Regular Second Appeal No. 197 of 2008 -1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Regular Second Appeal No. 197 of 2008 Date of decision : February 09, 2010 Haryana Tourism Corporation Ltd. ....Appellant versus Swaran Kanwal and another ....Respondents Coram: Hon'ble Mr. Justice L.N. Mittal Present : Mr. Sushil Jain, Advocate, for the appellant None for the respondents L.N. Mittal, J. (Oral) This is second appeal by plaintiff Haryana Tourism Corporation Limited. The appellant filed suit for recovery of Rs 3,37,758/- alleging that the respondents/defendants were Manager and Divisional Manager respectively at L1 outlet of the plaintiff at Karnal. The defendants embezzled Rs 3,37,758/- belonging to the Corporation. The modus operandi was that defendant no. 2 issued cheques on behalf of the plaintiff in favour of defendant no. 1 who encashed the same but in counterfoils of the cheques it was depicted that the cheques had been issued in favour of M/s Khoday India Limited (in short, M/s Khoday) towards costs of liquor Regular Second Appeal No. 197 of 2008 -2- supplied by M/s Khoday to the plaintiff-Corporation. The plaintiff also alleged that the charge sheets under Rule 7 of the Haryana Civil Services (Punishment & Appeal) Rules, 1987 for major penalty were served on the defendants. After the defendants filed replies to the charge sheets, Inquiry Officer was appointed . On regular departmental inquiry, the charges were held proved against the defendants regarding embezzlement of the suit amount. Ultimately, the defendants were dismissed from service and recovery of the suit amount was ordered. However, defendants failed to pay the same. Hence the suit. The defendants, interalia, pleaded that amount claimed in the suit has already been paid in cash to M/s Khoday and therefore, no demand has been made by M/s Khoday from the plaintiff. The defendants admitted that the amount of the cheques in question had been withdrawn in the name of defendant no. 1 in cash but the plea of the defendants is that they deposited cash amount with M/s Khoday. Learned Civil Judge (Senior Division), Karnal vide judgment and decree dated 13.1.2005 decreed the suit for recovery of Rs 3,37,758/- against both the defendants jointly and severally but did not award any interest to the plaintiff. The defendants challenged the judgment and decree of the trial court by filing first appeal. Learned Additional District Judge, Karnal vide judgment and decree dated 24.7.2007 allowed the appeal and set aside the judgment and decree of the trial court and dismissed the suit of the plaintiff. Feeling aggrieved, the plaintiff has filed the instant second appeal. I have heard learned counsel for the appellant and perused the Regular Second Appeal No. 197 of 2008 -3- case file whereas the respondents have been proceeded exparte in the instant second appeal. The following substantial question of law arises in the instant regular second appeal:- “Whether the finding of the lower appellate court that defendant no. 1 deposited the suit amount with M/s Khoday India Limited in cash is perverse and illegal ?” Learned counsel for the appellant contended that it is admitted case of the defendants, as is also established from oral and documentary evidence on record that the cheques in question for the suit amount were issued by defendant no. 2 in the name of defendant no. 1 but in the counterfoils, the cheques were shown to have been issued in favour of M/s Khoday India Limited. It is also admitted case of the defendants that the cheques were issued by defendant no. 2 in the name of defendant no. 1 who withdrew the amount of the said cheques. Consequently, the question to be determined is whether the suit amount withdrawn by defendant no. 1 in cash was deposited in cash with M/s Khoday or not. In this regard, the defendants examined Ajay Kumar, Clerk from M/s Khoday India Limited as DW3, besides both defendants themselves entering into witness box. Statement of Ajay Kumar DW3 along with documents proved by him has been relied upon by lower appellate court to non-suit the plaintiff. Perusal of the statement of Ajay Kumar DW3 reveals that he did not bring record relating to the payments in question. He stated that the record could not be traced because prohibition was introduced in State of Haryana in 1996-97, 1997-98 and therefore, the record was destroyed. Regular Second Appeal No. 197 of 2008 -4- He, however, proved account statement Ex. D3 allegedly signed by Deputy Manager MP Singh depicting that the suit amount of the disputed cheques had been received by M/s Khoday. However, the defendants did not even examine MP Singh who had allegedly issued the said account statement so as to afford opportunity to the plaintiff to cross-examine him regarding correctness and veracity of the account statement. Moreover, as noticed hereinabove, the admitted position is that the cheques were not issued in favour of M/s Khoday. The defendants' version is that they deposited the amount in cash after withdrawing the cheque amounts. However, perusal of account statement Ex. D3 which is magnacarta of the defendants to substantiate their case of deposit of the suit amount in cash with M/s Khoday reveals that the amounts in question were credited on the basis of the cheques in question. However, cheques had never been issued to M/s Khoday and it defies a logic as to how numbers of the said cheques were mentioned in the account statement Ex. D3. It would lead to the inference that the account statement Ex. D3 has been obtained to support the case of the defendants and even the relevant record has not been produced to substantiate the correctness and veracity of account statement Ex. D3. Account statement Ex. D3 does not mention that the amounts of the disputed cheques were received in cash by M/s Khoday. The account statement rather mentions that the amounts were received through cheques. However, this is factually incorrect position depicted in account statement Ex. D3 because admittedly the amounts were not deposited with M/s Khoday through cheques. Learned lower appellate court has also reasoned that M/s Regular Second Appeal No. 197 of 2008 -5- Khoday never demanded suit amount from the plaintiff and it would also lead to the inference that the suit amount was deposited with M/s Khoday in cash. However, this approach of lower appellate court is erroneous, illegal and unsustainable because the appellant has also mentioned in the dismissal order of the defendants that the modus operandi of the defendants was to keep cheque amount with themselves after withdrawing the same from the bank and to obtain credit notes from M/s Khoday for discount/incentive money which should have come to the accounts of the plaintiff-Corporation. Thus, demand by M/s Khoday was not made for the suit amount because the said amount might have been credited in the account of the plaintiff towards discount/incentive money payable by M/s Khoday. For the reasons mentioned hereinabove, the substantial question of law as framed hereinabove is answered in the affirmative i.e. in favour of the plaintiff-appellant and it is held that finding of the lower appellate court that the suit amount was deposited in cash by defendants with M/s Khoday is perverse, illegal and unsustainable. The plaintiff has proved its case by cogent evidence that the defendants fraudulently withdrew the suit amount by issuance of cheques by defendant no. 2 in favour of defendant no. 1 but by depicting in the counterfoils that the cheques had been issued in favour of M/s Khoday. The defendants are, thus, required to pay the suit amount to the plaintiff. In view of the aforesaid, the instant second appeal is allowed and impugned judgment and decree dated 24.7.2007 passed by learned Additional District Judge, Karnal are set aside and judgment and decree Regular Second Appeal No. 197 of 2008 -6- dated 13.1.2005 passed by learned trial court are restored with costs throughout. ( L.N. Mittal ) February 09, 2010 Judge 'tiwana'