Second Appeal dismissed. The High Court held that the defendant admitted accepting the money but failed to provide satisfactory evidence proving the specific repayment of the amount under the promissory note, thereby affirming the decree for money recovery.
Second Appeal dismissed; decree in O.S. No. 1370 of 2004 affirmed; no order as to costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
MONDAY,THE TWENTY FOURTH DAY OF JULY TWO THOUSAND AND TWENTY THREE
PRESENT
THE HONOURABLE SRI JUSTICE SAMBASIVA RAO NAIDU
SECOND APPEAL NO: 202 OF 2016
Between:
Bandaru Jagan Mohan Reddy, S/o. B. Narasimha Reddy, Occ Business, Rl/o. H.No. 4-114lAJ4, Lane.No. 3, Saichitra Nagar, Ramanthapur, Ranga Reddy District.
...APPELLANT/ APPELLANT/DEFENDANT
AND
Beeram Ranga Reddy, S/o. B. Bushireddy, R/o, H.No- 7-23l3, Street.l,lo.8, Habsiguda, Uppal, Ranga Reddy District.
...RESPONDENTi RESPONDENT/PLAINTIFF
Appeal filed under Section 100 of C.P.C. against the Judgment and Decree dated 04.'12.2015 made in A.S.No. 278 of 2007 on the file of the Court of the V Additional District and Sessionsjudge preferred against the Judgment and Decree in O.S.No. 1370 ol 2OO4 dated 21.10.2007 on the file of the Court of the I Additional Senior Civil Judge, Ranga Reddy District at L.B.Nagar.
ORDER: This Second Appeal coming on for hearing, upon perusing the grounds of appeal, the Judgment and Decree of the Lower Appellant Court and the Court of the First lnstance and the materialpapers in the Suit and upon hearing the arguments of Sri J. VENUDHAR REDDY, Advocate for the Appellant and of Sri M. DAMODAR REDDY, Advocate for Respondent.
is Court doth Order and Decree NHas follows:
Sd/. M. RNMANA KRISHNA DEPIJTY REGISTRAR
//TRUE COPY//
SECTION OFFICER
To,
HIGH COURT
SSRN,J
DATED:2410712023
DECREE
SA.No.202 of 2016
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DISMISSING THE SA
WITHOUT COSTS
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HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
MONDAY,THE TWENTY FOURTH DAY OF JULY TWO THOUSAND AND TWENTY THREE
PRESENT
THE HONOURABLE SRI JUSTICE SAMBASIVA RAO NAIDU
SECOND APPEAL NO: 202 OF 2016
Appeal filed under Section'100 of C.P.C. against the Judgment and Decree dated 04.12.2015 made in A.S.No. 278 of 2007 on the file of the Court of the V Additional District and Sessionsjudge preferred against the Judgment and Decree in O.S.No. 1370 of 2OO4 dated 2'1 .10.2007 on the file of the Court of the I Additional Senior Civil Judge, Ranga Reddy District at L.B.Nagar.
Between:
Bandaru Jagan Mohan Reddy, S/o. B. Narasrmha Reddy, Occ Business, R/o. H.No. 4-1141N4, Lane.No.3, Saichitra Nagar, Ramanthapur, Ranga Reddy District.
...APPELLANT/ APPELLANT/DEFENDANT
AND
Beeram Ranga Reddy, S/o. B. Bushireddy, R/o. H.No.7-2313, Street.No.8, Habsiguda, Uppal, Ranga Reddy District.
...RESPONDENT/ RESPONDENT/PLAINTIFF
l.A. NO: 1 OF 2016(SAMP. NO: 552 OF 2016)
Petition under Section 151 of CPC praying lhat in the circumstances stated in the affidavit filed in support of thepetition, the High Court may be pleased to stay all further proceedings including execution in pursuance of the Decree and Judgment passed in O.S.No. 137O of 2004, dated 31-'10.2007, onthe file of the I Additional Senior Civil Judge, Ranga Reddy District, at L.B.Nagar, Hyderabad, as confirmed by the Appellate Court in A.S.No. 278 of 20O7, daled 04.12.2015, on th€ file of the V Additional District and Sessions Judge, Ranga Reddy District, at L.B.Nagar, pending disposal of Second Appeal.
Counsel for the Appellant : Sri J. VENUDHAR REDDY
Counsel for the Respondent : Sri M. DAMODAR REDDY
The Court delivered the following: JUDGMENT
I
HONOURABLE SRI JUSTICE SAMBASIVA RAO NAIDU
S.A.No.2O2 of 2O16
JUDGMENT:
This Second Appeal has been filed by the unsuccessful defendant in OS.No.137O of 2OO4 on the file of I Addl. Senior Civil ludge. Ranga Reddy under Section 100 of Civil Procedure Code (for short 'C.P.C.') assailing the judgment in AS.No.278 of 2007 on the file of V Addl. District and Sessions Judge, Ranga Reddy, dated 04-12-2015 by which the first appellate Court having dismissed the appeal of the appellant herein, confirmed the judgment and decree of the trial Court in the above referred orig ina I suit.
.i
5S RN, ] s A.No 202 0f 2016
chits and the appellant herein used to pay the chit amount by way of cash and cheques as and when the chits were matured. The respo ndent/pla intiff further averred in the plaint that on 03-10-2001, the appellant approached him and sought for a sum of Rs.5,00,000/- to meet his business requirements. Keeping in view the relationship and acquaintance with the appellant, he has lent a sum of Rs.4,72,000/- on the same day and appellant in turn, executed a promissory note agreeing to repay the amount on demand. Even though, the respondent demanded the amount several times, the appellant dodged the amount on onepretext or the other. Therefore, the respondent got issued a legal notice demanding the repayment of money. The appellant herein received the notice, did not pay the amount but got issued a reply denying the receipt of money and execution ofpromissory note.
't
7
chits in M/s. Koutilya Chit Funds Private Limited to which the appellant is the Director. The respondent was depositing advance amount to the defendant by way of loan. The interest on the said amount was adjusted towards the chit subscriptions and whenever the respondent and his family members became prize subscribers, the appellant used to pay the prize money through cheque or by way of cash and again it was deposited with the appellant towards loan. He has also claimed that he was maintaining the accounts in the course of his regular business and all the transactions were reflected in the accounts. Therefore, the appellant claimed that he need not pay any amount to the respondent/plaintiFF. It was also the case of the appellant that promissory note relied on by the respondent was in respect of accumulated amount and he never borrowed Rs.4,72,000/- in lumpsum. Thereby, he prayed for dismissal of the suit.
I
SSRN I s A No 202 0f 2016
DW.1. One G.Vinod was examined as DW.2. The appellant got - marked Exs.B1 to 832. The trial Court having considered the oral and documentary evidence, as well as arguments of both counsels, believed the claim of respondent and passed a decree for recovery of an amount of Rs.4,72,000/- with costs and interest @ L2o/o per annum from the date of suit till the date of decree, thereafter @ 60loper annum till the realisation.
B. The present appeal has been filed on the following
grounds:
The appellant has claimed that the Courts below failed to consider and appreciate the distinction between Chit transactions, receipts and payment under the accounts produced by the appellant. The Courts below failed to consider Ex.B1-b
7
5 SSRN, J 5.A.No 202 of 2016
categorically clinches the issue and disprove the case of respondent. The respondent filed the suit alleging that a promissory note was executed as Ex.A1 on 03-10-2001, whereas Ex.B1-b also contains the same date showing the balance of credit of Rs.4,72,000/- which exactly matched thepronote amount. Therefore, it established that the suitpromissory note was obtained by theplaintiff being security for the said amount reFlecting on account and there is no liability on the said promissory note.
\
6 SSRN, ] S A.No.2O2 oI.?016
Exs.B2 to 824 documents. The observations made by the Courts below as if, the appellant Failed to produce accounts maintained by Koutilya Chit Funds Company and observed that Ex.B1 Ledger does flot pertain to Koutilya Chit Funds Company, and it is a personal ledger of defendant, surprisingly, the Courts held that in the absence of account books pertaining to Koutilya Chit Fund Company. The evidence of DW.1 cannot be believed. Therefore, according to the appellant, when the respondent himself stated that Koutilya Chit Fund Company is nothing to do with the subject account, the accounts of the said Chit Funds Company are nothing to do with the pro-note transaction, thereby, the First appellate Court grossly erred in holding that in observing that Koutilya Chit Fund Company is essential and relevant by drawing adverse interference.
a. Whether the Courts below arejustified in fixing burden of proof, regarding discharge of iiability under Ex.A1 pronote, on the defendant when it is categorically denied and established that there is no consideration passed under the said pronote by the defendant, particularly when the amount under the said pronote dated 03-10-2001 and the accumulated account credit balance uMer Ex.B1 ar€ corresponding and one and the same, while shifting the burden on the plaintiff so as to prove establish that the pronote claim is an independent transactaon and the same was not discharged?
/
SSRN, ] 5.A.No.202 of 2016
b. When the a ppella nt/defenda nt has disproved that there is no third transaction and there is nopassing of considerataon under suitpronote Ex.A1, whether the Courts below are lustified an decreeing the suit, when there is documentary evadence got marked under Ex.B31 and Ex.B32 regarding habilaty on account, which covered under Ex.A1 and Exs.82 and 824 rcgardtng Chit Fund liability discharged, particularly while drawing adverse inference for non-filing of irrelevant documents even as admitted by the plaintiff relating to Koutilya Chit Fund Company, which is totally unconcerned2
8
SSRN,I S A-No.20: of 2C16
used topay the chit subscriptions and when any member become prize subscriber, he used topay prize amount through cheque or by way ofcash and the prized subscriber used todeposit the amount inthe Chit business by way of loan and the interest on the saidamountused to be adjustedas subscription.The suit pro-note was executed in respect of such deposit and he never borrowedand amountof Rs.4,72,O00l-as claimedby the plaintiFf. The defendanthas further claimedthat he and his family memberssubscribedB chits.He used to maintain all registersin respect of business.He has repaid the amounts to the plaintiff. TheplaintifF was into money lending businesswithoutlicense.
SSRN, ' S A.No.202 of 2016
has further claimed that he has repaid the amount deposited by the plaintiff, thereby he is not liable to pay any amounts to the plaintiff
"The reason for joining them as chits subscriber was the plaintiff was depositing advance amounts with the defendant herein by way of loan and the interest accrued on investment was adjusted towards each subscription amount".
has averred as follows :
"The defendant submits that there as no such transaction of borrowing lumpsum amount of Rs.4,72,OOOI- from plaintiff and on the other hand, the outstanding account reflected in the books towards accumulated amount shows the entry of Rs.4,72,OOO/- for which a pronote was executed".
\
10
55RN, ] S A.No.202 of 2016
requirements and he is under obiigation to pay the interest. By the above stated averments in the written statement itself, the loan transaction between the plaintiff and defendant has been proved.
/
7
I1 SsRN, ] S A.No.202 of 2016
by the defendant was in hispersonal capacity. It nray be true that the defendant is able to show that he haspaid Rs.3,00,000/to the plaintiff by producing Exs.B1 to 825 but there is no evidence to believe that the saidpayment was in respect of amount due under Ex.Al. If really, he has discharged the said amount, he could have insisted the plaintiff to return the promissory note. It may be true that the transaction reflected in the accounts under Ex.B1 shows the credit balance of Rs.4,72,OOO/- which corresponds that the amount shown in the pro-note. The defendant has claimed that though the suit pro-note was executed on 03-10-2001, it was without any consideration but executed in respect of accumulated amount in the account oF plaintiff.
2L. The evidence of DW. 1 coupled with the averments made in the written statement shows that there was practicing deposit of prize amount by the plaintiff or his family members as a loan with the defendant Chit Fund business. The defendant did not deny the execution of pro-note on 03-10-2001. Therefore, it shall be believed that Ex.A1 was executed having accepted the amount from plaintiff and the Suit promissory note is supported by consideration. In the light of his own admission, the defendant accepted the receipt of money from Ex.A1. Therefore, it is for the
V
tl
SSRN, J S a.No 2O2 of 2016
defendant to prove the alleged repayment but in the present
case, though some documents are marked, the defendant is not able to show that he paid the same amount which was due under Ex.A1 through the documents marked as Exs.B1 to 825. There is no answer from the defendant as to why he did not insist the plaintifF to return the promissory note. Therefore, the Courts below rightly accepted the contention of respondent/plaintiff and
there are no merits in the appeal.
Consequently, miscellaneous applications if any, are closed.
No costs.
Sd/. M. RAMANA KRISHNA DEPUTY REGISTRAR //TRUE COPY// ,i" SECTION OFFICER
To,
Njb 5. Two CD CoPiest\ .V
HIGH COURT
SSRN,J
DATED: 2410712023
JUDGMENT+ DECREE
SA.No.202 of 2016
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DISMISSING THE SA
WITHOUT COSTS
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2 issues framed by the court
Whether the defendant successfully proved that the promissory note was executed without consideration only for security of chit fund deposits and that he had discharged the liability.
Whether the High Court should interfere with the lower courts' finding that the loan transaction under the promissory note was supported by consideration despite the defendant's claims of repayment.
1 provisions across 1 enactments
Bandaru Jagan Mohan Reddy
Beeram Ranga Reddy
Sambasiva Rao Naidu
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
