IN THE HIGH COURT OF KERALA AT ERNAKULAM
RSA.No. 25 of 2010()
1. CHINNAMMA, W/O. SKARIA, VALAVATHIL HOUSE
... Petitioner
2. JOMON, S/O. SKARIA, OF DO. NOW IN DO.
3. JIJO, S/O. DO. OF DO. IN DO. DO.
4. JOYS, S/O. DO OF DO. IN DO. DO.
Vs
1. SABEER.T.M, S/O. MYTHEEN,
... Respondent
For Petitioner :SRI.K.JAYAKUMAR
For Respondent : No Appearance
The Hon'ble MR. Justice THOMAS P.JOSEPH
Dated :12/01/2010
O R D E R
THOMAS P JOSEPH, J.
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R.S.A.No.25 of 2010
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Dated this 12th day of January, 2010
JUDGMENT
The second appeal arises from concurrent finding entered by the
courts below as to the existence of a legally recoverable debt and a
consequent decree passed in favour of the respondent. According to
the respondent, Skaria predecessor-in-interest of the appellants
borrowed Rs.95,000/- from him on 20-08-2005 at his residence and
issued a post dated cheque dated 20-08-2007 (Ext.A1) for the sum of
Rs.95,000/- with a promise that the borrower will make arrangements
for honouring the cheque on its presentation in the drawee bank on
the due date. On believing the assurance made by the said Skaria,
respondent advanced Rs.95,000/- by way of loan and accepted the
cheque. On 13-02-2006 Skaria died. Following that, appellants who
are his legal representatives requested the respondent to prolong
presentation of the cheque till the due date. Accepting that he
presented the cheque on the due date but to be told that the cheque
cannot be honoured as the account was closed. It is also the case of
respondent that appellants who inherited 40.47 ares from the
deceased Skaria fraudulently transferred that property to one Shameer
as per assignment deed No.1141 of 2006 dated 24-08-2006 a copy of
which is marked as Ext.A4 and making use of the sale proceeds they
R.S.A.No.25 of 2010 2
purchased another item of land as per sale deed No.6713 of 2006
dated 11-12-2006, a copy of which is marked as Ext.A5. Ext.A2 is the
memo and Ext.A3 is the intimation received from the drawee and
collecting banks showing that the cheque was dishonoured as account
was closed. Respondent sued the appellants for recovery of the
amount with interest to be realised from the assets of the deceased
Skaria in the hands of the appellants. Appellants claimed that they
have no information about the alleged loan transaction between
respondent and Skaria. Skaria had borrowed money from one Baby
(DW2) and Saji. That liability was discharged by the appellants after
the death of Skaria. One Babu claiming that he has signed the blank
cheques of Skaria with him has been threatening the appellants after
his death. It is contended that respondent may have misused the
cheque for and on behalf of the said Babu. They denied that the
property belonging to Skaria was sold to defraud the respondent.
According to them sale proceeds were used for discharging the
liabilities of Skaria. The property referred to in Ext.A5 was purchased
making use of the compensation received by a relative of appellant
No.1 for the injury the relative suffered in a motor accident. Hence,
that property is not liable for the debts of Skaria. In the trial court
respondent gave evidence as PW1 and proved Exts.A1 to A3. He
asserted that Skaria had borrowed Rs.95,000/- from him on 20-08-
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2005 and issued Ext.A1, cheque. Appellant No.3/defendant No.3 gave
evidence as DW1. DW2 is said to be one of the creditors of deceased
Skaria. He claimed that Skaria had borrowed Rs.50,000/- from him and
that liability was discharged by the appellants after the death of Skaria
paying Rs.40,000/-. Courts below found in favour of the transaction
pleaded by the respondent. Courts below were of the view that there
is no denial of the transaction pleaded by the respondent since the
plea of appellants is only one of ignorance about the alleged
transaction. It was found that the property as per Ext.A5 was
purchased making use of proceeds of sale as per Ext.A4 and hence the
property covered by Ext.A5 is answerable for the debts of Skaria.
Accordingly decree was granted. First appellate court has confirmed
the finding and judgment and decree. That is under challenge in the
second appeal. The substantial questions of law urged are that in so
far as the cheque was presented after the death of Skaria on 13-02-
2006 there was no valid presentation of the cheque and hence the
dishonour of the cheque could not have presented a valid cause of
action for the respondent. Hence the suit must fail on that account. It
is further contended that the courts below are legally and factually
wrong in concluding that there was a transaction between respondent
and deceased Skaria as claimed by the former. The improbability in
the case was not taken into account by the courts below. Yet another
R.S.A.No.25 of 2010 4
question raised is that the courts below went wrong in fastening
liability on the property acquired by the appellant as per Ext.A5.
2. So far as proof of transaction pleaded by the respondent is
concerned, in para 3 of the plaint (copy of which learned counsel has
given me for perusal) it is specifically stated that on 20-08-2005 Skaria
had borrowed Rs.95,000/- from the respondent at the residence of the
latter and issued a post dated cheque dated 20-08-2007 (Ext.A1). It is
also stated in para 3 of the plaint that Skaria had made the respondent
believe that the cheque when presented will be honoured and based
on that assurance the money was lent. The reply for those averments
comes in para 5 of the written statement. There it is stated that
appellants have no information about the averments in para 3 of the
plaint. It is also stated that appellants have no information about the
transaction referred to in para 3 of the plaint between the respondent
and deceased Skaria. Denial in para 5 of the written statement is only
regarding the case of respondent that at the time of the impugned
transaction appellant No.1 also was present. True, appellants denied
that statement. But that does not amount to denial of the transaction
pleaded by the respondent in para 3 of the plaint. Learned counsel for
the appellants would contend that in so far as appellants were not
parties or witnesses to the alleged transaction they could only plead
ignorance of the transaction. I am unable to accept that contention.
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Order 8 Rule 5 of the Code of Civil Procedure (for short, “the Code”)
does not differentiate between a defendant who had allegedly taken
part or witnessed the transaction and a defendant who had only
information about that. The statement in the written statement that
appellants are not aware of the transaction pleaded in the plaint, in my
view does not amount to a denial, not to say about the specific denial.
In such a situation, averment in the plaint must deemed to have been
admitted as held by the Supreme Court in Jahuri Sah and Ors. Vs.
Dwarika Prasad Jhunjhunwala & Ors (AIR 1967 SC 109). There it
has been held that to say the defendants have no knowledge of a fact
pleaded by the plaintiff does not tantamount to a denial of existence of
the fact, not even an implied denial. The courts below therefore are
correct in observing that there was no specific denial of the transaction
and hence that amount to its admission.
3. The judgment and decree of courts below do not stand on
that footing alone. There is the evidence of respondent as PW1 about
the transaction. In support of the evidence he has also produced
Exts.A1 to A3. True, appellants have a contention that since Ext.A1
was presented after the death of the drawer, there is no valid
presentation and hence there is no valid dishonour also. Assuming so,
Ext.A1 can be taken as a document supporting the cases of the
respondent. Leaving aside the question of availability presumption
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under section 118(a) of the Negotiable Instruments Act there is the
evidence of respondent as PW1 which gets corroboration from Ext.A1.
Along with this is the added circumstance that appellants have no
specific denial of transaction.
4. What learned counsel described as improbability is that
though the alleged transaction was on 20-08-2005, Ext.A1 is dated 20-
08-2007 ie. two years after the transaction. It is also contended by
learned counsel that it is quite unlikely that such a long period would
be provided for presentation of the cheque and at any rate the version
of the respondent that after the death of Skaria on 13-02-2006
appellants had requested the respondent to prolong presentation of
the cheque till the due date cannot be believed. I am unable to accept
the contention that giving a period of two years for presentation of the
cheque (ie for repayment of the loan) is so improbable a thing that in
the circumstances it must be taken as something equivalent to near
impossibility. The period of two years given, I am not inclined to think
affected the veracity of evidence given by PW1. Courts below on the
evidence found in favour of the transaction. That being a finding of
fact based on evidence and circumstances involved no substantial
question of law.
5. Then the next question urged is whether in the particular
facts of the case a suit could laid on the dishonoured cheque and
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hence it should fail. There again the contention is that the cheque was
presented after the death of the drawer and hence it cannot be treated
as a valid cheque after the death of the drawer. Learned counsel has
invited my attention to para 11 of the plaint where it is stated about
the cause of action. It is stated that cause of action (for the suit) arise
on 13-02-2006 when the appellants inherited the property of deceased
Skaria consequent to his death on that day, on 20-08-2007 the date of
the cheque, on 10-10-2007 when the cheque was dishonoured and
thereafter when respondent demanded repayment of the amount and
that was denied. It is true that in para 11 of the plaint one of the dates
mentioned as giving cause of action to the respondent is the due date
of Ext.A1 and its dishonour. But, the cause of action was not confined
to those date alone. 13-02-2006 date of death of Skaria on which day
appellants inherited his property and hence the property became liable
for his debt along with the date from 20-10-2007 onwards when in
spite of demand made by respondent, appellants failed to pay the
amount also constituted cause of action as pleaded in para 11 of the
plaint. On the question whether the suit is based on dishonour of
cheque or is on the original cause of action its is apposite to refer to
para 3 of the plaint where it is stated about the transaction of lending
and borrowal on 20-08-2005, the issue of the cheque which as per
averments in the plaint comes consequent to the borrowal and the
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offer made by the deceased Skaria to pay the amount on the due date.
Reading the plaint averment as a whole I am unable to accept the
contention of learned counsel that the suit is based on the dishonour
of the cheque, there is no valid presentation of the cheque due to the
death of Skaria and hence the suit has to fail.
6. What remained for consideration is whether the courts
below are legally correct in fastening liability on the property covered
by Ext.A5. DW2 is examined to show that after the death of Skaria
appellants discharged the liability created by Skaria in his favour by
paying Rs.40,000/-. He claimed that it is as per a demand promissory
note that Skaria had borrowed Rs.50000/- from him and that appellants
discharged that liability and the demand promissory note was returned
to them. But that document is not produced. What is available is only
his interested version on which the courts below did not place much
reliance on. It is seen that property belonging to deceased Skaria was
sold by the appellants on 28-06-2006 as per Ext.A4. The consideration
received as per Ext.A4 was Rs.70,000/- apart from the advance of
Rs.50,000/- already received by deceased Skaria. Even if it is accepted
Rs.40,000/- out of the sale consideration of the Rs.70,000/- was paid to
DW2 still there remained Rs.30,000/- with the appellants being part of
the sale consideration as per Ext.A4. But the version of appellants is
that Ext.A5, property was purchased making use of compensation
R.S.A.No.25 of 2010 9
awarded to and received by a relative of appellant No.1 from the Motor
Accidents Claims Tribunal. Appellant No.1 who is a said to have taken
that amount is not examined, not to say that the relative is also not
examined. Thus, there is no evidence to show that the source of
consideration for purchase of Ext.A5 property came from elsewhere as
claimed by the appellants. It is in the above circumstances that courts
below found that Ext.A5 property is purchased by the appellants
making use of the consideration obtained by sale of property they
inherited from Skaria and hence debt of Skaria is liable to be satisfied
from the said property. On going through the judgments under
challenge and hearing learned counsel for appellants I do not find any
substantial question of law involved in this appeal deserving its
admission. However, having regard to the facts and circumstances
appellants are granted three months time from today to discharge the
liability.
Resultantly the second appeal fails and it is accordingly
dismissed in limine.
THOMAS P JOSEPH,
JUDGE
Sbna/