D. Maria Muthuraj vs K. Rajamani Chettiar, represented through its Proprietor, Maria Muthuraj

P.R. Shivakumar, J.—Sri Ambal Finance, represented by its Managing Director K. Rajamani had filed original suit O.S. No. 88 of 2007, on the file of the Additional Sub ordinate Judge, Dindigul for the recovery of a sum of Rs. 1,64,808/- being the principal amount of Rs. 90,000/- allegedly borrowed by the Appellant herein on 01.05.2004 and the accrued interest from the date of such borrowal till the date of filing of the suit and also for subsequent interest and costs.

It was the contention of the Plaintiff that the said amount was borrowed by the Appellant herein for the business run by the Appellant in the name of ''Gnanam Fancy Store'' as a proprietary concern. However, the Plaintiff had chosen to show the Appellant herein and the Gnanam Fancy Store as Defendants 1 and 2 respectively in the suit. It was contended therein that for the amount thus borrowed, the Appellant had issued a cheque bearing No. 036784, on 01.08.2004; that when the said cheque was presented for encashment, the same was returned with and endorsement to the effect that the account had been closed; that when the same was brought to the notice of the Appellant, he promised to make payment of the amount and take back the cheque; that the Appellant also agreed to by interest at the rate of Rs. 2.40/- paise per Rs. 100/- per month from 05.06.2004; that thereafter till November 2006, the Appellant did not make payment of either the principal or interest which made the Plaintiff to issue a legal notice calling upon the Appellant to make payment of the said amount with interest and that after receiving the said notice without making of payment, the Appellant issued a reply notice containing false and untenable allegations. Based on the said plaint averments, the Plaintiff had prayed for a decree.

The Appellant who figured as the first Defendant contested the suit by filing a written statement denying the alleged borrowal and issuance of a cheque in favour of the Plaintiff. It had also been contended therein that the Appellant was running a business in the name of ''Gnanam Fancy Store'' as its sole proprietor and the said Gnanam Fancy Store happened to be the subscriber in a chit that was conducted by Devi Chit Funds; that when Gnanam Fancy Store became a priced subscriber and received the chit amount as a security for due payment of the subsequent subscriptions, a cheque was obtained by the said Devi Chit Funds in which the particulars like date, payee''s name and amount were not noted; that thereafter, the Appellant stopped business of Gnanam Fancy Store as the building in which the business was run collapsed due to natural calamity; that the Devi Chit Funds, which was a partnership firm, was also dissolved; that hence, the amount due to Devi Chit Funds was collected by the employees of Devi Chit Funds; that the said amount due to Devi Chit Funds was paid by the Petitioner through a cheque of Kamal Agencies which was run by M. Padmaraj, who was none other than the wife of the Appellant; that at that point of time those persons who collected the amount due to the Devi Chit Funds informed that the blank cheque issued by the Appellant could not be traced and they would not be using the same against the Appellant and that subsequently, the said cheque came to be filled up in the name of the Plaintiff that the suit had been filed. It was the specific contention of the Appellant herein that there was no transaction between the Appellant and Plaintiff. Based on the said pleadings, the Appellant had prayed for the dismissal of the suit.

The Gnanam Fancy Store, which was described as the second Defendant, did not file a separate written statement and was not represented by any counsel because it was the contention of the Appellant herein who had been shown as the Defendant that Gnanam Store ceased to exist from 1997.

The learned Trial Judge, after framing necessary issues, conducted the trial in which one witness was examined as P.W.1 and seven documents were marked as Ex.A1 to Ex.A7 on the side of the Plaintiff. The Appellant herein, who was shown as the first Defendant figured as the sole witness, namely D.W.1 on his side and four documents were marked as Ex.B1 to Ex.B4. At the conclusion of trial, the learned Additional Subordinate Judge considered the pleadings and evidence and upon such consideration, came to the conclusion that the plaint allegations stood proved. Accordingly, the trial court decreed the suit for a sum of Rs. 1,64,808/- with subsequent interest at the rate of 6% p.a. from the date of the plaint till the date of realization, on the principal amount, namely Rs. 90,000/- . Cost was also awarded in favour of the Plaintiff.

As against the decree of the trial court, dated 30.01.2009, the Appellant herein filed an appeal before the Principal District Judge, Dindigul in A.S. No. 39 of 2009 showing the Plaintiff as the first Respondent and Gananam Fancy Stores, through its sole proprietor (the Appellant himself) as the second Respondent. The same came to be made over to the learned Additional District Judge(Fast Track Court), Dindigul. The learned Additional District Judge (Fast Track Court),Dindigul, after hearing both sides and on re appreciation of the evidence, concurred with the findings of the trial court and dismissed the appeal with costs. Hence, the present second appeal has been filed by the Appellant on various grounds set out in the memorandum of second appeal.

The arguments advanced by Mr. B. Bommaiyan, learned Counsel for the Appellant were heard. The copies of the judgment of the courts below and the other documents produced in the form of typed-set of papers were perused.

A second appeal against a decree of an appellate court which is subordinate to the High Court, shall lie only on a substantial question of law as per Section 100 of CPC Code. In this case, at the outset, it is pointed out that the decree passed by the lower appellate court confirming the decree of the trial court is solely based on appreciation of evidence and findings of facts. The decree is passed on the concurrent findings of facts regarding the alleged loan transaction between the Plaintiff and the Appellant herein. The questions of law formulated and incorporated in the memorandum of second appeal are not in fact substantial questions of law.

The main ground on which the suit was resisted is that there was no loan transaction as alleged in the plaint between the Plaintiff and the Appellant. Admittedly, the Appellant(Mariamuthuraj) was running a business in the name of Gnanam Fancy Store as a sole proprietary concern. Of course, it is true that the Plaintiff had committed a mistake in showing the Appellant as the first Defendant and Gnanam Fancy Store represented by the Appellant as the second Defendant. In effect, one and the same person has been shown to be the first and second Defendants, because a proprietary concern does not have a juristic personality and not distinct from the personality of proprietor himself. The said mistake crept in because of the loose and defective manner of preparing pleadings in the moffusil courts. However, the said mistake will not affect the Plaintiff''s case, because, the Appellant who was admittedly the proprietor of Gnanam Fancy Store was the actual Defendant though he has been shown in two capacities, one in independent capacity and another as the proprietor of the Gnanam Fancy Store. That is the reason why the Appellant had chosen to contest the suit in his own name and not in the name of Gnanam Fancy Store. It should be noted that order XXX Rule 10 of CPC code alone is the appropriate provision dealing with the suit against a person running a business as a proprietary concern in the name other than his own. Though the preceding rules permit the partners of a firm to sue and to be sued in the name of the partnership firm, Rule 10 differs from the same insofar as it does not permit a proprietary concern to file a suit in its name and it only permits other persons to file a suit against a proprietary concern in such name. The rational behind it is that the customer dealing with a business concern may not be expected to know the composition of the business concern as to whether the same is a proprietary concern or a partnership firm. That happened to be the reason behind providing Order XXX Rule 10 to enable others to file suits against persons doing business in the name other than their own, in name of the business itself. However, when a person is sure of the composition of the business concern, that it is a proprietary concern either the suit shall be filed against the proprietor in case his name is known to the Petitioner or the suit shall be filed against the proprietary concern in the name of the business concern, namely proprietary concern. Filing a suit against the proprietor in his individual capacity and also in the name of the proprietary concern shall be improper. But, the same will not result in the rejection of the suit as it is only an irregularity which can be cured.

This Court wants to point out the fact that the Appellant who was shown to be the first Defendant chose to be content with contesting the suit in his name only on the premise that one and the same person had been shown to be the first and second Defendants. It must be noticed that in the second appeal itself, though the Appellant himself is shown to be the proprietor of Gnanam Fancy Stores, it has been shown as the Respondent No. 2 and the cause-title has also been appended with an explanatory note that the second Respondent has been given up.

So far as the second appeal filed by the Appellant is concerned, there is a mistake in the grounds of appeal in describing the first Respondent/Plaintiff. The suit was filed not by an individual, but, by the partners of a partnership firm "Sri Ambal Finance" in their collective name, namely in the name of the firm. The collectivity of the partners identified in the firm name was said to be represented by Rajamani, Managing Partner of the firm. The suit could not be construed to be a suit filed by a single person who was the Managing Partner of Sri Ambal Finance. On the other hand, the cause-title of the suit makes it abundantly clear that the suit was filed by the partners in the name of the firm represented by the Managing partner Rajamani. That being so, the Appellant herein while filing the appeal before the lower appellate court had rightly described the Plaintiff, who was shown as the first Respondent therein, to be the firm "Sri Ambal Finance" represented by its Managing Partner, Rajamani. However, the Appellant has chosen to show Rajamani alone as the first Respondent in the cause-title provided to the memorandum of second appeal. The description of the first Respondent found in the cause title of the memorandum of second appeal is as follows:

.K. Rajamani, S/o. Kandasamy Chettiar, Administrative Officer, Sri Ambal Finance, Door No. 16, V.M. Lane(Upstairs), Dindigul Town.

The same will show that an individual by name, Rajamani is shown as the first Respondent and his description as Managing Partner of Sri, Ambal Finance follows his name. In this regard, the framing of the appeal memorandum itself is defective. Even then, this Court is not inclined to reject the appeal on the above said technical ground, namely the mistake committed in drafting the memorandum of second appeal. The Respondent No. 1, though described to be Rajamani, is to be read as Sri Ambal Finance, a partnership firm, represented by its Managing Partner Rajamani. With the above said preliminary observations, this Court proceeds with the questions of admissibility of the second appeal.

As pointed out supra, a second appeal against the decree of an appellate court which is subordinate to the High Court, shall lie to the High Court u/s 100 only on a substantial question of law. The suit is a money suit based on an alleged loan transaction which took place on 01.05.2004. Of course, the Plaintiff has also stated that a cheque was issued on 05.06.2004 and a promise was also made at the time of issuing the cheque, to make payment of interest from the date of the cheque as there was no specific agreement regarding payment of interest from the date of original lenting, namely 01.05.2004 to the date of cheque (05.06.2004). The Plaintiff had approached the court with a clear pleading that when the cheque was presented for collection, the same was returned with an endorsement that the account in respect of which the cheque was issued had already been closed and that when the same was put to the Appellant herein, he promised to pay the amount with interest and get back the cheque. It is true that immediately after the dishonour of the cheque, the Plaintiff did not issue any notice contemplated u/s 138 of the Negotiable Instruments Act. The issuance of such a notice is necessary for the prosecution of the drawer for an offence u/s 138 of the Negotiable Instruments Act. The non-issuing of such notice will not disentitle the payee or the bearer or holder in due course or who claims based on the original cause of action evidenced by the cheque, from filing a suit for the recovery of amount provided, the suit is filed within the period of limitation.

In this case, the amount was said to be lent on 01.05.2004. The cheque was issued, according to the plaint allegations, on 05.06.2004. The suit was filed on 26.04.2007. So even from the original cause of action, the suit was well within time. The cheque has been relied on as evidence showing the transaction. The suit was not filed based on the cheque as a negotiable instrument. It is not the case of the Appellant that the cheque was not pertaining to the account of the Appellant. Admittedly, the Appellant was maintaining the account with the bank in the name of the proprietary concern he was running. But, the Appellant would state that there was no transaction between the Appellant and the Plaintiff and the cheque that had been handed over to one Devi Chit Funds without mentioning the date, amount and name of the payee was filled up in the name of the Plaintiff and the suit was filed in order to have a wrongful gain.

It was also the contention of the Appellant herein before the trial court that when he became a prized subscriber and was paid with the chit amount, he was made to hand over such a blank cheque; that subsequently, he was regularly making payment of the subscription for the subsequent period; that since the said Devi Chit Funds, a partnership firm had been dissolved, he discontinued payment to the said chit fund; that in the meanwhile the place in which the Appellant''s business concern being run got destroyed due to natural calamity on 26.10.1997; that hence, the account itself was closed in 1999; that subsequently in 2001, the amount due to Devi Chit Funds was paid to its employees through cheques of Kamal Agencies which had been run by Padma Raj, the wife of the Appellant herein and that at that point of time, it was informed that the blank cheque was missing and the same would be returned if it could be traced. On appreciation of evidence, the said contention of the Appellant was disbelieved by the trial court. The lower appellate court also, on re appreciation of evidence, concurred with the said finding of the trial court. At the cost of being more elaborate to some extent, this Court wants to point out certain important aspects as to how the said finding of fact could not be termed defective or infirm much less perverse.

It is the case of the Appellant that his business concern, namely Gnanam Fancy Store, got destroyed on 26.10.1997 and in 1999 the bank account was closed. It is the further contention of the Appellant, as found in the written statement that the amount due to Devi Chit Fund was paid in the year 2001 through the cheque of another business concern run by his wife. But, excepting the interested testimony of D.W.1, Appellant himself, there is no evidence to show that such payment was made in 2001 Though the Appellant would contend that the business of Gnanam Fancy Store had been closed in 1997 itself, pass book for the bank account of the said business concern has been produced as Ex.B1. There is nothing to show that while closing the account, the unused cheque slips had been surrendered with the bank. There is also no evidence to show that the bank was informed of the fact that a particular cheque slip was used as a blank cheque or issued as a cheque in favour of anybody. That will go to show that even after closing the account, the Appellant was holding the cheque book pertaining to the closed account. Though the Appellant would have stated in the Written statement that the amount due to Devi Chit Funds was paid by his wife Padmarajan in 2001, the Appellant has chosen to produce only a receipt of the year 1992 as Ex.B3. When was the chit fund started? when did the Appellant become the prized subscriber? when was the amount paid to him by the foreman of the chit? when was the blank cheque issued?-such particulars are not found mentioned in the written statement or in the evidence. The counter-foil of the cheque book of Kamal Agency produced as Ex.B2 shall be a self-serving document and no credence can be attached to the same. There is no explanation forthcoming from the Appellant as to why he had not chosen to obtain an acknowledgement from the person who was allegedly collected the amount on behalf of the Devi Chit Fund to the effect that the blank cheque given to the Devi Chit Funds had been misplaced and the same would not be used against the Appellant.

On the other hand, the Plaintiff has chosen to produce the dishonoured cheque, dated 05.06.2004 as Ex.A2 and banker''s advice for the dishonor of the cheque as Ex.A3. A certificate to the effect that the account in respect of which the cheque was issued had already been closed has been produced as Ex.A4. The notice issued by the Plaintiff, the acknowledgement for the service of the said notice on the Appellant and the reply notice issued issued by the Appellant have been produced as Ex.A5 to Ex.A7. Rajamani, who figured as the sole witness on the side of the Plaintiff, has also given a clear evidence to the effect that the suit was filed based on a loan transaction. The defence story set up by the Appellant has been clearly denied by P.W.1. Appraising the evidence, both oral and documentary, adduced on both sides, the courts below have arrived at a finding of fact which cannot be termed defective or infirm, much less perverse. Therefore, the said concurrent finding of the courts below cannot be interfered with in this second appeal.

The learned Counsel for the Appellant in the second appeal made an attempt to show that the Plaintiff firm was not proved to be a registered firm and that was the reason why the individual who filed the suit as its Managing Partner was shown to be the first Respondent in the second appeal. This Court is duty bound to point out that the Plaintiff firm is proved to be a registered firm by the production of Ex.A1 and hence, the said contention is not tenable. In fact, the suit was not resisted on any question of law and on the other hand, it was resisted based on pleading of facts and the factual issues were decided against the Appellant herein. As pointed out above, the findings of fact cannot be termed perverse. As such, this Court has to hold that no substantial question of law is proved to be involved in the second appeal. This Court comes to the conclusion that the second appeal deserves dismissal at the threshold itself.

Accordingly, the second appeal is dismissed. Consequently, connected Miscellaneous Petition is dismissed. No costs.