The High Court · 2025

Judgment

I iJ THE HON'BLE SRI JUSTICE NARSING RAO NANDIKONDA 1 NNR,J CCCA No.35 of 2020 JUDGMENT: C.C.C.A.No.35 of 2o2o

This A1:peal is filed by the appellant/defendant under Section 96 order 4L ol' C.P.c as against the Judgemerit and Decree, dated

04.07.2019 passed in OS No. 1O77 of 2015 on the file of the II Senior Civil Judge, City Civil Court at Hyderabad. The plaintiff/respondent herein, earljer filed a suit for recovery of a sum of Rs.g,g0,0oo/- together with future interest and costs against the defendant i.e., petitioner he rein basing on the promissory note, dated ol.oB.2or2.

2. For the sake of convenience, the parties wilt be hereinafter referred to as they are arrayed before the learned trial court.

3. Brief fzrcts of the case are that the ptaintiff and the defendant are well acquairLted with each other and on the request of the defend.ant, the plaintiff has lent an amount of Rs. 5,00,000 /- for the purpose of financial ne,:essities to the defendant. on o1.09.20 12, the d.efend.ant borrowed an amount of Rs.5,o0,0oo/- from the plaintiff, agreeing to pay the interest at the rate of 24%o per annum and executed a promissory note to repay the same as and when demanded by the plaintiff. Th': defendant has also handed over the photocopies of the property wtrich was standing in the name of the husband. of the defendant as a surety. 2 NNR,J CCCA No.35 of 2020

4. Further, on the demand of return of amount, the defendant issued. a cheque of Rs.5,00,OOO/- vid.e Cheque bearing No.O30496, dated 06.05.2014, however, when the said cheque was presented, the same was d.ishonoured for the reasons of insufficient funds.'Inspite of the repeated requests and demands, the defendant failed to pay the said amount. As such, the plaintiff filed the suit and thereafter, the plaintiff has also filed a criminal case vide CC No.59/2OL8 on the file of XXIV Spl.M.M Court, E,rramanzll, Hyderabad against the defendant.

5. Before the trial Court, the defendant has denied the entire pleadings and written statement and contended that the defendant along with plaintiff entered into a 'Memorandum of'Understanding' for rrrnning a business in the name and style of Mrs. SVS Eye Needs and both the plaintiff and defendant husband's used to take care of the business as such, the defendant's husband gave a blank signed promissory note and cheques to the husband of the plaintiff for day to day business transaction and for the security purpose but the promissory note was materially altered, as such the dqfendant pleaded that the promissory note is not binding on the defendant and prayed the trial Court to dismiss the suit.

6. Learned counsel for the plaintiff submits that defendant and defend.ant's husband are family friends and out of such acquaintance, 3 NNR,J CCCA No.35 of 2020 the defendant and her husband approached plaintiff and requested for loan amour.t of Rs.5,00,0OO/-. Further the defendant agreed for execution of promissory note in favour of plaintiff for the said amount and also agreed to repay the same r,vith interest at the rate of 24o/o p.a. payable on ,lemand to plaintiff. ihereafter, after several requests the defendant agreed to repay the said amount and on 06.05.2014, the defendant husband issued cheque bearing No.030496, dated

06.05.2014 for a sum of Rs.5,00,OOO/-, and the said cheque was presented, but the cheque get dishonoured with endorsement "insufficient funds". Aggrieved the same, plaintiff prefer suit.

7. Basin5S on the pleadings of both the parties, the trial Court has framed the lbllowing issues for consideration: * 1. Whethei the promissorg note is materially altered?

2. Whe:ther the suit promissory note is tnte, legal, ualidly supported by consideration and executed by the defendant in fauour of the plaintirf as praged?

3. Wh<:ther there is any nexus between tLte suit of the plaintiff and the business partnership if any entered into bg the plaintiffs husba,zd and run bg the defendant in the name and stgle of M/s. SVS E,4e Needs, under a MOU dt 14.10.2O'Og? 4. whether the plainttlf is entitled for the suit claimed amount ag ains,t the defendant?

5. To tuhat ertent?"

8. During the course of the enquiry, to prove the case of the plaintiff, th,: plaintiff has got examined pw Nos.1 to 3, i.e., pw 1, who 1l 4 NNR,J CCCA No.35 of 2020 is the plaintiff and PW.2- K.Srinivasa and PW.3- P Srinivasa Reddy, and marked Ex.A1 to A7. On behalf of defendant Ex.Bl and 82 were marked.

9. After considering the entire evidence placed and after going into the merits of the case, the learned trial Court disbelieved the version of the defendant and helcl that there is no material alteration and came to conclusion that as the defendant did not produce any cogent evidence to disprove the contents of the plaintiff, as such, it held that the suit promissory note is valid and binding on the defendant and decreed. the suit in favour of plaintiff. Aggrieved by the same, the present appeal is filed by the defendant.

10. The lresent suit is preferred by the appellant/defendant on the following among the other grounds that the trial Court erred in decreeing the suit basing on assumptions and presumption and the trial Court failed to appreciate the fact that the suit debt is not proved by the plaintiff by filing the documents evidencing the loan transaction. The trial Court ought to have seen that the defendant had categorically explained the circumstances under which the promissory note, cheques were obtained by the husband of the ptaintiff from the defendant for the purpose of security and that no consideration of any nature was parted between the parties nor there was any intention to pay the money thereof either in discharge of any debt. 5 cccA Nils Jyfild

11. Learne,l counsel for the defendant further submitted that the plaintiff had specially averted in the plaint that she had arranged loan amount by pledging the gold ornaments in a private bank, however, no such documents are filed in the suit and the plaintiff had specifically averred that the imount was lent to the defendant in the presence of witnesses arrd the defendant had executed the promissory note in the presence of witness, but no such witness who are signatory to the alleged prorrrissory note were examined.

12. Learned counsel for the defendant further submits that the trial Court ought to have seen that the Cheque was issued on behalf of SVS Eye needs, however, svs Eye needs was not made a party to the suit, therefore ttLe suit itself was not maintainable for non-joinder of necessary parties and further contended that the alleged promissory note was m:r.terially altered and no reliance could have been placed on the altered promissory note, more particularly in view of the categorical rstand of the defendant, that no consideration was parted between the parties and further submitted that the criminal case filed by the plairLtiff against the defend.ant ended. in acquittal as there was no enforceable debt proved by the plaintiff.

13. counsel for the t further submits that there is a categoric:rl admission of the plaintiff in respect of Exs.Bl and 82 and that ,:he trial Court did not consider the entire oral and 6 NNR,J CCCA No.35 of 2020 documentary evidence placed by the defendants and decreed the suit without any basis and prayed this Court to set aside the judgment and decree passed by the trial Court and allow the present appeal.

14. Learned counsel for the plaintiff/respondent herein submits that after considering the entire evidence available on record, the trial Court Tribunal has rightly aliowed the suit and came to a conclusion that the said promissory note is tnre, valid and binding on the defendant and obligate the defendant to repay the amount of Rs.5,0O,OOOl-, which needs no interference.

15. Heard, Sri P.Pandu Ranga Reddg, learned counsel for the appellant/defendant and Srt Mudumbi Rango.sutamg, learned counsel for the respondent/plaintiff. Perused the material on record. L6. The points which arose for consideration before this Court in this appeal are that: "1) whether the suif is liable to be dismissed as praged bg the defendant? 2)Wheth.er the trial Court erred- in d"ecreed. the suit? 3) If so to what extent?"

17. Admittedly, the suit is filed by the seeking the recovery of amount of Rs.8,80,000/- from the defendant against the promissory note which said set to have executed by the defendant 7 "r CCCA No.35 of 2020 A,,VR

18. On perrrsal of the entire case, the case of the defendant is that, the defendant though admitting the execution of the promissory note and also issuance of the cheque in favour of the plaintiff, but there was 'Memorandum of Understanding' between the parties, that the husband of the defendant who:was looking day to day transaction of 'M/s. SVS Eye Need' and in the course of the business, the plaintiff said to have obtained blank signed promissory note and cheques from the defendant for the purpose of using them to offer security to the person who are interested to invest in their firm and in view of the cordial relationship between the plaintiff husband and the defendant as there we s no occasion for the defendant to suspect the conduct behaviour o: the plaintiff husband. L9. on perusal on the Ex.Al i.e., copy of cheque No.030496, dated

06.05.2014, no doubt when the said cheque was presented before the bank, the said cheque was dishonoured, thereafter legal notice was issued under Ex.B3 and the same was served under Ex.AS. The plaintiff besides the oral contentions has also placed the certified copy of the prornissory note, dated OL.O8.2OL2 which was executed by defendant and the plaihtiff clalmed thdt-the Said promiSsory note was -executed af[er plaintiff have-given cash-of Rs.S,OO,OOO/- toward.s loan to the defendant on 01.O8.2OL2. : B NNR,J CCCA No.35 of 2020

20. Further in support of the plaintiff, plaintiff examined herself as PW.1 and PW.2 - who is the husband of plaintiff has categorally stated that the promissory note was executed in favour of plaintiff for the loan taken by the defendant for an amount of Rs.5,00,OOO/-. PW3 has also categorically stated that the M/s.SVS Eye Needs was registered in the year 2014, as such entering into Memorandum of Understanding with the 'M/s.SVS Eye Need'in the 2OO9 does not arise-

21. Further, the case of the defendant that the defendant issued the blank promissory note duly signed but it 'uvas later filled at a later point of time, the law being settled in this aspect is that, once any blank promissory note issued duly signing the same, it automatically extends the power to the holder of the said promissory note to giving authorization to frll the same. In this regard, it is necessary to extract the Section 2O inThe Negotiable Instruments Act, 1881 and the same is reproduced for better understanding 2O. Inchoate stamped instntments,l "Wlrere one person signs and deliuers to another a paper stamped iru accordance uith the law relating to negotiable instruments then in force in India, and. either whollg blank or hAuing written t)hereon an ineomplete negotiable ttstnlmeit, he thereby giues prima facie authority to the holder thereof to make or complete, as the. case may be, upon it a negotiable instrument, for ang amount specified thereht and not exceeding the amount couered bA the stamp. The person so signing shall be liable upon such instrumen| in the capacity in which he I NNR,.f CCCA No.i5 of 2020 signed tlrc same, to any holder in due course for such amount; prouided that no person other than a holder in due course shall recouer Jrom the person deliueing the instrument anything in excess o.,'the amount intended by him to be paid thereunder."

22. The plaintiff has examined PW.2 who said to be witness to the execution o:' the promissory note and the transaction between the plaintiff antt defendant and also the there is no Memorandum of understanding being produced neither in the trial Court nor in this Court the substantiate the claim that there was a nexus between the \ \ alleged MerrLorandum in Understanding and promissory note and also failed to produce any documents to prove that the d.efendant has given I t blank chequ.e for security to the plaintiff.

23. Therefore, it is clearly evident from the record that the defendant has execute d the promissory note which was also not denied by the defendant and no substantial documdntary evidence was placed that the said prtlmissory note was issued only for the purpose of security as part of alleged Memorandum of understapding.

24. In vierv of the above observation, this Court is of the opinion that the learnerl trial Court having considered the entire oral and documentary evidence -has- rightly -decreed the suit in favour of the plaintiff anri this Court after appreciating the entire material placed, did not see any grounds to interfere nor find fault with the finding the I r'll ,l I i I ,l ]I :i : i 10 A'A/R,J CCCA No.35 of 2020 judgment of the trial Court. For the said reasons, the appeal of the appellants falls to the ground and appeal deserves to be and liable to be dismissed.

25. In the result, CCCA is dismissed with costs confirming the Judgement and Decree passed by the II Senior Civil Judge, City Civil Court at Hyderabad , dated 04.07.2019 in OS No. lO77 of 2015. Miscellaneous petitions, if any are pending, shall stand closed \ //TRUE COPY/I SD/- N.SRIHARI PUTY REG ON OFFICER To

1. The ll Senior Civil Judge, City Civi Court at Hyderabad. ( with records ) 2. One CC to SRl. P. PANDU RANGA REDDY, Advocate IOPUCI 3. bne CC to SRl. MUDUMBI RANGASWAMY, Advocate IOPUCI 4. Two CD Copies kul/PSL s\ I t (.T ':iii: lBTTBM *r * (:) () iI HIGH COURT DATED:2210912025 +DECREE ORDER CCCA.No.35 cif 202A DISMISSTNG THE CCCA WITH COSTS 11 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD MONDAY,THE TWENTY SECOND DAY OF SEPTEMBER TvVO THOUSAND Ai.lD TWENIY FIVE PRESENT THE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA CITY CIVIL COURT APPEAL NO: 35 OF 2020 Between: M. Padmalatha, W/o. B.Srinivas Reddy, Aged about 45 years, Occ. Private Teacher, Plot No.147 and 148, Sri Shiva Sai Hitt Top, Flat No.4B, Prashanthi Hills Colony, Rayadurgam, Hyderabad. AND ...APPELLANT/ Defendant K.Ramya, Wo. K.Srinivas, Aged about 43 years, Occ. Business, R/o. H.No.8-3- 966/6, F-2, Sai Shakthi Nivas, Nagarjuna Nagar, Madhurangar, Yousufguda, Hyderabad ..RESPONDENT/ Plaintiff Appeal Under Section 96 Order 41 of CPC aggrieved by the order dated O4-O7-2019 in O.S.N o. 1077 ol 2015 on the file of the Court of the ll Senior Civil Judge, City Civil Court at Hyderabad. The City Civil Court appeal coming on for hearing, upon perusing the Memorandum of grounds filed in the Appeal, the Decree of the Lower Court and the record in the case and upon hearing the arguments of Sri p. Pandu Ranga Reddy, Advocate for the Appellant and of MUDUIVIBI RANGASWAMY, Advocate for the Respondent This Court doth order and decree as follows :

1. That the Appeal be and hereby is dismissed . 2. That the Judgment and Decree passed by the ll Senior Civil Judge, City Civil Court at Hyderabad, dated 04-07-2019 in O.S.No. 1077 of 2015 be and hereby is confirmed.

3. That the Respondent is entitled Rs. 5/- to be paid by the Appellant. ; MEMORANDUM OF COSTS Resoondent of Costs Stamp for Vakalatnama Advocates Fee Translation and F'rinting Charges: Respondent is entitled Rs 5/- to be paid by the Appellant 05-00 00-00 00-00 6sAo //TRUE COPY/ SD/- N.SRIHARI TY REG SECTION OFFICER l'o l. The ll Sr:nior Civil Judge, City Civil Court at Hyderabad 2. Two C.D.Copies u Kul/PSL' I / HIGH COURT DATED:2210912025 DECREE CCCA.No.3S of 2O2O DISMISSING't'HE CCCA WITH COSTS \1