Judgment:
(Prayer: This Regular First Appeal is filed under Section 96 of the Code of Civil Procedure, 1908, against the judgment and decree dated 19.8.2003 passed in O.S.No.4321/1984 on the file of the XXXI Additional City Civil Judge, Bangalore (CCH-14), decreeing the suit for recovery of money.)
1. The appellants were the defendants before the trial Court. The first appellant having died, is represented by his legal representatives. The respondent was the plaintiff.
2. It was the case of the plaintiff that she and the defendants were neighbours and that they were under financial pressure in completing a building and had borrowed money from the plaintiff as on 15.12.1981 in a sum of Rs.15,000/-, which was to be repaid with interest at the rate of 2% per month and the defendants had jointly executed a Promissory Note in respect of the same. Again on 7.4.1982, the defendants are said to have borrowed a further sum of Rs.25,000/-, which was to be repaid with interest at the rate of 2.5% per month and had also executed a Promissory Note in respect of the same. The plaintiff claimed that the defendants had paid interest from time to time amounting in all to Rs.5,975/-. The plaintiff claimed that the defendants, when called upon to repay the entire amount, had failed to do so and were due in a sum of Rs.64,305/-, inclusive of interest, which the plaintiff sought to recover and therefore, the suit was filed.
3. The defendants entered appearance and denied the plaint averments. Insofar as the payments made by the defendants to the plaintiff through cheques from time to time, were claimed as payments made under a Chit Fund Scheme, to which defendant no.1 was subscriber. It was claimed that the plaintiff and her aunt were running a Chit Fund Scheme, while also lending money and defendant no.1 was a subscriber to two such Chit Fund Schemes. In the course of those transactions, the plaintiff was in the habit of securing signatures of the subscribers and defendant no.1 may have affixed his signature to bland papers. Similarly, defendant no.2 may have put her thumb impression to blank papers at the instance of the plaintiff with respect to the said Chit transactions. It was also alleged that the plaintiff was in the habit of obtaining post-dated cheques while parting with cash and since the defendants were illiterate, they did not suspect the bona fides of the plaintiff.
It is further alleged that the plaintiff and her husband had approached the defendants to take out Life Insurance Policies, since the second defendant’s husband was an agent canvassing for such policies and they also wanted to purchase the house being constructed by the defendants and since the defendants had declined to entertain the request of the plaintiff, the suit was filed out of sheer greed and spite, misusing the documents which had been obtained as aforesaid and sought for dismissal of the suit.
4. On the basis of the pleadings, the court below framed the following issues:-
“1. Does plaintiff prove that defendant took loan of Rs.15,000/- on 15.12.1981 by executing promissory note promising to repay with interest @ 2% P.M.?
2. Does plaintiff further prove that defendant took further amount of Rs.25,000/- as loan on 7.4.1982 by executing D.P.Note agreeing to repaying with interest @ 2 ½% per month?
3. Does plaintiff further prove the payment of interest by defendant as averred in para 4 of the plaint?
4. Whether the plaintiff is entitled for the amount claimed with interest?
5. Whether plaintiff is a money lender carrying on business without licence? If so whether suit is not maintainable?
6. Whether defendants are debtors and suit claim is discharged?”
The court below answered issues 1 to 3 in the affirmative and awarded future interest at the rate of 6% per annum while answering issue no.4 and held issues 5 and 6 in the negative and decreed the suit. It is that which is under challenge in the present appeal.
5. It is firstly contended by the learned Counsel for the appellants-defendants that the very suit was not maintainable. It is pointed out from the record that the suit was filed in the year 1984. The plaintiff did not choose to prosecute the suit with any diligence. Therefore, it was dismissed in the year 1997. Though it was restored later, the suit was again dismissed on 25.7.2002, as the respondent and her counsel had remained absent. Though an application was filed on the very day, to set aside the dismissal of the suit, that application is said to have been dismissed on 26.7.2002. Aggrieved by the dismissal, the plaintiff had filed a Civil Revision Petition in CRP 3229/2002 before this Court. At the stage of admission, the plaintiff chose to withdraw the petition and it was accordingly dismissed. The plaintiff thereafter having filed a petition to restore the suit before the trial court in Misc. No.682/2002, that petition is said to have been allowed, without notice to the defendants by order dated 8.10.2002 and it is thereafter that the suit has been decreed in favour of the plaintiff as on 19.8.2003.
The learned Counsel for the appellants would therefore contend that when the suit was dismissed in the first instance and the miscellaneous application to restore the suit also having been rejected and when a revision petition was filed challenging the same and the same has been dismissed by this court, the dismissal of the suit attains finality. The court below having entertained a second Miscellaneous Petition, is inexplicable. Therefore, the entire proceedings are vitiated as the revival of the suit by the trial court was impermissible in law and is rendered void. An application in this regard in Interlocutory Application No.22 has also been rejected on the ground that on a second Miscellaneous Application, the defendants had not chosen to challenge the same by seeking framing of an issue as to whether the suit itself was maintainable, since it could not have been restored on s second Miscellaneous Application, and therefore, the trial court felt it unnecessary to frame any additional issues on events that have followed subsequent to the completion of pleadings and that the validity or otherwise of the order could not be reviewed by the trial court itself. This, the learned Counsel would submit, is opposed to the admitted sequence of events that when a revision petition was preferred before this court and was unconditionally withdrawn without reserving liberty to approach the trial court with a Second Miscellaneous Petition and therefore, the legality of such restoration of the suit by the trial court, would be a primary ground on which the present appeal is filed and would submit that the appeal would have to be allowed on that ground alone. In this regard, he would rely on the following authorities:
1. Amba Bai and others vs. Gopal and others, AIR 2001 SC 2003,
2. Kunhayammed and others vs. State of Kerala and another, JT 2000 (9) SC 10,
3. Abbai Maligai Partnership Firm and another, vs. K. Santhakumaran and others, AIR 1999 SC 1486.
It is further contended that even on merits, the defendants had denied the execution of the documents, on the basis of which, the suit had been filed and therefore, the burden was on the plaintiff, to establish the execution of the said documents. A presumption under Section 118 of the Negotiable Instruments Act, 1881 (Hereinafter referred to as the ‘NI Act’, for brevity) would come into play only if the execution of the documents in question is admitted. Therefore, in the face of a handwriting expert having expressed an opinion, that the disputed signatures and the admitted signatures of defendant no.1, though were identical, the thumb impression of defendant no.2 has not been confirmed as that of defendant no.2 and therefore, when the plaintiff does not seek to rely upon the said report, it cannot be said with any certainty that the execution of the documents in question, have been established. The learned counsel would submit that the court below having proceeded to hold that the since the defendants had admitted the execution of blank documents, the same could have been presumed as being suit documents is unfair and therefore, the learned counsel would seek to contend that the plaintiff had failed to discharge her burden to establish that the documents were executed by the defendants.
6. The learned counsel for the respondent-plaintiff, on the other hand, would contend that insofar as the contention that the dismissal of the suit had attained finality is not correct. Though the initial dismissal of the suit and dismissal of an application to restore the same, having been challenged in revision before this court and at the stage of admission. It was pointed out that the circumstance, under which the suit was dismissed, was in the following background:
The suit had been posted on 21.2.2002 and since it was declared a general holiday, the case had been called on 22.2.2002, on which date, process was ordered to be taken and notice was ordered to be issued if such process was taken and the matter stood adjourned to 25.7.2002. On 25.7.2002, the case had been called out and the suit was dismissed without granting the prayer of the plaintiff to furnish process for issuance of notice to the legal representatives of Defendant No.1. The order of dismissal was made even against defendant no.2, who was on record and was contesting the proceedings. Therefore, even if the suit could have been dismissed as against defendant no.1, it could not have been dismissed as against defendant no.2, who continued to be on record. The application made on the very day seeking to recall the order was summarily rejected. This was noticed by this court at the stage of admission and it was observed that the remedy of the plaintiff was to be found in Order IX Rule 4 of the Code of Civil procedure, 1908 and not by way of a revision petition. It is in that background that the revision petition was withdrawn and a Miscellaneous Petition was filed in Misc.No.682/2002, which came to be allowed by an order dated 8.10.2002 and therefore, there is no illegality or irregularity in the suit having been restored, for it was found that the court below could not have dismissed the suit even as against defendant no.2, if there was default in furnishing process in respect of defendant no.1 and would submit that the Doctrine of Merger sought to be pleaded by the learned Counsel for the defendants would not be applicable, if the appellate or revisional jurisdiction of a higher court is not exercised on the merits of the matter and therefore, the dismissal of the suit by the trial court, sought to be contended to have merged with the order of this court, dismissing the revision petition as withdrawn, is not tenable and seeks to place reliance on the following authority:
Gangadhara Palo vs. Revenue Divisional officer and another, (2011) 4 SCC 602
Insofar as the other contention that the execution of the suit documents having been denied, it is contended that the burden was on the plaintiff to establish the same. Except the self-serving denial by the defendants, no doubt has been created insofar as the said documents are concerned and the admitted statement that the several blank papers had been signed or that the thumb impressions of the second defendant affixed and handed over to the plaintiff, would belie the claim that the defendants have not signed or affixed their thumb impressions on any document. Such a plea is taken only to overcome the execution of the documents in question. The categorical evidence of the handwriting expert that the signatures of the first defendant had been compared with the specimen signature or the admitted signature and were found to be by one and the same person is adequate proof to independently establish the execution of the document. Since the said expert had expressed some doubt about the thumb impression of the second defendant, the said report not being pressed into service, cannot be circumstance which can be cited in favour of the defendants. The court below having independently scrutinized the documents has accepted the genuineness thereof and therefore, it cannot be said that the execution of the documents has not been proved and hence Section 118 of the NI Act would come into play and passing of consideration under the documents is a presumption in favour of the plaintiff. Therefore, there is no substance in the grounds raised in the appeal and the Counsel would seek dismissal of the appeal.
7. In the light of the above rival contentions, the first point that requires to be considered would be whether the order of dismissal of the suit stood merged with the order passed by this court in revision and therefore had attained finality, and on a second application seeking restoration of the suit whether was maintainable, and whether the suit could have been revived.
The contention that the order of dismissal of the suit stood merged with the order passed by this court in revision is not a valid contention.
Insofar as the decision relied upon by the learned Counsel for the appellants in Abbai Maligai supra, is concerned, the said decision may not apply to the facts of the case on hand, since the apex court was dealing with a situation where a Single Judge of a High Court had exercised review jurisdiction in certain matters, which had originally been carried by way of a Special Leave petition to the apex court and had been dismissed by the apex court. The learned Single Judge, who was aware of such dismissal, had exercised review jurisdiction in respect of the very matters and therefore, while expressing disapproval of such action on the part of the High Court, the order being set aside, would be out of context.
In Kunhayammed and others, supra, the apex court has set out its judicial opinion on the development of Doctrine of Merger and the principles that have been established in relation to the same and summed up its conclusions as under:
“(i) Where an appeal or revision is provided against an order passed by a court, tribunal or any other authority before superior forum and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges in the decision by the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law.
ii) The jurisdiction conferred by Article 136 of the Constitution is devisible into two stages. First stage is upto the disposal of prayer for special leave to file an appeal. The second stage commences if and when the leave to appeal is granted and special leave petition is converted into an appeal.
(iii) Doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or capable of being laid shall be determinative of the applicability of merger. The superior jurisdiction should be capable of reversing, modifying or affirming the order put in issue before it. Under Article 136 of the Constitution the Supreme Court may reverse, modify or affirm the judgment-decree or order appealed against while exercising its appellate jurisdiction and not while exercising the discretionary jurisdiction disposing of petition for special leave to appeal. The doctrine of merger can therefore be applied to the former and not to the latter.
iv) An order refusing special leave to appeal may be a non-speaking order or a speaking one. In either case it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed.
v) If the order refusing leave to appeal is a speaking order, i.e. gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the apex court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting special leave petition or that the order of the supreme is the only order binding as res judicata in subsequent proceedings between the parties.
(vi) Once leave to appeal has been granted and appellate jurisdiction of Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order may be of reversal, modification or merely affirmation.
(vii) On an appeal having been preferred or a petition seeking leave to appeal having been converted into an appeal before Supreme Court the jurisdiction of High Court to entertain a revew petition is lost thereafter as provided by sub-rule (1) of Rule (1) of Order 47 of the C.P.C.”
And the following passage from Amba Bai’s case, is sought to be relied upon by the learned Counsel for the appellants:
“If the Judgment or order of an inferior Court is subjected to an appeal or revision by the superior court and in such proceedings the order or judgment is passed by the superior court determining the rights of parties, it would supersede the order or judgment passed by the inferior court. The jurisdic justification for such doctrine of merger is based on the common law principle that there cannot be, at one and the same time, more than one operative order governing the subject matter and the judgment of the inferior court is deemed to lose its identity and merges with the judgment of the superior court. In the course of time, this concept which was originally restricted to appellate decrees on the ground that an appeal is continuation of the suit, came to be gradually extended to other proceedings like Revisions and even the proceedings before quasi-judicial and executive authorities.”
While in the case relied upon by the respondent in Gangadhara Palo, supra the Supreme Court has elaborated the legal position thus:
“6. When this Court dismisses a special leave petition by giving some reasons, however meager (it can be even of just one sentence), there will be a merger of the judgment of the High Court into the order of the Supreme Court dismissing the special leave petition. According to the doctrine of merger, the judgment of the lower court merges into the judgment of the higher court. Hence, if some reasons, however meager, are given by this court while dismissing the special leave petition, then by the doctrine of merger, the judgment of the High Court merges into the judgment of this Court and after merger, there is no judgment of the High Court. Hence, obviously, there can be no review of a judgment which does not even exist.
7. The situation is totally different where a special leave petition is dismissed without giving any reasons whatsoever. It is well settled that special leave under Article 136 of the Constitution of India is a discretionary remedy, and hence a special leave petition can be dismissed for a variety of reasons and not necessarily on merits. We cannot say what was in the mind of the Court while dismissing the special leave petition without giving any reasons. Hence, when a special leave petition is dismissed without giving any reasons, there is no merger of the judgment of the High Court with the order of this Court. Hence, the judgment of the High Court can be reviewed since it continues to exist, though the scope of the review petition is limited to errors apparent on the face of the record. If, on the other hand a special leave petition is dismissed with reasons, however meager (it can be even of just one sentence), there is a merger of the judgment of the High Court in the order of the Supreme Court. (See: the decisions of this Court in Kunhayammed and others vs. State of Kerala and another, (2000) 6 SCC 359, S. Shanmugavel Nadar vs. Stat of T.N., (2002) 8 SCC 361 State of Manipur vs. Thingujam Brojen Meetei, (1996) 9 SCC 29, and U.P. SRTC vs. Omaditya Verma, (2005) 5 SCC 424.)”
The case-law that is sought to be referred to hereinabove would hardly assist the appellants. It cannot be said that the dismissal of the suit merged with the order of this court dismissing the revision petition as withdrawn and as already pointed out, the dismissal of the suit itself was irregular, as the trial court had failed to notice that the suit could not have been dismissed for default or for non-furnishing of process in respect of one of the defendants, when the other defendant was very much on record and therefore, had been summarily restored, even without issuing notice to the respondent.
Insofar as the contention that the execution of the documents has not been proved is concerned, the mere denial of the execution, though would cast the burden on the plaintiff, the admission by the defendants that there were transactions between the plaintiff and themselves and there was occasion to execute the documents in favour of the plaintiff, was apparently a caveat to overcome the documents, to which they had affixed their signature and thumb impression respectively. Therefore, it was at best a self-serving denial. The trial court has adequately scrutinized the documents in arriving at the conclusion that the execution of the documents was proved. Hence, there is no substance in the contention raised in that regard. In this view of the matter, the consideration under the suit documents having passed is a presumption that would arise in favour of the plaintiff under Section 118 of the NI Act.
Hence, there is no merit in this appeal and the same stands dismissed.
It is brought to the attention of the Court that the appellants had, in the first instance, deposited a sum of Rs.34,500/-, which the respondent is entitled to withdraw in partial satisfaction of the decree. Accordingly, the respondent is permitted the withdraw the same