Mallavarapu Kasivisweswara Rao vs Thadikonda Ramulu Firm & Ors

2. The facts leading to the filing of this appeal as emerging from the case made out by the appellant in the plaint are as under.

The appellant is the son-in-law of respondent no.2. The respondent nos. 3 and 4 are the sons of respondent no. 2 while respondent no. 1 is the firm belonging to respondent nos. 2 to 4 whose managing partner is respondent No.2. The appellant introduced one Pynda Ramakumar to the respondents who agreed to advance monies to the respondents on the understanding that the respondents would repay the amount while the appellant would execute pronotes as surety. The appellant accordingly executed certain pronotes whose consideration was received by the respondents. As regards repayment, the respondents were sending monies by drafts or otherwise in the name of one Narayan Murthy, who was the clerk of the appellant, by depositing the same in his account. The appellant would withdraw such amount deposited in the clerk's account by encashing the TTs or Drafts which was then paid to Pynda Ramakumar who then got the endorsements signed by the appellant. This continued for some time but when the respondents failed to repay the balance amount due to Pynda Ramakumar, he pressurized the appellant for payment of the balance amount due to him. The appellant made several 2 demands to the respondents for payment of the amounts due to Pynda Ramakumar but when the respondents could not pay the amounts, the respondent no. 2 as manager of the joint family and also on behalf of the respondent No. 1 firm executed two pronotes for sums of Rs. 2,15,000/- and Rs. 4,72,000/- being Ex.A-20 and Ex.A-21 respectively and a Khararnama in favour of the appellant whereby the respondent No. 1 agreed to repay amounts with interest at Rs. 2.50 ps. and Rs. 1.50 ps. respectively per annum. After execution of such pronotes, when, despite several demands, the respondents did not pay the amounts, a notice dated 3rd of October, 1986 was issued to them by the appellant stating that the pronotes and khararnama were executed by respondent no. 1 in favour of the appellant which may be discharged. The respondents vide letters dated 16th of October, 1986 and 20th of October, 1986 replied to the notice wherein they did not specifically deny the execution of the pronotes and the Khararnama but referred to the allegations made in such notice as false and vague.

3. In the backdrop of the above mentioned facts, in 1987, the appellant, therefore, filed O.S. No. 33/1987 in the 1st Court of the Additional Subordinate Judge, Kakinada for recovery of the amounts due under the pronotes of Rs. 4,72,000/- and Rs. 2,15,000/- with interest and costs. The respondent No. 2 contested the suit by filing written statement on his own behalf and also on behalf 3 of the respondent No. 1 firm denying any execution of the pronotes in favour of the appellant and further stating that the pronotes were forged by the appellant with the assistance of his brother-in-law and the Clerk. It was further alleged that the appellant bore a grudge against the respondents and was involved in many criminal cases and since he was not looking after his wife and children properly, the respondents had opened an account in the name of Narayanmurthy and were sending monies regularly in that account for the maintenance of the appellants' family and therefore, it was alleged that no money was ever borrowed from the said Pynda Ramakumar, whom the respondent no.2 did not know, through the appellant for the respondent No. 1 firm. It was also alleged by the respondent no. 2 that the respondent no. 1 firm was not carrying on any business and in fact, all its branches were closed and the respondent Nos. 2 to 4 were partitioned in the year 1980.

4. The respondent nos. 3 and 4 also filed separate written statements contending, inter alia, that they had not signed any pronotes and the scribe of the pronotes in question was the clerk of the appellant and the Attester was his brother-in-law. They also contended that they were not aware of the alleged borrowing by the respondent no.2 for the respondent no. 1 firm from the 4 said Pynda Ramakumar or the appellant and in fact, the pronotes in question did not show that the amounts so borrowed were for the business of the respondent no.1 firm. It was further alleged in the written statement filed by the respondent Nos. 3 and 4 that the pronotes were fabricated on account of family disputes between the appellant and the respondent No. 2 and that they had no necessity to borrow any amount from some other person. Infact, Pynda Ramakumar was a friend and an associate of the appellant. Even otherwise, the pronotes were not binding on them as no amounts were borrowed for the benefit of the firm and they were not signatories to the said pronotes. It was further the case of the respondent Nos. 3 and 4 that there was no joint family because the properties of the respondents were partitioned in the year 1980 and, therefore, the respondent no. 2 had no right or authority to borrow debts for the firm on their behalf. Accordingly, all the respondents prayed for dismissal of the suit filed by the appellant.

c) Whether the 2nd defendant executed the suit pronotes in the capacity of Manager of the joint family of the defendants 2 to 4 so as to bind the defendants 3 and 4?

6. As noted herein earlier, by the judgment dated 5th of August, 1991, the 1st Court of the Additional Subordinate Judge, Kakinada decreed the suit of the appellant in part for a sum of Rs. 2,33,125/- with proportionate costs and subsequent interest @ 18 % p.a. from the date of suit till realization holding the same to be a commercial transaction(Ex.A-20). As regards recovery of the amount due under the other pronote Ex.A-21, the trial court held that the appellant was not 6 entitled to recover the same because the said pronote was not supported by consideration and accordingly, the rest of the claim of the appellant was dismissed with proportionate costs. Feeling aggrieved by the said judgment of the trial court, both the appellant and the respondents filed two appeals before the High Court of Andhra Pradesh at Hyderabad being A.S. NO. 721/87 and 1872/92 respectively. By the impugned judgment of the High Court dated 30th of July, 1999, both these appeals were dismissed. The appellant has filed this special leave petition before us against the aforesaid judgment of the High court passed in A.S. No. 721/87.

16. For the foregoing reasons, the appeal is allowed and the judgments of the courts below are, therefore, modified to the extent that the suit of the appellant must stand decreed in its entirety. There will be no order as to costs.