IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN WEDNESDAY, THE 12TH AUGUST 2009 / 21ST SRAVANA 1931 AS.No. 544 of 1995(C) ------------------------------ OS.231/1991 of PRINCIPAL SUB COURT,ALAPPUZHA .................... APPELLANT/PLAINTIFF: ---------------------------------- M/S. ST. GEORGE KURIES (REGD.). SRINAGAR, KASHMIR. BY ADV. MR.JOSEPH A.VADAKEL, MR.GEORGE K.VARGHESE, MR.ASHERAFF. RESPONDENTS/DEFENDANTS: -------------------------------------------- 1. V. SREEKANTAN NAIR, SANTHI SADANAM, PENGATTUKONAM, VATTIYOORKAVU, TRIVANDRUM (PROFESSOR GRADE II, N.S.S. HINDU COLLEGE, PERUNNA, CHANGANACHERRY). 2. K. MADHUKUMAR, THAIPARAMBIL, MANCOMBU P.O., PULINCUNNU (LECTURER, N.S.S. HINDU COLLEGE, PERUNNA, CHANGANACHERRY). 3. N. CHANDRASEKHARA PILLAI, SREELAKSHMI, VAZHATTUKONAM, VATTIYOORKAVU, RANDAMAD, TRIVANDRUM (PROFESSOR, V.T.M.N.S.S. COLLEGE). 4. DR. P. SASIDHARN NAIR, VILAYIL VEEDU, VARKALA P.O., (LECTURER, DEPT. OF SOCIOLOGY, N.S.S. HINDU COLLEGE, PERUNNA, CHANGANACHERRY). 5. P. SUKUMARAN NAIR, CHENKOTTUKONAM, EDAPAZHANJI, SASTHAMANGALAM. ANCHAMADA, TRIVANDRUM. (LECTURER, DEPT. OF POLITICS, N.S.S. HINDU COLLEGE, CHANGANACHERRY). R1, R3 TO R5 BY ADV. MR.V.CHITAMBARESH, MR.SURESH MENON. THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 21/05/2009,THE COURT ON 12/08/2009 DELIVERED THE FOLLOWING: rs. K. SURENDRA MOHAN, J. ------------------------------------------------------------ A.S. NO: 544 OF 1995 ----------------------------------------------------------- Dated this the 12th August, 2009. JUDGMENT The appellant, the plaintiff in O.S.231/1991 challenges the judgment and decree dated 30.7.1994 of the Principal Sub Judge, Alappuzha dismissing the suit. Respondents are the defendants in the suit. 2. The suit was filed by the plaintiff for the recovery of an amount of Rs.40,075/- from the defendants, with interest and costs. The plaintiff is a partnership firm registered at Srinagar, Jammu and Kashmir, having its branch at Edathua in Alleppey district. The plaintiff had organised a monthly kuri spread over a period of 40 months from its Head Office at Srinagar as Kuri No: 503/86. The kuri consists of A, B, C and D class tickets. The first defendant had joined and was subscribing to two tickets in the B class and one ticket in C class having total value of Rs.60,000/-. He was the successful bidder of the above tickets at an auction conducted on 22.12.1986. The price amount was received by the defendant from the plaintiff after executing an agreement on 25.2.1987. As per the agreement, the defendants had undertaken to pay the future instalments on the said tickets, on the due dates A.S. 544/1995 2 without fail. They had jointly and severally made themselves liable for repayment of the said amount and they also made themselves liable for payment of the defaulted instalments in lump, with interest at the rate of 12% per annum. However, the first defendant paid only upto and inclusive of the 20th instalment which fell due on 7.7.1988. The subsequent 20 instalments were defaulted by them. In spite of repeated demands made by the plaintiff directly and through their lawyer by notice dated 24.4.1991, the amounts were not paid. Therefore, the plaintiff sought to recover the defaulted 20 instalments at the rate of Rs.1500/- per instalment with interest totalling an amount of Rs.40,075/-, with interest and costs. 2. The claim was contested by defendants. The first defendant filed a separate written statement. The second defendant remained ex parte. Defendants 3 to 5 filed a joint written statement. According to the first defendant the plaintiff had wilfully suppressed the variola and other particulars regarding the registry of kuries. He contended that he had not joined in any kuri as alleged. Actually, he was told that an amount of Rs. 60,000/- would be paid in two instalments and the amount should be repaid in 40 instalments. He took part in only the first half of the scheme and paid only a few instalments. However, on A.S. 544/1995 3 finding that the transaction was void, after intimating the plaintiff, he discontinued the scheme. It is alleged that he had also paid back the amount taken from the plaintiff in instalments and therefore no amount was due to the plaintiff from him. 3. The first defendant challenged the legality of the kuri transaction. According to him, the kuri transaction conducted by the plaintiff was in violation of the Kerala Chitties Act, 1975, hereinafter referred to as the 'Act'. There is no contractual liability for the first defendant to pay the amount claimed in the plaint. Therefore, he prayed for dismissal of the suit. 4. Defendants 3 to 5 also raised similar contentions. They further alleged that the amount was taken under a scheme by which, an amount of Rs.60,000/- was to be paid in two instalments of Rs.30,000/- each. The amount was to be repaid in 40 instalments. But, the first defendant had participated only in the first half of the scheme. Thereafter, finding that the transaction was void, the first defendant did not continue the scheme. According to defendants 3 to 5 the accounts furnished by the plaintiff was false. They contended that the transaction was against the Act and therefore, they were not liable to pay any A.S. 544/1995 4 amount to the plaintiff. Hence, they prayed for dismissal of the suit. 5. The parties went to trial on the above pleadings. The trial court framed four issues and tried the suit. The evidence in the case consists of the oral evidence of P.W.1 and D.W.1 and Exts.A1 to A8 and Exts.B1 to B9 documents. The court below considered the rival contentions of the parties and the evidence on record and came to a conclusion that the transaction in question was not legal since the conduct of the kuri was in violation of the Act. Consequently, under Section 23 of the Indian Contract Act the object of the agreement being unlawful, the plaintiff could not succeed. The court below has found fault with the plaintiff for not having produced their accounts. The court below also found that there was no convincing evidence to show that the amount claimed by the plaintiff was due from the defendant and payable by him. Since the books of accounts were not produced by the plaintiff, it was not possible to know the real nature of the transaction between the parties. On the basis of the above findings, the court below dismissed the suit. This appeal is against the said judgment and decree. A.S. 544/1995 5 6. According to the counsel for the appellant, the provisions of the Act does not prohibit the conduct within the State of Kerala of chitties registered in other states. Therefore, there are many financial institutions conducting such chitties in Kerala though the chitties are registered in other States. At any rate, it is pointed out that the documents produced by the plaintiff shows that the chitty amount was received by the first defendant. Therefore, he had a liability to pay back the amount. Since the contention in the written statement is that the first defendant had paid back the amount, the burden of proving such repayment was squarely on the first defendant. As there is no evidence in the case to prove such repayment, it is contended that the trial court should have decreed the suit. 7. I have heard the appeal in detail. I have gone through the records of the case as well as the evidence adduced by the contesting parties. 8. The point that arises for consideration is:- “Whether the appellant/plaintiff is entitled to a decree for the amount claimed in the plaint?” 9. The plaintiff has claimed an amount of Rs.30,000/- from the defendant as the amount payable by the first defendant A.S. 544/1995 6 towards 20 instalments at the rate of Rs.1,500/- each. The plaintiff has also claimed interest and notice charges. Thus, the total claim of the plaintiff is Rs. 40,075/- which figure has been arrived at after giving due credit for an amount of Rs.500/- that had been paid by the first defendant. According to the plaintiff, the first defendant was a subscriber to a kuri that was being conducted by the plaintiff. He had bid the kuries at an auction conducted on 22.12.1986 at a discount of Rs.24,000/-. Therefore, the bid amount of Rs.36,000/- was paid to him as per Ext.A7 receipt dated 25.2.1987. At the time of receiving the amount the first defendant had executed Ext.A1 agreement which is also dated 25.2.1987. Ext.A1 is a document that is partly written on a stamp paper with a printed page containing the terms and conditions thereof attached to the stamp paper, which are standard terms with blank portions in between, to be filled up to suit the requirement of each transaction. The unfilled portions of the printed page are seen filled up, to make up the agreement. Both the stamp paper as well as the printed pages are signed by the defendants. Ext.A1 agreement shows that the first defendant was a subscriber to Kuri No: 503/86, that he was the successful bidder in the auction held on 22.12.1986 and that the bid was at a discount of Rs.24,000/-. A.S. 544/1995 7 The agreement also acknowledges the receipt of the amount of Rs.36,000/-. The trial court has not relied on Ext.A1 agreement finding that some portions in the printed part of the agreement were not filled. However, a reading of the agreement shows that the unfilled portions are the clauses that are not applicable to the present situation. Therefore, the authenticity of Ext.A1 is not in any way affected by the fact that some portions thereof have been left unfilled. The signatures of the defendants are seen both on the stamp paper and on the printed page of the agreement. It is worth noticing that the defendants do not dispute their signatures in Ext.A1. Therefore, I do not find any reason to discard Ext.A1 as unreliable. Ext.A7 is a receipt which has been executed by the first defendant for receiving the amount of Rs.36,000/-. The above document was not relied on by the court below for the reason that the amount of Rs.36,000/- in Ext.A7 appears to have been subjected to correction. Ext.A7 shows that originally the amount of Rs.30,000/- was written which has been corrected to the figure of Rs.36,000/-. Where the amount has been written in words, the word 'six' has been inserted after the word 'thirty' to read 'thirty six thousand'. The court below has found that Ext.A7 was unreliable because of the above correction. However, it is worth noticing A.S. 544/1995 8 that the amount seen to have been received as per Ext.A1 is Rs.36,000/-. It is the very same amount that is seen in Ext.A7 also. Further, the corrections seen in Ext.A7 appears to have been made with the same pen with which the rest of the entries have been made and in the same hand writing. Therefore, it is clear that the corrections were contemporaneous to the execution of the document. Exts. A1 and A7 are executed on the very same day. Ext.A7 also bears a seal at the bottom which says, 'cash paid' with a signature of one Geetha and the date 25.2.1987. In view of the fact that Ext.A7 is corroborated by Ext.A1, the corrections therein are of not much consequence and it is not necessary to discard the said document. Apart from the above, the first defendant has also executed a promissory note in favour of the plaintiff for an amount of Rs.47,500 on 25.2.1997. A comparison of all the three documents, Exts. A1, A7 & A8 shows that the said documents have all been executed on the same day. The handwriting in all the three documents are the same. The parties to all the three documents are seen to have affixed their signatures thereon using their respective pens, which are the same in all the three documents. It is not very clear how the figure in Ext.A8 promissory note has been arrived at. However, the above documents establish A.S. 544/1995 9 beyond doubt that the bid amount of the auctioned kuri was received by the first defendant. 10. According to the defendants, the first defendant had not joined any kuri and the averment to the said defect in the plaint was false. According to the defendants, the first defendant was told that an amount of Rs. 60,000/- would be paid in two instalments, which was to be paid back in monthly instalments. However, there is no evidence to support the above contention. On the contrary Ext.A6 bye laws which has been signed by the first defendant together with Exts.A1, A7 and A8 show that the first defendant was a subscriber to the kuri. The defendants have a case that they were made to sign those documents while receiving the amount from the plaintiff. However, the defendants are all highly qualified persons and are College Lecturers. The first defendant is a Professor and, therefore, it cannot be presumed that they would have signed Exts.A1, A6, A7 and A8 without understanding the nature of the documents or the transaction that they were entering into. 11. The defendants have a case that only an amount of Rs.30,000/- was received by the first defendant and the figure in Ext.A7 receipt was corrected to Rs.36,000/- later to support the A.S. 544/1995 10 plaint claim. Ext.B6 passbook is produced to support the above contention. The entry in Ext.B6 dated 8.12.1987 shows that an amount of Rs.30,000/- has been credited to the account of the first defendant. However, Ext.A7 receipt is dated 25.2.1987 and, therefore, amount seen credited on 8.1.1987 in Ext.B6 cannot be the amount received as per Ext.A7 receipt or Ext.A1 agreement. Therefore, the contention of the defence of this score has to fail. 12. The defendants have further contended that the conduct of chitty by the plaintiff was in violation of the Act and, therefore, was unlawful and incapable of enforcement. However, it is to be noted that the Act does not prohibit within the State of Kerala, the conduct of chitties registered in other States. Therefore, there is nothing illegal in the conduct of chitties registered in other States being conducted in Kerala. It is to be noted that the defendants are all educated persons who had entered into the kuri transaction with the plaintiff. They have also received a substantial amount from the plaintiff agreeing to repay the amount in instalments. However, they have defaulted the instalments and when the plaintiff has sought for recovery of the defaulted instalments they are contending that the transaction is void. Therefore, their contentions are found to be absolutely without bonafides and A.S. 544/1995 11 unsustainable in law and fact. 13. Another important aspect to be taken note of is that as per paragraph 7 of the written statement of the first defendant, the case pleaded is that he had paid back the amount taken from the plaintiff in instalments and that no amount is due to the plaintiff. The above contention is seen reiterated in paragraph 7 of the joint written statement filed by the other defendants also. It is trite that the onus of proving a plea of discharge is on the person who puts forward the said claim. Therefore, the defendants had to prove the plea of discharge by clear and cogent evidence. However, in the present case there is no evidence to prove the plea of discharge that has been put forward. 14. The court below has found fault with the plaintiff for not having produced their books of accounts. The books of accounts would have shown the real nature of the transaction between the parties, it has been observed. However, in the nature of the pleadings and the evidence of the parties in the present case, the books of accounts of the plaintiff does not have much relevance. Though the defendants have disputed the kuri transaction, as already noted above, the agreement Ext.A1 signed by the first defendant as well as Exts.A7 and A8 clearly show that the said A.S. 544/1995 12 contention is without any foundation. Exts.B1 to B3 notices issued on behalf of the plaintiff and produced by the defendants also evidence the existence of a kuri transaction. Though the said notices were issued intimating default in payment of kuri instalments, the defendants have no case that they issued any reply disputing the nature of the transaction. Therefore, it is found that the court below was in error in finding that the plaintiff had not established his claim. It is the specific case of the plaintiff that the instalments were defaulted from the 20th instalment onwards. The plaint claim is restricted to the amount covered by the balance 20 instalments remaining unpaid. I also take note of the circumstances that though Ext.A8 promissory note is for an amount of Rs. 47,500/-, the plaint claim is limited to Rs.30,000/-. Ext.A2 notice has been issued demanding the said amount, to which no reply is seen to have been issued by the defendants. Therefore, the contentions of the defendants are only to be rejected. 15. In the above circumstances, I find that the plaintiff is entitled to succeed. I therefore, set aside the judgment and decree dated 30.7.1994 of the Sub Court, Alappuzha in O.S.231/91 and the suit is decreed for an amount of Rs.40,075/- with interest at the rate of 6% per annum from the date of suit till date of A.S. 544/1995 13 realisation on the principal amount of Rs.30,000/- with costs. The appeal is allowed on the above terms. K. SURENDRA MOHAN Judge jj A.S. 544/1995 14 K. SURENDRA MOHAN,J. -------------------------------------- A.S.NO:544 OF 1995 -------------------------------------- JUDGMENT Dated:12th August, 2009.