IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY EIGHTH DAY OF SEPTEMBER TWO THOUSAND AND TEN PRESENT THE HON'BLE SRI JUSTICE GHULAM MOHAMMED and THE HON’BLE SRI JUSTICE P.SWAROOP REDDY APPEAL SUIT No.2420 of 2000 Between: K.M.Surya ..... APPELLANT (S) AND Ramasubbamma .....RESPONDENT(S) THE HON'BLE SRI JUSTICE GHULAM MOHAMMED and THE HON’BLE SRI JUSTICE P.SWAROOP REDDY APPEAL SUIT No.2420 of 2000 ORDER: (Per HON'BLE SRI JUSTICE GHULAM MOHAMMED) This Appeal Suit is directed against the judgment and decree dated 19.07.2000 passed in O.S.No.44 of 1999 by the learned Additional Senior Civil Judge, Tirupati. 2. Appellant is defendant and respondent is plaintiff. For the sake of convenience, parties herein are referred to as they are arrayed before the trial Court. 3. The case of the plaintiff is that the defendant borrowed Rs.71,000/- from him, on 23-07-1996, by way of cheque No.15377 for his business purpose promising to repay the same with interest at 24% per annum. As the defendant failed to repay the same in spite of repeated demands, he got issued a legal notice on 16-02- 1999 but the defendant, having received the said notice, neither repaid the debt nor issued any reply. Therefore, he filed the Suit for recovery of Rs.1,16,013/- being the principal and interest due. The defendant filed written statement denying the averments made in the plaint except receipt of the cheque and encashment thereof. The case of the defendant is that the plaintiff is his close relative and on account of the relationship she used to take his help in their wholesale medical shop and purchase lands. It is also his case that the plaintiff and her husband requested him to close their fixed deposit account in Vijaya Bank and bring the amount duly signing the requisite forms and also gave cheque stated supra for drawing the amount. Accordingly, he withdrew Rs.71,000/- being the entire amount from the fixed deposit and gave the same to the plaintiff. It is his further case that as per the request of the plaintiff’s husband, he purchased a land at Tiruchanoor and paid the entire sale consideration to the vendors of the said land and because of the disputes arose between him (plaintiff’s husband) and the vendors of the land, the plaintiff’s husband misunderstood him and, due to that enmity, foisted false case against him and got issued a notice to him by the plaintiff. As per the advice of their relatives, he did not issue any reply notice with a view to get the matter compromised but the plaintiff’s husband without being abide by the terms of settlement got filed the present Suit i.e. O.S. No.44 of 1999 on the file of the Additional Senior Civil Judge, Tirupati, the result of which culminated in the present appeal and another Suit in O.S.No.5 of 1999 on the file of the Court of the V Additional District Judge, Tirupati, for recovery of Rs.6,00,000/- with interest which was the subject matter in A.S.No.675 of 2005. The defendant further states that the plaintiff never lent any amount to him and that he is not liable to pay any amount to her and that he has no necessity to borrow such huge amount and that inasmuch as there is no presumption that all the cheque transactions are loans or debts in the absence of any instrument in writing, the Suit is not maintainable. On the basis of the above pleadings, the trial Court framed the following issues for trial. (1) Whether the plaintiff is entitled to recover suit amount? (2) To what relief? On behalf of the plaintiff, the plaintiff herself was examined as P.W.1 and got marked Exs.A.1 to A.5. On behalf of the defendant, the defendant himself was examined as D.W.1 and got marked Exs.B.1 to B.4. The trial Court, upon considering the material on record, decreed the suit with proportionate costs for Rs.71,000/- with interest at 24% per annum from 19.2.1999 till the date of realisation. Aggrieved by the judgment and decree passed against him, the defendant filed the present appeal. 4. The learned counsel appearing for the appellant- defendant vehemently contended that except the cheque there is no other document to show that the defendant has received amount from the plaintiff; that receipt of the amount through a cheque does not always necessarily mean that one has borrowed amount from the drawer of the cheque; that the plaintiff has failed to discharge her obligation to prove the nature of transaction and she has not adduced any circumstantial evidence thereto and that there was nothing in writing that the defendant has to repay money with interest and therefore the plaintiff has miserably failed to establish her case. It is contended that it is only a case of probabilities and the defendant has nowhere admitted that he received that amount from the plaintiff by way of loan and except the said cheque there is no other document in writing so as to disclose another transaction. In the absence of any other document or admission on the part of the defendant, the trial Court erred in giving a finding to the effect that inasmuch as the defendant admitted receipt of the cheque and its encashment but failed to prove that the said amount was paid to the plaintiff, it should be presumed that he appropriated the amount for his personal business purpose as alleged in the registered notice and his failure to reply to the said notice and to examine the mediators lends support to this presumption. In support of his contentions he relied on ANANDA NAMDEO vs. PUNDALIK TUKARAM[1], OFFICIAL RECEIVER vs. ABDUL SHAKOOR[2], BIHARI LAL vs. CHANDU LAL[3], BAL KISHAN GUPTA vs. RAMADHAR[4], SANGAPPA BASAPPA vs. CHIDANANDA BASAWANTRAYA[5], M.NARASIMHULU vs. M.LAXMAMMA[6] and SATYANARAYANA vs. SREE RAMULU[7]. 5. Per contra, the learned counsel appearing for the respondent-plaintiff contended that issuance of the said cheque and its encashment is not in dispute. Further, the plea of the defendant that he paid the said amount to the plaintiff in the presence of his brother-in-law, Venkata Ramana Reddy, cannot be accepted as he failed to adduce the evidence of said Venkata Ramana Reddy. The fact that he purchased land in the name of his wife on the date of withdrawal of the amount from the bank itself is a circumstantial evidence that he borrowed the said money from the plaintiff and utilised the same for that purpose. It is further contended that since the defendant has withdrawn the amount from the bank as an agent of plaintiff, an obligation is cast upon the defendant to repay the same to the plaintiff and that obligation has not been discharged by him. Therefore, the trial Court rightly considered the provisions of the Indian Evidence Act and the Negotiable Instruments Act. 6. Now the point for determination is whether the defendant is not liable to pay the suit amount to the plaintiff? 7. For deciding the point, it is necessary to go through the evidence of the plaintiff and the defendant who were examined as P.W.1 and D.W.1, respectively. The plaintiff deposed that the defendant is son-in-law of her husband’s brother and that he borrowed Rs.71,000/- on 23.07.1996 by way of cheque No.15377 dated 23.07.1996 agreeing to repay the same with interest at 24% per annum and when he failed to repay the same she got issued a notice on 16.02.1999 but the defendant neither give any reply to the said notice nor repaid the amount. In the cross-examination, she admitted that there is a dispute between her and the defendant with regard to purchase of a land and that the agreement relating to the land is still with the defendant and that there was a mediation in that regard. She, however, denied the suggestion that she gave necessary papers to the defendant to withdraw and encash the amounts from the fixed deposit and in that connection gave a cheque to him and that he encashed the same and gave the amount to her in the presence of one Sri Venkataramana Reddy. From the above, it is clear that nothing was elicited from the cross-examination to disbelieve the testimony of the plaintiff. The defendant, as D.W.1, apart from admitting the relationship, deposed that the plaintiff asked him to withdraw the fixed deposit lying in her favour with the Vijaya Bank and gave a cheque duly signed by her asking him to fill up the amount after the interest is calculated and accordingly he withdrew Rs.71,000/- and gave that amount to her in the presence of his wife’s brother, Sri L.Venkataramana Reddy. He further deposed that there was a dispute between him and the plaintiff’s husband regarding purchase of a land and that he did not give reply to the notice as their relatives wanted to settle the matter out side the Court. In the cross examination, he admitted that he did not give reply for the notice issued to him. He tried to explain that it is only because the mediation tried by their relatives, he did not give reply for the notice. 8. The trial Court considering the evidence on record, disbelieved the version of the defendant that the plaintiff asked him to encash her fixed deposit, credit the proceeds in her savings bank account and withdraw Rs.71,000/- from the said amount on the ground that if the said version is true, the defendant would have at least summoned for production of the fixed deposit voucher and also the papers presented by him in the bank before the Court. The trial Court further observed that though there is a clear admission on the part of the defendant that he encashed the cheque and received Rs.71,000/-, he failed to prove that the said amount was given to the plaintiff. The trial Court also observed that though the defendant received a registered notice from the plaintiff on 19.02.1999 and the suit was filed on 15.03.1999 he failed to give any reply. The plea taken by the defendant in this regard that the mediators who are his close relatives suggested him that it is not proper to exchange notices and that they will compromise the matter is also disbelieved by the trial Court for want of evidence to speak about the alleged mediation. For this, the trial Court relied on the decision given in M.NARASIMHULU case (6 supra). The contention that except the cheque there is no another transaction in writing for proving that the defendant has obtained loan from the plaintiff and the presumption drawn by the trial Court suffers from illegality is without merit because when once the receipt of the cheque, encashment of the said cheque, receipt of the legal notice demanding repayment of the loan and not issuing any reply by the defendant, the trial Court was right in drawing the presumption under Section 139 of the Negotiable Instruments Act. 9. At this juncture, it is pertinent to refer to the decisions relied on by the counsel for the appellant-defendant. 10. The decision given in ANANDA NAMDEO case (1 supra) has no application to the facts of the present case and in fact it goes contra to his case inasmuch as it is held therein that there is nothing in law making it imperative that a transaction of debt should be reduced to writing. 11. The decision given in ABDUL SHAKOOR case (2 supra) also has no application to the facts of the present case inasmuch as it is given while dealing with the provisions of the Provincial Insolvency Act for drawing a presumption under Section 118(a) of the Negotiable Instruments Act and, in fact, in para-16 of the judgment, it is held that Section 114 of the Indian Evidence Act authorises the Court to presume existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business in their relation to the facts of the particular case. Therefore, in the facts and circumstances of the case and the decision given in ABDUL SHAKOOR case (2 supra), it can be said that the trial Court rightly presumed that the defendant has obtained loan from the plaintiff. 12. No doubt, in the decision given in BIHARI LAL case (3 supra) it is held that when a sum is admitted to have been received, there is no legal presumption that it was meant to be repaid and that the payment might have been for various reasons and it is for the person who comes to Court and sues for recovery of the sum of money to prove that it was meant to be repaid, but not issuing any reply to the notice gives a scope to draw the presumption that the defendant obtained loan from the plaintiff and received the said cheque and encashed the same for that purpose. 13. In the decision given in BAL KISHAN GUPTA case (4 supra) the facts are akin to the present case. In that case also the plaintiff filed the suit alleging that he gave a cheque for Rs.4,700/- to the defendant on 10.03.1959 as a loan bearing interest at 6% per annum and when the learned Subordinate Judge decreed the plaintiff’s suit for Rs.4,700/- the defendant preferred the appeal. The said appeal was allowed setting aside the judgment and decree of the learned Subordinate Judge on the main ground that the learned Subordinate Judge did not take a total view of all the circumstances and, in particular, he did not even evaluate the delay in filing the suit in the light of the halting, feeble and unnatural allegations made even in the notice sent by the plaintiff and the background of strained relationship between the parties. In the case on hand, there are no such peculiar circumstances and so the decision given in that case will have no bearing on the present case. 14. In the decision given in SANGAPPA BASAPPA case (5 supra), in para-11, though it is stated that a cheque drawn, presented and paid is by itself no evidence of money lent or advanced by the drawer to the payee and it may be a prima facie evidence to extinguish an existing debt, but not to create a new one, it is also stated that however it is open to the drawer to show by other evidence that the cheque was, in fact, loaned to the payee and that mere issuance of a cheque in favour of the payee by itself will not be evidence of a loan even if the cheque is encashed by the payee and that it was loaned to the payee must be proved by the drawer by other evidence. In the case on hand, non-issuance of any reply by the appellant-defendant to the respondent-plaintiff gives rise to draw the presumption that the defendant obtained loan from the plaintiff by way of the said cheque. 15. As already stated supra, the trial Court relied on the decision given in M.NARASIMHULU case (6 supra) for disbelieving the version of the appellant-defendant that the mediators who are his close relatives suggested him that it is not proper to exchange notices and that they will compromise the matter is also disbelieved by the trial Court for want of evidence to speak about the alleged mediation. 16. In the decision given in SATYANARAYANA case (7 supra) it is held that where the suit is based on an alleged handloan, the burden is and will be on the plaintiff to make out that the handloan is true, that he did in fact advance the money representing the loan to the defendant on condition of repayment and that consequently he is entitled to recover the money from him. In the case on hand, the plaintiff has discharged the burden cast upon her by issuing notice to the defendant and gave evidence on oath as P.W.1 and nothing was elicited during the cross-examination so as to disprove her testimony. Further, the plaintiff also deposed that her husband also gave Rs.6,00,000/- to the defendant and that another suit is also pending on the file of the V Additional District Court, Tirupati. 17. For the foregoing reasons, we do not find any infirmity or illegality in the judgment rendered by the trial Court. Thus, the appeal is devoid of merits and hence is liable to be dismissed. 18. Accordingly, the Appeal Suit is dismissed. There shall be no order as to costs. ___________________________ GHULAM MOHAMMED, J. _________________________ P.SWAROOP REDDY, J. 28th September 2010 CVRK [1] AIR 1936 NAGPUR 225 [2] AIR 1965 SC 920 [3] AIR 1939 LAHORE 386 [4] 1974-ILR (DEL)-1-856 [5] 1980-AIR (KAR)-0-220 [6] 1997 (1) ALD 246 [7] AIR 1961 AP 461