IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID THURSDAY, THE 25TH FEBRUARY 2010 / 6TH PHALGUNA 1931 AS.No. 76 of 1998 ------------------- APPELLANTS/DEFENDANTS: ------------------------------ 1. PREMIER TRADERS, POOVARANI, REPRESENTED BY PARTNER RADHAKRISHNAN, AGED 50 YEARS, RADHAMANDIRAM, MEVADA P.O. 2. K.RADHAKRISHNAN, - DO- -DO- 3. M.K.KUNJAN PILLAI, AGED 70 YEARS, -DO- -DO- 4. CHANDRAVALLI, W/O.RADHAKRISHNAN, AGED 45 YEARS, -DO- -DO- BY ADV. MR.K.K.CHANDRAN PILLAI RESPONDENTS: --------------- 1. P.C.ABRAHAM AGED 58 YEARS, PERUNTHIRAKAL, THODANAL PO., PULIYANNOOR. 2. V.R.GOPALAKRISHNAN, VATHALLOOR, THAKADIYIL, THODANAL P.O., PULIYANNOOR. ADV. MR.JOSEPH A.VADAKKEL THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 15/01/2010, THE COURT ON 25/02/2010 DELIVERED THE FOLLOWING: AS.No. 76 of 1998 ORDER ON C.M.P.NO.597/98 IN A.S.NO.76/1998 DISMISSED. 25.2.2010 SD/- HARUN-UL-RASHID, JUDGE. // TRUE COPY // P.A TO JUDGE. HARUN-UL-RASHID, J. ----------------------------------- A.S.No.76 of 1998 - D --------------------------------- Dated this the 25th day of February, 2010 J U D G M E N T Defendants 1 to 4 in O.S.No.175 of 1994 on the file of the Sub Court, Pala are the appellants. Suit for realisation of money filed by the plaintiff was decreed by the court below. The decree is passed allowing the plaintiff to realise a sum of Rs.27,194.50/- with future interest. Aggrieved by the said decree and judgment, defendants had preferred this appeal. The parties are referred to hereinafter as plaintiff and the defendants as arrayed in the suit. 2. The first defendant is Premier Traders, a partnership firm, dealing in the purchase and sale of raw rubber. The defendants 2 to 4 are the partners. The principal place of business of the first defendant firm is at Poovarani. They had a purchasing depot at Thodanal and the depot is managed by an employee. Fifth defendant is the said employee in charge of the depot at Thodanal. 3. According to the plaintiff, he used to sell rubber sheets at the depot of the defendants at Thodanal. On 30.5.1987, A.S.No.76 of 1998 - D 2 plaintiff sold 1412.700 kilograms of rubber sheets at Rs.19.25/- per kilogram. Price of the sold rubber sheets is Rs.27,194.50/- Practice in the depot is that the price of the rubber sheets purchased will be paid then and there or will be paid later. If paid later, the person in charge of the depot used to issue chits recording the details of the purchase and price payable. On supply of 1412.700 koligrams of rubber sheets at the rate of Rs.19.25/- per kilogram, the fifth defendant issued a chit stating the details and the sum payable. In the plaint it is further pleaded that, since the payment got delayed for a few months, the fifth defendant issued cheque bearing SB.No.3801 dated 19.8.1987 drawn on the Poovarani Service Co-operative Bank Ltd. in favour of the plaintiff for an amount of Rs.27,194.50/- The cheque was signed by the second defendant. The above said cheque is produced by the plaintiff and marked as Ext.A2. The plaintiff's case is that the understanding was that when the money is paid the cheque should be returned. Since the defendants failed to make the amount payable, a registered notice was issued to the defendants 2 to 4. Defendants 1 to 4 A.S.No.76 of 1998 - D 3 send a reply notice denying the transaction and alleged that the cheque might have been fraudulently issued by the fifth defendant on a cheque leaf lost and which was found out as lost on 1.1.1987. 4. Defendants 1 to 4 contested the suit denying the material averments in the plaint. It is contended in the written statement that the present suit was filed by the plaintiff in collusion with the fifth defendant after creating false documents. It is admitted that they were running a purchasing depot at Thodanal, that the fifth defendant was their employee who was in charge of the depot and that the fifth defendant was purchasing rubber sheets from agriculturists for an on behalf of defendants 1 to 4. The defendants also contended that the bill book and stock register maintained by the 1st defendant firm shows that there was no purchase of rubber sheets from the plaintiff. The defendants denied the allegations in the plaint about the purchase of 1412.700 kilograms of rubber sheets and that a chit was given to the plaintiff for Rs.27,914.50/-; that the 5th defendant was not authorised to purchase rubber sheets from persons without issuing bills; that no bill for the purchase of A.S.No.76 of 1998 - D 4 rubber from the plaintiff was issued to him nor the bill was sent by the 5th defendant to the main shop at Poovarani. It is also stated that the chit alleged to have been given to the plaintiff by the 5th defendant was created by the 5th defendant for the purpose of instituting the suit. In the written statement, it is further averred that on 25.9.1987, Thodanal depot was closed and service of the 5th defendant was terminated finding that he had committed serious irregularities in the account. It is also stated that on 1.1.1987, the 2nd defendant came to know that a signed blank cheque bearing No.3801 in the SB Account was stolen and the said fact was informed on the same day to the bank; that the 2nd defendant came to know only later that the 5th defendant had committed theft of the signed blank cheque leaf and that the 5th defendant is inimical to defendants 2 to 4 after he was dismissed from the service. 5. The evidence in the case consists of the oral testimonies of PWs 1 to 5, DWs 1 & 2, Exts.A1 & A2, Exts.B1 & B2 including B1(a) to B1(c) and B2(a) and Exts.X1 to X3 were marked as third party exhibits. A.S.No.76 of 1998 - D 5 6. Evidence of PW1 is supported by the oral evidence of PWs 2 and 3. PW4 is none other than the 5th defendant. He had given evidence in support of the plaint claim. Ext.A2 is the cheque bearing No.3801. According to PW4 he collected Ext.A2 cheque from the head office and the same was given to the plaintiff for the value of the rubber sheets purchased. He admitted that the date, name and amount were written by him in Ext.A2. Ext.A1 is the chit mentioned in the plaint alleged to have been issued by the 5th defendant (PW4) to the plaintiff. Relying on the evidence of PW4 court below held that 5th defendant gave Ext.A2 cheque to the plaintiff towards purchase price of the rubber sheets sold by the plaintiff at Thodanal depot. 7. The court below examined the other contentions of the plaintiff and the contesting defendants. According to PW1, Exts.A1 and A2 were given by PW4 for the sale of rubber sheets on 30.5.1987 at Thodanal depot by the 5th defendant. The understanding was that when money is paid cheque should be returned. The allegation of the defendants 1 to 4 is that Ext.A2 cheque is a lost cheque which was stolen by the 5th defendant and gave to PW1. The second defendant on behalf of defendants A.S.No.76 of 1998 - D 6 1 to 4 was examined as DW2. He maintained the stand that PW4 was not authorised by defendants 1 to 4 to obtain rubber without bill and to give chits to anybody for the purchase of rubber, that whenever rubber is purchased at Thodanal deport purchase bills would be written, that corresponding entries will be made in the stock register kept at the Thodanal depot and the rubber purchased would thereafter sent to the main depot, that on 30.5.1987 no rubber was purchased from any body is evident from Exts.B1, B1(a) to B1(c) and B2. DW2 also testified before the court that Ext.A2 cheque which was stolen by the 5th defendant and was given to PW1 on account of the animosity of the 5th defendant towards defendants 2 to 4 due to the termination of his service from the Thodanal depot. According to him Ext.A1 chit is created as a result of the collusion between the plaintiff and the 5th defendant and Ext.A2 cheque is a stolen cheque which was also used for the purpose of raising illegal claim. Defendants 1 to 4 contended that they are not liable to pay the plaint claim. 8. Ext.A1 is the chit showing the name of the purchaser, weight and rate of the rubber per kilogram and the price payable A.S.No.76 of 1998 - D 7 to the plaintiff. The said chit was admittedly issued by PW4. The trial court placed reliance on Ext.A1 chit stating that it was signed by PW4, who is admittedly the agent of defendants 1 to 4. The court below also placed reliance on Ext.A2 cheque admittedly given to PW1 by PW4 putting the date 19.8.1987. The court below also relied on the evidence of PWs 2 and 3. PW2 is the person who is running a ration shop next to the room wherein the Thodanal depot was functioning. He gave evidence to the effect that he was also a supplier of rubber at the Thodanal depot and on several occasions the 5th defendant gave him chits showing the amount, rate, weight etc. PW3 is another witness who is a resident of the locality testified before the court that he used to sell rubber sheets at the Thodanal depot managed by PW4. The court below relied on the evidence of PWs 2 and 3 in support of the oral evidence tendered by PW1. The dismissed employee of the 1st defendant firm, who is the 5th defendant in the suit was examined as PW4. He testified before the court in terms of the plaint allegations. The trial court accepted the evidence of PW4 also and opined that his evidence cannot be discarded on account of the wild allegations pointed out by defendants 1 to 4. The trial A.S.No.76 of 1998 - D 8 court observed that PW4 has admitted issuance of Exts.A1 and A2 to PW1 for the sale of rubber sheets at Thodanal depot of the 1st defendant. The trial court believed the evidence of PW4 to the effect that Ext.A2 cheque was given as per the directions of the second defendant. 9. The court below relied on the evidence of PWs 1 to 4 and held that in the light of the oral evidence of PWs 1 to 4 the case put forward by DW2 is false. Ext.X3 intimation was not acted upon by the court stating some technical reasons. The case of the defendants 1 to 4 that Ext.A2 stolen cheque was handed over to the plaintiff showing the value of the rubber sheets is disbelieved. The trial court also observed that PW1 is a retired professor of a College and opined that even according to DW2 the professor has no animosity towards defendants 1 to 4 to make a false plaint claim. For the above said reasons the court below disbelieved the case set up by the defendants 1 to 4 that the 5th defendant committed theft of a blank cheque signed by the 2nd defendant and gave the same to PW1 and held that the plaintiff is entitled to realise the plaint claim with future interest from defendants 2 to 4 personally, jointly and severally and from A.S.No.76 of 1998 - D 9 the assets of the first defendant. 10. I have examined the oral and documentary evidence adduced by the respective parties. I have perused Ext.A1 chit, A2 cheque, X3 letter, additional documents and notice issued by the plaintiff dated 19.10.1989. Notice dated 19.10.1989 was produced by the appellants/defendants as additional documents with a petition to receive it in evidence. There is reference to the said notice in the pleadings and therefore the said document was received in evidence and marked as Ext.X3. I have also examined in detail the oral evidence of PWs 1 to 5, DWs 1 and 2. At the outset I may say that, I cannot agree with the findings recorded by the court below based on the materials on record. On a perusal of the oral and documentary evidence I am of the view that the reasons stated and the findings arrived by the court below cannot be sustained. 11. PW1 spoke in terms of the plaint. The court below relied on the evidence of PWs 2 and 3 as corroborative evidence. PWs 2 and 3 examined to prove the fact that the chit would be given by the 5th defendant when rubber sheets are sold to the depot of the first defendant at Thodanal. PWs 2 and 3 are not A.S.No.76 of 1998 - D 10 witnesses to the transaction. They tendered evidence stating that they have also sold rubber sheets to the first defendant in their depot at Thodalnal. PWs 2 and 3 are residing in the locality wherein the depot is situated. Their evidence would show that they used to sell rubber sheets in the depot at Thodanal. They are not eye witnesses to the transaction alleged by the plaintiffs. Even with the aid of oral evidence of PWs 2 and 3 it can be concluded that the depot at Thodanal was transacting business in the purchase of rubber and that some of the residence of the locality are selling their rubber sheets in the 1st defendant's depot. PWs 2 and 3 are two among a number of customers of the Thodanal depot. They have only tendered evidence that the depot is transacting business in rubber and that several persons are selling their rubber goods to the depot at Thodanal. So long as they have no case that they have witnessed the transaction between the first defendant firm through 5th defendant (PW4) and the plaintiff, their evidence cannot be taken as corroborative piece of evidence in support of the case set up by the plaintiff. 12. PW4 was examined by the plaintiff who is none other than the 5th defendant. PW4 is the employee in charge of the A.S.No.76 of 1998 - D 11 first defendant's depot at Thodanal. The case set up by the plaintiff has to be appreciated in the light of the contentions raised by the contesting defendants that Ext.A1 chit alleged to have been given to the plaintiff by the 5th defendant was created by the 5th defendant for the purpose of the suit. It has also come out in evidence that the depot at Thodanal was closed on 25.9.1987 and the service of the 5th defendant was terminated on charges of misappropriation, irregularity in the account and that the 5th defendant is inimical towards defendants 2 to 4 after he was dismissed from service. 13. The transaction alleged in the plaint was on 30.5.1987. The first defendant firm closed the depot on 25.9.1987 consequent to the dismissal of the 5th defendant on charges of serious irregularities in the account. The contesting defendants contended that the suit was filed experimentally with the connivance of the 5th defendant and it is a collusive suit. 5th defendant was examined by the plaintiff as one of his witnesses. 5th defendant who was formerly an employee of the first defendant firm adduced evidence in terms of the allegations in the plaint. He testified before the court that he had issued A.S.No.76 of 1998 - D 12 Ext.A1 chit on the date of alleged sale of rubber, i.e., on 30.5.1987 and also issued Ext.A2 cheque bearing No.3801 of Poovarani Service Co-operative Bank on 19.8.1987. He deposed that the quantity of rubber purchased from the plaintiff was not accounted, that the cheque was issued as a post dated cheque, that the cheque was issued three weeks prior to the date mentioned in the cheque and that the stock register and transfer bill are not maintained properly and regularly. He admitted that Ext.A2 cheque is a personal cheque of the second defendant. In this connection it is very relevant to examine the contentions of the contesting defendants, that on 1.1.1987 the blank signed cheque leaf bearing No.3801 in the SB account of the second defendant was missing and the said fact was informed on the same date to the bank by the second defendant. Ext.X3 is a letter dated 1.1.1987 issued by the second defendant addressed to the Secretary, Poovarani Service Co-operative Bank intimating the bank that a blank signed cheque leaf bearing No.3801 was missing and requested the bank not to honour the cheque. Ext.X3 was produced on summons by the Poovarani Service Co- operative Bank and marked as third party exhibit. Ext.X3 A.S.No.76 of 1998 - D 13 document cannot be sidelined for any reasons. Ext.X3 shows that cheque No.3801, a blank signed cheque was lost as on 1.1.1987. It is admitted by PW4 that the date written in Ext.A2 cheque is 19.8.1987. The 5th defendant as PW4 also admitted that the said cheque was issued three weeks prior to 19.8.1987. If he is to be believed he handed over the cheque during the last week of July, 1987 or in the first week of August 1987 putting the date 19.8.1987 and handed over the same to the plaintiff. The evidence and circumstances shows that there is every chance of Ext.A2 cheque leaf stolen by PW4, kept in his custody and was handed over to the plaintiff for realising the plaint claim. It is also important to note that though Ext.A2 cheque dated 19.8.1987 was issued to the plaintiff, he has no case that Ext.A2 cheque was presented at any point of time, instead the plaintiff as PW1 testified before the court that he used to enquire as to whether funds are available in the account of the second defendant. If such enquiries are made as testified by him without presenting the cheque the said conduct also shows his deceived intention to collect the amount as and when there is funds in the account of the second defendant. The very fact that the cheque A.S.No.76 of 1998 - D 14 was never presented before the bank till the filing of the suit in 1994, is also a very important circumstance which would go to show that Ext.A2 cheque might have been stolen by the 5th defendant and handed over to the plaintiff in their attempt to encash the plaint claim. The said circumstance also go to show that the plaintiff and the 5th defendant colluded and they were trying to encash the amount from the bank. 14. The appellants produced the reply notice send by the plaintiff through his lawyer. I have already marked the said document as Ext.B3. In Ext.B3 it is stated that on 19.8.1987 the cheque bearing No.3801 dated 19.8.1987 drawn on the Poovarani Service Co-operative Bank Ltd. was given to the plaintiff signed by the second defendant. The plaintiff's case is that the cheque was handed over on 19.8.1987. At the same time PW4 testified before the court that the cheque was issued three weeks prior to 19.8.1987. It is also revealed from the above said lawyer notice that the cheque was never presented for encashment and it is further stated in the notice that previous information has been given by the second defendant to the bank stating that the particular cheque was lost. Going by his own A.S.No.76 of 1998 - D 15 notice marked as Ext.B3, the plaintiff had prior knowledge about the fact of information given by the second defendant to the bank that in no circumstance the missing cheque shall be honoured. In spite of the said information gathered by the plaintiff from the bank, he never chose to file a suit even within a reasonable time. The suit was filed on 29.5.1990, i.e., after a period of seven and odd months. The suit was filed on the last day of expiry of the period of limitation, even after knowing that the cheque will not be honoured. The fact that he did not file the suit within a reasonable time nor any action is initiated against the second defendant under the Negotiable Instruments Act, and further failed to file a suit for recovery of amount within a reasonable time from the date of supply of rubber, are all circumstances which would go to show that the plaintiff and PW4 colluded together and conspired to realise the cheque amount by resorting to deceptive practice. It is rather surprising to note that the cheque dated 19.8.1987 was never presented and the said conduct of the plaintiff is strange and not appealing to reason. 15. PW1 deposed before the court that PW4's father was an employee of the plaintiff and admitted that the cheque issued A.S.No.76 of 1998 - D 16 is a post dated cheque. X3 letter dated 1.1.1987 send to Secreatry, Poovarani Service Co-operative Bank by the second defendant was proved by examining the Secretary of the bank. DW2 is the second defendant. He denied the sale of rubber to the Thodanal depot by the plaintiff. He testified that the handwriting in Ext.B1 chit is that of the 5th defendant, that if rubber was purchased on 13.5.1987 there could be entry in the bill book. The carbon copies of page numbers 5, 6 & 7 of bill book was produced and marked as Exts.B1(a), (b) and (c) respectively and Ext.B2 is the stock register of raw rubber. Ext.B1 bill book and Ext.B2 stock register produced in the case shows that no quantity of rubber was purchased from the plaintiff on 30.51987. Ext.B2 register further shows that 97.2 kilograms of rubber was purchased from a customer on 27.5.1987, and the subsequent purchase was on 1.6.19687. Bill No.39 relates to the purchase on 27.5.1987 and bill nos, 30 and 31 relates to the purchase on 1.6.1987. He testified that if the rubber was purchased on 30.5.1987 as alleged by the plaintiff necessary entries would have been made in Ext.B2. DW2 also deposed that he never permitted, at any time, to purchase rubber without A.S.No.76 of 1998 - D 17 issuing the bill and further he never instructed the 5th defendant to collect rubber by issuing chit. DW2 also deposed before the court that Ext.A1 chit is a fabricated document created as a result of the conspiracy between the plaintiff and the 5th defendant. He also stated that the 5th defendant was dismissed from service on 25.9.1987 for misappropriation of funds and for cheating the customers of the firm. Therefore the contention of the plaintiff that the 5th defendant had issued cheque bearing No.3801 signed by the second defendant to the plaintiff towards purchase price of the rubber sheets sold by the plaintiff at the Thodanal depot of the first defendant is not proved. The facts and circumstances and evidence adduced by the parties was wrongly appreciated and the findings are entered overlooking the materials on record. The facts and evidence proved shows that there was no transaction at all between the parties and further revealed that the 5th defendant had committed theft of the blank cheque signed by the second defendant and gave the same to PW1 and also issued Ext.A1 chit deceitfully. The findings of the court below to the contrary cannot be sustained. The plaintiff is a retired professor of St.Thomas College, Pala. The criminal act A.S.No.76 of 1998 - D 18 committed by a professor with the connivance of the 5th defendant lead to the filing of the suit and the defendants 1 to 4 are unnecessarily dragged to prolonged litigation. In the result, the appeal is allowed. The decree and judgment passed by the court below are set aside and the suit stands dismissed. The appeal is allowed with cost throughout. HARUN-UL-RASHID, JUDGE. bkn/-