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2019 Supreme(Kar) 1921
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
H.B. Prabhakara Sastry, J.
Sri. R.Chandrashekar, S/o. Late Sri. Ramanna - Appellant
Versus
Sri. R.Chandrashekar, S/o. Sri. G.Rajaram - Respondent
R.F.A.No.615 OF 2012
Decided On : 22-08-2019
For the Petitioner:Sri. G.B.Nandeesh Gowda, for Sri. R.B.Sadasivappa, Advocate
For the Respondent:Sri.N.Devaraj & Sri.M.N.Nagesh, Advocates
Headnote:
On-Demand Promissory Note - Demanding repayment of loan - Whether any rate of interest was agreed to be paid by defendant and if so at what rate - whether said ‘21’ is rate of interest in percentage or in what manner - Whether plaintiff defendant having borrowed hand loan of Rs.34,000/- from plaintiff executed demand Promissory Note as contended - Whether plaintiff further proves defendant has agreed to pay said sum within 3 months from date of borrowable as contended - Whether defendant proves father of plaintiff had collected signed blank pro-Note of defendant as a security towards chit transaction as alleged - Summary of case of plaintiff in Trial Court was that defendant was colleague of plaintiff’s father who had approached plaintiff through his father for financial assistance - Considering same plaintiff gave a hand loan of a sum of Rs.34,000 defendant in which regard defendant had executed an On-Demand Promissory Note in favor of plaintiff - Defendant had agreed to repay said loan within three months from date of loan - Since defendant did not repay loan amount despite demand made by plaintiff a legal notice was sent to defendant on behalf of plaintiff demanding repayment of loan - Since defendant did not meet demand made therein plaintiff was constrained to institute suit for recovery of loan amount of a sum with interest thereupon – Held, After hearing both side Trial Court by its impugned judgment and answered issues No.1, 2 and 4 in affirmative and issue No.3 in negative and decreed suit of plaintiff holding him entitled to recover a sum from defendant along with interest at rate of Rs.12% per annum from date of suit till and from till realization - It is against said judgment and decree defendant has preferred this appeal - In entire pleading plaintiff has only stated and repeated about defendant availing a loan of a sum of from him but nowhere whispered as to whether any rate of interest was agreed to be paid by defendant and if so at what rate - It is only in prayer column plaintiff has prayed for interest at rate - Even there also he has not made it clear whether is rate of interest in percentage or in what manner - Thus plaint is vague in so far as claim of any interest is concerned - A careful examination of On-Demand Promissory Note at Ex.P2 also goes to show that said Promissory Note nowhere mentions about percentage of rate of interest agreed to between parties - On-Demand Promissory Note which is in a printed formalized manner where blanks have been filled up has left rate of interest portion in blank without filling it - As such alleged rate of interest that is being claimed by plaintiff from defendant at rate of Rs.21% is for first time appeared in evidence of PW1 in his Examination-in-chief - Since plaint averment regarding agreement towards rate of interest so also On-Demand Promissory Note at Ex.P2 are silent about same introduction of said rate of interest for first time in evidence cannot be believed - However a person who has enjoyed benefit of loan for quite a long time and when said loan is shown to have been lent to him with a condition to repay same which according to PW1 is together with interest there upon cannot be considered a loan given or granted without any interest - Even otherwise exercising power under Section 34 of Code of Civil Procedure 1908 a reasonable interest can be awarded in facts and circumstances of case - However Trial Court without considering all these aspects and accepting contention of plaintiff that defendant had agreed to pay interest at rate per annum had reduced it per annum and awarded rate of interest at such rate - Since said reasoning of Trial Court is not convincing even otherwise in absence of any specific agreement towards rate of interest I am of view that payment of interest even per annum would be on higher side and rate of interest can be confined to per annum on principal amount - It is only to such extent judgment and decree passed by Trial Court requires interference - Appeal is allowed
JUDGMENT :
This is a defendant’s appeal. The original suit filed by the present respondent against the present appellant in the Court of the learned XXX Additional City Civil Judge, Bangalore City (hereinafter for brevity referred to as the “Trial Court”) in O.S.No.3280/2002 for recovery of a total sum of Rs.34,000/- - with interest thereupon came to be decreed by the Trial Court by its judgment and decree dated 12-12-2011. It is against the said judgment and decree, the defendant in the Trial Court has preferred this appeal.
2. The summary of the case of the plaintiff in the Trial Court was that, the defendant was the colleague of plaintiff’s father who had approached the plaintiff through his father for financial assistance. Considering the same, the plaintiff gave a hand loan of a sum of Rs.34,000/- on 11-07-1999 to the defendant in which regard, the defendant had executed an On-Demand Promissory Note in favour of the plaintiff. The defendant had agreed to repay the said loan within three months from the date of the loan. Since the defendant did not repay the loan amount despite the demand made by the plaintiff, a legal notice dated 17-10-2001 was sent to the defendant on behalf of the plaintiff demanding the repayment of the loan. Since the defendant did not meet the demand made therein, the plaintiff was constrained to institute the suit for recovery of the loan amount of a sum of Rs.34,000/- with interest thereupon.
3. In response to the suit summons, the defendant appeared through his counsel and filed his Written Statement. The defendant admitted that the father of the plaintiff was his colleague and that both of them were working in NIMHANS. However, the defendant stated that he had no acquaintance with the plaintiff, as such, question of he seeking any financial assistance from the plaintiff would not arise. He specifically denied that he had availed hand loan of a sum of Rs.34,000/- from the plaintiff and had executed an On-Demand Promissory Note in that regard. He has stated that he received the legal notice, but stated that the suit instituted by the plaintiff is a false claim, as such, deserves to be dismissed.
Further, the defendant has put forth his case contending that, the plaintiff’s father was running a chit business wherein a sum of Rs.1,000/- had to be paid every month and the chit holders were all employees of NIMHANS. The defendant also had subscribed for two chits each for a sum of Rs.30,000/- . He had taken one of the chits, where he got a sum of Rs.12,000/- by leaving a discount of Rs.18,000/- on 30-06-1994. Subsequently, after three months, the second chit was also taken by him and that he had cleared his liability under both the chits. However, at the time of the defendant opting to raise the chit amount, the plaintiff’s father had taken duly signed but a blank On-Demand Promissory Note from him as a security. Undue advantage of the said Promissory Note has been taken by the plaintiff by instituting the suit. The defendant also contended that the suit was barred by limitation.
4. Based on the pleadings of the parties, the Trial Court framed the following issues for its consideration :-
“1] Whether the plaintiff proves, on 11-7-1999 the defendant having borrowed hand loan of Rs.34,000/- from the plaintiff executed demand Promissory Note as contended?
[2] Whether the plaintiff further proves the defendant has agreed to pay the said sum within 3 months from the date of borrowal as contended?
[3] Whether the defendant proves, the father of the plaintiff had collected signed blank pro-Note of the defendant as a security towards chit transaction as alleged.?
[4] Whether the plaintiff is entitled to suit claim as prayed for?
[5] What order or decree?”
In support of his contention, the plaintiff got his father Sri.B.G. Rajaram examined as a Power of Attorney and as PW1 and got marked documents from Exhibits P1 to P4(a). The defendant got himself examined as DW1 and got one Sri.K.N. Vishwanatha examined as DW2 and go
