Regular Second Appeal No.1009 of 1988 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Regular Second Appeal No.1009 of 1988 Date of decision: 16.7.2010 1. The Union of India through Secretary , Ministry of Finance, New Delhi. 2. The Excise and Taxation Officer, Jagraon, exercising the powers of Assistant Collector, Ist Grade, Jagraon. ..... Appellants. Versus 1. Smt. Gian Devi widow; 2. Ashok Kumar; 3. Pawan Kumar; 4. Kanta Rani; 5. Kusam Lata; 6. Shashi Bala, minor daughter (Minor through their mother Smt. Gian Devi next friend & guardian) 7. Kasturi Lal; 8. Baljit Rai; sons 9. Shanti Devi; (since deceased) through legal representative: Satish Kumar Takkar, 10.Bimla Devi; 11.Krishana Devi; Daughters of Smt. Jamna Devi, deceased widow of Sh. Amritsaria Mal and mother of deceased Telu Ram. (Legal representatives of Sh. Telu Ram, deceased son of Sh. Amritsaria Ram, plaintiff and Jamna Devi widow of Sh. Amritsaria Mal, deceased, plaintiff) All rs/o Dana Mandi, Jagraon, District Ludhiana. 12.M/s Babu Ram Pawan Kumar, Jagraon, through Shri Pawan Kumar and Smt. Bimla Rani, partners, Regular Second Appeal No.1009 of 1988 -2- 13.Sh. Pawan Kumar son of Shri Babu Ram, 14.Smt. Bimla Rani, wife of Shri Babu Ram, both residents of Mohalla Shastri Nagar, Jagraon, District Ludhiana. ..... Respondents. CORAM: HON'BLE MR. JUSTICE SHAM SUNDER Present:- Mr. Kirat Singh Sidhu, DAG, Punjab for the appellants. None for respondent no. 1 to 6,7,8 and Lrs of respondent no.9 , and respondent nos. 10 and 14. Mr. Deepak Thapar, Advocate for respondent nos.11,12 and 13. -- Sham Sunder, J. This Regular Second Appeal is directed against the judgment and decree dated 18.9.1985, rendered by the Court of Additional Senior Sub Judge, Ludhiana, vide which it decreed the suit of the plaintiff(now respondent no.1) and the judgment and decree dated 19.11.1987, rendered by the Court of Additional District Judge, Ludhiana, vide which it dismissed the appeal. 2. The suit was originally filed by Telu Ram, who died during the pendency thereof and his legal heirs (now respondents) were brought on record. 3. The facts, in brief, are that, M/s Babu Ram Pawan Kumar moved an application for registration as Dealer on 4.4.1975, under Section 7 of the Central Sales Tax Act, 1956 Regular Second Appeal No.1009 of 1988 -3- to the Excise & Taxation Officer, Jagraon. The application was entertained and without imposition of any condition of furnishing security/surety, 'Registration Certificate' was issued in their favour. A show cause notice was issued to Telu Ram, (since deceased) by the Excise & Taxation Officer, Jagraon, exercising the power of Collector Ist Grade, Jagraon, requiring him to appear before him on 22.09.1979, failing which, penalty to the tune of Rs.50,000/- shall be imposed upon him, as he stood surety of M/s Babu Ram Pawan Kumar. It was further stated that Telu Ram, (since deceased) appeared before the Assistant Collector, Jagraon and contested his liability to pay a sum of Rs.50,000/- on various grounds. Ultimately, a certificate for recovery of Rs.50,000/- from Telu Ram was issued as against M/s Babu Ram Pawan Kumar, Commission Agents, which were carrying on the business as Commission Agents under the Central Sales Tax Licence No.LUD/IV/24378 tax had been assessed in the sum of Rs.24,777/- and penalty had been assessed in the sum of Rs.31,990/-, but they failed to pay the same. The order dated 12.10.1979 passed by the Assistant Collector Ist Grade, Jagraon holding Telu Ram,(since deceased) to pay a sum of Rs.50,000/- out of the total dues of tax and penalty outstanding against M/s Babu Ram Pawan Kumar, was Regular Second Appeal No.1009 of 1988 -4- challenged as illegal, void, ultra-vires, without jurisdiction and inoperative against his rights, on the grounds, that he had not furnished any security bond/surety bonds in pursuance of any order, passed under Section 9 of the Punjab General Sales Tax Act, 1948; that the Excise and Taxation Officer, Jagraon, while granting a certificate of Registration to M/s Babu Ram Pawan Kumar, Commission Agents, on the basis of application, did not impose any condition for furnishing of security bond/surety bond; that the recovery certificate was issued without affording any opportunity of being heard to Telu Ram; that no effort was made to recover the amount from M/s Babu Ram Pawan Kumar, dealers; that the recovery could be effected from the alleged surety only after the dealer failed to pay the same; that the alleged surety bond furnished by Telu Ram (since deceased) had been altered and interpolated and not signed by him ; and that no liability could be imposed upon him even under the provisions of law, on the basis of the alleged surety bond. The defendants were many a time asked, to withdraw the illegal order/certificate of recovery, but to no avail. On their final refusal, left with no alternative, a suit for permanent injunction was filed. Regular Second Appeal No.1009 of 1988 -5- 4. Defendant nos.1 and 2, put in appearance, and contested the suit, by way of filing joint written statement, wherein, it was pleaded that the Civil Court had no jurisdiction to entertain and try the same. It was further pleaded that Telu Ram and Madan Lal, partner of M/s Inderjit & Co. , Jagraon Mandi, District Ludhiana, had filed a Civil Writ Petition No.3756 of 1979 in this Court, claiming the same relief, but the said Writ Petition was dismissed by the Division Bench, vide judgment dated 6.11.1979. It was further pleaded that, as such, the suit was barred by the principles of res-judicata. It was admitted that M/s Babu Ram Pawan Kumar, Commission Agents made an application for the issuance of registration certificate as dealer on 4.4.1975. It was further stated that before the issuance of registration certificate, the dealer was called upon to furnish security/surety bond. It was further stated that Telu Ram furnished the surety bond for M/s Babu Ram Pawan Kumar, Commission Agents. It was further stated that since M/s Babu Ram Pawan Kumar, Commission Agents were defaulters, the amount could not be recovered from them. It was further stated that notice was given to Telu Ram,(since deceased), who was surety and after affording full opportunity of being heard to him, the order for recovery of the amount, Regular Second Appeal No.1009 of 1988 -6- aforesaid, was passed. It was further stated that the recovery certificate was accordingly issued. The remaining averments, contained in the plaint, were denied, being wrong. 5. From the pleadings of the parties, the following issues were framed by the trial Court :- “1- Whether the suit is not maintainable under law ? OPD 2- Whether notice u/s 80 CPC was served before the institution of the suit, if not its effect ?OPP 3- If issue no.2 is proved in the negative whether the plaintiff had already obtained exemption from notice? If so its effect ?OPD 4- Whether civil Court has no jurisdiction to try the suit ?OPD 5- Whether the suit is barred by principle of resjudicata ?OPD 6- Whether the plaintiff is entitled to the injunction prayed for ?OPP 7- Whether the order of the Assistant Collector dated 12.10.1979 for the recovery of security amount from the plaintiff is illegal, ultravires for the reasons stated in the plaint ?OPP 8- Relief.” 6. The Court of Sub Judge Ist Class, Ludhiana, treated the issues with regard to jurisdiction of the Court to entertain the suit and maintainability of the same as preliminary issues. The suit was dismissed, vide judgment Regular Second Appeal No.1009 of 1988 -7- dated 28.11.1981, holding that neither the Civil Court had jurisdiction to entertain and try the suit, nor the suit was maintainable. 7. Feeling aggrieved, an appeal was preferred by the plaintiff/appellant, which was accepted and the Appellate Court remanded the case with a direction to the trial Court to frame an issue whether the plaintiff executed the alleged surety/security bond and, if so, whether the same was legal and valid, and, as such, he (plaintiff) was liable as surety or not. 8. After receipt of the case, the following additional issue was framed by the Court of Sub Judge Ist Class, Ludhiana:- “7(a) Whether the plaintiff had executed surety bond standing surety of Babu Ram Pawan Kumar, Commission Agents Jagraon and the said surety bond was valid and legal and the plaintiff was liable as surety to discharge the dues outstanding against M/s Babu Ram Pawan Kumar Gupta)?” 9. The parties led evidence, in support of their case. The trial Court after hearing the Counsel for the parties, and, on going through the evidence and record of the case, decreed the suit, on the ground, that the defendants(now Regular Second Appeal No.1009 of 1988 -8- appellants) failed to prove the execution of the security/surety bond allegedly furnished by Telu Ram, on the basis whereof, penalty was imposed upon him. 10. Feeling aggrieved, an appeal was preferred by the appellants/ defendants, which was dismissed, by the Court of Additional District Judge, Ludhiana, vide its judgment and decree dated 19.11.1987. 11. Still feeling dis-satisfied, the instant Regular Second Appeal has been filed, by the appellants/ defendants. 12. I have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 13. Alongwith the appeal, an application under Order 41 Rule 27 read with Section 151 CPC was filed by the appellants, on the ground, that Telu Ram(since deceased) furnished security/surety bond in the sum of Rs.50,000/-. It was further stated that the sole ground, on which the suit of the plaintiffs was decreed was that the execution of the surety bond, furnished by him(Telu Ram), was not proved by the defendants(now appellants) as they failed to produce the marginal witnesses thereof. It was further stated that the surety bond was a part of the registration file of the firm, Regular Second Appeal No.1009 of 1988 -9- maintained by the Excise & Taxation Department. It was further stated that the document was executed before a Public Officer and was presented in the Court by a Public Officer. It was further stated that the defendants were not advised to produce the marginal witnesses. Accordingly, a prayer was made that the appellants be allowed to examine the marginal witnesses of the surety bond and also Handwriting Expert, as their evidence is essential for the just decision of case and to enable the Court to pronounce the judgment, in a satisfactory manner. 14. No reply was filed to this application. 15. The Counsel for the appellants, submitted that if on account of wrong advice of the Counsel, the defendants/appellants could not produce these witnesses, in the trial Court, then they( appellants ) could not be penalized for the same. He further submitted that the additional evidence, sought to be produced, being essential for the just decision of the case, be allowed. 16. On the other hand, the Counsel for respondent nos. 11 to 13 submitted that sufficient opportunity was granted to the defendants/appellants to produce evidence, to prove the execution of the surety bond, as the same was Regular Second Appeal No.1009 of 1988 -10- denied by Telu Ram, (since deceased), but they failed to do so. He further submitted that, at this stage, if the appellants were allowed to adduce additional evidence, that would amount to filling up the gaps, in the case, as also re-opening the same. He further submitted that, no ground, thus, is made out for allowing the application. 17. After giving my thoughtful consideration, to the rival contentions, raised by the Counsel for the parties, in my considered opinion, the application is liable to be dismissed, for the reasons, to be recorded hereinafter. In Arjan Singh v. Kartak Singla, AIR 1951 (SC), 193, the principle of law, laid down, was to the effect that, Order 41 Rule 27 of the Code of Civil Procedure, is not intended to allow an unsuccessful litigant, to patch up the weak parts of his case, and fill in the lacuna, in the Appellate Court. Under sub- Rule 1(b) thereof, additional evidence, can be admitted only when the Appellate Court requires it to enable it to pronounce the judgment or for any other substantial cause. Reception of such evidence should be the necessity of the Court for proper adjudication of the dispute, between the parties. In K.Venkataramiah V. Seetharama Reddy, AIR, 1963 (SC), 1546 the principle of law , laid down, was to the effect, that Regular Second Appeal No.1009 of 1988 -11- there may well be cases, in which, even though the Courts find that it is able to pronounce judgment, on the State of record, as it is, and so it cannot strictly say that it requires additional evidence, to enable it to pronounce the judgment, but it still considers that, in the interest of justice, something which remains obscure, should be filled up, so that it can pronounce its judgment, in a more satisfactory manner. Such a case, will be one for allowing additional evidence, for any other substantial cause under Rule 27(1) (b) of the Code of Civil Procedure. It was very much within the knowledge of the appellants that the security/surety bond, was attested by two marginal witnesses. No doubt, they examined two departmental witnesses, but did not examine any of the marginal witnesses. They were given full opportunity to adduce their evidence, but they did not show due diligence in summoning and examining these witnesses. Now they cannot say that only on account of wrong advice of the Counsel, they did not do so. The Civil Suit was decided in the year 1985, whereas the First Appeal was decided, in the year 1987 and the Regular Second Appeal relates to the year 1988. If the application is allowed, at this stage, i.e. after a period of 25 years of the decision of trial Court that would amount to re- Regular Second Appeal No.1009 of 1988 -12- opening the case again thereby delaying the litigation further. The evidence, already led, in my opinion, is sufficient to enable this Court to pronounce the judgment, in a satisfactory manner. There is no substantial cause in allowing the application under Order 41 Rule 27 read with Section 151 of the Code of Civil Procedure. In this view of the matter, the application, being devoid of merit, must fail, and the same stands rejected. 18. The following substantial question of law, arises, in this appeal, for the determination of this Court:- “Whether the Courts below on account of mis-reading and mis-appreciation of evidence, recorded perverse findings that no legal and valid surety bond was executed by Telu Ram, plaintiff (since deceased) for M/s Babu Ram Pawan Kumar, Commission Agents, and, as such, he and after his death his Lrs were not liable to discharge the liability outstanding against them?” 19. The Counsel for the appellants, submitted that the Courts below completely mis-read and mis-appreciated the evidence, resulting into recording perverse findings that surety bond, copy whereof is Ex.D-2 was not executed by Telu Regular Second Appeal No.1009 of 1988 -13- Ram,plaintiff (since deceased). He further submitted that from the evidence of P.S. Preet, Excise and Taxation Officer, Khanna, (DW-1), it was proved that the surety bond was executed by Telu Ram, plaintiff(since deceased). He further submitted that even Telu Ram, plaintiff(since deceased), lateron, moved an application for withdrawal of surety bond, which was duly proved by P.S. Preet, ETO, Khanna, (DW-1). He further submitted that the surety bond, executed by the plaintiff, formed part of the official record and was produced therefrom by a Public Officer. He further submitted that the statement of P.S. Preet, ETO , (DW-1) with regard to the execution of the surety bond, aforesaid, by the plaintiff, remained unchallenged. He further submitted that, under these circumstances, the judgments and decrees of the Courts below, being perverse, are liable to be set aside. 20. On the other hand, the Counsel for respondent nos. 11 to 13 submitted that the Courts below were right in coming to the conclusion that since the execution of surety bond, Ex.D-2, by Telu Ram, plaintiff (since deceased) did not stand proved by the defendants/appellants, no liability could be imposed upon him. He further submitted that the evidence of P.S.Preet, ETO, (DW-1) was not sufficient to prove the execution of the said Regular Second Appeal No.1009 of 1988 -14- document. He further submitted that the judgments and decrees of the Courts below, being legal and valid, are liable to be upheld. 21. After giving my thoughtful consideration, to the rival contentions, advanced by the Counsel for the parties, in my considered opinion,the appeal deserves to be accepted,for the reasons to be recorded hereinafter. The sole ground, on which the suit of the plaintiffs was decreed by the Courts below, was to the effect that execution of the surety bond, copy whereof is Ex.D-2, did not stand proved. P.S. Preet, ETO, Khanna, appeared as DW-1. He brought the original surety bond, executed by Telu Ram, plaintiff(since deceased). He stated that he was conversant with his signatures as he had been seeing him sign and write during the course of official business. He further stated that an application for cancellation of his surety bond was moved by Telu Ram, plaintiff (since deceased). He also identified the signatures of Telu Ram on the original surety bond, copy whereof is Ex.D-2 and the original application moved by him. Since P.S. Preet, ETO, (DW-1) was well conversant with the signatures of Telu Ram, plaintiff (since deceased), as he had been seeing him sign and write, during the course of official business, he was a competent witness to Regular Second Appeal No.1009 of 1988 -15- prove the surety bond and the application, aforesaid. According to Section 47 of the Indian Evidence Act, 1872, when the Court has to form an opinion as to the person by whom any document was written or signed, the opinion of any person, acquainted with the handwriting of the person by whom it is supposed to be written and signed that it was or was not written or signed by that person is relevant. A person is said to be acquainted with the handwriting of another person when he has seen that person write. The surety bond was not required by law to be attested. Under these circumstances, the execution thereof, could be proved either by a person in whose presence, Telu Ram, plaintiff (since deceased) signed the same, or by a person, who was acquainted with his signatures in the official course of business, on the ground of having seen him sign and write. Accordingly, there was no necessity to examine the attesting witnesses, to prove the execution of the surety bond. Even the evidence of P.S. Preet, ETO, (DW-1), on the point, that he identified the signatures of Telu Ram, plaintiff (since deceased) surety, on the surety bond, referred to above, as he was well conversant with the same, on the ground that he had been seeing him sign and write in the official course of business, was not challenged during the course of his cross-examination. That part Regular Second Appeal No.1009 of 1988 -16- of the statement of P.S. Preet, ETO, Khanna, (DW-1), thus, remained un-rebutted. Nishan Singh, Taxation Inspector, Patiala, (DW-2), no doubt, stated that he had no personal knowledge with regard to the execution of the surety bond, aforesaid, yet he was only given these documents for verification, lateron. His evidence in the face of cogent and convincing evidence of P.S. Preet, ETO, (DW-1) was of no avail. The Courts below, thus, completely mis-read the statement of P.S. Preet, ETO,(DW-1) and by mis-appreciating the same, came to the conclusion that the execution of the surety bond, aforesaid, by Telu Ram, plaintiff(since deceased), did not stand proved by the defendants/appellants. Since the execution legality and validity of the surety bond, referred to above, stood proved from the statement of P.S. Preet, ETO, (DW-1), at the relevant time, penalty could be imposed upon the plaintiff. The Assistant Collector Ist Grade, thus, after affording full opportunity to the plaintiff of being heard, was right in imposing the penalty. The findings of the Courts below that the execution of the surety bond, aforesaid, did not stand proved, being perverse and illegal, on account of mis-reading and mis-appreciation of evidence, are liable to be set aside. The substantial question, of law, depicted above, is answered, in Regular Second Appeal No.1009 of 1988 -17- favour of the appellants. The submission of the Counsel for the appellants, carries substance and the same is accepted. 22. For the reasons recorded above, the appeal is accepted with costs throughout. The judgments and decrees of the Courts below, are set aside. The suit of the plaintiff shall stand dismissed. (Sham Sunder) Judge 16.07.2010 dinesh`