M. Elamuhilan vs Jayamurugan Cycle Mart

M. Venugopal

The Appellant/Defendant has filed the present Second Appeal as against the Judgment and Decree dated 22.07.1998 in A.S. No. 3 of 1998

passed by the Learned Additional Sub Judge, Nagapattinam in confirming the Judgment and Decree dated 28.11.1997 in O.S. No. 62 of 1996

passed by the Learned District Munsif, Tiruvarur.

The First Appellate Court viz., the Additional Sub Judge, Nagapattinam, while passing the Judgment in Appeal, has, among other things,

observed that ''For Ex. A. 1-Pronote, the plea of the Respondent/Plaintiff that the amount has been paid to the Appellant/ Defendant is accepted

and also that for Ex. A. 1-Pronote a sum of Rs. 17,000/- has been received by the Appellant/Defendant from the Respondent/Plaintiff and that the

Appellant/Defendant has executed the pronote to and in favour of the Respondent/Plaintiff and the said finding of the trial Court is a correct one

and resultantly, dismissed the Appeal with costs.''

Before the trial Court, in the main suit 1 to 5 issues have been framed for determination. On behalf of the Respondent/Plaintiff, witness P.W. 1

has been examined and Exs.A.1 to A.4 have been marked. On the side of the Appellant/Defendant, witness D.W. 1 has been examined and

Exs.B.1 and B.2 have been marked.

The trial Court, on an analysis of the entire oral and documentary evidence on record, has come to a consequent conclusion that the

Appellant/Defendant is received a sum of Rs. 17,000/- from the Respondent/Plaintiff and executed a suit pronote, which has been proved by the

Respondent/Plaintiff and resultantly, decreed the suit by directing the Appellant/Defendant to pay a sum of Rs. 23,120/- and to pay interest at the

rate of 12% for the principal sum of Rs. 17,000/- from the date of suit till date of judgment and to pay 6% interest from the date of Judgment till

date of payment together with costs.

Earlier, the Appellant/Defendant aggrieved against the Judgment and Decree of the trial Court dated 28.11.1997 in O.S. No. 62 of 1996 has

preferred A.S. No. 3 of 1998 before the First Appellate Court as an aggrieved person.

The First Appellate Court viz., the Additional Sub Judge, Nagapattinam, after contest, has dismissed the A.S. No. 3 of 1998 (filed by the

Appellant/Defendant) on 22.07.1998, thereby confirming the Judgment and Decree of the trial Court passed in the suit.

Feeling aggrieved against the Judgment and Decree of the First Appellate Court in A.S. No. 3 of 1998, the Appellant/Defendant has projected

this Second Appeal before this Court.

At the time of admission, this Court has formulated the following Substantial Questions of Law for consideration:

(i) Whether the suit claim is barred by limitation?

(ii) Whether the suit is bad for non-joinder of necessary parties?

(iii) Whether the Courts below erred in law and misdirected themselves in granting a decree in the absence of proof of execution on passing of

consideration?

The Contentions, Discussions and Findings on Substantial Questions of Law 1 to 3:

A perusal of Memorandum of Grounds in Second Appeal filed by the Appellant/Defendant indicates that the Appellant/Defendant has taken a

ground that the suit is out of time and the pronote on which the money has been taken is dated 03.05.1986, but the suit has been filed on

12.06.1989 and that the Plaint has been signed only on 05.06.1998 and that the suit is time barred. But no issue has been framed by the trial

Court.

Another ground on the Appellant/Defendant (taken in the grounds of Second Appeal) is that the First Appellate Court has failed to neglect to

enquire whether the business of having lent the money is within the parameters of the partnership deed and further, if the money has been advanced

on the basis of friendship, then, the Respondent/Plaintiff ought to have filed the suit in his individual name and not in the name of partnership.

The stand of the Appellant/Defendant (as seen from the grounds of Second Appeal) is that the Respondent/Plaintiff has no right to do money

lending business without licence and the admission of the Respondent/Plaintiff in this regard that he had two firms has not been given importance by

the Courts below.

It is the stand of the Appellant/Defendant (taken in the grounds of Second Appeal) that the consideration for the pronote has not been given in

one day viz., 03.05.1986 and admittedly, the amount of Rs. 12,000/- only has been available in the shop, has been paid on 03.05.1997 and Rs.

5,000/- drawn from the Bank. Also, the Appellant/Defendant has denied the payment under pronote and further, his stance is that his signature has

been obtained in blank. Moreover, the First Appellate Court, in its Judgment in appeal, also refers to the payment being made on two days.

Added further, the Appellant/Defendant has also taken a plea (in the grounds of Second Appeal) that no evidence has been let in before the

trial Court to establish that when the amount has been withdrawn from the Bank.

Apart from the above, the specific plea has been taken by the Appellant/Defendant (in the grounds of Second Appeal) that he is a headmaster

and not a illiterate person and except the signature nothing else is in his handwriting and such an educated individual would not need a scribe to

write the amount for him, since there is no evidence of disablement at the relevant time.

Yet another plea taken by the Appellant/Defendant (in the grounds of Second Appeal) is that all the partners should have been made as parties

to the suit and they should acquiescence with the partnership fund being used for such purpose and also that money lending is not the business of

the partnership of the Respondent/ Plaintiff.

Per contra, it is the contention of the Learned Counsel for the Respondent/Plaintiff that both the Courts have clearly come to a clear conclusion

that the Appellant/Defendant has received a sum of Rs. 17,000/- under Ex. A. 1 suit pronote from the Respondent/Plaintiff and has executed the

suit pronote. Further, as per Ex. A. 3- Respondent/Plaintiff''s Ledger Account page 12, there is an entry that as per pronote dated 03.05.1986 a

sum of Rs. 17,000/- has been advanced and an interest of Rs. 2,337/- at the rate of 15% for the period from 03.05.1986 to 31.03.1987 has been

made mention of and as per Ex. A. 3-Respondent/Plaintiff''s Ledger Account page 12, relating to the accounts of the Appellant/Defendant, the

Appellant/Defendant is due a sum of Rs. 19,337/- and Ex. A. 3-Ledger extract is kept by the Respondent/Plaintiff in the ordinary and normal

course of business transactions of the Respondent/Plaintiff.

Also, P.W. 1, in his evidence, has deposed before the trial Court that in the Respondent/ Plaintiff shop a sum of Rs. 12,000/- has remained

and the balance of Rs. 5,000/- has been taken from the Bank and in all, a sum of Rs. 17,000/- has been paid to the Appellant/ Defendant, which

details have been taken note of by both the trial Court as well as the First Appellate Court and resultantly, both the Courts have held in favour of

the the Respondent/Plaintiff and against the Appellant/Defendant by observing that Ex. A. 1-Pronote dated 03.05.1986 has been executed by the

Appellant/Defendant to and in favour of the Respondent/Plaintiff after receiving the amount mentioned in the document and these findings need not

be interfered with by this Court.

P.W. 1 (Managing Partner of the Respondent/Plaintiff) has deposed that Ex. A. 1-Pronote has been executed by the Appellant/ Defendant on

03.05.1986 after receiving a sum of Rs. 17,000/- in his favour and he is not doing money lending business and because of his acquaintance with

the Appellant/Defendant and himself, he has given the pronote amount to the Appellant/Defendant for constructing the house and it is incorrect to

state that the Appellant/Defendant after purchasing a product from him in the printed pronote, he has filled up the same.

It is the further evidence of P.W. 1 that in Ex. A. 1-Pronote, witness one Hari has signed and the same has been written by one Kesavan and

those two persons are not now working under him and they have left office.

P.W. 1 (Managing Partner of the Respondent/Plaintiff), in his cross examination, has deposed that if accounts are looked into then, on

03.05.1986 in their firm it will be evident that there has been a cash of Rs. 17,000/- and the sum of Rs. 17,000/- has been paid to the

Appellant/Defendant in cash and only on Appellant/Defendant''s compulsion, a sum of Rs. 17,000/- has been advanced as loan to the

Appellant/Defendant and further, Ex. A. 3-Ledger Account of the Respondent/Plaintiff has been submitted to the Commercial Tax Office and the

same has been added and signed as per Ex. A. 4 dated 20.11.1997.

D.W. 1 (Appellant/Defendant), in his evidence, has deposed that he purchased products from the Respondent/Plaintiff firm on instalment basis

and as such, he got acquainted with the Respondent/ Plaintiff and that the Respondent/Plaintiff is not in the habit of lending money and in the

Respondent/Plaintiff''s firm, he has purchased different articles and he has purchased a Bureau worth about Rs. 1,500/- in the year 1980 and at the

time of purchase of Bureau, he has paid a sum of Rs. 500/- and at the time of purchase of the said Bureau, he has affixed his signature in the

unfilled stamp paper, which the practice and if full amount is repaid, then, the unfilled signed stamp paper will be returned and at the time of

purchase of the Bureau he has affixed his signature in the printed unfilled document which is Ex. A. 1 and when he has affixed his signature in Ex.

A. 1- Pronote and the same has not been filled up and it is incorrect to state that he has received a sum of Rs. 17,000/- and has executed an Ex.

A. 1-Pronote.

D.W. 1 goes on to add in his evidence (in cross examination) that he has not given any notice raising objection for the Respondent/ Plaintiff

obtaining his signature in the unfilled document and it is not correct to state that his signature has not been obtained in documents in unfilled manner.

It is to be noted that the ''Firm'' is not to be presumed. Conversely, as an agent of the individual partners, ordinarily, payment made to one

partner is a good payment to the Firm. The payment to the Firm of a private debt due to one partner is not a discharge, unless it is shown that the

Firm has in fact an authority to receive it, as per decision in Powell v. Brodhurst (1901) 2 Ch 160.

The name of ''Firm'' is an expression, a compendious manner of designating the individuals who have agreed to carry on business in

partnership. Also, it is well settled principle of law that the Act of the partner of the firm can very well be construed as an act on behalf of all the

partners if the situation so warrants to arrive at such a conclusion.

A partner has the full authority to deal with the partnership property for partnership purposes as per observation of Lord Westbury in exp

Darlington & Banking Co.; Re Rches 4 De GJ & S 581, p 585, 46 ER 1044, 146 RR 466, p 469.

If a suit is filed in the name of ''Firm'', it is still a suit by all the partners of the Firm, unless it is proved that all the partners have not filed the suit.

A Firm may not be a legal entity like that of a Corporation or Company (incorporated under the Companies Act, 1956), but it is still an

existing concern where business is transacted by a number of persons in partnership.

A perusal of Ex. A. 1-Pronote shows that the same bears the date 03.05.1986 and it has been executed by the Appellant/Defendant to and in

favour of the Respondent/Plaintiff Cycle Mart for sum of Rs. 17,000/-. As a matter of fact, Ex. A. 1-Pronote dated 03.05.1986 is an unfilled one

and in the unfilled document, the name of the Appellant/Defendant, his father''s name, residential address and a sum of Rs. 17,000/- and the words

Rupees Seventy Thousand alone in cash being the value of house construction expenses are written in Tamil. Even the place of Pronote date is

mentioned as Tamil in Vijayapuram and the date is also mentioned as ''3rd day of May 1986''.

Admittedly, the Respondent/Plaintiff''s firm is a registered one as seen from the acknowledgement of registration of firm issued by the Registrar

of Firms, Nagapattinam dated 07.12.1973.

Any presumption as to the quantum of consideration as distinguished from the mere existence of consideration, has to be drawn, not by means

of Section 118 of the Negotiable Instruments Act, or even as per Section 114 of the Indian Evidence Act. However, a presumption only from the

recitals has to be established, that being a prima facie evidence against the relevant parties to the instrument. The presumption to be drawn is one

of law as per the Negotiable Instruments Act, as opined by this Court. As per Section 118 of the Negotiable Instruments Act certain presumptions

are to be attached to a negotiable instrument until the contrary is established. Before these presumptions are to be drawn, execution of the

instrument ought to be admitted or proved. But, there is no presumption about execution of a Negotiable Instrument. In case of denial by the other

side, the Plaintiff basing his claim on such instrument and fully proved its execution, in the considered opinion of this Court. In law, the presumption

u/s 118(a) of the Negotiable Instruments Act can be rebutted either by a circumstantial evidence or by presumption of facts drawn u/s 114 of the

Indian Evidence Act.

As a matter of fact, the entries in Books of Account relevant as per Section 34 of the Indian Evidence Act are not alone sufficient to charge

any one with liability and as such, corroboration is required. But, where accounts are relevant also as per Section 32(2) of the Indian Evidence

Act, they are in law sufficient evidence in themselves and the law does not, as in the case of accounts admissible u/s 34 of the Indian Evidence Act

required corroboration.

Entries in Books of Account when found admissible in the same suit both as per Section 34 and 32 of the Indian Evidence Act, the necessity of

corroboration no more arises (this is because here the entries are relevant also u/s 32 clause (2) of the Indian Evidence Act, as per decision in Ram

Pyarabai v. Balaji 28 Bom. 294). The Books of Account must be held to have been proved in the absence of its writer on proof of its proper

maintaining and keeping as per decision in Ramjanki v. Juggilal AIR 1971 SC at page 2551.

This Court aptly points out the decision in Parasram v. Champalal AIR 1957 MB 118 wherein it is held that ''the Books of Account should

explain itself and on its face and would create a liability against whom it is offered.''

In Mathilda Sice and Another Vs. Fritz Gaebele and Others, it is held that ''the law requires proof not only of Account Books generally, but of

each item.'' If the transactions are numerous and extent over many years, it is not necessary to prove each item but only specific disputed entries as

per decision in Kaka Ram Sohanlal and Others Vs. Firm Thakar Das Mathra Das and Others, .

In the present case on hand, on behalf of the Respondent/ Plaintiff, no day book has been produced and marked as an exhibit before the trial

Court in the suit. However, the ledger account of the Respondent/Plaintiff page No. 12 relating to the accounts of the Appellant/Defendant has

been marked as Ex. A. 3 in and by which it is crystal clear that there is an entry that the Appellant/Defendant has been paid a sum of Rs. 17,000/-

and also there is a reference that the Appellant/Defendant should pay an interest amount of Rs. 2,337/- at the rate of 15% for the period from

03.05.1986 to 31.03.1987. It is true that there is no evidence before the trial Court to establish that for the sum of Rs. 5,000/- obtained from the

Bank and paid to the Appellant/Defendant apart from the sum of Rs. 12,000/- paid by the Respondent/Plaintiff, with the money available in the

Respondent/ Plaintiff''s firm. Notwithstanding the fact that there is no proof that the Respondent/Plaintiff has withdrawn or drawn a sum of Rs.

5,000/- from the Bank and this sum has been paid to the Appellant/Defendant, yet, there is a positive documentary evidence in the instant case on

behalf of the Respondent/Plaintiff to clinchingly prove that as per account relating to the Appellant/Defendant in the Ledger maintained by

Respondent/Plaintiff that there is a reference that the Appellant/ Defendant has been paid a sum of Rs. 17,000/-. The said Ledger of the

Respondent/Plaintiff cannot be doubted for the simple reason that the said Ledger is regularly kept by the Respondent/Plaintiff in its ordinary,

routine, regular, daily business course of transaction purposes and the same is relevant and legally admissible under the Indian Evidence Act.

Though a plea has been taken on behalf of the Appellant/ Defendant (in the Memorandum of Grounds of Appeal) that the Respondent/Plaintiff

has filled up the blanks in Ex. A. 1-Pronote including the sum of Rs. 17,000/- mentioned therein, it is to be pointed out that as an ''Holder in Due

Course"", the Respondent/Plaintiff/Firm under the Negotiable Instruments Act, 1881, through its partner is entitled to fill up the blanks in pronote

(inchoate stamped instrument) (inclusive of the amount) and to negotiate. Therefore, the contra plea taken by the Appellant/Defendant in this

regard is outrightly rejected by this Court.

That apart, the Appellant/Defendant is an Headmaster of a School and he is an illiterate person and not a novice. Therefore, it is very difficult

and hard to believe the version pleaded by him that the Respondent/Plaintiff has taken advantage of the signature in Ex. A. 1- Pronote to suit his

convenience and the said plea suffers from ground realities of the facts and circumstances of the case, in the considered opinion of this Court.

Therefore, in view of the evidence of P.W. 1 coupled with Ex. A. 1-Pronote and Ex. A. 3-Respondent/Plaintiff''s Ledger Account page 12,

this Court comes to an inevitable conclusion that Ex. A. 1-Pronote has been executed by the Appellant/Defendant to and in favour of the

Respondent/Plaintiff.

As regards the plea of the Appellant/Defendant that the suit filed before the trial Court is bad for non-joinder of necessary parties viz., that all

the partners of the Respondent/Plaintiff firm have not been arrayed as parties at the time of institution of the suit, it is to be pertinently point out that

the Respondent/Plaintiff''s firm is represented by the Managing Partner viz., P.W. 1 and as a Managing Partner of the Respondent/Plaintiff''s firm,

P.W. 1 is entitled to file a suit for and on behalf of the Respondent/Plaintiff firm. Therefore, this Court comes to an irresistible conclusion that as a

Managing Partner of Respondent/ Plaintiff firm, P.W. 1 has filed the suit representing the Plaintiff''s firm and it cannot be said that he is incompetent

to file the present suit and as stated already that all partners need not be arrayed or shown as parties at the time of filing of the suit by the

Respondent/Plaintiff firm before the trial Court. Viewed in that perspective, this Court holds that the suit is not bad for non-joinder of other

partners and the suit is perfectly maintainable in law when it has been instituted by the P.W. 1 as Managing Partner of the Respondent/Plaintiff firm.

Coming to the plea of Limitation, it is to be pointed out that even in the Plaint, the Respondent/Plaintiff in para 3 has clearly averred that the suit

pronote-Ex. A. 1 is dated 03.05.1986 for Rs. 17,000/-, which has been executed by the Appellant/Defendant to and in favour of the

Respondent/Plaintiff firm. Furthermore, it is specifically averred that the period from 01.05.1989 till 12.05.1989 has been a Court Holiday for the

trial Court and the trial Court has reopened after summer recess on 12.05.1989. On the day viz., 12.05.1989, when the Court has reopened after

summer, when the Respondent/Plaintiff has filed the suit, it cannot be said that the suit is barred by limitation because of the simple fact under the

Limitation Act, a litigant/party is entitled to present papers, filed Plaints/Appeal papers on the day when Court reopens on the summer recess and

even if three years period has expired during summer /Court holidays, that is not a defective one and certainly filing of the Plaint on a reopening day

after summer before the trial Court, is a permissible and valid one under the Limitation Act.

Accordingly, this Court holds that the suit is not barred by limitation and further as discussed earlier, the suit is not barred for non-joinder of the

necessary parties viz., all the other partners (except the Managing Partner) and both the Courts have not committed any material irregularity or

patent illegality in arriving at a conclusion that Ex. A. 1-Pronote has been supported by consideration for a sum of Rs. 17,000/- and in fact both the

Courts have rightly held that Ex. A. 1- Pronote dated 03.05.1986 for Rs. 17,000/- has been executed by the Appellant/Defendant to and in favour

of the Respondent/Plaintiff and accordingly, all the Substantial Questions of Law 1 to 3 are answered against the Appellant/Defendant.

In the result, the Second Appeal is dismissed, leaving the parties to bear their own costs. Resultantly, the Judgment and Decree of the trial

Court dated 28.11.1997 in O.S. No. 62 of 1996 passed by the Learned District Munsif, Tiruvarur as well as the First Appellate Court dated

22.07.1998 in A.S. No. 3 of 1998 passed by the Additional Sub-Judge, Nagapattinam are affirmed by this Court for the recess assigned in this

Appeal. The Appellant/Defendant is granted three months'' time for making payment from the date of receipt of copy of this Judgment.

Consequently, connected Civil Miscellaneous Petition is closed.