Dismissed

Palakurthi Ramakrishna Rao v. Durga Rice and Oil Mill Contractors Company, Machlipatnam

Telangana HC9 Jul 2013AS/2759/1999

Case brief

AI extract

What is this about?

In an appeal against dismissal of a suit for recovery of money on a promissory note, the Court held that the appellant failed to prove the note's execution due to lack of witness evidence and acknowledgement documents, and the suit was barred by limitation.

What did the court decide?

The appeal was dismissed with no order as to costs.

Palakurthi Ramakrishna Rao Vs Durga Rice… — Contract and Commercial Disputes | Telangana HC (2013)

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THE HON’BLE SRI JUSTICE L. NARASIMHA REDDY AND THE HON’BLE SRI JUSTICE S.V. BHATT

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A.S.No.2759 of 1999

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JUDGMENT: (per the Hon’ble Sri Justice L.Narasimha Reddy)

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The appellant filed O.S.No.6 of 1991 in the Court of the Senior Civil Judge, Machilipatnam against the respondents for recovery of a sum of Rs.4,59,500/- on the strength of a promissory note, dated 16.12.1984. The 1^st respondent is a firm, respondents 2 and 3 are its managing partners and remaining respondents are either the other partners of the firm or the legal representatives of the deceased parties. The appellant pleaded that the 1^st respondent used to obtain loans from him from time to time for its necessities and the loan transaction covered by the promissory note, dated 16.12.1984, is one such. He stated that in spite of several demands, the respondents did not pay the amount.

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All the respondents, except the 4^th respondent, remained ex parte. The 4^th respondent, who is a partner as well as accountant of the firm, filed a written statement. He pleaded that the managing partners i.e. respondents 2 and 3 colluded with the appellant to bring about fictitious transaction by receiving illegal gratification and that the so-called promissory note is not supported by any consideration. He further pleaded that the suit is barred by limitation. Another plea was that any amount exceeding Rs.20,000/- is required to be paid by way of a cheque and the plaint is silent as to the mode of payment. The trial Court dismissed the suit through its judgment, dated 20.08.1999. Hence, this appeal.

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Learned counsel for the appellant submits that there was virtually no contest whatever to the suit and the trial Court has simply believed the version of the 4^th respondent, who deposed as D.W.1 and that the promissory note, Ex.A1, is not supported by any consideration. He submits that being an accountant, D.W.1 was not supposed to be aware of the transactions or borrowing of amounts and that the trial Court was not justified in dismissing the suit.

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Learned counsel for the contesting respondents, on the other hand, submit that the suit transaction itself was fictitious one and brought into existence with the collusion of respondents 2 and 3. They submit that even if there was no proper resistance to the suit, the burden squarely rested upon the appellant to establish the

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transaction and except that he deposed as P.W.1, no other evidence was adduced either to prove Ex.A1 or to prove the payment of consideration. They further submit that the so-called acknowledgements were brought into existence only to bring the suit within the limitation, which is otherwise barred.

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The suit filed by the appellant was on the basis of promissory note, Ex.A1, and two acknowledgements of the year 1990, marked as Exs.A4 and A5. Except the 4^th respondent, no other respondent has contested the suit.

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On the basis of the pleadings before it, the trial Court framed the following issues for its consideration:

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1. Whether the suit is barred by limitation?

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2. Whether the plaintiff is entitled to recover the suit amount?

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3. Whether the payment endorsement made subsequent to the filing of the suit in O.S.No.115 of 1987 on the file of this Court do not bind either the D-1 firm or its partners?

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The appellant deposed as P.W.1 and he filed Exs.A1 to A5. The 4^th respondent deposed as D.W.1 and no documentary evidence was adduced. The suit was dismissed.

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Now, the points that arise for consideration, in this appeal, are,

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1. Whether the appellant has proved execution of Ex.A1 and the transaction covered by it? and

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2. Whether the suit is filed within the limitation?

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The money is said to have been lent to a partnership firm, the 1^st respondent herein. Respondents 2 and 3 are its Managing Partners. Both of them have chosen to remain ex parte. In addition to that, quite large number of partners or their legal representatives did not choose to contest the suit and the burden fell only upon the 4^th respondent. The specific plea taken by him that there is collusion between respondents 2 and 3 on the one hand and the appellant on the other, to bring about the fictitious transaction, almost remained un-rebutted.

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With the absence of respondents 2 and 3 and other partners, the resistance to the suit was almost meek. However, the appellant failed to prove his case despite there being hardly any resistance.

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It is fundamental that a promissory note can be proved only by examining the persons who have witnessed the execution thereof. How-so-ever strong or wellframed the statement of the plaintiff in a suit of this nature may be, unless it is supported by independent evidence, the Court cannot take the transaction as proved.

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Added to that, there was a specific plea by the 4^th respondent that the transaction is not supported by consideration. At least, in this behalf, the appellant was expected to examine any person who has seen the payment of consideration. Hence, we hold that the appellant failed to prove the execution of Ex.A1.

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Coming to the question of limitation, assuming that Ex.A1 is otherwise proved, it needs to be seen as to whether the suit was filed within limitation. The suit was filed in the year 1991 i.e. about seven years from the date of Ex.A1. An attempt was made by the appellant to plead acknowledgments to keep the transaction within limitation. The first attempt was to Ex.A2, dated 06.12.1987. It is said to be an endorsement as to payment. The trial Court recorded a finding to the effect that the said endorsement is an interpolation. If that is ignored, the suit is clearly barred by limitation. The subsequent attempt through Ex.A3 is almost futile once Ex.A2 is ignored. Hence, the suit is barred by limitation.

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The appeal is accordingly dismissed. There shall be no order as to costs.

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The miscellaneous petitions filed in this appeal shall also stand disposed of.

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______________________ L. NARASIMHA REDDY,J

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______________________ S.V. BHATT,J

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Dt:09.07.2013

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kdl

Palakurthi Ramakrishna Rao v. Durga Rice and Oil Mill Contractors Company, Machlipatnam

Case brief

What is this about?

What did the court decide?

Palakurthi Ramakrishna Rao v. Durga Rice and Oil Mill Contractors Company, Machlipatnam

Case brief

What is this about?

What did the court decide?

What the court decided

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