M Narasimha Rao vs R. Hanumantha Rao

This appeal is filed by the defendant aggrieved by the judgment and decree passed in O.S.No.771 of 2016 on the file of the XVII Additional Senior Civil Judge, City Civil Court, Hyderabad dated 03.04.2018 directing the appellant herein to pay an amount of Rs.8,30,000/- with subsequent interest @ 12 % per annum from the date of suit till the date of decree and thereafter with future interest @ 6 % per annum till the date of realization on the principal amount of Rs.5.00 lakhs with costs thereon to the respondent herein.

The parties are herein after referred as arrayed before the trial court.

The case of the plaintiff was that the plaintiff and the defendant were known to each other since several years and out of that acquaintance, the defendant approached the plaintiff for hand loan of Rs.5.00 lakhs and on 24.10.2013 the plaintiff gave the said amount to the defendant and the defendant executed a demand promissory note and passed a separate receipt and agreed to repay the same within a period of one year along with interest @ 24 % per annum. The defendant having received the hand loan amount failed to repay the same as agreed earlier and dragged the matter for months together inspite of repeated requests on 20.01.2016, 21.03.2016 and 15.07.2016 and on the other hand threatened the plaintiff with dire consequences. Again on 20.07.2016, the plaintiff demanded the defendant to repay the loan amount with interest but the defendant threatened the plaintiff with dire consequences. As such, having no other alternative, the plaintiff filed the suit for recovery of money.

The defendant filed written statement denying the petition averments. He contended that his name was M.R.Narasimha Rao but not M.Narasimha Rao as alleged in the plaint. The house premises bearing No.2067, MIG Phase-I, BHEL, Chanda Nagar which was sought for attachment was the self-acquired property of his father namely Sri M.R.Prasad having purchased the same through a deed of conveyance bearing document No.3398 of 1996 dated 10.05.1996 from BHEL represented by its Vice President Sri P.Kanthaiah. He admitted that the plaintiff was known to him for the past several years but denied that he approached the plaintiff for a hand loan amount and executed a promissory note and passed a separate receipt acknowledging the same. He contended that he never received an amount of Rs.5.00 lakhs on 24.10.2013. As a matter of fact, he was neither in Hyderabad nor at his house on the said date. He was out of station on his pre-occupation. As such, the question of execution of alleged promissory note on 24.10.2013 would not arise at all. The plaintiff filed the suit by creating the alleged promissory note dated 24.10.2013 for wrongful gain by forging his signature. The father and relatives of the plaintiff filed cases against the defendant basing on the alleged money transactions several years back but the said cases were dismissed. The plaintiff filed the present suit with fabricated documents for wrongful gain with a view to harass the defendant. The plaintiff had not approached the court with clean hands and suppressed true and material facts and was not entitled for recovery of money and prayed to dismiss the suit with exemplary costs.

Basing on the said pleadings the trial court framed the following issues:

i) Whether the suit promissory note is true, valid and supported by consideration?

ii) Whether the plaintiff is entitled for recovery of suit claim from the defendant as prayed for?

iii) To what relief?

The plaintiff examined himself as PW.1 and got marked the demand promissory note as Ex.A1. The defendant examined himself as DW1 and got marked Exs.B1 to B4 on his behalf. Ex.B1 was the copy of the registered sale deed document No.3398 of 1996 dated 10.05.1996 in the name of his father, Ex.B2 was the encumbrance certificate dated 17.08.2016, Ex.B3 was the statement of encumbrance of the said property issued by the Sub-Registrar, Serilingampally dated 17.08.2016 and Ex.B4 was the market value certificate issued by the Sub-Registrar, Serilingampally.

On considering the oral and documentary evidence on record, though the defendant examined as DW1, denied his signatures found on Ex.A1, the trial court took upon it the task of comparing the signatures of the defendant on his vakalath, written statement, chief evidence affidavit, cross-examination and on the counter filed by him in I.A.No.631 of 2016 in the suit and observed that the signatures were not similar to each other but had significant changes and were dissimilar in slanting, size of letters and curves, more particularly the signatures made by him on his chief evidence affidavit and therefore held that he was in the habit of signing signatures differently and was trying to escape from the suit liability by falsely disowning his signatures in Ex.A1 and in the absence of the defendant filing any registered documents containing his original signature or his bank cheques containing his signature prior to the suit transaction to show that his signature was similar to the signatures made by him in his vakalath and written statement and also in his evidence, but not as found in Ex.A1, disbelieved the stand taken by the defendant.

The trial court also disbelieved the contention of the defendant that Ex.A1 could not be believed in the absence of any witnesses to the said document and that no legal notice was issued by the plaintiff prior to filing the suit but as the defendant had not taken any steps to send Ex.A1 document to the handwriting expert, held that the plaintiff established his case against the defendant and was entitled to recover the suit amount from the defendant.

Aggrieved by the said judgment and decree passed by the trial court, the defendant preferred this appeal contending that the trial court erroneously decreed the suit with costs and failed to consider that there were no witnesses signed on Ex.A1, so also on the receipt and no notice was issued by the plaintiff seeking refund of the amount from the appellant prior to filing the suit and failed to consider the admissions made by PW.1 in his cross-examination about the difference of ink used for the signature and the particulars written on Ex.A1, and that PW.1 admitted in his cross-examination that he was residing in BHEL contra to his pleadings that Ex.A1 pro-note transaction took place at his residence situated at Malakpet, which established his false claim. He further contended that the initial burden was on the plaintiff to establish that the defendant had executed Ex.A1 on 24.10.2013 after receiving the consideration amount of Rs.5.00 lakhs mentioned therein and failed to prove the execution of Ex.A1 by the plaintiff and prayed to set aside the judgment and decree of the trial court.

Heard the learned counsel for the appellant – defendant and the learned counsel for the respondent – plaintiff.

The learned counsel for the appellant contended that that there was no jurisdiction to the trial court to try the said suit, as the plaintiff admitted in his cross-examination that he was residing in BHEL at the time of transaction, as both the parties were not residing within the jurisdiction of the trial court, the amount of Rs.5.00 lakhs alleged to have been borrowed by the defendant was not a small amount and the plaintiff admitted in his cross-examination that he was an Income Tax assessee but failed to file his Income Tax returns showing the above transaction, there were no witnesses to the alleged transaction, the same was suspicious. The plaintiff further admitted that the signature and the writings on the pro-note were with different inks, but the trial court failed to consider the same, the trial court without resorting to comparing the writings on its own under Section 73 of Indian Evidence Act, ought to have sent the same to the handwriting expert for comparison and relied upon the judgments of the Hon’ble Apex Court in The State (Delhi Administration) v. Pali Ram (1979) 2 SCC 158, Ajit Savant Majagvai v. State of Karnataka (1997) 7 SCC 110 and Jagdish Prasad Patel (Dead) through LRs and Another v. Shivnath and Others (2019) 6 SCC 82.

The learned counsel for the respondent on the other hand supported the judgment of the trial court contending that when the original promissory note itself was filed, there was no need to examine any witnesses to prove the same, no petition was filed by the defendant to send the document to Forensic Science Laboratory (for short “FSL”), admitted facts need not be proved as per Section 58 of Indian Evidence Act. The plaintiff also admitted in his cross-examination that he was residing both in Malakpet and BHEL, there is no illegality in the judgment of the trial court and prayed to dismiss the appeal.

Now the point for consideration is:

i) Whether the trial court was having jurisdiction to try the suit?

ii) Whether the suit promissory note was true, valid and supported by consideration?

iii) Whether the trial court committed any error in decreeing the suit in favour of the respondent - plaintiff?

i) Whether the trial court was having jurisdiction to try the suit?

The plaintiff examined himself as PW.1. He filed his evidence affidavit on the same lines of his plaint averments. The plaintiff admitted in his cross-examination that the defendant’s father was his childhood friend and they were neighbours in BHEL Township and further admitted that at the time of execution of promissory note i.e. Ex.A1 dated 24.10.2013, he was residing in BHEL Township.

As per the contention of the learned counsel for the appellant, as the transaction took place at BHEL Township, the XVII Senior Civil Judge, City Civil Court would have no jurisdiction to entertain the suit and the suit was filed by the plaintiff stating that basing on the promissory note, he was a resident of Anand Nagar, Malakpet and had shown his address as such and also filed his evidence affidavit showing that he was a resident of Anand Nagar, Malakpet.

The admissions made by PW.1 in his cross-examination would prove that he had filed the suit claiming wrong jurisdiction. As such, this point need to be answered against the plaintiff and in favour of the defendant.

ii) Whether the suit promissory note is true, valid and supported by consideration?

PW.1 filed the promissory note dated 10.04.2013, marked as Ex.A1. Ex.A1 is the promissory note as well as receipt for receiving the amount of Rs.5.00 lakhs but both these documents were not signed in the presence of any of the witnesses. The writings on the promissory note and the signatures were with different ink. The writings would disclose the name of the defendant as M.Narasimha Rao and that he was resident of H.No.2067, MIG Phase-I, BHEL, Hyderabad and that on demand, he promised to pay to the plaintiff i.e., Sri R.Hanumantha Rao, S/o. Venkata Rao, who was residing at H.No.16-2-147/66, Anand Nagar, Malakpet, Hyderaad, the sum of Rs.5.00 lakhs with interest @ 24 % per annum. PW1 also admitted that the defendant was called as M.R.Narasimha Rao and added that he was also called as M.Narasimha Rao. He admitted that he was an IT assessee prior to 2012 and stated that he did not remember whether he had shown the amount of Rs.5.00 lakhs in his Income Tax returns filed by him for the assessment year 2013-14. He also admitted that there were no witnesses, signed on Ex.A1 as well as on receipt and that there were no witnesses when he demanded the money from defendant. He also admitted that he had not issued any written notice either by himself or through his counsel demanding refund of money prior to filing the present suit.

The defendant examined himself as DW1 and he filed his evidence affidavit on the same lines of his pleadings as in his written statement. In his cross-examination, he admitted that he knew the father of the plaintiff by name Shri Venkata Rao for the past ten (10) years. He denied that he signed on Ex.A1 and had taken a sum of Rs.5.00 lakhs from the plaintiff on 24.10.2013. He also admitted that he had not filed any document to show that he was out of Hyderabad on 24.10.2013.

Thus, though the defendant admitted that he was acquainted with the plaintiff and his family, denied that he executed Ex.A1 promissory note or that any consideration was passed under it or that he signed on the receipt and contended that his signatures were forged. When the defendant is denying his signatures, the burden lies on the plaintiff to prove that the promissory note is true, valid and binding on the defendant and that consideration was passed under it on the date mentioned in it. Admittedly, there were no witnesses to the said transaction. The plaintiff failed to file his bank statement to show that the amount was transferred through cheque or withdrawn by him at the relevant time. He had not stated the mode of payment whether he paid it through cash or cheque or by any other means of transfer. Though, he admitted that he was an IT assessee and was filing his IT returns prior to 2012 failed to file his IT returns for the assessment year 2013-14 to show that he had shown the said transaction of giving the hand loan to the defendant at the relevant time. As such, the passing of consideration itself is doubtful. Admittedly, he had not given any notice demanding the defendant to repay the amount prior to filing the suit. He only stated that he made oral demands on 24.01.2016, 21.03.2016, 15.07.2016 and 20.07.2016. He also admitted that there were no witnesses to the said demand made by him. Thus, there were no witnesses to the transaction under Ex.A1 either at the time of giving loan to the defendant or at the time of making demand for repayment of the loan. Thus, the plaintiff failed to prove that the suit promissory note was supported by any consideration.

The defendant also contended that his signature was forged by the plaintiff and the said promissory note was a fabricated document. The burden would lie upon the defendant to prove the fact of forgery but he had not filed any application along with his admitted signatures to send Ex.A1 to FSL. In the absence of any such petition filed by the defendant, the trial court took upon itself the burden of comparing the signatures of the defendant on Ex.A1 with his signatures on his vakalath, written statement, evidence affidavit and as well as the counter affidavit filed by him in I.A.No.631 of 2016 and held that the defendant was in the habit of signing differently. The Hon’ble Apex Court in The State (Delhi Administration) v. Pali Ram ((1979) 2 SCC 158 supra), held that:

“The matter can be viewed from another angle, also. Although there is no legal bar to the Judge using his own eyes to compare the disputed writing with the admitted writing, even without the aid of the evidence of any handwriting expert, the Judge should, as a matter of prudence and caution, hesitate to base his finding with regard to the identity of a handwriting which forms the sheet -anchor of the prosecution case against a person accused of an offence solely on comparison made by himself. It is, therefore, not advisable that a Judge should take upon himself the task of comparing the admitted writing with the disputed one to find out whether the two agree with each other; and the prudent course is to obtain the opinion and assistance of an expert.”

The Hon’ble Apex Court in State of Maharashtra v. Sukhdev Singh 1992 AIR 2100, held that:

“Although, the Section (Section 73 of the Indian Evidence Act) specifically empowers the court to compare the disputed writings with the specimen / admitted writings shown to be genuine, prudence demands that the court should be extremely slow in venturing an opinion on the basis of mere comparison, more so when the quality of evidence in respect of specimen / admitted writings is not of high standard.

In Dhanakodi Padayachi v. Muthu Kumaraswamy 1997 (II) MLJ 37, the Madras High Court held that:

“It is clear there from that the main reason for dismissing the suit is comparison of signatures. Even though, the court may have the power to compare the signatures, there must be some admitted signatures of the defendant, on the basis of which a comparison will have to be made. In this case, a comparison has been made on the basis of signatures affixed by the defendant in the vakalath and in the written statement which are the documents that have come into existence after the dispute arose and after the promissory note in question was filed into court along with plaint. A comparison should not have been made on the basis of those signatures. If that be so, it has to be held that the comparison was not made in accordance with law, even though, the court is empowered to make a comparison.”

The Hon’ble Apex Court in Ajit Savant Majagvai v. State of Karnataka (1997) 7 SCC 110, held that:

“38. As a matter of extreme caution and judicial sobriety, the Court should not normally take upon itself the responsibility of comparing the disputed signature with that of the admitted signature or handwriting and in the event of the slightest doubt, leave the matter to the wisdom of experts. But this does not mean that the Court has not the power to compare the disputed signature with the admitted signature as this power is clearly available under Section 73 of the Indian Evidence Act.”

The trial court comparing the signatures of the defendant on vakalath, written statement and counter which were filed subsequent to Ex.A1 on its own and observing that the defendant was intentionally signing differently, ought not to have been made and basing on such observation, ought not to have allowed the suit. The circumstances like there were no witnesses to the execution of promissory note and passing of consideration under it, the transaction not shown in IT Returns by the plaintiff, admissions made by the plaintiff in his cross-examination about his residence at BHEL at the time of transaction contrary to the contents of the document under Ex.A1 and his further admission about the difference in writings of the contents and signature by the defendant and defendant denying the transaction all creates a suspicion about the genuinity of the transaction. In view of the same, the plaintiff failed to prove that the suit promissory note was true, valid and binding on the defendant and that the same is supported by consideration. As such, issue No.2 is answered in favour of the appellant – defendant as against the respondent – plaintiff.

iii) Whether the trial court committed any error in decreeing the suit in favour of the respondent – plaintiff?

Even though the defendant failed to prove the aspect of forgery, the initial burden lies upon the plaintiff to prove that consideration was passed under the suit promissory note and the plaintiff failed to prove the same. As such, the suit need to be dismissed but the trial court decreeing the suit is against the established principles of law. As such, the same need to be set aside.

In the result, the CCCA is allowed setting aside the judgment and decree passed in O.S.No.771 of 2016 by the XVII Additional Senior Civil Judge, City Civil Court, Hyderabad dated 03.04.2018. The amount deposited by the appellant – defendant before the trial court is directed to be returned to him.

No order as to costs.

As a sequel, miscellaneous applications pending in this appeal, if any, shall stand closed.