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Satya NaraIn Vs. Smt. Nanki Devi - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberSecond Appeal No. 1274 of 1962
Judge
Reported inAIR1968All224
ActsEvidence Act, 1872 - Sections 11 and 101 to 104; Contract Act, 1872 - Sections 18; Stamp Act, 1899 - Sections 36 and 61
AppellantSatya Narain
RespondentSmt. Nanki Devi
Appellant AdvocateAmbica Pd. and ;H.P. Agarwal, Advs.
Respondent AdvocateRoshanlal Bhata and ;S.N. Verma, Advs.
DispositionAppeal allowed
Excerpt:
(i) civil - validity of transaction - sections 101, 104,and 111 of evidence act, 1872 - promissory note executed because the other party denied execution and saying that the document is forged - respondent is a female - held, respondent has signed the promissory note - she is not pardanashin woman. (ii) civil - promissory note not stamped properly - sections 36 and 61 of stamp act, 1899 - at one point the respondent counsel object that the promissory note is not stamped sufficiently - held, court denied this objection on the grounds that case should be decided on merits not on the technical objections - appeal allowed. - - on appeal the learned additional district judge held that the appellant stood in a position of active confidence to the respondent and, therefore, under section 111..........dismissing his suit for the recovery of a sum of rs 6,529/4/6 plus interest on the basis of a promissory note. the plaintiff appellant satya narain and the defendant respondent smt. nanki devi are related, though the relationship is distant. the appellant alleged that the respondent's husband was his uncle (mama) who died in 1949 leaving two widows one of whom is the respondent nanki devi; that the respondent resides in last pakistan; that after her husband's death the two widows had disputes: that the respondent required money for recovery of the debts due to her late husband and requested him (the appellant) to help him and he agreed; that he advanced her money to triable her to file a suit in the court of the civil judge at fatehpur and another sum of money to pay a part of the.....
Judgment:

S.S. Dhavan, J.

1. This is a plaintiff's second appeal from the decree of the Additional District Judge, Kanpur confirming that of the First Additional Civil Judge, Kanpur dismissing his suit for the recovery of a sum of Rs 6,529/4/6 plus interest on the basis of a promissory note. The plaintiff appellant Satya Narain and the defendant respondent Smt. Nanki Devi are related, though the relationship is distant. The appellant alleged that the respondent's husband was his uncle (mama) who died in 1949 leaving two widows one of whom is the respondent Nanki Devi; that the respondent resides in last Pakistan; that after her husband's death the two widows had disputes: that the respondent required money for recovery of the debts due to her late husband and requested him (the appellant) to help him and he agreed; that he advanced her money to triable her to file a suit in the Court of the Civil Judge at Fatehpur and another sum of money to pay a part of the sale price of the house which the purchased in Kanpur, and a further sum of money to enable her to carry out the repairs of the house purchased by her; that the respondent was unable to re-pay the amounts borrowed by her but on the appellant's insistence she executed a promissory note on 16-5-56 for Rs. 6529/4/6 with interest at the rate of eight annas per cent per month: that the respondent had not paid this amount in spite of several demands and the appellant was compelled to file the suit as the limitation was expiring.

2. The respondent resisted the suit and denied all liability. She denied that she had executed any promissory not to borrow any money at any time from the appellant, and alleged that the latter had filed a falsa claim at the instigation of the co-widow of her husband. She further alleged that after the death of her husband the appellant was looking after her affairs till 1956 and during this period he was getting money from the respondent under various pretexts and in this manner squandered various amounts by misrepresentation. She contended that during their dealings the appellant was occupying a position of confidence and was also in a position to dominate her will.

She alleged that he was getting various papers signed by her under the pretext that they were required in connection with the litigation in the Fatehpur Court and further alleged (to quote her own words),

'it appears that ha got the signature on a blank printed form of pronote and later on got a pronote prepared on the same.'

She also alleged that the plaintiff was in a position to dominate her will and she was a widow of immature understanding and not conversant with preparation of documents, and if the plaintiff abused his position and made her sign the document without getting it filled up and completed and without making her understand the implications, then the contract, if any, was voidable at the instance of the respondent on the ground that it had been induced by misrepresentation and undue influence.

3. Both sides led evidence, oral and documentary. The plaintiff gave evidence himself and produced his son Shri Narain and three other witnesses to prove the advancing of moneys to the defendant from time to time and also examined the scribe and the witnesses of the promissory note. These witnessees testified that the note had been signed by the respondent in their presence. The defendant also gave evidence and testified that she never needed any money from the appellant nor asked him for any loan. She deposed that whenever she needed any money she borrowed it from other persons but never from the appellant She examined Ayodhya Prasad who deposed that he advanced a sum of Rs. 4,000/- to her and also produced Mathura Prasad who deposed that he had sold the Kanpur house to her and that he had repaired the houst before selling it She also produced certain documents with the object of showing that the appellant had acted as her pairokar in the Fatehpur suit and in another proceeding at Kanpur. She also produced two postcards written by the appellant's son Shiy Narain for the purpose of proving that he was in charge of her affairs during her absence in East Pakistan.

The trial court, after reviewing the entire evidence, believed the respondent's version and disbelieved the appellant's story that he had lent moneys to her. It held that the promissory note and the receipt were not executed for consideration. It also held that the promissory note was not duly executed. On these findings it dismissed the suit with costs. On appeal the learned Additional District Judge held that the appellant stood in a position of active confidence to the respondent and, therefore, under Section 111 of the Indian Evidence Act, the burden of proving the good faith of the transaction was on him. He then considered 'whether that burden had been discharged', and observed that there was a complete absence of any evidence of any amounts having been lent actually by the appellant to the respondent and that the only witnesses of payments were the plaintiff and his son Shiv Narain. He rejected the Bahis of the appellant as 'wastepaper'. He disbelieved the plaintiff's witnesses who had testified that the note was executed in their presence. He believed the defendant's witnesses. On these findings he held that the appellant had failed to prove either the execution of the note or its consideration and dismissed the appeal. The appellant has now come to this Court in second appeal.

4. I have heard learned counsel for the appellant and respondent at considerable length. As this case presented some peculiar features, I permitted the appellant's counsel. In the interests of justice, to prepare a typed paper book of the entire record for my perusal. The hearing of this appeal lasted several days.

5. The first question before me is whether the view of the learned appellate Judge that there was a relationship of active confidence between the appellant and the respondent as contemplated under Section 111 of the Evidence Act is correct; and if not, whether this erroneous view vitiates his findings of fact. The respondent, to prove this alleged relationship of active confidence, relied on the following facts:

(1) The plaintiff was looking after the affairs of the defendant from the death of her husband till 1956;

(2) he was in a position to dominate her will;

(3) she was a widow of immature under-standing and not conversant with the preparation of documents;

(4) he was getting various papers signed by her under the pretext that they were required in connection with the litigation in Fatehpur;

(5) It appeared that he got the signatures on a blank printed form of pronote and later on got a pronote prepared on the same.

6. It will be observed that the defence in the written statement with regard to the execution of the promissory note appears to be self-contradictory. In paragraph 12 the respondent alleged that she never executed any promissory note in favour of the appellant, whereas in paragraph 20 she alleged, 'It appears that he got the signatures on a blank printed form of pronote and later on got a pronote prepared on the same'. The second statement, taken at its face value, appears to be an admission that she may have signed the promissory note in dispute, and this is confirmed by her contention in paragraph 22 that the contract, if any, was voidable at the instance of the respondent, 'having been induced by misrepresentation and undue influence.' But Mr. Roshan Lal Bhatla who appeared for the respondent in the Courts below and also before me in this appeal explained that paragraphs 20, 21 and 22 of the written statement were not intend-ed to contain a plea of admission of the execution of the promissory note, but only an admission of a possibility that the appellant might have obtained the respondent's signatures on a blank printed form by fraud. Learned counsel stated that the second half of paragraph 22 of the written statement should read as follows:

'If the plaintiff abused his position and made her sign the document without getting it filled up and completed and without making her understand the implications

......................................'

The question before me is whether on these facts the lower appellate court was Justified in holding that the appellant stood In a position of active confidence to the respondent. The respondent is not a pardanashin woman. After the death of her husband in East Pakistan she managed his property (with the assistance of the Muneems). She has travelled from Pakistan to India and back alone on a number of occasions. It is quite true that the appellants acted as her pairokar in the two suits mentioned above, and his denial of this fact was disbelieved by the courts below--rightly in my opinion. But a pairokar is not necessarily in a position of active confidence to the person on whose behalf he does pairvi in that person's suit: The Court has to consider the totality of circumstances and the conduct of the parties to determine whether one of them stood at the material time in the active confidence of the other.

The following facts have been either admitted or proved by evidence:

(1) The respondent appointed Vakils and Instructed them in connection with her litigation.

(2) She purchased property in Kanpur and, to quote her own words, 'I had seen the house when I paid the earnest money.'

(3) She has taken loans from various persons without the help of the appellant.

(4) On the very day when she purchased the house in Kanpur she mortgaged it for a sum of RS. 8,000 and subsequently paid off the mortgage debt.

(5) She borrowed a sum of Rs. 1,700 from Vishav Nath Prasad Devi Dayal for the purpose of depositing the amount in Court. According to her own admission she had a cheque for Rs. 5,100 prepared on the very day when she borrowed Rs. 1,700.

(6) She approached one Tulsi Ram, who is described as a friend of her late husband, for the purpose of borrowing money and this person introduced her to his brother-in-law Ayodhya Prasad who became willing to lend her a sum of Rs. 4,000. She signed an agreement as evidence of this loan. Ayodhya Prasad admitted that the respondent herself brought the stamped paper on which this agreement was signed. The money was lent at a comparatively modest rate of interest at ten annas per cent per month, simple interest, which indicate that she made a good bargain.

(7) She has bank accounts which she operates herself.

(8) She brought Rs. 5,000 or Rs. 6,000 in cash from Pakistan though she travelled alone--an act of unusual courage.

(9) She appointed one Ram Ghulam as her attorney general in a suit.

(10) She obtained a succession certificate after the death of her husband which required appearance in Court.

(11) She had some dealings with Lakkhoo Babu for she deposed, 'I have brought money from Lakkhoo Babu in Calcutta where I used to keep money in deposit'. From these facts it is not possible to hold, as alleged by her, that she was a widow of Immature understanding and not conversant with preparation of documents. I think a woman who can purchase property, borrow money from strangers and execute mortgages, operate bank accounts and have business dealings with others must have some experience of wordly affairs and is capable of protecting her own interests.

7. As regards her relations with the appellant, it is established that he was acting AS her pairokar in two suits. But as stated above a pairokar is not necessarily in a position of active confidence. It is note-worthy that though she took work as pairokar from the appellant, she never appointed him is her Mukhtare Am as she did with Ram Ghulam. A Mukhtare Am has a general power of attorney and therefore enjoys the confidence of the person who appoints him. But whenever the respondent selected & mukhtare am, her choice was not the appellant but some one else. I have perused the antire evidence, but found nothing to show that the respondent was depending upon the plaintiff for guidance or under his influence. The mere fact that she was a widow and that the appellant was her pairokar in two cases ts not sufficient to justify the conclusion of the learned appellate judge that he stood in a position of active confidence to her.

8. There is one fact which must be mentioned, though it was not pointed out by any of the learned counsel for the respondent. While reading the testimony of the appellant's son Shiv Narain I came across the following statement made in cross examination:

'I know Smt. Nanki Devi from ten years when she had come to my house when she was ill. She lived with us for one or li years.'

Ordinarily this would be a material fact in considering whether one party stood in a position of active confidence to the other. But in the preserft case the respondent made no such allegation in her written statement nor did she stase in her evidence that the appellant took advantage of her illness while she was residing in his house. It is not her case that she was made to sign this promissory note while she was residing with the appellant or when she was ill.

9. It has been held in several cases that if a woman is literate and of considerable intellectual capacity and habits, the Court will not be inclined to presume that the party with whom she has dealings stood in a position of active confidence to her.

10. I shall now consider the cases cited by learned counsel for the respondent. In A. V. Palanivelu Mudaliar v. Neelavathi Ammal , the Privy Council held that the onus of proving that a promissory note was not executed under undue influence was on the plaintiff who sued on the note. But in this case the defendant, the maker of the note, was the younger sister of the wife of the plaintiff and it was established that the plaintiff was managing the affairs of the defendant who depended upon her in several matters. This decision has no application to the present case, because the respondent did not depend upon the appellant in the same way. In Ram Parshad Misser v. Ranee Phoolputtee, (1867) 7 Suth WR 98 a Mukhtar sued a Hindu widow upon a parwana which purported to give away valuable properties without any substantial consideration. It was held that the onus was on him to satisfy the Court as to the circumstances under which the widow's seal was obtained and also to prove that the gift was made by her advisedly. This case too has no application because there is no transaction which is admitted by the respondent

Section 111 applies where the validity of a transaction, which is otherwise valid in all respects, Is called in question on the ground that the person benefiting from it old not act in good faith or took advantage of his position. If for example a solicitor obtains property from his client or a doctor from his patient or a guru from his chela and subsequently the donor or transferor wants to have it set aside on the ground that the donee took advantage of his position, the onus will be on the solicitor or the doctor or the guru to establish his good faith. But where one party alleges that the other executed a promissory note in consideration of a debt, and the other denied execution and alleges that the document itself is a forged one, the simple question is which side is telling the truth and Section 111 ordinarily has no application.

In the present case the appellant has sued the respondent on a promissory note and she has denied having executed it and alleged that the entire story of the appellant is a fabrication. In such a situation the Court has to decide on the evidence which Version is true. Moreover, in the present as the question of onus of proof became irrelevant when both sides have produced evidence in support of their respective versions. All that the Court has to do was to assess the evidence and decide which party is telling the truth. The trial court made a correct approach and held on the evidence before it that there was no consideration for the note but the appellate judge took the view that the appellant was in a position of active confidence to the respondent and, therefore, the onus was on him to prove his good faith. In this he was in error. The question was not whether the appellant had acted in good faith but whether his version was true or false. If false, the suit had to be discussed; but if true It had to be decreed.

11. Learned counsel for the respondentthen argued that even assuming that the appellate judge erred in applying Section 111 to thiscase, this error did not influence his ultimatedecision. I cannot agree. The entire reasoning of the learned Judge is coloured by hisview that Section 111 applied to this case. Hisvery conclusion proves this. He observed,'The result is that the plaintiff appellant hasfailed to prove either the due execution ofthe pronote or its consideration.

12. Learned counsel for the respondent contended that the appellant's suit should be dismissed in any case because the onus of proving the execution of the promissory note was on him and both the courts below have held that he failed to prove This argument overlooks that the respondent in paragraphs 20. 21 and 22 of her written statement virtually admitted that she had signed the note. In naragraph 20 she stated

'. . . . it appears that he got the signatures on a blank printed form of pro-note and later on got a pronote prepared on the same.' In paragraph 22 she alleged, 'That in any case the plaintiff was in a position to dominate the will of the defendant and the defendant is a widow of immature understanding and is not conversant with preparation of documents and the plaintiff abused his position and made her sign the document without getting it filled up and completed and without making her understand the implications and the contract, if any is proved, is voidable at the instance of the defendant, having induced by misrepresentation and undue influence.' This paragraph, as I understand raises a plea of what is known as non est factum, which means that the defendant's signatures were obtained by fraud and her mind did not accompany the physical act of signing the document.

Learned counsel stated that this paragraph which was drafted by him, was not intended to admit even the physical act of signing the document. It is not for me to say what the intention of the learned counsel was, but the language of the paragraph conveys an impression that the respondent admitted her signatures. This is obvious from the statement that 'the contract if any is proved is voidable at the instance of the defendant; having been induced by misrepresentation or undue influence.' This statement is virtually an admission that there was a contract but it was obtained by misrepresentation or undue influence. There can be no contract in a promissory note unless the maker has signed the note. The respondent should have applied to the trial court for the amendment of the written statement if she thought that it did not accurately state her defence, but no such application was made Under the written statement as it stands, it cannot be contended that the respondent did not admit her signatures and the onus was on the appellant to prove the execution of the note. I think it is otherwise. The respondent having admitted that she signed the promissory note, it was for her to prove circumstances which would vitiate her consent.

13. For these reasons the findings of the learned appellate judge cannot stand. This does not mean that the suit must be decided in favour of the appellant, but only that he is entitled to a proper hearing of his appeal by the lower appellate Court,

14. At one stage during the hearing if the arguments learned counsel for the respondent tried to argue that the suit should have been dismissed because the promissory note was insufficiently stamped, and as there was no independent loan transaction the plaintiff could not produce other evidence of previous transaction I have examined the note. It has four one anna revenue stamps, three of which were defaced by the alleged signatures of the respondent, but one was left blank The office made a report that the failure to deface the fourth stamp meant that the note should be considered as insufficiently stamped and inadmissible in evidence. The Court asked the plaintiff to file his objection against this report which he did but it appears that the plaintiff's witnesses were permitted to prove the execution of the note and the court formally admitted it. It bears the mark Ex 7. There was no objection -- at any rate none was recorded -- on behalf of the respondent that the note should be admitted

Relying on these circumstances Mr. Ambika Prasad for the appellant contended that the respondent cannot raise the question of the admissibility of the note at this stage. He also argued that the trial court after having admitted the note could not have pronounced any opinion in the judgment inconsistent with its own act. I think there is substance in this argument. Section 36 of the Stamp Act provides 'where an instrument has been admitted in evidence, such admission shall not, except as provided in Section 61, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped.' Section 61 confers upon the appellate court the power under certain circumstances of considering the validity of the order of the lower court admitting an instrument duly stamped. Mr. Ambika Prasad contended that this section does not apply to a promissory note because it refers to an instrument which should not have been admitted in evidence without the payment of duty and penalty under Section 35, and an insufficiently stamped promissory note cannot be admitted even after the payment of penalty. This section does not apply to such note. In any case, Section 61 confers on the appellate court a discretionary power It says, 'It may ..... (appellate court)... . . impound the same when produced.' I do not think it will be just to exercise this power merely because a revenue stamp of the value of one anna was not defaced. I feel that this case should be decided on merits and not on a technical objection involving trifling amount of one anna.

15. I allow this appeal, set aside the decree of the court below and remand the case to the lower appellate court for a re-hearing of the appeal on merits in accordance with the findings of this Court. The costs of this appeal will abide the result of the appeal below.


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