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Bishnu Dayal Junjhunwalla Vs. Atal Behari Acharya and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtOrissa High Court
Decided On
Case NumberFirst Appeal No. 80 of 1951
Judge
Reported inAIR1960Ori172
ActsNegotiable Instruments Act, 1881 - Sections 78 and 118
AppellantBishnu Dayal Junjhunwalla
RespondentAtal Behari Acharya and anr.
Appellant AdvocateL. Mohanty and ;S.K. Ghosh, Advs.
Respondent AdvocateN. Mukherji and ;M.K. De, Advs.
DispositionAppeal dismissed
Cases ReferredNarhari v. Shankar
Excerpt:
.....a loan from b. 2 proved himself to be unreliable by saying that on the date of execution of the handnote, his master d. jhunjhunwalla is obviously the best person to explain the contents of this letter but he has discretely avoided the witness box. the best person to explain the circumstances under which these receipts were granted is shri d. i am therefore of the view that even after giving full weight to the presumption in favour of the holder of the handnote,under section 118(a) of the negotiable instruments act, the evidence on record clearly shows that the hand-note was not for consideration and that it was taken benami in the name of b. it is well settled that the principle of section 78 of the negotiable instruments act will not be a bar to prove benami if the suit is based on..........period, on payment of a stipulated rent. in pursuance of that lease, dr. acharya handed over to shri jhunjhunwalla, the salt works at talpada and inchuri and allowed him to manufacture salt there.he remained in possession of the factory till about march 1948, but did not render accounts to dr. acharya. it is unnecessary to describe in detail the various matters in controversy between the parties in o. s. no. 866 of 1949 and it is sufficient to state that dr. acharya's suit was for rendition of account and for other consequential reliefs against shri d.k. jhunjhunwalla (who was the principal defendant on the one hand) and bharat salt and chemical works (of which he was said to be the managing partner,) on the other.3. dr. acharya further alleged that as shri d.k. jhunjhunwalla wanted.....
Judgment:

Narasimham, C.J.

1. This is an appeal from the judgment of the First Additional Subordinate Judge, Cuttack, dated 31st July 1951 dismissing with costs the plaintiff's suit for recovery of a sum of Rs. 4,000/- with interest on the basis of a hand-note, Ext. 1--(1) dated 1st January, 1947, for Rs. 4,500/- executed by defendant No. 1 in favour of the plaintiff. The suit under appeal (O. S. 202 of 1949) was instituted in the Court of the Subordinate Judge, Cuttack on the 12th September 1949. On the 23rd December 1949, defendant No. (1) Dr. Atal Behari Acharya filed another suit against Sri D.K. Jhunjhunwalla (own brother of Sri B.D. Jhunjhunwalla plaintiff in O. S. No. 202 of 1949) and another person for rendition of accounts and for other reliefs. That suit was numbered as O. S. No. 866 of 1949. Both the suits were tried analogously and disposed of by the learned Subordinate Judge in one judgment dated 31st July 1951. But in the judgment he kept the two suits separately and also discussed separately the issues arising in those two suits. While dismissing the suit under appeal (O. S. No. 202 of 1949) he passed a preliminary decree in the other suit filed by Dr. Atal Behari Acharya and directed the appointment of a Commissioner to go into the accounts between the parties, to find out the amount due from one to the other. Against that decision Sri D.K. Jhunjhunwalla filed an appeal before this Court on the 19th November, 1952 which was numbered as F. A. 62 of 1952. But he allowed that appeal to be dismissed for non-prosecution on 24th November 1954 as the requisite costs were not deposited.

2. To appreciate the contentions of the parties it is necessary to recapitulate certain admitted facts. Dr. Atal Behari Acharya is a Medical practitioner of Cuttack Town owning a medical shop known as the Swaraj Medical Hall. He was also the Managing Director of a firm known as Utkal Salt and Chemical Works Ltd. That firm had taken on lease certain lands in Talpada and Inchuri in Balasore district in Tua in Puri district from the Khasmahal for the purpose of manufacturing salt. Shri D.K. Jhunjhunwalla and Sri B.D. Jhunjhunwalla are two brothers who with some other persons were running a Glass Factory at Barang known as Shri Durga Glass Works. Dr. Acharya's case was that some time in 1943 or 1944 Sri D.K. Jhunjhunwallaclaiming himself to be the Managing Partner of a firm known as Bharat Salt and Chemical Works at Tua, took lease of the salt factory of Dr. Acharya at Talapada and Inchuri for a certain period, on payment of a stipulated rent. In pursuance of that lease, Dr. Acharya handed over to Shri Jhunjhunwalla, the Salt works at Talpada and Inchuri and allowed him to manufacture salt there.

He remained in possession of the factory till about March 1948, but did not render accounts to Dr. Acharya. It is unnecessary to describe in detail the various matters in controversy between the parties in O. S. No. 866 of 1949 and it is sufficient to state that Dr. Acharya's suit was for rendition of account and for other consequential reliefs against Shri D.K. Jhunjhunwalla (who was the principal defendant on the one hand) and Bharat Salt and Chemical Works (of which he was said to be the managing partner,) on the other.

3. Dr. Acharya further alleged that as Shri D.K. Jhunjhunwalla wanted to purchase a large quantity of salt stored in the warehouse at Bhutmandi in Cuttack district by the Utkal Salt and Chemical Works and that for that purpose he gave an advance of Rs. 6,000/- in three instalments, viz. on the 9th July, 16th July and 25th July 1945. Subsequently, however, Shri Jhunjhunwalla refused to accept delivery and wanted Dr. Acharya to return the advance money. Dr. Acharya had paid certain sums in re-payment of the said advance and after checking the accounts between the parties it was found that the balance due to the said Jhunjhunwalla came to Rs. 4,500/- Then at his suggestion a hand-note Ext. 1 (1) was executed by Dr. Acharya in favour of Sri B.D. Jhunjhunwalla, brother of Sri D.K. Jhunjhunwalla, for the said sum of Rs. 4,500/- by way of security for the repayment of the sum due to Sri D.K. Jhunjhunwalla, from Utkal Salt and Chemical Works. According to Dr. Acharya therefore no loan was taken on the basis of the hand-note Ext. 1 (1) dated 1st January 1947 and it was a benami document taken by Shri D.K. Jhunjhunwalla in the name of his brother Shri B.D. Jhunjhunwalla by way of security for the repayment of balance of the money advanced to Dr. Acharya.

4. Thus in both the suits one of the important issues for decision was whether, as a fact, any loan of Rs. 4,500/- was taken by Dr. Atal Behari Acharya from B.D. Jhunjhunwalla on the basis of the hand-note Ext. 1-(1) or else whether that note was really executed benami on behalf of D.K. Jhunjhunwalla by Dr. Atal B. Acharya and whether there were financial transactions between them in connection with the purchase of salt. The learned Subordinate Judge after hearing parties directed, by his order dated 23rd November 1950 that both his suits be heard analogously. Shri B.D. Jhunjhunwalla did not challenge the correctness of this order by way of revision. Only one set of evidence was recorded and it was taken as evidence in both the suits.

5. It is not necessary to discuss in detail the accounts suit of Dr. Acharya as the judgment-debtor Shri D.K. Jhunjhunwalla by allowing his appeal to this Court (S. A. 62/52) to be dismissed for default, has left the trial Court judgment un-challenged. Shri B.D. Jhunjhunwalla appellant in the present suit has however pressed this appeal urging that he and his brother D.K. Jhunjhunwalla were separate, that he was not the benamidar for his brother that the loan was an independent transaction entered into by Dr. Acharya with him and that he was entitled to a decree for the loan plus interest.

6. Thus the main question for decision in this appeal is whether the hand-note Ext. 1-(1) dated 1st January, 1947 represented a genuine transaction between B.D. Jhunjhunwalla and Dr. Acharya by which the latter took a loan of Rs. 4,800/- from the former, or else whether Sri B.D. Jhunjhunwalla was a mere benamdar for Shri D.K. Jhunjhunwalla and the hand-note was taken merely by way of security for some money advanced to Dr. Acharya.

7. To prove the case the plaintiff relied on the hand-note itself Ext. 1-(1) and the evidence of two of his own men, namely Banarsilal Agarwalla P. W. 1 and Anantalal Sharma P. W. 2. He also relied on the presumption that every hand-note is for consideration (under Section 118(a) of the Negotiable Instruments Act) and also on the principle laid down in Section 78 of that Act by which it is not ordinarily open to a promisor to assert that the holder of the hand-note is a mere benamdar for some other person. The principle underlying Section 78 of the (Negotiable Instruments Act will be discussed later on. The plaintiff is undoubtedly entitled to the presumption under Section 118(a) of that Act that the hand-note in question was for consideration and the burden will be heavy on the promisor, Dr. Acharya, to show that in fact no consideration passed when he executed the handnote. But when both parties have adduced evidence regarding the passing of consideration the question ultimately depends on appreciation of evidence, bearing on that question.

8. Admittedly, the two witnesses for the plaintiff namely Banarshilal and Anantlal are not independent witnesses. P. W. 1 Banarashilal had worked on behalf of the Jhunjhunwalla brothers as manager of the Bharat Salt Factory, for sometime. P. W. 2 Anantlal is admittedly the cashier of the Glass Factory at Barang. These two witnesses have, doubtless, spoken about the payment of a loan of Rs. 4500/- to Dr. Acharya who wanted the amount for constructing a house. P. W. 1 stated that Dr. Acharya contacted him for the loan and that he made enquiries from his master Sri. B.D. Jhunjhunwalla with a view to secure his agreement for advancing the said amount. The improbability in this story lies in fact that Dr. Acharya was well known to the Jhunjhunwallas from 1944-45 and if he wanted a loan from B.D. Jhunjhunwalla there was no need for him to take the help of Banarashilal. One would ordinarily have expected him to contact B.D. Jhunjhunwalla himself directly on the subject. Moreover neither P. W. 1 nor P. W. 2 has signed as a witness in the handnote. Further, P. W. 2 proved himself to be unreliable by saying that on the date of execution of the handnote, his master D.K. Jhunjhunwalla was not at Barang where the transaction was completed, but that he had gone away to Calcutta or Delhi about 10 to 15 days before that date. This statement can hardly be believed because Ext. 14 which is a letter dated 31-12-1946, from D.K.Jhunjhunwalla to Dr. Acharya shows that he was at Barang on that date. Sri (D.K. Jhunjhunwalla is obviously the best person to explain the contents of this letter but he has discretely avoided the witness box. Thus, in view of Ext. 14 the evidence of P. W. 2 must be taken as not believable, though he has made a clever attempt to show that D.K. Jhunjhunwalla was not present at Barang when the handnote was executed, apparently with a view to show that the handnote is not a benami one.

9. Apart from the aforesaid unsatisfactory feature in the plaintiffs evidence, the evidence of Dr. Acharya and his witnesses shows conclusively that the handnote is a benami document. Dr. Acharya (as D. W. 5) has proved the entries in the cash book of the Utkal Salt and Chemical Works (Exts. 10(c), 10 (e)) which show that an advance of Rs. 8000/-was taken from D.K. Jhunjhunwalla between 9th July and 25th July 1945. He also proved some other entries (Ext. 10 series) which show that certain payments have been made by way of repayment of that advance. Thus Ext. 10 (f) shows that on 26-7-1945 some money was paid to one Banarashi Bai who, according to Dr. Acharya, was the person in whose name the advance was made to him. She is admittedly the mother of the Jhunjhunwalla brothers. Similarly Ext. 10(g) dated 30-4-1946, shows that Rs. 300/- was handed over to Shri D.K. Jhunjhunwalla as advance for purchase of salt from Bharat Salt Works. Ext. 10(t) shows that on 30-9-1948 some amount was paid to D.K. Jhunjhunwalla towards payment of interest on loan. Ext. 10(v) is an entry dated 28-3-1949 which also shows that some principal and interest on loan were paid to Shri D.K. Jhunjhunwalla. Exts. 10(y) and 19(z) dated respectively 29-6-1949 and 29-7-1949 are entries relating to similar transactions.

The strongest corroboration of these entries in the account book of the Utkal Salt and Chemical Works is found in the receipt (Ext. 4 series) in the handwriting o Shri D.K. Jhunjhunwalla showing the receipt by him of various amounts of money. These receipts are signed by Shri D.K. Jhunjhunwalla and were granted after the loan in question. The best person to explain the circumstances under which these receipts were granted is Shri D.K. Jhunjhunwalla himself but he did not appear in the witness box. Similarly, the plaintiff in the suit out of which the present appeal arose, namely, Sri B.D. Jhunjhunwalla has also discretely avoided the witness box and on the other hand has set up two of his servants who are obviously not in a position to ex-plain whether apart from the handnote there was any other loan due to D.K. Jhunjhunwalla from Dr. Acharya and how the receipts evidenced by Ext. 4 series were granted by D.K. Jhunjhunwalla.

In the peculiar circumstances of the case therefore the avoidance of the witness box by the two Jhunjhunwalla brothers must lead to an adverse inference against the plaintiff's case and must strengthen the case as put forward by Dr. Acharya. It should be further noted that the genuineness of the entries in the account book cannot be challenged because they were scrutinised by a Chartered Accountant, one Mr. H. Nayak (D. W. 1) who has initialled the same at p. 265 (Ext. 3 dated 20-9-1949) when he checked the same. Dr. Acharya has also examined the Manager of the Swaraj Medical Hall, Prabhakar Nanda (P. W. 3) to prove the original (advance of Rs. 6000/-) by D.K. Jhunjhunwalla to Utkal Salt and Chemical Works and the repayment of certain sums towards that advance. He also examined one Rajkishore Nanda, P. W. 6 who worked as part time clerk of the Utkal Salt and Chemical Works to prove the entry in the account books (Ext. 10).

These witnesses are his own men but they alone are competent to prove the entries in the account book and other transactions that took place between Dr. Acharya and Shri D.K. Jhunjhunwalla. It was admitted by Dr. Acharya that some medicines were supplied by the Swaraj Medical Hall (of which Dr. Atal B. Acharya is the proprietor) to a Charitable dispensary at Barang maintained by the Jhunjhunwalla brothers. Prabhakar Nanda stated that the cost of these medicines was partially adjusted towards the handnote dues Ext. 1(1). Some of the receipts of Jhunjhunwalla, namely Ext. 4 (b) show that he has received certain payments from Dr. Acharya on behalf of Swaraj Medical Hall. In the absence of rebutting evidence from D.K. Jhunjhunwalla there is no reason to disbelieve the evidence of Dr. Acharya and of Prabhakar Nanda on this point. The non-production of the accounts of the Swaraj Medical Hall was commented on, but I do not think that those accounts are very material. The most important accounts arc those of Utkal Salt and Chemical Works and when those had been produced and some receipts were also produced from D.K. Jhunjhunwalla it is not further necessary to produce the accounts of the Swaraj Medical Hall also to show the quantity of medicines supplied by the Medical Hall to the Charitable dispensary maintained by the Jhunjhunwalla brothers at Barang.

10. It is true that merely because the two Jhunjhunwallas are brothers and they were joint partners in the Shri Durga Glass Works at Barang, it will not be proper to hold that the handnote taken by B.D. Jhunjhunwalla must necessarily be benami on behalf of his brother D.K. Jhunjhunwalla. There is no evidence that the brothers were joint and it is quite possible for them to have had separate transactions. But once it is clear from unimpeachable documentary evidence that Dr. Acharya and Sri D.K. Jhunjhunwalla were having financial transactions from 1944 and some payments towards principal and interest in respect of the advance taken by Dr. Acharya from D.K. Jhunjhunwalla have been proved by such documentary evidence and when no evidence has been adduced to show that there was no other transaction between these two persons and when it is further noticed that the Jhunjhunwallas would not go into the witness box to explain the previous transactions, the trial court was justified in accepting the evidence of Dr. Acharya regarding the circumstances under which the handnote (Ext. 1 (1)) was executed.

It is also clear from a scrutiny of the accounts showing various payments by Dr. Acharya to Sri D.K. Jhunjhunwalla that out of the original advance of Rs. 6000/-, Rs. 2600/- had been paid and the balance due was only Rs. 4400/- (sic) when the handnote Ext. 1(1) was executed. I am therefore of the view that even after giving full weight to the presumption in favour of the holder of the handnote,under Section 118(a) of the Negotiable Instruments Act, the evidence on record clearly shows that the hand-note was not for consideration and that it was taken benami in the name of B.D. Jhunjhunwalla by his brother D.K. Jhunjhunwalla from Dr. Acharya by way of security for the balance of the sum due to him out of the original advance of Rs. 6000/- made to Utkal Salt and Chemical Works of which Dr. Acharya was the Managing Director. There is absolutely no reason to disbelieve Dr. Acharya's evidence on this point.

11. It was then contended, relying on Section 78 of the Negotiable Instruments Act that it was not open to the promisee to take the plea of benami and that he was bound to pay the money to the holder of the handnote. There may be some justification for this contention if the suit had been brought on the basis of the handnote. In this connection paragraph 2 of the plaint may be quoted:-

'The defendant borrowed Rs. 4500/- from the plaintiff on 1-1-47 and in token of the said loan executed a handnote which is being attached with this plaint and thereby agreed to pay the said amount with interest at 6 per cent per annum on demand.'

From this it is clear that the plaintiff himself brought the suit, not on the basis of the handnote but on the basis of a loan taken from him by Dr. Acharya. According to him the handnote was taken only in token of the said loan. It is well settled that the principle of Section 78 of the Negotiable Instruments Act will not be a bar to prove benami if the suit is based on the original consideration land the handnote in question was taken as collateral security for payment of the money--see Sarajoo Prasad v. Rampyari Debi, AIR 1950 Pat. 493 and the various decisions cited therein. In view of my clear finding to the effect that the handnote was taken by way of security by D.K. Jhunjhunwalla, and also in view of the plaintiff's own case, as put forward in the plaint, from which it follows that the suit was based not on the handnote but on the original consideration, the plaintiff cannot invoke the principle of Section 78 of the Negotiable Instruments Act so as to shut out the promisor from raising the question that the promisee was a benamidar for someone else.

12. The aforesaid conclusion is sufficient to dispose of this appeal. I may briefly notice a preliminary objection raised by Mr. Mukerji appearing for Dr. Acharya against the maintainability of this appeal. Mr. Mukherjee urged that as D.K. Jhunjhunwalla allowed F.A. 62 of 1952 to be dismissed for default thereby confirming the judgment of the trial court in O. S. 866 of 1949 in which the handnote was held to be a mere collateral security, that finding became res judicata in the present appeal also and it was not open to the appellant to contend that the handnote was for consideration. For this purpose he relied on the fact that the appellant did not object to the two suits being heard analogously and did not challenge the order of the trial Court by way of revision, to the High Court. Mr. Mukherji also relied on a Division Bench decision of this Court reported in Sumi Debi v. Pranakrushna Panda, (S) AIR 1956 Orissa 68, where it was held that if two suits are tried analogously anddisposed of in one judgment and two decrees are drawn up; and there is an appeal against the decree in only one of the suits that appeal will be barred by res judicata as the appellant did not prefer an appeal against that decree. The principle on which this decision rests seems to be that otherwise one may get two inconsistent decrees in the two suits.

Thus, if the present appeal be allowed and the handnote be held to be a genuine document there will be two conflicting decrees on the same issue, viz. whether Dr. Acharya is bound to pay under the handnote Ext. 1 (1). So far as O. S. 866 of 1949 is concerned the trial Court's judgment will remain and he will have to make good this sum by way of scrutiny when accounts are taken between him and D.K. Jhunjhunwalla. He may also have to pay the same sum over again as the unsuccessful party in this appeal. This will indeed be an anomalous position.

13. I am also conscious of the fact that a contrary view has been taken in Manohar Vinayak v. Laxman Anand Rao, AIR 1947 Nag 248 following Full Bench decisions of the Lahore High Court reported in Mt. Lachhmi v. Mt. Bhulli, AIR 1927 Lah 289. There are also some observations in AIR 1953 SC 419, Narhari v. Shankar which may lend support to this view though that case is clearly distinguishable on facts because there was only one suit in the lower court. In (S) AIR 1956 Orissa 68, it was observed that the decision in AIR 1953 SC 419 had not the binding effect of a decision of the Supreme Court as only one of the Judges who were parties to that decision was a Judge of the Supreme Court the other two Judges being Judges of the High Court of Hyderabad. With respect, I must differ from this observation. That judgment was delivered by the Supreme Court in exercise of its special power under Article 374(4) of the Constitution, That Article clearly says that the decision shall be by the Supreme Court and it is immaterial as to whether one or more Judges of the Supreme Court constituted the Bench for the purpose of disposing on an appeal under Clause (4) of Article 374. Once it is a judgment of the Supreme Court it is binding on all the courts in the land irrespective of the special procedure adopted for constituting the Bench for hearing certain classes of appeals.

14. But on the other matters it will be somewhat academic to examine how far (S) AIR 1956 Orissa 68 is correct and whether it should be reviewed by a larger Bench. Here the two suits are not between the same patties and for applying the principle laid down in the aforesaid decision it must first be decided whether B.D. Jhunjhunwalla wag the benamdar for D.K. Jhunjhunwalla. But once this question is decided, the entire suit is practically disposed of inasmuch as on that decision will rest the further decision as to whether the handnote was a genuine document or else whether it was given merely by way of security for the sums due from Dr. Acharya to Sri D.K. Jhunjhunwalla. Hence, before the principle laid down in (S) AIR 1956 Orissa 68 can be invoked, this appeal can be decided on the main question of fact and it seems unnecessary to consider the preliminary question as to whether the appeal is maintainable in view of the failure of the connected F. A. No. 62 of 1952 (arising out of the judgment in O. S. 866 of 1949 tried analogously with O. S.No. 202 of 1949). Hence, apart from noticing the argument raised by Mr. Mukherji I am not deciding this preliminary point.

15. For the aforesaid reasons the appeal is dismissed with costs.

Misra, J.

16. I agree.


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