K.C. Agarwal, J. - (1.) THIS appeal is directed against the judgment dated 13-11-1963 of the IInd Addl. Civil Judge, Nainital, decreeing the suit of the plaintiff for the return of Truck No. U.S.N. 1117 and for recovery of damages. The defendant was further directed to execute a deed of reconveyance in favour of the plaintiff in respect of the truck mentioned above, failing which the plaintiff was entitled to recovery of a sum of Rs. 18,000/- from the defendant as price of the truck.
(2.) THE plaintiff' s case, as laid in the plaint is that he purchased Truck No. U.S.N. 1117 in March, 1959 and as he did not have any truck work to execute the truck was standing idle. Yadav Ram the defendant approached the plaintiff for taking the truck on hire. Consequently the plaintiff gave the truck to the said defendant on June 8, 1959 on hire for a period ending December 31, 1959. THE defendant agreed to pay Rs. 1000/- per month of hire. THE plaintiff further alleged that in order to enable Yadav Ram to obtain a permit in his name from the Regional Transport Authority, the plaintiff executed a receipt showing transfer of the truck to the defendant in lieu of Rs. 18,000/-. THE receipt executed was fictitious and unreal, THE defendant thereafter made an application to the R. T. A. for the permit for the aforesaid truck on the basis of the receipt obtained by him from the plaintiff. On the same day, simultaneous to the execution of the receipt, an agreement was executed by Yadav Ram whereby he undertook to return the truck to the plaintiff in the beginning of January, 1960 without receiving any money. THE plaintiff stated that as the defendant neither paid the hire nor returned the truck to the plaintiff after expiry of December, 1959, the plaintiff got suspicious. He thereafter sent a notice dated 5th of Jan. 1960 to the defendant to return the truck. THE defendant gave a false and incorrect reply to the said notice and refused to hand over the truck. Consequently, the plaintiff filed the suit for the return of the truck and, in the alternative, for the recovery of Rs. 32,000/- as its price. THE plaintiff also claimed damages for the period from 1st of Jan. 1960 upto the date of delivery of the truck. A sum of Rs. 6,000/- was claimed by him as hire for the period 8th of June, 1959 to 31st Dec. 1959. In his written statement Yadav Ram the defendant denied the allegations made in the plaint. He alleged that a sum of Rs. 11,415/- was outstanding against the plaintiff in respect of certain commodities purchased by him from time to time from the defendant' s firm - Ram Lal Ram Swarup - and the money borrowed by him in cash. Further, a sum of Rs. 20,000/- was due from the plaintiff to the defendant towards the profits of different contracts which he and the plaintiff had carried out in partnership. The truck in suit was given by the plaintiff to defendant to liquidate a part of the debt. The truck was transferred in favour of the defendant in lieu of Rs. 18,000/- which was duly adjusted towards the dues recoverable by the defendant from the plaintiff. The allegation made further by the defendant was that at the time of making the transfer the parties had settled that in case the plaintiff wanted to get the truck reconveyed in his favour, the defendant would return the same on payment of Rs. 18,000/- besides other dues referred to above. The defendant denied that the truck was taken by him from the plaintiff on hire. He further alleged that the receipt dated 8-6-1959 was executed by the plaintiff acknowledging receipt of Rs. 18,000/-as the said amount had been adjusted under the settlement arrived at between the plaintiff and the defendant towards the old debt which was payable by the former to the latter. With regard to the agreement dated 8th June, 1959 the defendant alleged that the same was fictitious and fraudulent. He denied the liability of payment of damages as well as the amount claimed by the plaintiff as rent. The trial court framed a number of issues and after taking the evidence, both oral and documentary of both the parties, accepted the plaintiffs case in toto and passed a decree for the return of the truck. Feeling aggrieved, the defendant filed the present appeal against the aforesaid judgment and decree.
(3.) WE have heard the learned counsel for the parties at some length and have gone through the judgment of the trial court. WE have also been taken through the entire evidence. WE are constrained to observe that the court below has not made a correct approach to the facts of the present case and has proceeded mostly on conjectures and speculations and has also committed errors of record in arriving at some of the important findings. Before dealing with the merits, we may say a word relating to the evidence which is admissible in a case like the present. All legal evidence is either direct or circumstantial. By direct evidence is meant when the principal fact is attested directly by witnesses, things or documents. To all other forms, the term circumstantial evidence is applied. The basic distinction between the direct and the circumstantial evidence is that in the former witnesses testify directly of their knowledge as to the facts to be proved, while in the latter proof is given of facts and circumstances from which the court may infer other facts which reasonably follow. Circumstantial evidence proves and tells the story of a transaction which has already been completed. It is said that witnesses may lie, but circumstances do not. Since it is often not possible to bring direct evidence to prove the real character of a transaction, circumstantial evidence is permitted to be brought on record to prove the same. In fact, sometimes circumstantial evidence is as cogent and as irresistible as direct as positive testimony of the witnesses. Thus, whether a transaction is sham or fictitious and not real may be proved by inferences which may reasonably be drawn from the intrinsic evidence respecting the transaction itself or from extrinsic circumstances surrounding the transaction. While we will discuss the evidence adduced in this case, we will show that the trial court committed an error in not referring to the circumstances and in deciding the case by making a wrong approach to it.;