Dismissed

Sri N R Prakash v. Sri G C Onkarappa

Karnataka HC22 Sept 2023RSA/158/2014

Case brief

AI extract

What is this about?

In a second appeal under Section 100 of CPC, the High Court of Karnataka dismissed the appeal at the admission stage, holding that no substantial question of law existed. The court found that the defendant failed to rebut the presumption under Section 118 of the Negotiable Instruments Act and did not file for handwriting verification.

What did the court decide?

The appeal was dismissed at the admission stage; no substantial question of law was made out.

Sri N R Prakash Vs Sri G C Onkarappa — Contract and Commercial Disputes | Karnataka HC (2023)

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1 - NC: 2023:KHC:34473 RSA No. 158 of 2014

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 22^ND DAY OF SEPTEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE PRADEEP SINGH YERUR REGULAR SECOND APPEAL NO. 158 OF 2014 (MON)

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BETWEEN:

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SRI. N.R. PRAKASH, S/O. N.H. RUDRAPPA, AGED ABOUT 43 YEARS, WORKING AS ASSISTANT TEACHER, HPBS, THANIGEHALLI, HIREKANDAWADI, R/O HIREKENDAVADI VILLAGE, B-DURGA HOBLI, HOLALKERE TALUK, CHITRADURGA DISTRICT - 577 526.

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…APPELLANT (BY SRI. K.B. CHANDRASHEKAR SWAMY, ADVOCATE FOR SRI. PARAMESHWARAPPA T., ADVOCATE)

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AND:

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Digitally signed by CHAITHRA P Location: High Court of Karnataka

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SRI. G.C. ONKARAPPA, S/O. G. CHANNABASAPPA, AGED ABOUT 50 YEARS, WORKING AS CRAFT TEACHER, GOVERNMENT HIGH SCHOOL, KODAGAVALLIHATTY, R/O HIREKENDAVADI VILLAGE, B-DURGA HOBLI, HOLALKERE TALUK, CHITRADURGA DISTRICT - 577 526.

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…RESPONDENT (BY SRI. D.S. SHIVANAND, ADVOCATE FOR SRI. M.V. HIREMATH, ADVOCATE)

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THIS REGULAR SECOND APPEAL IS FILED UNDER SECTION 100 OF CIVIL PROCEDURE CODE PRAYING TO SET

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NC: 2023:KHC:34473 RSA No. 158 of 2014

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ASIDE THE JUDGMENT AND DECREE DATED 05.11.2013 PASSED IN R.A.NO.05/2013 ON THE FILE OF THE SENIOR CIVIL JUDGE AT HOLALKERE, WHEREIN THE JUDGMENT AND DECREE DATED 30.11.2009 PASSED IN O.S.NO.57/2008 ON THE FILE OF THE ADDITIONAL CIVIL JUDGE (JN.DN.) AT HOLALKERE.

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

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JUDGMENT

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This appeal is preferred by the defendant challenging the judgment and decree dated 05.11.2013 passed by the Senior Civil Judge and Additional MACT, Holalkere in R.A.No.2/2010, which confirmed the judgment and decree dated 30.11.2009 passed by the Additional Civil Judge (Jr.Dn.), Holalkere in O.S.No.57/2008.

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Parties shall be referred to as per their status before

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the trial Court.

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Brief facts of the case are as under:

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The plaintiff filed a suit against the defendant for recovery

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of sum of Rs.89,400/- together with interest. The plaintiff is well known to the defendant since long time and both are working in the Education department. The defendant approached him for financial assistance and borrowed a sum of Rs.70,000/- on 02.11.2006 promising to repay the same with

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3 - NC: 2023:KHC:34473 RSA No. 158 of 2014

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interest at the rate of 18% per annum within a short period. In pursuance to this, the defendant executed on demand promissory note and consideration receipts. But, the defendant did not take any steps to repay the loan amount with interest, despite several request and reminders made by the plaintiff. The plaintiff got issued legal notice dated 17.12.2007 calling upon the defendant to repay the loan amount along with interest @ 18% p.a. The legal notice is duly served on the defendant. Instead of complying the terms of notice, the defendant got issued untenable reply. Hence, the plaintiff was constrained to file the suit for recovery of the loan amount given to the defendant.

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3.1 The defendant filed written statement specifically denying and disputing the entire case of the plaintiff. The defendant admitted that he was working as a teacher and also looking after the landed property and getting lakhs of rupees per annum and he was a respectable person in the village. There was no need for him to borrow any loan amount from the plaintiff as he was having sufficient source of income. Apart from these statements, the entire averments made in the plaint was denied by the defendant to be concocted and fabricated.

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NC: 2023:KHC:34473 RSA No. 158 of 2014

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3.2 Based on the pleadings, the trial Court framed the

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following issues for consideration:

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"1) ªÁ¢AiÀÄªÀgÀÄ, ¥ÀæwªÁ¢AiÀÄªÀgÀÄ vÀ«ÄäAzÀ ¢£ÁAPÀ: 2-11-2006 gÀAzÀÄ

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gÀÆ.70,000-00 UÀ¼À£ÀÄß ¸Á®ªÁV ¥ÀqÉzÀÄ ¥ÀvÀæ §gÉzÀÄPÉÆnÖgÀÄªÀÅzÁV gÀÄdÄªÁvÀÄ¥Àr¹zÁÝgÉAiÉÄÃ?

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ªÁ¢AiÀÄªÀgÀÄ ªÀÄÄAzÀÄªÀgÉzÀÄ ¥ÀæwªÁ¢AiÀÄªÀgÀÄ »ÃUÉ ¥ÀqÉzÀ ¸Á®PÉÌ CªÀgÀÄ ¸Á°AiÀiÁ£À ±ÉÃPÀqÁ gÀÆ.18 gÀAvÉ §rØ PÉÆqÀÄªÀÅzÁV M¦àgÀÄªÀÅzÁV gÀÄdÄªÁvÀÄ ¥Àr¹zÁÝgÉAiÉÄÃ?

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ªÁ¢AiÀÄªÀgÀÄ ºÉÃ½gÀÄªÀAvÉ ¥ÀæwªÁ¢AiÀÄªÀgÀÄ ¸ÀÄ¹ÛzÁgÀgÁVgÀÄªÀÅzÁV gÀÄdÄªÁvÀÄ¥Àr¹zÁÝgÉAiÉÄÃ?

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¥ÀæwªÁ¢AiÀÄªÀgÀÄ ªÁ¢AiÀÄ zÁªÁ ¥ÉÆæÃ£ÉÆÃl£ÀÄß ¸ÀÈ¶Ö¹gÀÄªÀÅzÁV gÀÄdÄªÁvÀÄ¥Àr¸ÀÄvÁÛgÉAiÉÄ?

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ªÁ¢AiÀÄªÀgÀÄ zÁªÉAiÀÄ°è PÉÃ½gÀÄªÀ ªÉÆ§®VUÉ rQæ ¥ÀqÉAiÀÄ®Ä CºÀðgÁVgÀÄªÀgÉÃ?

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K£ÀÄ rQæ CxÀªÁ DzÉÃ±À?"

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3.3 In order to substantiate the issues and establish the

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case, the plaintiff got examined himself as PW.1 and two other witnesses as PWs.2 and 3 and got marked Exs.P1 to P6 on behalf of the plaintiff. On the other hand, the defendant got examined himself as DW.1 and got marked Exs.D1 to D12.

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3.4 On the basis of the materials placed on record, both oral and documentary and having heard learned counsel for both parties, the trial Court decreed the suit of the plaintiff and

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5 - NC: 2023:KHC:34473 RSA No. 158 of 2014

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directed the defendant to pay amount of Rs.89,400/- to the plaintiff with interest @ 6% p.a. from the decree till realisation.

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3.5 Being aggrieved and dissatisfied with the judgment and decree passed by the trial Court, the defendant preferred an appeal before the first Appellate Court in R.A.No.2/2010.

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3.6 On appearance of the respondent in the first appeal,

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the first Appellate Court after hearing the contentions of both counsels on record and after re-appreciation and re-analisation of the entire materials placed on record, both oral and

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documentary, formulated following points for consideration:

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"1. Whether the appellant is able to show that appreciation of evidence by the learned trial judge, with regard to proof of execution of on demand pronote is not proper and cannot be sustained?

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2. Whether the interference of this court is absolutely necessary?

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3. What order/decree?"

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3.7 After hearing learned counsel for both parties and after re-analysing the materials evidence on record and thoughtful appreciation of the same, the first Appellate Court did not find merit in the contention put-forth by learned counsel

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NC: 2023:KHC:34473 RSA No. 158 of 2014

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for defendant and accordingly, dismissed the appeal. Consequently, confirmed the judgment and decree passed by learned trial Judge in O.S.No.57/2008.

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3.8 Being aggrieved by the concurrent finding rendered by both Courts, the trial Court and the first Appellate Court, the defendant is before this Court in second appeal questioning the legality and correctness of the judgment passed by both Courts on the ground that the judgment and decree passed by both Courts is perverse, illegal and arbitrary and has raised substantial question of law to be considered by this Court and consequently, set-aside the judgment and decree passed by both Courts.

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It is the vehement contention of learned counsel for appellant-defendant that the entire approach of both Courts is manifestly illegal, perverse, arbitrary and one sided and calls for interference at the hands of this Court by considering the substantial question of law. It is further contended by learned counsel for defendant that the trial Court as well as the first Appellate Court have not considered the factum of pleadings and evidence adduced by the defendant that he was working as a teacher and he was gainfully employed and having sufficient

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source of income by agricultural sources. Hence, there was absolutely no necessity or requirement for the defendant to avail any loan from the plaintiff. It is also contended by learned counsel for defendant that PW.1 has admitted that there is difference of signatures of the defendant found on Exs.P1(a) and P6(a) i.e. promissory note and receipt and even PW.2 has admitted that there is a difference between the signatures found on Exs.P1(a) and P6(a) and on the written statement, which is being conveniently ignored and not taken into consideration by both the Courts. It is further contended that both Courts have failed to take into consideration that primarily, the burden of proof lies on the plaintiff to establish that the defendant had borrowed the money and the same has not been proved cogently by the plaintiff to the satisfaction of both Courts. On these grounds, learned counsel for appellantdefendant contends that the judgment and decree passed by both Courts is perverse, illegal and contrary to the materials placed on record and therefore, the substantial question of law arises for consideration before this Court.

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4.1 Learned counsel for appellant-defendant, in support of his case, relied on following decisions:

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8 - NC: 2023:KHC:34473 RSA No. 158 of 2014

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i) Sri Devaraj vs. Smt.Dayarathini and Others, ILR 2020 KAr 2447;

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ii) Rajinder Bajaj v. Indian Tanning Industries and Ors, AIR 2008 Delhi 62;

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Learned counsel for respondent-plaintiff submits that there is no perversity or illegality committed by the trial Court as well as the first Appellate Court. The materials placed on record, both oral and documentary has been elaborately considered by both Courts and fair opportunity has been given to the respondent to rebut the presumption in law under the Negotiable Instruments Act, 1881 (for short, 'the N.I.Act'). On these grounds, he seeks for dismissal of the appeal.

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This matter is taken up for admission and both learned counsels are heard at length. On perusal of the materials placed on record, it is not in dispute that the plaintiff has got produced Exs.P1 to P6 and got examined PWs.1 to 3 in his favour and established that Exs.P1 and P6 being the promissory note and the acknowledgement receipt and Exs.P1(a) and P(6)(a) are the signatures of the defendant thereon respectively. Though the defendant has disputed the signatures on the promissory note and PW.1 has admitted in the crossexamination that there is difference between the signatures of

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the defendant found on Exs.P1(a) and P6(a) and PW.2 has admitted that there is difference between the signatures found on EXs.P1(a) and P6(a) and on the written statement, the trial Court and the first Appellate Court have taken into consideration of this aspect of fact and after hearing both sides, it has come to the conclusion that the defendant has not made out any ground to prove that the signatures found on Exs.P1(a) and P6(a) are not his signatures. The trial Court and the first Appellate Court have also taken into consideration the evidence of PWs.2 and 3, who have identified their signatures on Exs.P1 and P6. The trial Court considering the aspect with regard to the signatures being different in Exs.P1 and P6 with that of the written statement, given a finding of fact with regard to signatures having been changed in the written statement. The contention put-forth by learned counsel for defendant with regard to the defendant having sufficient source of income as a teacher and from agricultural sources, there was no requirement for defendant to take any loan. However, the defendant has not established the same by producing any material documents on record.

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Section 20 of the N.I.Act reads as under:

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NC: 2023:KHC:34473 RSA No. 158 of 2014

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"20. Inchoate stamped instruments.─Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount; provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder."

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Section 118 of the N.I. Act lays a presumption in favour of the holder of the negotiable instrument and draws a presumption that until the contrary is proved, it would be in favour of holder of the negotiable instrument with regard to instrument which includes the promissory note.

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"118. Presumptions as to negotiable instruments.─Until the contrary is proved, the following presumptions shall be made:─

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NC: 2023:KHC:34473 RSA No. 158 of 2014

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(a) of consideration─that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;

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(b) as to date─that every negotiable instrument bearing a date was made or drawn on such date;

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(c) as to time of acceptance─that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;

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(d) as to time of transfer─that every transfer of a negotiable instrument was made before its maturity;

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(e) as to order of indorsements─that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;

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(f) as to stamps─that a lost promissory note, bill of exchange or cheque was duly stamped;

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(g) that holder is a holder in due course─that the holder of a negotiable instrument is a holder in due course:

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Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."

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Therefore, under the provisions of Sections 20 and 118 of the N.I. Act, when a negotiable instrument is issued or executed in favour of the plaintiff herein, it becomes the duty of the defendant to rebut the presumption already enshrined in the Act in favour of the holder of the promissory note. In the present case on hand, rebuttal of presumption in favour of the plaintiff has not been established or proved to hold otherwise, which is in favour of the plaintiff in view of the above provisions of law as stated supra.

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The trial Court and the first Appellate Court have decided the matter exhaustively. After giving a reasonable

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NC: 2023:KHC:34473 RSA No. 158 of 2014

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opportunity to both parties, the trial Court has come to the conclusion that the plaintiff has made out a valid case on the basis of Exs.P1 and P6 and accordingly, decreed the suit and the same has been confirmed by the first Appellate Court.

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In the second appeal under Section 100 of CPC, the appellant-defendant would have to make out an extraordinary case to establish that both the trial Court and the first Appellate Court have not appreciated and considered the evidence on record, both oral and documentary and have committed perversity, illegality and causing gross miscarriage of justice to him. The presumption enshrined in the statute in favour of the plaintiff of the negotiable instrument (promissory note) has been held in favour of the plaintiff and the onus is on the defendant to disprove the presumption existing in law in favour of the plaintiff, which has not been done. The defendant has also not made any attempt to file an application before the trial Court and the first Appellate Court to refer the matter for handwriting expert to disprove the signatures found on Exs.P1 and P6. This being the circumstances, I do not find any illegality or perversity or non-consideration of the material evidence on record while passing the impugned judgment and

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NC: 2023:KHC:34473 RSA No. 158 of 2014

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decree by both Courts. Therefore, the judgment and decree passed by the trial Court and confirmation of the same made by the first Appellate Court does not call for any interference and so also, the appellant-defendant has not made out any ground to show that any substantial question of law arises for consideration, which has been ignored or negatived or not considered by both Courts.

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In view of the above discussions, I proceed to pass the following:

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ORDER

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The appeal is dismissed , at the stage of admission itself, as no substantial question of law is made-out for consideration.

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In view of dismissal of the appeal, pending interlocutory application, if any, would not survive for consideration and the same pales into insignificance.

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CPN/LB

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Sd/JUDGE

Sri N R Prakash v. Sri G C Onkarappa

Case brief

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Sri N R Prakash v. Sri G C Onkarappa

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