Allowed

D. Jayanna v. Smt. Jothi Chandani

Karnataka HC3 Dec 2024RFA/1703/2014

Case brief

AI extract

What is this about?

First appeal against dismissal of a money-recovery suit based on a Rs.3.5 lakh hand loan repaid by four cheques. The court held the defendant failed to rebut the presumption arising from admitted signatures on the cheques and that non-declaration in income tax returns was no ground for disbelief, decreed the suit with interest.

What did the court decide?

Trial court judgment set aside; suit decreed; defendants directed to repay Rs.3,50,000 with 12% p.a. from date of filing till realisation, with costs.

D. Jayanna Vs Smt. Jothi Chandani — Cheque Dishonour | Karnataka HC (2024)

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NC: 2024:KHC:49831 RFA No. 1703 of 2014

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3^RD DAY OF DECEMBER, 2024

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BEFORE

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THE HON'BLE MR JUSTICE K.NATARAJAN REGULAR FIRST APPEAL NO. 1703 OF 2014 (MON-)

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BETWEEN:

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D. JAYANNA AGED ABOUT 53 YEARS, S/O DODDAIAH, R/AT NO.J-59, BELLIMUTT ROAD, COTTONPET, BANGALORE - 560 053.

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…APPELLANT

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(BY SRI. ANANTHA NARAYANA B N., ADVOCATE)

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AND:

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Digitally signed by VEDAVATHI A K Location: High Court of Karnataka

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SMT. JOTHI CHANDANI @ RAJKUMA CHANDANI, MAJOR, W/O SHRI. RAJU, NO.37, M.R. LANE, MANAVARTHIPET, BANGALORE - 560 053.

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…RESPONDENT (VIDE ORDER DATED: 03/12/24, NOTICE TO RESPONDENT IS HELD SUFFICIENT)

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THIS RFA IS FILED U/SEC.96 OF CPC, AGAINST THE JUDGMENT AND DECREE DATED:28.08.2014 PASSED IN O.S.10773/2006 ON THE FILE OF THE XXXI-ADDL. CITY CIVIL AND SESSIONS JUDGE, BENGALURU, DISMISSING THE SUIT FOR RECOVERY OF MONEY.

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THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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NC: 2024:KHC:49831 RFA No. 1703 of 2014

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CORAM: HON'BLE MR JUSTICE K.NATARAJAN

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ORAL JUDGMENT

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This appeal is filed by the appellant/plaintiff under Section 96 of CPC for setting aside the judgment of dismissal of the suit of the plaintiff passed by the XXXI Addl. City Civil and Sessions Judge, Bangalore in O.S.No.10773/2006 dated 28.08.2014.

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Heard the arguments of learned counsel for the

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appellant. The respondent is served and unrepresented.

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The ranks of the parties is retained for the sake of convenience.

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The case of the plaintiff before the trial court is that the plaintiff knows the defendant through her husband Sri.Raju who is running chit company business. The defendant approached the plaintiff for finance assistance and hand loan. Accordingly, the plaintiff paid ₹3,50,000 on 13/04/2005. The defendant undertaken to repay the same within one month at 1% interest per month, for repayment, the defendant also said

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to be issued 4 cheques on 13.05.2005 for ₹1,00,000/- each for

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3 cheques and ₹50,000/- in another cheque drawn by Deepak Sahakari Bank Limited. On 12.05.2005, the defendant

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approached personally and requested the plaintiff not to present the cheque to the bank and she will returned the amount within 3 months. Believing the version of the defendant, the plaintiff not presented the cheque. Subsequently, the defendant did not repay the amount. Hence, a Legal Notice was issued on 12.10.2006 and it was served. In spite of the same, the defendant failed to pay the amount. Hence, the plaintiff was constrained to file the suit before the trial court.

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The defendant, in pursuance of the summons appeared through the counsel and filed written statement by denying the averments made in the plaint as false and taken the contention that the defendant not at all borrowed any loan from the plaintiff. On the other hand, she has not issued any cheque by the plaintiff. However, she had issued cheque for a chit business conducted by Chandru and as security amount which she got on the bidding day. She had issued cheque and she has paid the entire amount of subscription. After the completion of the chit, she was not able to take back the cheques, but she do not know how the cheques came into hand

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of the plaintiff and by denying the relationship, prayed for

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dismissal of the suit.

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Based upon the pleadings, the Trial Court framed

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following 5 issues as under;

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(1) Whether the plaintiff proves that on 13.04.2005 he had given loan of Rs.3,50,000/- to the defendant for the sake of business of her husband?

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(2) Whether the plaintiff further proves that the cheques bearing No.292264, 292265, 292266 and 292263 dated 13.05.2005 for Rs.1,00,000/-, Rs.1,00,000/-, Rs.50,000/- and Rs.1,00,000/- came to be issued towards repayment?

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(3) Whether the plaintiff is entitled to interest at the rate of 2% per month?

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(4) Whether the defendant proves that court fee paid is insufficient?

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(5) What decree or order?

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On behalf of the plaintiff, plaintiff himself examined as PW1 and also examined one of the witnesses PW2. Got marked 8 documents. On behalf of the defendants, she herself examined as DW1, also examined one more witness as DW2, but no documents were produced. After hearing the arguments, the trial court, answered the issue Nos.1 to 4 in the

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negative and ultimately dismissed the suit of the plaintiff. Hence, the plaintiff is before this court.

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Learned counsel for the appellant contended that the Trial Court committed error in dismissing the suit by believing the evidence of defendant and disbelieved the evidence of PW1 which is not correct. The issuance of cheque was not disputed by the defendant, though she has taken contention, that it was given to one Chandru, but she has not examined the said Chandru or she do not know where is Chandra, and there is no police complaint filed against Chandru for not returning back the cheque. The notice was issued, which was not claimed by her, though it is served, but it is claimed, 'it is not served'. But has taken the contention, only denial. Even in the appeal, she has failed to appear before this court. The trial court only based upon non-filing of the Income Tax Returns and not disclosing the loan amount in the income tax returns disputed the evidence and dismissed the suit, which is not correct. Hence, prayed for setting aside the judgment. In support of his argument, has relied upon various judgment of Hon'ble Apex

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Court reported in (2008) 7 SCC 655 in case of Mallavarapu

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Kasivisweswara Rao Vs Thadikonda Ramulu Firm and

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Others. And the judgment of the co-ordinate bench of this

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court reported in 2022 (3) AKR 381 in case of M.S.Sathya

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Narayana Vs Lingaraje Urs.

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Having heard the arguments and perused the records

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the point that arises for my consideration are;

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(i) Whether the plaintiff proves that the defendant borrowed the loan ₹3,50,000/- and for the repayment, she has issued for 4 cheques with assurance to refund the loan with 1% interest p.m.?

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(ii) Whether the defendant proves that the cheques were given to one Chandru in the chit business and not to the plaintiff?

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(iii) Whether the judgment of the trial court calls for any interference?

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Having heard the arguments and perused the records which reveals, the case of the plaintiff is that the husband of the defendant known to him and she borrowed ₹3,50,000/with assurance to repay within one month, she has issued 4 cheques on the same date i.e, 13.05.2005 for ₹1,00,000/- each for 3 cheques and ₹50,000 for one cheque. In order to prove the case, the plaintiff himself examined as PW1 and to corroborate his evidence he also got marked Ex.P.1 to 4 are the

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cheques. The Ex.P.5 is business card of the defendant. Ex.P.6 is legal notice. Ex.P.7 is written statement and Ex.P.8 UCP receipt.

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On the other hand, except oral evidence of the defendant and another witness, there is no documents produced. On careful reading of the evidence of the plaintiff, where the defendant, though denied the issuance of cheque and borrowing the loan, taking contention that the cheques were given to one Chandru and the cheques were issued, at the time of joining the chit business.

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Learned counsel for the appellant has contended that as per the written statement, defendant has stated, she was the highest bidder in the chit and while receiving the chit amount as a security, the cheques were given to Chandru, but in the cross examination she has stated, the cheques were given to Chandru, when she joined the chit business. There is contradiction, in the pleadings, as well as evidence before the court and in the cross examination. On careful perusal of the written statement, where the defendant has taken contention only that she has given the cheque to Chandru in the chit

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business, she has not stated, what was the subscription per month? and what was the entire chit amount?, how many subscribers? and how much was the bid amount? and how much was received? there is nothing mentioned in the written statement, but in the cross examination it was elicited by the plaintiff's counsel that the chit business stated by her, that it was Rs.1 lakh and payable Rs. 5000/- each and she has not stated how much subscription she has paid and how much subscribers were present in the cheque business? If at all the amount was repaid by her to Chandru or Chandrashekar, whatever the name called, who is said to be a chit businessman, but she has not produced any single piece of paper before the court, to show the said Chandru was running the chit business and she was the Subscriber. Though DW2 was also examined by her, he also said to be a subscriber in the chit business, paying ₹2000/- per month for Rs.50,000/but he also not produced any documents to show that he was subscriber in the chit business. If at all any amount is received by Chandru, he could have received any chit or receipt for receiving the money. But no such details were produced by the defendants in the evidence, except for oral contention that

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cheques were issued to Chandru. It is pertinent to note that the defendant not denied her signature on the cheque leaf and also the handwritings in the cheques were not denied. Once the cheque is issued and she has admitted the cheque, the presumption available to the plaintiff. That apart, once the plaintiff is able to show the cheque was issued by her, where the signature was not denied then the burden shifts on the defendant to rebut the burden on discharging their burden to show the cheques were given to Chandu. Apart from that, if the cheques were not returned back to Chandru, the defendant could have filed complaint to the police, against him, in order to show ,he has cheated her by receiving cheque. Merely the cheuqes were dated on the same day i.e., on 13.5.2005, that itself is not a ground to disbelieve. Though the assurance was said to be given by the defendant within one month of repayment, but the cheques were not presented by the plaintiff before the bank, on the request of the defendant. It is not a case, where, the plaintiff presented the cheque and the cheques were dishonoured and he has filed any complaint under Section 200 Cr.P.C., for punishing the accused under Section 138 of NI Act.

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The Trial Court went on explaining that the contention of the plaintiff as improbable holding that the cheuqes might have been issued to Chandru, when the other witnesses not produced any documents by the defendant, except denial, even the evidence or improvement in the evidence without any pleadings, which is no consequences. On the other hand plaintiff is also examined PW2 where he said to be tenant under him, he was witness while borrowing the loan by the defendant. Therefore, disbelieving the evidence of PW1 and PW2 is not correct, without impeaching their evidence by the defendant, except denial. That apart, the Trial Court Judgment reveals the plaintiff not produced any Income Tax Returns and it was not declared in the Income Tax returns that he was not Income Tax Assessee. But in the pleadings by the defendant, there is no such contention taken by the defendant to say he was not disclosing the Income Tax Returns etc., even in the cross examination, that he has not declared the same in the Income Tax Returns before the Income Tax Authority. Therefore, any contention taken by the defendant during the cross examination or during the arguments, cannot be acceptable without any evidence on record.

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The coordinate bench of this court, has held in respect of non declaring of the income tax, the issuance of cheque and punishment under Section 138 of NI Act, cannot be exonerated, in the case of M.S.Sathya Narayana stated supra

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under para No.15, the coordinate bench has stated, merely the non declaration of the income for payment made to the defendant to the Income Tax Department that cannot be a ground to disbelieve the evidence of PW1 or issuance of cheques. Therefore, the Trial Court committed error in disbelieving the evidence of PW1, merely it was not declared before the Income Tax Authorities and even the capacity of the plaintiff was not challenged by the defendant, either in the written statement or in the cross examination. Therefore, I hold the plaintiff was successful in proving that the loan of ₹3,50,000/- received by the defendant and issued the cheque for repayment and at the request it was not presented by the plaintiff and suit came to be filed. Normally in the criminal case, where the complaint was filed under Section 138 of NI Act, the complainant is required to prove the case beyond all reasonable doubt, whereas in civil case, the decree of proof is lesser than the decree of proof in the criminal case, where it is

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based upon the preponderance of the probabilities and not beyond reasonable doubt. Such being the case, disbelieving the evidence of the PW1 and PW2 and issuance of the cheque cannot be doubted, it is not a criminal case but a civil case for recovery of the loan. The Hon'ble Supreme Court in case of

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Mallavarapu Kasivisweswara Rao's stated supra at para

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No.15 has held as under;

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" "No doubt in the income tax declaration, PW1 has not declared for having paid the money. But, in the cross-examination, PW1 admits that, he has not produced any documents to show that, he is paying income tax. But he admits that, he is an income tax assessee. But non filing of the document for having paid income tax, will not take away the case of the Complainant and the petitioner has to explain how the subject matter of Cheque had gone to the hands of the said Devraj Urs. and what made him to give the said Cheque. Per contra defence was taken in one breath that, Cheque was stolen and in another breath the said Devraj Urs had given the said Cheque in favour of this petitioner. No reply was given when the notice was issued to the petitioner and he would have given the reply, if no such transaction was taken place between the petitioner and the Complainant and after thought only in the cross-examination inconsistent defence was taken and nothing is averred in the chief defence regarding loss of Cheque. It is only stated that Devraj urs had taken away several cheques belonging to him and no doubt, the wife of the petitioner had given the complainat in terms of Ex.P.D2 but she has not been examined before the Trial Court and both the Court have taken note of that if she had been examined before the Trial Court an opportunity was given to the complainant to testify the documents of Ex.D2"

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In view of the judgment of the Hon'ble Supreme Court, where the plaintiff able to discharge his initial burden, it is the defendant to rebut the same by leading evidence by documentary or any other plausible evidence. Mere denial and oral evidence cannot be acceptable . Therefore, the defendant failed to prove the cheques were issued to Chandru but not the plaintiff. Hence, answered the point No.2 in negative and in view of the above said reasons, the judgment of the Trial Court where disbelieved the evidence, only on the fraud, it was not declared before the Income Tax Returns, is not sufficient to disbelieve the evidence and discard the evidence of PW1. Therefore the judgment of the Trial Court deserves to be set aside. Apart from that, the respondent also not contested the appeal before this court. Hence, the appeal deserved to be allowed.

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This appeal is allowed .

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The judgment of the Trial Court dismissing the suit by the XXXI Addl. City Civil and Sessions Judge, Bangalore in O.S.No.10773/2006 dated 28.08.2014, is hereby set aside.

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The suit of the plaintiff is hereby decreed.

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