IN THE HIGH COURT OF KERALA AT ERNAKULAM
AS.No. 76 of 1998()
1. PREMIER TRADERS
... Petitioner
Vs
1. P.C.ABRAHAM
... Respondent
For Petitioner :SRI.K.K.CHANDRAN PILLAI
For Respondent :SRI.JOSEPH A.VADAKKEL
The Hon'ble MR. Justice HARUN-UL-RASHID
Dated :25/02/2010
O R D E R
HARUN-UL-RASHID, J.
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Dated this the 25th day of February, 2010
J U D G M E N T
Defendants 1 to 4 in O.S.No.175 of 1994 on the file of the
Sub Court, Pala are the appellants. Suit for realisation of money
filed by the plaintiff was decreed by the court below. The decree
is passed allowing the plaintiff to realise a sum of Rs.27,194.50/-
with future interest. Aggrieved by the said decree and judgment,
defendants had preferred this appeal. The parties are referred to
hereinafter as plaintiff and the defendants as arrayed in the suit.
2. The first defendant is Premier Traders, a partnership
firm, dealing in the purchase and sale of raw rubber. The
defendants 2 to 4 are the partners. The principal place of
business of the first defendant firm is at Poovarani. They had a
purchasing depot at Thodanal and the depot is managed by an
employee. Fifth defendant is the said employee in charge of the
depot at Thodanal.
3. According to the plaintiff, he used to sell rubber sheets
at the depot of the defendants at Thodanal. On 30.5.1987,
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plaintiff sold 1412.700 kilograms of rubber sheets at Rs.19.25/-
per kilogram. Price of the sold rubber sheets is Rs.27,194.50/-
Practice in the depot is that the price of the rubber sheets
purchased will be paid then and there or will be paid later. If
paid later, the person in charge of the depot used to issue chits
recording the details of the purchase and price payable. On
supply of 1412.700 koligrams of rubber sheets at the rate of
Rs.19.25/- per kilogram, the fifth defendant issued a chit stating
the details and the sum payable. In the plaint it is further
pleaded that, since the payment got delayed for a few months,
the fifth defendant issued cheque bearing SB.No.3801 dated
19.8.1987 drawn on the Poovarani Service Co-operative Bank
Ltd. in favour of the plaintiff for an amount of Rs.27,194.50/-
The cheque was signed by the second defendant. The above said
cheque is produced by the plaintiff and marked as Ext.A2. The
plaintiff’s case is that the understanding was that when the
money is paid the cheque should be returned. Since the
defendants failed to make the amount payable, a registered
notice was issued to the defendants 2 to 4. Defendants 1 to 4
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send a reply notice denying the transaction and alleged that the
cheque might have been fraudulently issued by the fifth
defendant on a cheque leaf lost and which was found out as lost
on 1.1.1987.
4. Defendants 1 to 4 contested the suit denying the
material averments in the plaint. It is contended in the written
statement that the present suit was filed by the plaintiff in
collusion with the fifth defendant after creating false documents.
It is admitted that they were running a purchasing depot at
Thodanal, that the fifth defendant was their employee who was in
charge of the depot and that the fifth defendant was purchasing
rubber sheets from agriculturists for an on behalf of defendants 1
to 4. The defendants also contended that the bill book and stock
register maintained by the 1st defendant firm shows that there
was no purchase of rubber sheets from the plaintiff. The
defendants denied the allegations in the plaint about the
purchase of 1412.700 kilograms of rubber sheets and that a chit
was given to the plaintiff for Rs.27,914.50/-; that the 5th
defendant was not authorised to purchase rubber sheets from
persons without issuing bills; that no bill for the purchase of
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rubber from the plaintiff was issued to him nor the bill was sent
by the 5th defendant to the main shop at Poovarani. It is also
stated that the chit alleged to have been given to the plaintiff by
the 5th defendant was created by the 5th defendant for the
purpose of instituting the suit. In the written statement, it is
further averred that on 25.9.1987, Thodanal depot was closed
and service of the 5th defendant was terminated finding that he
had committed serious irregularities in the account. It is also
stated that on 1.1.1987, the 2nd defendant came to know that a
signed blank cheque bearing No.3801 in the SB Account was
stolen and the said fact was informed on the same day to the
bank; that the 2nd defendant came to know only later that the 5th
defendant had committed theft of the signed blank cheque leaf
and that the 5th defendant is inimical to defendants 2 to 4 after
he was dismissed from the service.
5. The evidence in the case consists of the oral
testimonies of PWs 1 to 5, DWs 1 & 2, Exts.A1 & A2, Exts.B1 &
B2 including B1(a) to B1(c) and B2(a) and Exts.X1 to X3 were
marked as third party exhibits.
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6. Evidence of PW1 is supported by the oral evidence of
PWs 2 and 3. PW4 is none other than the 5th defendant. He had
given evidence in support of the plaint claim. Ext.A2 is the
cheque bearing No.3801. According to PW4 he collected Ext.A2
cheque from the head office and the same was given to the
plaintiff for the value of the rubber sheets purchased. He
admitted that the date, name and amount were written by him in
Ext.A2. Ext.A1 is the chit mentioned in the plaint alleged to have
been issued by the 5th defendant (PW4) to the plaintiff. Relying
on the evidence of PW4 court below held that 5th defendant gave
Ext.A2 cheque to the plaintiff towards purchase price of the
rubber sheets sold by the plaintiff at Thodanal depot.
7. The court below examined the other contentions of the
plaintiff and the contesting defendants. According to PW1,
Exts.A1 and A2 were given by PW4 for the sale of rubber sheets
on 30.5.1987 at Thodanal depot by the 5th defendant. The
understanding was that when money is paid cheque should be
returned. The allegation of the defendants 1 to 4 is that Ext.A2
cheque is a lost cheque which was stolen by the 5th defendant
and gave to PW1. The second defendant on behalf of defendants
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1 to 4 was examined as DW2. He maintained the stand that PW4
was not authorised by defendants 1 to 4 to obtain rubber without
bill and to give chits to anybody for the purchase of rubber, that
whenever rubber is purchased at Thodanal deport purchase bills
would be written, that corresponding entries will be made in the
stock register kept at the Thodanal depot and the rubber
purchased would thereafter sent to the main depot, that on
30.5.1987 no rubber was purchased from any body is evident
from Exts.B1, B1(a) to B1(c) and B2. DW2 also testified before
the court that Ext.A2 cheque which was stolen by the 5th
defendant and was given to PW1 on account of the animosity of
the 5th defendant towards defendants 2 to 4 due to the
termination of his service from the Thodanal depot. According to
him Ext.A1 chit is created as a result of the collusion between
the plaintiff and the 5th defendant and Ext.A2 cheque is a stolen
cheque which was also used for the purpose of raising illegal
claim. Defendants 1 to 4 contended that they are not liable to
pay the plaint claim.
8. Ext.A1 is the chit showing the name of the purchaser,
weight and rate of the rubber per kilogram and the price payable
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to the plaintiff. The said chit was admittedly issued by PW4. The
trial court placed reliance on Ext.A1 chit stating that it was signed
by PW4, who is admittedly the agent of defendants 1 to 4. The
court below also placed reliance on Ext.A2 cheque admittedly
given to PW1 by PW4 putting the date 19.8.1987. The court
below also relied on the evidence of PWs 2 and 3. PW2 is the
person who is running a ration shop next to the room wherein the
Thodanal depot was functioning. He gave evidence to the effect
that he was also a supplier of rubber at the Thodanal depot and
on several occasions the 5th defendant gave him chits showing
the amount, rate, weight etc. PW3 is another witness who is a
resident of the locality testified before the court that he used to
sell rubber sheets at the Thodanal depot managed by PW4. The
court below relied on the evidence of PWs 2 and 3 in support of
the oral evidence tendered by PW1. The dismissed employee of
the 1st defendant firm, who is the 5th defendant in the suit was
examined as PW4. He testified before the court in terms of the
plaint allegations. The trial court accepted the evidence of PW4
also and opined that his evidence cannot be discarded on account
of the wild allegations pointed out by defendants 1 to 4. The trial
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court observed that PW4 has admitted issuance of Exts.A1 and
A2 to PW1 for the sale of rubber sheets at Thodanal depot of the
1st defendant. The trial court believed the evidence of PW4 to the
effect that Ext.A2 cheque was given as per the directions of the
second defendant.
9. The court below relied on the evidence of PWs 1 to 4
and held that in the light of the oral evidence of PWs 1 to 4 the
case put forward by DW2 is false. Ext.X3 intimation was not
acted upon by the court stating some technical reasons. The
case of the defendants 1 to 4 that Ext.A2 stolen cheque was
handed over to the plaintiff showing the value of the rubber
sheets is disbelieved. The trial court also observed that PW1 is a
retired professor of a College and opined that even according to
DW2 the professor has no animosity towards defendants 1 to 4 to
make a false plaint claim. For the above said reasons the court
below disbelieved the case set up by the defendants 1 to 4 that
the 5th defendant committed theft of a blank cheque signed by
the 2nd defendant and gave the same to PW1 and held that the
plaintiff is entitled to realise the plaint claim with future interest
from defendants 2 to 4 personally, jointly and severally and from
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the assets of the first defendant.
10. I have examined the oral and documentary evidence
adduced by the respective parties. I have perused Ext.A1 chit,
A2 cheque, X3 letter, additional documents and notice issued by
the plaintiff dated 19.10.1989. Notice dated 19.10.1989 was
produced by the appellants/defendants as additional documents
with a petition to receive it in evidence. There is reference to the
said notice in the pleadings and therefore the said document was
received in evidence and marked as Ext.X3. I have also
examined in detail the oral evidence of PWs 1 to 5, DWs 1 and 2.
At the outset I may say that, I cannot agree with the findings
recorded by the court below based on the materials on record.
On a perusal of the oral and documentary evidence I am of the
view that the reasons stated and the findings arrived by the court
below cannot be sustained.
11. PW1 spoke in terms of the plaint. The court below
relied on the evidence of PWs 2 and 3 as corroborative evidence.
PWs 2 and 3 examined to prove the fact that the chit would be
given by the 5th defendant when rubber sheets are sold to the
depot of the first defendant at Thodanal. PWs 2 and 3 are not
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witnesses to the transaction. They tendered evidence stating
that they have also sold rubber sheets to the first defendant in
their depot at Thodalnal. PWs 2 and 3 are residing in the locality
wherein the depot is situated. Their evidence would show that
they used to sell rubber sheets in the depot at Thodanal. They
are not eye witnesses to the transaction alleged by the plaintiffs.
Even with the aid of oral evidence of PWs 2 and 3 it can be
concluded that the depot at Thodanal was transacting business in
the purchase of rubber and that some of the residence of the
locality are selling their rubber sheets in the 1st defendant’s
depot. PWs 2 and 3 are two among a number of customers of
the Thodanal depot. They have only tendered evidence that the
depot is transacting business in rubber and that several persons
are selling their rubber goods to the depot at Thodanal. So long
as they have no case that they have witnessed the transaction
between the first defendant firm through 5th defendant (PW4) and
the plaintiff, their evidence cannot be taken as corroborative
piece of evidence in support of the case set up by the plaintiff.
12. PW4 was examined by the plaintiff who is none other
than the 5th defendant. PW4 is the employee in charge of the
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first defendant’s depot at Thodanal. The case set up by the
plaintiff has to be appreciated in the light of the contentions
raised by the contesting defendants that Ext.A1 chit alleged to
have been given to the plaintiff by the 5th defendant was created
by the 5th defendant for the purpose of the suit. It has also come
out in evidence that the depot at Thodanal was closed on
25.9.1987 and the service of the 5th defendant was terminated
on charges of misappropriation, irregularity in the account and
that the 5th defendant is inimical towards defendants 2 to 4 after
he was dismissed from service.
13. The transaction alleged in the plaint was on
30.5.1987. The first defendant firm closed the depot on
25.9.1987 consequent to the dismissal of the 5th defendant on
charges of serious irregularities in the account. The contesting
defendants contended that the suit was filed experimentally with
the connivance of the 5th defendant and it is a collusive suit. 5th
defendant was examined by the plaintiff as one of his witnesses.
5th defendant who was formerly an employee of the first
defendant firm adduced evidence in terms of the allegations in
the plaint. He testified before the court that he had issued
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Ext.A1 chit on the date of alleged sale of rubber, i.e., on
30.5.1987 and also issued Ext.A2 cheque bearing No.3801 of
Poovarani Service Co-operative Bank on 19.8.1987. He deposed
that the quantity of rubber purchased from the plaintiff was not
accounted, that the cheque was issued as a post dated cheque,
that the cheque was issued three weeks prior to the date
mentioned in the cheque and that the stock register and transfer
bill are not maintained properly and regularly. He admitted that
Ext.A2 cheque is a personal cheque of the second defendant. In
this connection it is very relevant to examine the contentions of
the contesting defendants, that on 1.1.1987 the blank signed
cheque leaf bearing No.3801 in the SB account of the second
defendant was missing and the said fact was informed on the
same date to the bank by the second defendant. Ext.X3 is a
letter dated 1.1.1987 issued by the second defendant addressed
to the Secretary, Poovarani Service Co-operative Bank intimating
the bank that a blank signed cheque leaf bearing No.3801 was
missing and requested the bank not to honour the cheque.
Ext.X3 was produced on summons by the Poovarani Service Co-
operative Bank and marked as third party exhibit. Ext.X3
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document cannot be sidelined for any reasons. Ext.X3 shows
that cheque No.3801, a blank signed cheque was lost as on
1.1.1987. It is admitted by PW4 that the date written in Ext.A2
cheque is 19.8.1987. The 5th defendant as PW4 also admitted
that the said cheque was issued three weeks prior to 19.8.1987.
If he is to be believed he handed over the cheque during the last
week of July, 1987 or in the first week of August 1987 putting the
date 19.8.1987 and handed over the same to the plaintiff. The
evidence and circumstances shows that there is every chance of
Ext.A2 cheque leaf stolen by PW4, kept in his custody and was
handed over to the plaintiff for realising the plaint claim. It is
also important to note that though Ext.A2 cheque dated
19.8.1987 was issued to the plaintiff, he has no case that Ext.A2
cheque was presented at any point of time, instead the plaintiff
as PW1 testified before the court that he used to enquire as to
whether funds are available in the account of the second
defendant. If such enquiries are made as testified by him without
presenting the cheque the said conduct also shows his deceived
intention to collect the amount as and when there is funds in the
account of the second defendant. The very fact that the cheque
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was never presented before the bank till the filing of the suit in
1994, is also a very important circumstance which would go to
show that Ext.A2 cheque might have been stolen by the 5th
defendant and handed over to the plaintiff in their attempt to
encash the plaint claim. The said circumstance also go to show
that the plaintiff and the 5th defendant colluded and they were
trying to encash the amount from the bank.
14. The appellants produced the reply notice send by the
plaintiff through his lawyer. I have already marked the said
document as Ext.B3. In Ext.B3 it is stated that on 19.8.1987 the
cheque bearing No.3801 dated 19.8.1987 drawn on the
Poovarani Service Co-operative Bank Ltd. was given to the
plaintiff signed by the second defendant. The plaintiff’s case is
that the cheque was handed over on 19.8.1987. At the same
time PW4 testified before the court that the cheque was issued
three weeks prior to 19.8.1987. It is also revealed from the
above said lawyer notice that the cheque was never presented for
encashment and it is further stated in the notice that previous
information has been given by the second defendant to the bank
stating that the particular cheque was lost. Going by his own
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notice marked as Ext.B3, the plaintiff had prior knowledge about
the fact of information given by the second defendant to the bank
that in no circumstance the missing cheque shall be honoured.
In spite of the said information gathered by the plaintiff from the
bank, he never chose to file a suit even within a reasonable time.
The suit was filed on 29.5.1990, i.e., after a period of seven and
odd months. The suit was filed on the last day of expiry of the
period of limitation, even after knowing that the cheque will not
be honoured. The fact that he did not file the suit within a
reasonable time nor any action is initiated against the second
defendant under the Negotiable Instruments Act, and further
failed to file a suit for recovery of amount within a reasonable
time from the date of supply of rubber, are all circumstances
which would go to show that the plaintiff and PW4 colluded
together and conspired to realise the cheque amount by resorting
to deceptive practice. It is rather surprising to note that the
cheque dated 19.8.1987 was never presented and the said
conduct of the plaintiff is strange and not appealing to reason.
15. PW1 deposed before the court that PW4’s father was
an employee of the plaintiff and admitted that the cheque issued
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is a post dated cheque. X3 letter dated 1.1.1987 send to
Secreatry, Poovarani Service Co-operative Bank by the second
defendant was proved by examining the Secretary of the bank.
DW2 is the second defendant. He denied the sale of rubber to
the Thodanal depot by the plaintiff. He testified that the
handwriting in Ext.B1 chit is that of the 5th defendant, that if
rubber was purchased on 13.5.1987 there could be entry in the
bill book. The carbon copies of page numbers 5, 6 & 7 of bill
book was produced and marked as Exts.B1(a), (b) and (c)
respectively and Ext.B2 is the stock register of raw rubber.
Ext.B1 bill book and Ext.B2 stock register produced in the case
shows that no quantity of rubber was purchased from the plaintiff
on 30.51987. Ext.B2 register further shows that 97.2 kilograms
of rubber was purchased from a customer on 27.5.1987, and the
subsequent purchase was on 1.6.19687. Bill No.39 relates to
the purchase on 27.5.1987 and bill nos, 30 and 31 relates to the
purchase on 1.6.1987. He testified that if the rubber was
purchased on 30.5.1987 as alleged by the plaintiff necessary
entries would have been made in Ext.B2. DW2 also deposed that
he never permitted, at any time, to purchase rubber without
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issuing the bill and further he never instructed the 5th defendant
to collect rubber by issuing chit. DW2 also deposed before the
court that Ext.A1 chit is a fabricated document created as a result
of the conspiracy between the plaintiff and the 5th defendant. He
also stated that the 5th defendant was dismissed from service on
25.9.1987 for misappropriation of funds and for cheating the
customers of the firm. Therefore the contention of the plaintiff
that the 5th defendant had issued cheque bearing No.3801 signed
by the second defendant to the plaintiff towards purchase price of
the rubber sheets sold by the plaintiff at the Thodanal depot of
the first defendant is not proved. The facts and circumstances
and evidence adduced by the parties was wrongly appreciated
and the findings are entered overlooking the materials on record.
The facts and evidence proved shows that there was no
transaction at all between the parties and further revealed that
the 5th defendant had committed theft of the blank cheque signed
by the second defendant and gave the same to PW1 and also
issued Ext.A1 chit deceitfully. The findings of the court below to
the contrary cannot be sustained. The plaintiff is a retired
professor of St.Thomas College, Pala. The criminal act
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committed by a professor with the connivance of the 5th
defendant lead to the filing of the suit and the defendants 1 to 4
are unnecessarily dragged to prolonged litigation.
In the result, the appeal is allowed. The decree and
judgment passed by the court below are set aside and the suit
stands dismissed. The appeal is allowed with cost throughout.
HARUN-UL-RASHID,
JUDGE.
bkn/-