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2018 Supreme(Ori) 251
IN THE HIGH COURT OF ORISSA : CUTTACK
A.K. RATH, J.
Pandi Appa Rao and another - Appellants
Versus
Indian Bank, Brach at Parlakhemundi represented by the Regional Manager - Respondent
S.A.No.232 of 1989
Decided on : 09-04-2018
Advocate Appeared:
For the Appellants :Mr.S.S.Rao, Advocate
The central legal point established in the judgment is the admissibility of evidence under the Bankers’ Books Evidence Act to prove the execution of financial documents and transactions.
Headnote:
D.P.Note - Loan Disbursement - The court held that the plaintiff-Bank had proved the execution of the Demand Promissory Note (D.P.Note) by the defendants and the disbursement of the loan amount, based on the evidence presented and the Bankers’ Books Evidence Act.
Fact of the Case:
The plaintiff-Bank sued the defendants for the realization of a loan amount. The defendants denied applying for the loan and executing the D.P.Note, claiming that defendant no.2 had applied for an agricultural loan and defendant no.1 had signed as a guarantor without receiving any amount.
Finding of the Court:
The appellate court found that the plaintiff-Bank had proved the execution of the D.P.Note and the disbursement of the loan amount to defendant no.1. It held that the evidence supported the plaintiff-Bank's case and that there was no perversity or illegality in the finding.
Issues: The issues included the execution of the D.P.Note, the understanding of its contents by the defendants, and the disbursement of the loan amount by the plaintiff-Bank.
Ratio Decidendi: The court relied on the evidence presented, including the signatures of the defendants on the loan application and the D.P.Note, and the provisions of the Bankers’ Books Evidence Act to establish the execution of the D.P.Note and the loan disbursement.
Final Decision: The appeal was dismissed, and no costs were awarded.
JUDGMENT :
A.K. RATH, J.
1. The defendants are the appellants against a reversing judgment.
2. The plaintiff-respondent instituted the suit for realization of Rs.5471.45 from the defendants. The case of the plaintiff-Bank was that on 10.1.1978 defendant no.1 borrowed a sum of Rs.3,500/-from the plaintiff-Bank. Defendant no.2 stood surety for the said loan. Accordingly, they had executed a Demand Promissory Note (“D.P.Note”). When the defendants failed to make any payment, the plaintiff-Bank instituted the suit for realization of the loan amount.
3. The defendants filed a written statement denying the assertions made in the plaint. According to them, defendant no.1 had neither applied for loan, nor received any amount from the plaintiff-Bank. They had not executed the D.P.Note. In the month of January, 1978, defendant no.2 had applied for an agricultural loan of Rs.3,000/-to the plaintiff-Bank. The plaintiff-Bank sanctioned a sum of Rs.3,000/-which was paid to him on 10.1.1978. Defendant no.1 stood as a guarantor. The then Branch Manager obtained the signatures of defendant no.1. Defendant no.1 signed the papers on the assumption that he was signing as a surety for the loan taken by his son. He had not received any amount.
4. On the inter se pleadings of the parties, learned trial court framed four issues. Parties led evidence, oral and documentary, to substantiate their cases. Learned trial court came to hold that the plaintiff-Bank had failed to prove execution of D.P.Note by defendant no.1 and advance of Rs.3,500/-. Held so, it dismissed the suit. Felt aggrieved, the plaintiff-Bank filed Money Appeal No.12 of 1988 in the Court of the learned Additional District Judge, Parlakhemundi. Learned appellate court allowed the appeal holding inter alia that the defendants had executed a D.P.Note and the plaintiff-Bank had disbursed the loan amount to defendant no.1.
5. This appeal was admitted on the substantial questions of law enumerated in ground nos.2, 3 and 6 of the appeal memo. The same are:
“2. For that the finding of learned lower appellate court that execution of demand promissory note was proved as the defendant no.2 admitted his signature on Ex-2 is contrary to law. It is submitted that mere signing is not executing a document. As such the decision passed by learned lower appellate court allowing the appeal and thereby reversing the judgment and decree of trial court dismissing the suit is liable to be set aside.
3. For that learned lower appellate court acted contrary to law in drawing a presumption that the signatures were after understanding the contents of Exts.1, 2 and 3. It is submitted that execution as a fact must be proved and no presumption is possible under law. As such the decision of lower appellate court is contrary to law and is liable to be set aside.
6. For that the learned lower appellate court misread the judgment of learned trial court in observing that learned lower court also found that the defendants failed to prove fraud in as much as the learned lower appellate court lost sight of the fact that the finding of learned trial court was on an assumption of establishment of proof of valid execution of documents by respondent. As such the decision of learned lower appellate court is contrary to law and is liable to be set aside.”
6. Heard Mr.S.S.Rao, learned Advocate for the appellants. None appeared for the respondent.
7. Mr.Rao, learned Advocate for the appellants submitted that defendant no.2 had not executed the D.P.Note. Learned appellate court is not justified in drawing a presumption with regard to Exts.1, 2 and 3. The finding of the learned appellate court is based on surmises and conjectures. The plaintiff-Bank has failed to prove due execution of the documents.
8. On scanning of the evidence on record and pleadings, learned appellate court came to hold that defendant no.1 had admitted his signature appearing in the loan application, Ext.1, D.P.Note dated 10.1.1978, Ext.2 and payment voucher, Ext.3. Defenda
