IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS WEDNESDAY, THE 24TH JUNE 2009 / 3RD ASHADHA 1931 AS.No. 79 of 1999() ------------------- OS.150/1994 of SUB COURT, PATHANAMTHITTA .................... APPELLANTS/PLAINTIFF: ------------------------------------- MATHAI DANIEL, MELAKATH HOUSE, THEKKEMALA, VANCHITHARAMURI, KOZHENCHERY TALUK. BY ADV. SRI.V.PHILIP MATHEW RESPONDENT/DEFENDANT: ----------------------------------------- THOMAS P. MATHEW, PULIYILETH HOUSE THEKKEMALA, VANCHITHARAMURI, KOZHENCHERY TALUK. ADV. SRI.MVS.NAMBOOTHIRY THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 18/06/2009, THE COURT ON 24/06/2009 DELIVERED THE FOLLOWING: M.L. JOSEPH FRANCIS, J. - - - - - - - - - - - - - - - - - - - - - - A.S.No. 79 of 1999 - - - - - - - - - - - - - - - - - - - - - - Dated this the 24th day of June, 2009 JUDGMENT This appeal is filed by the plaintiff in O.S.No. 150 of 1994 on the file of the Sub Court, Pathanamthitta. The respondent is the defendant in that suit. That is a suit for realisation of money. 2. The case of the plaintiff is briefly as follows. On 25.5.1991, the defendant approached the plaintiff and requested for a personal loan of Rs.30,000/- for his business purposes. The plaintiff paid Rs.30,000/- to the defendant on 1.6.1991. As per the terms of the loan transaction, the amount was repayable within three months from the date of payment of the amount. In order to ensure the repayment, the defendant executed a receipt in favour of the plaintiff, termed as a Promissory Note, on the same A.S.No. 79 of 1999 2 day on a non-judicial stamp paper worth Rs.10/- Simultaneously, the defendant also issued a cheque dt.2.9.1991 for Rs.30,000/- drawn on the State Bank of Travancore, Kozhencherry to the plaintiff, which was dishonoured when presented for encashment. The defendant orally agreed to repay the loan amount with 12% interest. Inspite of repeated demands and notice, the defendant did not repay the amount. Hence the plaintiff filed the suit. 3. The defendant filed written statement and contended that the suit is not maintainable. The title deed of the property of the defendant, a blank signed stamp paper and two blank signed cheques bearing No.434899 and 434900 were entrusted with the plaintiff on 5.4.1991 as security when he demanded Rs.10,000/- from the plaintiff as loan. The plaintiff did not pay the amount as agreed, on the ground that there is liability over the property. He had also not returned the documents entrusted with him. The allegation that on 1.6.1991 the defendant received an amount of A.S.No. 79 of 1999 3 Rs.30,000/- is not true. The defendant has not executed any promissory note or any other document on 1.6.1991. The plaintiff fraudulently created documents with the blank signed stamp paper and cheques. The defendant sent a reply for the notice issued by the plaintiff demanding repayment of Rs.30,000/- The plaintiff has no cause of action. 4. In the Sub Court PWs. 1 and 2 and DW1 were examined. Exts.A1 and B1 were marked. The learned Sub Judge, on considering the evidence, dismissed the suit without cost, on finding that the plaintiff failed to prove the money transaction. Against that judgment and decree the plaintiff filed this appeal. 5. Heard the learned counsel for the appellant and the learned counsel for the respondent. 6. The learned counsel for the appellant submitted that the cause of action for the money transaction was complete in itself before giving the negotiable instrument and therefore even if A.S.No. 79 of 1999 4 negotiable instrument becomes inadmissible in evidence, the appellant has a cause of action independently of the negotiable instrument and the appellant is entitled to succeed on the proof of original transaction. The plaintiff produced a document written on a Rs.10/- non-judicial stamp paper dt.1.6.1991 executed by the defendant in favour of the plaintiff and the document is described as a promissory note. In that document it is stated that the defendant received Rs.30,000/- from the plaintiff on that day and the defendant undertook to return that amount to the plaintiff and settle the transaction within three months. In that document it is further stated that the defendant has handed over a cheque bearing No.434899 dt. 2.9.1991 for Rs.30,000/- of State Bank of Travancore, Kozhencherry branch. That document is not admitted in evidence by the Sub Court. The reason for non-admissibility of that document is not stated by the learned Sub Judge in the judgment. A.S.No. 79 of 1999 5 7. When the cheque for Rs.30,000/- was presented by the plaintiff it was dishonoured due to insufficiency of funds in the account of the defendant and therefore the plaintiff filed a complaint against the defendant before the J.F.C.M., Pathanamthitta under Section 138 of the N.I. Act. Ext.A1 is the copy of the judgment in S.T. 91 of 1991 dt.25.6.1994 showing that the defendant, who was the accused in that case, was found guilty under Section 138 of the N.I. Act and he was convicted and sentenced to undergo R.I. for a period of one year. Against that conviction and sentence the defendant filed an appeal before the Sessions Court. In S.T. 91 of 1991 the cheque issued along with the alleged promissory note was produced before the Magistrate Court and therefore the plaintiff was unable to produce that cheque before the Sub Court. The plaintiff has not filed any civil suit on the basis of the dishonoured cheque. 8. The plaintiff was examined as PW1. He swears that there was money transaction between himself and the defendant. A.S.No. 79 of 1999 6 PW1 deposed that on 25.5.1991 the defendant requested him to give Rs.30,000/- as loan for his business purpose. On the basis of that request the plaintiff gave Rs.30,000/- on 1.6.1991 and the defendant agreed to pay 12% interest after three months and also promised to return back the amount before 2.9.1991. PW1 further deposed that as a security for that loan amount, the defendant gave a cheque and executed a promissory note on a non-judicial stamp paper of value Rs.10/- 9. In the course of examination, when PW1 was asked whether the present suit was filed on the basis of the cheque or the promissory note, he answered that he instituted the suit for return of the amount availed by the defendant as loan. PW2 is an eye witness to the transaction between the plaintiff and the defendant. PW2 swears that he saw the plaintiff giving Rs.30,000/- to the defendant and the defendant gave a cheque and stamp paper worth Rs.10/- in which something was written A.S.No. 79 of 1999 7 and that he saw the defendant signing the stamp paper and the cheque. 10. The defendant admits his signature in the stamp paper, but he contends that when he handed over that stamp paper it was a blank stamp paper. Apart from the interested testimony of DW1, there is no independent evidence to show that when the defendant handed over the same to the plaintiff it was a blank stamp paper. Nothing was brought out to discredit the testimony of PWs. 1 and 2 with regard to the suit transaction. Although the loan and promissory note for the loan form part of the same transaction, a suit will lie on the original consideration. If there is a loan that itself gives a cause of action and the fact that there is a loan can never be a term of the contract contained in the promissory note. It is therefore open to the creditor to prove that there was loan independently of the promissory note. Since the plaintiff has succeeded in proving that the defendant availed a loan for Rs.30,000/- agreeing to repay the amount with A.S.No. 79 of 1999 8 12% interest, I am of the view that the plaintiff is entitled to get a decree as prayed for. Hence the learned Sub Judge is not justified in dismissing the suit. 11. This appeal is accordingly allowed. The judgment and decree dismissing O.S. 150 of 1994 on the file of the Sub Court, Pathanamthitta are set aside and that suit is decreed allowing the plaintiff to realise an amount of Rs.39,875/- together with interest at the rate of 6% p.a. on the principal sum of Rs.30,000/- from the date of the suit till realisation and cost of the suit from the defendant and his assets. The parties are directed to suffer their respective cost in this appeal. (M.L. JOSEPH FRANCIS) Judge tm