C.B. Changumaiah vs C. Prasanna

Ram Mohan Reddy, J.—This is defendants'' second appeal. Respondent instituted O.S. No. 173 of 2002 on 17-4-2002 before the Judge, Small Causes and Civil Judge (Senior Division), Mysore, arraigning appellants as defendants for recovery of Rs. 55,000/- with interest at the rate of 18% per annum on the assertion that the defendants borrowed Rs. 55,000/- from the plaintiff on 21-4-1999 and executed an on demand promissory note and consideration receipt of even date, agreeing to repay the amount with interest at the rate of 18% per annum. That suit was opposed by filing written statement, inter alia, denying the assertions as well as receipt of payment much less execution of the promissory note and consideration receipt.

In the premise of pleadings of the parties, the Trial Court framed the following three issues:

Whether the plaintiff proves execution of on demand promissory note dated 21-4-1999 for Rs. 55,000/- with the interest allowed by defendants?

Whether the plaintiff is entitled for suit claim?

What decree or order?

Plaintiff when examined as P.W. 1 and another witness as P.W. 2 marked Exs. P. 1 to P. 9 and Ex. C. 1 while defendants were examined as D.W. 1 and D.W. 2 and did not introduce any documents in evidence".

The Trial Court, having regard to the oral testimony of P.Ws. 1 and 2 and the fact that in the cross-examination, what was elicited was not incriminating statements, but statements in support of the plaintiff''s case, coupled with the testimony of the scribe examined as P.W. 2, held that the promissory note-Ex. P. 1 and the consideration receipt-Ex. P. 2 were proved.

The Trial Court observed that D.Ws. 1 and 2 though initially denied any relationship with the plaintiff and that D.W. 2 was never admitted in JSS Hospital as well as the fact that they were not acquainted with Mysore City, nevertheless, in cross-examination, when confronted with the extract of the inpatient register-Ex. C. 1, the witnesses admitted the fact that D.W. 2 was admitted in JSS Hospital and was an inpatient on the day Exs. P. 1 and P. 2 were executed. So also, D.W. 1, in cross-examination stated that he had no knowledge of the contents of the affidavit in lieu of the examination in chief as well as his signature in the written statement, while D.W. 2 in her cross-examination, admitted that due to a gynecology problem was admitted as an inpatient at JSS Hospital from 17-4-1999 to 23-4-1999. In the light of vacillating statement made by D.Ws. 1 and 2, the Trial Court declined to accept their plea that D.W. 1 had not executed Exs. P. 1 and P. 2 at JSS Hospital on 21-4-1999. The Trial Court found that the testimony of D.Ws. 1 and 2 was unreliable and hence discarded their evidence. The Trial Court further noticed that in Ex. P. 1-promissory note the rate of interest was mentioned as 1 1/2% per month and accordingly returned findings in the affirmative over issues 1 and 2 to allow the suit by judgment and decree dated 2-2-2009.

That judgment and decree, when carried in RA No. 103 of 2009, the Lower Appellate Court, by judgment and decree dated 9-9-2010, partly allowed the appeal by modifying the judgment and decree of the Trial Court, directing future interest at the rate of 6% per annum from the date of the decree until payment. Hence this second appeal.

Although learned Counsel for the appellants submits that in the light of Section 68 of the Indian Evidence Act, 1872 (for short, ''Act'') the attesting witnesses to Exs. P. 1 and P. 2 were not examined, evidence of P.Ws. 1 and 2 had to be discarded, nevertheless cannot be countenanced. Regard being had to the definition of the term ''promissory note'' in Section 4 of the Negotiable Instruments Act, 1881, coupled with Section 118 of Chapter XIII relating to rules of evidence providing for presumption as to Negotiable Instruments, Section 68 of the Act had no application. If regard is had to the vacillating statement made by the appellants when examined as D.Ws. 1 and 2 as noticed by the Trial Court, no exception can be taken to the reasons, findings and conclusions over proof of execution of Exs. P. 1 and P. 2.

Learned Counsel for the appellants submits that the Courts below were not justified in declining to deploy Section 73 of the Act in the matter of comparison of alleged signatures of 1st defendant on Exs. P. 1 and P. 2 with his admitted signature. There can be no further dispute that 1st defendant when examined as D.W. 1, denied his signature and execution on Exs. P. 1 and P. 2 on the premise that he was not acquainted with Mysore City and his wife was never admitted as an inpatient in JSS Hospital, however, in the cross-examination, admitted that he was acquainted with Mysore City and his wife was admitted at JSS Hospital. In addition he had stated that he had no knowledge of the contents of the affidavit filed in lieu of examination-in-chief and that he was not aware of the signature of the person on the written statement. In that view of the matter, it cannot but be said that there was no admitted signature of the 1st defendant in order to compare with the alleged signature of 1st defendant on Exs. P. 1 and P. 2. Therefore, there was no necessity for comparing the signature.

The last of the contention of learned Counsel for the appellants deserves acceptance.

Ex. P. 1-promissory note records the rate of interest as 12% and not 1 1/2%. Both the Trial Court as well as the Lower Appellate Court though noticed the plea of the appellants that the rate of interest mentioned in Ex. P. 1 was 12%, nevertheless, by a perverse finding, held that the rate of interest was 1 1/2% per month.

In that view of the matter, the only substantial question of law that arises for decision making is:

"Whether Courts below recorded perverse finding of fact that in Ex. P. 1 rate of interest was indicated as 1 1/2% per month?"

Regard being had to the observations supra, that in Ex. P. 1 the rate of interest is mentioned as 12%, it is needless to state that the Courts below were not justified in recording perverse finding that it was 1 1/2% per month.

The substantial question of law is answered in the affirmative. In the result, this appeal is allowed in part. The judgment and decree of the Courts below stand modified, entitling the plaintiff to interest at the rate of 12% per annum from the date of the suit upto the date of decree and 6% per annum from the date of the decree until payment and in all other respects remains unaltered.