IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH FRIDAY, THE 5TH FEBRUARY 2010 / 16TH MAGHA 1931 RSA.NO. 27 OF 2010() ------------------------------ AS.66/2006 OF PRL.S.C.,THALASSERY OS.562/2005 OF ADDL.MUNSIFF COURT, KANNUR .................... APPELLANT-APPELLANT-DEFENDANT: ---------------------------------------------------- EDAMANA KAMMARAN, S/O.LATE KRISHNAN AGED 80 YEARS, KOLACHERI AMSOM, PERUMACHERY DESOM P.O.KOLACHERY, KANNUR DISTRICT. BY ADV. SRI.T.P.PANKAJAKSHAN RESPONDENT(S): RESPONDENT/PLAINTIFF: ----------------------------------------------------------- M.P.MOIDEENKUTTY, S/O.ASSAINAR, MARITHIYODAN PUTHIYAPURAYIL, MAYYIL AMSOM, CHERUPAZHASSI DESOM, P.O.CHERUPAZHASSI, KANNUR DISTRICT. ADV. SRI.P.U.SHAILAJAN THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON 05/02/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P.JOSEPH, J. = = = = = = = = = = = = = = = = = = = = = = = = R.S.A. NO.27 of 2010 = = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 5th day of February, 2010 J U D G M E N T --------------------- Second Appeal arises from judgment and decree of learned Sub Judge, Thalassery in A.S. No.66 of 2006 confirming judgment and decree of learned Additional Munsiff, Kannur in O.S. No.562 of 2005. Respondent, on the strength of an agreement for sale of his vehicle sued appellant for realisation of money due under that agreement. He was owner of bus No.KL-13/3117 which as per Ext.A1, agreement was sold to the appellant on 7.3.2005 for a total consideration of Rs.7 lakhs. Appellant paid Rs.30,000/- by way of advance at the time of agreement. As per the terms of Ext.A1, of the balance amount, Rs.5 lakhs was to be paid to the respondent within 14 days and the remaining Rs.1,70,000/- was to be paid within two months of the agreement. Further agreement between the parties as stipulated in Ext.A1 is that in case of default on the part of appellant to make payment within the aforesaid period he shall pay to the respondent at the rate of Rs.1,000/- per day towards loss. On the strength of the above terms and conditions respondent gave possession of the vehicle to the appellant who has R.S.A. No.27 of 2010 -: 2 :- been allegedly operating the same from then onwards. But according to the respondent, appellant did not comply with the terms and conditions of Ext.A1. Rupees 5 lakhs was paid only after one month of the agreement (as against the period of 14 days prescribed). Thus respondent suffered Rs.30,000/- by way of loss (at the ate of Rs.1,000/- per day for 30 days). Balance sum of Rs.1,70,000/- was paid only on 18.7.2005. Loss suffered by the respondent is Rs.1,03,000/-. He sued for realisation of Rs.1,00,000/- with future interest. While admitting Ext.A1, appellant contended that it was orally agreed between appellant and respondent that the former will get five months' time to pay the balance amount and later, dispute between the parties was settled in the presence of Circle Inspector of Police, Valapattanam on 18.8.2005. Accordingly the sum of Rs.5,00,000/- and balance sum of Rs.1,70,000/- were paid to the respondent who received the same without any protest. Hence respondent is not entitled to get any further amount as claimed. Trial court found that as per terms and conditions in Ext.A1 respondent is entitled to get Rs.1,03,000/- and granted a decree for realisation of Rs.1,00,000/- with interest at the rate of 6% per annum from the date of suit till realisation and costs. First appellate court confirmed the judgment and decree. Hence the R.S.A. No.27 of 2010 -: 3 :- Second Appeal urging by way of substantial questions of law whether courts below were justified in ignoring the basic requirement for invoking principles enshrined in Illustration (g) of Section 114 of the Evidence Act (for short, “the Act”) and whether courts below were justified in ignoring law enshrined in Section 19A of the Contract Act? It is contended by learned counsel for appellant that finding of courts below though concurrent is erroneous. According to the learned counsel courts below have not referred to Illustration (g) of Section 114 of the Act before drawing presumption against appellant. It is also contended that Ext.A1 was obtained under undue influence and it is not enforcible. 2. So far as legal effect of Ext.A1, agreement is concerned argument is that it is vitiated by undue influence. But concededly there is no pleadings in that regard. Learned counsel for appellant would say that it is a question of law which this Court even in Second Appeal can consider. I am afraid that contention cannot be sustained as, if accepted it would go against the principle laid down in Order VI, Rule 4 of the Code of Civil Procedure (for short, “the Code”). Argument based on undue influence without the substractum for the same pleaded in the plaint cannot be entertained. Learned counsel for the respondent has brought to R.S.A. No.27 of 2010 -: 4 :- my notice the decision in Ladli Parshad Jaiswal v. Karnal Distrillery Co. Ltd. (AIR 1963 SC 1279) where referring to Order VI, Rule 4 of the Code it is held that when a plea of undue influence is raised the party raising that plea is required to plead particulars of the said plea in the plaint. In this case not to say about particulars, there is not even a plea that Ext.A1 is vitiated by undue influence. Hence no substantial question of law in that regard arises for decision. 3. Exhibit A1 is not disputed. Nor is there any dispute regarding the terms and conditions stipulated therein. Respondent had given a complaint to the Circle Inspector, Valapattanam on 18.7.2005. Exhibit A3 is the copy of complaint dated 22.8.2005. According to the appellant in the mediation held in the presence of the Circle Inspector on 18.8.2005 respondent had agreed to receive the balance amount (without compensation for the delay) and accordingly he received Rs.5 lakhs and later Rs.1,70,000/- without any protest. So far as that alleged mediation and settlement in that way is concerned what is available is only the version of D.W.1, son of appellant. Appellant did not even mount the witness box. P.W.1 denied the suggestion in that line. P.W.1 claimed that he had R.S.A. No.27 of 2010 -: 5 :- endorsed on the copy of Ext.A1 retained by the appellant that he had not received amount by way of loss as stipulated in Ext.A1. D.W.1, son of appellant stated that on the copy of Ext.A1 which is retained by the appellant P.W.1 had made some endorsement. But that endorsement was later corrected and cancelled. Appellant who is admittedly in possession of that document did not care or dare to produce the same. Argument is that when no application to direct appellant to produce copy of Ext.A1 which appellant was retaining was filed an no order was issued, courts below went wrong in drawing adverse inference against the appellant. In Gopal Krishnaji Ketkar v. Mohammed Haji Latif (AIR 1968 SC 1413) it was held that notwithstanding the question regarding burden of proof and whether there was an order calling for a document if a party who is in custody of the relevant document does not produce the same it is open to the court to draw adverse inference against him. That position must apply to the facts of the case. Therefore courts below are justified in drawing presumption against the appellant for non-production of copy of Ext.A1 retained by him. 4. It is then contended by learned counsel that at any rate R.S.A. No.27 of 2010 -: 6 :- payment of Rs.1,000/- per day as compensation in case of delay in making payment as stipulated in Ext.A1 is unconscionable and hence not recoverable. It has been held in Paulo v. Narayanan Bhattathiripad (1956 KLT SN 28) and Lekshmi Starch Factory Ltd. v. Muhammed Ismail (1968 KLT 713) that when there is stipulation in an agreement for payment of fixed amount by way of damages for breach, a reasonable compensation can be claimed. Learned counsel for respondent has brought to my notice the decisions in Kerala State Civil Supplies Corporation v. Muraleedharan (2001 [2] KLT 435) and Akbar Ali v. Vinod Khanna and Another ([2005] 9 SCC 367). In the former case it is held that penalty can be stipulated by parties to ensure that obligations are performed without delay and such a stipulation will not be unconscionable or unreasonable. In the latter decision the Supreme Court in paragraph 3 held that in the absence of plea or issue and evidence regarding unconscionableness of the claim a contention in that regard cannot be advanced. Learned counsel for respondent contends that there is no plea by the appellant that the sum of Rs.1,000/- stipulated in Ext.A1 to be paid by way loss is unconscionable. R.S.A. No.27 of 2010 -: 7 :- 5. In deciding whether the amount claimed by way of loss is unreasonable or unsustainable I must also look into the attending circumstances. At the time Ext.A1 was executed and stipulation was made, of the total amount of Rs.7 lakhs payable for the vehicle only Rs.30,000/- was paid to the respondent and the balance sum of Rs.6,70,000/- remained with the appellant to be paid to the respondent within the time stipulated. In other words, right from the time of Ext.A1 the sum of Rs.6,70,000/- remained with the appellant on which he could earn profit and along with that, he was also plying the vehicle and enjoying its benefit. Respondent has suffered loss by not getting the balance sum of Rs.6,70,000/- on time while appellant benefited by the delayed payment in two ways. Firstly the sum of Rs.6,70,000/- remained with the appellant until ultimately the amount was paid and he was earning profit on that ground. Secondly on payment of Rs.30,000/- he got the vehicle on 7.3.2005 and from then onwards he was enjoying the vehicle by operating it. Therefore on the factual situation also I am unable to accept the contention that amount fixed by way of compensation in Ext.A1 is in any way unconscionable or unreasonable so that it could not be enforced. 6. Having heard counsel on both sides and on going R.S.A. No.27 of 2010 -: 8 :- through the judgments under challenge I do not find any substantial question of law involved requiring interference in Second Appeal. Second Appeal is dismissed in limine. Interlocutory Application Nos.70, 71 and 283 of 2010 shall sand closed. THOMAS P.JOSEPH, JUDGE. vsv