Andhra Pradesh High Court – Amravati
Smt.Kanchari Umadevi vs Inumarthy Aruna Lakshmi on 2 January, 2025
1
APHC010707302017
IN THE HIGH COURT OF ANDHRA PRADESH
AT AMARAVATI [3369]
(Special Original Jurisdiction)
THURSDAY,
DAY, THE SECOND DAY OF JANUARY
TWO THOUSAND AND TWENTY
TWENTY-FIVE
PRESENT
THE HONOURABLE SRI JUSTICE T MALLIKARJUNA RAO
APPEAL SUIT NO: 472/2017
Between:
Smt. kanchari Umadevi ...APPELLANT
AND
Inumarthy Aruna Lakshmi ...RESPONDENT
Counsel for the Appellant:
1. KURITI BHASKARA RAO
Counsel for the Respondent:
1. VASAVI RATNA KUMARI DANDAMUDI
The Court made the following JUDGMENT:
1. The Appeal, under Section 96 of the Code of the Civil Procedure, 1908
(for short, ‘C.P.C.’), is filed by the Appellant/Plaintiff
Appellant/ challenging the decree
and Judgment dated 28.03.2017 in O.S.No.50 of 2015 passed by the
learned II Additional District Judge, Parvatipuram, (for short, ‘trial Court’).
Court
2. The Appellant is the Plaintiff, who filed the suit in O.S.No.50 of 2015
against the Defendant directing her to pay Rs.13,95,000/
Rs.13,95,000/- along with
subsequent interest at 18% per annum on Rs.10,00,000/
Rs.10,00,000/- due under the
registered mortgage
age deed, dated 28.07.2012, from the date of filing the suit
till the date of realization.
2
3. Referring to the parties as they are initially arrayed in the suit is
reasonable to mitigate confusion and better comprehend the case.
4. The factual matrix, necessary and germane for adjudicating the
contentious issues between the parties inter se, may be delineated as
follows:
Defendant borrowed a sum of Rs.10,00,000/- from Plaintiff, agreeing to
repay the amount with interest at the rate of 18% per annum, and
executed a registered simple mortgage deed dated 28.07.2012, under
document No. 2833/2012, agreeing to redeem the mortgage within one
year by creating a charge over the plaint schedule property. Despite
repeated demands and requests by the Plaintiff, the Defendant failed
to repay the loan. Defendant continued to delay the matter, and on
06.10.2014, Plaintiff learned that Defendant was trying to alienate the
plaint schedule property to third parties. When Plaintiff confronted
Defendant, she was challenged to take any action she wished.
Consequently, the Plaintiff filed the present suit to recover the loan
amount based on the mortgage deed.
5. In the written statement, Defendant refuted the plaint averments and
asserted that Plaintiff, being a poor woman, could not have lent
Rs.10,00,000/-. The Defendant further contended that she did not need to
borrow such a large sum as a housewife and small farmer with Ac.3.00 cents
of land. She never executed a registered mortgage deed in favour of the
Plaintiff, describing the alleged deed dated 28.07.2012 as a forgery. She
explained that her husband had a rice mill in Kotipam, mortgaged to the State
Bank of Hyderabad, but due to loss, the bank sought to sell the mill, prompting
their move to Rajahmundry in 2009. During this time, she claimed that her
husband’s enemies fabricated documents, including the alleged mortgage
deed, and filed suits against him. Defendant also contended that Plaintiff
never demanded repayment of the loan and sought protection under A.P.Act
7/77, requesting the suit be dismissed with costs for lack of cause of action.
3
6. Based on the pleadings, the trial Court framed the following issues:
(1) Whether the mortgage deed dated 28.07.2012 is true, valid and binding
on the Defendant?
(2) Whether the Plaintiff is entitled for suit amount?
(3) To what relief?
7. The suit was initially filed before the Principal District Court,
Vizianagaram, as O.S.No.107 of 2014. It was later transferred to the trial court
and renumbered as O.S.No.50 of 2015.
8. During the trial, on behalf of Plaintiff, P.Ws.1 to 3 were examined and
marked Ex.A.1. On behalf of Defendant, no witnesses were examined, and no
documents were marked.
9. After completing the trial and hearing the arguments of both sides, the
trial Court dismissed the suit without costs.
10. Sri Kuriti Bhaskara Rao, learned counsel for the Appellant / Plaintiff,
asserts that the trial Court failed to consider the clear terms of the registered
mortgage deed (Ex.A.1), executed on 28.07.2012, which acknowledged the
Defendant’s receipt of Rs.10,00,000/- in total, with Rs.6,00,000/- previously
borrowed and Rs.4,00,000/- paid at the time of execution. The Sub-Registrar
verified the document and took the Defendant’s thumb impression, with two
witnesses present. Despite this, the trial Court did not address the execution
of the mortgage deed. He further asserts that the trial Court overlooked written
arguments and evidence, particularly, the testimonies of PWs.2 and 3, who
confirmed the payment mode. Instead of appreciating this material evidence,
the trial Court dismissed it without valid reasoning.
11. Additionally, PW.3’s cross-examination further corroborated the
transaction and execution of the Ex.A.1 in favour of the Plaintiff. The Appellant
claims that the trial Court dismissed the suit, ignoring issue No.1, which
questioned the validity of the Ex.A.1. Despite the Defendant’s claim of forgery,
Ex.A.1 was duly executed in the presence of Sub-Registrar and witnesses.
4
Furthermore, the mortgage property, valued at over Rs.33,00,000/-, had an
outstanding loan of only Rs.3,00,000/- to the State Bank of Hyderabad, not
Rs.10,00,000/- as claimed by the Defendant. The trial Court failed to apply
sound legal principles and wrongly dismissed the suit. Therefore, the
Appellant seeks the Judgment and decree to be set aside and the Appeal to
be allowed in the interest of justice.
12. Per contra, Sri Dandamudi Vasavi Ratna Kumari, learned counsel for
the Respondent / Defendant, contends that the trial Court correctly
appreciated the case facts and reached a correct conclusion. The reasons
given by the trial Court do not require any interference.
13. Concerning the pleadings in the suit, the findings recorded by the Trial
Court and in light of the rival contentions and submissions made on either side
before this Court, the following points would arise for determination:
1) Is the trial Court justified in holding that the Plaintiff
failed to prove the execution of Ex.A.1, registered simple
mortgage deed, dated 28.07.2012?
2) Does the Judgment passed by the trial Court need any
interference?
3) Whether the Appellant / Plaintiff is entitled to a decree?
If so, to what amount?
POINT NOs.1 to 3:
14. The First Appellate Court, being the final Court of fact, has jurisdiction to
reverse or affirm the trial court’s findings. Considering the nature and scope of
the First Appellate Court in Vinod Kumar V. Gangadhar 1 , the Hon’ble
Supreme Court held that:
1
MANU/SC/0946/2014
5
15. Again, in B.V. Nagesh v. H.V. Sreenivasa Murthy2, this Court, taking
note of all the earlier judgments of this Court, reiterated the principle as
mentioned above with these words:
3. How the regular first Appeal is to be disposed of by the
appellate Court/High Court has been considered by this Court in
various decisions. Order 41 Code of Civil Procedure deals with
appeals from original decrees. Among the various rules, Rule 31
mandates that the Judgment of the appellate Court shall state:
(a) the points for determination;
(b) the decision thereon;
(c) the reasons for the decision, and
(d) where the decree appealed from is reversed or varied, the
relief to which the Appellant is entitled.
4. The appellate Court has jurisdiction to reverse or affirm the
findings of the trial court. The first Appeal is a valuable right of the
parties, and unless restricted by law, the whole case is open to
rehearing both questions of fact and law. The Judgment of the
appellate Court must, therefore, reflect its conscious application of
mind and record findings supported by reasons on all the issues
arising along with the contentions put forth and pressed by the parties
for the decision of the appellate Court. Sitting as a court of first
Appeal, it was the duty of the High Court to deal with all the issues
and the evidence led by the parties before recording its findings. The
first Appeal is a valuable right, and the parties have a right to be heard
on questions of law and facts. The Judgment in the first Appeal must
address all the issues of law and fact and decide it by giving reasons
in support of the findings. (Vide Santosh Hazari v. Purushottam Tiwari
(Deceased) By L.Rs. MANU/SC/0091/2001 and Madhukar and
ORs.v. Sangram and ORs. MANU/SC/0302/2001
The Court of First Appeal has jurisdiction to reverse or affirm the findings of
the trial Court. When the Court of First Appeal takes a different view, the
Judgment of the first appellate Court must show the conscious application of
mind and record its findings based on the evidence adduced by the parties.
The Judgment must record the reasons as to why the first appellate Court
differs from the Judgment of the Trial Court.
Given the settled legal position outlined above, I now re-appreciate the
evidence on record, taking into account the evidence adduced by both parties,
to assess the correctness of the findings recorded by the trial Court.
2
MANU/SC/0768/2010
6
15. The learned counsel for the Appellant asserts that the trial Court erred
in failing to draw an adverse inference from the Defendant’s non-examination
despite being a party to the mortgage. The learned counsel contends that the
Plaintiff’s claim is purportedly backed by the oral evidence of PWs.1 to 3. In
response, the learned counsel for the Respondent asserts that, as correctly
held by the trial Court, the Plaintiff failed to establish the passing of
consideration. This was due to Plaintiff’s failure to produce the promissory
notes allegedly executed by Defendant and evidence of any subsisting liability
at the time the mortgage was executed. After properly assessing the
evidence, the trial Court reached a sound and unassailable conclusion, which
merits this Court’s full endorsement.
16. The Plaintiff has been examined as PW.1. Her husband, K. Rama
Krishna Rao, is examined as PW.2. Their version of events is that the
Defendant borrowed Rs.10,00,000/- from the Plaintiff and executed a
registered simple mortgage deed on 28.07.2012 (Ex.A.1), agreeing to repay
the loan with interest at the rate of 18% per annum, while mortgaging the
schedule property. Defendant, however, denies the transaction, contending
that the simple mortgage deed is a blatant forgery and asserts that she never
borrowed any sum, let alone Rs.10,00,000/- from Plaintiff at any point in time.
To substantiate the mortgage transaction, the Plaintiff examined one of the
attestors to the deed, K. Srinivasa Rao, as PW.3. The evidence of PWs.1 to 3,
in conjunction with Ex.A.1, reveals that the document was attested by
K.Chakradhar Rao and PW.3 and scribed by Belagam Sivananda Rao. PW.3
testified that Defendant borrowed Rs.3,00,000/- on the second Saturday of
May 2012, Rs.3,00,000/- on the third Sunday of June 2012, and Rs.4,00,000/-
on 28.07.2012, the very day the mortgage deed (Ex.A.1) was executed.
17. The trial Court observed that during the cross-examination of PW.1, she
failed to provide the complete details of the transaction. However, she claimed
that her husband was privy to such information. In line with this, PW.2, the
Plaintiff’s husband, testified to the payments of Rs.3,00,000/- on the second
7
Saturday of May 2012, Rs.3,00,000/- on the third Sunday of June 2012, and
Rs.4,00,000/- on 28.07.2012. Despite this testimony, the trial Court noted
significant inconsistencies in the evidence of PWs.2 and 3 concerning the
alleged payments made to the Defendant. Given these discrepancies, the trial
Court found their testimonies unreliable and discarded their evidence
accordingly.
18. The trial Court also highlighted a crucial inconsistency in the testimony
of PW.3, who stated that the Defendant had executed two promissory notes,
which were later torn, and a fresh document was subsequently executed at
the Sub-Registrar’s office in Parvathipuram. The trial Court further observed
that the three different dates mentioned by PWs.2 and 3 were neither reflected
in the plaint nor the chief affidavit of PW.1, suggesting that these details were
developed during the trial without proper pleadings. Ex.A.1, the mortgage
deed clearly states that Plaintiff had previously lent Rs.6,00,000/- and, on the
day of execution of the mortgage, Defendant received an additional
Rs.4,00,000/-, in the presence of witnesses. From the outset, the Plaintiff’s
case was that a total of Rs.10,00,000/- was involved, with Rs.6,00,000/- paid
earlier and Rs.4,00,000/- on the date of the mortgage transaction. The mere
fact that the Plaintiff and her witnesses later testified to the particulars of the
payment of Rs.6,00,000/- does not warrant the complete rejection of their
evidence. In fact, the evidence adduced by the Plaintiff is not in stark contrast
to her initial pleadings and, therefore, cannot be dismissed in its entirety as
inconsistent. The trial Court overlooked a crucial aspect of the mortgage deed,
Ex.A.1, which explicitly indicates that a payment of Rs.6,00,000/- was made
before the execution of the mortgage deed. While it is true that the specifics of
this earlier payment were not provided in the evidence, the contents of the
mortgage deed itself establish the Plaintiff’s claim of a prior payment of
Rs.6,00,000/-. Section 25 of the Contract Act unequivocally establishes that
past consideration is valid consideration for the formation of a binding
contract.
8
19. In Atluri Usha Swamy V. Vijay Prestessed Products (P) Limited
and others3, the composite High Court of Andhra Pradesh held that:
“It is well settled that the consideration for any contract need not be
contemporaneous to the document itself. Consideration can be past,
present and future. The same is valid in law as long as law does not prohibit
it. The presumption under Section 118 of the Act may not necessarily be as
to the amounts specified in the promissory note itself. The presumption can
be as to the existence of consideration as such, but not the quantum of it
and that is what is needed in law for giving effect to the transaction”.
20. In Joseph Mariano Santos Pinto V. Aires Concocao Rodrigues 4, the
Goa, Daman And Diu Judicial Commissioner’s Court are pleased to consider
whether a sum of money due sometime prior to the execution of the
promissory note can be a good consideration for the issuance of the
promissory note, and further held as follows:
In the said case, Defendant owed Plaintiff a sum of Rs.485/- for the buffalo
that he purchased in May 1966, and on February 16th 1967, he executed
the promotion wherein he stated that he had received the money mentioned
in the promissory note.
Considering the various rulings of the Hon’ble High Court and
Supreme Court, it is held that the learned Trial Judge was correct in holding
that there was consideration and that it decreed the suit of the Plaintiff.
21. The testimony of PWs.1 to 3 is crystal clear, confirming that Ex.A.1
mortgage deed was taken as past consideration, and the payment of
Rs.4,00,000/- was made at the time of the mortgage transaction. The failure to
provide detailed particulars of the Rs.6,00,000/- payment does not invalidate
the core statement made in the mortgage deed. Therefore, the trial Court’s
disregard for the clear reference to this payment within Ex.A.1 was a
significant oversight.
22. The learned counsel for the Respondent contends that when the
Plaintiff pleads the existence of payments prior to the Ex.A.1 mortgage
transaction, he has to prove the said fact to the satisfaction of the Court, and
3
2002 (5) ALT 68
4
MANU/GO/0027/1975
9
as the Plaintiff has not let in evidence, he would fail in the suit. He relied on
the Judgment of Gomi Bai and Ors to support his contention. V. Uma
Rastogi and Ors.5, wherein the composite High Court of Andhra Pradesh
held that:
……… Secondly, Vidhyadhar v. Mankikrao 6 is of no assistance to the
Appellant. When the burden of proof lies on Plaintiff, and such burden is not
discharged initially for the non-appearance of Defendant or non-production
of rebuttal evidence by Defendant, adverse inference as contemplated
under Section 102 of the Evidence Act cannot be drawn by the Court. The
same would amount to allowing the suit to claim wholly and solely on the
weakness of the Defendant’s case rather than the strength of the Plaintiff’s
case. In this regard, a reference may be made to the following observations
made by this Court in V. Srisailam v. V. Krishna Murthy.7.
Evidence means and includes all statements which the Court
permits to be made by witnesses in relation to matters of fact and enquiry. It
may be oral evidence or documentary evidence produced for inspection by
the Court. Any fact from which, either by itself or in connection with other
facts, the existence, non-existence, nature, or extent of any right, liability, or
disability asserted or denied in any suit or proceeding necessarily follows is
expressed by the phrase ‘facts in issue’. (See Section 3 of the Indian
Evidence Act, 1872). As per Section 101 of the Evidence Act, a person who
desires the Court to give Judgment as to any legal right or liability
depending on the existence of facts must prove that those facts exist and
the burden of proof lies on such person. He would fail if no evidence at all
was given on either side. Under Section 114 of the Evidence Act, the Court
is entitled to presume the existence of any fact. As per illustration (h) a
person who refuses to answer a question, an inference can be drawn that if
he had given an answer, it would be unfavourable to him. When the Court
raises adverse inference, these provisions of the evidence law have to be
kept in mind.
23. Before examining whether Plaintiff discharged that onus and thus
shifted it on Defendant, it is to take note of the procedure prescribed for proof
of execution of the document. In this regard, Section 68 of the Indian Evidence
Act 1872 is reproduced hereunder:
68.- Proof of execution of document required by law to be attested. – If a
document is required by law to be attested, it shall not be used as evidence5
MANU/AP/1138/2004
6
MANU/SC/0172/1999
7
MANU/AP/1128/2002
10until one attesting witness at least has been called for the purpose of
proving its execution, if there be an attesting witness alive, and subject to
the process of the Court and capable of giving evidence:
Provided that it shall not be necessary to call an attesting witness in proof of
the execution of any document, not being a will, which has been registered in
accordance with the provisions of the Indian Registration Act, 1908 (16 of
1908), unless its execution by the person by whom it purports to have been
executed is specifically denied.
24. The learned counsel for the Respondent relied on the decision in
Thakkar Vrajlal Bhimjee V. Thakkar Jamnadas Valjee And another8, the
Hon’ble Supreme Court held that:
3. In Kunwar Surendra Bahadur Singh v. Thakur Behari Singh9, it has
been held that one of the essentials of a mortgage deed is that each of the
attesting witnesses must have signed the document in the presence of the
executant. The Court held that if the provisions of Sections 58 and 59 of the
Registration Act and Sections 3 and 59 of the Transfer of Property Act are
read together, there was no escape from the conclusion that a mortgage
deed was required to be proved by producing; it least one of the attesting
witnesses. In view of this decision, the Judgment of the High Court cannot
be upheld.
25. This Court finds that the Judgment cited by the Respondent’s counsel
does not aid the Defendant’s case. In the present matter, Plaintiff examined
the attesting witness, PW.3, whose testimony fully supports the Plaintiff’s
position. Given the evidence provided by PW.3, it is difficult to conclude that
the statutory requirements are not met.
26. However, mere proof of the contents of the document does not prove
the due execution of the mortgage deed. The Plaintiff has not only to prove
the contents of the document, but she has to prove that the document was
duly executed as required by Section 59 of the Transfer of Property Act and
that the same was registered.
8
1994 SCC (4) 723
9
MANU/PR/0010/1939
11
27. The execution of the mortgage deed can, however, be proved only if the
Plaintiff can show that the mortgagor signed the document with intent to
execute the same and the deed was attested in the manner required by law.
To prove the signature of the mortgagor on the deed, Plaintiff relied upon Sub-
section (2) of Section 60, Registration Act. That sub-section, in so far as it is
material, provides that where a certificate of registration under Sub-section (1)
of Section 60 has been signed, sealed and dated by the registering officer, it
shall be admissible to prove that the facts mentioned in the endorsements
referred to in Section 59 have occurred as therein mentioned. Section 59
requires the registering officer to affix the date and his signature to all
endorsements made under Sections 52 and 58.
28. Section 58(1)(a) requires the registering officer to endorse the signature
and addition of every person admitting execution of every document, and, if
such execution has been admitted by the representative, assign or agent of
any person, the signature and addition of such representative, assign or
agent. In this case, from the endorsement made on the deed of mortgage by
the Sub-Registrar, it is clear that the mortgage deed was admitted to have
been executed by the mortgagor and duly presented by him/her for
registration.
29. Learned counsel for the Respondent relied on the decision in
M.L.Abdul Jabbar Sahib V. H. Venkata Sastri and Sons 10 , the Hon’ble
Supreme Court held that:
10. The Indian Registration Act. 1908 lays down a detailed procedure for
registration of documents. The registering officer is under a duty to enquire
whether the document is executed by the person by whom it purports to
have been executed and to satisfy himself as to the identity of the executant,
Section 34(3). He can register the document if he is satisfied with the
identity of the person executing the document and if that person admits
execution [Section 25(1)]. The signatures of the executant and of every
person examined with reference to the document are endorsed on the
document (Section 58). The registering officer is required to affix the date
and his signature to the endorsements (Section 59). Prima facie, the
10
1969 LawSuit (SC) 41
12registering officer puts his signature on the document in the discharge of his
statutory duty Under Section 59 of the Registration Act and not for the
purpose of attesting it or certifying that he has received from the executants
a personal acknowledgement of his signature.
30. The record clearly demonstrates that Ex.A.1, the mortgage deed,
includes the Defendant’s photograph and is duly registered following the
provisions of the Registration Act. Despite being served with the suit
summons, Defendant has failed to initiate any action against Plaintiff alleging
the fabrication of the document. It is not the Defendant’s contention that the
registering authorities failed to appraise her of the contents of the Ex.A.1
document. Notably, the Defendant has not taken the witness stand to
substantiate her claim of fabrication. Furthermore, she has refrained from
appearing in Court to deny her signature on Ex.A.1. Once it is established that
the Defendant executed Ex.A.1, the onus shifts to her to explain the contents
of the mortgage deed, specifically concerning the alleged passing of the
consideration amount.
31. The record reveals that the Ex.A.1 document is registered, and the
registration of the document reinforces the valid execution of the document. A
registered document carries with it a presumption that it was validly executed.
It is for the party challenging the genuineness of the transaction to show that
the transaction is not valid in law. The Hon’ble Supreme Court in Prem Singh
and ORs.V. Birbal and Ors11, it was held as follows:
27. There is a presumption that a registered document is validly
executed. A registered document, therefore, prima facie would be valid in
law. The onus of proof, thus, would be on a person who leads evidence to
rebut the presumption. In the instant case, Respondent 1 has not been able
to rebut the said presumption.
The above Judgment in Prem Singh‘s case has been referred to in
Vishwanath Bapurao Sabale V. Shalinibai Nagappa Sabale and others 12.
11
MANU/SC/8139/2006
12
MANU/SC/0442/2009
13
32. The Defendant, who is a party to Ex.A1, to prove that the mortgage
came into existence under the circumstances stated in the written statement,
that too, without any consideration, though there are some recitals in the
deed, regarding the passing of consideration. This Court is conscious of the
fact that Ex.A1 is not a negotiable instrument, armed with presumption, under
the Negotiable Instruments Act. In this view, the initial burden is upon the
Plaintiff to prove the passing of consideration. In this case, given the evidence
of PWs.1 to 3 supported by recitals in the registered document viz., Ex.A1, to
which the Defendant is a party, are sufficient to discharge the initial burden,
thereby shifting the burden to disprove the passing of consideration, or to
disprove the recitals contained in Ex.A1, thereby to establish the fact, if it is a
fact, that Ex.A1 is not supported by consideration. In a mortgage deed, if there
are recitals that the mortgage money was given as a loan to the mortgagor,
either on that date or previous to that date, affirming that the mortgagor
received the amount, then the burden is on the mortgagor to prove, that no
consideration was in fact paid. This proposition is laid down by the Hon’ble
Apex Court in R.S. Kothari V. Smt. Anar Dei13.
33. The Defendant’s stance is that her husband suffered significant financial
losses in the rice mill business, leading to the property being notified for sale.
She claims that Ex.A1, the mortgage deed, was fabricated by the Plaintiff in
collusion with the attestors and scribe. The Defendant has failed to come into
the witness box to support her case. Despite her allegations regarding the
fabrication of Ex.A1 by the Plaintiff in collusion with the attestors and scribe,
she has not provided direct testimony to substantiate these claims. The
absence of her testimony significantly weakened her defence, as she needed
to take the opportunity to present her version and face cross-examination
personally. However, Defendant failed to present any concrete evidence or
material on record to substantiate her allegations that Plaintiff, attestors, and
scribe conspired to fabricate the document. Furthermore, it was not
13
1968 1 SCWR 235
14
specifically suggested during the cross-examination of PWs.1 to 3 that Ex.A.1
lacked the Defendant’s signature or that it was a forged document. The
absence of such a direct challenge weakens the credibility of the Defendant’s
claims.
34. In dismissing the suit, the trial Court failed to conduct a thorough and
objective examination of the pleadings, instead relying on mere surmises and
conjectures. This oversight is particularly glaring because Defendant did not
come forward to testify in her defence. This omission should have been given
considerable weight in assessing the credibility of her claims. By choosing not
to present herself in the witness box, the Defendant deprived the Court of the
opportunity to scrutinize her testimony under cross-examination, which is a
fundamental aspect of the adversarial process. Instead of focusing on this
crucial gap in the Defendant’s defence, the trial Court gave undue significance
to minor inconsistencies in the evidence provided by the Plaintiff’s witnesses.
These trivial discrepancies were overemphasized and used as the primary
basis for rejecting the Plaintiff’s case, even though they did not materially
affect the core of the Plaintiff’s claim. Such an approach fails to recognize that
inconsistencies in testimony are not uncommon in cases involving multiple
witnesses and do not render the entire case unworthy of consideration.
35. The submission of the learned counsel for the Appellant, that for the
non-examination of the Defendant, an adverse inference and presumption
against the Defendant has to be taken, is of much force. The proper person
who could speak about the execution of the mortgage deed and passing of
consideration thereunder should be only the Defendant, the party to Ex.A1.
36. Section 114 of the Indian Evidence Act empowers the Court to draw
certain presumptions based on certain facts. Section 114(g) says the Court
may presume that the evidence which could be and is not produced would if
produced, be unfavourable to the person who withholds it. Under this
provision, an adverse inference could be drawn against the defendants for
15
failing, on their part, to call the material witness, viz., the second Defendant.
Further, when a party fails to call as his witness, the principal person involved
in the transaction, who is competent to give a first hand account of the matters
of controversy and throw light on them and who could rebut the allegations of
the other side, it is legitimate on the part of the Court to draw an adverse
inference against the party, who failed to produce such principal witness or
who failed himself/herself to be examined as a witness, when he is a party, as
ruled by the Apex Court in V.K.Saklecha V. Jagjiwan. 14 , Engu
Lakshmamma V. Vennapuse Chinaa Malla Reddy 15 and in Vidhyadar V.
Mankikrao16. In the above third cited decision, their Lordships of the Supreme
Court has held as follows:
“Where a party to the suit does not appear into the witness box and
states his own case on oath and does not offer himself to be cross-
examined by the other side, a presumption would arise that the case set up
by him is not correct.
He did not state the facts pleaded in the written statement on oath in the
trial Court and avoided the witness box so that he may not be cross-
examined. This, by itself, is enough to reject the claim that the sale
transaction between defendant No. 2 and the Plaintiff was bogus”.
37. Admittedly, Defendant abstained from entering into the box, which
should give rise to an adverse inference against her, to contend against the
recitals in Ex.A1, given the admitted position that Defendant is the signatory,
i.e., an executant to Ex.A1
38. Furthermore, the trial Court disregarded the fact that the Plaintiff’s claim
was supported by a registered mortgage deed, Ex.A.1, which clearly outlined
the terms of the loan and the agreement between the parties. This document,
executed and registered under the law, should have carried significant weight
in the Court’s analysis, as it serves as a formal and legally binding record of
the transaction. Ignoring the importance of Ex.A.1, the trial Court erred in
14
MANU/SC/0370/1972
15
MANU/SC/0271/1985
16
MANU/SC/0172/1999
16
dismissing the suit without properly considering the pivotal evidence that
substantiated the Plaintiff’s case.
39. In the absence of any tangible evidence from the Defendant to
substantiate the claim of fabrication, the matter does not progress further. The
testimony of the attesting witness unequivocally supports the Plaintiff’s case,
effectively dispelling any doubts and tilting the balance decisively in favour of
the Plaintiff.
40. Assuming that Plaintiff failed to pay the amount covered under Ex.A.1,
in the ordinary course, Defendant ought to have issued a notice, calling upon
Plaintiff, setting forth under what circumstances Ex.A1 came into existence,
then demanding the amount also or questioning the genuineness of the
document itself
41. For the reasons stated above, this Court is of the opinion that Plaintiff is
able to establish the execution of the Ex.A.1 mortgage deed in her favour by
Defendant. Given the same, the findings and conclusions recorded by the trial
Court are based on something other than a proper appreciation of the
evidence on record. Based on the evidence available on record and the
settled position of law, as pointed out, this Court is of the considered opinion
that the Plaintiff has proved the case regarding the passing of consideration
under Ex.A1, which should follow the Plaintiff is entitled to a decree as prayed
for. The trial Court, unfortunately, without considering the case from its proper
perspective on the legal position correctly, committed an error in concluding
that the execution of Ex.A1 is not proved and is not supported by
consideration. In light of the foregoing discussion, the trial Court’s Judgment to
dismiss the suit is based on an incomplete and flawed evaluation of both the
pleadings and the evidence. In this view, the findings of the trial Court
regarding Ex.A1 should be reversed, and the suit should be decreed as
requested. The Trial Court Judgment is erroneous, cannot be sustained, and
17
is liable to be set aside, and the Appeal deserves to be allowed. Accordingly,
the Points are answered.
42. As a result,
(a) The Appeal Suit is allowed without costs.
(b) The Judgment and Decree, dated 28.03.2017, passed in
O.S.No.50 of 2015 by the learned II Additional District Judge,
Parvatipuram, is set aside.
(c) The suit in O.S.No.50 of 2015 is preliminarily decreed with costs
for a sum of Rs.13,95,000/- together with interest @ 12% p.a.,
on Rs.10,00,000/- from the date of the suit till the date of trial
Court’s Judgment and thereafter, interest @ 6% p.a., till the date
of redemption. The time for redemption is three months from this
date.
Miscellaneous applications pending, if any, in this Appeal shall stand
closed.
_____________________________
JUSTICE T. MALLIKARJUNA RAO
Date: 02.01.2025
SAK
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THE HON’BLE SRI JUSTICE T.MALLIKARJUNA RAO
APPEAL SUIT No.472 of 2017
DATE: 02.01.2025
SAK