Judgment:
1. Heard the learned Counsel for the appellant and the learned Counsel for the respondent.
2. The appellant was the plaintiff before the Trial Court who had filed a suit for recovery of money on the basis of a Promissory Note, said to have been executed by the defendant. The claim of the plaintiff was that the defendant had borrowed a sum of Rs.1,00,000/- on the basis of the Promissory Note dated 10-3-1996 and received the amount, agreeing to repay the same with interest at 24% per annum, or 2% per month, on the said amount and thereafter, had failed to repay the same on several demands made by the plaintiff. Ultimately, the defendant had issued a cheque for Rs.50,000/- dated 22-10-1997 drawn on Canara Bank, Channapatna Branch, towards part satisfaction of the loan amount. However, when the same was presented for realisation, had been returned with an endorsement of the banker that there were insufficient funds in the account and therefore, it was dishonoured. It is in that background that the plaintiff had filed the suit claiming the principal amount with interest and sought a decree for a sum of Rs.1,56,250/- with current and future interest. The suit was contested and the defendant denied the execution of the Promissory Note and the entire transaction. On the basis of the said pleadings, the Court below has framed two issues, which are as follows.-
“1. Does the plaintiff prove that he is entitled to recover Rs.1,56,000/- from the defendant along with 2% of interest per month?
2. To what relief the parties are entitled?
3. What order or decree?”
The Court below has answered issue No.1 in the negative are consequently, issue Nos.2 and 3 were held against the plaintiff. It is that which is under challenge in the present appeal.
3. The learned Counsel for the appellant would point out that the Court below has proceeded to address the suit on extraneous issues, as can be seen from the reasons afforded insofar as the findings on Issue No.1, namely, the Court has chosen to address the claim of the plaintiff with reference to the aspects, as under.
Firstly, whether the defendant was in need of money and therefore had approached the plaintiff. Secondly, whether the plaintiff had the capacity to lend money to the defendant and that the defendant had willfully failed to comply with those conditions and in doing so, has addressed the motive behind the loan. Since it was expressed in the body of the Promissory Note itself, that the defendant was borrowing money for the purpose of construction of a house and as it was established at the trial, that no such house was being constructed by the defendant, the Trial Court has held that the loan transaction was dubious. Thirdly, the Court below has addressed the capacity of the plaintiff to lend money and the contention put forward that the plaintiff had money, which he had received after selling his car and therefore, he was in a position to lend money to the defendant, has been debunked, on the opinion of the Court below that the car was a 1974 Model Ambassador Car and would not fetch more than Rs.50,000/- and even if the plaintiff had received Rs.1,25,000/-, one could not accept such a huge amount being kept in cash at home and hence, has disbelieved the case of the plaintiff. Fourthly, it is pointed out that the Court below has embarked on a comparison of the signatures of the defendant as found on the Promissory Note as well as the cheque issued and the admitted signatures in the vakalath and the written statement and has concluded that thee is variance in the admitted signatures and the disputed signatures and has hence dismissed the suit.
The learned Counsel would point out that the motive to borrow and the capacity of the plaintiff to lend money, were wholly extraneous and even if the Court was not in a position to accept the explanation of the plaintiff, it was wholly immaterial to the transaction, if the execution of the Promissory Note and the issuance of the cheque could be established. The Court below has unfairly negated the signatures of the defendant on the Promissory Note, in its opinion, which may not be tenable. The learned Counsel would draw attention to the record to indicate that there is no such discernible difference, which would render the signatures suspicious and the Court below having taken an extreme view as to there being a discrepancy is, therefore, not readily acceptable. The Court did not choose to refer the matter to an expert for comparison of the signatures in arriving at such an opinion and would seek indulgence of this Court to undertake a similar exercise of a cursory examination of the several signatures in order to convince this Court that there was no warrant to suspect the genuineness of the transaction. The learned Counsel would also point out that the signature on the cheque was not doubted insofar as the comparison with the admitted signatures are concerned. However, the Court below has held that the cheque was not proved, since the defendant claimed that he had no account with the bank and he had not issued the cheque. While the Court below has overlooked the fact that the banker, on presentation of the cheque, had returned it with an endorsement that the funds were insufficient and not on the ground that there was no such account relatable to the cheque. That circumstance having been overlooked, it would be open for this Court to reverse the judgment of the Trial Court, since it has proceeded on premised, which were wholly extraneous to the suit.
4. While the learned Counsel for the respondent would seek to justify the judgment.
5. On a plain examination of the material on record, the pleadings of the parties and the reasoning of the Trial Court, this Court is of the opinion that there is no reason to doubt the signatures on the Promissory Note as well as the cheque in question. The Court below has unfairly rejected the claim of the plaintiff. The reasoning that the plaintiff was required to establish his capacity to lend money and that there was reason to go behind the motive, in borrowing money, are again extraneous circumstances. If the Promissory Note is accepted as having been executed by the defendant, he should be held liable to repay the money which he has borrowed. In this view of the matter, this Court, on a plain examination of the record, would conclude that the plaintiff has established his case. However, the interest claimed on the principal amount is certainly on the higher side, since interest of justice would require that the interest payable by the defendant be reasonable, the suit is decreed with the modification that the defendant shall be liable to repay Rs.1.00 lakh, with interest at 8% per annum from the date of the suit till the date of payment. The judgment and decree of the Trial Court is set aside. The appeal is allowed. The suit is decreed in terms as above.