* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA Nos.533/2001 & 619/2001
% 3rd March, 2011
RFA No.533/2001
Jitender Kumar ...... Appellant
Through: None.
VERSUS
M/s Goel Estate Finance & Ors ...... Respondents
Through: None.
RFA No.619/2001
Balbir Singh ...... Appellant
Through: None.
VERSUS
M/s Goel Estate Finance & Ors ...... Respondents
Through: None.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
1. Whether the Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest?
VALMIKI J. MEHTA, J (ORAL)
RFA No. 533&619/2001 Page 1 of 6
1. These cases are on the Regular Board of this Court since
17.1.2011. Today these are effective item no. 5 on the Regular Board. It is
12:25 pm but no one appears for the parties. I have therefore perused the
respective records and am proceeding to dispose of the appeals.
2. By means of these two regular first appeals under Section 96 of the
Code of Civil Procedure, 1908 challenge is laid to the impugned judgment
and decree dated 12.7.2001 passed by the trial court whereby the suit of the
respondent no.1/plaintiff was decreed for recovery of Rs.1,37,280/- along
with the interest at the rate of 12% p.a., as the appellants failed to repay the
loan which was granted to Sh. Jitender Kumar, the appellant in RFA
533/2001. With respect to the loan, guarantees were executed by one
Romesh and Sh. Balbir Singh, the appellant in RFA 619/2001. The appeals
arising from one judgment and decree are therefore being disposed of by
this common judgment.
3 The case of the respondent no.1/plaintiff in the trial court was that it
was engaged in finance business and the appellant/defendant no.1 required
finance to purchase a vehicle HNR-2244. Loan of Rs.1 lac was given to the
appellant/defendant no.1 and in consideration of which, defendants executed
the agreement dated 6.4.1994 and also executed the promissory note for
Rs.1,38,000/-. The loan of Rs.1 lac was repayable in 23 equal installments of
Rs.6000/- each over a period of two years ending on 4.5.1996. Appellant
/defendant no.1 paid five installments but failed to pay other installments
RFA No. 533&619/2001 Page 2 of 6
claiming that the vehicle had got burnt and he was pursuing his claim with
the Insurance Company. It transpired that the Insurance Company rejected
the claim of appellant/ defendant no.1 on the ground that the driver did not
carry a valid driving licence at the time of the incident. On account of the
default of the defendants to repay the loan, defendant no.1 being the
principal borrower and the defendants no.2 and 3 being the guarantors, the
subject suit came to be filed. The suit was originally filed as under Order 37
CPC but subsequently it was treated as an ordinary suit.
4 The suit was contested with the defendant nos.1 and 3 filing a joint
written statement and the other guarantor/defendant no.2 Sh. Balbir Singh,
appellant in RFA 619/2001, filing a separate written statement. In the
written statement filed by the defendants no.1 and 3, it was claimed that
there was no registered partnership firm of the respondent no.1/plaintiff and
that the suit was not maintainable because there was an arbitration clause.
Defendant no.2 Sh. Balbir Singh, appellant in RFA 619/2001 pleaded that he
signed the document only as a witness and not as a guarantor.
5 The trial court, after pleadings were completed, framed the following
issues:
“1. Whether the plaintiff is a registered partnership firm and suit
has been filed by a competent person? OPP
2. Whether the suit is barred by limitation? OPD
3. What is the effect of arbitration clause in the agreement? OPD
RFA No. 533&619/2001 Page 3 of 6
4. Whether this court has no pecuniary jurisdiction as alleged by
defendant No.1? OPP/D1.
5. To what amount the plaintiff is entitled? OPP
6. Whether the plaintiff is entitled to interest, if so, at what rate
and on what amount? OPP
7. Relief.”
6 On the issue no.1, the trial court has held that the respondent no.1 was
a registered partnership concern by referring to the certificate of registration
Ex.PW1/1 and the certified copy of form A Ex.PW1/2. This issue has been
correctly decided by the trial court.
7 The second issue was whether the suit was barred by limitation. In this
regard, the trial court has held that with respect to the installment, the same
fell due monthly and those installments which were due within three years
within the date of filing of the suit, were within the period of limitation, and
the suit was accordingly decreed for such installments, and for which, the
relief was prayed. The trial court had rightly referred to Article 36 of the
Limitation Act. I have also referred to the agreement between the parties
exhibited as Ex.PW1/3 and in terms of this agreement, the case clearly falls
under Article 36, inasmuch as there is no automatic termination of the
agreement and no notice of termination of agreement was ever served by
the respondent no.1. Even if, the agreement was to be automatically
terminated for non-payment, surely, it was a right which the respondent
company could have waived so as to continue with the agreement. The trial
court has therefore rightly held the suit to be within limitation The trial court
RFA No. 533&619/2001 Page 4 of 6
has also rejected the stand of the appellant that no amount was received
because it was proved that the appellant/ defendant no.1 purchased an old
truck which was financed with another financer and therefore a sum of
Rs.82,000/- was paid by the respondent no.1 to the previous financer and a
sum of Rs.18,000/- was paid to the previous owner of the vehicle.
8 With respect to the defence of the defendant no.2, the appellant in RFA
619.2001, the trial court has held that plea of the said defendant
no.2/appellant could not be believed that the documents at the time of his
signing them were blank and he signed only as a witness. I note that
signatures of the appellant/defendant no.2 Balbir Singh appeared at the
place of the guarantor and not at the place of the witness. The trial court
has held that there was no reason why the appellant Balbir Singh should not
be held liable because there is no ill will alleged against the respondent no.1.
In this regard, the trial court has rightly given the following findings and
conclusions in para 27, and which I agree with:-
“27. It is the case of the plaintiff that defendant no.2 and 3
stood as guarantors. In this regard, it may be mentioned that
defendant no.2 has nowhere disputed that he signed the
agreement Ex.PW1/3. His only plea is that he never stood a
guarantor, he was called by Sh.P.K. Goel and was told that Sh.
Jitender Kumar Singh was taking a loan from him and that he
should sign the documents as a witness. According to him, he
knows only Urdu language and does not know what was written on
those documents. The contents of the documents were not even
read over to him. No demand notice was served upon him. Here,
it may be mentioned that it has come in cross-examination of
plaintiff that all the three defendants were present when the
contents were explained to the guarantors and at that time,RFA No. 533&619/2001 Page 5 of 6
witness Sh. Ishwar Singh Lakhra was also present. He
categorically denied the suggestion that signatures of defendant
No.2 were obtained on blank agreement and on pronote or that
defendant no.2 signed the documents as witness and not as a
guarantor. It is pertinent to note that defendant no.3 has nowhere
objected to the execution of the agreement or that he stood as a
guarantor. He has never taken the plea that documents were
blank when he signed the same. Under these peculiar
circumstances, it was incumbent upon defendant No.2 to have
proved that the documents were blank or that he was never
informed about the contents of the documents or that he never
stood as a guarantor. No illwill has been alleged by him against
the plaintiff for which reasons, plaintiff could fraudulently obtained
his signatures on the agreement as guarantor. Rather, it has
come in his cross-examination that plaintiff was known to him for
the last 25 years and during this period, prior to this case, he was
never called by the plaintiff to sign any document. Therefore, it
cannot be presumed that defendant no.2 would have signed the
documents as a witness and not as a guarantor without
understanding the contents of the documents.”
9 This court is not entitled to interfere with the findings and conclusions
of the trial court unless the same are wholly illegal or perverse or cause
grave injustice/prejudice. I do not find any illegality or perversity in the
impugned judgment and decree which calls for any interference in the
appeal. The appeals being devoid of any merit, are dismissed leaving the
parties to bear their own costs. Trial court record be sent back.
March 03, 2011 VALMIKI J. MEHTA, J.
ib
RFA No. 533&619/2001 Page 6 of 6