Allowed

Ravi N v. H a Garigeppa

Karnataka HC15 Jan 2025RFA/273/2021

Case brief

AI extract

What is this about?

The High Court allowed the appeal and set aside the lower court's decree for recovery of Rs.1,50,000. The court held the plaintiff failed to prove the loan amount due to limited evidence, unreferenced disputed handwriting, and a recorded admission revealing a much lower debt and prodigious interest, effectively barring the suit on limitation grounds.

What did the court decide?

The judgment and decree dated 06.07.2020 in O.S.No.6957/2015 are set aside, and the suit is dismissed.

Ravi N Vs H a Garigeppa — Karnataka HC (2025) — LawSathi Research

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1 - NC: 2025:KHC:1429 RFA No. 273 of 2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 15^TH DAY OF JANUARY, 2025

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BEFORE

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THE HON'BLE MR JUSTICE K.NATARAJAN

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REGULAR FIRST APPEAL NO. 273 OF 2021 (MON)

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BETWEEN:

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RAVI N., AGED ABOUT 53 YEARS, S/O DORAISWAMY, R/AT NO.257, 1ST MAIN ROAD, CHOWDESHWARINAGAR, NEAR KEMPE GOWDA, LAYOUT BUS-STOP, BENGALURU - 560 058.

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…APPELLANT

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(BY SRI. GOPALA H M.,ADVOCATE)

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AND:

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Digitally signed by KAVYA R Location: High Court of Karnataka

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H. A. GARIGEPPA, S/O LATE HANUMNATHA REDDY, NO.41, SOUTH END ROAD, SHESHADRIPURAM, BENGALURU - 560 020.

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(BY SRI. RAVI SHANKAR.,ADVOCATE)

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…RESPONDENT

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THIS RFA IS FILED UNDER SECTION 96 OF THE CPC, AGAINST THE JUDGMENT AND DECREE DATED 06.07.2020 PASSED IN O.S.NO.6957/2015 ON THE FILE OF THE XXIX ADDITIONAL CITY CIVIL JUDGE, BENGALURU CITY, DECREEING THE SUIT FOR RECOVERY OF MONEY.

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

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NC: 2025:KHC:1429 RFA No. 273 of 2021

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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/defendant under Section 96 of CPC for setting aside the judgment and decree passed in O.S.No.6957/2015 dated 06.07.2020 by the XXIX Additional City Civil and Sessions Judge, Bengaluru (hereinafter referred to as the 'Trial Court') for having decreed the suit filed by the respondent/plaintiff directing the appellant/defendant to pay a sum of Rs.1,50,000/- with 6% interest per annum.

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Heard the learned counsel for the appellant and

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learned counsel for the respondent.

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For the sake of convenience, the parties in this appeal shall be referred to in terms of their status and ranking before the trial Court.

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The case of the plaintiff before the trial Court is that he has filed the suit for recovery of money for Rs.2,02,000/with interest at the rate of 12% per annum. It is alleged that both plaintiff and defendant were known to each other for more than 25 years. The defendant borrowed a sum of Rs.1,50,000/as loan from the plaintiff on 10.08.2012, for his domestic use

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and he has executed an On Demand Promissory Note and promised to repay the same with interest at 1% p.m., within 6 months from the date of borrowal. The defendant also issued a cheque for Rs.1,50,000/-, dated 01.03.2013, drawn on the Karnataka State Co-operative Bank Ltd., RPC Layout Branch, Bengaluru. The cheque was presented for collection, which was dishonoured with a remark "Account Closed". The plaintiff has intimated the defendant about the dishonour of the cheque and demanded the amount. But, the defendant has neglected to return the said amount. Hence, he has filed a private complaint against the defendant for the offence punishable under Section 138 of the Negotiable Instrument Act, in CC No.21865/2013. The plaintiff also issued another notice to the defendant on 15.07.2015. But, the defendant has given an untenable reply. Hence, he has filed the suit.

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The defendant has appeared in pursuance of summons and filed written statement contending that the defendant had borrowed Rs.60,000/- in the year 2002, and plaintiff had insisted him to pay interest at 3% p.m., on the loan amount. At the time of borrowing loan, the plaintiff had obtained two signed blank cheques drawn on Karnataka State

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Co-operative Apex Bank Ltd., and also signed the blank On Demand Promissory Note along with the receipt as collateral security. However, the defendant has repaid the loan of Rs.30,000/- by cash on 23.10.2002, out of the principal loan amount and also paid another sum of Rs.10,000/- on 07.01.2004, totally Rs.40,000/- has been paid, the remaining amount payable by the defendant is only Rs.20,000/-. But, the defendant never borrowed loan of Rs.1,50,000/- from the plaintiff. The plaintiff is running Money Lending Business without any licence and he has also filed case before the Magistrate under Section 138 of the Negotiable Instrument Act. Hence, prayed for dismissing the suit.

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On the basis of the pleadings, the trial Court framed

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the following issues, which read as under:

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"1. Whether the plaintiff proves that the defendant availed the loan of Rs. 1,50,000/- on 10.08.2012?

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2. Whether the plaintiff proves that arrears of the defendant is Rs.2.02,500/- on the date of suit?

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3. Whether the defendant proves that the plaintiff is doing money lending business and he has availed loan of rupees only 60,000/-?

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4. Whether the plaintiff is entitled for decree as prayed in the suit?

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5. What order or decree?"

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To prove the case, plaintiff examined himself as PW.1 and also examined one more witness as PW.2 and got marked 12 documents as Exs.P1 to Ex.P12.

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In order to prove the case of the defendant, he himself examined as DW.1 and got marked 19 documents as Exs.D1 to Ex.D19.

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The Trial Court after hearing the arguments, answered issue No.1 in the affirmative, issue No.2 in partly affirmative, issue No.3 in affirmative in favour of the defendant and issue No.4 in favour of plaintiff and decreed the suit of the plaintiff directing the defendant to pay a sum of Rs.1,50,000/with interest at 6% p.a.

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Being aggrieved by the same, the defendant filed this appeal.

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Learned counsel for the appellant has contended that the Trial Court has committed an error in decreeing the suit of the plaintiff. The defendant proved that, he has never borrowed sum of Rs.1,50,000/- and he has borrowed only sum of Rs.60,000/- and repaid sum of Rs.40,000/-, as per the

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Exs.D.1 and D.2., which was admitted by the Trial Court and answered issue No.3 in favour of the defendant. It is also contended that the plaintiff was in the habit of lending money for exorbitant interest and obtaining the signatures, blank cheques and filing the cases under Section 138 of the Negotiable Instrument Act, for the huge amount and settling the same for meager amounts that was alleged in the crossexamination of PW.1 and he has admitted the same. In spite of the same, the Trial Court decreed the suit, which is not correct.

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Learned counsel also contended that during the pendency of the case filed under Section 138 of the Negotiable Instrument Act, the plaintiff himself came to the house of the defendant, at that time, one Nagaraj was also there during the conversation. The plaintiff admitted that the defendant has to pay only Rs.20,000/- and he has given Rs.40,000/- as interest, the same was recorded in the mobile phone, which is already marked in the Trial Court. The same was not properly appreciated by the Trial Court and hence, prayed for setting aside the judgment.

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Per contra, learned counsel for the respondent supported the judgment of the Trial Court and contended that, if at all, the plaintiff paid any loan to the third party, they are settled in those cases, that has nothing to do with the case of the defendant. Even the defendant could have settled the case in the Trial Court or in the Magistrate Court but he has not settled. The signature in the documents i.e., Ex.P1 has been proved by examining PW.1 and PW.2, which clearly indicates he has borrowed sum of Rs.1,50,000/-. Though case has ended in acquittal but the amount borrowed by the defendant has not repaid by him. There was some other transaction between them in the year 2002 that amount was repaid by him. This transaction was in the year 2012, the same was not paid by the defendant. Such being the case, the Trial Court rightly decreed the suit of the plaintiff and there is nothing to interfere in the judgment of the Trial Court. Hence, prayed for dismissal of the appeal.

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Having heard the arguments and perused the material on record, following points would arises for consideration:

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i) Whether the plaintiff proves that the defendant borrowed the loan in sum of Rs.1,50,000/- and executed On Demand Promissory Note?

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ii) Whether the defendant proves that he has not borrowed the loan in a sum of Rs.1,50,000/and he has borrowed only sum of Rs.60,000/- and repaid sum of Rs.40,000/- and balance is only Rs.20,000/-?

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iii) Whether the Trial Court committed an error in answering issue No.3 in favour of defendant but decreed the suit of the plaintiff and called for interference?

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On perusal of the records, the case of the plaintiff is that both of them are known to each other and he has borrowed loan in a sum of Rs.1,50,000/- in August 2012 and he has also executed the On Demand Promissory Note as Ex.P.1 and the same was paid in the presence of PW.2. The PW.2 also given evidence in support of the plaintiff before the Trial Court. The case of the defendant is that he has not borrowed sum of Rs.1,50,000/- but he admits that he has borrowed only sum of Rs.60,000/- in the year 2002 and paid sum of Rs.30,000/- on 23.10.2002 and Rs.10,000/- on 07.01.2004. Ex.D.1 and Ex.D.2

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were marked during the cross examination of PW.1 by the admission made by the appellant. However, the plaintiff has stated that there is no other transaction between them, except only one transaction in the first cross-examination made by the defendant's counsel and subsequently, these documents were marked as Exs.D.1 and D.2., as stated, there was some other transaction between them. There is contradictory in the evidence of PW.1. The plaintiff proves whether there was continuous transaction between them or only one transaction.

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It is also admitted fact that the plaintiff also filed a case under Section 138 of Negotiable Instrument Act, against the defendant, which ended in acquittal and there is an appeal filed by him before the High Court challenging the acquittal, where the judgment of the Magistrate reveals that there is date of borrowing loan or amount paid to the accused person was not been established and the account was closed by the banker and also notice was not served on the accused/defendant. Based upon these grounds, the Magistrate dismissed the complaint by acquitting the defendant.

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During pendency of the same, the plaintiff issued one more notice to the defendant and by using the On Demand Promissory Note, filed suit against the defendant by showing Rs.1,50,000/-. Even in the cross-examination of PW.1 and PW.2, the handwriting in the consideration receipt and On Demand Promissory Note has been disputed by the defendant as it is not his own handwriting it is filled up subsequently. Throughout, the case of the defendant is that the 'On Demand Promissory Note' has been obtained by the plaintiff as a security along with the blank cheque issued by him. The defendant has signed two blank cheques which have been issued to the plaintiff but he has utilised only one cheque. Another cheque is not presented before the bank. It has come in the cross-examination of PW.1. The defendant was also able to show that the plaintiff is a money lender and he is in the habit of obtaining the On Demand Promissory Note as well as blank cheques and used to file criminal cases against the borrowers and settle in the Magistrate Court during the LokAdalath.

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In order to support the case of the defendant, he has given evidence in support of the defence. He has also

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produced and marked Exs.D.3 to D.14. PW.1 the plaintiff, admitted regarding the filing of the criminal cases against various persons and settling down in the Lok-Adalath for lesser amounts.

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On perusal of Ex.D.3, a criminal case filed by the one Sri.H A Gerigappa, against one Sri.Jayanna in CC.No.21852/2013 for a sum of Rs.1,25,000/- and settled for Rs.80,000/- as per the order sheet Ex.D.3. Ex.D.4 is the private complaint filed by the plaintiff. Likewise, in Ex.D.5, the order sheet goes to show that he has settled down the dispute and criminal case with one Smt. Sumana for sum of Rs.60,000/- and as per Ex.D.6 he has filed complaint for a sum of Rs.1,00,000/- under Section 138 of the Negotiable Instrument Act. Ex.D.7, i.e., order sheet in CC.No.21857/2013, filed against one Smt.Chandrakala, where he has got settled for sum of Rs.1,00,000/- in the Lok-Adalath. Ex.D.8 is the complaint filed under Section 138 of the Negotiable Instrument Act for sum of Rs.1,50,000/-. In another case in CC.No.21862/2013 filed against one Sri.Fayaz Ahmed, for sum Rs.2,00,000/cheque amount but it was settled for Rs.1,50,000/-, as per Ex.D.9 and Ex.D.10. In another case in

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CC.No.21853/2013 filed against one Sri.Shankarappa for having settled for Rs.65,000/- for the cheque amount of Rs.1,00,000/in Ex.D.12. In another case in

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CC.No.21854/2015 filed against one Vinodh, for sum of Rs.25,000/- cheque amount and Ex.D.14 that case was pending and was not settled.

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On perusal of these documents and admission made by PW.1 in his cross examination, it reveals that he is in the habit of filing the cases for larger amount and settling the dispute for the lesser amount or meager amount as per the mutual understanding between them. The defence taken by the defendant probabilises the case of the defendant that plaintiff is in the habit of obtaining the signatures and filing the cases against various persons and filing the complaint to the Magistrate and settling the same for the lesser amount. It appears that the plaintiff is in the habit of lending money to various persons without any licence and recover the same by obtaining the signatures on demand notes, cheques and filing the complaint and settling the same and recovering the amounts from various persons.

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During the pendency of the criminal case filed by the plaintiff against the defendant for the cheque amount, where the notice has been issued and Non Billable Warrant has been issued against him, at that time, when the plaintiff contacted the defendant through phone and plaintiff went to the house of the defendant where there was a conversation between them. During the conversation, one Nagaraj was also present at that time. Nagaraj was recorded the conversation through his mobile phone and the transcription is also produced and marked as Ex.D.17.

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On perusal of the conversation between them, the defendant has stated that even though he has repaid the amount, balance amount only payable is Rs.20,000/- but he has demanded Rs.40,000/- as interest for that and he has given justification that he has paid the amount long back and he has admitted that he has filed a case for Rs.1,50,000/- and also stats that for Rs.40,000/- for 5 years interest, it becomes Rs.15,000/- and Rs.20,000/- p.a.

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The conversation between them shows that the amount payable by the defendant is not Rs.1,50,000/- but it is

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only for Rs.40,000/- and for Rs.40,000/-, he was demanding more amount as interest. Even in the conversation, he has mentioned for one year, he has demanded Rs.14,000/- as interest for 5 years and he has demanded Rs.1,00,000/- as interest and Rs.15,000/- said to be spent in the Court expenses. The said document especially the conversation between them has been produced and marked before the Court. Of course it is in the Telugu language and same was translated to Kannada language. Ex.D.18 is a Certificate issued by one Sri.Mahendra B, in respect of the conversation which has been converted into pendrive (then pendrive and Compact Disc (CD) is also produced and marked as Ex.D15 and Ex.D.16). The said conversation in Ex.D.15 and its transcription in Ex.D.17 have not been denied by the plaintiff and even he has not sought for referring the same to the Forensic Science Laboratory (FSL). Exs.D.15, D.16 and D.17 clearly shows that there is no amount of Rs.1,50,000/- balance payable by the defendant to the plaintiff and transaction was Rs.40,000/- was already paid and balance payment is only Rs.20,000/- and even if it is considered as interest as per their conversation,

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Rs.40,000/- is payable by the defendant but filed the suit for Rs.1,50,000/-.

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It appears that the plaintiff filed a false case and he has not appeared before the Court with clean hands and used the Court as tool for recovery of the amount for illegal gains. Therefore, I hold that the plaintiff failed to prove that defendant has borrowed sum of Rs.1,50,000/- from the plaintiff and same was executed in EX.P.1. Even the defendant has denied Ex.P.1. The same was not referred to the FSL for comparing the handwriting, to the handwriting experts for getting opinion. Such being the case, the records clearly reveal that the defendant is not payable Rs.1,50,000/- as contended in the suit. Hence, the issue No.1 is answered as negative. The Trial Court without proper evidence on record, wrongly held as affirmative.

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That apart, once the issue No.3 is held that the defendant is able to show that he has borrowed only sum of Rs.60,000/- and paid sum of Rs.40,000/-, balance payable is only Rs.20,000/-, the same was not properly appreciated by the Trial Court. Even though the issue No.3 was in favour of the

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defendant, but in view of the findings on issue No.1 that plaintiff has failed to prove that he has paid sum of Rs.1,50,000/- to the defendant and he has executed On Demand Promissory Note as Ex.P.1., such being the case, the question of recovering sum of Rs.1,50,000/- together with interest at 12% p.a. and 6% p.a. does not arise. The Trial court without appreciating the material evidence on record, simply decreed the suit, which is not correct. Therefore, when the plaintiff has approached the Court, he should come with clean hands and he cannot suppress the material facts and even though there was a finding against him in the Criminal Court where the date of payment was not proved by the complainant in the said case. Such being the case, taking consideration that amount was paid in the year 2012 cannot be acceptable. The amount should have been paid only in the year 2002 and the case was filed in the year 2015 which is barred by limitation. Such being the case, the question of decreeing the suit is not correct. Hence, the judgment of the Trial Court requires interference.

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Accordingly, I pass the following:

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:: ORDER ::

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i. The appeal is allowed.

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ii. The judgment and decree passed by the XXIX Additional City Civil and Sessions Judge, Bengaluru dated 06.07.2020 in O.S.No.6957/2015 is hereby set aside.

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iii. The suit of the plaintiff is dismissed.

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iv. Any amount deposited by appellant is refunded to the appellant.

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v. No order for cost.

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Sd/(K.NATARAJAN) JUDGE

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AMA List No.: 1 Sl No.: 38

Ravi N v. H a Garigeppa

Case brief

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Ravi N v. H a Garigeppa

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