JUDGMENT
AR. Lakshmanan, J.
1. The appellant/plaintiff bank has filed O.S. No. 713 of 1979 on the file of the Subordinate Judge, Tiruchirapalli, against the respondents/defendants for recovery of a sum of Rs. 88,005.24 together with interest at 15% per annum till date of payment and for costs.
2. The 1st defendant is a firm registered under the Indian Partnership Act and defendants 2 to 5 are its partners and thus they are jointly and severally responsible to repay the amount borrowed by the 1st defendant firm. On 26.4.1975, the defendants borrowed a sum of Rupees six lakhs from the plaintiff-bank. The advance was made as a clean loan subject to the rules of business of the plaintiff and supported by a promissory note for rupees six lakhs and carrying interest at the rate of 12.5% per annum. A sum of Rs. 88,005.24 was due and payable by the defendants at the end of March, 1979. The plaintiff issued a notice through its advocate on 20.9.1977. Defendant 2 and 3 have received the same. According to the plaintiff, it is entitled to recover interest subsequent to the plaint at the same rate as would be applicable under the loan rules.
3. The 2nd defendant alone filed a written statement. According to him, the suit is liable to be dismissed so far as himself and the 4th defendant are concerned. He would state that defendants 2 to 5 are not partners of the 1st defendant firm and they are not jointly and severally responsible to repay the amount borrowed by the 1st defendant. The alleged execution of the suit promissory note and the borrowing are specifically denied. The claim of interest at 21% is exorbitant and that it is against the Reserve Bank of India’s rate of interest. The fixed deposit receipts of Ramakrishna Kudil have been offered as security as seen from the copy of account and the loan advanced on the strength of the same. As such, the loan in question cannot be called a clean loan and hence the claim of interest and appropriation of amount calculating interest as if it was a clean loan is illegal and improper and is liable to be re-opened. Defendants 2, 4 and 5 have retired from partnership by a deed of release as early as 31.3.1975 and this fact of their retirement from the partnership is very well known to the plaintiff’s officers including the Chairman. It is only the said circumstance which prompted the bank not to issue notice to these defendants as partners and never any claim was made upon these defendants. The plaintiff is aware that defendants 2 and 4 ceased to be the partners of the 1st defendant firm. These defendants are, therefore, not liable to any extent. The claim of interest is usurious. The suit claim is barred by limitation. There was no acknowledgment of liability by these defendants as alleged.
4. On the above pleadings, the learned Principal Subordinate Judge framed the following issues:
1. Whether the suit promissory note is true, valid and supported by consideration?
2. Whether the defendants 2 to 5 are not liable jointly and severally with the 1st defendant?
3. Whether the interest charged is correct?
4. Whether the promissory note has been materially altered arid thus is vitiated?
5. Whether the suit claim is barred by limitation?
6. Whether defendants 2 and 4 are unnecessary parties?
7. What is the amount payable to the plaintiff bank?
8. To what relief, if any, is the plaintiff entitled?
5. The trial court tried issue Nos. l, 2 and 4 to 7 together and held that defendants 2 and 4 are not liable for the suit claim even though they have signed the Current Account opening form Ex. A-4 dated 15.4.1970, that the signing of Ex. A-4 will not prove that they are also liable for the suit claim and since defendants 2 and 4 have already retired from the partnership business of the 1st defendant firm by executing a release deed Ex. B-1 and as Ex. A-1 promissory note was executed subsequent to Ex. B-1, defendants 2 and 4 are not liable for the suit claim. However, the lower court decreed the suit against the other defendants who remained ex parte. As regard the claim of the plaintiff for interest, the trial court held that the plaintiff is entitled to charge the rate of interest as claimed in the plaint since the defendants have not protested as against the change of rate of interest. The trial court has also held that the charge of 21% interest as per the Reserve Bank of India Rules is not excessive since the security offered by the defendants was not accepted and was returned and as such, the plaintiff has treated the loan as a clean loan and not as a secured loan and claimed interest at 21% per annum. Aggrieved against the dismissal of the suit as against defendants 2 and 4, the plaintiff has filed the present appeal in this Court.
6. All the respondents are absent in spite of service of notice. Hence, we have heard the arguments of Mr. S.P. Subramaniam, learned Counsel for the appellant at length and have gone through the entire pleadings, suit documents and the oral evidence adduced by both sides.
7. According to Mr. S.P. Subramaniam, learned Counsel for the appellant/plaintiff, the learned Subordinate Judge has failed to take note that Ex. B-1 cannot be acted upon under the circumstances under which it has been disclosed and produced and that defendants 2 and 4, who are partners of the 1st defendant firm, need not be a signing party to the loan transaction as the borrowing has been made on behalf of the firm. It is also contended that all the partners have executed the Current Account opening form viz., Ex. A-4, in which the suit transaction was transacted. It is further argued that there was no intimation to the plaintiff in writing that defendants 2 and 4 have retired from the partnership. We shall now consider the case of both parties.
8. Admittedly, the 1st defendant firm opened a Current Account on 15.4.1970 under Ex. A-4 with the plaintiff bank. The same has been signed by all the defendants. Defendants 2 to 5 have opened the Current Account in the plaintiff bank in the name of their firm viz., the 1st defendant. It is stated that the 1st defendant firm is a partnership firm as per the partnership deed dated 15.2.1969 and that all the partners who have signed the form Ex. A-4, viz., defendants 2 to 5, will operate the Current Account jointly. Under Ex. A-4 they have specifically agreed to comply with the rules of the plaintiff-bank governing Current/Savings Bank Account. Two things are clear from Ex. A-4. The partnership firm Sun Einance/1st defendant was in existence on 15.4.1970 when the defendants have opened a Current Account with the plaintiff bank, and that all the partners, as per the partnership deed dated 15.2.1969, have signed the Current Account opening form.
9. Ex. A-5 dated 15.4.1970 is the partnership letter given by the 1st defendant enclosing a copy of the partnership deed dated 15.2.1969. Under Clause (a) they have agreed to intimate the plaintiff bank whenever any change occurs in the firm at once in writing. As per Clause (b) it is clear that until receipt of such notice by the plaintiff and the receipt of acknowledgment by the defendants from the bank for the same, and notwithstanding any provisions of the Indian Partnership Act, 1932, the plaintiff shall be entitled to regard each of them as partners of the firm and accordingly entitled to honour their respective signatures in the firm’s name as binding on the firm and each of the partners and their respective estates. They have also said under Clause (c) that notwithstanding any provision of the Indian Partnership Act or any change in the membership of the firm, all acts purporting to be done on behalf of the firm, before the bank had received notice in the manner aforesaid, shall be binding on the firm and each of the partners and their respective estates and the liability of the firm and of each of the partners and of their respective estates shall continue until all liabilities in respect of such acts shall have been discharged. Thus, a close reading of Clauses (a) to (c) of Ex. A-5 partnership letter clearly reveal that the undertaking has been given by the partners to the plaintiff bank with the intention of binding the 1st defendant firm. All the partners, viz., defendants 2 to 5 have signed in Ex. A-5.
10. It is seen from the partnership deed dated 15.2.1969 that the net profits or losses as disclosed by the annual account after defraying all charges including the remuneration, etc., shall be divided between the partners equally at 25% each. Clause VI of the deed provides that the management and general conduct of the business shall be carried on by the 3rd defendant with due diligence to the best advantage of the partnership. Clause IX of the partnership deed provides that on the dissolution or termination of the partnership for whatever reasons, the name and goodwill of the business shall be the exclusive property of the 3rd defendant and the other partners shall have no right, title or interest in the same. Clause XII also says that no partner shall under any circumstances transfer or encumber his share of interest in the firm without the consent of the other partners in writing.
11. The 3rd defendant as the Managing Partner and the 5th defendant as a partner of the 1st defendant firm have executed Ex. A-1 promissory note dated 26.4.1975 for Rupees Six Lakhs jointly and severally promissing to pay the plaintiff bank with interest at the rate of 12.5% per annum with monthly rests. The plaintiff issued a notice under Ex. A-20 calling upon the defendants to clear the loan. The same was received by defendants 2 and 3 as shown by the acknowledgments Exs. A-21 and A-22. The defendants, however, have defaulted to pay the balance amount due to the plaintiff bank.
12. The 1st defendant has not filed any written statement. The 2nd defendant has filed a written statement contending inter alia that himself and defendants 4 and 5 have retired from partnership and executed a release deed Ex. B-1 dated 31.3.1975 and that the fact of retirement was also well known the plaintiff’s officers including its Chairman. He also disputed that interest should not be claimed at 21% per annum. Defendants 1, 3 and 5 have remained ex parte. The trial court held that Ex. B-1 shows that defendants 2, 4 and 5 have retired from partnership and hence they could not be made liable for the suit claim. The trial court has further held that the plaintiff is entitled to claim interest at 21% per annum since the loan was an unsecured one and that the defendants were intimated that interest could be charged at 21% per annum. The plaintiff-bank has filed the appeal against the dismissal of the suit as against defendants 2 and 4. The defendants have not preferred any appeal or memorandum of cross objections challenging the finding of the trial court that the plaintiff is entitled for interest at 21% per annum.
13. The only question which arises for determination in this appeal is:
Whether Ex. B-1 is true and genuine and whether defendants 2 and 4 are not liable for the suit claim?
14. Point: It is interesting to notice as to how the trial court has decided the genuineness of Ex. B-1. The relevant portion reads as follows:
The 2nd defendant who has been examined as D.W. I has spoken in his evidence that on 31.3.1975 himself, 4th defendant and 5th defendant retired from the partnership under Ex. B-1 and so they are not liable for the suit amount. On a perusal of Ex. B-1, I find that the defendants 2 and 4 have retired from the partnership business on 31.3.1975 itself. The suit transaction is dated 26.4.1975. Hence, on the date of suit transaction the defendants 2 and 4 were no longer the partners of the 1st defendant firm. Hence, I find that the defendants 2 and 4 are not liable for the suit claim. The counsel for the plaintiff pointed out that the fact of retirement of the persons from the partnership were not known to the plaintiff bank. D.W. 1’s evidence is that this fact is known to their Chairman. It is significant to note that at the time of Ex. A-1 the defendants 2 and 4 are not the partners. The defendants 2 and 4 have not joined in the execution of the deed Ex. A-1. For the suit transaction the defendants 2 and 4 are not at all the parties. Since the defendants have not joined in the execution of the document Ex. A-1, at no stretch of imagination it can be stated that the defendants 2 and 4 are also liable for the suit claim. Even though the defendants 2 and 4 have signed in Ex. A-4 which relates to the year 1970, the signing in the document Ex. A-4 will not prove that the defendants 2 and 4 are also liable for the suit claim. As the defendants 2 and 4 have already retired from the partnership business of the 1st defendant firm by executing the release deed Ex. B-1 and as Ex. A-1 was executed subsequent to Ex. B-1 and as the defendants 2 and 4 are not parties to the document Ex. A-1, I find that the defendants 2 and 4 are not liable for the suit claim. But the plaintiff is entitled to the suit claim as against the other defendants, I answer these issues accordingly.
15. The conclusion arrived at by the learned Subordinate Judge holding that Ex. B-1 is true and genuine and hence no decree can be passed against defendants 2 and 4, is far from satisfactory. It appears to our mind that though the learned Subordinate Judge says that a perusal of Ex. B-1 would go to show that defendants 2 and 4 have retired from the partnership business on 31.3.1995, she has not even cared to look into the averments made therein in its proper perspective. We ourselves have carefully looked into the only document filed on the side of defendants 2 and 4. Ex. B-1 is engrossed on two non-judicial stamp papers of the value of Rs. 2.50 purchased on 24.3.1971 in the names of defendants 4 and 2 respectively from the stamp vendor G. Dasaratharaman, B.S.V., Nagapattinam. Only the 2nd defendant as D.W. 1 has spoken about Ex. B-1. Defendants 2 and 4 have signed as retiring partners and the 3rd defendant as continuing partner. Ex. B-1 is dated 31.3.1975. Three witnesses have attested Ex. B-1. They are, Y.S. Newton, son of T.G. Yesudian, 55, T.B. Road, Madurai-10; A.K. Subramania Pillai, son of S. Kasi Viswanathan Pillai, 493, Karunanidhi Nagar, Madurai-20; and N. Balasubramanyan, son of S. Nataraja Mudaliar, 84, L.C.H. Colony, Anna Nagar, Madurai-20. None of the attesting witnesses has been examined. Likewise, defendants 3, 4 and 5 also have not been examined. Though the 5th defendant is said to have retired from the partnership as per Ex. B-1, she has joined in the execution of the promissory note Ex. A-1 dated 26.4.1975.
16. Ex. A-2 dated 23.9.1975 is a letter written to the plaintiff on behalf of the 1st defendant. It is recited therein that the balance sheet that had been asked for by the plaintiff had been sent to the Managing Partner at Madras and that he would deliver it at the head office of the plaintiff. The 3rd defendant is described in Ex. A-2 as the Managing Partner of the 1st defendant firm. He was informed that interest at 21% will be charged on their Fixed Deposit loan upto 9.9.1975 and at 24% per annum from 10.9.1975 treating the advance as an irregular one. The Managing Partner of the 1st defendant firm viz., 3rd defendant is directed to clear the loan by 10.10.1975. Ex. A-14 dated 11.10.1975 is the reply sent by the 1st defendant to the plaintiff. There is no demur or whisper or protest in this regarding the charging of interest at 21% by the plaintiff treating the loan as unsecured one. Ex. A-3 dated 13.11.1975 is a letter written by the 3rd defendant as Managing Partner of the 1st defendant firm to the Chairman of the plaintiff bank, in which the 3rd defendant has signed in his capacity as the Managing Partner of the 1st defendant firm, agreeing to clear the loan by paying at least Rs. 25,000 per week. Ex. A-16 dated 1.6.1976 is another letter by the 1st defendant firm to the plaintiff in which the 3rd defendant has signed as the Managing Partner requesting further time to settle the amounts outstanding on their account.
17. Ex. A-11 dated 1.10.1975 is a letter sent by the Administrative Office of the plaintiff bank with reference to the 1st defendant’s account. It is seen from the said letter that the documents deposited by the 3rd defendant by way of security on behalf of the defendants cannot be accepted as security since the trustees of Sri Ramakrishna Kudil have no authority or power to pledge or mortgage the properties belonging to the trust as security for advance to third parties and therefore, the loan advanced to the 1st defendant firm is to be treated as clean advance and interest is to be charged at the rate of 21% per annum. Ex. A-15 is yet another letter sent on behalf of the 1st defendant undertaking to discharge the entire amounts due by the end of April, 1976.
18. The 2nd defendant has examined himself as D.W. 1. He was cross-examined with reference to Ex. B-1 retirement deed. He has deposed that he does not remember when and where he purchased the stamp papers for Ex. B-1. He does not know what stamp duty has to be paid for partnership release deed. It is to be noticed that as per Article 46(b) of the Stamp Act, the stamp duty payable at that time was Rs. 35 whereas the defendants have utilised two stamp papers of the year 1971 for Rs. 2 and Rs. 0.50, for writing the retirement deed dated 31.3.1975. It was suggested to D.W. 1 that Ex. B-1 has been fabricated for the purpose of this case. Of course, he has denied this suggestion. The fact that the 5th defendant has also signed in Ex. A-1 and that the 3rd defendant has been described as the Managing Partner of the 1st defendant firm in Exs. A-2, A-3, A-14 and A-16 would, in our view, clearly show that Ex. B-1 has been got up much later only in order to defeat the claim of the plaintiff. Therefore, we have no hesitation to hold that Ex. B-1 is a fabricated document and has been invented only for the purpose of deceiving the bank’s claim with an ulterior motive and with mala fide intention.
19. Further, while P.W. 2 deposed that Ex. A-20 suit notice was given to all the defendants, there is no cross-examination on that aspect. Nor D.W. I, the 2nd defendant, who alone gave evidence for the defendants, repudiated the same. On the other hand, he admits receipt of the notice but only says that no reply was sent since Ex. A-20 did not describe the defendants as partners. This contention has no merit. When the suit claim is made by Ex. A-20, which is addressed to all the defendants, if really some defendants (defendants 2 and 4) are not liable because they were not partners at the time of Ex. A-1 promissory note, they could have replied so.
20. Assuming that Ex. B-1 is true, it is contended, in law, the partners are liable to pay the suit claim since, according to Mr. S.P. Subramaniam, certain provisions of the Indian Partnership Act have not been complied with. Section 45 of the Indian Partnership Act reads as follows:
45. Liability for acts of partners done after dissolution: (1) Notwithstanding the resolution of a 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:
Provided that the estate of a partner who dies, or who is adjudicated as insolvent, or of a partner who not having been known to the person dealing with the firm to be a partner, retires from the firm, is not liable under this section for acts done after the date on which he ceases to be a partner.
(2) Notices under Sub-section (l) may be given by any partner.
It provides that until public notice of the dissolution of a partnership firm is given, the partners, who had retired, will also be liable for their transactions with respect to third parties with whom they had dealt with during the subsistence of the partnership. In the written statement of the 2nd defendant, there is no plea that the alleged retirement of defendants 2, 4 and 5 from the 1st defendant firm was communicated to the plaintiff. The vague averment in paragraph 8 of the written statement is, that the fact of retirement was well known to the plaintiff’s officers including its Chairman. In our opinion, such an explanation is far from satisfactory. P.W. 1 has also deposed that he was not informed about the alleged retirement as could be seen from his evidence.
21. The 2nd defendant has examined himself as D.W. 1. He has stated in chief-examination that the Chairman of the plaintiff bank knew that defendants 2, 4 and 5 have retired from the 1st defendant firm recently. He does not say or explained to the court as to how the Chairman of the plaintiff bank knew about their retirement. He has admitted in cross-examination that no notice was given in writing to the plaintiff about the alleged retirement. In the letter of undertaking, Ex. A-5 dated 15.4.1970, the partners of the 1st defendant have undertaken to give notice to the plaintiff of any change occurring in the firm in writing and that until receipt of such notice by the bank and the receipt of acknowledgement by them from the bank for the same, the plaintiff shall be entitled to regard all of them as partners of the 1st defendant firm. Since admittedly no notice was given in writing about the alleged retirement of defendants 2, 4 and 5 from the 1st defendant firm to the plaintiff, they are, in our view, also liable for the suit claim. Section 45 of the Indian Partnership Act says that a partnership continues as to third persons who deal with the members thereof as partners until public notice of dissolution is given, even though, as between the partners, the firm has been dissolved prior to such notice. In other words, a partnership is presumed to continue as to third persons until public notice of dissolution has been given, unless the person dealing with the firm, after its dissolution, had actual knowledge of such dissolution. Accordingly, each partner of a former firm is bound by, and continues liable for, the acts of any former partner, if they would have been acts of the firm if dissolution had not taken place. The dissolution of a firm completely breaks the partnership relation between its members and consequently the agency constituted by that relation in regard to dealings with third persons. Thereafter, a partner ceases to have any authority to bind his previous co-partners by any act. The words “any act done by any of them which would have been an act of the firm if done before dissolution” indicate that not with standing the dissolution of the 1st defendant firm, the old partners of the firm continue to be liable as partners although by virtue of the dissolution they have ceased to be partners and are no longer partners for any act done by any of the old partners, provided that act is of a character that would have been an act of the firm.
22. Sections 61, 62 and 63 of the Indian Partnership Act also require to be noticed in this connection. Section 61 relates to noting of closing and opening of branches. It is not necessary that such intimation be signed and verified by all the partners. It is enough if a mere intimation is sent, and sent by any partner, or an agent of the firm. Section 62 relates to noting of changes in names and addresses of partners. According to this section, when any partner in a registered firm alters his name or permanent address, an intimation of the alteration may be sent by any partner or agent of the firm to the Registrar, who shall deal with it in the manner provided in Section 61. Section 63 deals with recording of changes in and dissolution of a firm. This section contemplates giving of notice to the Registrar of any change or dissolution in the constitution of a registered firm and on receipt of such intimation, the Registrar shall make a record of the notice in the entry relating to the firm in the Register of firms. The registration is indubitably in the interest of the trading public as well as the partners. It would render easy to prove the existence of the partnership in case of disputes between the partners themselves or the trading public and the firm. However, in the case of a retired partner, it is necessary to have the changes noticed in the Register since he continues to be liable for the acts of the firm until notices are given of the retirement. Therefore, it will be in his own interest to give immediate notice to the Registrar. As such, Section 63(l) does not make it imperative but merely permissive to the partner incoming, continuing or out-going, when a change occurs in the constitution of a registered firm, to give notice to the Registrar of such change specifying the date thereof. Further, Section 63(1) does not prescribe any limitation as to the period within which notice should be filed. Notice should, however, be given within a reasonable time.
23. Section 72 of the Indian Partnership Act deals with the mode of giving public notice. It is useful to extract the following passage in J.P. Singhal’s Indian Partnership Act, Fifth Edition, appearing at page 1215:
A partnership continues, as to third persons who deal with the members thereof as partners, until due notice of dissolution is given even though as between the partners, the firm has been dissolved prior to such notice, especially as to persons who dealt with the firm or extended credit prior to the dissolution as between partners. Accordingly, each member of a former firm is bound, and continues liable for the acts of any partner within the ordinary scope of the business of the firm, until due notice of such dissolution has been given. But, in case of dissolution by operation of law, notice thereof need not be given, nor is notice necessary where a valid partnership has never existed. Wherever a notice is required by law to be given, it ought to be given in such a manner as the law deems sufficient. In India, notice is regulated by this Act.
24. Under Section 32(3) of the Indian Partnership Act, a retired partner continues to be liable until public notice is given of his retirement and what the public notice under the Act is specified by Section 72. Therefore, on a reading of both the sections, it is clear that a retiring partner will be liable for any subsequent act on behalf of the firm which would bind the firm until the public notice as prescribed by Section 72 is given.
25. Rule 4 of the Tamil Nadu Partnership (Registration of Firms) Rules, 1951 deals with the form of intimation and notices under Sections 61, 62 and 63 of i he Indian Partnership Act, which shall respectively be in Forms III, IV, V and VI annexed to these rules with such variations as circumstances may require. Form No. V is the form prescribed for giving of notice of change in the constitution or dissolution of the firm to be presented or forwarded to the Registrar of Firms for filing under Section 63(1) of the Indian Partnership Act. Three decisions cited by Mr. S.P. Subramaniam, learned Counsel for the appellant, may be usefully looked into in this regard. The first is reported in Jwaladutt R. Pillani v. Bansilal Motilal 56 M.L.J. 739 : 56 I.A. 174 : L.R. 115 I.C. 707 : 29 M.L.W. 884 : 1929 M.W.N. 440 : I.L.R. 53 Bom. 414 : A.I.R. 1929 P.C. 132. This decision deals with the corresponding section under the Indian Contract Act, which was in force before the enactment of the Indian Partnership Act. The Full Bench observed as follows:
Where on the dissolution of partnership, public notice of dissolution is given, but no notice is given to the old customers, the retiring partner is still liable to the old customer if he continues to give credit to the partnership.
26. The second decision is reported in Central United Bank Limited v. B.A. Venkatarama Naidu . In that case, public notice of dissolution had not been given but one of the partners was the Chairman of the very bank. It was held that there was personal notice and hence the partners who had retired cannot be held liable. The law as obtaining prior to the Indian Partnership Act, the scope of Section 45 of the Indian Partnership Act and the English Law on the subject have been discussed. The Division Bench has observed as follows:
Section 32(3) of the Partnership Act specifies the mode by which the retiring partner may be relieved of the responsibility of issuing notice to the various classes of persons who might enter into transactions with surviving partners. Public notice is intended only to serve a purpose, namely, to bring home to the persons concerned the fact of retirement. That purpose will undoubtedly be served in a better way by personal or actual notice…. Section 32(3) of the Partnership Act puts an end to the partnership between partners qua the retiring partner with the consequence that the rule as to the agency of each partner to the rest of the partners would cease to apply in the case of the retiring partner. A strict application of this rule would cause a hardship to third parties who were having and continue to have dealings with the firm without knowing that a particular partner had retired. Its object therefore is not to impose a statutory liability on the retiring partner but to protect third parties by embodying a rule of estoppel so far as the retiring partner is concerned for repudiating the agency of others.
27. The last decision cited by Mr. S.P. Subramaniam is reported in State of Kerala v. Saroja . In that case, there was neither public notice nor private notice. A learned Single Judge of Kerala High Court held that all the partners are liable for the sales tax liability.
28. Next we come to the question of rate of interest awarded by the court below. The promissory note mentions interest at 12.5% per annum. The interest has been calculated at 21% per annum. P.W. 1, the then Manager of the plaintiff bank at Tiruchirapalli, has deposed in chief-examination that the partnership has not given any security for the loan and that they had given fixed deposit of Ramakrishna Kudil but the bank returned them. P.W. 2 has deposed that the plaintiff has received instructions under Ex. A-11 asking the bank to change the interest rate at 21 % and accordingly, they sent Ex. A-12 to the 1st defendant claiming interest at 21% per annum and Ex. A-13 is the acknowledgement thereof. Ex. A-14 is the reply sent by the 1st defendant. The 1st defendant has not protested against the claim of interest at 21% and it has only prayed for further time for return of the loan. The learned Subordinate Judge has referred to this aspect in paragraph 5 of the judgment. Hence, we are of the view, that the claim of interest at 21% is justified and correct and that the plaintiff is entitled to collect interest as claimed in the plaint.
29. In this appeal, the plaintiff has paid a court-fee of Rs. 9,323.75 in the memorandum of appeal whereas the court-fee payable is Rs. 8,475.50. It is stated by the learned Counsel for the appellant that the mistake has occurred because of wrong calculation of the amount due as originally made. Therefore, we are of the view, that the appellant will be entitled for the refund of the excess court-fee of Rs. 848.25 to the appellant.
30. We have already held that Ex. B-1 is a fabricated document and that defendants 2 and 4 have utilised the same in order to wriggle out of their liability to the plaintiff. The 2nd defendant has not only filed Ex. B-1 but also gave false evidence as D.W. 1 in order to cheat the plaintiff. We are of the firm view that a person who gives false evidence in a Court of Law should be dealt with severely. The arms of this Court are long and strong enough to reach any one if they attempt or try to give false evidence and file a fabricated document as a true document and use such evidence known to be false as of its. Chapter XI of the Indian Penal Code deals with giving false evidence. As already stated, the 2nd defendant has given false evidence when he deposed that himself and defendants 4 and 5 have retired from the 1st defendant firm on 31.3.1975. Section 192 of the Indian Penal Code defines ‘fabrication of false evidence’ as including, inter alia, making a document containing a false statement intending that such statement may appear in evidence in a judicial proceeding. Section 193 of the Indian Penal Code deals with the punishment for false evidence.
31. Section 195(1)(b)of the Code of Criminal Procedure deals with any offence punishable under Sections 193 to 196 of the Indian Penal Code when such offence is alleged to have been committed in, or in relation to, any proceedings in any court or of any offence described in Section 463 (forgery) and 468 and also punishable under Sections 471, 475 and 476 of the Indian Penal Code when such offence is alleged to have been committed in respect of a document produced or given in evidence in a proceeding in any court. As per Section 471 of the Indian Penal Code, whoever dishonestly uses as genuine a forged document, which the party knows or has reason to believe to be a forged document, shall be punished in the same manner as if he had forged a document. Section 340 of the Code of Criminal Procedure (Chapter XXVI) deals with the procedure in cases mentioned in Section 195 of the Code of Criminal Procedure.
32. We are of the view that defendants 2 and 4 have made use of Ex. B-1 knowing it to be a fabricated document. The 2nd defendant has also given false evidence when he deposed that himself and defendants 4 and 5 have retired from partnership on 31.3.1975, in order to cheat a scheduled bank viz., the plaintiff. Such persons should not be allowed to go scot free. It is expedient in our opinion, and in the interest of justice, that an enquiry should be made into the offences referred to above, which appears to have been committed by defendants 2 and 4 in relation to the proceedings in this Court in respect of a document marked as Ex. B-1. We, therefore, direct the Registrar of this Court to make a complaint thereof in writing before the Judicial Magistrate concerned against defendants 2 and 4 for the offences of fabricating and producing a false document and also for giving false evidence against the 2nd defendant. We are constrained to take this legitimate step of initiating criminal prosecution against defendants 2 and 4 since, in our opinion, parties/litigants of any position or status should not be allowed to use the Temple of Justice to achieve their illegal object or for illegal gain.
33. For the foregoing reasons, the appeal is allowed, the decree of the court below is modified and the suit is decreed against all the defendants as prayed for with costs. As directed earlier, the Registrar of this Court to file a criminal complaint against defendants 2 and 4 before the concerned Judicial Magistrate Court for the offences indicated above within a period of one month.