Dismissed

The Dhanalakshmi Bank Ltd. v. Sri H C Mahadevaiah

Karnataka HC17 Nov 2023RFA/21/2008

Case brief

AI extract

What is this about?

The High Court dismissed an appeal by a bank seeking to set aside an order dismissing a loan recovery suit. The court held that the bank failed to prove execution of loan documents because the trial court found signatures unsubstantiated, and the bank did not adduce additional evidence to cure this defect.

What did the court decide?

The appeal was dismissed as meritless; no order as to costs.

The Dhanalakshmi Bank Ltd. Vs Sri H C Mahadevaiah — Banking and Recovery | Karnataka HC (2023)

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 17^TH DAY OF NOVEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE V SRISHANANDA REGULAR FIRST APPEAL NO. 21 OF 2008 (MON)

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BETWEEN:

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THE DHANALAKSHMI BANK LTD, HAVING ITS REGISTERED OFFICE, AT THRISSURE, KERALA HAVING ITSBRANCHES AMONGST OTHER PLACES ALSO AT DICKENSON ROAD, BANGALOIRE REPRESENTED BY ITS MANAGER.

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…APPELLANT

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(BY SRI.P.SRINIVASAIAH, SRI.SUPREETH S., VENKATARATHNAPPA AND ASHWINI L.N., ADVOCATE)

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AND:

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Digitally signed by R MANJUNATHA Location: HIGH COURT OF KARNATAKA

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SRI.H.C.MAHADEVAIAH, S/O SRI. CHIKKANNA, WORKING AS ASSISTANT MASTER, GOVERNMENT HIGHER PRIMARY SCHOOL, CHERANAHALLI, MANDYA TALUK, MANDYA DISTRICT - 571 401.

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SRI. V. SWAMY, R/AT.NO.174, KUREPURNAGAR, MANDYA - 571 401.

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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SRI. H.V. RAMASHETTY, R/AT. HARAKERE, HARAKERE POST, MANDYA DISTRICT - 571 401.

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…RESPONDENTS

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(BY SRI.R.A.DEVANAND FOR R1, ADVOCATE V/O/D 23.08.2012 NOTICE TO R2 IS DISPENSED WITH, R3 - SERVED)

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THIS RFA IS FILED U/S.96 R/W O XLI R 1 AND 2 OF CPC AGAINST THE JUDGMENT AND DECREE DT.6.9.2007 PASSED IN O.S.NO.8622/98 ON THE FILE OF THE IX ADDL. CITY CIVIL AND SESS. JUDGE, BANGALORE (CCH-10), DISMISSING THE SUIT FOR RECOVERY OF MONEY.

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THIS APPEAL COMING ON FOR HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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Heard Smt. Ashwini L.N., counsel for appellant. There is

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no representation on behalf of respondent No.1.

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For the sake of convenience, parties are referred to as per their original ranking before the Trial Court.

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The present appeal is filed by unsuccessful plaintiff challenging the validity of the judgment and decree dated 06.09.2007 passed in O.S.No.8622/1998 on the file of the IX Additional City Civil and Sessions Judge, Bengaluru.

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The facts in brief which are utmost necessary for disposal of the present appeal are as under:

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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Plaintiff filed a suit seeking for decree in a sum of Rs.38,973.30 with future interest, by contending that defendant No.1 borrowed loan in a sum of Rs.20,000/- for purchase of a television set and defendant Nos.2 and 3 stood as co-applicants for the said loan transaction. It was further contended that the loan carried 24% interest per annum compounded quarterly at the rate of Rs.840 for 35 monthly installments and necessary documents were executed by the first defendant in this regard and as such, the proceeds of the loan amount was given to M/s Sri Chamundeshwari International, whereunder the television set was sought to be purchased by the first defendant. According to the plaintiffbank, there were defaults in repaying the loan amount and a sum of Rs.38,973.39 was due from first defendant and therefore, filed the suit.

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Upon service of suit summons, defendant No.1 appeared before the Court and filed written statement denying the plaint averments in toto and also contended that plaint claim is vexatious and is filed only with an intention to harass the defendants. He also contended that there is no cause of

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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action to file the suit and since the television set that was purchased by the first defendant is repossessed by the plaintiffbank, defendant is not liable to pay any amount much-less the suit claim and therefore, sought for dismissal of the suit. Defendant No.2 was placed ex-parte .

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Based on the rival contentions of the parties, the

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Trial Court framed the following issues for consideration:

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1. Does plaintiff prove the availment of loan of Rs.20,000/- and execution of the loan documents by the 1^st defendant as stated in para-4 to 6 of the plaintiff ?

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2. Does plaintiff prove that it disbursed the loan amount to M/s Chamundeshwari International on the request of the 1^st defendant ?

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3. Does plaintiff prove that the defendants committed default in payment despite issue of notice dated 14.10.1997?

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4. Whether the suit is barred by time?

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5. Whether the plaintiff is entitled to interest at 20.4% per annum?

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6. Does plaintiff prove that the defendants are liable to pay Rs.38,973.39?

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7. What order or decree?”

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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In order to prove the case of plaintiff, an officer of the plaintiff-bank by name Sri.A.V.Subbaraman was examined as P.W.1 and relied on eight documents which were exhibited and marked as Exs.P.1 to P.8.

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On conclusion of the recording of evidence, the learned Trial Judge considered the oral and documentary evidence on record in its proper perspective and dismissed the suit of the plaintiff by holding that plaintiff has failed to prove the signatures of defendants on Exs.P.1 (a), 2(a) and 4(a).

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Being aggrieved by the same, plaintiff-Bank has

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filed the present appeal on the following grounds:

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It is submitted that the suit is not maintainable either in law or facts and circumstances of the case.

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It is submitted that there was substantial evidence on record for the decreeing the suit as prayed for by the plaintiff. All the loan documents and agreement along with the statements of accounts was available on record for the court below to appreciate the same and decree the suit, having failed to do so the court below erred in dismissing the suit which is apparent o the face of the record itself.

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It is submitted that there is a legal presumption in favour of the bank both in Indian evidence act as well banker's book of evidence as regards to the documents as well statements of accounts Therefore without applying the mind judiciously to

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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the said position of law and circumstances, the court below has failed to accept and appreciate the documents produced before the court. Thus caused serious miscarriage of justice, therefore the order impugned is bad in law.

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It is submitted that the defendants having failed to lead any evidence cannot escape the liability further the onus is not on the plaintiff but was on the defendants to prove the plea of non-payment of the last payment thus the order is bad

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It is submitted that even otherwise the cause of action is continuous and the suit is filed within three years from the date of last payment that the defendants was required to make therefore the question of the suit being barred by limitation does not arise. The loan was taken on 01-06-1995 and the last payment was to be made on November 1996 and the suit is filed on 30-05-1998 which is within three years, therefore the order of dismissal is bad in law.

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It is submitted that the court is prejudiced by the incorrect and unfortunate submission made by counsel of the bank. It is submitted as asserted by the bank that there was no communication from the counsel regarding the requirement of the witness to be present for further cross examination on any dates muchless the dates of hearing. Therefore the absence of the bank witness could not be solely be held against the institution and loss to the public monies. There was no reason muchless any occasion for the bank official to remain absent as attending the courts is also the part of the obligations of the bank official therefore closure of the case is also bad in law. Besides submission made by the counsel is without totally incorrect besides unethical. Though the counsel ought to have informed and obtain the presence of the witness, has failed to do so which has culminated in miscarriage of justice.

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It is submitted that even other wise there was ample evidence on record especially documents itself which need not be proved by oral evidence

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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which clearly establishes the ability of the defendants therefore the order of dismissal is bad in law

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Even otherwise the defendants having failed to lead any evidence to substantiate the case of the defendants the court ought not to have accepted the plea of the defendants and dismiss the suit, thus the order is bad for this reason also

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The court has also erred in rejecting the evidence of the plaintiff merely on the ground that the same is not subjected to full cross examination which is not only incorrect proposition of law. There is no need of any oral evidence which is proved by documents and the contents of the documents also need not be proved, thus on a mere and general denial the court ought not have accepted the contentions of the defendants Moreso when there is legal presumption to in favour of the plaintiff bank. Therefore viewed from any angle the burden of proving was not on the plaintiff bank but was on the defendants to prove the assertions. Therefore the judgment impugned is bad in law.

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Even otherwise the order of dismissal of the suit is based on wrong appreciating of law and based on surmises and non appreciation of documents and evidence on record and failure of the defendants, besides the impugned order suffers from proper reasoning and proper of judicious mind”

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Reiterating the grounds urged in the appeal

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memorandum, Smt.Ashwini, learned counsel for appellant vehemently contended that when the Court has recorded a finding that signatures found on Exs.P.1(a), 2(a) and 4(a), are almost similar, it ought to have decreed the suit of the plaintiff. Dismissal of the suit by the learned Trial Judge based on the

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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ground that signatures are not proved, has thus resulted in miscarriage of justice and sought for allowing the appeal.

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Since there is no representation on behalf of the respondents, this Court perused the material on record in the light of the arguments putforth on behalf of the appellant.

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On such perusal of the material on record, the following points arise for consideration:

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(i) Whether the plaintiff has made out a case that defendant No.1 was due in a sum of Rs.38,973.39 in respect of a loan transaction wherein a sum of Rs.20,000/- was paid as loan for purchase of a television set?

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(ii) Whether the plaintiff has further proved that defendant Nos.2 and 3 stood as guarantors for the said transaction and loan amount of Rs.20,000/- was released in favour of M/s Chamundeshwari International, at the request of first defendant and after so releasing the amount, defendant became due in a sum of Rs.38,973.39?

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(iii) Whether plaintiff is entitled for interest at the rate of 24% per annum, compounded quarterly?

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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(iv) Whether the impugned judgment is suffering from legal infirmity or perversity and thus calls for interference?

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(v) What Order?

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An Officer of the plaintiff-bank by name Sri Subbaraman is examined as P.W.1 and plaintiff relied on eight documents as stated supra. In the written statement, defendant has taken a specific contention that the signatures found on Exs.P.1 to 4 are not his signatures. Under such circumstances, plaintiff was required not only to prove the signatures found at Exs.P.1(a), P2(a) and P4(a) but also, was required to prove due execution of loan agreement marked on behalf of the plaintiff.

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Further, according to plaintiff, loan amount of Rs.20,000/- was given to M/s Chamundeshwari International, at the request of first defendant. However, the first defendant has denied the same. Under such circumstances, non examination of any person from M/s Chamundeshwari International or producing necessary document to show that a sum of Rs.20,000/- was in fact given to M/s Chamundeshwari

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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International is not proved by placing necessary material evidence on record.

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Further, when the signatures at Exs.P.1(a), P2(a) and P4(a) are denied by the defendant categorically, mere confronting the signature on vakalath of the defendant would not be sufficient enough to discharge the burden cast on the plaintiff to prove the signature on Exs.P.1(a), P2(a) and P4(a).

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It is settled principles of law and requires no emphasis that mere marking of the signature or admission thereof would not be sufficient enough to prove the due execution of the document. Admission of the signature is one aspect of the matter and proof of execution of the document on which the signature found is another aspect. In this regard, this Court places reliance on the judgment of this Court in the case of N.M.Ramachandraiah and another vs. State of Karnataka and others reported in AIR 2007 KARNATAKA 164 , wherein, it has been held as under:

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“15. Therefore, the law is well settled. Execution of a document does not mean merely signing, but signing by way of assent to the terms of the contract embodied in the document. Execution consists in

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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signing a document written out and read over and understood, and does not consist of merely signing a name upon a blank sheet of paper. It is a solemn act of the executant who must own up the recitals in the instrument and there must be clear evidence that he put the signature after knowing the contents of document fully. To be executed, a document must be in existence; where there is no document in existence there cannot be execution. Mere proof or admission that a person's signature appears on a document cannot by itself amount to execution of a document. Registration does not dispense with the necessity of proof of execution when the same is denied. Thus, execution of document is not mere signing of it.”

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Applying the legal principles enunciated in the above judgment to the facts of this case, it is crystal clear that plaintiff has not taken any steps to prove the signature at Exs.P.1(a), P2(a) and P4(a), especially, when the same has been categorically denied by the first defendant. Further, even assuming that signatures at Exs.P.1(a), P2(a) and P4(a) is admitted to be proved for the sake of argument, that itself would not relieve the burden on the plaintiff to prove the proper execution of the loan documents which are marked at

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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Exs.P.1 to P.4. Despite granting sufficient opportunity, plaintiff did not choose to place any positive evidence on record, in this regard.

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Under such circumstances, left with no alternative, the learned trial Judge has recorded a categorical finding that plaintiff has failed to prove the suit documents and the suit claim and dismissed the suit of the plaintiff.

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Even after re-appreciating the material evidence on record, in the light of the grounds urged in the appeal memorandum, this Court is unable to accept the arguments put forth on behalf of the appellant that plaintiff has discharged the burden in proving its case and made out a case that the plaintiff is entitled to recovery of sum of Rs.38,973.39 with interest at 24% compounded quarterly from the first defendant. Accordingly, points 1 to 3 are answered in the negative.

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Regarding point No.4 : In view of the finding of

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this Court on point Nos.1 to 3 as above, following Order is passed:

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NC: 2023:KHC:41385 RFA No. 21 of 2008

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ORDER

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(i) Appeal is merit less and is accordingly dismissed .

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(ii) No order as to costs.

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Sd/JUDGE

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KAV List No.: 1 Sl No.: 41

The Dhanalakshmi Bank Ltd. v. Sri H C Mahadevaiah

Case brief

What is this about?

What did the court decide?

The Dhanalakshmi Bank Ltd. v. Sri H C Mahadevaiah

Case brief

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What did the court decide?

What the court decided

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