataka HC15 Dec 2021RFA/1562/2018

Case brief

AI extract

What is this about?

In an appeal against a decree for recovery of ₹10 lakh based on an alleged loan acknowledgment, the Court held that the document was incomplete, un-dated, and inconsistent. Finding the loan unproven but signatures likely obtained on blank papers, the appeal was allowed and the suit dismissed.

What did the court decide?

The impugned judgment and decree dated 13-06-2018 were set aside, the plaintiff's suit was dismissed, and there is no order as to costs.

Smt Sowbhagyamma Vs Smt Prema Venkatesh — Succession and Inheritance | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 15^TH DAY OF DECEMBER, 2021

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BEFORE

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THE HON’BLE Dr. JUSTICE H.B. PRABHAKARA SASTRY

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R.F.A. No.1562 OF 2018

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BETWEEN:

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Smt. Sowbhagyamma, W/o. Late Sunder Rao, Aged about 73 years.

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Sri. Kupendra Rao, S/o. Late Sunder Rao Aged about 38 years.

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Smt. Vatsala, W/o. Sri Panduranga Aged about 48 years.

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All are residing at No.525, 9^th Cross, Banashankari Second Stage, Jayanagar 7^th Block, Bengaluru - 560 070.

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…Appellants

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(By Sri. V.F. Kumbar, Advocate)

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AND:

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Smt. Prema Venkatesh, W/o. Sri.K.A. Venkatesh, R/o. No.1004/5, 3^rd Cross, "E" Block, Second Stage, Rajajinagar,

R.F.A.1562/2018

Bengaluru - 560 010.

…Respondent

(By Sri. D. Nagaraj, Advocate)

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This Regular First Appeal is filed under Section 96 of the Code of Civil Procedure, 1908, praying to call for the record; to set aside the judgment and decree passed by the learned XXXVIII Additional City Civil and Sessions Judge, at Bangalore City (CCH39) in O.S.No.1643/2012 dated 13-06-2018 and consequently dismiss the suit of the plaintiff/respondent with costs; to pass any other order/s that this Court deems fit to grant, in the circumstances of the case, with costs, in the interest of justice and equity.

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This Regular First Appeal having been heard through Physical Hearing/Video Conferencing Hearing and reserved on 09-12-2021 , coming on for pronouncement of judgment this day, the Court delivered the following:

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J U D G M E N T

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This is a defendants' appeal. The present respondent as a plaintiff had instituted a suit against the present appellants and one Smt. Deepika, arraigning them as defendants in O.S.No.1643/2012, in the Court of the XXXVIII Additional City Civil Judge at Bengaluru City, (hereinafter for brevity referred to as “the Trial Court”) for recovery of a sum of `13,30,000/-, with interest there upon from them.

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The summary of the case of the plaintiff in the Trial Court was that, herself and the defendant No.1 who is the respondent No.1 herein were known to each other for the last thirty years. They were also neighbours and knew each other since their childhood. However, after their marriage, they started living at different places. In the year 2006, the defendant No.1 approached the plaintiff for a financial assistance, for putting up a house construction at Jayanagar. At that time, the plaintiff could not help her. However, in view of the persistent request made by the defendant No.1, a sum of 10,00,000/- was paid by the plaintiff to her on Dt.10-02-2008, as loan. The defendant No.1 had agreed to repay the said amount along with interest at 2% per month. Because of their close intimacy, no documents were executed with respect to the said loan transaction.

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It is further the plaint averment that, on 09-04-2009, the defendant No.1 herself executed an affidavit, acknowledging the receipt of `10,00,000/-. The defendant Nos.2 to 4 have signed the said affidavit as consenting witnesses. Through the said affidavit, the defendant No.1 has acknowledged the debt. The plaintiff has

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also contended that, the defendants have paid only a sum of 3,00,000/- towards interest, but not paid any amount towards principal. This made the plaintiff to issue a legal notice dated 16-11-2011, calling upon the defendants, to pay a sum of 13,30,000/- towards the principal amount and interest, within four weeks from the date of receipt of the legal notice. The defendants replied to the said notice, denying the demand made in the notice. The plaintiff has stated that this made her to institute a suit against the defendants in the Trial Court.

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In response to the suit summons, the defendants appeared through their counsel and filed their Written Statement, where they denied the plaint averments. They contended that the plaintiff has not produced the Money Lenders' licence, as such, she cannot lend money. They also contended that the interest claimed by the plaintiff is excessive. They further stated that the alleged affidavit dated 09-04-2009 is written on an insufficient stamp paper.

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On the other hand, the defendants stated that the defendant No.1 was in need of money in the month of April-2009 for the family necessities, as such, the defendant Nos.1 and 2 approached

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the husband of the plaintiff and requested for a hand loan of a sum of 50,000/-. The said loan was given to them. However, the husband of the plaintiff obtained signatures of the defendants on blank stamp papers as a security for the loan transaction and also obtained signatures of the defendants on note book, diary book and other blank papers. The husband of the plaintiff agreed to return those signed blank papers after re-payment of the loan by the defendants. Though the said loan of 50,000/- was returned, on the date 10-10-2010, however, stating that the documents were misplaced at the time of cleaning the house for Gowri-Ganesha festival, the husband of the plaintiff did not return those documents, but undertook to return them immediately after he tracing them. That being the position, the defendants were shocked to receive the legal notice dated 16-11-2011 issued by the plaintiff. They contended that, the plaintiff, colluding with her husband has created the alleged affidavit which was never executed by the defendants.

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Based on the pleadings of the parties, the Trial Court framed the following issues for its consideration:

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“1. Whether the plaintiff proves that on 10.2.2008 defendant No.1 has received a hand loan of ` 10 lakh from her with promise to repay the said amount together with interest at 2% p.m.?

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2. Whether the plaintiff proves that on 9.4.2009 the defendant No.1 executed an affidavit acknowledging receipt of ` 10 lakhs on 10.2.2008 with promise to repay the same together with interest at 2% p.m.?

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3. Whether the plaintiff proves that the defendant No.2 to 4 have signed such an affidavit agreeing to repay the amount together with interest, in the event of failure on the part of defendant No.1 to repay the same within two years?

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4. Whether the defendants prove that the plaintiff and her husband had obtained their signatures on blank stamp paper as a security or loan transaction entered into the month of April 2009 for ` 50,000/-?

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5. Whether the plaintiff is entitled for the reliefs

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claimed?

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6. What Order or Decree?"

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In support of her plaint, the plaintiff got herself examined

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as PW-1 and got marked documents from Exs.P-1 to P-4. On

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behalf of the defendants, defendant No.1 was examined as DW-1 and got marked documents from Exs.D-1 to D-4.

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After hearing both side, the Trial Court, by its impugned judgment and decree dated 13-06-2018, while answering issues No.1, 2, 3 and 5 in the affirmative and issue No.4 in the negative, partly decreed the suit of the plaintiff, directing the defendants to pay a sum of `10,00,000/- to the plaintiff, within three months from the date of the said order. It is against the said judgment and decree, the defendants have preferred the present appeal.

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The Trial Court records were called for and the same are placed before this Court.

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Heard the arguments of the learned counsels from both side and perused the material placed before this Court including the memorandum of appeal and the impugned judgment.

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For the sake of convenience, the parties would be henceforth referred to as per their rankings before the Trial Court.

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After hearing the learned counsels from both side, the

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points that arise for my consideration in this appeal are:

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i] Whether the plaintiff has proved that on Dt. 10-02-2008, she has lent a hand loan of a sum of _10,00,000/- to the defendant No.1 for interest at_ 2% per month thereon, on its return by the defendants?

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ii] Whether the plaintiff proves that the defendant No.1 executed an affidavit on 09-04-2009, acknowledging the loan of ` 10,00,000/- and also promising to pay the same on interest thereupon?

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iii] Whether the defendants No.1, 2 and 4 have signed the said affidavit as consenting parties?

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iv] Whether the impugned judgment and decree warrants interference at the hands of this Court?

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The plaintiff, who got herself examined as PW-1, in her examination-in-chief, in the form of affidavit evidence, has reiterated the contentions taken up by her in her plaint. In support of her contention, she got produced a copy of the legal notice dated 16-11-2011 at Ex.P-1; reply said to have been sent by the defendants and dated 15-12-2011 at Ex.P-2; copy of the Khatha

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extract of a house property at Ex.P-3; affidavit dated 09-04-2009 said to have been executed by the defendants at Ex.P-4.

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The defendant No.1 got herself examined as DW-1, who also in her examination-in-chief, in the form of affidavit evidence, has reiterated the contentions taken up by the defendants in their Written Statement. In support of her contention, she also got produced and marked sanctioned plan of a residential house at Ex.D-1, another sanctioned plan of the year 2002 at Ex.D-2, original equitable mortgage title deed at Ex.D-3 and Death Certificate of her husband Sri. S.M. Sundar Rao at Ex.D-4.

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In the light of the above, the arguments of the learned counsel for the appellants/defendants are that, the alleged loan transaction between the plaintiff and the defendants is a created story and the transaction is not supported by any loan documents. He submits that, though the loan is said to have been given for the purpose of construction of the house, but seven to eight years prior to the alleged loan transaction, the house warming ceremony of the house of the defendant No.1 had already taken place. He also submitted that the contention of the plaintiff that the request

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for the loan was made in the year 2006, however, the loan was given two years thereafter itself would create a serious doubt in the alleged loan transaction. Further, the non-examination of the sister of PW-1 also prevents to hold that the plaintiff has proved the alleged loan transaction.

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Learned counsel further submitted that the plaintiff had no financial capacity to lend such a huge amount of money as loan. The plaintiff's contention that she had money after leasing her alleged house property at an area called Nagarabhavi in Bengaluru, is also not proved. Her contention that she was keeping huge amount of `10,00,000/- in her house in the form of cash, is also unbelievable. However, the Trial Court, without noticing all these aspects, has erroneously decreed the suit of the plaintiff.

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The learned counsel for the respondent/plaintiff, in his argument submitted that, the affidavit at Ex.P-4 is the document proving the loan transaction and also the liability of the defendants to pay the suit claim to the plaintiff. He submitted that Ex.P-4 acts both as an acknowledgment of loan as well a promise to repay the same. In that regard, he relied upon a judgment of the Hon’ble

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Apex Court in the case of Syndicate Bank Vs. R. Veeranna and others reported in (2003) 2 Supreme Court Cases 15 .

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Learned counsel further submitted that, the signatures of the executants in the affidavit at Ex.P-4 is proved, as such, a doubt arises as to how come the children of the defendant No.1, who are educated, could sign in the blank stamp paper. While drawing the attention of the Court to a sentence in a Written Statement, learned counsel stated that the statement made in the Written Statement that the defendants agreed to put the signatures to the blank stamp paper itself would go to show that, all the defendants have signed the stamp paper. With this, he submitted that, the impugned judgment and decree does not warrant any interference at the hands of this Court.

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The entire case of the plaintiff is based upon a document marked as Ex.P-4, which, according to the plaintiff, is an affidavit executed by all the defendants (appellants herein). The said document which is shown to be a certificate ['pramana patra' (¥ÀæªÀiÁt ¥ÀvÀæ" in kannada)] was canvassed as an affidavit. For an affidavit in Kannada language, it will be called as 'shapatha patra'

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("±À¥ÀxÀ ¥ÀvÀæ" in Kannada). However, the said document mentions

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that the defendant No.1 has certified that, she has received a loan of `10,00,000/- from the plaintiff for the purpose of building a house, on Dt. 10-02-2008. Her children and daughter-in-law (other defendants in the suit) have consented to the same and have put their consenting signatures to that certificate. From the date of that document, i.e. 09-04-2009, within two years, the loan would be repaid and in case the loan is not repaid, her son, daughter-inlaw and daughter have agreed to repay the same. In case of nonclearance of the loan within two years, a suitable legal action can be taken including the recovery of the amount from the movable and immovable property for which the plaintiff is having all rights under the said agreement. Towards the security of the loan given by you (plaintiff), the following numbered cheques have been issued. Here, after giving some space, one more sentence is added, stating that, 'what is stated above is true'. This is shown to have been signed by the certifier and the three consenting witnesses. The date column in the affidavit has been left blank.

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The plaintiff, both in the plaint as well in her evidence as PW-1, has stated that, the defendants have executed the said document which has been specifically and categorically denied by the defendants in their Written Statement. Even DW-1 in her evidence also has denied that the defendants had ever executed the said document at Ex.P-4. No doubt, the defendants in their Written Statement in paragraph 18, inter alia have made one statement as follows:

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“since the defendant No.1 and the husband of the plaintiff are very close and family friends and as such due to urgent need of money, the defendants agreed to put the signature on the blank stamp paper.”

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By bringing the said sentence to the notice of the Court, the learned counsel for the respondent/plaintiff contended that, the defendants have admitted the execution of document at Ex.P-4. The said argument is not acceptable, since the said statement, no where admits the execution of Ex.P-4. But even if it is liberally interpreted, it only goes to show that, due to the close friendship of both the families, the defendants agreed to put their signatures,

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more particularly, on the blank stamp paper. This cannot be considered as an execution of document at Ex.P-4.

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Learned counsel for the respondent/plaintiff, drawing the attention of the Court to one sentence in the examination- in-chief of DW-1, in the form of affidavit evidence, submitted that the said sentence also admits the execution of the document at Ex.P-4, which sentence in its English transaction reads as follows:

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“ Like that it is far away from the truth that on the date 09-04-2009 at the time of writing the certificate, it is written that the cheque would be given for the loan”.

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The above sentence would not show that the defendants have admitted of executing the affidavit or the Certificate at Ex.P-4. When the said sentence is read, in the light of the previous statement made by DW-1 in the very same affidavit, it goes to show that, she has denied several of the statements made by PW-1 in her examination-in-chief. It is in that process of denying several statements PW-1 and the plaint averments, she (plaintiff) had made the above statement which means like previous several

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R.F.A.1562/2018 15

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statements made by PW-1 even her statement that the cheques would be given at the time of writing the certificate, is far away from truth. Thus, that sentence alone cannot be isolated and interpreted in such a manner that DW-1 has admitted the execution of the document at Ex.P-4.

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A careful perusal of the document at Ex.P-4 would go to show that, the said document is titled as a 'Certificate' (not as an affidavit as analysed above). However, while concluding, it calls the said document as an 'agreement'. On the other hand, the plaintiff is producing the said document calling it as an 'affidavit'. Thus, in understanding the nature of that document itself, there is lot of confusion. As analysed above, the said document cannot be called as an affidavit though the document is shown to have been attested by a Notary. However, the Notary also has not certified that the said document was sworn to before him. He has only endorsed as 'signature attested before me'. As such, looking at the notorised seal, still, it cannot be concluded that it is an affidavit.

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The said document also cannot be an 'agreement' though called so at its end, since it does not bear the signature of the other party to the agreement.

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The last option is, treating the said document at Ex.P-4 as a Certificate, as nomenclated to it. Even if it is considered as a certificate, still, it is incomplete and un-dated. It is incomplete, because, it mentions that, certain cheques with certain numbers (stated as “the cheques bearing following numbers”) is mentioned. However, the cheques' numbers have not been mentioned below that line, but some place is left blank. These discrepancies, in the said document, makes it very clear that, even though it is presumed that the defendant No.1 has signed the said paper, but her contention that she has signed the said stamp paper when it was in its blank form appear to be probable. This probability is also for the reason that, if the plaintiff has obtained such an alleged affidavit (Ex.P-4 – certificate) in writing, which according to the plaintiff is not only signed by the defendant No1, but also by the remaining defendants too, then a doubt arises as to, how come she did not get any documentation made for the alleged loan

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transaction of a sum of 10,00,000/-. Therefore, the contention of the appellants/defendants that the loan taken was only a sum of 50,000./- from the husband of the plaintiff and that the said amount was also returned, however, the husband of the plaintiff who had obtained the signatures of the defendants on a blank stamp paper, in a diary and also a note book, has failed to return them on the pretext that they have been misplaced while cleaning the house for the festival of Gowri-Ganesha, appears to be more nearer to the truth.

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In this background, J. Veeranna's case (supra), wherein the Hon’ble Apex Court has observed that, unqualified acknowledgment of liability causes fresh period of limitation to begin and also gives the plaintiff a cause of action to base his claim on the said acknowledgment under Section 18 of the Limitation Act, 1963, is not attracted in the instant case. However, the Trial Court, without appreciating the document at Ex.P-4 in its proper perspective, has admitted it and accepted it as an acknowledgement of liability and promise to pay the alleged loan amount and proceeded to decree the suit, as prayed. Since the

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said finding is now proved to be an erroneous one, the same deserves to be reversed.

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Even though the learned counsel for the appellants/defendants canvassed a point on the alleged financial incapacity of the plaintiff to lend such a huge amount of loan of `10,00,000/- to the defendants and drew the attention of the Court to few sentences of PW-1 made in her cross-examination, but admittedly, the said contention of financial incapacity of the plaintiff was not taken up by the defendants in their Written Statement. As such, what has not been pleaded, though elicited in the crossexamination of the plaintiff, the same cannot be made use in favour of the defendants in the instant case. As such, I am of the view that, though the appellants/defendants could not establish that, the plaintiff had no financial capacity to lend the alleged loan to them, since they had not taken such a plea in their Written Statement, but they could make out a case on preponderance of probability that, their signatures at Ex.P-4 were obtained when the

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said document was in the form of a blank stamp paper. Simultaneously, the plaintiff also could not able to prove that she

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(or her husband) had lent a hand loan of a sum of `10,00,000/- to the defendants.

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As such, I proceed to pass the following

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O R D E R

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[i] The appeal is allowed ;

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[ii] The judgment and decree dated 13-06-2018 passed by the learned XXXVIII Additional City Civil and Sessions Judge, at Bengaluru City in O.S.No.1643/2012, is set aside ;

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[iii] The suit of the plaintiff in O.S.No.1643/2012 on the file of the learned XXXVIII Additional City Civil and Sessions Judge, at Bengaluru City, stands dismissed;

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[iv] There is no order as to costs.

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Registry to transmit a copy of this judgment along with the Trial Court records to the concerned Court, immediately.

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Sd/JUDGE

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BMV*

Smt Sowbhagyamma v. Smt Prema Venkatesh

Case brief

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What did the court decide?

Smt Sowbhagyamma v. Smt Prema Venkatesh

Case brief

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