IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH THURSDAY, THE 5TH NOVEMBER 2009 / 14TH KARTHIKA 1931 RSA.NO. 1056 OF 2009() ---------------------- AS.70/2006 OF DISTRICT COURT, PATHANAMTHITTA OS.114/2002 OF MUNSIFF COURT, RANNI .................... APPELLANT – APPELLANT PLAINTIFF: ------------------------------ PHILIP MATHEW, S/O.C.P.MATHEW, SRAMPICKAL HOUSE, CHACKOM BHAGOM MURI, KALLOOPARA VILLAGE, MALLAPPALLY TALUK, PATHANAMTHITTA DISTRICT. BY ADV. SRI.P.B.SURESH KUMAR SRI.K.P.SUJESH KUMAR SRI.K.N.SASIDHARAN NAIR SMT.M.SRUTHY SMT.SANDHYA RADHAKRISHNAN RESPONDENT(S) - RESPONDENT – DEFENDANT: ----------------------------------------- GEORGE VARGHESE, S/O.VARGHESE, PADINJATTATHIL HOUSE, KARIYAMPLAVE, ANGADI MURI, RANNI TALUK, PATHANAMTHITTA DISTRICT. THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON 05/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P.JOSEPH, J. = = = = = = = = = = = = = = = = = = = = = = = = R.S.A. NO.1056 of 2009 = = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 5th day of November, 2009 J U D G M E N T --------------------- Second Appeal arises from judgment and decree of learned District Judge, Pathanamthitta in A.S. No.70 of 2006 confirming judgment and decree of learned Munsiff, Ranni in O.S. No.114 of 2002 dismissing the suit and allowing the counter claim. Appellant is the proprietor of M/s.Lilly Finance, a private financing institution. He claimed that on 20.8.1999 respondent borrowed Rs.25,000/- from him, according to him agreeing to repay the same within one month and issued Ext.A1, cheque dated 20.9.1999. But that cheque on presentation was dishonoured for insufficiency of funds and in spite of service of notice intimating dishonour and demanding payment, respondent did not pay the amount. Hence the suit. Respondent contended that there was no transaction on 20.8.1999, nor did he issue any cheque in favour of appellant. He claimed that appellant is a money lender and from him, he had borrowed a total sum of Rs.31,600/- during the period from 20.2.1996 to 18.11.1998 on pledging gold ornaments altogether weighing 16 sovereigns and in connection with those transactions appellant had obtained under R.S.A. NO.1056 of 2009 -: 2 :- coercion four signed blank cheque leaves. One of those cheque leaves has been misused by the appellant for the purpose of the present suit. In spite of his demand appellant did not settle the account in connection with the pawn transactions and hence respondent made a counter claim in connection with that. Appellant filed replication denying the contentions of respondent and asserting the truth of the averments in the plaint. Appellant gave evidence as P.W1 and examined P.W2 to prove the transaction. Exts.A2 and A2(a) are produced to show that the cheque was dishonoured for insufficiency of funds. Exhibits A3 to A5 are produced to show service of notice on respondent. Respondent gave evidence as D.W.1. He proved Exhibit B3 series to B5. Exhibits B1 and B2 are the copy of account book and register maintained by M/s.Lilly Finance, private financing concern of the appellant. 2. Learned Munsiff after consideration of the evidence found that though there is no evidence to show that cheque in question was obtained by appellant under coercion version of respondent is more probable and dismissed the suit. Counter claim was allowed. That was confirmed by the first appellate court. Hence this Second Appeal urging by way of substantial questions of law whether the finding of the courts below that respondent has rebutted the presumption under Section 118(a) of the Negotiable Instruments Act is perverse in view of R.S.A. NO.1056 of 2009 -: 3 :- the decision of the Supreme Court in Kulwant Kaur v. Gurdial Singh Maan (2001) 4 SCC 262) and whether courts below erred in discarding the evidence of P.W2 that he has witnessed the payment under Ext.A1. Learned counsel for appellant contends that in the absence of any evidence to substantiate the contentions raised by respondent and in the light of evidence given by P.Ws.1 and 2 finding of the courts below is perverse and if the finding is perverse it involved a substantial question of law as held in the decision referred supra. Learned counsel has taken me through the evidence. 3. Here is a case where execution of cheque is denied by respondent. True, courts below found that respondent was not able to prove his contention that cheque leaf was obtained by the appellant under coercion. But failure to prove coercion or the mere admission or proof of signature in Ext.A1 does not tantamount to admission or proof of execution of Ext.A1 though admission or proof of signature certainly went a long way in proving execution. Appellant has given evidence as P.W.1 regarding the alleged transaction and execution of cheque and P.W2 as the witness while contra evidence is given by the respondent as D.W.1. So far as evidence of P.W2 is concerned, first appellate court has observed that himself was working in another private financing institution at Ranni and his evidence would show that R.S.A. NO.1056 of 2009 -: 4 :- he was not even acquainted with the signature of respondent. Courts below were not inclined to act upon the evidence of P.W2 for the reasons stated in the judgment. 4. So far as the evidence of P.W.1, appellant is concerned he admitted that he is running M/s.Lilly Finance which is a private financing institution and that during 20.2.1996 to 18.11.1998 respondent had availed loans from him on the security of pledging gold ornaments which is also proved by Ext.B3 series, four of the pawn tickets. It is admitted by the appellant as P.W.1 that alleged payment to the respondent on 20.8.1999 was at a time when a substantial amount was due from the respondent to him as per the said pawn tickets. It is also admitted by him that even before and after 20.8.1999 he had issued notices to the respondent demanding payment of the amount as per the said transactions. Courts below observed that in such a situation it was quite unlikely that on 20.8.1999 appellant would further advance Rs.25,000/- to respondent on the strength of the cheque in question. 5. Appellant denied that payment of Rs.25,000/- to the respondent was connected to his private financing business. He stated that it was a personal loan. It is true that Ext.B1, copy of account book did not show that on 20.8.1999 appellant advanced Rs.25,000/- to respondent. But it is interesting to note that Ext.B2, R.S.A. NO.1056 of 2009 -: 5 :- register shows an entry on 20.9.1999 (date of cheque) about the alleged personal loan in favour of respondent though appellant contended that said loan is personal and is not connected with M/s.Lilly Finance. Explanation offered by learned counsel for appellant is that the entry in Ext.B1 on 20.9.1999 is for accounting purposes. I fail to understand why that entry should be made in Ext.B2 on 20.9.1999 no such entry having been made in Ext.B1 on 20.8.1999 and according to the appellant, the transaction is not connected with the financing institution. Appellant maintained the stand that loan of Rs.25,000/- on 20.8.1999 was not connected with M/s.Lilly Finance but was only a personal loan. Appellate court referred to the evidence of P.W1 in paragraphs 20 and 22 of the judgment. P.W1 was asked whether ornaments pledged by respondent in connection with the borrowal of amount as per Ext.B1 series are still with him. His answer was that he can say about it only if accounts of M/s. illy Finance is verified. It is true that he has denied the suggestion that threatening to sell the pledged ornaments he got respondent open an account with the Bank in November, 1998 and obtained signed blank cheques. But courts below observed that prior to 20.8.1999 he had made demands under the pawn transactions and when that demand was not complied it is quite unlikely that appellant would advance a further sum of Rs.25,000/- on 20.8.1999 without any security when he is in R.S.A. NO.1056 of 2009 -: 6 :- the habit of advancing loan on the security of gold. It is also seen that on 24.5.2001 respondent had issued Ext.B5 notice to the appellant demanding return of the four signed blank cheque leaves and pledged gold ornaments on receiving the balance amount due. Admittedly, there was no reply to Ext.B5. I do not forget that Ext.B5 came only on 24.5.2001 after the dishonour of Ext.A1. 6. Courts below have considered the oral and documentary evidence adduced by both sides and came to the conclusion that the case set up by the respondent is more probable. Decision of the courts below rests on proper appreciation of oral and documentary evidence. No doubt if the finding is perverse or based on no evidence it would attract a substantial question of law. On going through the judgment and decree under challenge I do not find any such situation arising on the facts and circumstances of the case so that any substantial question of law is involved requiring admission of this Second Appeal. Resultantly, Second Appeal is dismissed in limine. THOMAS P.JOSEPH, JUDGE. vsv R.S.A. NO.1056 of 2009 -: 7 :- THOMAS P.JOSEPH, J. =================== R.S.A. NO.1056 OF 2009 =================== J U D G M E N T 5TH NOVEMBER, 2009