R.S.A.No. 25 of 1989 -1- **** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH R.S.A.No. 25 of 1989 Date of decision: 25.11.2011. Firm M/s Dhani Ram Rice Mills, Sunam and others Appellants Versus Firm Singla Rice Co., Sangrur ...Respondent CORAM: HON'BLE MR. JUSTICE G.S.SANDHAWALIA. Present: Mr. Alok Mittal, Advocate for the appellants. None for the respondent. ***** G.S.SANDHAWALIA, J. The defendants are in appeal against the judgment and decree of the Courts below whereby the suit of the plaintiff-respondent was decreed and has been upheld in appeal by the Lower Appellate court. The plaintiff-respondent filed a suit for recovery of Rs.23,000/- out of which Rs.17,000/- was the amount of principal and Rs.6000/- was on account of interest. The case of the plaintiff was that the said amount was given to the defendants-appellants by cheque dated 9.4.1979 for Rs.17,000/- and was delivered to Sh. Krishan Kumar, partner of the appellants firm. It was alleged that the said amount has been given as a loan amount and, therefore, plaintiff was entitled to the interest also and accordingly, interest at the rate of 12% per annum had been charged on the principal amount of Rs.17,000/- and accordingly Rs.6000/- was claimed as interest. The defence of the defendants was that amount was R.S.A.No. 25 of 1989 -2- **** received by them for some business purpose and that the amount was given back in cash on 10.7.1979 to the tune of Rs.9000/- and secondly a sum of Rs.8000/- was paid by them through one Delhi firm Makhan Lal Suresh Kumar on 22.9.1979. It was alleged that the defendants firm as well as the plaintiff firm had accounts with the Delhi firm and the entries regarding that amount of Rs.8000/- had been made in the accounts books of the defendants firm and, therefore, this amount of Rs.17,000/- stood paid back. On the issue of interest, it was held that there was no question of payment of interest because the amount was not received as loan, therefore, there was no liability to pay interest . The plaintiff-respondent denied the allegations in the written statement by filing replication and accordingly, the following issues were framed:- “1. Whether the plaintiff-firm is a registered partnership firm?OPP 2. Wehter the amount of Rs.17,000/- as mentioned in para No.2 of the plaint was advanced as a loan to the defendants?OPP (onus objected to). 3. Whether the plaintiffs are entitled to charge interest, if so to what extent?OPP 4. Whether the amount of Rs.17,000/- was paid back by the defendants to the plaintiffs, as alleged in para No.2 of the written statement?OPD 5. Relief.” The Trial Court on the basis of evidence came to the conclusion that the plaintiff firm was registered one and, therefore, the suit was maintainable under Issue No.1. The finding under Issue No.2 regarding the amount advanced was that the same had been given by R.S.A.No. 25 of 1989 -3- **** cheque and there were entries in the books of accounts but on examining of Ex.P3 came to the conclusion that there was a different ink regarding the words “UDHAR LAI GAYA”(taken on loan) and, thus, held that no interest was liable to be paid as it was not amount advanced as loan. Accordingly, under Issue no.3 interest was denied to the plaintiff firm. On the issue of repayment, it was held that a sum of Rs.9000/- which was alleged to be paid in cash on 10.7.1979 was not substantiated as the payment had been made by cheque and the repayment also should have been made through cheque or draft and there should have been some receipt. It was also observed that a suggestion was made to PW-3 Rajinder Pal regarding repayment on 7.10.1979 whereas the plea was of repayment on 10.7.1979. Accordingly, the entries in the accounts books regarding cash payment of Rs.9000/- was disbelieved. Regarding balance payment of Rs.8000/- on 22.9.1979 through Delhi firm of Makhan Lal Suresh Kumar, after examining the evidence, the Trial Court came to the conclsuion that payment was made to Singla Rice Mills and not Singla Rice Company, the present plaintiff-respondent. It was also taken into account that the Delhi firm had dealings with the plaintiff firm Singla Rice Company and with Singla Rice Mills to whom the alleged payment had been made and, therefore, that payment of Rs.8000/- have been made to Singla Rice Mills which was sister concern and since the plaintiff-partner PW3 Rajinder Singh appeared in rebuttal evidence and clarified that even Singla Rice Mills had given a loan on 14.5.1979 Ex.PW3/X-1 to 5 to the defendants-appellants, therefore, that repayment was not to the plaintiff and accordingly, it was held that defendants were also liable to repay that amount to the plaintiff. Hence, the suit for recovery or Rs.17,000/- was decreed along with interest at the rate of 6% per annum from the date of the filing of the suit till its R.S.A.No. 25 of 1989 -4- **** payment by judgment and decree dated 28.5.1985 after upholding the issue of territorial jurisdiction at Sangrur. That defendants-appellants filed first appeal which was dismissed on 25.11.1988 by the Addl. District Judge, Sangrur wherein the Lower Appellate Court rejected the contention of the defendants-appellants and held that in absence of any receipt, repayment of Rs.9000/- was not proved. Regarding the second payment of Rs.8000/- it was held that payment was made to Singla Rice Mills and a suit had been filed by the Delhi firm against Singla Rice Mills for recovery of Rs.8000/- and, therefore, amount was never paid to the plaintiff-respondent Singla Rice Company and the appeal was, accordingly, dismissed. The defendants are, thus, in appeal against the decisions of the Courts below. While issuing notice of motion on 17.2.1989, execution qua Rs.8000/- and interest thereon was stayed till further orders and the case was admitted for regular hearing, and on an application being filed, the order was modified on 8.5.1989 and the appellants were directed to deposit the remaining decretal amount within six weeks and on the said deposit the execution regarding Rs.8000/- and interest thereon would stand stayed. The counsel for the appellants has now placed on record receipt of payment of Rs.13050/- on 13.6.1989 deposited with the Treasury after taking permission from the Senior Sub Judge, Sangrur and copy of the same has been placed on record as Mark 'X'. Learned counsel for the appellants has contended that there has been misreading of the pleadings and the evidence on record which would entitle the appellant to invoke the jurisidiction of this Court as misreading of the pleadings and non consideration thereof in proper perspective would amount to a substantial question of law. It was a specific R.S.A.No. 25 of 1989 -5- **** case of the defendants-appellants in their written statement that a sum of Rs.8000/- had been paid by the Delhi firm of Makhan Lal Suresh Kumar on 22.9.1979 and this fact had been pleaded in paragraph 2 of the written statement. Accordingly, the following substantial question of law was formulated:- “Whether the Courts below failed to take into consideration the defence raised in para 2 of the written statement and accepted the case of the plaintiff without any pleadings to the effect of the refund of Rs.8000/- to Singla Rice Mills which has led to misreading of evidence by the Courts below?” This plea was totally denied in the replication but no explanation was forthcoming in detail. The counsel submitted that in the evidence of Ramesh Kumar Gupta, partner of the firm Makhan Lal Suresh Kumar, who had been examined as DW-1, who has stated that a draft of Rs.8000/- was prepared at the instance of the representative of Singla Rice Company in the name of Singla Rice Mills, Sangrur and was handed over to Rajinder Pal, their representative. This has been done on the assurance that both the firms had the same constitution. Thus, it was submitted that once the payment of Rs.8000/- had been made on 22.9.1979 by way of draft to the sister concern, namely, Singla Rice Mills at the instance of the representative of the plaintiff-company Rajinder Pal, then the Courts below were not justified in decreeing the suit for a sum of Rs.8000/-. There is sufficient merit in the submission of the counsel for the appellants as admittedly a categorical defence was taken in the written statement and as noticed above there was no specific denial or explanation in the replication filed by the plaintiff. It has come in evidence that Singla Rice Mills was paid a sum of Rs.8000/- which has been sought to be R.S.A.No. 25 of 1989 -6- **** explained by Rajinder Pal plaintiff PW-3 in rebuttal by holding out that Singla Rice Mills had given a separate loan to the defendants on 14.5.1979 and that payment of Rs.8000/- was against the said loan which was being returned. This fact has also been discussed by the Trial Court under Issue No.4 wherein it has accepted the explanation of Rajinder Pal PW-3 in rebuttal and the Trial Court went on to hold that since the amount was being repaid to Singla Rice Mills, therefore, the payment of Rs.8000/- was not proved as having been made to the Singla Rice Company. This reasoning of the Trial Court which has not been discussed by the Lower Appellate Court though it was a final Court of fact is not acceptable on the simple ground that parties have to plead and prove their case and cannot take the other person by surprise and in the absence of any pleadings, the Trial Court was not justified in making out a new case altogether which was never pleaded and proved. Thus, relief denied by the Courts below regarding the repayment of Rs.8000/- without taking into account the absence of pleadings regarding the said fact and the setting up of a new case altogether is not permissible. The Hon'ble Supreme Court in Gappulal Vs. Thakurji Shriji Dwarkadheeshji and another AIR 1969 SC 1291 and in the case of Bachhaaj Nahar Vs. Nilima Mandal & another 2009 Volume 1 RCR (Civil) 855 has laid down this principle of law that without pleadings, the Courts below are not permitted to infer some facts and build a new case altogether. The cross-examination of Rajinder Pal PW3 in rebuttal goes on to show that on 14.5.1979 when Singla Rice Mills is alleged to have advanced the loan to the Delhi firm it had only Rs.9139.29 cash in hand as opening balance and that Singla Rice Mills had credited Rs.8000/- in the name of Jarnail Singh son of Dalip Singh, who was their friend and, therefore, he deposited the amount to the firm. R.S.A.No. 25 of 1989 -7- **** The cross-examination further shows that word 'Jarnail Singh son of Dalip Singh' was in red ink and word 'cash' is in blue ink. From 10.5.79 to 2.6.1979, there was no other transaction except that of Rs.8000/- to Dhani Rice Mills on 14.5.1979 though he volunteered it was due to off season. He further denied that the entry regarding Jarnail Singh is fictitious and made in order to show the credit balance on 14.5.1979 and admitted that page No.9 of the cash book of Singla Rice Mills was in a loose condition. That Rajinder Pal in his cross- examination during rebuttal admitted that he used to attend both Singla Rice Mills and the shop; his sons used to work in Singla Rice Company. Thus, from the cross-examination of PW-3, it would be clear that the submission of the appellants that Singla Rice Mills and Singla Rice Company-plaintiff were existing in the same premises and being run within the family and payment made to Singla Rice Mills by way of demand draft through the Delhi firm was at the instance of Rajinder Pal PW-3 himself which has come in the evidence of DW-1 Ramesh Kumar Gupta, who was an independent witness dealing with both the firms. Another factor which is to be taken into consideration is that an effort was made by the plaintiff firm to show that sum of Rs.17,000/- advanced as principal was by way of loan but this fact has been disbelieved by the Trial Court while discussing Issue No.2 and it has found that the words “UDHAR LAI GAYA”(taken on loan) was in a different light ink than the other words of the entry. Thus, it is patent that the plaintiff firm was trying to extract more from the defendants dishonestly by attempting to claim interest on the money advanced for business purposes which was accepted by the Trial Court and accordingly, the payment of interest was denied on the said transaction. This conduct of the plaintiff is further proved from what has been discussed above regarding payment of R.S.A.No. 25 of 1989 -8- **** Rs.8000/- which had been made by the defendants to the plaintiff firm through Makhan Lal Suresh Kumar and since both the firms the plaintiff and the defendants were dealing with the Delhi firm, Rajinder Pal had prevailed upon the Delhi firm to give payment to Singla Rice Mills on 22.9.1979 and thereafter the said suit came be filed on 13.4.1982 alleging that a sum of Rs.8000/- had also not been received. Thus, from the above facts and circumstances it would be clear that the Courts below have failed to take into considerfation the pleadings raised by way of defence in para 2 of the written statement and wrongly accepted the plea of the plaintiff regarding non payment of Rs.8000/- which was never pleaded and question of law formulated above is answered in favour of the appellants. Accordingly, the appeal is partly allowed and it is held that the defendants- appellants are not entitled to pay back a sum of Rs.8000/- out of Rs.17,000/-, accordingly, the judgments and decree's of the Courts below are modified. The appeal is, however, dismissed qua the sum of Rs.9000/- regarding which appellants had already deposited payment alongwith interest to the tune of Rs.13050/- on 13.6.1989 as noticed above. The respondents are free to withdraw the same, if not already withdrawn by them. November 25, 2011 (G.S.SANDHAWALIA) Pka JUDGE R.S.A.No. 25 of 1989 -9- ****