Syndicate Bank by itsManagerSalem – 2 v. S.R.Subramaniam ..... RespondentAppeal filed against the Judgment and Decree

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 18.12.2007CORAM :THE HON’BLE MR. JUSTICE S.TAMILVANANA.S.No.683 of 1996 and C.M.P.No.3372 of 2007Syndicate Bank by itsManagerSalem – 2. .... AppellantVs.S.R.Subramaniam ..... RespondentAppeal filed against the Judgment and Decree, dated29.03.1993 made in O.S.No.272 of 1987 on the file of theAdditional Subordinate Judge, Salem.For Appellant: Mr.S.Ramachandran for Mr.K.Chandrasekaran For Respondent: Mr.R.Subramanian J U D G M E N T This appeal has been preferred against the Judgment andDecree dated 29.03.1993 made in O.S.No.272 of 1987 on the fileof the Additional Subordinate Judge, Salem. 2. The appellant herein was the plaintiff in the suitbefore the trial Court and the suit was filed seeking a decreebased on the loan obtained by the respondent/defendant on12.09.1974 by way of executing a promissory note, marked asEx.A1. 3. In this appeal, it is not in dispute that the respondenthad borrowed a sum of Rs.5,500/- and executed a promissory noteEx.A1 on 12.9.1974. Ex.A2 is the document of security for theloan obtained by the respondent, whereby the respondentacknowledged the hypothecation of goods in favour of theappellant on 12.9.1974. The application for advance againstmerchandise transaction, executed by the respondent for the saiddebt on 12.9.1974 has been marked as Ex.A3. As per Ex.A.6, thesaid debt was acknowledged by way of acknowledgment of debt toan extent of Rs.9,706.75/-. As per Ex.A.7, the respondent had https://hcservices.ecourts.gov.in/hcservices/ admitted his liability to the appellant for Rs.15,780.90/- as on10.7.1980. The trial Court has given its finding that theacknowledgment of liability under Ex.A7 has not been disputed bythe respondent and as such the same has been established byP.W.3 as a genuine document. Even in this appeal, the validityof Ex.A.7 has not been disputed.4. Learned counsel for the respondent contended that Exs.A8and A9 said to have been filed as acknowledgment of debts on01.07.1983 and 30.06.1986 respectively have not been executed bythe respondent herein. According to the respondent, he had onlysigned in the blank formats for some other loan, but that hasbeen misused by the appellant bank and marked as documents inthis suit. It is seen that the trial Court has framed thefollowing issues:(1) Whether the statement of account producedby the appellant plaintiff is in correct?(2) Whether the letters of acknowledgment ofliability, dated 19.7.1977, 10.7.1980, 01.7.1983 and30.6.1986 are genuine?(3) Whether the plaintiff is entitled to adecree as prayed for?(4) What relief the plaintiff is entitled to?5. In the finding at paragraph No.10 of the impugnedjudgment, the trial Court has decided the answer for issue No.1against the plaintiff and also has stated that the issue No.2 ispartly allowed in favour of the plaintiff. For the other twoissues held that the appellant / plaintiff is not entitled toget any decree as prayed for. Accordingly, the suit has beendismissed with cost by the trial Court. 6. As contended by both the counsel, the appeal is mainlybased on the question of validity of the documents, Exs.A8 andA.9, letters of acknowledgment of debt. It has been admittedthat the respondent had obtained the loan of Rs.5,500/- on12.9.1974 from the appellant bank, as stated by the appellantherein. As per the endorsement, Ex.A.6, he has also admitted theliability on 19.07.1977 for a sum of Rs.9,706.75/-. As perEx.A.7, dated 10.7.1980, the respondent has acknowledged hisliability to the extent of Rs.15780.90/-, however, he isdisputing Ex.A.8 and Ex.A.9. It is seen that Exs.A8 and A9 arealso similar documents, in printed forms relating to 01.07.1983and 30.06.1986 respectively and the details have been filled inby ink. The respondent, D.W.1 has not denied his signature andthe seal, which are available in Exs. A8 and A9. Ex.A.8 is anacknowledgment of debt, dated 01.7.1983 and Ex.A9 dated30.6.1986. Both the acknowledgements of debt are well withinthe period of limitation and if they are genuine documents, theywould save the limitation of the pro-note, Ex.A.1. https://hcservices.ecourts.gov.in/hcservices/

7. However, the trial Court has rejected the letter ofacknowledgment of liability Ex.A.9, dated 30.06.1986, since theamount stated therein is only Rs. 21,482.55, less than theamount of Rs.24,120.75/- stated in Ex.A.8, dated 01.07.1983. Itis seen that there is no correction or alteration is availablein both the documents. Therefore, the only vital questionavailable for consideration in the suit and the appeal iswhether Ex.A.9, acknowledgement of debt, dated 30.06.1986 is notvalid, as it contains a lesser amount than in Ex.A.8. It is notin dispute that as per Ex.A.9, the liability is stated to theextent of Rs.21,482.55/-. As there is no subsequent payment bythe respondent, the amount could not have been reducedsubsequently, and on that ground, the trial Court has held thatthe said documents could not be a genuine document. 8. The learned counsel for appellant contended that it isonly a clerical error whereby, the balance amount has not beencorrectly stated in Ex.A.9, however, which would not vitiate thecase of the appellant and create any doubt with regard to thegenuineness of the document. It is not in dispute that Ex.A.7,dated 10.7.1980 has been admitted as genuine document executedby the respondent. Exs.A8 and Ex.A9 are also in the sameformat containing the signature of the respondent with the sealof his proprietary concern. 9. The defence raised by the respondent is that he hadsigned in blank formats of acknowledgment of debt, for someother loan obtained by him, which were misused by the appellantfor the suit transaction. Since the respondent has admitted hissignature and the seal of his proprietary concern, available inthe acknowledgment of debt, the burden is upon to him toestablish that he had signed only in blank formats for someother debts obtained by him in the Bank. In Exs.A.8 and A.9 alsothe loan account number has been stated at the appropriate placeavailable for Loan account Number with other details as that ofEx.A.7. Therefore, merely because the balance amount payable hadbeen stated as Rs.21,482.55/- in the acknowledgment of debtdated 30.06.1986, lesser than in Ex.A.8, the earlier document,the same cannot be construed as a fabricated document created bythe appellant bank for the purpose of saving the limitation. 10. In this case, it has been clearly admitted by therespondent that on 12.09.1974, he obtained a sum of Rs.5,500/-as loan from the appellant and executed Ex.A.1, promissory note.Similarly, as per endorsement, Ex.A.6 available at the back ofthe promissory note, he acknowledged the liability to an extentof Rs.9706.75/- on 19.07.1977. As per Ex.A.7, admittedly, therespondent has acknowledged the debt to an extent ofRs.15,780.90/- on 10.07.1980. In the subsequent document,Ex.A.8, the liability to an extent of Rs.24,120.75/- has been https://hcservices.ecourts.gov.in/hcservices/ stated. The contention of the respondent that he had affixed hisseal and also signed in the blank formats of Ex.A.8 and Ex.A.9,for the purpose of acknowledging some other loan obtained by thebank cannot be accepted as a legal defence. Being the proprietorof his sole trading concern, the respondent could have signedonly in the filled up format. As the said document contains allthe details and also the loan account number and having admittedthe signature available on the revenue stamp, it is not open tothe respondent to dispute the document, saying that he hadsigned only in the blank format.11. As contended by the learned counsel for the appellant,having admitted the signatures in the acknowledgements of debt,the defence that he had affixed his signature only in the blankformats cannot be accepted, since the burden is upon therespondent to establish that he had signed only in the blankformat. The respondent has not even stated for which loan amountobtained from the bank, he had handed over the signed letter ofacknowledgment of debt. Even if it is assumed for the sake ofargument that he had signed Ex.A.8, when it was a blank format,it could be legally presumed that he had authorized theappellant bank to fill it up. Therefore, the defence raised bythe respondent that he had signed in Exs.A.8 and A.9,acknowledgments of debt is not legally sustainable. Merelybecause in the acknowledgment of debt, dated 01.07.1983 theamount of liability is stated as Rs.24,120.75/- and in thesubsequent document, Ex.A.9, a lesser amount has been stated, itcould not be presumed that the said document has been fabricatedby the appellant bank for the purpose of saving period of thelimitation.12. As contended by the learned counsel for the appellant,the amount stated in Ex.A.9 would be construed only as aclerical error in calculation. This Court is of the view thatthe court below, without considering the entire evidenceavailable on record, has erroneously held that Ex.A.9 is afabricated document, merely on the ground that the amount statedin the subsequent acknowledgment of liability is lesser than theamount specified in the earlier acknowledgment of debt.Therefore, this court is of the considered view that theaforesaid clerical error in mentioning the balance amount in oneacknowledgment of debt would not vitiate the entire case basedon various documents. 13. The short point for consideration is whether there wascontinuous acknowledgment of debt to maintain the claim of theappellant ? In the instant case, it has been admitted that therespondent had borrowed a sum of Rs.5,500/- from the appellantbank, as stated in the plaint. Subsequently, by Exs.A.6 and A.7,the respondent has admittedly extended his liability by https://hcservices.ecourts.gov.in/hcservices/ specifying the loan account number and the amount due. As perEx.A.8, acknowledgment of debt, dated 01.07.1983, it has beenextended before the expiry of the time limit, similarly, withina period of three years, from the date of Ex.A.8, Ex.A.9 hasbeen executed on30.06.1986 and subsequently, within the timelimit, the suit has been filed. Therefore, merely on the groundof the clerical error, in stating a lesser amount in Ex.A.9, itwould neither make the document a fabricated one nor make itinvalid. The trial court, without considering these aspects inthe proper and legal perspective, has erroneously dismissed thesuit and hence, I am of the view that the appeal has to beallowed.14. In the plaint, the appellant has claimed interest at16.5% per annum. As per Ex.A.1, pronote, interest has to becalculated at 6% per annum, over and above the Reserve Bank ofIndia rate of interest with the minimum of 15% per annum( compounded quarterly ) for the value received. The appellant /plaintiff has not produced any supporting documents to show theReserve Bank rate of interest to justify the claim of interestat 16.5%. Therefore, as per Ex.A.1, pronote, the appellant canclaim interest only at 15% (compound interest) and not 16.5%, asclaimed in the plaint.15. In this appeal, the respondent by way of filingC.M.P.No.3372 of 2007, has produced the Xerox copy of theevidence given by one Krishnan, who was the Branch Manager inthe appellant bank during 1987, similarly, a letter dated30.09.1980, however, they are not relevant to decide the appealherein, since the case is based on contractual rate of interestand there is no legal defence to reduce the said contractualrate of interest. Hence, C.M.P.No.3372 of 2007 filed under Order41 Rule 27 CPC has been dismissed.16. In the result, the appeal is allowed and the impugnedJudgment and Decree passed by the court below are set aside.Consequently, connected C.M.P.No.3372 of 2007 is dismissed. Thesuit is decreed for the principal sum of Rs.5,500/- to be paidwith contractual rate of interest at 15% (Compound Interestquarterly) from 12.09.1974 till the date of realization withproportionate costs in the suit. In the appeal, no order as tocosts. Sd/Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ tsvnTo1.The Additional Subordinate Judge, Salem. 2.The Section Officer, V.R.Section, High Court, Madras.one cc to Mr.K.Chandrasekaran, advocate SR.No.74805 A.S.No.683 of 1996sky/9/1