Monday, 27 April 2020

Whether it is necessary to produce and prove books of accounts for recovery of money given on promissory note?

 Coming to the last averments of the appellant that the
books of account have not been produced by the plaintiff as required
under Section 34 of the Evidence Act, I again do not find any merit in
the said contention. Firstly, the “book of accounts” as referred to in this
section means books in which merchants, traders or businessmen
generally keep their accounts i.e. statements of debits and credits or
receipts of any payments. Since there is no evidence on record that
the plaintiff was in fact indulged in the business of money lending then
obviously, the plaintiff was not required to maintain the books of
accounts and thereafter prove the same in accordance with the
requirement of Section 34 of the Evidence Act. Therefore, nonproduction
of these books, is of no consequence.

15. It is more than settled that it is not in all cases that nonproduction
of account-books by itself may be pressed into service as a
factor to disbelieve a litigant’s case and characterize his conduct as
fraudulent. Each case has to be decided on its own merits. Otherwise
also, it is normal that account-books kept in the regular course of
business of a tradesman is merely a compilation of all the details of his
dealings from day-to-day and is practically a summary of such
transactions written up in bills,vouchers, anamath chits etc. Therefore,
the account-books by themselves do not stand on any better footing
than a bill or a voucher issued by the plaintiff in the regular course of
business.
16. Here in the instant case, the plaintiff is armed with the
pronote acknowledging the liability to pay a sum of Rs.1,00,000/- by
the defendant in favour of the plaintiff and the execution of such
pronote has duly been proved on record and as a matter of fact, has
not been seriously disputed even by the defendant. Therefore, the
provisions of Section 34 of the Evidence Act, have no applicability to
the facts of the instant case.
The substantial question of law is accordingly answered.

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
R.S.A. No. 704 of 2008

Date of decision: 29. 08. 2019
Smt. Brij Bala  Vs  Sh. Surender Kumar
Coram
The Hon’ble Mr. Justice Tarlok Singh Chauhan, Judge.
Citation: AIR 2020(NOC) 154 HP

The defendant is the appellant, who after having lost
before both the learned Courts below, has filed the instant appeal.
The parties shall be referred to as the ‘plaintiff’ and the
‘defendant’.

2. The plaintiff/respondent filed a suit for recovery of
Rs.1,00,000/- on the allegation that the defendant/appellant on
12.10.2004 had borrowed the aforesaid amount in the presence of the
witnesses in order to fulfill her necessities and financial commitment. It
was further averred that the defendant agreed to repay back the
aforesaid amount of Rs.1,00,000/- to the plaintiff and also executed a
promissory note to this effect. However, when the plaintiff demanded
the amount, the defendant refused, constraining him to issue a legal
notice to her and despite receipt of the notice, the defendant failed to
pay the amount. Hence, the suit.
3. The defendant contested the suit by filing written
statement wherein preliminary objection regarding maintainability was
raised. On merits, it was contended that the defendant had not
executed any pronote or receipt of the loan amount of Rs.1,00,000/-
and even if the pronote or receipt is produced on the record, the same
is an outcome of fraud and misrepresentation of facts.
4. From the pleadings of the parties, the learned trial Court
on 13.9.2005 framed the following issues:
1. Whether the defendant has borrowed a sum of
Rs.1,00,000/- (Rs. One Lac) from the plaintiff on
12.10.2004 and executed a pro-note and receipt? OPP

2. Whether the defendant failed to make repayment of sum
borrowed as per agreed? OPP
3. Whether the plaintiff is entitled for the recovery of
Rs.1,00,000/- (Rs. One Lac) alongwith interest at the rate
of 12% per annum from the defendant? OPP
4. Whether the suit is not legally maintainable? OPD
5. Relief.
5. After recording the evidence led by the parties and
evaluating the same, the learned trial Court decreed the suit of the
plaintiff and the appeal filed against the same was also dismissed by
the learned first Appellate Court vide its judgment and decree dated
30.8.2008, constraining the defendant to file the instant appeal.
6. On 26.10.2009, the appeal was admitted on the following
substantial question of law:
“1. Whether the findings of the learned trial Court as
well as first Appellate Court are result of complete
misreading and misinterpretation of the evidence
and material on record and against settled position
of law?”
7. I have heard learned counsel for the parties and have
gone through the material placed on record.

8. Mr. J.R. Poswal, learned counsel for the appellant has
vehemently argued that the findings recorded by the learned Courts
below are perverse inasmuch as both the learned Courts below have
not taken into consideration the following points:
(i) That the plaintiff being in the business of money
lending without licence could not have filed a suit
for recovery of the amount as the same is not
maintainable in view of the provisions of the
Himachal Pradesh Registration of Money
Lenders’ Act, 1976.
(ii) That the pro-note Ex. P-1 cannot be held to be
proved and therefore no reliance can be placed
on the pro-note as it is written in Hindi, whereas
the word ‘NIL’ has been written in English.
(iii) That the pro-note otherwise has not been
stamped in accordance with Schedule 1 of the
Indian Stamp Act.
(iv) That the Books of Accounts have not been
produced by the plaintiff under Section 34 of the
Indian Registration Act and therefore an adverse
inference was required to be drawn by the
learned Courts below and consequently, the suit
ought to have been dismissed.
9. On the other hand, Mr. Rakesh Thakur, learned counsel
appearing for the respondent would contend that no fault can be found

with the judgments and decrees passed by the learned Courts below,
more particularly, when the same are based on correct appreciation of
the pleadings as also the evidence on record. It is further contended
that since none of the questions as raised before this Court in the
second appeal was ever raised before the trial Court or before the first
Appellate Court, therefore, the same cannot be raised for the first time
before this Court in second appeal.
10. Admittedly, the questions urged before this Court have
never been raised before the trial Court or before the first Appellate
Court and cannot, therefore, be permitted to be raised for the first time
before this Court in second appeal. In taking this view, I am fortified by
the judgment passed by four Judge Bench of the Hon’ble Supreme
Court in Banarsi Dass and others vs. Kansi Ram and others, AIR
1963, SC 1165. That apart, even if all these points as raised by the
appellant are considered, even then, there is no merit in the same.
11. Adverting to the first point, it is not the pleaded case of the
defendant that the plaintiff has indulged in money lending and,
therefore, cannot recover the amount in question in view of the bar
imposed under the Himachal Pradesh Registration of Money Lenders’
Act, 1976.

12. As regards the second point regarding the pro-note being
in Hindi and the word ‘NIL’ written in English therein that by itself
cannot cast any shadow of suspicion over the said document. The
document in fact is printed one (in Devnagari) and it is only blank
spaces therein that have been filled in by the parties.
13. As regards the pro-note not being stamped in accordance
with Schedule-1, as is canvassed by learned counsel for the appellant,
the pro-note falls under Schedule 1 and has been duly stamped in
terms of entry No.49 which relates to pro-note.
14. Coming to the last averments of the appellant that the
books of account have not been produced by the plaintiff as required
under Section 34 of the Evidence Act, I again do not find any merit in
the said contention. Firstly, the “book of accounts” as referred to in this
section means books in which merchants, traders or businessmen
generally keep their accounts i.e. statements of debits and credits or
receipts of any payments. Since there is no evidence on record that
the plaintiff was in fact indulged in the business of money lending then
obviously, the plaintiff was not required to maintain the books of
accounts and thereafter prove the same in accordance with the
requirement of Section 34 of the Evidence Act. Therefore, nonproduction
of these books, is of no consequence.

15. It is more than settled that it is not in all cases that nonproduction
of account-books by itself may be pressed into service as a
factor to disbelieve a litigant’s case and characterize his conduct as
fraudulent. Each case has to be decided on its own merits. Otherwise
also, it is normal that account-books kept in the regular course of
business of a tradesman is merely a compilation of all the details of his
dealings from day-to-day and is practically a summary of such
transactions written up in bills,vouchers, anamath chits etc. Therefore,
the account-books by themselves do not stand on any better footing
than a bill or a voucher issued by the plaintiff in the regular course of
business.
16. Here in the instant case, the plaintiff is armed with the
pronote acknowledging the liability to pay a sum of Rs.1,00,000/- by
the defendant in favour of the plaintiff and the execution of such
pronote has duly been proved on record and as a matter of fact, has
not been seriously disputed even by the defendant. Therefore, the
provisions of Section 34 of the Evidence Act, have no applicability to
the facts of the instant case.
The substantial question of law is accordingly answered.

17. In view of the aforesaid discussion, there is no merit in this
appeal and the same is accordingly dismissed, so also the pending
application(s), if any, leaving the parties to bear their own costs.
(Tarlok Singh Chauhan)
29th August , 2019. Judge
(GR)

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