2023 (8) TMI 178 - HC - Indian Laws

Dishonour of Cheque - 1st defendant had borrowed money on the basis of daily, weekly Kandu from P.S.K. Finance Ltd., Salem belong to the family of T.K.Kuppusamy in 2002, 2003 and signed in blank papers, and blank promissory notes and they are used in this case for filling this caseor not - signature of the defendants 1 and 3 were obtained by threat and coercion through rowdy elements and the letters for creating equitable mortgage by depositing of title deeds was created or not? - fabricated guarantee letters or not - recovery of amount alongwith interest and penalty. Whether the plaintiffs have proved that the defendants have borrowed a sum of Rs. 10,00,000/- and executed the suit promissory note/Ex.A-2 and Ex.A-6/memorandum of deposit of title deeds creating equitable mortgage? HELD THAT - As far as Ex.A-2/promissory note is concerned, the second defendant had denied his signature in the same, specifically contending forgery. They have also taken out an application to compare the signatures, which was opposed by the plaintiffs and it was dismissed with an observation that it was for the plaintiffs to take steps to prove the signatures. The law and the point are very well settled that when there is a categorical and clear denial of the signature and allegation of forgery, it was for the plaintiffs to prove the signature by sending the suit promissory note for analysis of an expert by comparing it with admitted signatures. When the plaintiffs have not discharged their onus, then the claim based on Ex.A-2/promissory note is bound to fail. On the other hand, the plaintiff in the cross-examination evades and ducks by saying that the defendants had brought the letters after being typed and signed from outside. Therefore, Ex.A-3 to A-5 /Letters were also not proved by the plaintiffs. The only document in which the signature is obtained is Ex.A-6(series)/the memorandum of title deeds. Even though the said memorandum of title deeds can be taken as correct, especially, in the absence of any criminal complaint regarding the abduction of the first defendant, when the borrowal itself is not proved by the plaintiffs, and the execution of the memorandum of title dates is not supported by any consideration. The plaintiffs' case is compounded by the fact that there are interpolations and alterations in the Account Books - There are no clear-cut pleadings in the plaint as to the other transactions and a perusal of the judgments in the criminal appeals also is clear that there are no clear-cut pleadings and that those transactions were apart from the suit transaction. When between the same persons, there is more than one transaction of borrowal, normally, in the pleadings, it would have been mentioned by the plaintiffs. This is yet another circumstance. When P.W.1 s personal knowledge itself, is in doubt, in view of his admission in the cross-examination and non-production of his passport, this Court has to conclude that the plaintiffs have not proved the borrowal and the execution of the suit promissory note and consequently, they are not entitled for any relief based on Ex.A-2/promissory note or Ex.A-6/memorandum of deposit of title deeds. Appeal suit dismissed.

Summary

Issues Involved:
1. Alleged forgery and fabrication of promissory notes and guarantee letters.
2. Alleged coercion in obtaining signatures for creating an equitable mortgage.
3. Entitlement of the plaintiffs to recover Rs. 12,68,250/- with interest.
4. Validity of the mortgage deed.

Summary:

1. Alleged Forgery and Fabrication:
The plaintiffs claimed that the defendants borrowed Rs. 10,00,000/- from the deceased T.K.Kuppusamy and executed a promissory note dated 21.09.2003 with an interest rate of 18% per annum. The defendants, however, contended that the promissory note and guarantee letters were fabricated and their signatures were forged. The Trial Court found that the plaintiffs failed to prove the authenticity of the signatures on the promissory note and guarantee letters. The court noted that the plaintiffs did not take steps to compare the disputed signatures with admitted ones, leading to the conclusion that the signatures did not belong to the defendants.

2. Alleged Coercion in Obtaining Signatures:
The third defendant admitted his signature on the memorandum of deposit of title deeds but claimed it was obtained under duress by holding the first defendant hostage. The Trial Court found no evidence to support this claim as no police complaint was lodged by the defendants regarding the alleged coercion.

3. Entitlement to Recover Rs. 12,68,250/- with Interest:
The plaintiffs sought to recover Rs. 12,68,250/- with interest, claiming that the defendants borrowed the amount and failed to repay it. The Trial Court found inconsistencies in the plaintiffs' evidence, including material alterations in the account books and lack of corroborating evidence. The court concluded that the plaintiffs failed to prove the borrowal and execution of the promissory note, thus dismissing the suit.

4. Validity of the Mortgage Deed:
The plaintiffs argued that the third defendant created an equitable mortgage by depositing the title deeds of his property. The Trial Court observed that while the memorandum of deposit of title deeds was admitted, the borrowal itself was not proved. The court noted that the account books contained interpolations and alterations, and the plaintiffs failed to establish the consideration for the mortgage.

Conclusion:
The High Court upheld the Trial Court's findings, concluding that the plaintiffs did not prove the borrowal or the execution of the promissory note and memorandum of deposit of title deeds. The appeal was dismissed with no order as to costs.