Jaldu Ananta Raghura... v. Sri Rajah Bommadevar...

Shri Srinivasachari, J.:— This is an appeal against the judgment and decree of the Subordinate Judge, Gudivada, in O.S No. 1/1951. One Sri Raja Bommadevara Naganna Naidu executed a simple mortgage bond on 18th of April 1933 in favour of one Sri Raja Venkatarathnamma for Rs. 8,500 in respect of sums due to the said Raja Venkatarathanamma under a promissory note. The mortgagor hypothecated three villages viz., Bollapadu, Appikatla and Velpore. Subsequently on the 27th February 1935 the mortgagee executed a mortgage in favour of one Nagapotrao mortgaging the right that she possessed under the mortgage bond of 18th April 1933. In addition to the above, the said Venkataratnamma executed an assignment in favour of the same Nagapotrao authorising him to collect the money due under the mortgage bond in her favour. The three villages which were subject to mortgage were brought to sale in execution of a simple money decree against Raja Bommadevara Naganna Naidu, the original mortgagor and they were purchased at the court auction subject to the mortgage by three persons. Bollapadu was purchased by one Nagayya, Appikatla by one Jaldu Venkata-subbarao, and Velpore by one Nageswar Swamy for the same Jaldu Venkata-subbarao, the said Nageswarswamy being Venkat Subbarao's clerk. Nagapotrarao the assignee of the mortgage reassigned his rights in favour of the present plaintiff by means of a document dated 6th April 1945, being Ex. A-3 in the case for a consideration of Rs. 32,000/- Plaintiff has now brought this suit on the basis of the assignment in his favour for the recovery of the amount due under the mortgage together with interest accrued due thereon. The plaintiff has prayed for a decree for a sum of Rs. 16,131-8-0.

(b). To this suit the following persons were made parties:— The original mortgagor as defendant No. 1. As the original mortgagee Lanka Venkata Ratnamma was dead, his legal representative was made defendant No. 2. Plaintiff's assignor Tatavarti Nagapotharao was made defendant No. 3. It may be mentioned that by this time Jaldu Venkatasubbarao, the purchaser of the two villages, Velpore and Appikatla was dead, and as he had executed a will before his death appointing certain persons as executors, the executors under the will were made defendants 4 and 5. The clerk of Jaldu Venkatasubbarao in whose name the village of the Velpore was purchased benami was made defendant No. 6. Defendant No. 7 is the purchaser of the village Bollapadu. Defendant 8 is the widow of Jaldu Venkatasubbarao and defendants 9 to 11 are his daughters. Defendant 12 is the adopted son of defendant No. 8.

(c.) During the pendency of the suit defendant No. 3 died and, therefore his legal representatives have been brought on record and impleaded as defendants 13 to 15.

2. The plaintiff's suit is a simple suit on the basis of the mortgage assigned in his favour. Plaintiff, however, did not produce the original mortgage bond but stated that it was represented to him by his assignor that the original document was missing from the records. The suit, therefore, was laid as on a lost mortgage bond. The contending parties filed written statements. The plaintiff's assignor viz., defendant No. 3 filed a written statement admitting the assignment by him in favour of the plaintiff and stating that the plaintiff was entitled to the amount due under the mortgage bond. He made a statement to say that no amount had been paid under the mortgage. The executors of the will of Jaldu Venkatasubbarao who represented the estate being defendants 4 and 5 filed a written statement putting the plaintiff to proof of the mortgage. They stated that they did not admit that any mortgage debt was subsisting which was payable by the estate of Venkatasubba Rao. They further averred that defendants and themselves were appointed executors under the will of Venkatasubbarao and as such, they in conjunction with defendant No. 3 discharged most of the liabilities. It was also stated that during the period that they and the 3rd defendant were managing the estate, no demand was made by the 3rd defendant for the amount said to be due under the mortgage. It may be mentioned that after the defendant No. 8 the widow of Venkatasubbarao adopted defendant No. 12, defendants 4 and 5 ceased to have any interest in the estate as defendant No. 12 became entitled to the properties. They were, therefore, discharged.

(b). The statement of defendant No. 6 the clerk of Venkatasubbarao was only formal to say that the village of Velpore was purchased only benami in his name for Venkatasubbarao. Defendant 8, the widow of Venkatasubbarao pleaded that she was not personally aware of the transaction of mortgage. She, however, stated that her husband purchased the villages of Appikatla and Velpore at the court auction subject to mortgage. She further stated that the liability to pay the debt, if any was to be discharged by the purchaser of Bollapadu also who had redeemed the property only partially by paying some amount to the plaintiff. On these pleadings the following issues were framed by the lower court:—

1. Whether the original mortgage bond is lost?

2. Whether the assignment in favour of plaintiff is true, valid and supported by consideration?

3. Whether the rate of interest is usurious and whether it is liable to be relieved against?

4. To what relief is plaintiff entitled?

3. Plaintiff examined five witnesses and the defendants examined one. The 1st witness on behalf of the plaintiff is one Jalluri Linga Moorti who was the clerk of defendant No. 3 Nagapotharao. He says that he was present when the mortgage in favour oF defendant No. 3 his master, was executed. He speaks to the fact of the mortgagor having signed in that deed, Ex. A-1 in the presence of the attestors. He says that three of those who attested the document are no more. This witness also speaks about the original mortgage deed executed by defendant No. 1 in favour of Lanka Venkataratnamma. He also deposes that defendant 3 received a sum of Rs. 32,000 as consideration for the assignment of the mortgage in favour of the plaintiff. This witness says that he was writing the accounts of the defendant No. 3 and produced the account books relating to his master. He refers to the entry in the day book as having been written by him evidencing the payment of consideration by defendant No. 3 to Venkata-Ratnamma, Ex. A-4. He also refers to the corresponding entry in the ledger Ex. A-5. He says that no payments were made towards the mortgage. The receipt of the sum of Rs. 32,000/- by the 3rd defendant from the plaintiff is also spoken to by him. With regard to the original mortgage he says that he learnt that the document was with defendant-5 (one of the executors) and that defendant-3 appears to have sent the original to defendant No. 5 to enable the father of defendant-7 to take an account of the amount due and pay it.

(b) P.W 2 is one Valluri Narsimharao and P.W 3 is the original mortgagor, defendant No. 1. Their statements are not of much importance. Nor is the statement of P.W 4. P.W 5 has been examined in order to show that an amount of Rs. 4000 and odd was paid on behalf of the purchaser of Bollapadu thus getting a release of that property from the security.

(c) On behalf of the defendants, one of the executors under the will of Venkatasubbarao has been examined as D.W 3. He says that he along with the other executors came into possession of large funds relating to Subbarao's estate; that they discharged most of Subbarao's liabilities and the balance that was left was invested in banks and in securities; that all the time defendant No. 3, the co-executor, was with them and that he knew about all the transactions. He further states that defendant 3 borrowed large sums of money from the estate and that during all the period he never said that Subbarao's estate was liable to pay him under the suit mortgage for the villages purchased by Subbarao. Nor was any demand made prior to the notice before suit. He denies that the mortgage bond was ever given to him. This is all the evidence in the case. On the basis of this evidence the trial court came to the following conclusions:—

With regard to the non-production of the original mortgage bond the lower court came to the conclusion that although the version in the case of the document having been given to defendant No. 5 for the purposes of making up of accounts, had not been established, nevertheless it held that it had been proved that the bond was lost, and therefore, allowed secondary evidence of the same to be led by the introduction of a registration copy. Alternatively, the court held that even if the loss of the suit mortgage bond had not been conclusively established, there was nothing to prevent secondary evidence being led of the same, because of the fact that the 8th defendant, the widow of Subbarao, had admitted the existence of the mortgage bond by pleading that her husband purchased the properties subject to the mortgage. The trial Judge, therefore purporting to act under Section 65, clause (b) of the Evidence Act, allowed secondary evidence to be led. On the evidence he held that the assignment of the suit mortgage bond in favour of the plaintiff by the 3rd defendant had been established and the payment of consideration also proved. He, therefore, passed a preliminary decree in favour of the 2nd plaintiff who had been brought on record by reason of the death of the 1st plaintiff, as against the 12th defendant, the legal representative of Nagapotharao. Defendant-12 has now come up in appeal.

4. Arguments were heard in the appeal from time to time and at one stage it was thought advisible to see if a settlement could be arrived at in the case, having regard to the peculiar circumstances of the case. The case was, therefore, posted to the 5th of August 1957 for compromise or for arguments if negotiations for a compromise failed. On that day the legal representative of the 3rd defendant filed an application supported by an affidavit stating that the original of the mortgage bond Ex. A-2 which had been mislaid had been recovered on 1-8-1957 after a diligent search and that the same be received as additional evidence under Order 41, Rule 27, C.P.C It was also stated in the petition that there was no endorsement of any payment on the document and that alone was sufficient to hold that there was no discharge of the mortgage debt. This petition was strongly opposed by the other side. Finally after hearing the arguments of both sides we allowed the document to be filed subject to payment of costs to the other side. After this, the appellant herein made an application to the court that in view of the reception of this additional evidence it was necessary to send for the will of the late Jaldu Venkatasubbarao, for that would show that at the time of the said will the debt alleged to be due to the 3rd respondent was not subsisting. He, therefore, prayed that a registered copy of the will executed by Jaldu Venkatasubbarao might be allowed to be produced and filed in court. It was stated that the production of the will in the trial court was not possible because the orginal will had been filed in another suit instituted by the widow of Venkatasubbarao questioning the validity of the will. Having regard to the fact that there was enough evidence on the record to prove the fact of execution of a will by Jaldu Venkatasubbarao, and as the genuineness of the will had been admitted by the 3rd defendant in the suit filed by Venkatasubbarao's widow, and as it was urged that by the reception of that document the court would be in a position to determine about the existence or otherwise of the mortgage liability we thought that in the interests of justice the document should be received in evidence. So it was directed to be filed. Subsequent to this, the respondents made an application requesting the court to call upon the appellant to produce the account books of Jaldu Venkatasubbarao. No orders were passed on this application. After all this stage, another opportunity was taken to see if the matter could be amicably settled, but as the attempt proved abortive, arguments were heard and the case was reserved for judgment.

5. The singular feature about this case is that the suit has been filed on the basis of a mortgage the original document not having been filed with the plaint. The contesting defendant did not admit the execution of the document and under those circumstances it was necessary for the plaintiff to prove the execution of the document and for this purpose primary evidence by the production of the original deed itself and proof of execution by the examination of the attesting witnesses was necessary. Plaintiff sought to lead secondary evidence by alleging that the document has been mislaid and lost. The case with regard to the document in the plaint was that it was mislaid Defendant No. 3 who filed a statement and in whose possession the document should have been, stated that he recollected that he had sent the original to the 5th defendant for calculation of the amount due. P.W 1 the clerk of defendant 3 has given an indefinite and vague statement with regard to the original mortgage deed.

6. Every deed being the best evidence of its contents, its non-production will necessarily raise a suspicion in the mind of the court and great care and circumspection would be needed in order to decide whether there has been really a bonafide loss. Section 65 of the Evidence Act permits the leading of secondary evidence only where the original has been destroyed or lost. There must be sufficient proof of the search for the original to render secondary evidence admissible. It must be established that the party has exhausted all the sources and means in the search of the document, which were available to him. In this case, a mere statement was made that it was sent to defendant 5 for the making up of accounts. Defendant 5 has come into the box and denied this allegation. Beyond a statement, no evidence has been led to prove when the document was sent, how long it was with him, and why the document was not taken back after the work was over. If it was sent to defendant 5, then the story of it having been mislaid or lost is certainly false. No doubt permiting a party to lead secondary evidence, being satisfied about the loss of the original, is a matter of discretion left to the trial court and the appellate court would not ordinarily interfere with the exercise of such discretion. That is the principle that has been laid down by the Privy Council in Shrimati Ravi Surripria v. Rukmani Debi . 19 Indian Appeals 79.. But where the trial court has come to the conclusion that the loss of the document has been established without taking into consideration the pre-requisite conditions that are required by the Evidence Act, the appellate court would certainly interfere with the discretion wrongly exercised by the lower court. The lower court, in our opinion, could not have inferred loss of the document in face of divergent versions about the non-availability of the document placed before the court.

7. The learned Judge of the lower court has held in the alternative that even if the loss of the original could not be said to have been established, still secondary evidence could be allowed to be led, because, according to him, the 8th defendant admitted the existence of the mortgage bond when she stated in her written statement that her husband purchased the properties subject to the mortgage. He relied upon Section 65(b) of the Evidence Act, which reads as under:—

“Secondary evidence may be given of the existence, condition or contents of a document in the following cases:—

(a) …….

(b) When the existence, condition or contents of original have been proved to be admitted in writing by the person against whom it is proved or by his representative in interest.”

8. Admission of the execution and the terms of a document renders proof of the document unnecessary. Section 58 of the Evidence Act is clear on this point which says that facts admitted need not be proved. The question is whether the statement of defendant 8 in her written statement to say that her husband purchased the two villages subject to a mortgage would amount in law to an admission of the existence of a subsisting debt under the mortgage. The 8th defendant had no knowledge of the execution of the document and has put the plaintiff to proof thereof. A denial of the execution of a bond though accompanied by a statement of discharge of the debt cannot be regarded as an admission within the meaning of Section 65(b) of the Evidence Act, to dispense with the production of the document. The plaintiff cannot be allowed to disconnect the ??? admission from the context in which it appears and use it as an unqualified admission of the mortgage. Pleading ignorance of the execution of the document for all intents and purposes amounts to a denial of the execution of the document. We would say that a plea of ignorance of the execution of a document accompanied by even an alternative plea of payment cannot amount to an admission of the execution of the document. Herein also, in our opinion, the lower court has fallen into an error in relying upon the statement in the written statement of defendant 8 as amounting to an admission of the execution of the mortgage.

9. Section 65 of the Evidence Act cannot be invoked where a party being in possession of the document does not produce it, as in this case where the document not having been produced at all the relevant periods, has teen sought to be ushered in at the stage of the arguments in this court, producing it from his own possession. It would be useful in this regard to refer to the observations of the Privy Council in the case of Hiralal v. Ganesh Perskad. Their Lordships say:—

“If the plaintiff had the original and did not produce it in the court below his case was not proved because it rested almost entirely on the Ikrarnama there being no evidence of the contents of the deed of sale; but to accept secondary evidence of the document which was in the plaintiff's custody without looking at the original, seems to their Lordships to be an extraordinary course.”

10. A party ought not to be allowed to defeat his opponent by force of a document which he has in his possession and which he would not produce. The practice of not producing the document in the possession of the party has been deprecated very much by the Privy Council, and their Lordships put it in the strongest terms. They say:—

“A practice has grown up in Indian Procedure of those in possession of important documents of 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 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.” Vide Murugeshan Pillai v. Gnana Sambandha (4 Indian Appeals 98).

11. Having produced the document at this late stage, it was urged on behalf of the respondents that where the genuineness of the document could not be Questioned and the document showed that amount was advanced on the security of immoveable property, the burden was upon those who pleaded that the debt had been satisfied to prove by subs antial evidence that payment had been made in discharge of the mortgage bond. No doubt ordinarily that would be the case. Here the defendants to the suit did not plead payment. They merely said that they had no knowledge of the execution of the document and put the plaintiff to proof. The object of the respondents is that the court should look into the document and because there is no endorsement of payment, the court should hold that the amount due under the mortgage is still subsisting and if there is no proof of payment the court should bold that the amount due under the mortgage is still due. We cannot help remarking that such an important document as the mortgage bond have been mislaid or allowed to be lost. The document, it would appear, came to be in the possession of defendant 3 in 1945 and during all the period of the trial of the suit in the lower court and during all the period that the appeal was pending in this court, no attempt was made on the part of defendant 3 or his legal representative to make a search for the original document. Advantage was taken of the fact that the persons against whom the liability was sought to be enforced happened to be minor legal representatives of Venkatasubbarao.

12. A mere production of the mortgage deed is not enough to fasten any liability on parties who are not the executants of the document. Even if the document had been produced along with the plaint, the plaintiff would not be relieved of the burden of proving the document as required by law, to entitle him to a decree on the basis of the document. Section 68 of the Evidence Act says that the execution of a document required by law to be attested by witnesses can only be proved by calling atleast one attesting witness. The suit mortgage bond, therefore, could be proved only by calling an attesting witness, and this could be dispensed with only where the execution is admitted or has not been denied. The rule enacted in Section 68 of the Evidence Act is so stringent and mandatory that even in a case where the document is lost and secondary evidence is allowed to be led, the formality of an attesting witness being called has to be observed. Failure to call as witness any of the attesting witnesses where it is not established that all of them are dead or were incapable of giving evidence, is a fatal defect and a document cannot be held to have been proved. P.W 1, the clerk of defendant 3, says that among the attesting witnesses besides those that are said to be dead, defendant 1 and defendant 6 said to be among the attestors are still alive. They have not been examined. Under the circumstances, the mortgage deed cannot be held to have been proved.

13. Putting the case at its worst as against the appellant that the statement in the written statement of defendant 8 amounts to an admission of the execution of the document, where the document has not been proved to be lost an admission by the vendor of the execution of the deed cannot be admitted as secondary evidence against person other than the executant.

14. Certain aspects of the case have got to be considered before the court comes to the conclusion that the debt due under the bond is still subsisting. The mortgage, as is clear, was executed in favour of defendant 3, Nagpotarao, who was no other than the son-in-law of Jaldu Venkatasubbarao. This Nagpotarao was in active management of the estate of Venkatasubbarao. This is abundantly clear from the evidence. He was appointed one of the executors under the will of Venkatasubbarao. Venkatasubbarao died on 22nd June 1942. The assignment in favour of the plaintiff by the 3rd defendant, was made in 1945. It is in evidence that soon after, the death of Venkatasubbarao when the executors took over the estate they discharged all the liabilities and whatever balance was left was invested in banks and invested in securities. This is what D.W 1 one of the executors says. He also says that in all these matters the 3rd defendant was jointly administering the estate. One would have expected that if it was also a debt due by the estate of Subbarao, some arrangement would have been made for the discharge of this debt. But all the time till the sending of the notice by defendant No. 3 prior to the date of the suit, nothing was done for the payment of the debt. It may also be observed that in the will executed by Jaldu Venkatasubbarao there is a categorical statement to the following effect:

“There are no debts from me either to Tatavarti Nagapotarao or to others or the banks or the companies”.

15. So far as this will is concerned, there can be no doubt with regard to its genuineness. It was filed in O.S No. 55 of 1945 instituted at the instance of Venkatasubbarao's widow to question its validity. There the defendant No. 3 was actively supporting the case of the will. At the time when the will was made it could not be said that there was no cordial relationship between the 3rd defendant and his father-in-law's party. Therefore, this statement in the will to the effect that there are no debts due by the estate is very significant. It is in evidence that the defendant No. 3 borrowed large sums of money from the estate and repaid them. During all this period defendant No. 3 never told the other executors that his borrowings may be adjusted towards the debt due to him under the foot of the mortgage. Defendant No. 13's reticence and his inconsistency do justify the court drawing an inference that the debt could not be subsisting. This circumstance highly improbablises the fact of the debt under the mortgage being still subsisting. We may also advert to another important circumstance and that is that two of these very villages which were mortgaged to Nagpotarao were given over to Nagpotarao's daughter i.e the grand-daughter, by Jaldu Venkatasubbarao by means of the testamentary deposition that he made. If really there was a mortgage subsisting on these villages he would have mentioned about it. Further he is not likely to have bequeathed property. It is rather strange that Nagapotarao an executor under the will takes a bequest of a property in his daughther's favour with mortgage in his favour. Does it mean that the encumbrance on the bequeathed property was to be cleared by his daughter? We may also mention that being the son-in-law of Subbarao and one of the executors under the will, the defendant No. 3 was in possession of all the documents. Under those circumstances if the document was not returned to the obligor and continued to be with the obligee with no endorsement of payment it cannot be a very important circumstance going against the case set up by the legal representatives of Subbarao.

16. We are definitely of the opinion that this suit being one filed against persons who were not parties to the document having no knowledge of the transaction, it was incumbent upon the plaintiff to have proved the execution of the mortgage as well as the fact that the debt on the mortgage bond was still subsisting. The onus did not shift to the defendants to prove discharge of the liability. The position, therefore, is that the mortgage deed which has been assigned in favour of the plaintiff must be held to have not been proved. If, therefore, the mortgage bond has not been proved, plaintiff, who is only an assignee of the mortgage, cannot get any relief if his predecessor in interest could get no relief.

17. The result is that this appeal is allowed and the judgment and decree of the lower court set aside. The appellant will be entitled to his costs from respondents 13 to 15 both here and in the lower court.

K.S.R

18. Appeal allowed.