Sai Service Centre vs Jasbir Bajaj

Rathnakala, J.—This appeal is filed by defendant No. 4 aggrieved by the judgment and decree passed by the I Additional City Civil and Sessions Judge, Bangalore City, in O.S. No. 4704/1987 dated 29.1.2005. By the impugned judgment, the trial court decreed the money suit of the plaintiff with costs against all the four defendants for Rs. 1,06,126.50 paise with interest on the sum of Rs. 60,000/- @ 24% per annum from the date of suit till realization.

For the sake of convenience, parties will be referred to as per their ranking before the trial court.

The challenge in this appeal is only against the decree passed against the fourth defendant/M/s. Sai Service Centre, a partnership firm carrying on the business at No. 6, Kasturba Road, Bangalore-560001, represented by its partner Sri. Ashok Rao. The appellant herein is M/s. Sai Service Centre, a Proprietary concern carrying on the business at No. 6, Kasturba Road, Bangalore-560001 represented by its Proprietor Sq. Ldr. Bhushan Narang.

Facts briefly stated, the plaintiff filed a suit for recovery of money from the defendants. His case was, the second and third defendants being the sons of the first defendant borrowed a sum of Rs. 60,000/- from him agreeing to repay the amount at the rate of 2% and executed three on-demand promissory notes on 27.10.1984 for a sum of Rs. 20,000/- each; three cheques for Rs. 20,000/- each were executed on 22.1.1986 against the payment of principal amount. On failure of the defendants to repay the loan amount, the cheques executed were presented to the bank and they were dishonoured with the shara ''account closed''. The plaintiff lodged a private complaint in P.C.R. No. 89/1986 before the jurisdictional Magistrate Court; thereafter the second defendant confirmed that he is due to a sum of Rs. 60,000/- towards the principal amount and Rs. 18,975/- towards interest upto 17.5.1986. Hence the suit.

Second defendant contested the suit on various grounds. Among other things, his defence was, the second defendant, his father and brother are discharged by the Magistrate in the criminal case vide order dt. 15.6.1990; the plaintiff is a money lender without valid licence and the suit is not maintainable and he is not due any amount to the plaintiff.

Written statement was filed on behalf of the fourth defendant denying plaint allegations. In addition, it was pleaded that defendants-1 to 3 were never the partners of fourth defendant nor they were authorized to act on behalf the fourth defendant and no complaint was lodged against him and he has nothing to do with the alleged suit transaction; plaintiff is a total stranger to the fourth defendant and it is not in due of any money to the plaintiff and it is not a necessary party.

On the basis of the pleadings, the issues were framed and after recording the evidence and after hearing the parties, they were answered as below and the suit came to be decreed:

"1. Does the plaintiff prove that defendant borrowed a sum of Rs. 60,000/- on 27.10.1984 by executing 3 On Demand Pronotes each for Rs. 20,000/- on the aforesaid date? If so, do defendant prove that the said On Demand Promissory Notes are not supported by consideration?

...In affirmative

Does the plaintiff prove the 2nd defendant issued 3 Cheques dated 28.1.1986 towards the principle of each On Demand Promissory Notes dated 27.10.1984 and that they were dishonoured?

...Partly Affirmative

To what relief or order?"

Sri. S. Subhash, learned Counsel appearing for the appellant/defendant No. 4 submits, on the showing of the plaintiff himself, fourth defendant was not a party to the alleged transaction between the plaintiff and defendant Nos. 1 to 3. There was no pleading to the effect that the amount was borrowed either for the fourth defendant or on behalf of the fourth defendant; the Promissory Notes were executed by the second defendant as Proprietor of M/s. Rao Auto Garage; the first defendant signed the Promissory Notes as a guarantor and below his signature, a seal purported to be that of the fourth defendant is affixed; in none of the suit documents, the fourth defendant''s signature can be found; there was no pleading to the effect that fourth defendant was a guarantor to the loan borrowed by the second defendant under the three promotes or the loan borrowed for the benefit of fourth defendant. Though he had pleaded the above facts in his written statement, the trial court ignored to frame issue about his liability to the suit transaction. In his oral evidence also, he had reiterated his stand, which was not at all disputed by defendants-1 to 3; there is no direct or indirect evidence against him to bind him to the suit transaction. The judgment of the court below in decreeing the suit against him is perverse and has resulted in miscarriage of justice and is liable to be set aside.

The respondents though served are unrepresented. Hence there is no contest to this appeal.

We have gone through the records of the court below. In the facts and circumstances of the case, the sole point that arises for our consideration is:

"Whether the fourth defendant/M/s. Sai Service Centre, a partnership firm was a party to the loan transaction?"

On a perusal of lower court records, it emanates that the fourth defendant M/s. Sai Service Centre was arrayed as "represented by its partner Sri. Ashok Rao" who is also arrayed as second defendant as a partner of Sai Service Centre. The first and the third defendants are also arrayed as partners of Sai Service Centre. The defendants-2 and 3 are the sons of defendant No. 1 as manifested by the records itself. On service of summons to the fourth defendant, Sq.Ldr. Bhushan Narang represented the fourth defendant as its partner and filed his written statement disputing the liability under the loan transaction. Subsequently, by way of amendment to the written statement, it was brought on record that fourth respondent was a registered partnership; first and third defendants were not its partners at any point of time; the first defendant is not authorized to represent fourth defendant and he had no authority or right to represent the fourth defendant or to act on behalf of the fourth defendant and the action of the first defendant is not binding on the fourth defendant, etc. Despite there being such a categorical statement, the trial curt has ignored to frame proper issue on the contentious issue between the plaintiff and the fourth defendant. During the trial, the plaintiff was examined as PW-1 among others; the Promissory Notes executed by the defendants-1 to 3 and consideration receipts were marked as Exs. P9 to P14. The signatures of defendants-1 to 3 were marked in evidence. It is obvious from these documents that the first and second defendants have signed on the revenue stamp affixed to the above documents with his seal "For Rao''s Auto Garage. Proprietor" and the third defendant has affixed his signature as guarantor. However, all the three documents bear the seal of Sai Service Centre, 6, Kasturba Road, Banglaore-560001. DW-1''s statement was, that he took over the business on 29.10.1984 and the fourth defendant did not have any sort of transaction with M/s. Rao''s Auto Garage and the said garage is not a part and parcel of fourth defendant. When he took over the fourth defendant''s firm, defendants-1 and 3 were not its partners. No demand was made on the fourth defendant by the plaintiff and he had not authorized first defendant to represent the fourth defendant at any time. The income tax return pertaining to fourth defendant Ex. D1 for the relevant period, does not evince any dues payable to the plaintiff. From the year 1994, 4th defendant became a proprietary firm with information to the Registrars of firm and the acknowledgement is at Ex. D2. Before he became partner of the firm, first defendant and his wife Mrs. Hemalatha Rao were the partners. Though he was cross-examined at length by the plaintiff, the defendants who had conflicting interest with him about the subject matter of the suit never ventured to cross examine him. Second defendant has examined himself as DW-2 and there was not even a spell of allegation about the involvement of the fourth defendant in the suit transaction. The learned Trial Judge in the body of her judgment, has drawn inference that the first defendant acted on behalf of all other defendants with the consent and connivance of other defendants. This inference is drawn without the foundation of concrete evidence, hence is perverse.

It is evident from the records that the plaintiff had filed an application under Order XXXVIII Rule 5 of CPC for attachment of the moveables of the fourth defendant before judgment and on contest, said palliation was rejected. On challenge by the plaintiff, said order was confirmed by this Court. When there is no specific averment either in the plaint or in the evidence of the plaintiff, about the involvement of the fourth defendant in the suit transaction, either as a borrower or as a guarantor and the Promissory Notes are executed by the second defendant as proprietor of M/s. Rao''s Auto Garage, the trial court misdirected itself in decreeing the suit against the fourth defendant. That renders the impugned judgment and decree illegal, so far this appellant is concerned and liable to be set right in this appeal.

Accordingly, the appeal is allowed.

The impugned Judgment and Decree passed by the I Additional City Civil and Sessions Judge, Bangalore City, in O.S. No. 4704/1987 dated 29.1.2005, in decreeing the suit against the appellant herein/fourth defendant is set aside. The suit against fourth defendant is dismissed. Remaining portion of the impugned Judgment and Decree remains undisturbed.

No order as to cost.