Ram Mohan Reddy, J.
1. The Sangli Bank Limited, the appellant in all these appeals, aggrieved by the common Judgment dated 19.6.2004 of the District Judge, Bagalkot in LAC Appeal Nos. 268 to 288 of 2001, confirming the common order dated 27.5.2000 of the Addl. Civil Judge (Sr. Dn), Jamkhandi, dismissing LAC Nos. 2111 to 2131 of 1998, has presented these appeals.
2. The panorama of the factual position is:
A) The State Government issued a notification in the year 1984 under Section 4(1) of the Land Acquisition Act, 1894, for acquisition of large tracts of land including the lands and buildings of the first respondent in each of these appeals hereinafter referred to as 'loaners', on account of their submergence in the Upper Krishna Project. The loaners', allegedly, through their advocate by name M.S. Biradar Patil (Budihal) are said to have applied for and secured loans varying from Rs. 3,500/- Rs. 5000/- towards initial expenses for shifting to the new rehabilitation centre proposed to be established by the State. Each of the loaners', it is further alleged, opened Savings Bank Account in the appellant-Bank withdrew the loan amount, in cash, from the said accounts, executed a promissory note, letter of lien, created a charge on the immovable property sub-merged, and executed a special power of attorney authorising the appellant to recover the amount together with interest from out of the compensation, on the making of the award by the 2nd respondent-Spl. Land Acquisition Officer.
B) The acquisition proceedings stood abandoned and the loaners, it is alleged did not repay the amount. The State Government issued a fresh preliminary notification on 31.1.1996 and thereafter concluded the acquisition proceedings, determining the compensation payable in respect of the properties of the loaners, which were acquired, by the drawing of separate Awards. The Spl. Land Acquisition Officer, at the request of the appellant, having directed deduction of the said amounts due to the Bank, some of the loaners filed writ petitions before this Court which were allowed with a direction to the 2nd respondent to hear the loaners before proceeding to order.
C) On account of the dispute over the disbursement of the amounts to the appellant, the Bank sought individual references of the dispute under Section 30/31 of the Land Acquisition Act, 1894, resulting in the proceedings before the Civil Judge (Sr.Dn) in LAC Nos. 2111 to 2131 of 1998. The appellant was arraigned as opponent No. 1, while the loanee in each of the appeals as opponent No. 2. The appellant sought to recover the amount together with interest at 18% p.a. from out of the compensation awarded for the acquisition of the immovable properties belonging to the loaners by stating that the cause of action arose on the drawing up of the Award in the year 1998 and 'not earlier'. The petitions were opposed by filing statement of objections of the loaners in each of the petitions, inter alia denying the transaction, the execution of the documents, that the claim was barred by limitation, and that the residential premises, subject matter of acquisition being farm houses of agriculturists, are not liable to pay compound interest. It is further contended that the State Government failed to establish the rehabilitation centres in the year 1982 or in the year 1996.
D) The trial Court, in the premise of the pleadings of the parties, framed the following points for consideration:
1. Whether Opponent No. 1/Bank proves that it has advanced loan to the Opponent No. 2 or their Predecessor, in the year 1984 and Opponent No. 2 or their Predecessor have executed all the alleged documents in favour of the Bank in the above said 21 cases?
2. Further Opponent No. 1/ Bank proves that, in all 21 cases, Opponent No. 2 is liable to pay the advanced amount with interest out of the compensation amount as contended by the Opponent No. 1?
3. Further Opponent No. 1 proves that its claim is well within time?
4. To what extent Opponent No. 1 and 2 are entitled to receive the compensation amount out of the deposited compensation amount?
5. What Order?
The trial Court recorded the depositions of PWs-1 and 2, the witnesses for the Bank and marked documents Exs.P1 to P169 and the deposition of DWs 1 and 2, the witnesses for the respondent and marked one document, Ex.D1. The trial Court considering the evidence, both oral and documentary, answered all the points in the negative by the common order dated 27.5.2000.
E) The appellant carried the order in separate appeals numbered as LAC Nos. 268-288 of 2001 wherein the 1st appellate Court raised the following points for consideration:
1. Whether is a fit case to allow I.A.No. 2 filed in all LAC appeals U/O 6 Rule-17 CPC?
2. Whether it is a fit case to allow I.A.No. 3 filed U/O 41 Rule 27 CPC in LAC No. 268/2001?
3. Whether the appellant-Bank/Opponent No. 1 proves that, it had advanced loan to Respondent-1/Opponent-2 as contended, during 1984 and the Respondent-1 or their predecessors have executed the documents as alleged in favour of the Bank?
4. Whether the appellant-Bank/ Opponent No. 1 is entitled to recover the amount as claimed by it from respective respondent-1/opponent-2 out of the compensation awarded to them?
5. Whether the claim put-forth by the appellant/ Bank is barred by time?
6. Whether the order dtd. 27th May 2000 passed in LAC Nos. 2111/98, 2131/98, 2130/98, 2129/98, 2128/98, 2127/98, 2126/98, 2125/98, 2124/98, 2123/98, 2122/98, 2121/98, 2120/98, 2119/98, 2118/98, 2117/98, 2116/98, 2115/98, 2113/98, 2114/98 and 2112/98 by learned Addl. Civil Judge (Senior Division) Jamkhandi is erroneous and opposed to him?
7. What Order?
The first appellate Court in great elaboration re-appreciated the evidence, both oral and documentary and held in the affirmative point Nos. 2 and 5 and all other points in the negative, while dismissing the appeals by common Judgment dated 19.6.2004. Hence, these appeals raising the following questions of law as set out in para 16 of the memorandum of appeal:
a) Whether the finding of the Lower Appellate Court that the claim of this appellant-Bank was barred by limitation, is not erroneous and unsupportable in law?
b) In spite of the overwhelming documentary evidence supported by the oral evidence of this appellant-Bank's Officers, produced in the case, whether the findings of the Lower Appellate Court that the various documents produced in the case, including the entries in the Gazette Notifications and public documents, disclosing the loans in question, were not proved, and that this appellant Bank had failed to prove the loans in question, are not perverse arbitrary, capricious and unsupportable in law?
c) Whether an adverse inference is liable to be drawn against the respondent-debtors for not giving their evidence in the case?
d) Whether on the facts and in the circumstances of the case, the decision of the Lower Appellate Court is liable to be set-aside and the appellant-Bank's claim deserves to be upheld?
3. The contesting respondents in the appeals are represented by learned Counsel, having entered caveat, the appellants were heard at the stage of admission.
4. Sri. Padubidiri Raghavendra Rao, learned Counsel for the appellant contends that the terms of Special Power of Attorney, Ex.P22 coupled with the payment of the loan amount to the respondents constitute a concluded contract entitling the appellant to recover the amounts due together with interest. It is further contended that the attestations of the thumb impressions on the promissory notes, letter of lien, power of attorney, arises only if consideration receipts are executed and that the amounts having been transferred to the respective Savings Bank Accounts of the loaners, coupled with the individual letters of attestation executed by M.S. Biradar Patil (Budihal), advocate, was sufficient to establish the claim of the Bank. It is next contended that as the loaners did not enter the witness box and tender evidence, the courts below fell in error in not drawing an adverse inference over the execution of the documents. Learned Counsel relies upon the following decisions:
a) Ramjibun Serowgy v. Oghore Nath Chatterjee 25 Cal 401 : 2 CWN 188
b) Bhogi Ram v. Kishorilal ILR 1928 All. 754
c) Janaki Vashdeo Bhojwani v. Indusind Bank Limited AIR 2004 SCW 7064
d) Iswar Bhai C Patel @ Bachu Bhai Patel v. Harihar Behera : [1999]1SCR1097 Head Note (c)
e) Vidhyadhar v. Manikrao (1999) 3 SC 573 (Head Note (I)
5. Per contra, learned Counsel for the loaners contends that under Section 100 of the C.P.C. the scope of interference with the concurrent findings of two courts below is only where a substantial question of law is involved and not to re-appreciate the evidence so as to arrive at a different conclusion. Reliance is placed on the following decisions:
a) Narayanan v. Kumaran and Ors. 2004 (2) Supreme 486
b) Gurdev Kaur v. Kaki 2006 AIR SCW 2404
c) Mst. Sugani v. Rameshwar Das and Anr. 2006 (4) AIR KAR 628
6. According to the learned Counsel, admittedly the execution of the 'Instrument', the special Power of attorney, not being verified by an affidavit, the statutory declaration or other sufficient evidence, coupled with the failure to examine M.S. Biradar Patil (Budihal), advocate, allegedly said to have executed the letter of attestation, both the Court below were fully justified in concluding that there was no legal liability and the claim was barred by limitation. In addition, learned Counsel contends that the alleged charge creating an interest in the immovable property, admittedly on the basis of an unregistered document, is illegal and contrary to Section 100 of the Transfer of Property Act, 1982. Lastly, it is contended that in the absence of proof of opening of Savings Bank Accounts, the transfer of the loan amount and withdrawal in cash by the loaners as alleged, the rejection of the claim of the appellant is just, legal and proper.
7. These Miscellaneous Second Appeals are filed under Section 54(2) of the Land Acquisition Act, 1894. Before adverting to the contentions advanced by the learned Counsel for the appellant touching upon the merits, it is necessary to consider the scope of interference with concurrent findings of facts, in a Second Appeal.
8. In Narayanan's case (supra), the question that arose was whether an appeal under Order 43 Rule 1(u) Civil Procedure Code would lie if the order of remand is treated as a decree and not a mere order? The Apex Court held that it was quite safe to adopt that such an appeal be heard only on the grounds enumerated in Section 100 and not on question of fact.
9. The Supreme Court in Gurdev's case (supra) observed thus:
69. Now, after 1976 Amendment, the scope of Section 100 has been drastically curtailed and narrowed down. The High Courts would have jurisdiction of interfering under Section 100, C.P.C. only in a case where substantial questions of law are involved and those questions have been clearly formulated in the memorandum of appeal. At the time of admission of the second appeal, it is the bounden duty and obligation of the High Court to formulate substantial questions of law and then only the High Court is permitted to proceed with the case to decide those questions of law. The language used in the amended section specifically incorporates the words as 'substantial question of law' which is indicative of the legislative intention. It must be clearly understood that the legislative intention was very clear that legislature never wanted second appeal to become 'third on facts' or 'one more dice in the gamble'. The effect of the amendment mainly, according to the amended section, was:
i) The High Court would be justified in admitting the second appeal only when a substantial question of law is involved.
ii) The substantial question of law to precisely state such question;
iii) A duty has been cast on the High Court to formulate substantial question of law before hearing the appeal;
iv) Another part of the Section is that the appeal shall be heard only on that question.
10. In Mst. Sugani's case (supra), their Lordships of the Supreme Court having regard to the scope of Section 100 CPC after the 1976 amendment, which was intended to minimise the litigation restricting the second appeal only on such questions as are certified by the Courts to be substantial questions of law observed thus:
27. If the question of law termed as a substantial question stands already decided by a larger Bench of the High Court concerned or by the Privy Council or by the Federal Court or by the Supreme Court, its merely wrong application on the facts of the case would not be termed to be a substantial question of law. Where a point of law has not been pleaded or is found to be arising between the parties in the absence of any factual format, a litigant should not be allowed to raise the that question as a substantial question of law in second appeal. The mere appreciation of the facts, the documentary evidence or the meaning of entries and the contents of the document cannot be held to be raising a substantial question of law. But where it is found that the first appellate court has assumed jurisdiction which did not vest in it, the same can be adjudicated in the second appeal, treating it as a substantial question of law. Where the first appellate court is shown to have exercised its discretion in a judicial manner, it cannot be termed to be an error either of law or of procedure requiring interference in second appeal. This Court in : AIR1976SC830 Reserve Bank India v. Ramkrishna Govind Morey : AIR1976SC830 held that whether the Trial Court should not have exercised its jurisdiction differently is not a question of law justifying interference.
11. Karnataka State amendment to Section 54 of the Land Acquisition Act, 1894 reads thus:
Karnataka Land Acquisition (Mysore Extension and Amendment) Act XVII of 1961 (Section 35(24-8-1961)
For Section 54 in the principal Act, the following section shall be substituted namely:
54. Appeals in proceedings before Court- (1) subjection to the provisions of the Code of Civil Procedure, 1908, applicable to appeal from original decrees, an appeal shall lie from the award, or from any part of the award, of the Court in any proceedings under this Act to the Court authorised to hear appeals from the decision of that Court.
(2) From any decree of a Court, other than the High Court, passed on an appeal under Sub-section (1), an appeal shall be to the High Court, if but only if, the amount or value of the subject-matter in dispute in appeal exceeds two thousand rupees or the case involves any question of title to land.
(3) From any decree of the High Court passed on an appeal under Sub-section (1), an appeal shall lie to the Supreme Court, subject to the provisions contained in Section 110 of the Code of Civil Procedure, 1908, and in Order XLV of the first Schedule to the said Code.
From a plain reading of the aforesaid provision of law, what is discernable is that the second appeal is subject to the provisions of the Code of Civil Procedure, 1908. In other words, subject to Section 100 of CPC. If that is so, the appellant has to make out a substantial question of law for interference with the orders impugned.
12. Having regard to the observations of the Supreme Court and applying the same to the facts of these appeals, the questions whether the claim of the appellant was barred by limitation and whether the finding of the Courts below that the documents were not proved in evidence and the finding that the Bank has failed to prove the loans are pure findings of fact which are concurrently held in the negative by two Courts below after considering the materials on record. This Court cannot interfere with concurrent findings of fact of the Courts, below howsoever erroneous the findings of fact may be unless it is shown that the findings are a result of a substantial error of law.
13. In the admitted facts both the Courts below concurrently held that the appellant-Bank had failed to prove the execution of the documents, the thumb impressions on the promissory note, letter of Men and special power of attorney remained unattested and unidentified, resulting in not knowing as to whose thumb impression was found on the said documents. The non-examination of M.S. Biradar Patil (Budihal), advocate, the signatory to the letter of attestation, so also the non-examination of the Manager at the relevant point of time, was held to be fatal and a serious lacuna by the Courts below. The witnesses PW-1, the Manager as on the date of tendering evidence and PW-2, the Accountant during the year 1984-87, admittedly, had no personal knowledge of the loan transaction or execution of the documents, hence, both the Courts below did not attach much credence to their oral evidence. The Bank, which was the custodian of the originals of the documents such as the Account opening form, the transfer of the loan amount into the account, the voucher for having permitted the withdrawal of the amount from the said account, allegedly by the loaners were not produced in the trial, which was yet another compelling circumstance to record a finding that the Bank had failed to establish the claim.
14. Although Sri. Padubidiri Raghavendra Rao, learned Counsel for the appellant would press into service the observations in Ramjibun's case and Bhogiram's case to support the contention that the terms of the special power of attorney executed, extended the period of limitation up to the making of the award, to recover the amounts due by receiving and appropriating the compensation amount. I am not impressed by that submission. In Ramjibun's case the facts were that the defendant sought to set up a contemporaneous oral agreement to qualify or restrict the absolute engagement under a promissory note to pay on demand. It was held that a legal obligation to perform the promise was to be postponed, is not such an agreement as falling within the proviso (3) to Section 92 of Evidence Act. In Bhogiram's case while dealing with proviso (3) to Section 92 of the Evidence Act, Boys J., observed that there was nothing in law to debar the maker of a promissory note from pleading as a defence to a suit thereon that as a matter of fact the note was given for a special purpose and was not payable until the happening of a certain event, which, so far, had not yet happened.
15. As a matter of fact, both the Courts below have recorded specific findings of fact that as the special power of attorney bears unidentified thumb impression, not verified by an affidavit or other sufficient evidence, was justifiably rejected as not proved. In that view of the matter, both the aforesaid decisions cannot come to the aid of the appellant.
16. In my considered opinion both the Courts below, expected of a reasonable and judicious adjudication, by an objective manner of reasoning, recorded findings of fact and conclusions. The findings of fact are not shown to suffer from any infirmity in law nor substantiated to be based on no evidence or vitiated on account of perversity of approach so as to call for a different conclusion.
17. The contention that the Power of Attorney holder cannot depose in place and instead of the principal is no more resintegra in view of the decision of the Apex Court in Janki Vashdeo Bhojwani's case (supra). In the facts of this case, DW-1. the power of attorney holder for the loaners tendered evidence denying the transactions, which is the stand taken in the statement of objections. Keeping in mind that the proceedings under the Land Acquisition Act was one over the dispute regarding the disbursement of the compensation amount, in that the appellant claimed to be entitled to the payment on the basis of the loan transaction between the parties while the loaners denied the transaction, it was for the Bank to establish by cogent evidence the loan transaction more appropriately the identity of the thumb impressions on the documents and not for the loaners to appear before the Court and prove the negative. Their appearance before the Court through the power of attorney holder, DW-1 to tender evidence could not have prejudiced the case of the appellant. The appellant, having miserably failed to establish the fact of loan transaction, cannot claim to have established their case by the loaners personally not entering the witness box. Even if a suit proceeds exparte and in the absence of a written statement unless the applicability of Order 8 Rule 10 C.P.C. is attracted and the court acts thereunder, the necessity of proof by the plaintiff of his case to the satisfaction of the court cannot be dispensed with. It is elsewhere said that merely because the defendant is absent the court shall not admit evidence admissibility whereof is excluded by law nor permit its decision being influenced by irrelevant or inadmissible evidence.
18. The discharge of duties by the personnel of the Bank involved in the securing of documentation is condemnable on account of the cavalier manner adopted. The least that was expected of a Bank, the trustee of public funds, was to lay before court, substantial legal evidence in support of the claim not only from the stand point of view of the Bank but also the defence, more particularly in view of the fact that the onus of proof may shift to the opponent at a later stage. Why the Bank did not produce the documents regarding the opening of the alleged saving bank account, the alleged transfer of the loan amount into the said account, and its alleged withdrawal in cash by the loaners and also did not examine the then Manager of the Bank, who is said to have personal knowledge of the prosecution or the Advocate by name M.S. Biradar (Budhihal) the signatory to the letters of attenstation, whose evidence, if adduced, the omission of the loaners to enter the witness box and tender their evidence over the denial of the claim might have taken a back seat, and which might not have been ignored by the courts below.
19. It is by now well settled that the documents in the possession of the party obliged to produce the same in order to satisfactorily establish the claim, fails and/or neglects to produce the same, an adverse inference may be drawn against him. If this principle is applied to the facts of this case, necessarily adverse inference needs to be drawn against the Bank.
20. The observations at para 17 in Ishwar Bhai's case (supra) is pressed into service to contend that adverse inference must be drawn against the loaners who did not personally present themselves for cross-examination and refused to enter witness box in order to refute the allegations made against them or support the statements made in the statement of objections. The facts in Ishwar Bhai's case is that the respondent therein, admittedly the holder of an account in the Central Bank of India, authorised his father to operate the same. It was a further admitted fact that from the said account, amounts were advanced by his father, the 2nd respondent. The 2nd respondent in the statement, alleged that the appellant therein had approached him for a loan of Rs. 7,000/-, though explicitly told that he had no money to lend, the appellant himself suggested to lend the amount from the Account of the 1st respondent and it was in such circumstance, the 2nd respondent issued a cheque to the appellant who admittedly encashed. In the light of uncontroverted facts, the appellant having not entered the witness box to make a statement on oath denying the statement of 2nd respondent, the Apex Court held that an adverse inference needs to be drawn against him on the basis of principles contained in Illustration (g) of Section 114 of the Evidence Act, 1872.
21. As noticed supra, having regard to the facts of this case, more particularly the denial of the entire transaction by the loaners, and in the absence of proof of the documents allegedly executed by the loaners, it cannot be said that non-appearance of the loaners as a witness would attract application of illustration (g) of Section 114 of the Evidence Act, to draw an adverse inference, in order to establish the case of the appellant. It is needless to state that the appellant ought to have lead in substantial legal evidence in support of its claims against the loanee to the satisfaction of the Courts below. Having not done so, the failure on the part of the loanee to enter the witness box, no adverse inference could be drawn against him.
22. In Vidhyadhar's case (supra), the Supreme Court having regard to Section 114(g) of the Evidence Act, 1872, held that if a party abstains from entering the witness box and state his own case on oath and does not offer himself to cross-examination by the other side, a presumption arise that the case set up by him is not correct. In view of the reasons aforesaid, the principles laid down in the said decision are not applicable to the cases on hand.
23. Sri. Basavaraj Kareddy, learned Counsel for the loaners, in each of these appeals has filed individual affidavits of the loaners stating that without prejudice to the rights to defend the Judgments of the two Courts below, in order to buy peace, are ready to pay the amount together with interest at 6% simple interest from the date alleged to have been paid and have no objection to effect deduction of the said sum from out of the compensation awarded by the 2nd respondent.
24. Sri. Padubidiri Raghavendra Rao, learned Counsel for the appellant submits that the Bank is not willing to receive simple interest, amounts calculated at 6% on the amounts advanced. Learned Counsel further contends that despite several attempts in the past, during the pendency of the appeals, the Board of Directors of the Bank were not inclined to accept any reduction in the rate of interest and hence the offer made by the loaners was not acceptable.
25. Having regard to the fact that the Appellant failed to establish by cogent evidence, the alleged loan transaction, I am of the considered opinion, that the loaners having come forward to pay the amount with interest at 6% p.a. simple, needs to be accepted.
The appeals are allowed in part, the order dated 19.6.2004 of the District Judge Bagalkot in LAC Appeal No. 268/2001 to 288/2001 and the common order dated 27.5.2000 of the additional Civil Judge (Senior Division) Jamakhandi dismissing LAC 2111 to 2131/98 are set aside, and the references in LAC 2111 to 2131/98 are allowed in part, entitling the Bank to recover the principal sum together with simple interest at 6% p.a., from the date of advance, upto the date of recovery, in the first instance by a deduction from out of the compensation amount awarded to the loaners by the 2nd respondent Special Land Acquisition Officer, and in case of a shortage to proceed against the loaners personally to recover the same. No costs.