AI Structured Summary
Not yet generated for this judgment
Judgment
Tarlok Singh Chauhan, J.—1. This Regular Second Appeal is directed against the concurrent findings of fact recorded by the learned Courts below whereby the suit of the plaintiff (hereinafter referred to as the ''appellant'') for recovery of Rs. 60,000/- alongwith interest came to be dismissed.
The brief facts as per the appellant are that he was running a factory for manufacturing of plastic bags and for that he had availed an advance credit limit from the respondent-bank. It was further averred that the appellant had pledged FDR amounting to more than Rs. 1,00,000/- with maturity date of 23.12.1999. The appellant entered into an agreement with one Arvind Bhardwaj for the manufacturing of polythene bags bearing in mind that an amount of Rs. 1,25,000/- of credit limit was lying with the respondent-bank. The part payment of Rs. 20,000/- was made to him. The appellant also entered into an agreement with one Om Parkash, who was dealing in supply of old polythene road waste and part payment of Rs. 40,000/- as advance was also made to him and it was agreed that the remaining payment will be made on 8.11.1998. It was further agreed that in case of failure of the appellant, the advance payment made to Om Parkash shall be forfeited. The appellant presented a cheque dated 7.11.1998 for withdrawal of Rs. 50,000/- for the purchase of raw material, however, the then Bank Manager Sh. Ramesh Puri despite repeated requests did not make the payment. Rather the cash credit limit was closed without informing the appellant and it is alleged that on account of this the appellant suffered loss to the tune of Rs. 1,50,000/-. The appellant issued legal notice on 17.11.1998 which was duly replied wherein the respondent denied its liability, resulting in filing of the instant suit for recovery, as aforesaid.
The respondents filed written statement wherein preliminary objections regarding maintainability, locus-standi, cause of action and awarding of special costs were raised. It was averred that as per the bank record, the account of the firm stood closed as the same had stopped functioning. It was further averred that as a matter of fact, the appellant was not manufacturing and supplying the polythene bags, therefore, the question of having entered into an agreement with Om Parkash and Arvind Bhardwaj did not arise. It was further pleaded that the appellant in fact had visited the bank on 7.11.1998 for availing the bank facility, the activity of the firm at that time already stood closed and even the stock statement as per the terms and conditions of the bank, were not being supplied by the appellant. Even the guarantor of the loan had expired and despite repeated requests made to the appellant to execute fresh document, the appellant did not execute fresh document of guarantee, but claimed that he would never execute the document and would also not submit the stock statement. Therefore, in such circumstances, the payment could not be made and on such pleas, the respondents prayed for dismissal of the suit.
On 20.8.1999, the learned trial Court, framed the following issues:
"1. Whether the plaintiff had cash credit limit in the bank and the defendant intentionally/negligently refused to make payment, which resulted into loss to him, as alleged? OPP
Whether the plaintiff is entitled to the recovery of Rs. 60,000/-, with interest, as alleged? OPP
Whether the suit is not maintainable? OPD
Whether the plaintiff has no locus-standi to sue? OPD
Whether the suit deserves dismissal with special costs? OPD
Relief."
After recording the evidence led by the parties and evaluating the same, the learned trial Court dismissed the suit. The appellant thereafter filed an appeal before the learned lower Appellate Court, which too, was dismissed vide judgment and decree dated 11.3.2008 giving rise to the present appeal.
This Court vide its order dated 19.6.2008 admitted the appeal on the following substantial questions of law No. 1 and 3:
"1. Whether it was not incumbent upon the first appellate Court below to have given decision on each and every issue which arose for consideration before the learned Court? Was it not a statutory requirement for giving reason for each issue which arose for consideration before Hon''ble Court?
Whether the judgments and decrees passed by both the Courts below are not vitiated on the ground that both the Courts below have held that the respondents had rightly refused to encash the cheque presented by the plaintiff since at that time the Cash Credit Limit was deemed to have been closed after the death of the guarantor, though the FDRs of substantial amount of more than Rs. 1,20,000/- were lying pledged with the Bank?"
I have heard learned counsel for the parties and have also gone through the records of the case carefully and meticulously.
Substantial Question of law No. 1:
The scope, ambit and power of the first appellate court while deciding the first appeal have been subject matter of various judicial pronouncements and I only need to refer to the recent pronouncement of the Hon''ble Supreme Court in Shasidhar and others v. Smt. Ashwini Uma Mathad and another , 2015 AIR SCW 777 where the Hon''ble Supreme Court held as follows:--
"11. Having heard learned counsel for the parties and on perusal of the record of the case and examining the issue arising in this appeal, we find force in the submissions of the learned counsel for the appellants.
The powers of the first appellate Court, while deciding the first appeal under Section 96 read with Order XLI Rule 31 of the Code, are indeed well defined by various judicial pronouncements of this Court and are, therefore, no more res integra.
As far back in 1969, the learned Judge -V.R. Krishna Iyer, J (as His Lordship then was the judge of Kerala High Court) while deciding the first appeal under Section 96 of the CPC in Kurian Chacko v. Varkey Ouseph, , AIR 1969 Kerala 316, reminded the first appellate Court of its duty as to how the first appeal under Section 96 should be decided. In his distinctive style of writing and subtle power of expression, the learned judge held as under:
"1. The plaintiff, unsuccessful in two Courts, has come up here aggrieved by the dismissal of his suit which was one for declaration of title and recovery of possession. The defendant disputed the plaintiff''s title to the property as also his possession and claimed both in himself. The learned Munsif, who tried the suit, recorded findings against the plaintiff both on title and possession. But, in appeal, the learned Subordinate Judge disposed of the whole matter glibly and briefly, in a few sentences.
An appellate court is the final Court of fact ordinarily and therefore a litigant is entitled to a full and fair and independent consideration of the evidence at the appellate stage. Anything less than this is unjust to him and I have no doubt that in the present case the learned Subordinate Judge has fallen far short of what is expected of him as an appellate Court. Although there is furious contest between the counsel for the appellant and for the respondent, they appear to agree with me in this observation..... "
(Emphasis supplied)
This Court in a number of cases while affirming and then reiterating the aforesaid principle has laid down the scope and powers of the first appellate Court under Section 96 of the Code.
We consider it apposite to refer to some of the decisions.
In Santosh Hazari v. Purushottam Tiwari (Deceased) by L.Rs. , (2001) 3 SCC 179, this Court held (at pages 188-189) as under:
"......... the appellate court has jurisdiction to reverse or affirm the findings of the trial court. First appeal is a valuable right of the parties and unless restricted by law, the whole case is therein open for rehearing both on questions of fact and law. The judgment of the appellate court must, therefore, reflect its conscious application of mind and record findings supported by reasons, on all the issues arising along with the contentions put forth, and pressed by the parties for decision of the appellate court...... while reversing a finding of fact the appellate court must come into close quarters with the reasoning assigned by the trial court... and then as sign its own reasons for arriving at a different finding. This would satisfy the court hearing a further appeal that the first appellate court had discharged the duty expected of it............ "
The above view has been followed by a three-Judge Bench decision of this Court in Madhukar & Ors. v. Sangram & Ors., , (2001) 4 SCC 756, wherein it was reiterated that sitting as a court of first appeal, it is the duty of the High Court to deal with all the issues and the evidence led by the parties before recording its findings.
In H.K.N. Swami v. Irshad Basith, (2005) 10 SCC 243, this Court (at p. 244) stated as under:
"3. The first appeal has to be decided on facts as well as on law. In the first appeal parties have the right to be heard both on questions of law as also on facts and the first appellate court is required to address itself to all issues and decide the case by giving reasons. Unfortunately, the High Court, in the present case has not recorded any finding either on facts or on law. Sitting as the first appellate court it was the duty of the High Court to deal with all the issues and the evidence led by the parties before recording the finding regarding title."
Again in Jagannath v. Arulappa & Anr. (2005) 12 SCC 303, while considering the scope of Section 96 of the Code this Court (at pp. 303-04) observed as follows:
"2.A court of first appeal can reappreciate the entire evidence and come to a different conclusion......... "
Again in B.V Nagesh & Anr. v. H.V. Sreenivasa Murthy, , (2010) 13 SCC 530, this Court taking note of all the earlier judgments of this Court reiterated the aforementioned principle with these words:
"3. How the regular first appeal is to be disposed of by the appellate court/High Court has been considered by this Court in various decisions. Order 41 CPC deals with appeals from original decrees. Among the various rules, Rule 31 mandates that the judgment of the appellate court shall state:
(a) the points for determination;
(b) the decision thereon;
(c) the reasons for the decision; and
(d) where the decree appealed from is reversed or varied, the relief to which the appellant is entitled.
The appellate court has jurisdiction to reverse or affirm the findings of the trial court. The first appeal is a valuable right of the parties and unless restricted by law, the whole case is therein open for rehearing both on questions of fact and law. The judgment of the appellate court must,... therefore, reflect its conscious application of mind and record findings supported by reasons, on all the issues arising along with the contentions putforth, and pressed by the parties for decision of the appellate court. Sitting as a court of first appeal, it was the duty of the High Court to deal with all the issues and the evidence led by the parties before recording its findings. The first appeal is a valuable right and the parties have a right to be heard both on questions of law and on facts and the judgment in the first appeal must address itself to all the issues of law and fact and decide it by giving reasons in support of the findings. (Vide Santosh Hazari v. Purushottam Tiwari, , (2001) 3 SCC 179 at p. 188, para 15 and Madhukar v. Sangram, , (2001) 4 SCC 756 at p. 758, para 5.)
In view of the above salutary principles, on going through the impugned judgment, we feel that the High Court has failed to discharge the obligation placed on it as a first appellate court. In our view, the judgment under appeal is cryptic and none of the relevant aspects have even been noticed. The appeal has been decided in an unsatisfactory manner. Our careful perusal of the judgment in the regular first appeal shows that it falls short of considerations which are expected from the court of first appeal. Accordingly, without going into the merits of the claim of both parties, we set aside the impugned judgment and decree of the High Court and remand the regular first appeal to the High Court for its fresh disposal in accordance with law."
The aforementioned cases were relied upon by this Court while reiterating the same principle in State Bank of India & Anr. v. Emmsons International Ltd. & Anr., (2011) 12 SCC 174. This Court has recently taken the same view on similar facts arising in Vinod Kumar v. Gangadhar, , 2014(12) Scale 171."
Applying the principles laid down in the aforesaid case(s) to the facts of the present case, I find that the learned lower Appellate Court while deciding the appeal has kept in mind all the principles and thereafter rendered the impugned judgment.
It would be noticed that in Santosh Hazari case (supra), the Hon''ble Supreme Court had categorically held that the task of an appellate court affirming the findings of the trial Court is an easier one. The appellate court agreeing with the view of the trial court need not restate the effect of the evidence or reiterate the reasons given by the trial court; expression of general agreement with reasons given by the court, decision of which is under appeal, would ordinarily suffice. Though, in Shasidhar case (supra) some portion of the judgment passed in Santosh Hazari''s case has been quoted, but this part of the judgment is not quoted and is therefore, reproduced hereinunder:
"...The task of an appellate court affirming the findings of the trial Court is an easier one. The appellate court agreeing with the view of the trial court need not restate the effect of the evidence or reiterate the reasons given by the trial court; expression of general agreement with reasons given by the court, decision of which is under appeal, would ordinarily suffice (See Girijanandini Devi v. Bijendra Narain Choudhary, , AIR 1967 SC 1124. We would, however, like to sound a note of caution. Expression of general agreement with the findings recorded in the judgment under appeal should not be a device or camouflage adopted by the appellate court for shirking the duty cast on it."
Adverting to the judgment passed by the learned lower Appellate Court, it would be noticed that not only the pleadings but even the evidence and the effect thereof has been elaborately discussed therein. Though, it is vehemently argued by Mr. Anuj Nag, learned counsel for the appellant that the first Appellate Court was bound to have given its findings on each of the issues, but I find this plea to be untenable because as per the principles enunciated in Santosh Hazari''s case (supra), the learned first Appellate Court while agreeing with the view of the trial court was not required to restate the effect of the evidence or reiterate the reasons given by the trial court; expression of general agreement with reasons given by the court, would have sufficed.
Accordingly, this substantial question of law is decided against the appellant.
Substantial question of law No. 3:
It is the case of the appellant that he was running a plastic bag factory and had opened a bank limit account No. CC-138 for a sum of Rs. 1,25,000/- with the respondent and had pledged his FDR of more than Rs. 1,00,000/-, the maturity of which was due on 23.12.1999. The appellant further claimed to have entered into an agreement with one Arvind Bhardwaj on 20.10.1998 and with one Om Parkash on 24.10.1998 for the supply of raw material and for taking the expert opinion, had spent a sum of Rs. 60,000/-.
But the question however is whether the appellant had really entered into the aforesaid agreements with one Arvind Bhardwaj and Om Parkash as alleged? It would be evident from Ex. D.W. -1/B that the electricity supply to the factory of the appellant had already been disconnected on 30.7.1998, which means that the factory after 30.7.1998 was not in operation. Therefore, there was no necessity of purchasing any raw material. Why then in such circumstances the appellant still enter into the aforesaid contracts, is not at all forthcoming?
The record reveals that the appellant applied for the revival of the electricity supply on 5.11.1998 i.e. after having allegedly entered into agreements with Arvind Bhardwaj and Om Parkash, but then the electricity supply was not restored as the Assistant Engineer, Sub Division, Kotla asked the appellant vide letter dated 14.12.1998 to complete the codal formalities before the electricity supply could be re-installed. Admittedly, the appellant failed to do so. There is no evidence led by the appellant that the factory in fact had been running at the time when he entered into agreement with the aforesaid two persons, rather, a perusal of the memorandum of appeal filed before the learned lower Appellate Court would suggest that the appellant admits that the electricity supply had been got disconnected.
It would also be noticed that the appellant has not even cared to place on record the details of the workmen employed by him in his factory, which clearly proves that the factory was not at all operational at the relevant time.
It is further not in dispute that the mother of the appellant, who was the guarantor, had also died and, therefore, in such circumstances, it was incumbent upon the appellant to have got the contract of Cash Credit Limit renewed, but he failed to take any steps. The mere fact that the appellant had pledged FDR of more than Rs. 1,00,000/- with maturity date of 23.12.1999 would be of no avail as it was for the appellant to have complied with the guidelines/instructions applicable to the respondent-bank and it was not for the appellant to dictate terms to the respondent.
That apart, the record reveals that on 7.11.1998 the appellant himself has presented a cheque for encashment and on this very day he had closed his Account No. CC-138 by depositing an amount of Rs. 7580/- alongwith interest Rs. 106/-. It is further revealed that the appellant had not been supplying the stock statement as was required to be furnished to the respondent. The non-payment of cheque dated 7.11.1998 was only on account of the fact that the appellant himself had closed the account and had not entered into any fresh agreement after the death of the guarantor and moreover even the appellant''s factory had been lying closed.
Once the appellant does not dispute the death of the guarantor and further admits that no fresh guarantor was substituted by him, then the appellant cannot as a matter of right claim that the respondent should have still advanced the amount to the appellant. In fact, after the death of the guarantor and refusal on the part of the appellant to have submitted fresh deed of guarantee, the respondent-bank was under no obligation to have continued the bank transaction with the appellant and was well within its right to have refused advancing of any amount to the appellant.
Even otherwise, the findings recorded by the learned Court below on this aspect of the case are pure findings of fact which cannot ordinarily be interfered with by this Court in exercise of the powers under Section 100 of CPC.
Accordingly, substantial question of law No. 3 is decided against the appellant.
As a result of my aforesaid discussion, I find no merit in this appeal and the same is accordingly dismissed, leaving the parties to bear their own costs.