THE HON’BLE MR JUSTICE R. KANTHA RAO A.S.No.3221 of 1990 Date:19.02.2010 Between: Vundavilli Annapurna Devi and two others …Appellants And Chundru Venkanna Rao and two others ….Respondents THE HON’BLE MR JUSTICE R. KANTHA RAO A.S.No.3221 of 1990 JUDGMENT: This appeal is filed against the judgment and decree dated 27.08.1990 passed by the Additional Subordinate Judge, Kakinada in O.S.No.295 of 1983. 2. The defendants 4 to 6 are the appellants. The first respondent instituted a suit basing on a promissory note dated 27.06.1980 for recovery of an amount of Rs.1,29,000/- against the second respondent and its partners who are the present defendants and the suit was decreed against all the defendants. 3. For the sake of convenience, the parties will be referred to as ‘plaintiff and defendants’ i.e. as they are arrayed in the original suit. 4. The second defendant is the managing partner of the first defendant-firm Sri Guru Raja Art Productions. According to the plaintiff, the defendants 2 to 4 borrowed an amount of Rs.25,000/- on 01.06.1980 and a further sum of Rs.75,000/- on 27.06.1980 from the first defendant-firm and executed two promissory notes on the said dates in favour of the plaintiff agreeing to repay the same with interest @ 18% per annum. The 3rd defendant is the husband of the 4th defendant and though he is not a partner of the firm, the plaintiff insisted upon him to join as one of the executants since he played an important role in making negotiations for the purpose of borrowing the amount on behalf of the firm and accordingly he joined in execution of the promissory notes along with other partners. It is the version of the plaintiff that he transferred the promissory note dated 01.06.1980 for a sum of Rs.25,000/- in favour of his father for a valid consideration and the present suit relates to other promissory note dated 27.06.1980 for a sum of Rs.75,000/-. As per the version of the plaintiff, they undertook not to prepare and hand over the prints of picture ‘Dr.Malati’ to any person without the written consent of the plaintiff. However, it appears subsequently that the third defendant purchased the film from the firm on 25.11.1981. As per the request of the third defendant, the plaintiff permitted him to exhibit the film in Guntakal area in spite of the undertaking given by the defendants to the plaintiff. Subsequently, the defendants did not pay the amount, whereupon the plaintiff got issued registered notices to the defendants. The registered notices sent to 3rd defendant were returned with an endorsement ‘addressee is not available’. Whereas the second defendant gave a reply that an amount of Rs.1,40,000/- was kept with 3rd defendant who undertook to repay the amount due to the plaintiff and the plaintiff is entitled to proceed against all the defendants to pay and recover the amount. 5. Before the Court below, the defendants 1 and 2 in their written statements admitted the execution of promissory note and borrowing the amount on behalf of the first defendant firm. They also admitted about the role played by 3rd defendant and securing the loan from the plaintiff and also in joining the execution of the promissory note. However, their contention is that in view of the agreement between the defendants, they left an amount of Rs.1,40,000/- with 3rd defendant for the purpose of satisfying the debt due to the plaintiff and therefore, the 3rd defendant alone is liable to pay the amount. It is said that there is also an agreement dated 25.11.1981 wherein the 3rd defendant undertook to repay all the debts incurred by the first defendant-firm out of the sale consideration by him to the first defendant firm. 6. The 4th defendant who is no other than the wife of the third defendant contended that she was a signatory to some other pro- note but the promissory note basing on which the present suit is instituted is the forgery. She also took the plea that the 3rd defendant himself discharged the loan borrowed, the plaintiff and his father collected an amount of Rs.85,000/- from 3rd defendant and nothing was due under two promissory notes. She also contended in the alternative that since there is pledge of negative rights of film ‘Dr.Malathi’, the suit basing on the promissory note is not maintainable. 7. Basing on the rival contentions, the learned trial Court settled the following issues: 1) Whether on suit promissory note dated 27.06.1980 is true, valid and binding on defendants 3 to 6? 2) Whether the third defendant above alone is liable for the suit debt as contended by defendants 1 and 2? 3) Whether the 3rd defendant paid Rs.85,000/- to the plaintiff and if so, whether it is towards the suit pro-note debt? 4) Whether all the partners of the 1st defendant are not impleaded as defendants and if so, whether the suit is bad for non-joinder of necessary parties? 5) Whether the defendants are liable for the suit claim and if so, what is the extent of liability of each of the defendants? 6) To what relief? 8. In the course of the trial before the learned Court below, the plaintiff besides examining himself as PW-1, examined two attesting witnesses to the suit promissory notes as PWs.2 and 3. He marked Ex.A-1 to A-20. On behalf of the defendants, the 4th defendant was examined as DW-1 and she marked Exs.B-1 and B-2. 9. On a consideration of the entire evidence on record, the learned trial Court decreed the suit with costs granting subsequent interest @ 12% per annum which is now assailed in this appeal by the defendants 4 to 6. 10. The following points would arise for determination in the present appeal: 1) Whether the learned trial Court justified in holding the suit promissory note Ex.A-1 as valid and binding on all the defendants? 2) Whether the defendants proved discharge of the debt allegedly due in the suit promissory note? 3) Whether the remedy of the plaintiff is only to proceed against the third defendant alone in view of the agreement among the defendants? 11. POINTS 1 AND 2: The plaintiff as PW-1 and two attestors of the suit promissory note PWs.2 and 3 had categorically spoken to the factum of the defendants including 3rd defendant borrowing the amount on behalf of the first defendant and executing the suit promissory note. Nothing was elicited in the cross-examination to discredit their testimony. They had spoken to the fact of the second defendant executing the promissory note in his personal capacity as well as in the capacity of managing partner of the first defendant firm. It is also stated by them and mentioned in Ex.A-1 promissory note that the amount was borrowed for the purpose of business. Even though defendants 1 and 2 pleaded that the third defendant while purchasing the film “Dr. Malathi” agreed to discharge the entire debt due to him, for that purpose an amount of Rs.40,000/- was paid to the third defendant, they did not adduce any evidence in proof of the said fact. Further, even according to them the plaintiff is not a party to the said agreement. Therefore, it does not bind the plaintiff. Similarly, the 4th defendant who pleaded that 3rd defendant paid an amount of Rs.85,000/- to the plaintiff and his father towards the amount due under Ex.A-1 promissory note and nothing remains to be discharged, did not adduce any evidence in support of the said contention. Her admitted and disputed signatures were sent to the handwriting expert and the handwriting expert gave the opinion that both belongs to one and the same individual. Thus, the plaintiff adduced satisfactory evidence in proof of the execution of the promissory note by the defendants and the trial Court rightly held that the promissory note is true, valid and binding on the defendants. Further, the defendants could not able to adduce any sort of evidence in support of their contention of discharge. Moreover, the plaintiff adduced positive evidence in proof of the fact that suit promissory note is supported by consideration. Therefore, the findings of the learned trial Court on these points need no interference. 12. POINT NO.3: Since the defendants 2 and 4 are the partners of the firm, irrespective of the fact that 3rd defendant joined in executing the suit promissory note, they are liable to pay the debt due under the suit promissory note since the said amount was borrowed for the purpose of business of the firm. The contention of the defendants 1 and 2 that there was an agreement among the defendants whereunder 3rd defendant undertook to repay the debt due to the plaintiff and an amount of Rs.1,40,000/- was kept with him for the said purpose, as already pointed out, had not been proved by them. Thus, being the partners of the firm, defendants 2 and 4 are liable to repay the debt due under the promissory note to the plaintiff. Defendants 5 and 6 being the legal representatives of 3rd defendant are also liable to pay the debt due under the suit promissory note since they are the children of defendant No.3 who is one of the executants. Thus, this point is also answered in favour of the plaintiff and against the defendants 4 to 6. 13. For the foregoing reasons, the appeal fails and the same is dismissed without any order as to costs. _______________ R. KANTHA RAO, J Date:19.02.2010 THE HON’BLE MR JUSTICE R. KANTHA RAO A.S.No.3221 of 1990 Date:19.02.2010