IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN THURSDAY, THE 24TH JUNE 2010 / 3RD ASHADHA 1932 AS.No. 805 of 1999(A) --------------------- OS.483/1992 of III ADDL.SUB COURT, KOZHIKODE .................... APPELLANT(S): (DEFENDANT): ------------------------------------------------ C.PRABHAKARAN, MANAGING PARTNER, C.C.TRANSPORT COMPANY, LAKSHMI NIVAS, MARYKKUNNU, KOZHIKODE. BY SRI.A.P.CHANDRASEKHARAN, SENIOR ADVOCATE, BY ADVS.SMT.PRABHA R.MENON, SRI.PUSHPARAJAN KODOTH, SRI.M.KRISHNAKUMAR(MOHANKUMAR ASSOCIATES), SRI.K.JAYESH MOHANKUMAR. RESPONDENT(S): (PLAINTIFF): --------------------------------------------- T.USHA, W/O.C.VIJAYAN, 'SIVAPURAM', MALAPARAMBA, KOZHIKODE. BY SRI.K.P.DANDAPANI, SENIOR ADVOCATE THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 24/06/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss ORDER ON CMP.NO.6802/1999 IN AS. NO.805/1999 DISMISSED 24/06/2010 SD/- M.N.KRISHNAN, JUDGE /TRUE COPY/ P.A.TO JUDGE Kss M.N. KRISHNAN, J. ........................................... A.S.NO.805 OF 1999 ............................................. Dated this the 24th day of June, 2010. J U D G M E N T This is an appeal preferred against the judgment and decree of the Subordinate Judge's Court, Kozhikode in O.S.No.483/1992. The suit is one for realisation of the amount and the plaintiff has been granted a decree for Rs.59,950/= with 18% interest on the said sum from the date of suit till the decree. It is against that decision, the defendant has come up in appeal. 2. It is the case of the plaintiff that the defendant had borrowed a sum of Rs.40,000/= by two or three transaction and towards the discharge of the liability, had issued a cheque on 17.9.1989 which when presented for encashment, returned with the endorsement 'insufficiency of funds'. Thereafter a notice was issued to which a reply raising false contention had been sent. So, the suit is filed for realisation of the amount. 3. The defendant on the other hand would contend that he had only borrowed a sum of Rs.25,000/= by virtue of a : 2 : A.S.NO.805 OF 1999 cheque on 17.7.1989 on which date itself he had paid interest of Rs.5,000/= and thereafter had paid Rs.25,000/= more and thus had discharged the entire loan amount. The plaintiff had taken a blank signed cheque as security and did not return it after the closure of the transaction. He had made use of it and had instituted a suit of this nature. The trial court on an analysis of the materials had granted a decree. It is against that decision, the appeal is preferred. 4. The learned counsel for the appellant had canvassed the following points for consideration; (1) whether the suit framed against the individual is maintainable, (2) whether the suit transaction is properly proved and whether the lower court has erred in putting the burden on the defendant and (3) with regard to the rate of interest. 5. So far as the first point is concerned, it is stated that the borrower is Sri.Prabhakarn, Managing partner of C.C. Transport Company. So on a plain reading, one can say that it refers to an individual and it can also be read that the amount advanced to the company. The plaintiff has understood it as a transaction of an individual. The defendant : 3 : A.S.NO.805 OF 1999 at the stage of reply notice as well as at the time of filing of the written statement has also understood the case only as an individual transaction. Only subsequently after seeing that a seal is affixed in the cheque as the managing partner a contention is raised that it relates to the company. At the outset, it has to be stated that the defendant is not admitting the execution of the cheque. The defendant in his notice had only stated about a personal transaction between the two. So, a belated attempt and some confusing questions to the plaintiff shall not take away the legitimate right of the person who is entitled to the relief. I hold the view that the transaction is only a personal transaction for which a cheque is issued in the name of the firm. 6. Now the most important question is regarding the transaction. It has come out in evidence that the defendant had borrowed a sum of Rs.15,000/= in the month of May, 1989 and a sum of Rs.25,000/= on July 1989 and thereafter had issued a cheque Ext.A1 for a sum of Rs.40,000/= which when presented for encashment returned with the endorsement of insufficiency of funds. The cheque is : 4 : A.S.NO.805 OF 1999 alleged to be issued towards the discharge of the liability. 7. The defendant would contend that a blank signed cheque is given as a security for the loan transaction of Rs.25,000/=. The defendant in the written statement had only contended that he had only taken a loan of Rs.20,000/= and he had discharged that loan by payment dated 26.5.1989 Rs.5,000/=, 1.10.1989 Rs.5,000/= and 25.10.1989 Rs.10,000/=. But when the transaction is evidenced with respect to Rs.25,000/= by way of cheque on 17.7.1989, he would contend that he had borrowed Rs.25,000/= but had given Rs.5,000/= as interest on the date of borrowal itself and thereby the loan amount due was only Rs.20,000/=. The defendant is not an illiterate man. The evidence of the defendant would convincingly establish that he had contested a large number of litigations. There had been large number of loan transactions between the plaintiff and the defendant. The defendant would say that he had issued the cheque as security even at that time but the cheque is not returned back. When the amount is paid in the year 1989 itself and a notice is issued in the year 1991, it can be seen that there is : 5 : A.S.NO.805 OF 1999 a gap of almost two years. The defendant did not move his little finger in any direction either by notice or by filing a police complaint to get back the cheque. This speaks in volume about the contention of the defendant that the cheque has been given only as a security that too a blank signed cheque is false. It is true that mere admission of signature in a blank signed cheque is not a proper proof of execution of the document. But in a case of this nature, it is not an isolated piece of materials that has to be independently considered but it is the bunch of materials that has to be analysed in finding out the preponderance of probabilities. If really the case set up by the defendant is true, there would have been at least a scrape of paper to evidence the discharge of the amount alleged by him. Even according to the defendant, the plaintiff is a very strict person and he gives the amount only by way of cheque. So when the plaintiff wants a document for evidencing the loan transaction and when that loan amount is repaid, it is the duty of the defendant to see that he also get some document towards the discharge of the amount. This will : 6 : A.S.NO.805 OF 1999 go to show that if he had paid the amount, he would have asked for the receipt. Therefore the conduct of the defendant in this matter shows that his evidence is not acceptable. He changes his stand from the reply notice when he filed the written statement. Then again dissatisfied with the written statement, he filed an additional statement raising the transaction of an individual and a company. 8. I had perused the cheque before me. Even with the naked eyes, it can be seen that the cheque is written by the person who had signed the same. The signature in the cheque is admitted. Therefore coupled with the materials available it has to be stated that Ext.A1 cheque has been issued towards the discharge of the liability and therefore the loan transaction as contended by the plaintiff stands proved. 9. Lastly on the question of interest. The defendant has admitted the fact that the plaintiff used to collect a very high percentage of interest. The transaction is of course for the purpose of business. Section 34 specifically provides : 7 : A.S.NO.805 OF 1999 that in certain cases the court can grant commercial rate of interest. The learned counsel for the appellant would submit before me that the financial position of the appellant has come down and being a transaction of yester years, some indulgence be shown. 10. The court has granted interest at the rate of 18% for an amount of Rs.59,950/= from the date of suit till realisation. But I feel that in para 12 it is stated that the plaintiff is entitled for 18% interest on Rs.40,000/= from 17.9.1989 till realisation. It requires a little modification. The plaintiff is entitled to claim interest at the rate of 18% from 17.9.1989 till the date of decree and at the rate of 10% on a sum of Rs.40,000/= from the date of decree till realisation. 11. In the result, the appeal is disposed of and a revised decree is passed as follows: The plaintiff is given a decree for realisation of Rs.59,950/= with 18% interest on the sum of Rs.40,000/= from 16.6.1992 till 9.4.1999 and at the rate of 10% interest on the sum of Rs.40,000/= from 10.4.1999 till realisation : 8 : A.S.NO.805 OF 1999 with the costs in the suit. So far as the appeal is concerned, the parties are directed to bear their respective costs. M.N. KRISHNAN, JUDGE. cl : 9 : A.S.NO.805 OF 1999 M.N. KRISHNAN, J. ........................................... A.S.NO.805 OF 1999 ............................................. 24th day of June, 2010. J U D G M E N T : 10 : A.S.NO.805 OF 1999