IN THE HIGH COURT OF KERALA AT ERNAKULAM
SA No. 39 of 1995()
1. K.NARAYANAN NAIR
... Petitioner
Vs
1. SREEKRISHNA TYRES
... Respondent
For Petitioner :SRI.KODOTH SREEDHARAN
For Respondent :SRI.SREEPRAKASH K.NAIR
The Hon'ble MR. Justice M.SASIDHARAN NAMBIAR
Dated :22/02/2008
O R D E R
M.SASIDHARAN NAMBIAR,J.
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S.A .NO.39 OF 1995
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Dated 22nd February 2008
J U D G M E N T
Defendant in O.S.126/1989 on the file of
Munsiff court, Payyannur is the appellant. Respondent
is the plaintiff. Respondent instituted the suit for
realisation of Rs.6,000/- due from the appellant. It
was contended that the brother of the appellant was
owning bus KLS-1188 and when he left for employment
to Gulf countries, it was being managed by the
appellant and resoling work was carried out by the
respondent and in that account Rs.6,000/- was due. It
was contended that towards security of that amount,
appellant executed Ext.A1 agreement dated 12/1/1988
fixing a period of three months for payment and even
though the agreed period expired, appellant did not
pay the amount and finally Ext.A2 lawyer notice was
sent, which was returned back to the respondent
under Ext.A4. It was claimed that respondent is
entitled to realise the amount. Appellant resisted
the suit contending that his description in the
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plaint is not correct and as per the description he is not
the defendant and he has no acquaintance with the
respondent and he did not entrust any resoling work to
respondent and is not liable to pay any amount and he
did not execute Ext.A1 and is not liable and suit is to
be dismissed.
2. Learned Munsiff on the evidence of Pws.1 to 4,
DW1, Exts.A1 to A4 and X1 found that Ext.A1 agreement was
executed by the appellant and Ext.A1 is not a bond but
an agreement and execution of Ext.A1 is proved by the
evidence of PW1 the respondent and Pws.2 and 3 and granted
a decree directing appellant to pay the amount claimed
in the plaint with interest at 12% from the date of the
suit. Appellant challenged the judgment before Sub court,
Payyannur in A.S.150/1990. Learned Sub Judge on re-
appreciation of evidence confirmed the findings of learned
Munsiff and dismissed the appeal. It is challenged in the
second appeal.
3. Appeal was admitted formulating the following
substantial questions of law.
1) Whether courts below were correct in
construing Ext.A1 as an agreement and not a
bond.
2) Whether the courts below were
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justified in holding that the appellant
executed Ext.A1 and that too by comparing the
signature of the appellant with the disputed
signature in Ext.A1 with the signature in the
written statement especially when the courts
did not have the advantage of the report of an
expert after comparing the signature.
4. Learned counsel appearing for appellant was
heard. There was no representation for respondent.
5. Learned counsel appearing for appellant
vehemently argued that courts below should not have
upheld Ext.A1, when Ext.A1 was disputed and its
execution was not proved. True, appellant had in his
written statement disputed the execution of Ext.A1 and
when examined as DW1, he also denied the execution. But
apart from the respondent who was examined the two
attesting witnesses to Ext.A1 agreement were examined as
Pws.2 and 3. Learned Munsiff had the advantage to see and
appreciate the demeanour of the witnesses and
appreciated the evidence and found that evidence of Pws.2
and 3 are credible and reliable. First appellate court
re-appreciated the evidence and found that their evidence
are reliable and their evidence establish execution of
Ext.A1. There is nothing to show that appreciation of
evidence by the courts below was perverse. The factual
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findings of the courts below that Ext.A1 was executed by
the appellant cannot be interfered in exercise of the
powers of this court under Section 100 of Code of Civil
Procedure.
6. Arguments of learned counsel is that though
Ext.A1 was found to be an agreement and not a bond by the
courts below, it is in fact a bond and courts below
should not have relied on Ext.A1 which was not properly
stamped. Sub Section (a) of Section 2 defines the bond as
includes any instrument whereby a person obliges himself
to pay money to another, on condition that the obligation
shall be void if a specified act is performed, or is not
performed, as the case may be and the instrument is
attested by a witness and is not payable to order or
bearer, whereby a person obliges himself to pay money to
another. Learned Single Judge of this court had occasion
to consider the difference between a bond and an agreement
in West Coast Electroplating Co. Ltd. v. Sreedharan
(1971 KLT 383). It was held that no document can be a
bond within the relevant section unless by itself it
creates an obligation to pay money. Learned Single Judge
relied on the decision of a Division Bench of High Court
of Lahore in Dawan Chand v. Punjab and Kashmir Bank (AIR
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1937 Lahore 220) where it was held that essential
feature for construing a document as a bond is that it
must create an obligation to pay and no such obligation
can be inferred from a mere acknowledgment of a previous
balance and implied obligation cannot therefore convert
an acknowledgment into a bond. An agreement is not
defined under the Stamp Act. It is defined under the
Contract Act as every promise and every set of promises
forming the consideration for each other. A Full Bench of
the High Court of Delhi in Hamdard Dawakhana (Wakf)
Delhi’s case (AIR 1968 Delhi page No.1) elaborately
considered this question. The principles laid down by
the High Court of Calcutta in Gisborne and Co. v. Subal
Bowri (1882 ILR 8 Calcutta 284) was reiterated as
follows. Distinction of a bond and agreement is under
the event of breach of party to the instrument who had
obliged to pay money and is liable to pay the same
stipulated under the agreement. In the case of agreement
quantum of damages is to be fixed by the court. Another
Single Judge of this court as his Lordship then was in
Mathai Mathew v. Thampi (1989 (1) KLT 138) after
analysing the settled legal position held that the
document obliges to pay money and it shows that
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obligation in so far as the debtor and the creditor are
concerned is not a pre-existing one and so it is the
agreement.
7. Ext.A1 shows that before the date of execution
of Ext.A1 on 12/1/1988, appellant had the resoling work
carried out by respondent. He was thus liable to pay
Rs.6,000/-. Under Ext.A1 appellant had undertaken to pay
that amount within three months. The agreement provides
that if appellant fails to pay, respondent is entitled to
take possession of the vehicle and the appellant is liable
to pay damages. Therefore as distinguishable from a bond,
Ext.A1 provides for payment of damages quantum of which
is to be worked out separately, in the event of breach of
condition provided therein. As rightly found by the
courts below in such circumstances, Ext.A1 cannot be
construed a bond. It is an agreement. Courts below rightly
found that appellant is liable to pay Rs.6,000/- with
interest.
8. Learned counsel appearing for appellant argued
that rate of interest awarded by the courts below was
excessive. Ext.A1 shows that there was no agreement to
pay interest. It only provides for payment of Rs.6,000/-
which was the pre-existing liability, within three months
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from the date of execution of the agreement. It also
provides that on failure to pay the amount, respondent is
entitled to take possession of the vehicle and also
entitled to damages. In the suit respondent has claimed
interest at 12% per annum from the date of the agreement.
Courts below granted said interest not only till the
date of the decree but till realisation. It is seen from
the plaint that there is no allegation in the plaint that
it is a commercial transaction and so respondent is
entitled to interest at 12%. More over, when the agreement
does not provide for interest at 12% courts below were not
justified in granting interest at 12%. The decree granted
by the courts below, is to be modified with regard to the
future interest from the date of the decree till
realisation at 6% per annum.
9. Appeal is partly allowed. Decree granted by the
courts below are modified on the future interest awarded.
Appellant is liable to pay interest from the date of
institution of the suit till the date of decree and
thereafter at 6% per annum till realisation. No costs.
M.SASIDHARAN NAMBIAR,
JUDGE.
uj.
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M.SASIDHARAN NAMBIAR,J.
JUDGMENT
S.A.NO.39 OF 1995
22nd February 2008
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