R.S.A. No.1486 of 2008 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH **** R.S.A. No.1486 of 2008 (O&M) Date of Decision:18.12.2008 Takhat Raj Singh .....Appellant Vs. Shaminder Singh .....Respondent CORAM:- HON'BLE MR. JUSTICE HARBANS LAL Present:- Mr. S.K. Chawla, Advocate for the appellant. Mr. Sandeep Jasuja, Advocate for the respondent. **** JUDGMENT HARBANS LAL, J. This appeal is preferred against the judgment/ decree dated 7.4.2008 passed by the Court of learned Additional District Judge, Muktsar whereby she dismissed the appeal preferred against the judgment/ decree dated 20.9.2006 rendered by the Court of learned Civil Judge (Senior Division), Muktsar whereby he decreed the suit for the recovery of Rs.4,62,000/- in favour of the plaintiff and against the defendant together with pendente lite interest at the rate of 12% per annum. The minimal facts are these: On 25.9.2000, the defendant borrowed a sum of Rs.3,50,000/- from the plaintiff with the promise to repay the same on demand with interest @ Rs.2% P.M. In consideration thereof, he executed the pronote and receipt of even date in favour of the plaintiff, who made request to the defendant to return this amount together with interest, the latter refused.. In his written statement, the defendant has R.S.A. No.1486 of 2008 (O&M) -2- inter-alia pleaded that he did not obtain any loan from the plaintiff against any pronote. He used to sell his produce through firm M/s Professor Sikri and Sons, which was previously being run under the name and style Sikri Traders. The defendant started selling his crops through that firm. Due to water logging in the field in the year 1996, there was shortfall in the produce and this apart, in November, 1998, the only son of the defendant, namely, Satpal Singh, suddenly fell ill. He was in need of money for the treatment of his son. He asked Arwinder Sikri alias Kaku owner of the firm for advance money. He promised to pay Rs.25,000/- to the defendant, who was already to pay about Rs.1 lac to the firm. Thereafter, Arwinder Sikri alias Kaku obtained his signatures on blank pronote and retained the same as security. He cleared the accounts with that firm in March, 2003 as this firm was indulging in bungling in his account. When he demanded back the blank signed pronote, he was put off on the pretext that those papers have got mixed with other ones and the same will be traced out. Subsequently, aforesaid Kaku fabricated the pronote and receipt and filed the suit. The following issues were framed by the learned trial Court:- 1. Whether the plaintiff is entitled for the recovery of Rs.4,62,000/- alongwith interest on the basis of pronote and receipt? OPP 2. Whether the suit is not maintainable in the present form?OPD 3. Whether the plaintiff has no cause of action approved?OPD 4. Relief. After hearing the learned counsel for the parties and examining R.S.A. No.1486 of 2008 (O&M) -3- the evidence on record, the learned trial Court decreed the suit as noticed at the outset. Feeling aggrieved therewith, the defendant went up in appeal which was dismissed by the learned trial Court. Being undaunted and dissatisfied therewith, he has filed this regular second appeal. I have heard the learned counsel for the parties, besides perusing the record as well as the findings returned by both the Courts below with due care and circumspection. Mr. S.K. Chawla, Advocate representing the appellant agitated at the bar that the plaintiff- respondent was not in a position to advance such a huge amount to the defendant- appellant. A glance through the disputed receipt Ex.P.2 would reveal that the parentage as well as the address of the attesting witnesses are not borne on it and thus, their identity is rendered highly doubtful. To add further to it, the disputed pronote and receipt were not got scribed from a regular scribe. The disputed pronote and receipt do not bear the signatures of the scribe. In view of the provisions of Section 269-SS of the Income Tax Act, 1961, the payment of an amount of Rs.20,000/- or more should be made by way of cheque whereas in the instant case, there is no evidence to the effect that the payment of Rs.3,50,000/- was made by way of cheque. As surfaces in the cross- examination of the plaintiff- Shaminder Singh as PW2, he has lent money to 2-3 more persons barring this pronote and their business is to advance money by charging interest and it is their ancestral business. This evidence is conclusive of the fact that the plaintiff is running a business of money lending. In these premises, the suit is liable to be dismissed. He has sought to place abundant reliance upon the observations rendered in re: Daljit Kumar and another v. Popal Dass, AIR 1981 Punjab and Haryana 211; R.S.A. No.1486 of 2008 (O&M) -4- Ruldu v. Prabhu Dayal, 1982 Current Law Journal (Civil & Criminal) 106; and C. Sesha Reddy v. T. Basavana Goud 2004 (1) Civil Court Cases 23. To tide over these submissions, Mr. Sandeep Jasuja, Advocate appearing on behalf of the respondent- plaintiff pressed into service that the concurrent findings returned by both the Courts below are based on cogent and convincing evidence. That being so, no interference is warranted therein. He further argued that the defendant- appellant is a victim of the plaintiff and he is being put to exploitation by a click of commission agents. I have given a deep and thoughtful consideration to the rival contentions. The following substantial questions of law arise for consideration:- 1. Whether the alleged pronote and receipt could have been proved in the absence of regular deed writer and could be believed to fasten the defendant with the liability to pay the amount in dispute? 2. Whether the alleged transaction offends the provisions of Sections 269-SS of the Income Tax Act? 3. Whether the plaintiff/ respondent was in a capacity to pay the alleged amount to the defendant/ appellant and the latter was in the need of such amount? The law does not contemplate that the promissory note necessarily and ought to be scribed by a regular scribe. Charanjit Singh PW1, the scribe in his evidence tendered by way of affidavit Ex.P.1/A has solemnly affirmed that on 25.9.2000, Takhat Raj Singh (referring to the R.S.A. No.1486 of 2008 (O&M) -5- defendant) had borrowed as sum of Rs.3,50,000/- from Shaminder Singh (referring to the plaintiff) with the promise to repay the same together with interest at the rate of Rs.2% per month in his presence and in lieu thereof, he executed the pronote and receipt, which were scribed by him and that the defendant had signed on the pronote within his view. His credibility could not be impeached in any manner. In his cross-examination, Balbir Singh PW3 has solemnly affirmed in identical terms by further adding that the disputed pronote and receipt were attested by him and Sukhdev Singh. It is in the opening sentence of his cross-examination that he retired as Naib Subedar. No previous ill-will or motive has been attributed to these witnesses for deposing in favour of the plaintiff in relation to the execution of the disputed pronote and receipt for consideration by the defendant. Satpal Singh DW1 is none else, but own son of the defendant. It is a common-place experience that ordinarily a son cannot be expected to depose against his father in akin cases. The evidence of Ajaib Singh DW2 as well as the defendant as DW3 in no manner nullify the evidence adduced by the plaintiff. It is in the affidavit Ex.DW3/A of the defendant that “in the month of November, 1998 his only son Satpal Singh had fallen ill and he had abrupt need of money and he requested the owner Arwinder Sikri alias Kaku of M/s. Professor Sikri and Sons, who promised to pay Rs.25,000/-, anyhow the defendant- deponent was to pay an amount of Rs.1 lac to the said firm. So, the said person asked the defendant- deponent to sign the blank pronote and receipt and he had to do so and it appears that the said documents might have been forged and fabricated.” I have considered this evidence. If the amount was lent by Arwinder Sikri alias Kaku, where was the necessity for him to put the plaintiff as a figure head. He would have R.S.A. No.1486 of 2008 (O&M) -6- kept the alleged signed blank pronote form in his custody and after filling the amount, he would have filed the suit. As surfaces, in the cross- examination of the plaintiff- Shaminder Singh PW2, they never disposed of their produce through the commission agency of Professor Sikri. Thus, the version put forth by the defendant that indeed M/s Professor Sikri and Sons is in fact behind this transaction and the plaintiff is a merely figure head carries no conviction. On the disputed pronote, the scribe Charanjit Singh, PW1 has mentioned with specificity his full particulars as scribe. Thus, in respect of first question, it is concluded that the pronote and receipt in dispute could have been proved in the absence of a regular deed writer and on the basis of the same, the defendant can be saddled with the liability to pay the amount in dispute. As shall appear in the cross-examination of the plaintiff, their family is joint and they own 75/80 killas of land and that he has been running the business of commission agency for the past 4/5 years and the name of their firm is Atma Singh, Hardeep Singh and that they are holding the licence issued by Market Committee and that at the time when the pronote was got executed, they were not running the business of commission agency.” This evidence probablises that the pronote amount was lent to the defendant out of the sale proceeds of the agricultural produce. The plaintiff has not been cross-examined specifically on the source of money. The proviso to Section 269(ss) ibid reads as under:- “Provided further that the provisions of this section shall not apply to any loan or deposit where the person from whom the loan or deposit is taken or accepted and the person by whom the loan or deposit is taken or accepted are both having R.S.A. No.1486 of 2008 (O&M) -7- agricultural income and neither of them has any income chargeable to tax under this Act.” It has been manifested in plain words in the above language that the provisions of Section 269-SS ibid do not apply in the loan transactions between the persons having agricultural income. So, the second substantial question of law is answered accordingly. Section 118(a) of the Negotiable Instruments Act, 1881 envisages that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.” Obviously, this language has been couched in the widest possible terms that the onus upon the plaintiff is to prove the due execution of the promissory note and the moment, he discharges such onus, the burden shifts on to the defendant to demonstrate that such pronote is without consideration. In the present case, the defendant has not adduced any luculent evidence operating as rebuttal to the presumption arising under this Section. Section 121 of the Negotiable Instruments Act, 1881 reads as under:- “121. Estoppel against denying capacity of payee to indorse.-- No maker of a promissory note and no acceptor of a bill of exchange [payable to order] shall, in a suit thereon by a holder in due course, be permitted to deny the payee's capacity, at the rate of the note or bill, to indorse the same.” It can be culled out from this language that the defendant cannot pose a challenge to the paying capacity of the plaintiff in case of R.S.A. No.1486 of 2008 (O&M) -8- promissory note. Thus, in respect of the third substantial question of law, it is concluded that the plaintiff- respondent was in capacity to pay the disputed amount. The defendant was in need of the money to defray the expenses of his son's illness. As would be apparent from the cross- examination of the defendant, in the year 1996-1997, he had borrowed a loan from the land mortgage bank and he got repaired his house, apart from getting the tubewell bore sunk in the land. It is in his further cross- examination that Ex.P.1 and Ex.P.2 do not bear his signatures but the same bear resemblance with his signatures. On the one hand, he has alleged that his signatures were obtained on blank pronote form and on the other hand, he has denied to acknowledge his signatures on the disputed pronote as well as receipt. He has also admitted in his cross-examination that the plaintiff was on visiting terms with his nephew Sukhdev Singh. On perusing his evidence with due care and caution, it emerges out that the same hardly dislodges the overwhelming evidence adduced by the plaintiff- respondent. The facts of the authorities relied upon by Mr. Chawla are distinguishable from the one in hand. Doubtless that the plaintiff in his cross-examination has testified that apart from this pronote, he has lent money to 2-3 other persons, on the basis of promissory note and he runs the interest business and he lends the money by circulating a sum of Rs.5 to 7 lacs and that it is their ancestral business. Would this evidence be sufficient to hold the plaintiff to be a money lender within the contemplation of Section 3 of the Registration of Money Lender's Act. To hold a person as such, the element of continuity and habit is essential. A man does not become a money lender within the meaning of Section 2(9) of the Punjab Registration of Money Lender's Act by reason of occasional loans to relations, friends or R.S.A. No.1486 of 2008 (O&M) -9- acquaintances, whether interest be charged or not. Nor does a man become a money lender, merely because, he may upon one or several isolated occasions lend money to a stranger. There must be business of money lending and the word “business” imports the notion of system, repetition and continuity. An element of continuity and habit is, therefore, essential to constitute the exercise of a provision or business. Speaking generally, a man who carries on a money lending business is one, who is ready and willing to lend to all and sundry provided that they from his stand point are eligible. Not every man who lends money at interest carries on the business of money lending. There must be more than occasional and disconnected loans. No specific formula can define or demarcate a money lender and one who is not. Each case must depend on its own peculiar features. It is ever a question of degree. In the instant case, it has not been elicited from the plaintiff during his cross-examination as to whom he had advanced money and during which period. If it had been established on the record that he has lent money to a large number of persons in the regular course of money lending business, only then, the plaintiff could have been branded as such. The defendant has not proved even a single such transaction, much-less to prove the element of continuity and habit of money lending by the plaintiff. In view of the preceding discussion, this appeal fails and is dismissed with costs. December 18, 2008 ( HARBANS LAL ) renu JUDGE Whether to be referred to the Reporter? Yes.