Anand Sawrup Data vs Punjab National Bank and Others

R.L. Anand, J.—This appeal is directed against the judgment and decree dated 3.6.1995 passed by the Court of Additional District Judge, Rewari who accepted the first appeal of the appellant-Bank by setting aside the judgment and decree dated 13.2.1993 passed by the Sub Judge Ist Glass, Rewari, who dismissed the suit of the plaintiff-Bank. The first appellate Court granted a money decree for a sum of Rs. 24,620.16 with costs alongwith future interest at the rate of 15% per annum, from the date of filing of the suit till the date of payment.

Brief fact of the case are that New Bank of India, Qutabpur Branch, Rewari, filed a money suit for the recovery of Rs. 24,620.16 alleging that on 23.11.1979 defendant No. 1 M/s. Koolko Industries, Bawal Chowk, Rewari, approached the Outabpur Branch of the plaintiff-Bank for the grant of credit facility. The plaintiff-bank accepted the proposal and offered the grant of loan to the tune of Rs. 25,000/- on compound interest at the rate of 15% per annum on the guarantee furnished by defendants Nos. 2 to 4. In pursuance of the loan defendant No. 1 executed an agreement deed, hypothecation of goods deed, and demand pronote in favour of the plaintiff Bank on 23.11.1979. Defendants Nos. 2 to 4 had executed a letter of guarantee in favour of the plaintiff-Bank for the said loan. The plaintiff-Bank alleges that on the basis of the facility granted to defendant No. l, loan was advanced. A sum of Rs. 24,620.16 is due to the Bank from the defendants who are jointly and severally liable to pay the amount and the interest as on 13.12.1984. The defendants were called upon to pay the amount but to no effect. It is further pleaded by the plaintiff-Bank that defendant No. 1 acknowledged the liability on 1.7.1980, 18.7.1980, 1.1.1981 and 18.3.1982. In spite of the acknowledgement of the payment made by the plaintiff-Bank the defendants did not pay the amount.

The suit was contested on behalf of defendants Nos. 2 and 3, who are guarantor to the alleged loan. Defendants Nos. 1 to 4 did not appear despite substituted service and were proceeded against ex parte. Defendant No. 2 in his written statement stated that the suit was barred by time; that Shri A.K. Gupta was not authorised to file the suit and that the defendants had never stood sureties for repayment of the loan amount with interest at the rate as aforesaid. On merits this defendant stated that he and defendant No. 3 had gone to the plaintiff-Bank in order to indemnify defendant No. l, who was having some dealings with the Bank. The plaintiff-Bank got certain blank forms signed by the defendants and converted those documents into loan documents. This defendant is not liable to pay any amount much less interest as has been claimed by the plaintiff Bank.

Defendant No. 3 did not file any separate written statement. Rather he adopted the written statement filed by defendant No. 2.

From the above pleadings of the parties, the learned trial Court framed the following issues:-

Whether the suit has been filed by a duly authorised person? OPP.

Whether the plaintiff is entitled to receive the amount of Rs. 24,620.10 from the defendants on interest as alleged? OPP.

Whether the suit is time-barred? OPD

Whether the plaintiff has no cause of action of file the present suit? OPD

Relief.

The parties led evidence both oral and documentary and on the conclusion of the trial, the trial Court decided issue No. 1 in favour of the plaintiff and issue No. 2 was decided against the Bank. Issues Nos. 3 and 4 were decided against the defendants and finally the suit was dismissed.

Aggrieved by the judgment and decree the plaintiff-Bank filed first appeal in the Court of Additional District Judge, who vide the impugned judgment and decree dated 3.6.1995 accepted the appeal of the Bank and set aside the judgment and decree of the trial Court and granted a money decree for a sum of Rs. 24,620.16 as stated in the earlier part for the judgment.

Aggrieved by the decision of the first appellate Court the defendant-Guarantor has come in the present appeal.

I have heard the counsel for the parties and with their assistance have gone through the record of this case.

Material point for determination in this appeal is whether the execution of the loan documents relied upon by the Bank have been proved according to law or not. The trial Court dismissed the suit of the plaintiff mainly on the ground that Shri R.K. Gupta (P.W.2), who appeared on behalf of the Bank in order to prove the loan documents, has nowhere stated in his statement that before the executant put his signatures on the documents, the documents were written out, read over and understood by him. The trial Court further held that putting signatures/thumb impression in a mechanical manner on a document does not prove the execution until or unless the party was conscious about the nature and implications of his acts. The learned first appellate Court did not agree with the aforesaid reasons advanced by the learned trial Court and held as follows;-

".... It is no doubt true that the execution means putting signatures or thumb impression over it by the executant after it is written out, read over and understood by him. In the present case all the documents of the bank which had been executed by the defendants were in the printed forms and so they had been obviously written out and it would be presumed by that had been read over or understood by them before they had put their signature.''

Learned counsel appearing on behalf of the appellant vehemently submitted that the loan documents have not been proved by the Bank according to law and therefore his client cannot be fastened with any liability. On the contrary learned counsel appearing on behalf of the respondent submitted that as per the suggestion which has been given by defendant No. 2 to Mr. R.K. Gupta (P.W.2) it stands proved that the defendant, who was the guarantor of the loan, impliedly admitted the execution of the documents, and, therefore, he cannot be allowed to say that due execution of the documents has not been proved. Learned counsel for the respondent further submitted that the stand taken up by the appellant is contradictory to his pleadings. The principal debtor has not come to contest the suit. This suggests that the allegations of the plaintiff-Bank are true. Finally, the learned counsel for the respondent adopted the reasons which were advanced to the first appellate Court in the impugned judgment and decree.

After considering the rival contentions of the parties I am of the considered view that the plaintiff-Bank has failed to discharge the onus of issue No. 2 and the due execution of the documents has not been proved. In legal proceeding the due execution of a document is not a mere formality but a solemnity is attached with the execution of the documents. The principles of procedure cannot be put at naught. It is a well settled law that mere accepting the documents does not convey that those documents have been duly proved according to the procedure and as per the provisions of the Indian Evidence Act. The execution of a document in legal sense would mean that the person who wants to execute the document must be fully conscious of his acts and he must be in a position to know the consequences of a document which he was going to execute. If a person is called upon just to put his thumb impression or signatures on a document and he does so, it will not be considered as a due execution of the document as required under the law. In this regard I will have to see the statement of Shri R.K. Gupta, who appeared as P.W. 2. His examination-in-chief would show that through his mouth some documents were got exhibited by the learned counsel for the plaintiff, who represented the Bank in the trial Court; so much so those documents were duly objected to by the contesting defendants. If the examination-in-chief of Shri R.K. Gupta is read in extenso, there will be no two opinions that he has simply stated that some documents have been got executed in favour of the Bank. He nowhere states that the documents were read over and explained to the contesting guarantors or that they had signed the same in token of correctness after understanding its contents. It is also settled law that the plaintiff has to prove his own case and he has to stand on his own legs and cannot be allowed to rely upon the weakness of the defendants. It is also the law that admitted facts need not be proved but a bare suggestion given in the cross-examination cannot take the place of proof. The preponderance of evidence on a civil suit has to be proved by the plaintiff.

Learned counsel appearing on behalf of the respondent submitted that in the cross-examination a suggestion has been put to Mr. R.K. Gupta from which it can be inferred that the signatures of the defendants on the guarantee deeds have been proved. I am not in a position to agree with the argument raised by the learned counsel for the respondent. The plaintiff wants to invoke the guarantee deed (Exhibit P.W.2/9) dated 23.11.1979. This document has to be proved in the manner as provided under the law. Nobody has stated on behalf of the plaintiff-Bank that the contents of this documents were read over and explained to the executant or that they signed the same in token of correctness. In this view of the matter, I am not inclined to endorse the findings of the learned first appellate Court and hold that the trial Court had correctly decided issue No. 2 in favour of the defendant and against the plaintiff-Bank.

Resultantly, this appeal is accepted. The impugned judgment and decree of the first appellate Court is set aside and the suit of the plaintiff-Bank is hereby dismissed leaving the parties to bear their own costs.

Before I part with this judgment I must say that the plaintiff-Bank has been non-suited due to the improper conduct of the suit on the part of the lawyer who represented the Bank, which has lost the public money to the extent of about Rs. 25,000/-. The legal formalities are above the moral sympathies of the Court.