Sri. C.s.s.v.durga Prasad
I ADDL DISTRICT AND SESSIONS JUDGE
Nalgonda, PDJ Court Complex · Nalgonda · Telangana
SRI. C.S.S.V.DURGA PRASAD, I ADDL DISTRICT AND SESSIONS JUDGE, is posted at Nalgonda, PDJ Court Complex, Nalgonda, Telangana, India. 5 court orders on record since 2011. 5 judgments with full text available. Primarily handles AS cases.
Featured Judgments
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IN THE COURT OF THE I ADDL. DISTRICT JUDGE AT
NALGONDA.
Present: Sri C.S.S.V. Durga Prasad, M.Com., B.L.,
I Addl. District Judge, Nalgonda.
Dated this the 01st day of March, 2012
A.S. No. 72 of 2010.
BETWEEN:-
1. Chenagoni Yadaiah
2. Marru Sunitha
3. Mynampati Geethamma
4. Jonnalagadda Padma
5. Jonnalagadda Sandeep Reddy.
....Appellants
And
1.R.Padma
2.Srinidhi Chit Funds & Finance, Nalgonda, rep. by its M.P. M.Srinivas Rao
3.Madugula Srinivasa Rao. ….Respondents
ON APPEAL AGAINST THE JUDGMENT AND DECREE PASSED BY THE
JUNIOR CIVIL JUDGE AT NALGONDA, DT.31-07-2010 IN
O.S.No. 479 of 2002
R.Padma
....Plaintiff.
And
1.Srinidhi Chit Funds & Finance, Nalgonda, rep. by its Foreman M.Srinivas Rao,
2.Madugula Srinivasa Rao
3.Chenagoni Yadaiah
4.Marru Sunitha
5.Mynampati Geethamma
6.Jonnalagadda Padma.
7.Jonnalagadda Sandeep Reddy. …Defendants This suit is coming before me for disposal in the presence of Sri V.Surender Reddy, Advocate for the Appellant/s, Sri K.V.Sudhakar, Advocate for the Respondent No.1 and Sri M.V.Raghava Rao, Advocate
for the Respondent No.2 and having stood over for consideration till
this day this court delivered the following:
:: JUDGMENT ::
Having aggrieved by the Judgment and Decree passed in O.S.
No. 479 of 2002 by the Junior Civil Judge, Nalgonda, defendants No.3 to 7 have preferred this appeal.
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2. The plaintiff has filed the suit before the trial Court with the following allegations:
Plaintiff is a Tailor and doing business and first defendant is Chit
Fund Firm, doing business in Chit Funds and Finance. Defendant No.2 is Managing Partner, Defendant No.3 to 6 are partners of Defendant
No.1 Firm and Defendant No.7 is guarantor to the deposited amount.
Defendant No.1 partnership firm is registered under the Indian
Partnership Act, 1932, vide Registration No. 7024/95 and was doing
Chit Fund and Finance business. The plaintiff has deposited
Rs.30,000/- with first defendant on 9-12-1999 and defendant firm received the amount and second defendant Managing partner has executed the promissory note and also passed receipt and 7th defendant stood as surety. At the instance of defendant No.2 and 7, the amount was deposited by the plaintiff and defendant firm paid interest up to 9th December, 2000. Thereafter they are failed to pay interest. In spite of repeated the demands, the amount was not paid.
So, this suit is filed for recovery of the same and the same may be decreed.
3. First and Second defendants have filed written statement with the following allegations:
Second defendant is not Managing Partner of the first defendant firm. Plaintiff never deposited any amount with the defendant firm and second defendant never executed any promissory note. First and second defendants are not liable to pay any amount. The document is created. So, the suit may be dismissed.
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4. Third defendant has filed written statement with the following allegations:
First defendant was informed that the plaintiff never deposited any amount with the first defendant and second defendant never executed any promissory note. The defendants have no knowledge about the transaction between the plaintiff and first defendant. First defendant firm was doing only Chit Funds business and not Finance business and the partners of the firm are contributing the amounts for the business and they never authorized second defendant to collect the amount from third parties. The transaction may be with the second defendant. Plaintiff in collusion with the second defendant might have created the suit promissory note. The transaction is not genuine. It is only second defendant who might have been liable. The suit is not maintainable. There are no merits in the suit. Hence, it may be dismissed.
5. Defendants No.4 to 7 have filed written statement with the following allegations:
Defendants No.2 to 7 are not partners of the said firm. They have nothing to do with the suit transaction. The suit is bad for mis- joinder of necessary parties. The signature on the promissory note appears to be forged in collusion with the second defendant. The defendants 4 to 7 are not liable to pay any amount and the suit may be dismissed.
6. Basing on the pleadings of both parties, the trial Court has framed the following issues:
1.Whether the plaintiff is entitled for the suit amount?
2.Whether the suit is bad for non-joinder of necessary parties and mis-joinder of unnecessary parties?
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3.Whether defendant No.7 did not stand as surety for the suit transaction?
4.Whether first defendant has executed the promissory note and is binding on him?
5.Whether, the second defendant never executed pro note on 9-12-1999 and it is binding on him?
6.To what relief?
7. To substantiate the case of the plaintiff, Pws.1 and 2 were examined and Ex.A-1 to A-6 documents were marked. On behalf of the defendants, Dws-1 to 3 were examined and no documents were marked. Considering the evidence, documents and contentions of both parties, the learned Junior Civil Judge has decreed the suit as prayed for.
8. Having aggrieved by the Judgment and Decree, the defendants
No.3 to 7 have preferred this appeal alleging that the trial Court has not appreciated the evidence and the documents in right perspective.
There are vital variations in the evidence of Pws.1 and 2. In collusion with the second defendant, the documents are created. The transaction is the personal matter of second defendant. The other defendants have nothing to do with the suit transaction. The evidence of Dws.1 to 3 is consistent. Ignoring the vital issues, the trial Court has erroneously decreed the suit against the appellants. So, the appeal may be allowed and the suit may be dismissed against the defendants No.3 to 7.
9. Arguments are heard.
10. Now the points for determination in this appeal are:
1. Whether the plaintiff is entitled for recovery of the amount from all the defendants?
2. Whether the judgment and decree passed by the trial Court in
O.S.No. 479 of 2002 is sustainable?
3. To what relief?
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Point No.1 and 2:
11. It is the case of the plaintiff that she has deposited the amount with the first defendant firm. They failed to pay interest and not returning the deposited amount. So, she filed the suit and seeking recovery of the amount. It is the stand of the first defendant that he never executed any promissory note and documents are created, he sought for dismissal of the suit. It is the stand of defendants 3 to 7 that they are not partners of the first defendant firm and they have nothing to do with the suit transaction. In collusion with the plaintiff and second defendant, the documents are created and they sought for dismissal of the suit. For convenience sake, parties’ status as it was
before the trial Court is discussed in the same manner in this appeal
also.
12. It is the case of the plaintiff that she has deposited amount with the first defendant firm and the promissory note was executed and receipt was passed and seventh defendant stood as surety. The plaintiff herself was examined as PW-1 and stated that on 19-12-1999 he deposited an amount of Rs.30,000/- and second defendant has executed the promissory note and also passed receipt Ex.A-2 and seventh defendant stood as surety and executed a surety bond Ex.A-
3. Nothing is found in the cross-examination of PW-1 to say that for one reason or the other, she is deposing falsehood. Except some denial suggestions, nothing is found in the cross-examination to discredit her testimony. Her evidence is consistent that she deposited
Rs.30,000/- and a promissory note was executed.
13. The attester was examined as PW-2 and it is his evidence that on the date of execution of the promissory note, he went to the office 6 of the firm on his personal work and then he attested the document.
He was an Advocate. His evidence also substantiates the version of
PW-1 about depositing the amount and the execution of promissory note by second defendant.
14. Second defendant was examined as DW-1 and denied the transaction and his signature. As pointed out earlier, the evidence of
Pws.1 and 2 is consistent that it is the second defendant, who signed on the promissory note. Nothing is found in the evidence of second defendant to say that the plaintiff is having enmity with the second defendant and for one reason and other, she created the document.
Nothing is found in cross of PW-1 attributing any motive to the plaintiff in creating the document. So, at this place it can safely concluded that it is the second defendant who has signed on the promissory note and passed Ex.A-2 receipt. Similarly seventh defendant was examined as DW-3. He admitted that defendant No.6 is his wife. But he denied his signature on the surety bond. He is also not attributed anything against the plaintiff. It is not his case that he is having enmity with the plaintiff. So, there is no reason for the plaintiff to forge the signature of seventh defendant. So, at this place it is established by the plaintiff that it is the second defendant, who has signed on Ex.A-1 and Ex.A-2 receipt and it is the 7th defendant who has signed on the surety bond.
15. The crux of the issue is that the status of the second defendant while signing the document. As seen from the document, the promissory note was signed by the second defendant referring his name is Foreman of the chit fund company. Stamp was affixed on the promissory note. Similarly Ex.A-2 on receipt also, the seal of the first 7 defendant firm was affixed and under the signature of second defendant, his status was mentioned as Foreman. Much stress has been given on the contents of the documents. It is true that Ex.A-1 promissory note reads that “ " (for my necessities).
Relying upon these words, it is the stand of the defendants No.3 to 7 that the transaction is between the defendant No.2 and the plaintiff and it is their personal transaction and firm has nothing to do with the transaction. Here the evidence of PW-1 is consistent. It is her case that the first defendant firm was doing business in chits and
Finance and she deposited the amount with the first defendant firm and second defendant received the amount on behalf of the firm. It is also the evidence of PW-2, the entire transaction took place in the office of the first defendant firm.
16. In a decision reported in AIR 1963 A.P. - 154, in a case between
Thummala Rama Rao and others vs. Chodagam Venkateswara Rao.
“Notwithstanding the dissolution of the firm the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution, until public notice is given of the dissolution.”
Relying upon the above said decision, it was contended by the defendants that the transaction is a personal transaction. One of the defendants was examined as DW-2 and he reiterated their stand. It is appropriate to mention here, it is the stand of the defendants that they are not at all partners of the firm. Their stand is total denial.
Ex.A-4 is C.C. of Registration of the Firm, clearly show that defendants No.3 to 6 are the partners of first defendant firm including 8 the second defendant. In the reported decision, the facts disclose that the amount was not borrowed for the benefit of the firm and that was an individual transaction. So, their lordships held that the other partners are not liable.
17. In the present case, it is established by the plaintiff that the defendants have accepted the deposit on behalf of the firm. So, other defendants cannot deny their liability. So, facts of the reported decision and present facts are different and this decision has no application to the present facts of the case.
18. Coming to the evidence of DW-2, during the cross-examination, he has admitted that “We were 5 partners. Myself, D-4, D-5 and D-6 were the partners and D-2 is the Managing partner.”
So, there is a categorical admission on part of the DW-2 about the status of the defendants in the firm. During cross-examination he has admitted that “I was a sleeping partner ---------------- I was not attending the office of the firm and as such, I have no knowledge about taking of deposits from the depositors by the firm. ------------ The firm was closed on our own decision by executing a written document. --------- -- I have no disputes with plaintiff, since I have no acquaintance with her.”
19. He is the prime party who is challenging the plaintiff's case on several grounds. It is his case that since he was sleeping partner, he is not attending the office and he does not know about collecting the amounts by way of deposits of the firm. Then how can he say that the amounts were not taken by second defendant towards deposit.
Admittedly, he is not having any enmity with the plaintiff. So, there is no reason for the plaintiff to foist a case against these defendants.
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The defendants denying of their very status of themselves as partners in the firm, is creating any amount of doubt to say about the bonafides of their stand. The firm is registered as seen from Ex.A-4 and defendants No.2 to 6 are the partners. Nothing is found in the record to say that the firm is not collecting the amounts by way of deposits. DW-2 never denied that fact.
20. As seen from the contents of Ex.A-1 promissory note and Ex.A-2 receipt, the second defendant has received the amount. The firm is registered firm and the plaintiff is a third party. So, second defendant as a Foreman has executed the document. So, all the defendants are liable for the undertaken given by the second defendant.
21. In the decision reported in AIR 2003 A.P. - 46 in a case between
Vattumalli Narayana Rao vs. Medrarapu Krishna Rao and others, their lordships observed that “In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm be done or executed in the firm name, or in any other manner expressing or implying an intention to bind the firm.
In Thirumala Rama Rao v. Chodagam Venkateswara Rao and others, where pronote was executed by main partner in the individual capacity and there was no intention to bind the firm and the liability of the firm which indicated, it was held that the firm and the other partners other than the executant were not liable.”
22.A plain reading of the document clearly indicates that second defendant representing the firm has executed the promissory note and passed the receipt. So, it cannot be said that the amounts were received towards the personal need of the second defendant. All the defendants No.2 to 6 being the partners of the firm are certainly liable to repay the amount. The very affixing of stamp of the firm on the document itself shows the intension of the second defendant that the 10 document was executed on behalf of the firm. Further evidence of
P.W.1 & 2 clearly show and prove the fact that the transaction is between firm and plaintiff. So facts of reported decision and present facts are different, this decision has no application to the present facts of the case.
23. Seventh defendant was examined as DW-3 and stated that he never signed on the document. The evidence of Pws.1 and 2 is consistent that it is the seventh defendant who stood as surety.
Seventh defendant is none other than the husband of one of the partners of the first defendant firm. As seen from the evidence of
Pws.1 and 2, nothing is found in their evidence to say that they are enemically deposed of towards seventh defendant. Even seventh defendant, who was examined as DW-3 never attributed any enmity with the partners. Nothing is found in the evidence of Dws.2 and 3 to say that there are internal disputes between the partners and DW-1 was acting against the interest of the partnership firm and thus, he created the documents. That was not the spirit of their evidence.
Even they have not filed any documentary evidence to show that they have initiated any legal proceedings against the second defendant for his default. So, now it is not open for the defendants to say that second defendant acted against the interest of the institution.
24.It is contended by the learned counsel for the appellants that any oral evidence adduced against the contents of the document is inadmissible. It is appropriate to mention here, there is ambiguity in the document. The evidence of Pws.1 and 2 giving clarification to the ambiguity. So, it cannot be said that their evidence is against the contents of the documents. One portion of the document shows the 11 amount was borrowed for the personal necessities. The document was executed by the firm represented by the second defendant. So, whether it is a personal necessity, is a matter of fact, and that was clarified by the evidence of Pws.1 and 2 and by way of cross- examination of the defendants. So, it is not case of giving oral evidence against the contents of the document. So, it cannot be said that under Secs. 91 and 92 of C.P.C., the evidence of Pws.1 and 2 cannot be considered.
25.Relying upon the evidence of Dws.1 and 2, the defendants are contending that defendant No.2 to 5 have nothing to do with the suit transaction. But it is evident from the evidence of DW-2 that he has no knowledge about taking of the deposits, since he was a sleeping partner. He is not in a position to state how many chits, the firm was running and its value.
26.DW-2 has stated that a criminal complaint was filed by the chit subscribers and depositors. He mentioned that “A criminal case was filed by some of the chit subscribers to the Nalgonda II Town Police alleging that we are not paying the amounts, due to the chit subscribers and depositors of the amount and our firm was closed. Upon which, a criminal case was registered and criminal case is pending before the Hon'ble District and Sessions Court, Nalgonda.”
So, he accepted that some people have reported the matter to the police mentioning that the amount of the depositors was not refunded. So, the spirit of his evidence shows that the first defendant firm has collected the amounts towards deposits. So, version of the defendants that they are not collecting any deposits and contributing the amounts on their own cannot be believed.
27. In the written statement third defendant has mentioned that 12 “As per the partnership deed, if any amounts are required for the business of the first defendant that shall be contributed by the partners or same can be obtained loan from third persons with prior written consent of all the partners. It is submitted that as per the partnership deed of first defendant firm with regard to deposits and loans are concerned, no partner has consented in favour of sixth defendant to take deposits or loans other than the partners.”
28. A plain reading of the above said contents of the written statement clearly show that there is a provision in the partnership deed to collect deposits from third parties by the firm. Of course, there is a condition that all other partners shall give consent with regard to collecting of deposits or loans from third parties. Plaintiff is a third party to the proceedings. Now the defendants cannot say that since they have not given consent to the second defendant, he cannot take deposits on behalf of the firm. Defendants have not issued any legal notice against second defendant attributing motives or making allegation that he is collecting the amounts or he has collected the amounts, on behalf of the firm and misutilized those amounts. In the absence of such pleadings and such evidence, now the defendants cannot agitate that the claim of the plaintiff is vitiated, since there is no written consent by all the partners.
29. It is established that first defendant accepted the deposit from the plaintiff on behalf of the firm. Second defendant being the
Foreman and defendants No.3 to 6 being the partners and seventh defendant being a surety, all of them are jointly and severally liable.
The trial Court has rightly appreciated the evidence and the documents and there are no reasons to interfere with its findings.
Accordingly, points 1 and 2 are answered in favour of the plaintiff and against the defendants.
POINT NO.3:- 13
30. In the result, there are no merits in the appeal and the appeal is dismissed. In the present circumstances of the case, each party is directed to bare their own costs.
Dictated to the P.A., transcribed by him, corrected and pronounced by
me in the open court on this the 01st day of March 2012.
I ADDL. DISTRICT JUDGE
NALGONDA.
1
IN THE COURT OF THE I ADDL. DISTRICT JUDGE AT
NALGONDA.
Present: Sri C.S.S.V. Durga Prasad, M.Com., B.L.,
I Addl. District Judge, Nalgonda.
Dated this the 01st day of March, 2012
A.S. No. 74 of 2010.
BETWEEN:-
1. Chenagoni Yadaiah
2. Marru Sunitha
3. Mynampati Geethamma
4. Jonnalagadda Padma
....Appellants
And
1.S.Someshwar Rao
2.Srinidhi Chit Funds & Finance, Nalgonda, rep. by its M.P. M.Srinivas Rao
3.Madugula Srinivasa Rao. ….Respondents
ON APPEAL AGAINST THE JUDGMENT AND DECREE PASSED BY THE
JUNIOR CIVIL JUDGE AT NALGONDA, DT.31-07-2010 IN
O.S.No. 191 of 2003
S.Someshwar Rao.
....Plaintiff.
And
1.Srinidhi Chit Funds & Finance, Nalgonda, rep. by its Foreman M.Srinivas Rao,
2.Madugula Srinivasa Rao
3.Chenagoni Yadaiah
4.Marru Sunitha
5.Mynampati Geethamma
6.Jonnalagadda Padma. …Defendants This suit is coming before me for disposal in the presence of Sri V.Surender Reddy, Advocate for the Appellant/s, Sri N.Raghupathi, Advocate for the Respondent No.1 and Sri M.V.Raghava Rao, Advocate
for the Respondent No.2 & 3 and having stood over for consideration
till this day this court delivered the following:
:: JUDGMENT ::
Having aggrieved by the Judgment and Decree passed in O.S.
No. 191 of 2003 by the Junior Civil Judge, Nalgonda, defendants No.3 to 6 have preferred this appeal.
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2. The plaintiff has filed the suit before the trial Court with the following allegations:
Plaintiff is an agriculturist and first defendant is Chit Fund Firm, doing business in Chit Funds and Finance. Defendant No.2 is
Managing Partner, Defendant No.3 to 6 are partners of Defendant No.1
Firm. Defendant No.1 partnership firm is registered under the Indian
Partnership Act, 1932, vide Registration No. 7024/95 and was doing
Chit Fund and Finance business. The plaintiff has deposited
Rs.50,000/- with first defendant on 5-5-2000 and defendant firm received the amount and second defendant as a Foreman has executed the promissory note and also passed receipt. Thereafter they are failed to pay interest or return the deposit amount. In spite of repeated the demands, the amount was not paid. So, this suit is filed for recovery of the same and the same may be decreed.
3. First and Second defendants have filed written statement with the following allegations:
Second defendant is not the Foreman of the first defendant firm.
Plaintiff never deposited any amount with the defendant firm and second defendant never executed any promissory note. First and second defendants are not liable to pay any amount. The document is created. So, the suit may be dismissed.
4. Third defendant has filed written statement with the following allegations:
The plaintiff never deposited any amount with the first defendant and second defendant never executed any promissory note. The defendants have no knowledge about the transaction between the plaintiff and second defendant. First defendant firm was doing only 3
Chit Funds business and not Finance business and the partners of the firm are contributing the amounts for the business and they never authorized second defendant to collect the amount from third parties.
The transaction may be between plaintiff and second defendant.
Plaintiff in collusion with the second defendant might have created the suit promissory note. The transaction is not genuine. It is only second defendant who might have been liable. The suit is not maintainable.
There are no merits in the suit. Hence, it may be dismissed.
5. Defendants No.4 to 6 have filed written statement with the following allegations:
Defendants No.4 to 6 are not partners of the said firm. They have nothing to do with the suit transaction. The suit is bad for mis- joinder of necessary parties. The signature on the promissory note appears to be forged in collusion with the second defendant. The defendants 4 to 6 are not liable to pay any amount and the suit may be dismissed.
6. Basing on the pleadings of both parties, the trial Court has framed the following issues:
1.Whether the plaintiff is entitled for the suit claim?
2.Whether the suit pro note is forged one?
3.Whether the suit is bad for mis-joinder of un-necessary parties and non-joinder of necessary parties?
4.To what relief?
7. To substantiate the case of the plaintiff, Pws.1 was examined and Ex.A-1 to A-4 documents were marked. On behalf of the defendants, Dws-1 and 2 were examined and no documents were marked. Considering the evidence, documents and contentions of 4 both parties, the learned Junior Civil Judge has decreed the suit as prayed for.
8. Having aggrieved by the Judgment and Decree, the defendants
No.3 to 6 have preferred this appeal alleging that the trial Court has not appreciated the evidence and the documents in right perspective.
There are vital variations in the evidence of Pw.1. In collusion with the second defendant, the documents are created. The transaction is the personal matter of second defendant. The other defendants have nothing to do with the suit transaction. The evidence of Dws.1 and 2 is consistent. Ignoring the vital issues, the trial Court has erroneously decreed the suit against the appellants. So, the appeal may be allowed and the suit may be dismissed against the defendants No.3 to 6.
9. Arguments are heard.
10. Now the points for determination in this appeal are:
1. Whether the plaintiff is entitled for recovery of the amount from all the defendants?
2. Whether the judgment and decree passed by the trial Court in
O.S.No. 191 of 2003 is sustainable?
3. To what relief?
Point No.1 and 2:
11. It is the case of the plaintiff that he has deposited the amount with the first defendant firm. They failed to pay interest and not returning the deposited amount. So, he filed the suit and seeking recovery of the amount. It is the stand of the first defendant and second defendant that he never executed any promissory note and documents are created, he sought for dismissal of the suit. It is the stand of defendants 4 to 6 that they are not partners of the first 5 defendant firm and they have nothing to do with the suit transaction.
In collusion with the plaintiff and second defendant, the documents are created and they sought for dismissal of the suit. For convenience sake, parties’ status as it was before the trial Court is discussed in the same manner in this appeal also.
12. It is the case of the plaintiff that he has deposited amount with the first defendant firm and the promissory note was executed and receipt was passed. The plaintiff himself was examined as PW-1 and stated that on 5-5-2000 he deposited an amount of Rs.50,000/- and second defendant has executed the promissory note and also passed receipt Ex.A-2. Nothing is found in the cross-examination of PW-1 to say that for one reason or the other, he is deposing falsehood. Except some denial suggestions, nothing is found in the cross-examination to discredit his testimony. His evidence is consistent that he deposited
Rs.50,000/- and a promissory note was executed.
13. Second defendant was examined as DW-1 and denied the transaction and his signature. As pointed out earlier, the evidence of
Pws.1 is consistent that it is the second defendant, who signed on the promissory note. Nothing is found in the evidence of second defendant to say that the plaintiff is having enmity with him and for one reason and other, he created the document. Nothing is found in cross of PW-1 attributing any motive to the plaintiff in creating the document. So, at this place it can safely concluded that it is the second defendant who has signed on the promissory note and passed
Ex.A-2 receipt.
14. Much attack has been done to the evidence of PW-1 on the ground that during the cross, he accepted that the contents of Ex.A-1 6 that itself shows that for personal needs, the amount was borrowed and the document does not contain the signatures of other partners.
Even the defendants are disputing about their status as the partners of the firm, but the certificate of registration filed by the plaintiff substantiates the stand of the plaintiff that all the defendants are partners of the first defendant firm. The pro note shows that second defendant has put his signature as the Foreman of the first defendant firm. So, simply because defendants No.3 to 6 signatures were not there on the pro-note, it is not absolved their liability, since they are partners of the first defendant firm. Further nothing is found in the evidence of PW-1 to say that he is enmically deposed of towards the defendants and he created the documents.
15. It is the stand of defendant even the attestors were not examined. It is appropriate to mention here that it is not a private transaction, when the plea of forgery is taken the burden is heavily on the plaintiff. The document contain the stamp of first defendant firm and it is not the case of the defendants that the plaintiff has created the stamp of first defendant firm and affixed the same on Ex.A-1 pro- note and Ex.A-2 receipt and prosecuting the case. The very fact that the pro-note and the receipt contain the stamp of the defendant’s firm itself attaches any amount of sanctity to the version of PW-1 about his depositing of amount with the first defendant firm and receiving of the amount by the second defendant on behalf of the first defendant firm.
As pointed out earlier, nothing is found in the cross of PW-1 to say that he is enmically deposed of towards defendants and thus, he created document. So, at this place it is established by the plaintiff 7 that it is the second defendant, who has signed on Ex.A-1 pro-note and Ex.A-2 receipt.
16. The crux of the issue is that the status of the second defendant while signing the document. As seen from the document, the promissory note was signed by the second defendant referring his name is Foreman of the chit fund company. Stamp was affixed on the promissory note. Similarly Ex.A-2 on receipt also, the seal of the first defendant firm was affixed and under the signature of second defendant, his status was mentioned as Foreman. Much stress has been given on the contents of the documents. It is true that Ex.A-1 promissory note reads that “ " (for my necessities).
Relying upon these words, it is the stand of the defendants No.2 to 6 that the transaction is between the defendant No.2 and the plaintiff and it is their personal transaction and firm has nothing to do with the transaction. Here the evidence of PW-1 is consistent. It is his case that the first defendant firm was doing business in chits and
Finance and he deposited the amount with the first defendant firm and second defendant received the amount on behalf of the firm.
17. In a decision reported in AIR 1963 A.P. - 154, in a case between
Thummala Rama Rao and others vs. Chodagam Venkateswara Rao, his lordships held that “Notwithstanding the dissolution of the firm the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution, until public notice is given of the dissolution.”
Relying upon the above said decision, it was contended by the defendants that the transaction is a personal transaction. One of the 8 defendants was examined as DW-2 and he reiterated their stand. It is appropriate to mention here, it is the stand of the defendants that they are not at all partners of the firm. Their stand is total denial.
Ex.A-3 is C.C. of Registration of the Firm, clearly show that defendants No.2 to 6 are the partners of first defendant firm including the second defendant. In the reported decision, the facts disclose that the amount was not borrowed for the benefit of the firm and that was an individual transaction. So, their lordships held that the other partners are not liable.
18. In the present case, it is established by the plaintiff that the defendants have accepted the deposit on behalf of the firm. So, other defendants cannot deny their liability. So, facts of the reported decision and present facts are different and this decision has no application to the present facts of the case.
19. Coming to the evidence of DW-2, during the cross-examination, he has admitted that “We were 5 partners. Myself, D-4, D-5 and D-6 were the partners and D-6 is the Managing partner.”
So, there is a categorical admission on part of the DW-2 about the status of the defendants in the firm. During cross-examination he has admitted that “I was a sleeping partner ---------------- I was not attending the office of the firm and as such, I have no knowledge about taking of deposits from the depositors by the firm. ------------ The firm was closed on our own decision by executing a written document. --------- -- I have no disputes with plaintiff, since I have no acquaintance with her.”
20. He is the prime party who is challenging the plaintiff's case on several grounds. It is his case that since he was sleeping partner, he 9 is not attending the office and he does not know about collecting the amounts by way of deposits of the firm. Then how can he say that the amounts were not taken by second defendant towards deposit.
Admittedly, he is not having any enmity with the plaintiff. So, there is no reason for the plaintiff to foist a case against these defendants.
The defendants denying of their very status of themselves as partners in the firm, is creating any amount of doubt to say about the bonafides of their stand. The firm is registered as seen from Ex.A-3 and defendants No.2 to 6 are partners. Nothing is found in the record to say that the firm is not collecting the amounts by way of deposits.
DW-2 never denied that fact.
21. As seen from the contents of Ex.A-1 promissory note and Ex.A-2 receipt, the second defendant has received the amount. The firm is registered firm and the plaintiff is a third party. So, second defendant as a Foreman has executed the document. So, all the defendants are liable for the undertaken given by the second defendant.
22. In the decision reported in AIR 2003 A.P. - 46 in a case between
Vattumalli Narayana Rao vs. Medrarapu Krishna Rao and others, their lordships observed that “In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm be done or executed in the firm name, or in any other manner expressing or implying an intention to bind the firm.
In Thirumala Rama Rao v. Chodagam Venkateswara Rao and others, where pronote was executed by main partner in the individual capacity and there was no intention to bind the firm and the liability of the firm which indicated, it was held that the firm and the other partners other than the executant were not liable.”
23. A plain reading of the document clearly indicates that second defendant representing the firm has executed the promissory note 10 and passed the receipt. So, it cannot be said that the amounts were received towards the personal need of the second defendant. All the defendants No.3 to 6 being the partners of the firm are certainly liable to repay the amount. The very affixing of stamp of the firm on the document itself shows the intension of the second defendant that the document was executed on behalf of the firm. Further evidence of
P.W.1 clearly shows and proves the fact that the transaction is between firm and plaintiff. So facts of reported decision and present facts are different, this decision has no application to the present facts of the case.
24. Even they have not filed any documentary evidence to show that they have initiated any legal proceedings against the second defendant for his default. So, now it is not open for the defendants to say that second defendant acted against the interest of the institution.
25. It is contended by the learned counsel for the appellants that any oral evidence adduced against the contents of the document is inadmissible. It is appropriate to mention here, there is ambiguity in the document. The evidence of Pw.1 giving clarification to the ambiguity. So, it cannot be said that his evidence is against the contents of the documents. One portion of the document shows the amount was borrowed for the personal necessities. But the document was executed by the firm represented by the second defendant. So, whether it is a personal necessity or not, is a matter of fact, and that was clarified by the evidence of Pw.1 and by way of cross-examination of the defendants. So, it is not case of giving oral evidence against the contents of the document. So, it cannot be said that under Secs.
91 and 92 of C.P.C., the evidence of Pw.1 cannot be considered.
11
26. Relying upon the evidence of Dws.1 and 2, the defendants are contending that defendant No.3 to 6 have nothing to do with the suit transaction. But it is evident from the evidence of DW-2 that he has no knowledge about taking of the deposits, since he was a sleeping partner. He is not in a position to state how many chits, the firm was running and its value.
27. DW-2 has stated that a criminal complaint was filed by the chit subscribers and depositors. He mentioned that “A criminal case was filed by some of the chit subscribers to the Nalgonda II Town Police alleging that we are not paying the amounts, due to the chit subscribers and depositors of the amount and our firm was closed. Upon which, a criminal case was registered and criminal case is pending before the Hon'ble District and Sessions Court, Nalgonda.”
So, he accepted that some people have reported the matter to the police mentioning that the amount of the depositors was not refunded. So, the spirit of his evidence shows that the first defendant firm has collected the amounts towards deposits. So, version of the defendants that they are not collecting any deposits and contributing the amounts on their own cannot be believed.
28. In the written statement third defendant has mentioned that “As per the partnership deed, if any amounts are required for the business of the first defendant that shall be contributed by the partners or same can be obtained loan from third persons with prior written consent of all the partners. It is submitted that as per the partnership deed of first defendant firm with regard to deposits and loans are concerned, no partner has consented in favour of second defendant to take deposits or loans other than the partners.”
29. A plain reading of the above said contents of the written statement clearly show that there is a provision in the partnership deed to collect deposits from third parties by the firm. Of course, there is a condition that all other partners shall give consent with 12 regard to collecting of deposits or loans from third parties. Plaintiff is a third party to the proceedings. Now the defendants cannot say that since they have not given consent to the second defendant, he cannot take deposits on behalf of the firm. Defendants have not issued any legal notice against second defendant attributing motives or making allegation that he is collecting the amounts or he has collected the amounts, on behalf of the firm and misutilized those amounts. In the absence of such pleadings and such evidence, now the defendants cannot agitate that the claim of the plaintiff is vitiated, since there is no written consent by all the partners.
30. It is established that second defendant accepted the deposit from the plaintiff on behalf of the firm. Second defendant being the
Foreman and defendants No.3 to 6 being the partners, all of them are jointly and severally liable. The trial Court has rightly appreciated the evidence and the documents and there are no reasons to interfere with its findings. Accordingly, points 1 and 2 are answered in favour of the plaintiff and against the defendants.
POINT NO.3:-
31. In the result, there are no merits in the appeal and the appeal is dismissed. In the present circumstances of the case, each party is directed to bare their own costs.
Typed on dictation by the Personal Assistant, corrected and
pronounced by me in the open court on this the 01st day of March 2012.
I ADDL. DISTRICT JUDGE
NALGONDA.
1
IN THE COURT OF THE I ADDL. DISTRICT JUDGE AT
NALGONDA.
Present: Sri C.S.S.V. Durga Prasad, M.Com., B.L.,
I Addl. District Judge, Nalgonda.
Dated this the 01st day of March, 2012
A.S. No. 73 of 2010.
BETWEEN:-
1. Chenagoni Yadaiah
2. Marru Sunitha
3. Mynampati Geethamma
4. Jonnalagadda Padma
....Appellants
And
1.Marru Narayana Rao
2.Srinidhi Chit Funds & Finance, Nalgonda, rep. by its M.P. M.Srinivas Rao
3.Madugula Srinivasa Rao. ….Respondents
ON APPEAL AGAINST THE JUDGMENT AND DECREE PASSED BY THE
JUNIOR CIVIL JUDGE AT NALGONDA, DT.31-07-2010 IN
O.S.No. 257 of 2003
Marru Narayana Rao
....Plaintiff.
And
1.Srinidhi Chit Funds & Finance, Nalgonda, rep. by its Foreman M.Srinivas Rao,
2.Madugula Srinivasa Rao
3.Chenagoni Yadaiah
4.Marru Sunitha
5.Mynampati Geethamma
6.Jonnalagadda Padma. …Defendants This suit is coming before me for disposal in the presence of Sri V.Surender Reddy, Advocate for the Appellant/s, Sri M.Vasantha Rao, Advocate for the Respondent No.1 and Sri M.V.Raghava Rao, Advocate
for the Respondent No.2 and having stood over for consideration till
this day this court delivered the following:
:: JUDGMENT ::
Having aggrieved by the Judgment and Decree passed in O.S.
No. 257 of 2003 by the Junior Civil Judge, Nalgonda, defendants No.2 to 5 have preferred this appeal.
2
2. The plaintiff has filed the suit before the trial Court with the following allegations:
Plaintiff is a Government servant and first defendant is Chit Fund
Firm, doing business in Chit Funds and Finance. Defendant No.6 is
Foreman, Defendant No.2 to 5 are partners of Defendant No.1 Firm.
Defendant No.1 partnership firm is registered under the Indian
Partnership Act, 1932, vide Registration No. 7024/95 and was doing
Chit Fund and Finance business. The plaintiff has deposited
Rs.50,000/- with first defendant on 13-7-2000 and defendant firm received the amount and sixth defendant as a Foreman has executed the promissory note and also passed receipt. Thereafter they are failed to pay interest or return the deposit amount. In spite of repeated the demands, the amount was not paid. So, this suit is filed for recovery of the same and the same may be decreed.
3. First and Sixth defendants have filed written statement with the following allegations:
Sixth defendant is not the Foreman of the first defendant firm.
Plaintiff never deposited any amount with the defendant firm and sixth defendant never executed any promissory note. First and sixth defendants are not liable to pay any amount. The document is created. So, the suit may be dismissed.
4. Second defendant has filed written statement with the following allegations:
The plaintiff never deposited any amount with the first defendant and sixth defendant never executed any promissory note. The defendants have no knowledge about the transaction between the plaintiff and sixth defendant. First defendant firm was doing only Chit 3
Funds business and not Finance business and the partners of the firm are contributing the amounts for the business and they never authorized sixth defendant to collect the amount from third parties.
The transaction may be between plaintiff and sixth defendant. Plaintiff in collusion with the sixth defendant might have created the suit promissory note. The transaction is not genuine. It is only sixth defendant who might have been liable. The suit is not maintainable.
There are no merits in the suit. Hence, it may be dismissed.
5. Defendants No.3 to 5 have filed written statement with the following allegations:
Defendants No.3 to 5 are not partners of the said firm. They have nothing to do with the suit transaction. The suit is bad for mis- joinder of necessary parties. The signature on the promissory note appears to be forged in collusion with the sixth defendant. The defendants 3 to 5 are not liable to pay any amount and the suit may be dismissed.
6. Basing on the pleadings of both parties, the trial Court has framed the following issues:
1.Whether the plaintiff is entitled for the suit amount?
2.To what relief?
7. To substantiate the case of the plaintiff, Pws.1 and 2 were examined and Ex.A-1 to A-7 documents were marked. On behalf of the defendants, Dws-1 and 2 were examined and no documents were marked. Considering the evidence, documents and contentions of both parties, the learned Junior Civil Judge has decreed the suit as prayed for.
4
8. Having aggrieved by the Judgment and Decree, the defendants
No.2 to 5 have preferred this appeal alleging that the trial Court has not appreciated the evidence and the documents in right perspective.
There are vital variations in the evidence of Pws.1 and 2. In collusion with the sixth defendant, the documents are created. The transaction is the personal matter of sixth defendant. The other defendants have nothing to do with the suit transaction. The evidence of Dws.1 and 2 is consistent. Ignoring the vital issues, the trial Court has erroneously decreed the suit against the appellants. So, the appeal may be allowed and the suit may be dismissed against the defendants No.2 to 5.
9. Arguments are heard.
10. Now the points for determination in this appeal are:
1. Whether the plaintiff is entitled for recovery of the amount from all the defendants?
2. Whether the judgment and decree passed by the trial Court in
O.S.No. 257 of 2003 is sustainable?
3. To what relief?
Point No.1 and 2:
11. It is the case of the plaintiff that he has deposited the amount with the first defendant firm. They failed to pay interest and not returning the deposited amount. So, he filed the suit and seeking recovery of the amount. It is the stand of the first defendant and sixth defendant that he never executed any promissory note and documents are created, he sought for dismissal of the suit. It is the stand of defendants 3 to 5 that they are not partners of the first defendant firm and they have nothing to do with the suit transaction.
In collusion with the plaintiff and sixth defendant, the documents are 5 created and they sought for dismissal of the suit. For convenience sake, parties’ status as it was before the trial Court is discussed in the same manner in this appeal also.
12. It is the case of the plaintiff that he has deposited amount with the first defendant firm and the promissory note was executed and receipt was passed. The plaintiff himself was examined as PW-1 and stated that on 13-7-2000 he deposited an amount of Rs.50,000/- and sixth defendant has executed the promissory note and also passed receipt Ex.A-3. Nothing is found in the cross-examination of PW-1 to say that for one reason or the other, he is deposing falsehood. Except some denial suggestions, nothing is found in the cross-examination to discredit his testimony. His evidence is consistent that he deposited
Rs.50,000/- and a promissory note was executed.
13. The attester was examined as PW-2 and it is his evidence that on the date of execution of the promissory note, he went to the office of the firm on the request of PW-1 and then he attested the document. His evidence also substantiates the version of PW-1 about depositing the amount and the execution of promissory note by sixth defendant. During course of cross PW-2 was questioned about the contents of Ex.A-2, he mentioned that Ex.A-2 is not a deposit bond. But his evidence is consistent that PW-1 paid the amount in his presence and sixth defendant has executed Ex.A-2 promissory note and passed Ex.A-3 receipt. His evidence attaches sanctity to the version of PW-1 and giving force about his stand that PW-1 has paid
Rs.50,000/- and sixth defendant has executed documents.
14. Sixth defendant was examined as DW-1 and denied the transaction and his signature. As pointed out earlier, the evidence of 6
Pws.1 and 2 is consistent that it is the sixth defendant, who signed on the promissory note. Nothing is found in the evidence of sixth defendant to say that the plaintiff is having enmity with him and for one reason and other, he created the document. Nothing is found in cross of PW-1 attributing any motive to the plaintiff in creating the document. So, at this place it can safely concluded that it is the sixth defendant who has signed on the promissory note and passed Ex.A-2 receipt. So, at this place it is established by the plaintiff that it is the sixth defendant, who has signed on Ex.A-2 pro-note and Ex.A-3 receipt.
15. The crux of the issue is that the status of the sixth defendant while signing the document. As seen from the document, the promissory note was signed by the sixth defendant referring his name is Foreman of the chit fund company. Stamp was affixed on the promissory note. Similarly Ex.A-3 on receipt also, the seal of the first defendant firm was affixed and under the signature of sixth defendant, his status was mentioned as Foreman. Much stress has been given on the contents of the documents. It is true that Ex.A-2 promissory note reads that “ " (for my necessities).
Relying upon these words, it is the stand of the defendants No.3 to 5 that the transaction is between the defendant No.6 and the plaintiff and it is their personal transaction and firm has nothing to do with the transaction. Here the evidence of PW-1 is consistent. It is his case that the first defendant firm was doing business in chits and
Finance and he deposited the amount with the first defendant firm and sixth defendant received the amount on behalf of the firm. It is also 7 the evidence of PW-2, the entire transaction took place in the office of the first defendant firm.
16. In a decision reported in AIR 1963 A.P. - 154, in a case between
Thummala Rama Rao and others vs. Chodagam Venkateswara Rao, his lordships held that.
“Notwithstanding the dissolution of the firm the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution, until public notice is given of the dissolution.”
Relying upon the above said decision, it was contended by the defendants that the transaction is a personal transaction. One of the defendants was examined as DW-2 and he reiterated their stand. It is appropriate to mention here, it is the stand of the defendants that they are not at all partners of the firm. Their stand is total denial.
Ex.A-1 is C.C. of Registration of the Firm, clearly show that defendants No.3 to 6 are the partners of first defendant firm including the sixth defendant. In the reported decision, the facts disclose that the amount was not borrowed for the benefit of the firm and that was an individual transaction. So, their lordships held that the other partners are not liable.
17. In the present case, it is established by the plaintiff that the defendants have accepted the deposit on behalf of the firm. So, other defendants cannot deny their liability. So, facts of the reported decision and present facts are different and this decision has no application to the present facts of the case.
18. Coming to the evidence of DW-2, during the cross-examination, he has admitted that 8 “We were 5 partners. Myself, D-4, D-5 and D-6 were the partners and D-6 is the Managing partner.”
So, there is a categorical admission on part of the DW-2 about the status of the defendants in the firm. During cross-examination he has admitted that “I was a sleeping partner ---------------- I was not attending the office of the firm and as such, I have no knowledge about taking of deposits from the depositors by the firm. ------------ The firm was closed on our own decision by executing a written document. --------- -- I have no disputes with plaintiff, since I have no acquaintance with her.”
19. He is the prime party who is challenging the plaintiff's case on several grounds. It is his case that since he was sleeping partner, he is not attending the office and he does not know about collecting the amounts by way of deposits of the firm. Then how can he say that the amounts were not taken by sixth defendant towards deposit.
Admittedly, he is not having any enmity with the plaintiff. So, there is no reason for the plaintiff to foist a case against these defendants.
The defendants denying of their very status of themselves as partners in the firm, is creating any amount of doubt to say about the bonafides of their stand. The firm is registered as seen from Ex.A-1 and defendants No.2 to 6 are partners. Nothing is found in the record to say that the firm is not collecting the amounts by way of deposits.
DW-2 never denied that fact.
20. As seen from the contents of Ex.A-2 promissory note and Ex.A-3 receipt, the first defendant has received the amount. The firm is registered firm and the plaintiff is a third party. So, sixth defendant as a Foreman has executed the document. So, all the defendants are liable for the undertaken given by the second defendant.
9
21. In the decision reported in AIR 2003 A.P. - 46 in a case between
Vattumalli Narayana Rao vs. Medrarapu Krishna Rao and others, their lordships observed that “In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm be done or executed in the firm name, or in any other manner expressing or implying an intention to bind the firm.
In Thirumala Rama Rao v. Chodagam Venkateswara Rao and others, where pronote was executed by main partner in the individual capacity and there was no intention to bind the firm and the liability of the firm which indicated, it was held that the firm and the other partners other than the executant were not liable.”
22.A plain reading of the document clearly indicates that sixth defendant representing the firm has executed the promissory note and passed the receipt. So, it cannot be said that the amounts were received towards the personal need of the sixth defendant. All the defendants No.2 to 6 being the partners of the firm are certainly liable to repay the amount. The very affixing of stamp of the firm on the document itself shows the intension of the sixth defendant that the document was executed on behalf of the firm. Further evidence of
P.W.1 & 2 clearly show and prove the fact that the transaction is between firm and plaintiff. So facts of reported decision and present facts are different, this decision has no application to the present facts of the case.
23.Even they have not filed any documentary evidence to show that they have initiated any legal proceedings against the sixth defendant for his default. So, now it is not open for the defendants to say that sixth defendant acted against the interest of the institution.
24.It is contended by the learned counsel for the appellants that any oral evidence adduced against the contents of the document is 10 inadmissible. It is appropriate to mention here, there is ambiguity in the document. The evidence of Pws.1 and 2 giving clarification to the ambiguity. So, it cannot be said that their evidence is against the contents of the documents. One portion of the document shows the amount was borrowed for the personal necessities. But the document was executed by the firm represented by the sixth defendant. So, whether it is a personal necessity or not, is a matter of fact, and that was clarified by the evidence of Pws.1 and 2 and by way of cross- examination of the defendants. So, it is not case of giving oral evidence against the contents of the document. So, it cannot be said that under Secs. 91 and 92 of C.P.C., the evidence of Pws.1 and 2 cannot be considered.
25.As seen from the record, even before adjudication of the claim, a legal notice was issued to all the defendants demanding for repayment of the amount. Ex.A-7 is the legal notice given to the present appellants i.e. defendants 2 to 5. Ex.A-7 is the reply and there is no single whisper in the reply notice attributing any motive between the plaintiff or attributing collusion between the plaintiff and sixth defendant. They have pleaded ignorance about the transaction and denied their liability. Further they specifically denied their status in the firm. Ex.A-1 clearly indicates that they are partners. Their evidence also clearly show that they are partners. So, the stand of defendants 2 to 5 denying their status as partners of the first defendant firm also questioning their bonafideness.
26.Relying upon the evidence of Dws.1 and 2, the defendants are contending that defendant No.2 to 5 have nothing to do with the suit transaction. But it is evident from the evidence of DW-2 that he has 11 no knowledge about taking of the deposits, since he was a sleeping partner. He is not in a position to state how many chits, the firm was running and its value.
27.DW-2 has stated that a criminal complaint was filed by the chit subscribers and depositors. He mentioned that “A criminal case was filed by some of the chit subscribers to the Nalgonda II Town Police alleging that we are not paying the amounts, due to the chit subscribers and depositors of the amount and our firm was closed. Upon which, a criminal case was registered and criminal case is pending before the Hon'ble District and Sessions Court, Nalgonda.”
So, he accepted that some people have reported the matter to the police mentioning that the amount of the depositors was not refunded. So, the spirit of his evidence shows that the first defendant firm has collected the amounts towards deposits. So, version of the defendants that they are not collecting any deposits and contributing the amounts on their own cannot be believed.
28. In the written statement second defendant has mentioned that “As per the partnership deed, if any amounts are required for the business of the first defendant that shall be contributed by the partners or same can be obtained loan from third persons with prior written consent of all the partners. It is submitted that as per the partnership deed of first defendant firm with regard to deposits and loans are concerned, no partner has consented in favour of sixth defendant to take deposits or loans other than the partners.”
29. A plain reading of the above said contents of the written statement clearly show that there is a provision in the partnership deed to collect deposits from third parties by the firm. Of course, there is a condition that all other partners shall give consent with regard to collecting of deposits or loans from third parties. Plaintiff is a third party to the proceedings. Now the defendants cannot say that since they have not given consent to the sixth defendant, he cannot 12 take deposits on behalf of the firm. Defendants have not issued any legal notice against sixth defendant attributing motives or making allegation that he is collecting the amounts or he has collected the amounts, on behalf of the firm and misutilized those amounts. In the absence of such pleadings and such evidence, now the defendants cannot agitate that the claim of the plaintiff is vitiated, since there is no written consent by all the partners.
30. It is established that sixth defendant accepted the deposit from the plaintiff on behalf of the firm. sixth defendant being the Foreman and defendants No.3 to 5 being the partners, all of them are jointly and severally liable. The trial Court has rightly appreciated the evidence and the documents and there are no reasons to interfere with its findings. Accordingly, points 1 and 2 are answered in favour of the plaintiff and against the defendants.
POINT NO.3:-
31. In the result, there are no merits in the appeal and the appeal is dismissed. In the present circumstances of the case, each party is directed to bare their own costs.
Typed on dictation, by the Personal Assistant, corrected and
pronounced by me in the open court on this the 01st day of March 2012.
I ADDL. DISTRICT JUDGE
NALGONDA.
1
IN THE COURT OF THE I ADDL. DISTRICT JUDGE AT
NALGONDA.
Present: Sri C.S.S.V. Durga Prasad, M.Com., B.L.,
I Addl. District Judge, Nalgonda.
Dated this the 01st day of March, 2012
A.S. No. 75 of 2010.
BETWEEN:-
1. Chenagoni Yadaiah
2. Marru Sunitha
3. Mynampati Geethamma
4. Jonnalagadda Padma
....Appellants
And
1.Bachupalli Venkat Rao
2.Srinidhi Chit Funds & Finance, Nalgonda, rep. by its M.P. M.Srinivas Rao
3.Madugula Srinivasa Rao. ….Respondents
ON APPEAL AGAINST THE JUDGMENT AND DECREE PASSED BY THE
JUNIOR CIVIL JUDGE AT NALGONDA, DT.31-07-2010 IN
O.S.No. 94 of 2003
Bachupalli Venkat Rao
....Plaintiff.
And
1.Srinidhi Chit Funds & Finance, Nalgonda, rep. by its Foreman M.Srinivas Rao,
2.Madugula Srinivasa Rao
3.Chenagoni Yadaiah
4.Marru Sunitha
5.Mynampati Geethamma
6.Jonnalagadda Padma. …Defendants This suit is coming before me for disposal in the presence of Sri V.Surender Reddy, Advocate for the Appellant/s, Sri N.Raghupathi, Advocate for the Respondent No.1 and Sri M.V.Raghava Rao, Advocate
for the Respondent No.2 & 3 and having stood over for consideration
till this day this court delivered the following:
:: JUDGMENT ::
Having aggrieved by the Judgment and Decree passed in O.S.
No. 94 of 2003 by the Junior Civil Judge, Nalgonda, defendants No.3 to 6 have preferred this appeal.
2
2. The plaintiff has filed the suit before the trial Court with the following allegations:
Plaintiff is a Teacher and first defendant is Chit Fund Firm, doing business in Chit Funds and Finance. Defendant No.2 is Managing
Partner, Defendant No.3 to 6 are partners of Defendant No.1 Firm.
Defendant No.1 partnership firm is registered under the Indian
Partnership Act, 1932, vide Registration No. 7024/95 and was doing
Chit Fund and Finance business. The plaintiff has deposited
Rs.30,000/- with first defendant on 28-2-2000 and defendant firm received the amount and second defendant as a Managing Partner has executed the promissory note and also passed receipt. Thereafter they are failed to pay interest or return the deposit amount. In spite of repeated the demands, the amount was not paid. So, this suit is filed for recovery of the same and the same may be decreed.
3. First and Second defendants have filed written statement with the following allegations:
Second defendant is not the Foreman of the first defendant firm.
Plaintiff never deposited any amount with the defendant firm and second defendant never executed any promissory note. First and second defendants are not liable to pay any amount. The document is created. So, the suit may be dismissed.
4. Third defendant has filed written statement with the following allegations:
The plaintiff never deposited any amount with the first defendant and second defendant never executed any promissory note. The defendants have no knowledge about the transaction between the plaintiff and second defendant. First defendant firm was doing only 3
Chit Funds business and not Finance business and the partners of the firm are contributing the amounts for the business and they never authorized second defendant to collect the amount from third parties.
The transaction may be between plaintiff and second defendant.
Plaintiff in collusion with the second defendant might have created the suit promissory note. The transaction is not genuine. It is only second defendant who might have been liable. The suit is not maintainable.
There are no merits in the suit. Hence, it may be dismissed.
5. Defendants No.4 to 6 have filed written statement with the following allegations:
Defendants No.4 to 6 are not partners of the said firm. They have nothing to do with the suit transaction. The suit is bad for mis- joinder of necessary parties. The signature on the promissory note appears to be forged in collusion with the second defendant. The defendants 4 to 6 are not liable to pay any amount and the suit may be dismissed.
6. Basing on the pleadings of both parties, the trial Court has framed the following issues:
1.Whether the suit is bad for non-joinder of necessary parties?
2.Whether the suit transaction dt. 28-02-2000 is true and whether plaintiff is entitled for the suit amount?
3.Whether the suit pro note is binding on the 1st defendant?
4.To what relief?
7. To substantiate the case of the plaintiff, Pws.1 and 2 were examined and Ex.A-1 to A-5 documents were marked. On behalf of the defendants, Dws.1 and 2 were examined and no documents were marked. Considering the evidence, documents and contentions of 4 both parties, the learned Junior Civil Judge has decreed the suit as prayed for.
8. Having aggrieved by the Judgment and Decree, the defendants
No.3 to 6 have preferred this appeal alleging that the trial Court has not appreciated the evidence and the documents in right perspective.
There are vital variations in the evidence of Pws.1 and 2. In collusion with the second defendant, the documents are created. The transaction is the personal matter of second defendant. The other defendants have nothing to do with the suit transaction. The evidence of Dws.1 and 2 is consistent. Ignoring the vital issues, the trial Court has erroneously decreed the suit against the appellants. So, the appeal may be allowed and the suit may be dismissed against the defendants No.3 to 6.
9. Arguments are heard.
10. Now the points for determination in this appeal are:
1. Whether the plaintiff is entitled for recovery of the amount from all the defendants?
2. Whether the judgment and decree passed by the trial Court in
O.S.No. 94 of 2003 is sustainable?
3. To what relief?
Point No.1 and 2:
11. It is the case of the plaintiff that he has deposited the amount with the first defendant firm. They failed to pay interest and not returning the deposited amount. So, he filed the suit and seeking recovery of the amount. It is the stand of the first defendant and second defendant that he never executed any promissory note and documents are created, he sought for dismissal of the suit. It is the stand of defendants 4 to 6 that they are not partners of the first 5 defendant firm and they have nothing to do with the suit transaction.
In collusion with the plaintiff and second defendant, the documents are created and they sought for dismissal of the suit. For convenience sake, parties’ status as it was before the trial Court is discussed in the same manner in this appeal also.
12. It is the case of the plaintiff that he has deposited amount with the first defendant firm and the promissory note was executed and receipt was passed. The plaintiff himself was examined as PW-1 and stated that on 28-2-2000 he deposited an amount of Rs.30,000/- and second defendant has executed the promissory note and also passed receipt Ex.A-2. Nothing is found in the cross-examination of PW-1 to say that for one reason or the other, he is deposing falsehood. Except some denial suggestions, nothing is found in the cross-examination to discredit his testimony. His evidence is consistent that he deposited
Rs.50,000/- and a promissory note was executed.
13. The attester was examined as PW-2 and it is his evidence that on the date of execution of the promissory note, he went to the office of the firm after school hours and then he attested the document.
Except denial suggestions, nothing is found in his cross to discredit his testimony. His signature is found on Ex.A-1 pro-note as an attestor and it is his evidence that in his presence Rs.30,000/- was paid by
PW-1. His evidence also substantiates the version of PW-1 about depositing the amount and the execution of promissory note by second defendant.
14. Second defendant was examined as DW-1 and denied the transaction and his signature. As pointed out earlier, the evidence of
Pws.1 and 2 is consistent that it is the second defendant, who signed 6 on the promissory note. Nothing is found in the evidence of second defendant to say that the plaintiff is having enmity with him and for one reason and other, he created the document. Nothing is found in cross of PW-1 attributing any motive to the plaintiff in creating the document. So, at this place it can safely concluded that it is the second defendant who has signed on the promissory note and passed
Ex.A-2 receipt.
15. Much attack has been done to the evidence of PW-1 on the ground that during the cross, he accepted that the contents of Ex.A-1 that itself shows that for personal needs, the amount was borrowed and the document does not contain the signatures of other partners.
Even the defendants are disputing about their status as the partners of the firm, but the certificate of registration filed by the plaintiff substantiates the stand of the plaintiff that all the defendants are partners of the first defendant firm. The pro note shows that second defendant has put his signature as the Foreman of the first defendant firm. So, simply because defendants No.3 to 6 signatures were not there on the pro-note, it is not absolved their liability, since they are partners of the first defendant firm. Further nothing is found in the evidence of PW-1 to say that he is enmically deposed of towards the defendants and he created the documents.
16. The crux of the issue is that the status of the second defendant while signing the document. As seen from the document, the promissory note was signed by the second defendant referring his name is Foreman of the chit fund company. Stamp was affixed on the promissory note. Similarly Ex.A-2 on receipt also, the seal of the first defendant firm was affixed and under the signature of second 7 defendant, his status was mentioned as Foreman. Much stress has been given on the contents of the documents. It is true that Ex.A-1 promissory note reads that “ " (for my necessities).
Relying upon these words, it is the stand of the defendants No.3 to 6 that the transaction is between the defendant No.2 and the plaintiff and it is their personal transaction and firm has nothing to do with the transaction. Here the evidence of PW-1 is consistent. It is his case that the first defendant firm was doing business in chits and
Finance and he deposited the amount with the first defendant firm and second defendant received the amount on behalf of the firm.
17. In a decision reported in AIR 1963 A.P. - 154, in a case between
Thummala Rama Rao and others vs. Chodagam Venkateswara Rao.
“Notwithstanding the dissolution of the firm the partners continue to be liable as such to third parties for any act done by any of them which would have been an act of the firm if done before the dissolution, until public notice is given of the dissolution.”
Relying upon the above said decision, it was contended by the defendants that the transaction is a personal transaction. One of the defendants was examined as DW-2 and he reiterated their stand. It is appropriate to mention here, it is the stand of the defendants that they are not at all partners of the firm. Their stand is total denial.
Ex.A-3 is C.C. of Registration of the Firm, clearly show that defendants No.2 to 6 are the partners of first defendant firm including the second defendant. In the reported decision, the facts disclose that the amount was not borrowed for the benefit of the firm and that 8 was an individual transaction. So, their lordships held that the other partners are not liable.
18. In the present case, it is established by the plaintiff that the defendants have accepted the deposit on behalf of the firm. So, other defendants cannot deny their liability. So, facts of the reported decision and present facts are different and this decision has no application to the present facts of the case.
19. Coming to the evidence of DW-2, during the cross-examination, he has admitted that “We were 5 partners. Myself, D-4, D-5 and D-6 were the partners and D-6 is the Managing partner.”
So, there is a categorical admission on part of the DW-2 about the status of the defendants in the firm. During cross-examination he has admitted that “I was a sleeping partner ---------------- I was not attending the office of the firm and as such, I have no knowledge about taking of deposits from the depositors by the firm. ------------ The firm was closed on our own decision by executing a written document. --------- -- I have no disputes with plaintiff, since I have no acquaintance with her.”
20. He is the prime party who is challenging the plaintiff's case on several grounds. It is his case that since he was sleeping partner, he is not attending the office and he does not know about collecting the amounts by way of deposits of the firm. Then how can he say that the amounts were not taken by second defendant towards deposit.
Admittedly, he is not having any enmity with the plaintiff. So, there is no reason for the plaintiff to foist a case against these defendants.
The defendants denying of their very status of themselves as partners in the firm, is creating any amount of doubt to say about the 9 bonafides of their stand. The firm is registered as seen from Ex.A-3 and defendants No.2 to 6 are partners. Nothing is found in the record to say that the firm is not collecting the amounts by way of deposits.
DW-2 never denied that fact.
21. As seen from the contents of Ex.A-1 promissory note and Ex.A-2 receipt, the second defendant has received the amount. The firm is registered firm and the plaintiff is a third party. So, second defendant as a Foreman has executed the document. So, all the defendants are liable for the undertaken given by the second defendant.
22. In the decision reported in AIR 2003 A.P. - 46 in a case between
Vattumalli Narayana Rao vs. Medrarapu Krishna Rao and others, their lordships observed that “In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm be done or executed in the firm name, or in any other manner expressing or implying an intention to bind the firm.
In Thirumala Rama Rao v. Chodagam Venkateswara Rao and others, where pronote was executed by main partner in the individual capacity and there was no intention to bind the firm and the liability of the firm which indicated, it was held that the firm and the other partners other than the executant were not liable.”
23. A plain reading of the document clearly indicates that second defendant representing the firm has executed the promissory note and passed the receipt. So, it cannot be said that the amounts were received towards the personal need of the second defendant. All the defendants No.3 to 6 being the partners of the firm are certainly liable to repay the amount. The very affixing of stamp of the firm on the document itself shows the intension of the second defendant that the document was executed on behalf of the firm. Further evidence of
P.W.1 clearly shows and proves the fact that the transaction is 10 between firm and plaintiff. So facts of reported decision and present facts are different, this decision has no application to the present facts of the case.
24. Even they have not filed any documentary evidence to show that they have initiated any legal proceedings against the second defendant for his default. So, now it is not open for the defendants to say that second defendant acted against the interest of the institution.
25. It is contended by the learned counsel for the appellants that any oral evidence adduced against the contents of the document is inadmissible. It is appropriate to mention here, there is ambiguity in the document. The evidence of Pws.1 and 2 giving clarification to the ambiguity. So, it cannot be said that their evidence is against the contents of the documents. One portion of the document shows the amount was borrowed for the personal necessities. But the document was executed by the firm represented by the second defendant. So, whether it is a personal necessity or not, is a matter of fact, and that was clarified by the evidence of Pws.1 and 2 and by way of cross- examination of the defendants. So, it is not case of giving oral evidence against the contents of the document. So, it cannot be said that under Secs. 91 and 92 of C.P.C., the evidence of Pw.1 cannot be considered.
26. Relying upon the evidence of Dws.1 and 2, the defendants are contending that defendant No.3 to 6 have nothing to do with the suit transaction. But it is evident from the evidence of DW-2 that he has no knowledge about taking of the deposits, since he was a sleeping partner. He is not in a position to state how many chits, the firm was running and its value.
11
27. DW-2 has stated that a criminal complaint was filed by the chit subscribers and depositors. He mentioned that “A criminal case was filed by some of the chit subscribers to the Nalgonda II Town Police alleging that we are not paying the amounts, due to the chit subscribers and depositors of the amount and our firm was closed. Upon which, a criminal case was registered and criminal case is pending before the Hon'ble District and Sessions Court, Nalgonda.”
So, he accepted that some people have reported the matter to the police mentioning that the amount of the depositors was not refunded. So, the spirit of his evidence shows that the first defendant firm has collected the amounts towards deposits. So, version of the defendants that they are not collecting any deposits and contributing the amounts on their own cannot be believed.
28. In the written statement third defendant has mentioned that “As per the partnership deed, if any amounts are required for the business of the first defendant that shall be contributed by the partners or same can be obtained loan from third persons with prior written consent of all the partners. It is submitted that as per the partnership deed of first defendant firm with regard to deposits and loans are concerned, no partner has consented in favour of second defendant to take deposits or loans other than the partners.”
29. A plain reading of the above said contents of the written statement clearly show that there is a provision in the partnership deed to collect deposits from third parties by the firm. Of course, there is a condition that all other partners shall give consent with regard to collecting of deposits or loans from third parties. Plaintiff is a third party to the proceedings. Now the defendants cannot say that since they have not given consent to the second defendant, he cannot take deposits on behalf of the firm. Defendants have not issued any legal notice against second defendant attributing motives or making allegation that he is collecting the amounts or he has collected the 12 amounts, on behalf of the firm and misutilized those amounts. In the absence of such pleadings and such evidence, now the defendants cannot agitate that the claim of the plaintiff is vitiated, since there is no written consent by all the partners.
30. It is established that second defendant accepted the deposit from the plaintiff on behalf of the firm. Second defendant being the
Foreman and defendants No.3 to 6 being the partners, all of them are jointly and severally liable. The trial Court has rightly appreciated the evidence and the documents and there are no reasons to interfere with its findings. Accordingly, points 1 and 2 are answered in favour of the plaintiff and against the defendants.
POINT NO.3:-
31. In the result, there are no merits in the appeal and the appeal is dismissed. In the present circumstances of the case, each party is directed to bare their own costs.
Typed on my dictation by the P.A., corrected and pronounced by me in the open court on this the 01st day of March 2012.
I ADDL. DISTRICT JUDGE
NALGONDA.
1
IN THE COURT OF THE I ADDL. DISTRICT JUDGE AT
NALGONDA.
Present: Sri C.S.S.V. Durga Prasad, M.Com., B.L.,
I Addl. District Judge, Nalgonda.
Dated this the 01st day of March, 2012
A.S. No. 4 of 2011.
BETWEEN:- Nellutla Kummari Jagan
....Appellant
And
Narne Estates (P) Ltd. ….Respondent
ON APPEAL AGAINST THE JUDGMENT AND DECREE PASSED BY THE
SENIOR CIVIL JUDGE AT BHONGIR, DT.22-11-2010
IN
O.S.No. 116 of 2006
M/s. Narne Estates (P) Ltd.
....Plaintiff.
And
Nellutla Kummari Jagan. …Defendant.
This suit is coming before me for disposal in the presence of Sri K.Venkateshwarlu, Advocate for the Appellant/s and Sri V.Surender Reddy, Advocate for the Respondent/s and having stood over for consideration till this day this court delivered the following:
:: JUDGMENT ::
Having aggrieved by the Judgment and Decree passed in OS.No.
116 of 2006 by the Senior Civil Judge, Bhongir, the unsuccessful defendant preferred this appeal.
2. The plaintiff has filed the suit before the trial Court with the following allegations:
The plaintiff is a Company incorporated under the provisions of
Companies Act and was doing business in real estate and developing the house sites. The defendant has approached the plaintiff company and offered to sell his agricultural land admeasuring Ac.2-18 gts. in
Sy.No. 524 situated in Bibinagar Village. An agreement of the sale 2 was entered into on 1-2-2003 for a consideration of Rs.1,71,500/- and
Rs.70,000/- was paid on the date of agreement. Rs.65,000/- was paid by way of cheque and Rs.5,000/- was paid in cash. The balance amount is agreed to be paid at the time of registration. The defendant has not produced the Income Tax clearance certificate and not produced the revenue records, Title Deeds, Pattedar passbooks and
Encumbrance Certificate. In spite of repeated demands, the defendant was never ready and never produced the above said documents and later a legal notice was issued to the defendant. Having received the legal notice, the defendant kept quite. So, the plaintiff has constrained to file the suit for specific performance and the same may be decreed.
Alternatively the amount advanced by the plaintiff may be ordered to be refunded with 18% interest.
3. The defendant has filed written statement with the following allegations:
Defendant is an illiterate. Plaintiff has approached the defendant through mediators and agreed to purchase the suit schedule property @ Rs.70,000/- per acre and paid Rs.70,000/- as an advance.
Defendant being illiterate has signed on the agreement of sale without knowing the contents of the agreement and the conditions imposed therein. It was agreed between the parties that the plaintiff has to pay the balance sale consideration within one month from the date of agreement of sale. But in spite of repeated requests, the plaintiff has not paid the balance sale consideration and not obtained the sale deed. The plaintiff never approached the defendant with a request to execute the registered sale deed. The latches are on the part of the plaintiff. Since variation in the market value as on the date of 3 agreement of sale and date of filing of the suit, now the plaintiff has filed false suit for specific performance. The claim is barred by limitation. There are no merits in the plaintiff's claim. So, the suit may be dismissed.
4. Basing on the pleadings of both parties, the trial Court has framed the following issues:
1.Whether the plaintiff is entitled to seek specific performance of agreement of sale as prayed for?
2.Whether the suit claim is barred by limitation?
3.Whether the sale agreement and payment of consideration are true and correct?
4.To what relief?
5. To substantiate the case of the plaintiff, Pw.1 was examined and
Ex.A-1 to A-8 documents were marked. On behalf of the defendants,
Dw-1 was examined and no documents were marked. Considering the evidence, documents and contentions of both parties, the learned
Senior Civil Judge has decreed the suit as prayed for.
6. Having aggrieved by the Judgment and Decree, the defendant has preferred this appeal alleging that the learned Senior Civil Judge, has not appreciated the evidence and the documents in right perspective. The latches are on the part of the plaintiff. There are vital variations in the evidence of PW-1. The claim of the plaintiff is barred by limitation. The suit is not instituted within three years from the date of agreement of sale. Ignoring the vital issues, the trial Court has erroneously decreed the suit. So, the appeal may be allowed and
O.S. No. 116 of 2006 may be dismissed.
7. Arguments are heard.
4
8. Now the points for determination in this appeal are:
1. Whether the plaintiff is entitled for specific performance, as prayed for?
2. Whether the judgment and decree passed by the trial Court in
O.S.No. 116 of 2006 is sustainable?
3. To what relief?
Point No.1 and 2:
9. The plaintiff has filed the suit alleging that the defendant approached the plaintiff and offered to sell the suit schedule property and agreement of sale was entered into and in spite of repeated demands, the defendant has not registered the property. So, this suit is filed for specific performance. It is the stand of the defendant that the defendant is an illiterate, without knowing the contents of the agreement, he has signed. The claim of the plaintiff is barred by limitation. The latches are on the part of the plaintiff. There are no merits in the plaintiff's claim. He sought for dismissal of the suit. For convenience sake, parties’ status as it was before the trial Court is discussed in the same manner in this appeal also.
10. As seen from the contentions of both parties and the evidence of
PW-1 and DW-1, there is no dispute about the fact that the defendant is the owner of the suit schedule property admeasuring Ac.2-18 gts. in
Sy.No.524 at Bibinagar Village. There is no dispute about the identity of the property. So, at this place it is established that the suit schedule property is in existence as shown in the suit schedule within the four boundaries mentioned therein.
11. It is the plaintiff, who has approached the Court seeking specific performance, then it is for the plaintiff to establish his case. Now it has to be examined to what extent the plaintiff could make his case.
5
The Chairman of the plaintiff Company was examined as PW-1 and it is his evidence that their Company was incorporated under Companies
Act and doing business in real estate and developing the house sites for the Government employees and other defence personnel. Ex.A-1
Certificate of incorporation of Plaintiff Company. Ex.A-2 is
Memorandum of Association. Ex.A-3 is Articles of Association. All these three documents substantiate the stand of the plaintiff that the plaintiff is a Company incorporated by Companies Act. PW-1 was the
Chairman. Ex.A-4 copy of the minutes of resolution shows that PW-1 was authorized to represent the plaintiff Company. So, the status of the plaintiff as a Company and the status of PW-1 in representing the plaintiff Company is established.
12. It is the case of the plaintiff that the defendant offered to sell the suit schedule property and they agreed to purchase the same @
Rs.70,000/- per acre and an agreement of sale was executed. The defendant himself was examined as DW-1. Even though during the course of cross, he has taken different and deviated stands, during the course of chief, he admitted about the execution of the agreement of sale and receipt of Rs.70,000/-. In the written statement, the defendant has mentioned that “It is a fact that plaintiff by name Narne Ranga Rao approached the defendant through the mediators and agreed to purchase the suit schedule land at Rs.70,000=00 per acre and agreement of sale between the plaintiff and defendant --------------- It is a fact that plaintiff has paid a sum of Rs.70,000/- ---------------”
PW-1 attacked during the course of cross about the payment of consideration and payments made. It is the evidence of PW-1 that
Rs.65,000/- was paid by way of crossed cheque and Rs.5,000/- was paid by way of cash. Ex.A-5 agreement of sale shows that Rs.70,000/- 6 was paid on 1-2-2003 and out of which, Rs.65,000/- was by way of cheque and Rs.5,000/- by way of cash. The cheque number is shown in Ex.A-6 Receipt, is tallying with the cheque number mentioned in the
Agreement of sale Ex.A-5. The defendant is admitting about the execution of the agreement of sale. Of course, it is his stand that he is illiterate. He does not know the terms of the agreement. The effect of such pleadings will be decided at a later stage. But fact remains the defendant has admitted that he offered to sell the suit schedule property @ Rs.70,000/- per acre and entered into agreement of sale and Rs.70,000/- was paid. With regard to payment of Rs.5,000/-,
PW-1 has not filed any receipt. Admission in the written statement itself discloses that the receipt of Rs.70,000/- by the defendant. It is evident from Ex.A-5 that Rs.70,000/- was paid to the defendant as on the date of agreement.
13. It is not case of the defendant that fraudulently his signature was obtained without paying any amount. He is specific that he has received Rs.70,000/- and he offered to sell the land @ Rs.70,000/- per acre. So, at this place by the evidence of PW-1 and by placing
Ex.A-5 agreement of sale, A-6 receipt and through the evidence of
DW-1 and his admissions in the written statement, the plaintiff could establish that the plaintiff agreed to purchase the suit schedule property at Rs.70,000/- per acre. The defendant agreed for the same and an agreement of sale was executed between the parties on 1-2- 2003 and in pursuance to the agreement of sale, Rs.70,000/- was paid to the defendant.
14. It is the case of the plaintiff that since then, the defendant was dragging the matter and has not complied the conditions of the 7 agreement of sale. It is the stand of the defendant that he is an illiterate. He does not know the terms of the agreement of sale and he has nothing to do with the Income Tax clearance Certificate. As seen from the agreement of sale, it is agreed between the parties that the defendant has to produce the Income Tax clearance certificate and tax receipts, pattedar passbook, title deed and Encumbrance
Certificate. As seen from the evidence of DW-1, it is not his case that he has produced the above said documents to the plaintiff.
15. From the beginning, it is the contention of the defendant that he is an illiterate and time is essence of the contract and he has not bound by the terms of the agreement of sale. Defendant has admitted his signature on the agreement of sale. It is not his case that fraudulently such an agreement of sale was obtained. He pleaded ignorance about the terms of the agreement. Absolutely an untenable plea. He has signed on the agreement, received the substantial amount. Now it is not open to the defendant to say that he is not bound by the terms of the agreement of sale.
16. The terms of the agreement of sale Ex.A-5 discloses that the defendant has to produce Income Tax Clearance and other certificates. It is not the case of the defendant that he has produced such documents to the plaintiff. So, the latches are on the part of the defendant. It is the stand of the defendant that it was agreed between the parties within one month the sale deed has to be executed, but the plaintiff failed to comply the obligation on his part.
It is the evidence of PW-1 that it was agreed between the parties within six months or one year, the sale deed must be obtained. Here 8
Clause-17 of the Agreement of sale Ex.A-5 is crucial, which runs as follows:
“That it is agreed by both the parties that this Deed of Agreement to sell the schedule mentioned lands shall be valid till such date of execution and registration of sale deed or sale deeds in favour of the Purchaser or its nominee or nominees.”
The above said condition imposed in the agreement of sale indicate that time is not the essence of the contract. None of the
Clauses in the agreement of sale show that time is fixed for execution of the sale deed. There is no single whisper in the agreement of sale that within one month, the sale deed must be obtained. Even assuming that it is the spirit of the agreement of sale, still it is not case of the defendant that he has complied the other terms i.e.
production of Income Tax clearance certificate, tax receipts,
Encumbrance Certificate and other documents. When the defendant himself failed to comply the conditions, how can he blame the plaintiff in this regard?
17. It is the stand of the defendant that the claim of the plaintiff is barred by limitation. If it is his case that within one month when the plaintiff failed to get the sale deed executed, agreement of sale shall stands cancelled, then what made the defendant in keeping silent all these years. He never issued single notice to the plaintiff demanding him to pay the balance of sale consideration or mentioning the fact that since the plaintiff has not obtained the sale deed within one month, he is canceling the agreement of sale. Even the defendant has not initiated any legal proceedings seeking cancellation of the agreement of sale.
9
18. Contrary, it is the plaintiff who has issued a legal notice Ex.A-7 and receipt shows that notice was sent by way of registered post.
Defendant never replied for it. Further Clause-17 of agreement of sale never indicate that time is essence of the contract.
19. Defendant has received substantial amount as an advance and there is no record to show that the defendant has produced the documents as contemplated under Agreement of sale Ex.A-5. So, the defendant cannot say that the latches are on the part of the plaintiff.
The evidence of PW-1 is consistent and most of the facts are admitted between the parties. Nothing is found in the record to say that the defendant was always ready and it is the plaintiff who has dragged the issue. The plaintiff from the evidence of PW-1 and by placing ample documentary evidence substantiated their stand that the latches are on the part of the defendant. The trial Court has rightly appreciated the evidence and the documents and there are no reasons to interfere with its findings. So, points No.1 and 2 are answered in favour of the plaintiff and against the defendant.
POINT NO.3:-
20. In the result, there are no merits in the appeal and the appeal is dismissed. In the circumstances of the case, each party is directed to bare their own costs.
Dictated to the P.A., transcribed by him, corrected and pronounced by
me in the open court on this the 01st day of March, 2012.
I ADDL. DISTRICT JUDGE
NALGONDA.
Order Record 5 total
| Case No. | Parties | Date | Type | Outcome |
|---|---|---|---|---|
| AS/72/2010 | Chenagoni Yadaiah vs R. Padma | 18 Nov 2011 | Order On Exgibit | — |
| AS/73/2010 | Chenagoni Yadaiah vs Marru Narayana Rao | 18 Nov 2011 | Order On Exgibit | — |
| AS/74/2010 | Chenagoni Yadaiah vs S. Someshwar Rao | 18 Nov 2011 | Order On Exgibit | — |
| AS/75/2010 | Chenagoni Yadaiah vs Bachupalli Venkat Rao | 18 Nov 2011 | Order On Exgibit | — |
| AS/4/2011 | Nelluta Kummari Jagan vs Ms. Narne Estates Pvt. Ltd. | 02 Nov 2011 | Order On Exgibit | — |
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Aug 2011 — Apr 2013I ADDL. DIST AND SESSIONS JUDGE, Nalgonda · 5 orders
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