Rajkishore Sahu vs Khitish Chandra Sahu

S. Acharya, J.—The Defendant has preferred this appeal against the decision of the Subordinate Judge, Baripada in Money Suit No. 68 of 1970.

The Plaintiff filed the suit for recovery of Rs. 6,8001/ - which is made up of Rs. 5,000/ - as capital and Rs. 1,800/ - towards interest by way of compensation.

The Plaintiff''s case, in short, is as follows:

The Defendant required Rs. 5,000/ - in the month of November, 1967 in connection with his timber business and so he approached his cousin brother, the Plaintiff, fur the said amount. The Plaintiff, out of his savings, gave Rs. 5,000/ - to the Defendant on 6-11-1967 on his executing a document acknowledging the receipt of the said money. After some time, the Plaintiff started demanding from the Defendant the said amount with compensation, but the said amount was not paid till 1970. Thereafter the Plaintiff served pleader''s notice on the Defendant for the payment of money, but as the Defendant denied his liability to pay the said amount the Plaintiff has to institute this suit for recovery of the said amount with compensation for improperly withholding the said money.

The Defendant in his written statement has, inter alia, pleaded that the suit is not maintainable as the Plaintiff as a regular money and paddy lender and he had not registered himself under the Orissa Money Lenders Act; the document, on which this suit for realisation of money is based, is understamped and the suit purely based on such a hand note is liable to be dismissed. It is also alleged that no amount had been paid by the Plaintiff to the Defendant on the above mentioned document. It is also stated in the written statement that the Plaintiff, his elder brother and his nephew on several occasions had taken money from the Defendant for their joint family business amounting to Rs. 5,927/ -, and as the Defendant demanded that amount from the Plaintiff and the other above-named persons, the Plaintiff grew furious and instituted this false suit by bolstering up a frivolous claim. The Defendant has also prayed for dismissal of the suit on the ground of non-joinder of necessary parties.

The Court below finds that the Plaintiff was not a moneylender in regular course of business and so there was no necessity for him to get himself registered under the Orissa Moneylenders Act. It was also found that the -band note exhibited on behalf of the Plaintiff cannot be admitted in evidence for any purpose. It finds that the suit is not based on the said hand note, but is based on the fact or payment of consideration and hence the exclusion of the aforesaid document from the records would not entail in the dismissal of the suit. On its own appreciation of the evidence on record it has arrived at the finding that the Plaintiff had advanced Rs. 5,0001- to the Defendant on 6-11-1967, but the Plaintiff is not entitled to any interest on the said amount as there was no stipulation between the parties for the payment of any interest on that amount at the time of advancing the loan. It accordingly decreed the Plaintiff''s suit for recovery of Rs. 5,000/ - with costs of the suit.

The Defendant had filed this appeal against the aforesaid decision, and the Plaintiff has filed a cross-objection praying for an order for payment of interest on the aforesaid principal amount decreed in favour of the Plaintiff, at least at the rate of 6 per cent per annum from 6-11-1970 till the passing of the decree in this suit on 29.9.1972.

Mr. Rath, the learned Counsel for the Appellant, seriously urged that the suit is entirely based on the pronote filed by the Plaintiff which has been marked as ''X'' in the suit, and as the said pronote is admittedly under stamped, the same is inadmissible in evidence for all purposes whatsoever, and so the suit must fail as no other evidence can be looked into in a case of this nature.

The finding of the Court below that the Plaintiff was not a moneylender in regular course of business could not be successfully assailed by the learned Counsel appearing for the Defendant.

The Plaintiff admittedly is a petition writer at the Karanjia Courts. He has categorically stated that it was not his profession to lend money or paddy in regular course of business. There is no convincing evidence on record to show that the Plaintiff ever lent money to any person other than the loan in question which, as alleged, was paid to the Defendant to enable him to carry on his timber business. Both d. ws. 1 and 2 have of course deposed that they has taken certain amounts on loan from the Plaintiff, and they had paid off their loans and had taken back their hand notes. They say that they do not have these hand notes with them as they destroyed the same after taking them back from the Plaintiff. According to d.w.1 he took that loan in the year 1967 for the purpose of his election expenses. D.w.1 has admitted that he contested the election for the Assembly in 1967 on ]ana Congress ticket, the Plaintiff at that time was a Member and active worker of the Congress party and that in that constituency the contest was only between the Congress and the ]ana Congress candidates. If that was so, it sounds improbable that the Plaintiff would have given any loan to d.w.1 to be utilised in the said election against the Plaintiff''s own party man. Apart from that unconvincing feature in his evidence there are other things which do not inspire confidence in his aforesaid evidence. He has admitted that nobody saw him taking that loan or his repayment of the same or his taking back the band note from the Plaintiff. He has further admitted that though he submitted accounts of his election expenses before the concerned authorities he did not show therein this loan taken by him from the Plaintiff. Apart from the above unconvincing feature d.w.1 and the Plaintiff being admittedly in two rival factions of political parties, it is difficult to place implicit reliance on the evidence of d.w.1 without anything else to support the same. Because of the above and other suspicious circumstances the Court below has rightly discarded his evidence as unworthy of credit. D.w.2 is the only other person who says that he has taken loan of Rs. 1000/ - from the Plaintiff by executing a hand note but he repaid that loan, tack back the hand note and destroyed the same. He has admitted that nobody saw him taking the loan, repaying the same, and taking back the hand note from the Plaintiff. He further admits that he did not disclose before anybody that he even took any loan from the Plaintiff. According to him, he had taken this loan for purchasing motor parts in connection with his transport business. He has admitted that he has account books of his business and that he submits income tax returns. So, his account books could have been produced to support his evidence. His evidence does not inspire confidence. The Defendant''s evidence that the Plaintiff lent some money to one Chiranjilal Karanjia is not worthy of reliance as there is nothing on record to support his said statement, and the Court below has rightly not relied on his uncorroborated and interested testimony. On a perusal of the evidence on record I am satisfied that the Defendant has failed to establish that the Plaintiff was lending money in the regular course of business.

D. ws. 3 and 4 are the only two witnesses who have stated that the Plaintiff was advancing paddy loan to different persons. D.w.3''s statement that he took paddy loan from the Plaintiff for 3 to 4 years does not inspire confidence as he admitted that nobody had seen him taking such loan or repaying the same. The Plaintiff in his deposition stated that d.w.1 was a carpenter work 109 under the Defendant and the said suggestion was also put to d.w.3 though he denied the same. D.w.4, while stating that the Plaintiff was lending paddy to different persons, admitted in his cross-examination that the Plaintiff''s father died about 25 years back; since then the Plaintiff has no house or granary in the village and that whatever paddy loan was given only by the father of the Plaintiff. On the above admission of d.w.4, the Defendant''s case that the Plaintiff was lending paddy in the regular course of business is completely falsified.

On a perusal of the evidence on record and its discussion in the impugned judgment I am thoroughly satisfied that the finding of the Court below, that the Plaintiff was not a moneylender in regular course of business, is perfectly correct and justified.

That the document marked ''X'' is a promissory note is not seriously contested. Section 4 of the Negotiable Instruments Act, 1881 defines a promissory note as

A ''promissory note'' is an instrument in writing

(not being a bank-note or currency-note) containing an pay a certain sum of money only to, of the order of, a certain person, or to the bearer of the instrument.

The document marked ''X'', if read in the light of the above definition and illustrations (a) to (h) thereof, clearly shows that the said document is a promissory note. The learned Counsel appearing for the Plaintiff could not successfully urge anything substantial to show that the said document is not a promissory not; but he seriously contended that the said promissory note was not taken in absolute discharge or in satisfaction of the debt, and as the said loan was not advanced on the basis of that document, the provisions of Section 91 of the Evidence Act would Dot apply, and the payment of the loan could be proved by other evidence on record.

Admittedly, the said promissory note is understamped. During the pendency of the suit on 7-12-1970 by the order of the Court below the Plaintiff paid Rs. 5. 05 as stamp duty and penalty and the said document was impounded. But by impounding the said document on payment of stamp duty and penalty as stated above, the said promissory note cannot be utilised in evidence for any purpose because of the provisions of Section 35 and 41 of the Stamp Act. A promissory note and some other instruments are excepted from proviso (a) to Section 35 and Section 41 itself. Therefore, as the said document is admittedly insufficiently stamped, it cannot be used in evidence for any purpose whatsoever as provided u/s 35 of the Stamp Act.

Now as that document is inadmissible in evidence, it is to be examined if the Plaintiff can be permitted in this suit to prove the alleged loan on other evidence on record. It is well settled that a suit purely based on a promissory note must fail when the promissory note is inadmissible in evidence being insufficiently stamped. There is no doubt that a promissory note or any other negotiable instrument may be taken in supersession of an oral debt, or as a collateral security, or in absolute discharge of the said debt. Where the said document is taken in absolute discharge of the debt, the document alone can be used to prove the terms of the debt, because in that case the terms on which the loan is paid are reduced to therefrom of a document and no evidence can be given of the said disposition of property except the document itself, as provided u/s 91 of the Evidence Act. But where the document is not taken in absolute discharge or in satisfaction of the debt, it cannot be said that the terms of the said transaction have been reduced to the form of a document, and so Section 91 of the Evidence Act would not come into play and the loan can be proved on the production of other evidence on record. If payment of a loan was independent of the promissory note, or in other words if the loan is not based on the promissory note, but the pronote was taken merely by way of collateral security, in that case one can prove the loan by other evidence, without even proving the promissory note.

The law on the above point has been dealt with in the decisions reported in Lakshmi Narain Vs. Mst. Aparna Devi, ,

Chandrasekhar Misra v. Govinda Chandra Das 21 (1955) C.L.T. 917; Babu Ram Bahadur v. Babu Dasuri Ram 19 I.C. 840 and the other decisions referred to in these decisions. On the law on the subject as stated-above, it is now to be seen if the document in question marked ''X'' is in absolute discharge or in satisfaction of the debt; or, in simple language, whether the said promissory note was the basis for the loan, or was merely a collateral security obtained from the debtor after payment of the money on some oral contract between the two. The document at first describes the names of the lender and the borrower. In the contents thereof it is stated that because the borrower needs money for his timber business he is taking Rs. 5, 0001- from the lender and shall pay the same to the lender on demand. On a careful examination of the contents of the document, I am satisfied that the promissory note was given by the borrower to the lender in discharge of the above-mentioned loan taken by him, and so the loan is founded on the document and the document is the basis for the loan. The acceptance of the promissory note, as can be seen from the contents thereof, operates as accord or satisfaction of the debt. As the loan is purely based on the promissory note and as the said promissory note is inadmissible in evidence being insufficiently stamped, one cannot look to the Plaintiff''s other evidence on record to establish his case of payment of loan to the Defendant. So, on this consideration alone the suit must fail.

On the above view of the matter, it is not necessary for me to deal with the other evidence on record to assess the truth of the Plaintiffs case of payment of loan to the Defendant.

On the above consideration, the Plaintiff''s suit has to be and is hereby dismissed. Accordingly, the judgment and decree of the Court below are set aside and this appeal preferred by the Defendant is allowed, but in the facts and circumstances of the case there will be no order as to costs of this appeal.

On the above finding, the cross-objection filed by the Plaintiff has to and is hereby dismissed.