IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 130 OF 2013
(Arising out of S.L.P. (C) No. 13950 of 2009)
M/s. Gian Chand & Brothers and Another ... Appellants
Versus
Rattan Lal @ Rattan Singh ...Respondent
J U D G M E N T
Dipak Misra, J.
Leave granted.
2. In this appeal, the assail is to the legal soundness of the judgment
and decree dated 26.2.2009 in R.S.A. No. 1570 of 2008 passed by the
learned single Judge of the High Court of Punjab and Haryana at
Chandigarh whereby it overturned the decision of the learned
Additional District Judge, Kurukshetra in Civil Appeal No. 96 of 2006
dated 12.03.2008 wherein the judgment and decree dated 20.07.2006
passed by the learned Additional Civil Judge (Sr. Division), Pehowa
was partially modified.
3. The facts which are necessary to be stated are that
the plaintiffs-
appellants (hereinafter referred to as “plaintiffs”) had initiated a
civil action forming the subject matter of CS No. 337 of 2004 in the
court of Additional Civil Judge (Sr. Division), Pehowa for recovery of
a total sum of Rs.10,45,620/- along with pendente lite and future
interest at @18% per annum.
It was the case of the plaintiffs that
plaintiff No. 1 is a registered partnership firm carrying the business
of commission agent for sale and purchase of food grains in Shop No.
69, New Green Market at Anaj Mandi in Pehowa and plaintiff No. 2 is
the partner of the said partnership firm.
The plaintiff firm advances
money to the agriculturists and charges commission on the sale price
of the agricultural produce sold as determined by the market
committee.
For the aforesaid purpose, it has been maintaining the
books of accounts in the regular course of business.
The respondent-
defendant (hereinafter referred to as “the defendant”) had been
maintaining regular and long standing current account with the
plaintiffs.
The defendant had taken advance from time to time from
the plaintiffs which he had promised to return at the shop of the
plaintiffs.
All the transactions between the parties were entered in the books of accounts which reflected that as on 30.4.2002, a sum of Rs.5,80,000/- stood in the name of the defendant towards outstanding balance and he had acknowledged the same under his signature in the corresponding account entry in the account books of the plaintiffs.
The defendant neither returned the money nor brought any agricultural
produce for sale to the shop of the plaintiffs till 27.5.2003.
The
plaintiffs served a legal notice on 26.2.2004 on the defendant to make
good the payment and also made repeated requests requiring him to pay
the dues, but all requests and demands went in vain and eventually, on
18.8.2004, he refused to comply with the request.
Being put in such a
situation, the plaintiffs were compelled to institute the suit on
19.8.2004 wherein they claimed Rs.9,72,670/- which included the total
amount lent to the defendant at various times and Rs.72,950/- towards
interest till the date of filing of the suit and further claimed
pendente lite and future interest @ 18% per annum.
Be it noted, the
borrowings for the financial years 2002-2003 and 2003-2004 were
reflected in the “rokar bahi”.
4. A written statement was filed by the defendant which consisted of two
parts, namely, preliminary objections and reply on merits.
In the
preliminary objections, it was stated that the suit was not
maintainable;
that the father of the defendant was a customer of the
plaintiffs’ firm but the defendant had nothing to do with the
plaintiffs;
that if there was any liability, it was of Kewal Krishan
and not of the defendant;
that the plaintiffs had no locus standi to
file the suit and it was defective for non-joinder of parties; and
that no cause of action arose against the defendant.
As far as the
merits are concerned, reference was made to every paragraph of the
plaint and in oppugnation, it was stated that some of the averments
were false.
As far as the other averments were concerned, the
defendant denied them due to lack of knowledge.
5. The learned trial Judge, on the basis of the pleadings, framed five
issues. The principal issues that were really addressed on contest
were
whether the plaintiff was entitled to recover an amount of
Rs.10,45,620/- along with interest pendente lite and future interest @
18% per annum;
that whether the suit of the plaintiff was not
maintainable in the present form;
that whether the plaintiff had no
locus standi and cause of action to file and maintain the suit; and
that whether the suit of the plaintiff was bad for non-joinder of
necessary parties.
6. Be it noted, on behalf of the plaintiffs including the partner of the
plaintiffs’ firm, three witnesses were examined and 13 documents,
namely, copy of ledger, bahi, copy of ledger of S.T./C.S.T., copy of
Form-A, Form-C, copy of resolution dated 31.10.1993 and copy of the
certificate dated 28.07.2005 were brought in the evidence and marked
as exhibits. The defendant examined himself as DW-1 and did not
produce any documentary evidence.
7. The learned trial Judge, considering the evidence on record, came to
hold that the plaintiffs had been able to establish
that the firm was
engaged in the business of a commission agent which lends money to the
agriculturists;
that the business transaction with the plaintiff’s
firm had not been denied by the defendant;
that the bahi entries had
been produced on record by the plaintiffs to show that the amount was advanced to the defendant and the said entries had the stamp and signatures of the defendant;
that the plea of the defendant that his
signatures on the bahi entries were fraudulently obtained had not been
substantiated; that the transactions in dispute were numerous and
extended over a number of years and there was no reason not to lend
credence to the genuineness of the books of accounts;
that the
plaintiffs had the locus standi to file the suit and the cause of
action had arisen to initiate a civil action and
that the plea that
the suit was defective for non-joinder of parties had really not been
pressed.
Being of this view, the learned trial Judge opined that the
plaintiffs were entitled to recover the amount of Rs.10,45,620/- along
with pendente lite and future interest @ 6% per annum and,
accordingly, decreed the suit.
8. Grieved by the aforesaid judgment and decree,
the defendant preferred
a Civil Appeal wherein it was contended that
when the signatures in
the books of accounts were denied, it was obligatory on the part of
the plaintiffs to get the same examined by a handwriting expert; that
the signatures in the books of accounts had been forged by the
plaintiffs; that certain entries did not bear the signatures of the
defendant; that the plaintiffs had failed to show why such a huge
amount had been advanced to the defendant; and that the learned trial
Judge had fallen into error by decreeing the suit of the plaintiffs.
9. The first appellate court, considering the contentions raised before
it,
came to hold that the plaintiffs had placed reliance on the ledger
entries which were maintained in the regular course of business;
that
from Exhibit P-2, it was vivid that a sum of Rs.5,80,000/- was taken
in cash by the defendant and it had his signatures and
that the aspect
of forgery has not been pleaded and, in any case, had not been proven
at all; and
that except two entries, namely, Exh. P-4 and P-9, the
defendant had signed in all the entries which were maintained in the
regular course of business;
that the written statement was absolutely
evasive and no plea of forgery being taken, the challenge that the
signatures were obtained fraudulently or by any other method or undue
relationship did not warrant consideration and, in any case, the onus
did lie on the defendant which was not discharged.
10. On the aforesaid base, it opined that the plaintiffs were entitled to
recover the amount excluding the sums covered under those two entries
along with proportionate interest and, accordingly, partly allowed the
appeal and modified the judgment and decree of the learned trial
Judge.
11. Being dissatisfied, the defendant preferred second appeal and the
learned single Judge framed four substantial questions of law, namely,
(i) whether a suit for recovery could be decreed when the pleadings
and evidence led by the plaintiffs were at substantial variance;
(ii) whether the plaintiffs could be said to have established its case,
particularly when the defendant had denied the factum of borrowing any
sum and the signatures on the cash book and no evidence including
document/finger print expert was led by the plaintiffs to establish
the signatures of the defendant in the account books;
(iii) whether it was obligatory on the part of the plaintiff to prove the alleged
signatures of the defendant in the cash book when they had been
disputed; and
(iv) whether the admission of the defendant could be
assumed in the absence of clear and unambiguous admission of the party
to the litigation.
12. The High Court referred to paragraphs 6 and 7 of the plaint and
Exhibits P-1, P-2, P-3, P-7, P-9 and P-10 and noticed the variance of
the amounts mentioned therein and further opined that when the
signatures had been denied, the onus was on the plaintiffs to examine
a handwriting expert to establish the veracity of the signatures to
bring home the plea set up by the plaintiffs in the plaint. It also
ruled that the courts below had fallen into error in holding that the
onus to prove the falsity was on the defendant. Analyzing the
documents and evidence, the learned single Judge came to hold that the
averments as pleaded in the plaint and the evidence in support thereof
were at variance with each other and the evidence did not substantiate
the claim and the onus to prove the accounts and rokar bahi having not
been discharged, the judgments of the fora below were unsustainable.
Hence, the present appeal.
13. We have heard Mr. Gautam Narayan, learned counsel for the appellants.
Despite service of notice, there has been no appearance on behalf of
the respondent.
14. On a careful reading of the judgment, it is noticeable that the High
Court has observed that the findings returned by the courts below are
perverse and, accordingly, jurisdiction under Section 100 of the Code
of Civil Procedure could be exercised. The perversity has been
noticed on two counts, namely, incorrect placing of onus on the
defendant to prove that the signatures had been forged more so when
there was denial of the same and second, the variance in the pleadings
and the evidence as regards the amounts in question were not
appositely taken note of. Thus, we are required to see whether the
approach of the learned single Judge in annulling the judgments of the
courts below is correct on the aforesaid grounds which, according to
him, reflect perversity of approach.
15. First, we shall deal with the onus to prove in such a case. The
plaintiffs, in paragraphs 4 and 5 of the plaint, have categorically
asseverated that the defendant used to avail advance money from the
plaintiffs with the promise to bring his agriculture produce for sale
at their shop and the said amount had been duly entered in the books
of accounts which the defendant had acknowledged under his signatures
in the corresponding entries. The Accountant of the firm, PW-1, has
proved various entries and they have been marked as exhibits. There
had been no objection when the signatures were stated to be that of
the defendant. It is admitted by him that Exh. P-9 did not bear the
signature of the defendant. It is worthy to note that nothing has
been put to him in the cross-examination about the signatures. The
partner of the firm, PW-2, has testified the signatures in the
entries. He has clearly stated that he was able to identify the
signatures. The defendant had examined himself as DW-1 and had only
stated that he had no dealings with the plaintiffs but his father was
a customer of the firm. He had disputed to have signed any entries.
In the cross-examination, he has admitted his signatures on the
written statement and stated that he did not remember whether at the
time of purchase, his signatures were taken or not.
16. As noticed earlier, the High Court has held that the fora below
erroneously placed the onus on the defendant to disprove his
signatures. On a careful scrutiny of the evidence, it is manifest
that the signatures are proven by the witnesses and they have been
marked as exhibits without any objection. It is interesting to note
that in paragraphs 6 and 7 of the plaint, it was averred that the
defendant had given the acknowledgement of amount under his signature
in the corresponding entry in the books of accounts. While replying
to the same, the defendant has said that the arguments in para 6 of
the plaint are wrong and denied in view of the preliminary objections.
It is apt to note that the preliminary objections pertained to bald
denial of liability, lack of locus standi to file the suit, non-
joinder of parties and lack of cause of action. Thus, there was no
plea whatsoever as regards the denial of signature or any kind of
forgery or fraud. The High Court, as we find, has observed that the
plaintiffs should have examined a handwriting expert. The plaintiffs
had asserted that there was an acknowledgement under the signatures of
the defendant. There was no denial by the defendant about the
signatures; and further, the acknowledgements had been proven without
objection. Only in the examination-in-chief, the defendant had
disputed the signature and in the cross-examination he has mercurially
deposed that he does not remember to have signed at the time of any
purchase.
17. It is well settled principle of law that a person who asserts a
particular fact is required to affirmatively establish it. In Anil
Rishi v. Gurbaksh Singh[1], it has been held that the burden of
proving the facts rests on the party who substantially asserts the
affirmative issues and not the party who denies it and the said
principle may not be universal in its application and there may be an
exception thereto. The purpose of referring to the same is that if
the plaintiff asserts that the defendant had acknowledged the
signature, it is obligatory on his part to substantiate the same. But
the question would be what would be the consequence in a situation
where the signatures are proven and there is an evasive reply in the
written statement and what should be construed as substantiating the
assertion made by the plaintiff.
18. In Krishna Mohan Kul v. Pratima Maity and others[2], it has been ruled
thus: -
“When fraud, misrepresentation or undue influence is alleged by
a party in a suit, normally, the burden is on him to prove such
fraud, undue influence or misrepresentation.”
19. In Shashi Kumar Banerjee and others v. Subodh Kumar Bannerjee since
deceased and after him his legal representatives and others[3], a
Constitution Bench of this Court, while dealing with a mode of proof
of a will under the Indian Succession Act, observed that where the
caveator alleges undue influence, fraud and coercion, the onus is on
him to prove the same.
20. In A. Raghavamma and another v. A. Chenchamma and another[4], while
making a distinction between burden of proof and onus of proof, a
three-Judge Bench opined thus: -
“There is an essential distinction between burden of proof and
onus of proof : burden of proof lies upon the person who has to
prove a fact and it never shifts, but the onus of proof shifts.
The burden of proof in the present case undoubtedly lies upon
the plaintiff to establish the factum of adoption and that of
partition. The said circumstances do not alter the incidence of
the burden of proof. Such considerations, having regard to the
circumstances of a particular case, may shift the onus of proof.
Such a shifting of onus is a continuous process in the
evaluation of evidence.”
21. The present case is not one such case where the plaintiffs have chosen
not to adduce any evidence. They have examined witnesses, proven
entries in the books of accounts and also proven the acknowledgements
duly signed by the defendant. The defendant, on the contrary, except
making a bald denial of the averments, had not stated anything else.
That apart, nothing was put to the witnesses in the cross-examination
when the documents were exhibited. He only came with a spacious plea
in his evidence which was not pleaded. Thus, we have no hesitation in
holding that the High Court has fallen into error in holding that it
was obligatory on the part of the plaintiffs to examine the
handwriting expert to prove the signatures. The finding that the
plaintiffs had failed to discharge the burden is absolutely
misconceived in the facts of the case.
22. The said aspect can be looked from another angle. Rules 3, 4 and 5 of
Order VIII form an integral code dealing with the manner in which
allegations of fact in the plaint should be traversed and the legal
consequences flowing from its non-compliance. It is obligatory on the
part of the defendant to specifically deal with each allegation in the
plaint and when the defendant denies any such fact, he must not do so
evasively but answer the point of substance. It is clearly postulated
therein that it shall not be sufficient for a defendant to deny
generally the grounds alleged by the plaintiffs but he must be
specific with each allegation of fact (see Badat and Co., Bombay v.
East India Trading Co.[5]).
23. Rule 4 stipulates that a defendant must not evasively answer the point
of substance. It is alleged that if he receives a certain sum of
money, it shall not be sufficient to deny that he received that
particular amount, but he must deny that he received that sum or any
part thereof, or else set out how much he received, and that if an
allegation is made with diverse circumstances, it shall not be
sufficient to deny it along with those circumstances. Rule 5 deals
with specific denial and clearly lays down that every allegation of
fact in the plaint, if not denied specifically or by necessary
implication, or stated to be not admitted in the pleading of the
defendant, shall be taken to be admitted against him.
24. We have referred to the aforesaid Rules of pleading only to highlight
that in the written statement, there was absolutely evasive denial.
We are not proceeding to state whether there was admission or not, but
where there is total evasive denial and an attempt has been made to
make out a case in adducing the evidence that he was not aware whether
the signatures were taken or not, it is not permissible. In this
context, we may profitably refer to a two-Judge Bench decision in
Sushil Kumar v. Rakesh Kumar[6] wherein, while dealing with the
pleadings of election case, this Court has held thus: -
“73. In our opinion, the approach of the High Court was not
correct. It failed to apply the legal principles as contained
in Order 8 Rule 3 and 5 of the Code of Civil Procedure. The
High Court had also not analysed the evidence adduced on behalf
of the appellant in this behalf in detail but merely rejected
the same summarily stating that vague statements had been made
by some witnesses. Once it is held that the statements made in
paragraph 18 of the election petition have not been specifically
denied or disputed in the written statement, the allegations
made therein would be deemed to have been admitted, and, thus,
no evidence contrary thereto or inconsistent therewith could
have been permitted to be laid.”
25. We may state with profit that in the said case, reliance was placed on
Badat and Co. v. East India Trading Co. (supra).
26. Scrutinized thus, the irresistible conclusion would be that the
defendants could not have been permitted to lead any evidence when
nothing was stated in the pleadings. The courts below had correctly
rested the burden of proof on the defendant but the High Court, in an
erroneous impression, has overturned the said finding.
27. Another aspect which impressed the High Court was the variance in the
pleadings in the plaint and the evidence adduced by the plaintiffs.
To appreciate the said conclusion, we have keenly perused paragraphs 6
and 7 of the plaint and the evidence brought on record. It is
noticeable that there is some variance but, as we perceive, we find
that the variance is absolutely very little. In fact, there is one
variation, i.e., at one time, it is mentioned as Rs.6,64,670 whereas
in the pleading, it has been stated as Rs.6,24,670 and there is some
difference with regard to the date. In our considered view, such a
variance does not remotely cause prejudice to the defendant. That
apart, it does not take him by any kind of surprise. In Celina Coelho
Pereira (Ms) and others v. Ulhas Mahabaleshwar Kholkar and others[7],
the High Court had non-suited the landlord on the ground that he had
not pleaded that the business of the firm was conducted by its
partners, but by two other persons and that the tenant had parted with
the premises by sub-letting them to the said two persons under the
garb of deed of partnership by constituting a bogus firm. This Court
observed that there is substantial pleading to that effect. The true
test, the two-Judge Bench observed, was whether the other side has
been taken by surprise or prejudice has been caused to him. In all
circumstances, it cannot be said that because of variance between
pleading and proof, the rule of secundum allegata et probate would be
strictly applicable. In the present case, we are inclined to hold
that it cannot be said that the evidence is not in line with the
pleading and in total variance with it or there is virtual
contradiction. Thus, the finding returned by the High Court on this
score is unacceptable.
28. The next aspect which requires to be addressed is whether the books of
accounts could have been rejected by the High Court on the ground that
the entries had not been proven due to dispute of signatures solely on
the foundation that the plaintiff had not examined the handwriting
expert when there was a denial of the signature. We have already
dealt with the factum of signature, the pleading and the substance in
the evidence. The plaintiff No. 2, his accountant and other witness
have categorically stated that the books of accounts have been
maintained in the regular course of business. The same has not been
disputed by the defendant. In such a circumstance, we may profitably
reproduce a few lines from
Commissioner of Income Tax, Delhi v.
Woodward Governor India Private Limited[8]: -
“One more principle needs to be kept in mind. Accounts
regularly maintained in the course of business are to be taken
as correct unless there are strong and sufficient reasons to
indicate that they are unreliable.”
29. Applying the said principle to the pleadings and the evidence on
record, we find no reason that the books of accounts maintained by the
plaintiff firm in the regular course of business should have been
rejected without any kind of rebuttal or discarded without any reason.
30. In view of the aforesaid analysis, we conclude and hold that the High
Court has erroneously recorded that the findings returned by the
courts below are perverse and warranted interference and, therefore,
the judgment rendered by it is legally unsustainable and, accordingly,
we allow the appeal, set aside the judgment of the High Court and
restore that of the courts below. In the facts and circumstances of
the case, there shall be no order as to costs.
……………………………….J.
[K. S. Radhakrishnan]
……………………………….J.
[Dipak Misra]
New Delhi;
January 08, 2013
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[1] (2006) 5 SCC 558
[2] (2004) 9 SCC 468
[3] AIR 1964 SC 529
[4] AIR 1964 SC 136
[5] AIR 1964 SC 538
[6] (2003) 8 SCC 673
[7] (2010) 1 SCC 217
[8] (2009) 13 SCC 1
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