IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD TUESDAY, THE THIRTEENTH DAY OF SEPTEMBER TWO THOUSAND AND ELEVEN Present HON’BLE SRI JUSTICE G. BHAVANI PRASAD SECOND APPEAL No.1412 of 2008 AND S.A.M.P.No.1777 of 2011 Between: Kolasani Madhusudana Rao .. Appellant AND Devireddy Purnaiah .. Respondent The Court made the following: HON’BLE SRI JUSTICE G. BHAVANI PRASAD SECOND APPEAL No.1412 of 2008 AND S.A.M.P.No.1777 of 2011 COMMON JUDGMENT: The second appeal is directed against the judgment and decree in A.S.No.36 of 2003, on the file of the Additional Senior Civil Judge’s Court, Tenali, dated 31.05.2008, by which the judgment and decree in O.S.No.482 of 2000, on the file of the Principal Junior Civil Judge’s Court, Tenali, dated 28.11.2002, were confirmed. 2. The parties are referred to herein as they are arrayed before the trial Court. 3. The plaintiff filed the suit for recovery of a promissory note debt under a promissory note, dated 16.08.1997, executed by the defendant for Rs.30,000/- agreeing to repay the same with interest at 24% per annum. The plaintiff claimed the defendant to have not repaid the debt in spite of demands and a legal notice and, hence, the suit. 4. The defendant originally filed a written statement denying the borrowing or the execution of the promissory note and later filed an additional written statement which was permitted to be received as per the orders of the trial Court in I.A.No.2885 of 2002, dated 28.11.2002, contending that he borrowed only Rs.15,000/-, but executed the promissory note for Rs.30,000/- to cover excess interest agreed to be paid. The attestors were claimed to be not present at the time of the execution, while one Akula Edukondalu was claimed to have been present. The defendant also contended in additional written statement that as the place of execution is beyond the territorial jurisdiction of the Court, the Court has no jurisdiction to try the suit. Interest was also claimed to be liable to be scaled down, as the defendant is an agriculturist. 5. On such pleadings, the trial Court framed issues and additional issues about the entitlement of the plaintiff to the suit claim, the truth, validity and binding nature of the promissory note, the jurisdiction of the Court and failure of consideration in the promissory note to a tune of Rs.15,000/-. 6. During trial, the Court examined P.Ws.1 and 2 and D.Ws.1 and 2 and marked Exs.A-1 to A-3, B-1 and B-2. 7. The trial Court rendered its judgment firstly noting that the defendant who resides within the territorial jurisdiction of the trial Court is covered by Section 20 of the Code of Civil Procedure, 1908 (for short, “C.P.C”), and a suit against him can be instituted before the trial Court. The trial Court also found that D.W.2 was not a party to the Promissory Note-Ex.A-1 and there is no documentary evidence to probablise the presence of D.W.2 at the time of the execution of the promissory note. The trial Court also considered the plea about the failure of consideration to be an after thought and, therefore, concluded the issues in favour of the plaintiff except the issue regarding the rate of interest. The trial Court found that the defendant, admittedly, has agricultural land and the interest has to be, therefore, scaled down. Accordingly, the trial Court decreed the suit for the principal sum of Rs.30,000/- with interest at 12½% per annum from the date of the suit till the date of realization and proportionate costs. 8. In appeal against the said judgment and decree, the first Appellate Court rendered the impugned judgment referring to the rival pleadings, contentions and evidence and the grounds of challenge to the judgment and decree of the trial Court. The first Appellate Court considered the questions whether the trial Court had jurisdiction to entertain the suit and whether the plaintiff was entitled to the suit amount. The first Appellate Court also relied on Section 20 C.P.C to conclude that the suit could have been filed where the defendant resides and carries on business or personally works for gain. The trial Court further observed that if the defendant had executed the promissory note by receiving Rs.15,000/-, his initial denial of the execution of the promissory note and the borrowing and the subsequent admission do not inspire confidence in his evidence. The first Appellate Court also considered the failure to give a reply to the suit notice as a circumstance against the defendant and the voluntary execution of the Promissory Note-Ex.A-1 by the defendant in his own hand as admitted by him, as D.W.1 was considered favourable to the suit claim and the alleged absence of information from the learned counsel to the defendant about the contents of the written statement also was considered to be an after thought. The first Appellate Court also agreed with the trial Court about the defendant, being an agriculturist, being entitled to scaling down of the interest under A.P. Act 4 of 1938. Accordingly, the appeal was dismissed with costs by the first Appellate Court. 9. The defendant approached this Court with this second appeal contending that the compulsion under which the defendant executed the promissory note for a higher sum was not appreciated and D.W.1 and the other attestor were planted to pad the evidence in support of the plaintiff. 10. The defendant pleaded that the following substantial questions of law arise for consideration: “I. Whether the Courts below were justified in decreeing the suit in favour of the respondent/Plaintiff considering the evidence of PW2, who is his interested witness as a neighbour of the respondent, without considering the evidence of DW2, who has actually presented at the time of execution of the suit promissory note in the premises of Sangam dairy by the appellant as a scribe ? II. Whether the trial Court is justified in holding that the additional plea is after thought on the ground that the plea as his Advocate did not inform him about the plea in written statement is mentioned in the additional written statement ? III. Whether the Courts below were justified in considering the evidence on record while passing the judgment in the light of the finding of the trial Court that the additional pleading was allowed without filing petition without looking into the order dated 28-11-2002 in I. A. No.2885 of 2002 ? IV. Whether the Courts below were justified while holding that the appellant is agriculturist in fixing the interest @ 12 ½ instead of 6 % p. a. ?” 11. At the time of admission of the second appeal, a learned Judge of this Court admitted the appeal only on the grounds 2 and 3 mentioned in the memorandum of grounds of appeal and not on the grounds 1 and 4. 12. Sri Gade Venkateswara Rao, learned counsel for the appellant and Miss. Nimmagadda Revathi, learned counsel representing Sri Nimmagadda Satyanarayana, learned counsel for the respondent are heard. 13. The two questions on which the second appeal has been admitted are the questions for consideration in this adjudication. 14. Insofar as the question of jurisdiction raised before the trial and first Appellate Courts is concerned, the applicability of Section 20 C.P.C cannot be seriously in dispute conferring jurisdiction of the trial Court to entertain and determine the suit. Insofar as the interest awarded at 12 ½% per annum is concerned, the same is in tune with the provisions of A.P. Act 4 of 1938 as amended and as in force by the time of the suit claim. 15. The Courts below not believing the circumstances under which the defendant claimed the additional written statement to have been necessitated and the observation of the trial Court that the additional pleading was allowed without filing any petition for that purpose are the main grounds of challenge by the defendant. It is true that in I.A.No.2885 of 2002, the trial Court ordered on 28.11.2002 that the additional written statement should be received and it is only in consequence that the pleas of the defendant about the partial failure of consideration for the suit promissory note and the question of territorial jurisdiction of the trial Court had been made the subject of the additional issues framed by the trial Court. Though it is true that the observation of the trial Court in its judgment about the additional plea being allowed without filing a petition for their purpose, thus, appears to be factually incorrect, the refusal of the trial and the first Appellate Courts to act upon the said defence of the defendant cannot be considered to be vitiated by any perversity or to be against the broad human probabilities arising out of the evidence on record. The defendant has admitted the execution of the suit promissory note through the additional written statement, while contending the same to be without consideration to an extent of Rs.15,000/-. 16. As rightly relied on by Miss Nimmagadda Revathi, learned counsel for the respondent, in MALLAVARAPU KASIVISWESWARA RAO VS. THADIKONDA RAMULU FIRM AND OTHERS[1], the Apex Court had reiterated the effect of the presumption under Section 118(a) of the Negotiable Instruments Act, 1881, under which the Court is obliged to presume the promissory note being supported by consideration. It was explained that the initial burden in this regard lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances which would lead the Court to believe the non-existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable. No such direct or circumstantial evidence could have been placed before the Courts below by the defendant on the facts of the present case, as D.W.2, who was examined to claim that he was present at the time of execution of the promissory note, was not a party to the promissory note and there was no reason assigned for the presence of D.W.2 at the time of the suit transaction. The evidence of D.W.1 himself is necessarily tainted with interestedness and as oral evidence like that of D.W.2 can be procured with impugnity, the same cannot be considered as providing satisfactory corroboration to the claims of D.W.1. The claims of D.Ws.1 and 2 were denied with equal vehemence by P.Ws.1 and 2 and P.W.2 is the attestor of Ex.A-1-Promissory Note to corroborate the plaintiff as P.W.1. The attestor was not shown to be in any way interested in the plaintiff so as to deviate from truth and when his presence was probablised by his attestation, notwithstanding the claims of the defendant about the absence of the attestors, the evidence of D.Ws.1 and 2 being preferred cannot be considered to be a perverse appreciation of the evidence on record. 17. Sri Gade Venkateswara Rao, learned counsel for the appellant referred to the decision of the Apex Court in USHA BALASHAHEB SWAMI AND OTHERS VS. KIRAN APPASO SWAMI AND OTHERS[2] about the permissibility of an admission being subjected to a proviso or a condition without withdrawing the admission as a whole, but the inconsistent pleas taken by the defendant in the original written statement and the additional written statement were not refused to be considered on any grounds of inadmissibility of the statements made by the defendant in either pleading, but on the ground of the unacceptability of the evidence produced on behalf of the defendant in support of the said pleas. 18. The first Appellate Court, which is normally conceived to be the final fact finding Court, had reappreciated the evidence and considered the circumstances like the voluntary execution of Ex.A-1 by the defendant in his own hand as admitted by him as D.W.1 and the failure to reply to the suit notice without any explanation as further circumstances which improbablise the acceptability of the defence. The plaintiff, aided with the statutory presumption under Section 118(a) of the Negotiable Instruments Act, 1881, corroborated by the attestor of the promissory note as P.W.2 and not contradicted sufficiently by the evidence of D.Ws.1 and 2, succeeding before the trial and the first Appellate Courts cannot, therefore, be considered to be in opposition to any accepted principles of appreciation of evidence. The questions which are framed and on which the second appeal has been admitted cannot be considered under these circumstances to be raising any substantial questions of law, the questions involved being pure questions of fact. The questions formulated at the time of admission of the second appeal have to be, therefore, answered against the second appellant. 19. Therefore, under the said circumstances, the second appeal should fail and it is, accordingly, dismissed without costs. S.A.M.P.No.1777 of 2011: 20. Heard Sri Gade Venkateswara Rao, learned counsel for the petitioner/appellant and Miss Nimmagadda Revathi, learned counsel representing Sri Nimmagadda Satyanarayana, learned counsel for the respondent. 21. This Court, by an order, dated 28.06.2011, in S.A.M.P.No.1518 of 2011, directed that an interim injunction restraining the appellant from withdrawing an amount of Rs.90,000/- from out of his retiral benefits be granted until further orders. Sri Gade Venkateswara Rao, learned counsel for the petitioner/appellant had produced a certificate issued by the employer of the appellant specifying that the amounts due to the appellant consisted of Rs.2,87,204/- towards gratuity, Rs.22,222/- towards unavailed earned leave payment and Rs.30,500/- towards leave salary. Section 60 Clause (g) C.P.C. specifically exempts gratuities allowed to pensioners of any employer from attachment and sale in execution of any decree and, therefore, what could have been proceeded against by the decree holder are only the remaining sums due to the appellant towards leave salary and even the salary component of the amounts due to the appellant will be subject to the exemptions provided by Section 60 C.P.C. 22. Sri Gade Venkateswara Rao, learned counsel for the petitioner/appellant rightly referred to RADHEY SHYAM GUPTA VS. PUNJAB NATIONAL BANK AND ANOTHER[3], wherein the Apex Court had pointed out that the amounts payable by way of provident fund, compulsory deposits and pensionary benefits retain the character as such so long as they did not reach the hands of the employee and, therefore, could not be attached to the extent provided by Section 60 C.P.C. Therefore, while no amount could have been withheld from out of the amount of gratuity, the amounts due towards leave salary also shall be retained only to the extent permissible under Section 60 C.P.C. 23. In the affidavit in support of this petition, the petitioner/appellant claimed that only Rs.50,502/- were due towards the decree debt even if the judgment and decree were to be confirmed as they are and it is for the executing Court to determine the amount due under the decree as on today and the amount which could be recovered towards that decree debt from out of the unaviled earned leave payment or leave salary and, therefore, it is suffice for the purpose of this petition to restrict the interim injunction already granted to only the leave salary part of the amount due to the appellant. 24. Accordingly, the interim injunction granted in S.A.M.P.No.1518 of 2011 on 28.06.2011 shall be confined to a sum of Rs.52,722/- due to the petitioner/appellant towards unavailed earned leave payment and leave salary and there shall not be any interim injunction insofar as the amount of gratuity of Rs.2,87,204/- said to be due to the petitioner/appellant from his employer. Even the amount in respect of which the interim injunction shall continue to be in force will be subject to the determination by the executing Court on merits in accordance with law about the amount due under the decree from the appellant and about the attachability of the amounts due towards unavailed earned leave payment and leave salary to the petitioner/appellant, vis-à-vis, Section 60 C.P.C. 25. This petition is ordered accordingly. _____________________ G. BHAVANI PRASAD, J Date: 13th September, 2011 KL HON’BLE SRI JUSTICE G. BHAVANI PRASAD SECOND APPEAL No.1412 of 2008 AND S.A.M.P.No.1777 of 2011 Date: 13th September, 2011 KL [1] (2008) 7 Supreme Court Cases 655 [2] 2007 (5) ALD 79 (SC) [3] (2009) 1 Supreme Court Cases 376