IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH TUESDAY, THE 12TH JANUARY 2010 / 22TH POUSHA 1931 RSA.No. 25 of 2010() ------------------------------- AS.145/2008 of SUB COURT, MUVATTUPUZHA OS.475/2007 of MUNSIFF COURT,MUVATTUPUZHA .................... APPELLANTS IN RSA- APPELLANTS IN AS-DEFENDANTS IN SUIT -------------------------------- 1. CHINNAMMA, W/O. SKARIA, VALAVATHIL HOUSE THOTTAMCHERI KARA, MUVATTUPUZHA TALUK, NOW RESIDING AT VALAVATHIL HOUSE, RANDAR KARA, AVOLY PANCHAYAT, MUVATTUPUZHA VILLAGE, MUVATTUPUZHA TALUK. 2. JOMON, S/O. SKARIA, OF DO. NOW IN DO. 3. JIJO, S/O. DO. OF DO. IN DO. DO. 4. JOYS, S/O. DO OF DO. IN DO. DO. BY ADVS.MR.K.JAYAKUMAR MR.P.B.KRISHNAN MR.R.SURAJ KUMAR SMT.GEETHA P.MENON MR.N.AJITH MR.P.M.NEELAKANDAN RESPONDENT(S): IN RSA-RESPONDENT IN AS - PLAINTIFF IN SUIT -------------------------- SABEER.T.M, S/O. MYTHEEN, RESIDING AT THAIKKOOTTATHIL HOUSE, NELLIMATTOM P.O, KUTTAMANGALAM VILLAGE, KOTHAMANGALAM TALUK. THIS REGULAR SECOND APPEAL HAVING COME UP FOR ADMISSION ON 12/01/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss THOMAS P JOSEPH, J. ---------------------------------------- R.S.A.No.25 of 2010 --------------------------------------- Dated this 12th day of January, 2010 JUDGMENT The second appeal arises from concurrent finding entered by the courts below as to the existence of a legally recoverable debt and a consequent decree passed in favour of the respondent. According to the respondent, Skaria predecessor-in-interest of the appellants borrowed Rs.95,000/- from him on 20-08-2005 at his residence and issued a post dated cheque dated 20-08-2007 (Ext.A1) for the sum of Rs.95,000/- with a promise that the borrower will make arrangements for honouring the cheque on its presentation in the drawee bank on the due date. On believing the assurance made by the said Skaria, respondent advanced Rs.95,000/- by way of loan and accepted the cheque. On 13-02-2006 Skaria died. Following that, appellants who are his legal representatives requested the respondent to prolong presentation of the cheque till the due date. Accepting that he presented the cheque on the due date but to be told that the cheque cannot be honoured as the account was closed. It is also the case of respondent that appellants who inherited 40.47 ares from the deceased Skaria fraudulently transferred that property to one Shameer as per assignment deed No.1141 of 2006 dated 24-08-2006 a copy of which is marked as Ext.A4 and making use of the sale proceeds they R.S.A.No.25 of 2010 2 purchased another item of land as per sale deed No.6713 of 2006 dated 11-12-2006, a copy of which is marked as Ext.A5. Ext.A2 is the memo and Ext.A3 is the intimation received from the drawee and collecting banks showing that the cheque was dishonoured as account was closed. Respondent sued the appellants for recovery of the amount with interest to be realised from the assets of the deceased Skaria in the hands of the appellants. Appellants claimed that they have no information about the alleged loan transaction between respondent and Skaria. Skaria had borrowed money from one Baby (DW2) and Saji. That liability was discharged by the appellants after the death of Skaria. One Babu claiming that he has signed the blank cheques of Skaria with him has been threatening the appellants after his death. It is contended that respondent may have misused the cheque for and on behalf of the said Babu. They denied that the property belonging to Skaria was sold to defraud the respondent. According to them sale proceeds were used for discharging the liabilities of Skaria. The property referred to in Ext.A5 was purchased making use of the compensation received by a relative of appellant No.1 for the injury the relative suffered in a motor accident. Hence, that property is not liable for the debts of Skaria. In the trial court respondent gave evidence as PW1 and proved Exts.A1 to A3. He asserted that Skaria had borrowed Rs.95,000/- from him on 20-08- R.S.A.No.25 of 2010 3 2005 and issued Ext.A1, cheque. Appellant No.3/defendant No.3 gave evidence as DW1. DW2 is said to be one of the creditors of deceased Skaria. He claimed that Skaria had borrowed Rs.50,000/- from him and that liability was discharged by the appellants after the death of Skaria paying Rs.40,000/-. Courts below found in favour of the transaction pleaded by the respondent. Courts below were of the view that there is no denial of the transaction pleaded by the respondent since the plea of appellants is only one of ignorance about the alleged transaction. It was found that the property as per Ext.A5 was purchased making use of proceeds of sale as per Ext.A4 and hence the property covered by Ext.A5 is answerable for the debts of Skaria. Accordingly decree was granted. First appellate court has confirmed the finding and judgment and decree. That is under challenge in the second appeal. The substantial questions of law urged are that in so far as the cheque was presented after the death of Skaria on 13-02- 2006 there was no valid presentation of the cheque and hence the dishonour of the cheque could not have presented a valid cause of action for the respondent. Hence the suit must fail on that account. It is further contended that the courts below are legally and factually wrong in concluding that there was a transaction between respondent and deceased Skaria as claimed by the former. The improbability in the case was not taken into account by the courts below. Yet another R.S.A.No.25 of 2010 4 question raised is that the courts below went wrong in fastening liability on the property acquired by the appellant as per Ext.A5. 2. So far as proof of transaction pleaded by the respondent is concerned, in para 3 of the plaint (copy of which learned counsel has given me for perusal) it is specifically stated that on 20-08-2005 Skaria had borrowed Rs.95,000/- from the respondent at the residence of the latter and issued a post dated cheque dated 20-08-2007 (Ext.A1). It is also stated in para 3 of the plaint that Skaria had made the respondent believe that the cheque when presented will be honoured and based on that assurance the money was lent. The reply for those averments comes in para 5 of the written statement. There it is stated that appellants have no information about the averments in para 3 of the plaint. It is also stated that appellants have no information about the transaction referred to in para 3 of the plaint between the respondent and deceased Skaria. Denial in para 5 of the written statement is only regarding the case of respondent that at the time of the impugned transaction appellant No.1 also was present. True, appellants denied that statement. But that does not amount to denial of the transaction pleaded by the respondent in para 3 of the plaint. Learned counsel for the appellants would contend that in so far as appellants were not parties or witnesses to the alleged transaction they could only plead ignorance of the transaction. I am unable to accept that contention. R.S.A.No.25 of 2010 5 Order 8 Rule 5 of the Code of Civil Procedure (for short, “the Code”) does not differentiate between a defendant who had allegedly taken part or witnessed the transaction and a defendant who had only information about that. The statement in the written statement that appellants are not aware of the transaction pleaded in the plaint, in my view does not amount to a denial, not to say about the specific denial. In such a situation, averment in the plaint must deemed to have been admitted as held by the Supreme Court in Jahuri Sah and Ors. Vs. Dwarika Prasad Jhunjhunwala & Ors (AIR 1967 SC 109). There it has been held that to say the defendants have no knowledge of a fact pleaded by the plaintiff does not tantamount to a denial of existence of the fact, not even an implied denial. The courts below therefore are correct in observing that there was no specific denial of the transaction and hence that amount to its admission. 3. The judgment and decree of courts below do not stand on that footing alone. There is the evidence of respondent as PW1 about the transaction. In support of the evidence he has also produced Exts.A1 to A3. True, appellants have a contention that since Ext.A1 was presented after the death of the drawer, there is no valid presentation and hence there is no valid dishonour also. Assuming so, Ext.A1 can be taken as a document supporting the cases of the respondent. Leaving aside the question of availability presumption R.S.A.No.25 of 2010 6 under section 118(a) of the Negotiable Instruments Act there is the evidence of respondent as PW1 which gets corroboration from Ext.A1. Along with this is the added circumstance that appellants have no specific denial of transaction. 4. What learned counsel described as improbability is that though the alleged transaction was on 20-08-2005, Ext.A1 is dated 20- 08-2007 ie. two years after the transaction. It is also contended by learned counsel that it is quite unlikely that such a long period would be provided for presentation of the cheque and at any rate the version of the respondent that after the death of Skaria on 13-02-2006 appellants had requested the respondent to prolong presentation of the cheque till the due date cannot be believed. I am unable to accept the contention that giving a period of two years for presentation of the cheque (ie for repayment of the loan) is so improbable a thing that in the circumstances it must be taken as something equivalent to near impossibility. The period of two years given, I am not inclined to think affected the veracity of evidence given by PW1. Courts below on the evidence found in favour of the transaction. That being a finding of fact based on evidence and circumstances involved no substantial question of law. 5. Then the next question urged is whether in the particular facts of the case a suit could laid on the dishonoured cheque and R.S.A.No.25 of 2010 7 hence it should fail. There again the contention is that the cheque was presented after the death of the drawer and hence it cannot be treated as a valid cheque after the death of the drawer. Learned counsel has invited my attention to para 11 of the plaint where it is stated about the cause of action. It is stated that cause of action (for the suit) arise on 13-02-2006 when the appellants inherited the property of deceased Skaria consequent to his death on that day, on 20-08-2007 the date of the cheque, on 10-10-2007 when the cheque was dishonoured and thereafter when respondent demanded repayment of the amount and that was denied. It is true that in para 11 of the plaint one of the dates mentioned as giving cause of action to the respondent is the due date of Ext.A1 and its dishonour. But, the cause of action was not confined to those date alone. 13-02-2006 date of death of Skaria on which day appellants inherited his property and hence the property became liable for his debt along with the date from 20-10-2007 onwards when in spite of demand made by respondent, appellants failed to pay the amount also constituted cause of action as pleaded in para 11 of the plaint. On the question whether the suit is based on dishonour of cheque or is on the original cause of action its is apposite to refer to para 3 of the plaint where it is stated about the transaction of lending and borrowal on 20-08-2005, the issue of the cheque which as per averments in the plaint comes consequent to the borrowal and the R.S.A.No.25 of 2010 8 offer made by the deceased Skaria to pay the amount on the due date. Reading the plaint averment as a whole I am unable to accept the contention of learned counsel that the suit is based on the dishonour of the cheque, there is no valid presentation of the cheque due to the death of Skaria and hence the suit has to fail. 6. What remained for consideration is whether the courts below are legally correct in fastening liability on the property covered by Ext.A5. DW2 is examined to show that after the death of Skaria appellants discharged the liability created by Skaria in his favour by paying Rs.40,000/-. He claimed that it is as per a demand promissory note that Skaria had borrowed Rs.50000/- from him and that appellants discharged that liability and the demand promissory note was returned to them. But that document is not produced. What is available is only his interested version on which the courts below did not place much reliance on. It is seen that property belonging to deceased Skaria was sold by the appellants on 28-06-2006 as per Ext.A4. The consideration received as per Ext.A4 was Rs.70,000/- apart from the advance of Rs.50,000/- already received by deceased Skaria. Even if it is accepted Rs.40,000/- out of the sale consideration of the Rs.70,000/- was paid to DW2 still there remained Rs.30,000/- with the appellants being part of the sale consideration as per Ext.A4. But the version of appellants is that Ext.A5, property was purchased making use of compensation R.S.A.No.25 of 2010 9 awarded to and received by a relative of appellant No.1 from the Motor Accidents Claims Tribunal. Appellant No.1 who is a said to have taken that amount is not examined, not to say that the relative is also not examined. Thus, there is no evidence to show that the source of consideration for purchase of Ext.A5 property came from elsewhere as claimed by the appellants. It is in the above circumstances that courts below found that Ext.A5 property is purchased by the appellants making use of the consideration obtained by sale of property they inherited from Skaria and hence debt of Skaria is liable to be satisfied from the said property. On going through the judgments under challenge and hearing learned counsel for appellants I do not find any substantial question of law involved in this appeal deserving its admission. However, having regard to the facts and circumstances appellants are granted three months time from today to discharge the liability. Resultantly the second appeal fails and it is accordingly dismissed in limine. THOMAS P JOSEPH, JUDGE Sbna/