K.C. Agarwal, J.
1. This appeal is directed against the judgment dated 13-11-1963 of the IInd Addl. Civil Judge, 'Nainital, decreeing the suit of the plaintiff for the return of Truck No. U.S.N. 1117 and for recovery of damages. The defendant was further directed to execute a deed of reconveyance in favour of the plaintiff in respect of the truck mentioned above, failing which the plaintiff was entitled to recovery of a sum of Rs. 18,000/- from the defendant as price of the truck.
2. The plaintiff's case, as laid in the plaint is that he purchased Truck No. U.S.N. 1117 in March, 1959 and as he did not have any truck work to execute, the truck was standing idle. Yadav Ram the defendant approached the plaintiff for taking the truck on hire. Consequently the plaintiff gave the truck to the said defendant on June 8, 1959 on hire for a period ending December 31, 1959. The defendant agreed to pay Rs. 1000/- per month of hire. The plaintiff further alleged that in order to enable Yadav Ram to obtain a permit in his name from the Regional Transport Authority, the plaintiff executed a receipt showing transfer of the truck to the defendant in lieu of Rs. 18,000/-. The receipt executed was fictitious and unreal, The defendant thereafter made an application to the R. T. A. for the permit for the aforesaid truck on the basis of the receipt obtained by him from the plaintiff. On the same day, simultaneous to the execution of the receipt, an agreement was executed by Yadav Ram whereby he undertook to return the truck to the plaintiff in the beginning of January, 1960 without receiving any money. The plaintiff stated that as the defendant neither paid the hire nor returned the truck to the plaintiff after expiry of December, 1959, the plaintiff got suspicious. He thereafter sent a notice dated 5th of Jan. 1960 to the defendant to return the truck. The defendant gave a false and incorrect reply to the said notice and refused to hand over the truck. Consequently, the plaintiff filed the suit for the return of the truck and, in the alternative, for the recovery of Rs. 32,000/- as its price. The plaintiff also claimed damages for the period from 1st of Jan. 1960 upto the date of delivery of the truck. A sum of Rs. 6,000/- was claimed by him as hire for the period 8th of June, 1959 to 31st Dec. 1959.
3. In his written statement Yadav Ram the defendant denied the allegations made in the plaint. He alleged that a sum of Rs. 11,415/- was outstanding against the plaintiff in respect of certain commodities purchased by him from time to time from the defendant's firm--Ram Lal Ram Swarup--and the money borrowed by him in cash. Further, a sum of Rs. 20,000/- was due from the plaintiff to the defendant towards the profits of different contracts which he and the plaintiff had carried out in partnership. The truck in suit was given by the plaintiff to defendant to liquidate a part of the debt. The truck was transferred in favour of the defendant in lieu of Rs. 18,000/- which was duly adjusted towards the dues recoverable by the defendant from the plaintiff. The allegation made further by the defendant was that at the time of making the transfer the parties had settled that in case the plaintiff wanted to get the truck reconveyed in his favour, the defendant would return the same on payment of Rs. 18,000/- besides other dues referred to above. The defendant denied that the truck was taken by him from the plaintiff on hire. He further alleged that the receipt dated 8-6-1959 was executed by the plaintiff acknowledging receipt of Rs. 18,000/-as the said amount had been adjusted under the settlement arrived at between the plaintiff and the defendant towards the old debt which was payable by the former to the latter. With regard to the agreement dated 8th June, 1959 the defendant alleged that the same was fictitious and fraudulent. He denied the liability of payment of damages as well as the amount claimed by the plaintiff as rent.
4. The trial court framed a number of issues and after taking the evidence, both oral and documentary of both the parties, accepted the plaintiff's case in toto and passed a decree for the return of the truck. Feeling aggrieved, the defendant filed the present appeal against the aforesaid judgment and decree.
5. We have heard the learned counsel for the parties at some length and have gone through the judgment of the trial court. We have also been taken through the entire evidence. We are constrained to observe that the court below has not made a correct approach to the facts of the present case and has proceeded mostly on conjectures and speculations and has also committed errors of record in arriving at some of the important findings.
6. Before dealing with the merits, we may say a word relating to the evidence which is admissible in a case like the present. All legal evidence is either direct or circumstantial. By direct evidence is meant when the principal fact is attested directly by witnesses, things or documents. To all other forms, the term circumstantial evidence is applied. The basic distinction between the direct and the circumstantial evidence is that in the former witnesses testify directly of their knowledge as to the facts to be proved, while in the latter proof is given of facts and circumstances from which the court may infer other facts which reasonably follow. Circumstantial evidence proves and tells the story of a transaction which has already been completed. It is said that witnesses may lie, but circumstances do not. Since it is often not possible to bring direct evidence to prove the real character of a transaction, circumstantial evidence is permitted to be brought on record to prove the same. In fact, sometimes circumstantial evidence is as cogent and as irresistible as direct as positive testimony of the witnesses. Thus, whether a transaction is sham or fictitious and not real may be proved by inferences which may reasonably be drawn from the intrinsic evidence respecting the transaction itself or from extrinsic circumstances surrounding the transaction. While we will discuss the evidence adduced in this case, we will show that the trial court committed an error in not, referring to the circumstances and in deciding the case by making a wrong approach to it.
7. The main controversy between the parties was whether the plaintiff was entitled to the return and reconveyance of the truck in suit. It is the admitted case of the parties that the truck belonged to the plaintiff who had purchased the same in March, 1959. According to the plaintiff, the truck was given to the defendant on hire on 8th June, 1959. To prove his case the plaintiff appeared in the witness box as a witness. He further filed the agreement dated June 8, 1959 executed by Yadav Ram defendant in which the latter acknowledged and admitted that he was not the owner of the truck and that the same had been taken by him on hire from the plaintiff @ Rs. 1000/- per mensem. In this agreement the defendant also admitted that the receipt executed by Laxman Singh Bisht the plaintiff on 8th of June, 1959 acknowledging the payment of Rs. 18,000/- was false and that the same was obtained by the defendant from the plaintiff only to enable the latter to obain the permit. The circumstances under which the aforesaid agreement and the receipt had been executed by the defendant and the plaintiff respectively have been explained by the defendant in his deposition. The execution of the agreement dated 8-6-1959 having been admitted by the defendant, the only question that remains to be examined is whether the same was fictitious and sham, as contended by him. It has come in evidence of the said defendant that the plaintiff and the firm Ram Lal Ram Swarup, of which the defendant was a partner, had business relationship. The plaintiff used to borrow money in cash from the defendant and also used to obtain ration and other commodities. The defendant stated that the total amount of these two items had exceeded Rs. 14,000/- when the truck in question was given by the plaintiff to the defendant. To prove his case of the business dealings between the plaintiff and the firm, Ramlal Ram Swarup, the defendant produced the 'Bahi Khatas' of the said firm. The plaintiff also admitted that he was doing the business of supplying ration at the sites where the contracts used to be executed in partnership with the defendant. He further admitted that the truck given by him in June, 1959 was registered in the name of the firm Ramlal Ram Swarup and since then it was running in the same name on the permit obtained by the said firm.
8. Sri S. P. Gupta counsel for the defendant contended that on the facts and circumstances of the present case it was not believable that the truck was given by the plaintiff to the defendant on hire. He assailed the statement of the plaintiff and contended that it was not worthy of being relied upon inasmuch as he even denied the facts in proof of which documentary evidence has been brought on record. He further pointed out that the defendant admitted that the parties were having financial dealings under which the plaintiff had taken money from the defendant. It is, no doubt, true that in his statement the defendant had alleged that Ex. A/4 had been executed by him only for the purpose of enabling the defendant to obtain the permit, but on examination of the entire facts and circumstances of the present case it appears to us to be highly improbable that the plaintiff could have given the truck to the defendant on hire. We have carefully examined the statement of Laxman Singh Bisht, the plaintiff. We find that at places more than one, he attempted to conceal the true facts and gave incorrect versions about them regarding which there was no occasion for him to do so. Admittedly, the written contract between the plaintiff and the defendant relating to Pat Kote canal contract had been entered into between the plaintiff and the defendant and the terms of the same were also reduced to writing. The plaintiff still had the audacity to say that he knew nothing about the terms of the contract. Although in his statement made under Order X Rule 2 C. P. C. the plaintiff admitted that the aforesaid truck was with the defendant prior to June 8, 1959 for three months, but in his statement made in the court on oath he denied the said fact. This may not be a conclusive circumstance, but the court has to scrutinise it carefully. Prudence requires that the testimony of such a person should be carefully examined before relying upon it. Apart from the statement made by him, the other document which supports his case is the agreement dated 8th June, 1959 executed by the defendant. Although the execution of this document has been admitted by the defendant, he has made a consistent statement in the court explaining the circumstances under which the same was executed. He pointed out that as over Rs. 33,000/- were due to the firm Ramlal Ram Swarup and the plaintiff had not paid the same, the defendant pressed upon the plaintiff for the payment of the amount. It was then that the plaintiff gave the truck to him. The defendant had, however, agreed to return the truck to the plaintiff in case the sum of Rs. 18,000/-, which was adjusted towards the old dues had been paid by the plaintiff to the defendant. The statement of the defendant made to the effect that the truck was not taken by him on hire appears to be convincing. The plaintiff himself admitted that after the truck was given by him to the defendant, the same was got registered in the name of the firm Ramlal Ram Swarup. Had the plaintiff not given the said truck towards the liquidation of the debt due to the said firm, he could have immediately objected to the obtaining of the permit by the said firm in its name. The fact that the plaintiff kept silent and did not assert that the said firm had no right to obtain the permit, establishes that the truck was not given by him to Yadav Ram on hire.
9. Apart from the above, there are more important circumstances which clinch the controversy in favour of the defendant. Under the terms of the agreement Ex. 4 the defendant was liable to pay the rent @ Rs. 1,000/- per mensem. The liability to pay the rent accrued with effect from the date on which the permit was obtained from the Regional Transport Authority to ply the truck but the defendant did not pay any rent or hire to the plaintiff, as agreed to in Ex. 4. Normally, the plaintiff was expected to make a demand for the rent from the defendant. He did not do so. The fact that the demand for the hire was not made from the defendant shows that the same was not taken by the defendant for the purpose alleged by the plaintiff, otherwise the plaintiff would have made demand for the same. The rent was payable month-wise. The defendant kept the truck for about six months with him without paying a single paisa towards the hire, but curiously enough the plaintiff did not demand it.
10. The other noteworthy circumstance is that the truck was taken by the defendant on hire from the plaintiff only for six months. In case the plaintiff did not require the truck for his use the same should have been given for a longer period on hire to the defendant. Under the agreement Ex. 4 the defendant was required to return the truck by the end of Dec. 1959. At the time when this agreement was written the permit had not even been obtained. The date on which such a permit could be obtained was not known. Accordingly the taking of the truck for such a small period on hire does not appeal to the reason. It appears that the truck was given by the plaintiff because demand for the amount which was due from him must have been pressed upon. In order to pacify Yadav Ram, who was one of the partners of the firm Ramlal Ram Swarup, the plaintiff gave the truck with an understanding that the same would be returned by the latter when the payment of money was made.
11. Another circumstance which may be noted is the promptness with which the notice was given by the plaintiff to the defendant on 1st of January, 1960 for the return of the truck. If the truck was really on hire, there was no need to give such a notice so soon as January, 1960. This demonstrates that the plaintiff was advised to assert his right on the basis of the agreement Ex. 4 at the earliest in order to show that the same was genuine. One fails to understand the hurry for giving such 5 notice. The amount of hire on which the truck was let by the plaintiff to the defendant had been mentioned in the agreement. The plaintiff could get the same even for the period after the expiry of the term for which the truck was taken. Had it been genuine case of taking the truck on hire by the defendant from the plaintiff, the latter would not have given the notice for the return of the truck. Soon after the receipt of the notice dated 5-1-1960 the defendant gave the reply on 8-1-1960 refuting the allegations made in the notice and stating that the agreement Ex. 4 was fictitious or sham, not executed with a view to give effect to it.
12. The next thing which may be pointed out is that a hire purchase agreement normally contains express provisions for the termination in ceratin specified events, notably a breach by the hirer of any contractual term. Such termination may be automatic on the occurrence of the specified event or by the owner on giving notice of termination or by the owner without notice. On termination in accordance with the contractual provisions, the owner is, just as in the case of termination at common law, entitled to the possession of the truck. Such a clause is missing in the contract. The omission to mention it is not only an accidental mistake. It shows that the parties never wanted it to be an agreement of hire.
13. Some emphasis was laid by the learned counsel appearing for the plaintiff on the fact that since the defendant himself admits the receipt Ex. A/1 dated 8th of June, 1959 to be fictitious or fake, therefore the court should hold that the theory of adjustment of Rs. 18,000/- was not established. It is true that according to the defendant himself, the payment of Rs. 18,000/- was not made in cash as recited in Ex. A/1, but the defendant definitely alleged that this amount was due from the plaintiff and it is towards the payment of the said dues that this receipt was executed. Merely because the defendant stated that the sum of Rs. 18,000 was not paid in cash that would not be a circumstance in favour of the plaintiff. Learned counsel for the defendant also referred to the language of the agreement Ex. 4 and contended that there is no doubt that it was not real one. What is still more curious is that the truck was given by the plaintiff to the firm Ramlal Ram Swarup without any security. If the truck had been given on hire the plaintiff should have obtained some sort of security to safeguard his interest. It, is not believable that a truck valuing over Rs. 15,000/- was given on hire without any security. This circumstance again is inconsistent with the case of the plaintiff. It appears that the court below was also wrong in disbelieving the case of the defendant on the ground that since the defendant had not given any particulars of the alleged frauds, the defendant could not be heard to assert the same. The approach of the learned court below is incorrect. In the written statement, the defendant definitely and clearly asserted that the agreement Ex. 4 was not the reproduction of the terms agreed upon by the parties. It was fake, written only with a view to enable the plaintiff to take back the truck in future in case he so desired. On the facts of the present case the defendant was not required to state anything more than whatever he had stated. A pleading has to be read as a whole to ascertain its real import. It is the substance and not merely the form that has to be looked into. A court is required to gather the intention of the party from the tenor and terms of his pleadings taken as a whole. If the court below had read the written statement in the light of what we have said above, it would not have come to the conclusion mentioned above. It is also wrong, as observed by the court below, that the defendant had not given satisfactory. explanation from his side. The agreement Ex. 4 was executed when the real transaction entered into between the parties was a sale.
14. Another aspect of the matter which needs to be mentioned here is about the opinion of the court below that the case set up by the defendant and the oral evidence produced by him in support thereof, being absolutely inconsistent and contrary to the terms contained in the written agreement. Ex. 4 cannot be looked into. The view taken by the court below is incorrect. Sections 91 and 92 of the Evidence Act do not preclude a party from giving evidence to show that the written agreement executed was never intended to operate as an agreement, but was brought into existence solely for creating the evidence. In Tyagaraya Mudaliar v. Vedathannia the Privy Council observed thus (at p. 73).
'Section 92 only excludes oral evidence to vary the terms of the written contract, and has no reference to the question whether the parties had agreed to contract on the terms set forth in the document. So also Section 91 only excludes oral evidence as to the terms of a written contract. Oral evidence is admissible therefore to show that a document executed by a person was never intended to operate as an agreement but was brought into existence solely for the purpose of creating evidence about some other matter.'
15. The only other thing that remains to he considered is the argument of the learned counsel for the plaintiff that even if the truck was not given on hire by the plaintiff to the defendant, the plaintiff may not be entitled to hire, but he would certainly be entitled to the return of the truck. The argument was based on the admission of the defendant that at one time the plaintiff was the owner of the said truck. It is true that the defendant admitted that the plaintiff was the owner of the truck, but that itself would not be of any avail to the plaintiff. According to the plaintiff, the truck was given by him to the defendant under an agreement arrived at on 8th of June, 1959 when the defendant obtained it on hire. Since we have disbelieved the case of the plaintiff that the truck was given on hire, we cannot pass the decree in favour of the plaintiff directing the defendant to return it. The plaintiff could not succeed in proving his own case. He, having failed to do so, cannot be granted a decree on the basis that since the truck was found in possession of the firm Ramlal Ram Swarup, a decree for its return must be passed in favour of the plaintiff. On his failure to prove his case, as alleged the plaintiff could not be permitted to ask the Court to carve out a new case for him either by stretching his pleadings or reading into them something which was not there. In the absence of any proof of the right under which the plaintiff was entitled to the return of the truck, we cannot grant any decree to him. In our opinion the agreement. Ex. 4 is sham as the same was executed by the parties with the common intention that the said document was not to create the legal rights and obligations which it ostensibly appears to create.
16. On a consideration of the evidence of the plaintiff and the defendant we are clearly of the opinion that while the evidence of the defendant and the circumstances existing on record have a ring of truth, the evidence of the plaintiff is not worthy of credence. In other words, the evidence of the defendant on the question that the truck was not taken by him on hire far outweighs the evidence of the plaintiff's credibility and, in our opinion, the trial Court was wrong in accepting the evidence of the plaintiff on this point.
17. Another point which needs to be considered is about the fact of the suit having been filed against Yadav Ram as partner of the firm Ramlal Ram Swarup and not against the firm itself. We have indicated above that from the evidence of the plaintiff as well as from that of the defendant the truck was given to the firm Ramlal Ram Swarup. The liability to return the truck, if any, was that of the said firm. The plaintiff, however, filed a suit against Yadav Ram. It was not against the firm. It is true that a firm does not have a legal entity, but Order XXX Rule 1, C. P. C. permits that two or more persons claiming as partners may sue or be sued in the name of the firm. Appendix 'A' to the Code shows that in a suit against a firm description of the defendant should be 'A, B, a firm carrying on the business in partnership at .....'. It is not necessary to give the names of the partners or to sue the firm through the partners. As the suit was not against the firm it is liable to be dismissed on this ground as well.
18. Sri S. P. Gupta, counsel for the defendant, also challenged the decree for damages awarded by the court below and contended that the same is against all principles of law. Since we have not accepted the main case of the plaintiff, it is not necessary for us to go into the same. We, however, wish to observe that the court below was absolutely wrong in awarding damages @ Rs. 1000/- per mensem.
19. For these reasons the appeal succeeds and is allowed. The judgment and decree of the court below are set aside. The suit is dismissed with costs.