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Delhi High CourtIndian Cases

Sparrow Agro Forest Ltd. vs Baby Jasmeet Kaur [Along With Rfa Nos. … on 28 August 2006

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Delhi High Court
Sparrow Agro Forest Ltd. vs Baby Jasmeet Kaur [Along With Rfa Nos. … on 28 August, 2006
Author: T.S. Thakur
Bench: T.S. Thakur, S.L. Bhayana

T.S. Thakur, J.

1. These four appeals arise out of a common judgment delivered by the Additional District Judge, Delhi whereby four different suits for recovery of money filed by the plaintiffs who happen to be the members of the same family have been decreed. The facts giving rise to the institution of the suits and the present appeals may be briefly stated as under:

2. The appellant company appears to have invited deposits from the public at large on the representation held out to the depositors that the company was financially sound and the investment made in it secure. Acting upon the said representation, the plaintiffs appear to have deposited a sum of Rs. 1.25 lacs each, the receipt whereof was acknowledged by the defendant appellant in terms of four deposit receipts issued in their favor. The receipts promised to the depositors maturity amount of Rs. 2.50 lacs on each one of these receipts payable on 1st June, 2001. The plaintiffs’ case as set out in the suits filed by them was that despite repeated requests made to the appellant company, the maturity value of these deposits was not paid to them forcing the plaintiffs to seek redress from the court. In the suits, the plaintiffs claimed a sum of Rs. 2.50 lacs each representing the maturity value of the deposits apart from a sum of Rs. 1,15,625/- representing interest @ 25% per annum from the date of the maturity of the deposits till the date of the filing of the suits. The amount claimed in each suit thus rose to Rs. 3,65,625/- upon which the plaintiffs claimed future and pendente lite interest @25% per annum.

3. After securing leave to defend the suits, the defendant company filed a written statement in which it was inter alia alleged that the receipts relied upon by the plaintiffs were forged. It was also alleged that the suits were a counter blast to a suit for specific performance filed by the company in regard to certain property which one of the plaintiffs Mrs. Virender Kaur had agreed to sell for a consideration of Rs. 24.5 lacs. It was further alleged that the said Smt. Virender Kaur had, with the help of her husband Gurmit Singh, stolen the record and other valuable articles from the office of the defendant company in September, 2002 which incident had been, according to the defendant company, reported to the police also. It was further alleged by the defendant company that maximum amount which it used to entertain from depositors was Rs. 50,000/- per person and that no deposits like the ones alleged by the plaintiffs had been made by them at any stage.

4. In the replication filed on behalf of the plaintiffs, it was inter alia alleged that one Shri Arvind Bansal and his wife Smt. Gita Bansal have been dealing with them. It was alleged that Sh.Bansal was working for M/s Nilgiri Forest Ltd. who had taken the first floor of property No. 55, Hari Nagar, Ashram owned by the plaintiff Smt. Virender Kaur on rent in the year 1994. After the said Smt. Gita Bansal got married to Sh. Bansal, the couple started business in the name and style of M/s Sparrow Agro Forest Ltd. and took for that purpose the basement and the first floor of property No. 55, Hari Nagar Ashram, New Delih on rent from Smt.Virender Kaur. The allegation that no deposits were made by the plaintiffs or that FDRs were forged were also denied. It was also denied that Smt. Virender Kaur had agreed to sell the building in question to the defendant company as alleged.

5. On the pleadings of the parties, the trial court framed the following common issues in all the four suits:

(1) Whether this Court does not have territorial jurisdiction to try the present suit? OPD (2) Whether the plaintiff is entitled to the suit amount? OPP (3) Whether the plaintiff is entitled to interest, if so, at what rate and for what period? OPP (4) Relief.
6. The parties led common evidence in all the suits which comprised the statement of Sh.Gurmit Singh, the father of two of the plaintiffs, namely, Master Tajender Pal and baby Jasmeet Kaur, who were then minors and husband of the third plaintiff Smt. Virender Kaur. Smt. Swarn Kaur, the fourth plaintiff happened to be the mother of Sh.Gurmit Singh, the attorney.

7. On behalf of the defendant, an affidavit of Sh. D.N. Saini was filed. The oral and documentary evidence so adduced by the parties led the court below to hold all the issues in favor of the plaintiffs and against the defendant. Answering issue No. 1 in the negative, the court held that appellant company was carrying on business in Delhi and had a branch office in Delhi where it was accepting deposits from the public. It relied upon Ex.PW1/1 which happened to be the Fixed Deposit application form showing the regional office of the company at 55, Hari Nagar Ashram, New Delhi. The court held on the basis of the said evidence and the deposition of Sh.Gurmit Singh that the defendant company was indeed carrying on business in Delhi and had an office established for that purpose.

8. In so far as issue No. 2 was concerned, the Court took the view that the plaintiffs had indeed made deposits with the defendant company to the tune of Rs. 1.25 lacs each, the maturity value whereof came to Rs. 2.50 lacs which amount the defendant company was bound to pay to the plaintiffs. Issue No. 3 was held in favor of the plaintiffs but only in part and to the extent of holding the plaintiffs entitled to interest @10% per annum on the maturity amount w.e.f. 1st June, 2001 till realisation. The suits were on those findings decreed by the court, as already noticed earlier.

9. Appearing for the appellant company, Mr.K.K. Rai did not assail the finding recorded by the trial court in so far as Issue No. 1 is concerned nor was any comment made by learned Counsel regarding the rate of interest which the trial court has awarded while deciding issue No. 3. What he argued was that the court below had fallen in a serious error in holding that the plaintiffs respondents had made any deposits with the appellant company, the maturity value whereof was payable to them. Elaborating that submission he argued that the Fixed Deposit Receipts which the plaintiffs had relied upon were incomplete inasmuch as the receipts were not accompanied by the issue of cheques representing the maturity value payable on the same. This, according to the learned Counsel, raised a serious doubt about the genuineness of the receipts. Alternatively, he submitted that the plaintiffs had not led any evidence to prove the receipts relied upon by them. There was, according to the learned Counsel, no evidence to show that the receipts were signed by any person authorised to do so by the appellant company. Neither the signatures of Sh. Arvind Bansal nor those of the accountant and the cashier had been proved. He submitted that the non-production of Sh.Bansal as a witness to prove the issue of the receipts was fatal to the claim made by the plaintiffs and would justify the dismissal of the suits. He further argued that the deposition of Sh.Gurmit Singh as power of attorney holder of the plaintiffs was not admissible in evidence. In support of his submissions, he placed reliance upon the decision of the privy council in Janki Das v. Sir Kishen Pershad AIR 1918 PC 146 and decision of the Supreme Court in Janki Vashdeo Bhojwani v. Indusind Bank Ltd. .

10. We have given our anxious consideration to the submissions made by Mr. Rai but regret our inability to accept the same. The case of the plaintiffs as set out in the claims filed by them precisely was that the deposits in question were received by Sh.Arvind Bansal and his wife Smt.Gita Bansal in consideration in token whereof the company had, acting through the said Sh.Bansal, issued a receipt marked Ex.PW1/2 in favor of each one of the plaintiffs. That assertion of the plaintiffs was supported by the deposition of Sh.Gurmit Singh according to whom, upon deposit of Rs. 1.25 lacs by each one of the plaintiffs, the original receipt marked Ex.PW1/2 was issued in favor of each one of the plaintiffs by Sh.Arvind Bansal, Director of the defendant company. Upon maturity of the receipts, a notice was sent to the defendant company for payment of the amount marked Ex.PW1/3. Despite service of the said notice, the company did not make any payment. In October, 2002, however, Sh.Gurmit Singh claims to have received a phone call from Sh.D.N. Saini who claimed to be the Director of the defendant company promising to make the payment provided some time was given to him to do so and beseeching the plaintiffs not to initiate any legal action for recovery. In cross-examination of this witness, the version that the amount of deposit was received by Sh.Arvind Bansal and Smt. Gita Bansal has been reiterated and the allegation that no such deposit was made denied.

11. The only evidence in rebuttal produced by the defendant company comprised deposition of Sh.D.N. Saini, one of its directors in which the witness alleged that the receipts relied upon by the plaintiffs are forged and that the suit for recovery of the amount filed by them a counter blast to the suit for specific performance of contract pending in this Court. In cross-examination, the witness has admitted that Sh.Arvind Bansal was also one of the directors of the company in the year 1997 when the same was incorporated. He further admitted that the defendant company had an office in Delhi during July-August, 1997 and that Sh.Arvind Bansal used to look after the office at Delhi which happened to be the Regional Centre for the company where the record of deposits taken from the public was maintained. The witness has further stated that the Chartered Accountant of the Company in Delhi was an employee of the company and that the balance sheet of the company reflected deposits received by the Company on 1st August, 1997. When confronted with the signatures on the receipts, the witness stated that the monogram on the receipt was that of the defendant company.

12. Few significant features emerge from the above depositions. The first and the foremost is that the monogram on the receipt is admitted to be that of the company. Mr. Rai fairly conceded that while the printed part of the receipt with its monogram and other particulars was genuine, the entries made in the same were a fabrication. DW1 Sh. Saini had, however, stopped short of alleging that the receipts did not bear the signatures of Sh.Arvind Bansal. He simply declined to recognize the said signatures. Such being the position, the initial onus of proving that the receipt had been issued by the Company stood discharged by the plaintiffs. It was then for the defendant company to prove by producing whatever material was available with it that the receipts were fabricated or that no deposits in terms thereof was ever made by the plaintiffs. This the defendant company could do by examining Sh.Arvind Bansal and his wife Smt. Gita Bansal as witnesses. Both these persons were closely associated with the company, the former being one of its directors. It was not the case of the company that Sh.Bansal was either inimical towards the company or was not available for examination. The argument that the plaintiffs ought to have examined Sh.Bansal as their witness has not impressed us. Sh.Bansal, as noticed earlier, was a director of the company and continued to remain associated with the company as it is nobody’s case that he had quit the office that he hold. There was, in that view, no question of the plaintiffs’ citing or examining Sh.Bansal as a witness of truth on their behalf. The defendant company could, however, do so. Its failure to examine Sh.Bansal should therefore give rise to an adverse inference that if examined, Sh.Bansal would not have supported its theory that no deposit had been made and no receipt had ever been issued to the plaintiffs.

13. There is another piece of evidence which was available with the defendant but has not been produced giving rise to an adverse inference against it. As seen earlier, Sh. Saini has made a categoric statements that deposits received from the public on 1st August, 1997, when the plaintiffs also claim to have made their deposits were all reflected in the balance sheet of the company. If that were so, there is no reason why the company should not have placed on record a copy of the balance sheet to prove that the deposits allegedly made by the plaintiffs had never been made. The allegation made by the defendant that the records were stolen from its Delhi office thereby disabling it from producing the same in the trial court has not been substantiated. The defendant has not placed on record any complaint lodged by it with the police alleging any such theft. A copy of the complaint allegedly lodged with the police has no doubt been enclosed with the memo of appeal but the said document was never produced at the trial nor was any evidence led to show that it was actually filed with the concerned police station. We are, therefore, inclined to believe that the story regarding disappearance of the accounts is a convenient excuse advanced only to avoid the liability arising against the defendant.

14. Similarly, the cashier and the accountant whose signatures are found on the receipts produced by the plaintiffs could be identified only by the respondent company and produced as witnesses to support its case that their signatures had been forged. No such attempt was, however, made by the defendant company nor was there any explanation why the two officials who were known to the company and could throw light on the genuineness of the receipts were not produced.

15. Mr. Rai drew our attention to a private complaint filed by the company against Smt. Virender Kaur alleging tresspass into the premises and removal of furnitures, fixtures and records lying in the building but what is significant is that the said complaint was lodged in November, 2003 much after the institution of the suits and does not make any reference to the complaint dated 20th September, 2002 allegedly filed with the Commissioner of Police, Delhi. Suffice it to say that the defendant company was in possession of the best evidence regarding the genuineness of the receipts relied upon by the plaintiffs. Its failure to produce that evidence must give rise to an adverse inference against it. That such an inference can be drawn against a party who was in possession of the best evidence which it does not produce is well settled. We may, in this regard, refer to Murugesam Pillai v. Gnana Sambandha Pandara Sannadhi AIR 1917 PC 6 at p.8, where the legal position was summarised as under:

A practice has grown up in Indian procedure of those in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof, and failing, accordingly, to furnish to the Courts the best material for its decision. With regard to third parties, this may be right enough – they have no responsibility for the conduct of the suit; but with regard to the parties to the suit it is, in their Lordships’ opinion, an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the Court the written evidence in their possession which would throw light upon the proposition.
17. We may also refer to Gopal Krishanji v. Mohd. Haji Latif and Ors. , where their Lordships have observed:
Even if the burden of proof does not lie on a party the Court may draw an adverse inference if he withholds important documents in his possession which can throw light on the facts at issue. It is not, in our opinion, a sound practice for those desiring to rely upon a certain state of facts to withhold from the Court the best evidence which is in their possession which could throw light upon the issues in controversy and to rely upon the abstract doctrine of onus of proof.
18. To the same effect is the decision of this Court in Bansidhar Ganga Pershad v. Chanan Lal and Anr. 1975 2nd (Delhi) (1) 445.
19. The argument of Mr.Rai that the receipts were not accompanied by the issue of cheques has not commended itself to us. It is true that there is blank space available in the receipts for filling up the particulars of the cheque which the company may issue but the very fact that no cheque has been issued or the particulars thereof shown in the said blank space does not itself belie the making of the deposit by the person in whose favor a receipt has been issued. Each one of the receipt acknowledges deposit of a sum of Rs. 1.25 lacs by the depositor and also indicates the maturity amount of such deposits from the said deposits. So also the argument that the power of attorney’s deposition could not be relied upon needs to be noticed only to be rejected. In Janki Vashdeo Bhojwani’s case (supra) relied upon by the learned Counsel, the deposition of the power of attorney was held insufficient as the attorney had no personal knowledge about the facts of the case. The said decision is not, therefore, an authority for the proposition that a power of attorney holder can never be a competent witness in any case. It would depend upon the facts and circumstances of each case whether the attorney who appears to depose in support of the case of one of the parties to the litigation is or is not a competent witness. PW-1 was by any standard a competent witness in the present case. We say so because he was not only the guardian of the two minor plaintiffs on whose behalf the deposits were made at the relevant time but the husband of the third and the son of the fourth plaintiff. It was never suggested to him in the course of cross-examination that he had no personal knowledge about the facts that he had stated on oath. No objection regarding his being a competent witness was ever taken by the defendant company at any stage. In the totality of these circumstances, therefore, the attorney was in the facts of the case a witness who was competent to depose about the facts that were within his knowledge.
20. In the result, these appeals fail and are hereby dismissed with costs assessed at Rs. 5,000/- in each appeal.