Mukundbhai Vs. Banthia Trading Co. and anr. - Court Judgment

Excerpt:
- section 34: [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on petition under section 34 of the act bombay court fees act (36 of 1959), schedule i, article 3, schedule ii, article 1(f)(iii) held, according to article 3 of schedule i, on any plaint, application or petition or memorandum of appeal for setting aside or modifying an award, same court fee is payable as is payable on a plaint or memorandum of appeal under article 1. thus, when an award is challenged by a plaint, application, petition or memorandum of appeal, court fee is payable on ad valorem basis. but from this requirement of payment of court fee on ad valorem basis, article 3 excludes an application or petition or memorandum of appeal filed in civil or revenue court challenging any award made under the arbitration act, 1940.thus, the provisions of article 3 of schedule 1 do not apply when an application is filed or appeal is filed challenging an award made under the arbitration act, 1940. thus the provisions of article 3 of schedule i do not apply when an application is filed challenging an award made under the arbitration act, 1940. the question, therefore, that arises for consideration is whether reference to the provisions of 1940 act found in article 3 of schedule i of the bombay court fees act can be said to include reference to the 1996 act. perusal of the provisions of section 8 of general clauses act shows that where by a central enactment any provision of a former enactment is repealed and re-enacted with or without modification then reference in any other enactment to the provisions so repealed shall, unless a different intention appears, be construed as references to the provisions so re-enacted. in the present case, it is common ground that the former enactment is the 1940 act, the new enactment is the 1996 act and any other enactment is the bombay court fees act, the only provision of the 1940 act referred to in article 3 of schedule 1 of the bombay court fees act is the provisions of section 33 of the 1940act and bare comparison of that provision with the provisions of sub-section (1) of section 34 of the 1996 act shows that the provision of section 33 of 1940 act is repealed and re-enacted in sub-section (1) of section 34 of the 1996 act with slight modification. therefore, reference to the provisions of section 33 of the 1940 act in article 3 of schedule-i of the bombay court fees act has to be construed, in view of the provisions of section 8 of the general clauses act, as reference to the provisions of section 34 of the 1996 act. so far as an appeal filed under section 37 of the 1996 act is concerned, perusal of section 37 shows that an appeal is provided to the appellate court against an order setting aside an arbitral award or refusing to set aside an arbitral award under section 34. thus, as the provisions of article 3 of schedule-i do not apply to an application or petition filed under section 34 of the 1996 act, they will also not apply to the memorandum of appeal filed to set aside or modify an award made by the arbitrator under the 1996 act. in other words nothing contained in article 3 of schedule-i of the bombay court fees act applies to an application, petition or memorandum of appeal to set aside or modify any award made under the 1996 act as it does not apply to an application or petition or memorandum of appeal to set aside or modify an award made under the arbitration act, 1940. perusal of the provisions of section 8 of the general clauses act shows that references in any other enactment to a provision in a former enactment is to be construed as reference to re-enacted provision in the new enactment unless a different intention appears. the different intention may appear either in the new enactment or in the other enactment. nothing was pointed out either in the 1996 act or in the bombay court fees act which can be construed as a different intention or which will show that it was not the intention of the maharashtra legislature to exclude an application or petition or memorandum of appeal filed in court to set aside or modify an award made under the 1996 act, from the provisions of article 3 of schedule-i of the bombay court fees act. it appears that the intention behind excluding an application made, challenging the award made under the 1940 act, from requirement of payment of ad valorem court fee which is required to be paid if the same litigant filed a suit on the same subject matter, was to encourage a litigant to go for arbitration instead of filing a suit. nothing has been pointed out to show that ther4e is any change in that legislative policy. on the contrary, from the preamble of the 1996 act it is clear that the policy of the legislature is to encourage people to adopt the mode of arbitration for resolving disputes. article 3 of schedule-i of the bombay court fees act does not apply to a petition, application or memorandum of appeal filed for challenging an award made under the 1996 act, and court fee on a petition filed under section 34 of the 1996 act challenging an award in high court is payable according to article 1(f)(iii) of schedule ii. section 37: [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on appeal under section 37 of the arbitration & conciliation act, 1996 - held, court fee is payable according to article 13 of schedule ii of the bombay court fees act. schedule i, article 3 & schedule ii, article 1(f)(iii): [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on petition under section 34 of the arbitration & conciliation act, 1996 - held, when a petition under section 34 is to be filed before a principal civil court of original jurisdiction which is not a high court, the question arises which article of either first schedule or second schedule would apply. in so far as the challenge to an award made under the 1940 act is concerned, an application under section 33 of that act could be made to a civil court and therefore, payment of court fee was governed by article 1(a) of schedule ii. this was so because the application was to be presented to the court of civil judge which was not a principal civil court of original jurisdiction. but now because of change of definition of term court in the 1996 act, a petition has to be presented, challenging an award made under the 1996 act in terms of the provisions of section 34 thereof, before the principal civil court of original jurisdiction. no entry either in the first schedule or in the second schedule was pointed out which applies to an application or petition to be made before the principal civil court of original jurisdiction, and therefore, when a litigant wants to file petition before a principal civil court having original jurisdiction which is not high court, challenging an award made under the 1996 act, no court fee under bombay court fees act is payable because of absence of a general or specific provision. therefore, it can be said that no court fee under the bombay court fees act is payable when a petition under section 34 challenging an award is filed before any principal civil court of original jurisdiction which is not high court. schedule ii, article 13: [d.k. deshmukh, s.j. vazifdar & j.p. devadhar, jj] court fee on appeal under section 37 of the arbitration & conciliation act, 1996 - held, court fee is payable according to article 13 of schedule ii of the bombay court fees act. - the parties adduced evidence and relied on documentary as well as oral evidence. the trial court on consideration of the oral as well as documentary evidence recorded the finding that the defendants had borrowed the loan amount of rs. presumption as to negotiable instruments of the consideration--until the contrary is proved, the following presumptions shall be made--(a) of consideration--that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration; on 14.1.1974 at nagpur for your business purpose against a hundi dated 14.1.1974. the amount became due on 14.4.1974. my client several times demanded the money with interest but you failed to pay the same. ' 11. in spite of service of the aforesaid notice on the defendants they did not give any reply to the same for the reasons best known to them and instead they have taken a stand in the written statement that the hundi is a forged document. in these circumstances, the conduct of the defendants would clearly reveal that whatever defence was raised in the written statement is nothing but an afterthought only to suit their purpose to avoid the payment. if there would have been some truth in the defence, the defendants would not have failed to produce their account books to show as to what were the entries recorded by them in their account books regarding receipt of the funds borrowed by them through roshanlal. the trial court was perfectly justified in granting the decree for recovery of rs.s.t. kharche, j.1. by invoking the jurisdiction of this court under section 100 of the civil procedure code, this appeal is directed against the judgment dated 1.2.1990 of the learned additional district judge in regular civil appeal no. 35 of 1983, whereby the appeal came to be allowed and the judgment and decree granted by the trial court directing the defendants to pay the amount of rs. 9,563/- with interest at the rate of 10% per annum from the date of suit till realisation, has been set aside and the suit of the plaintiff for recovery of the said amount has been dismissed.2. briefs facts are required to be stated as under:the plaintiff has filed suit for recovery of rs. 9,563/- on the contentions that defendant no. 1 is a partnership firm of which defendant no. 2 is a partner. the partnership firm is carrying on the business in cloth at raipur. on 14.1.1974 the defendant no. 2 on behalf of the firm obtained the loan of rs. 7,000/- for the cloth business from the plaintiff by executing a hundi for the amount in the latter's favour. the defendant no. 2 signed the hundi on receiving the said amount and when the said amount was demanded on the due date, i.e. 14.4.1974 for the remaining unpaid amount, the notice dated 2.9.1976 was served and the defendants were called upon to repay the amount with interest, but did not pay the same, and therefore the plaintiff filed the suit for recovery of the said amount.3. the defendant contested the claim by filing written statement. it is contended that they did not enter into any transaction with the plaintiff nor have received the loan amount of rs. 7,000/-. it has been specifically pleaded that the defendants used to collect funds through roshanlal and in order to facilitate the collection of funds, the blank duly signed hundis were being handed over to the broker and it is the broker roshanlal who used to collect the funds for them. it is contended that any blank signed hundi might have been made over by the broker roshanlal to the plaintiff and the same hundi is a forged document and the suit is liable to be dismissed.4. on the aforesaid pleading, the trial court framed as many as six issues. the parties adduced evidence and relied on documentary as well as oral evidence. the trial court on consideration of the oral as well as documentary evidence recorded the finding that the defendants had borrowed the loan amount of rs. 7,000/- by execution of a hundi (ex. 22} on receiving the consideration and that the plaintiff is entitled to a decree for the amount rs. 7,000/- with interest at the rate of 12% per annum. the trial court negatived the contention of the defendant that the hundi was a fabricated document and also recorded the finding that presumption under section 118 of negotiable instruments act, 1881 (for short the act) would be available to plaintiff. consistent with these findings the trial court decreed the suit as mentioned above. being aggrieved by the judgment and decree passed by the trial court, the defendants carried appeal to the district court. the learned additional district judge on hearing the learned counsel for the parties and on re-appreciation of the evidence was of the view that the hundi (ex. 22) was a forged document; that the plaintiff has to stand on his own legs and cannot take the advantage of the weakness in the defence; and that there was no privity of contract between the parties. consistent with these findings, the appellate court allowed the appeal and set aside the judgment and decree passed by the trial court and instead dismissed the suit. this judgment of the appellate court is under challenge in this appeal.5. mr. h. d. dubey, learned counsel appearing for the plaintiff, contended that the execution of the hundi was duly proved and the defendant no. 2 has admitted his signature on the hundi and, therefore, presumption under section 118 of the act would be available to the plaintiff to show that there is presumption that the hundi has been executed for consideration. he contended that this presumption of law has not been rebutted by the defendants and the appellate court was totally wrong in applying the principle that the plaintiff has to stand on his legs and cannot take the advantage of the weakness in the defence. hp contended that hundi (ex. 22) is not a forged document and the appellate court was perfectly justified in granting decree for recovery of the said amount with interest. he contended that the defendants borrowed the loan amount of rs. 7,000/- and had executed the hundi on receiving the loan amount and agreed to repay the said amount by 14th april, 1974. he contended that the defendants though served with the notice did not give any reply to the notice. he contended that there was privity of contract between the parties because roshanlal was acting as a broker and used to collect funds for the defendants and that roshanlal is the nephew of one ranchhodas and the latter is the owner of bharat saree stores, situated at itwari, nagpur, and the plaintiff was in service and an' employee of bharat saree stores, and under thee circumstances the defendant no. 2 borrowed the loan amount of rs. 7,000/- from the plaintiff and on receiving the same he executed the hundi. he, therefore, contended that the impugned judgment of the appellate court is not sustainable-in-law and the appeal may kindly be allowed.6. none appears for the defendants, though duly served.7. this court has given thoughtful consideration to the contentions canvassed by the learned counsel for the plaintiff. it is not in dispute that roshanlal was working as a broker and used to collect funds for the defendants. it is also not in dispute that roshanlal is the nephew of ranchhodas and the latter is the owner of bharat saree stores, whereas the plaintiff was an employee in the same bharat saree stores. it is also not in dispute that the hundi bears the signature of defendant no. 2. some of the contents of the said hundi are typed written some portion is handwritten and those contents are incorporated on a stamp paper of rs. 2.50. it is necessary to reproduce those contents of the hindi which are as under: ' 2 rs. 50 np.rs. 7,000/-only due date 14.4.1974.(90) nagpur date 14.1.1974.ninety days from today without days of grace we banthia trading co. promise to pay to shri. mukundrai mathuradas madnani of nagpur a sum of rs. 7,000/- (rupees seven thousand only) received in cash from him today. for banthia trading co., received rupees seven thousand only.j.c. jainpartner'8. the contents mentioned in the bottom in the words 'rupees seven thousand only' are hand written. the ink used is the same for writing these contents and also for drawing the signature by defendant no. 2. defendant no. 2 who is a partner of banthia trading co., has signed this hundi by putting his signature in english. when the signature on the hundi has been admitted in the cross-examination by defendant no. 2, it would reveal that presumption of law would be available to the plaintiff.9. it is necessary to reproduce sub-section (a) of section 118 of the negotiable instruments act, 1881. it contemplates as under;'presumption as to negotiable instruments of the consideration--until the contrary is proved, the following presumptions shall be made--(a) of consideration--that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;'bare reading of the aforesaid provision, of law would reveal that once the execution of negotiable instrument is admitted, the passing of consideration can be presumed, but the course of presumption is rebuttable. the mere fact that the plaintiff did not adduce sufficient evidence to prove passing of consideration did not in any way relieve the defendants from the burden of establishing the contrary of the presumption arising under section 118 of the act. in the present case, the execution of hundi has been admitted by defendant no. 2 by putting signature and, therefore, it would follow that the presumption of law can be drawn that the hundi was executed for consideration. the defendants did not adduce any evidence to discharge the burden of establishing the contrary to the presumption arising under the aforesaid provision of law and, therefore, the appellate court committed an error in shifting the burned of proof on the plaintiff to show that there was a privity of contract between the parties.10. it is pertinent to note that the hundi (ex. 22) was executed on 14.1.1974 and the defendants had promised to pay the sum of rs. 7,000/- on or before 14th april, 1974. the amount was outstanding against the defendants though demanded several times and, therefore, the defendants were ultimately served with the notice (ex. 23) dated 2.9.1976 which was sent by r.p.a.d. and the postal acknowledgement has also been placed on record. the defendant no. 2 admits in his cross-examination that he had received the said notice but he did not give any reply to the said notice. it is necessary to reproduce the relevant contents of the said notice which are as under:'my client had advanced you a friendly loan of rs. 7,000/- on interest at 12% p.a. on 14.1.1974 at nagpur for your business purpose against a hundi dated 14.1.1974. the amount became due on 14.4.1974. my client several times demanded the money with interest but you failed to pay the same. the total amount due against you for principal and interest till today is rs. 8,995/-. by this notice i call upon you to pay the said amount within four days from receipt hereof failing which my client shall be constrained to file civil suit against you for recovering the said amount with interest and cost.please note.'11. in spite of service of the aforesaid notice on the defendants they did not give any reply to the same for the reasons best known to them and instead they have taken a stand in the written statement that the hundi is a forged document. in these circumstances, the conduct of the defendants would clearly reveal that whatever defence was raised in the written statement is nothing but an afterthought only to suit their purpose to avoid the payment. the appellate court has wrongly applied the principle that the plaintiff has to stand on his own legs and cannot take the advantage of weakness in the defence. the onus was on the defendants to prove by the cogent evidence to show that they did not receive the consideration of rs. 7,000/- and in absence of evidence in rebuttal the presumption is available to the plaintiff under section 118 of the act and it would lead to an irresistible conclusion that the amount of rs. 7,000/- was paid to the defendant no. 2.12. in such circumstances, it is not possible to accept the defence put forth by the defendants that they used to keep blank hundis duly signed by them with roshanlal and the latter used to collect funds for them and the present hundi (ex. 22) might have been one of the documents which was kept with roshanlal duly signed. if there would have been some truth in the defence, the defendants would not have failed to produce their account books to show as to what were the entries recorded by them in their account books regarding receipt of the funds borrowed by them through roshanlal. .13. even the broker roshanlal did not maintain the accounts and in absence of that evidence, it is quite clear that the defence sought to be raised was only for the purpose to avoid the payment. therefore, this court is of the considered opinion that the approach of the appellate court to the matter was totally wrong, ignoring the presumption of law, and instead placing the burden on the plaintiff to prove the absence of the consideration. it is, therefore, clear that the impugned judgment of the appellate court has resulted into miscarriage of justice. the trial court was perfectly justified in granting the decree for recovery of rs. 9,563/- and in such circumstances the impugned judgment cannot be sustained in law. therefore, the appeal is allowed with costs. the impugned judgment of the appellate court is set aside and that of the trial court is restored.