IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR WEDNESDAY, THE 22ND JUNE 2011 / 1ST ASHADHA 1933 RSA.No. 498 of 2004(A) ---------------------- AS.165/2002 of III ADDL.SUB COURT, KOZHIKODE OS.662/1998 of ADDL.MUNKOZHIKODE-II .................... APPELLANT (APPELLANT HEREIN IS THE RESPONDENT IN THE SUB COURT/ PLAINTIFF IN THE MUNSIFF COURT -------------------------------------------------------------------------------------------------------------- SATHEESH KUMAR, S/O.CHANDRASEKHARAN NAIR AGED 32 YEARS, NALINA BHAVAN, P.O.MAYANAD, KOZHIKODE TALUM REP. BY POWER OF ATTORNEY HOLDER AND FATHER CHANDRASEKHARAN NAIR, NALINA BHAVAN, MAYANAD AMSOM DESOM, P.O.MAYANAD, KOZHIKODE-8. BY ADV. SRI.P.J.MATHEW SRI.THOMAS JOHN AMBOOKEN RESPONDENT: (APPELLANT IN THE SUB COURT/DEFENDANT IN THE MUNSIFF COURT) ---------------------------------------------------------------------------------------------------------------- UDAYAKUMAR, S/O.K.SREEDHARAN, AGED 27 YEARS, THENGUM THOTTATHIL HOUSE, P.O.CHELAVOOR, KOZHIKODE DISTRICT. ADV. SRI.N.SUBRAMANIAM FOR R1 SRI.M.S.NARAYANAN FOR R1 THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 22 / 6 / 2011 THE COURT ON 22/06/2011 PASSED THE FOLLOWING: M.SASIDHARAN NAMBIAR,J. =========================== R.S.A. No. 498 OF 2004 =========================== Dated this the 22nd day of June,2011 JUDGMENT Plaintiff in O.S.662/1998 on the file of Munsiff Court, Kozhikode is challenging the judgment in A.S.165/2002, whereunder the decree granted by the learned Munsiff was reversed by the learned Sub Judge. Respondent is the defendant. Appellant instituted the suit for realisation of Rs.75,000/- with interest at 18% per annum contending that appellant and respondent are friends and respondent borrowed Rs.75,000/- on 9.1.1997 agreeing to repay the same within one year with interest at 18% per annum and the amount was borrowed for paying the hire purchase due in respect of his vehicle and he executed Ext.A1 agreement. But he failed to pay the amount and inspite of the notice sent demanding the amount it was not R.S.A.498/2004 2 paid and therefore respondent is liable to pay the amount. Respondent filed a written statement denying the execution of the agreement and the transaction and contended that he did not borrow any amount. It was contended that appellant had owned motorbike KL-12/865 which he exchanged with ambassador car KLZ 8376 owned by Jiji and later the said car was exchanged with KRD 9306 owned by Sanjeevkumar. Respondent was the mediator in the transactions. Later the said agreement was cancelled. As per the settlement, Sanjeevkumar had to return KLZ 8376 to the appellant, but he had sold the vehicle earlier for Rs.23,000/-. Therefore out of the value of Rs.40,000/- estimated for the vehicle, Sanjeevkumar had to return Rs.17,000/-. As the respondent was the mediator, appellant insisted respondent to give a signed blank stamp paper. Hence respondent has given a signed blank stamp paper. It was made use of for agreeing Ext.A1 agreement. Respondent contended that he is not liable to pay any amount. R.S.A.498/2004 3 2. Learned Munsiff on the evidence of PWs.1 and 2, DW1 and Exts.A1 to A3 granted a decree upholding execution of Ext.A1 and disbelieving the defence set up. Respondent challenged the judgment before Sub Court, Kozhikode in A.S.165/2002. Learned Sub Judge by a separate order dated 15.3.2004 found that Ext.A1 is not an agreement but a bond and directed the appellant to pay the stamp duty payable and the penalty. Hence Rs.41,000/- was paid as defecit stamp duty payable with penalty. Learned Sub Judge on appreciation of the evidence found that when Ext.A1 agreement shows that the interest payable is at 18% and the period for payment of the amount borrowed was one year, the evidence of PW1 is to the effect that the agreed interest was only 15% and the amount is to be repaid within 1 ½ years. On the evidence it was held that Ext.A1 agreement cannot be relied on. Learned Sub Judge on reappreciation of the evidence found that respondent did not borrow the amount as alleged by the appellant and set aside R.S.A.498/2004 4 the decree and dismissed the suit. It is challenged in the second appeal. 3. Second appeal was admitted formulating the following substantial questions of law. Is the lower appellate court justified in reversing the decree of the trial court based on Ext.A1 agreement merely for the reason that there were slight discrepancies in the evidence of PW1? 4. Learned counsel appearing for the appellant was heard. 5. The argument of the learned counsel is that though respondent contended that the stamp paper, in which Ext.A1 agreement was written, was obtained by the appellant in the presence of witnesses and the signed blank stamp paper was made use of to prepare Ext.A1 and it was not executed by the respondent, apart from examining himself as DW1, R.S.A.498/2004 5 no other evidence was adduced to substantiate the defence. Learned counsel also argued that respondent admittedly is an educated person and will never handover a signed blank stamp paper as alleged, especially when he is a broker of the vehicles. It was also argued that he did not take any action to get back the signed blank stamp paper allegedly given and that will not be the case if a signed blank stamp paper was given. Learned counsel also argued that evidence of PW1 corroborated by the evidence of PW2 show that respondent came to the house of the appellant along with the witnesses and the amount was borrowed and in the light of the evidence, the slight discrepancy in the evidence of PW1 should not have been made use of to set aside the decree granted by the trial court. Learned counsel also argued that when the terms of the agreement was reduced into writing, as seen in Ext.A1 agreement, the slight mistake in disclosing the terms by PW1 should not have been made use of, as the said mistakes are not R.S.A.498/2004 6 fatal and in such circumstances the decree granted by the trial court is to be restored. 6. As the suit is for realisation of the amount allegedly borrowed by the respondent, and the transaction was denied by the respondent, a decree can be granted only on establishing the said transaction. Appellant is relying on Ext.A1 to establish the transaction. The case is not that the amount was paid on execution of Ext.A1 agreement. On the other hand, the case is that the terms and conditions of the loan were fixed, the amount was paid and thereafter reducing the terms of the agreement, Ext.A1 was executed. If that be so, Ext.A1 should reflect the agreed terms between the appellant and the respondent. It is the specific case of the appellant in the plaint, and also as seen in Ext.A1, appellant had paid Rs.75,000/- to the respondent on the respondent agreeing to repay the same within one year with an interest at 18%. The question is whether there was such an agreement, as the agreement was denied by R.S.A.498/2004 7 the respondent. Appellant as PW1 deposed that when the respondent received Rs.75,000/-, he had undertaken to repay the same within 1 ½ years and not one year as stated in Ext.A1 and pleaded in the plaint. Similarly according to PW1 the rate of interest payable is 15% and not 18%. If the evidence of PW1 is to be accepted, it can only be found that Ext.A1 agreement does not reflect the terms and conditions agreed upon by the parties, even if it is to be found that Ext.A1 was executed by the respondent. It is in such circumstances, the evidence tendered by PW1 is relevant and material. 7. I cannot agree with the argument of the learned counsel that discrepancies in the evidence of PW1, with the terms in Ext.A1 are minor or inconsequential so as to ignore them. When the case is that a loan was granted for a period of 1 ½ years with an interest at 15% as deposed by PW1, the case pleaded and sought to be proved by Ext.A1 is a loan to be repaid within one year and that too R.S.A.498/2004 8 with an interest at 18%. If so Ext.A1 cannot be relied on. As rightly found by the first appellate court, that itself is sufficient to disbelieve the case of the appellant. Though learned counsel vehemently argued that PW2 a witness to Ext.A1 has corroborated the evidence of PW1 and the evidence of PW1 is that he had brought the witnesses to the house of the appellant for borrowing the amount, an analysis of the evidence of PW2 would establish that he was not a witness brought by the respondent. The evidence of PW2 is that the other witness who signed in Ext.A1 namely Balan as seen therein, was the witness of the respondent implying that PW2 is a witness of the appellant. The case of the appellant is inherently improbable as appellant has no case that respondent sought a loan of Rs.75,000/- earlier to 9-1-1997, the date of Ext.A1 and he agreed to pay the same provided the respondent brings two witnesses and executes an agreement. Without a previous agreement between the appellant and the respondent that amount would R.S.A.498/2004 9 be paid, on execution of the agreement, respondent cannot be expected to bring witnesses for the purpose of execution of the agreement. In the ordinary course, even if at the time of borrowal the lender insist for security, only a promissory note alone need be executed and not an agreement as seen in Ext.A1. When the entire evidence is appreciated, the view taken by the first appellate court is definitely a possible and reasonable view. In such circumstances, I find no reason to interfere with the findings of the first appellate court that the respondent is not to pay any amount to the appellant. Hence appeal is dismissed. Parties to suffer their respective cost. M.SASIDHARAN NAMBIAR JUDGE tpl/- M.SASIDHARAN NAMBIAR, J. --------------------- W.P.(C).NO. /06 --------------------- JUDGMENT SEPTEMBER,2006