- (1.) THIS is a regular civil first appeal by the plaintiff O. P. Verma against the judgment of the learned District Judge Kotah dated the 9th February, 1954, dismissing the plaintiff's suit with costs.
(2.) THE material facts leading up to this appeal may be shortly stated as follows. There was a partnership business between the plaintiff's wife and the defendants (who are father and son) at Bikaner in December, 1941. The plaintiff was looking after this business, on behalf of his wife, which was carried on in the name of chand Bros. under which firm name the defendants were already carrying on business. Although the nature of this business is not disclosed in the plaint, there is evidence to show that the parties had taken a sub-contract from Messrs. Green bus Co. Delhi, in connection with the supply of lorries for training drivers for the second World War. This partnership is alleged to have continued until May 1942. The plaintiffs case was that in order to settle the accounts of this partnership business, an arbitrator named S. P. Singh, who is admittedly a brother of the plaintiff, was appointed by the parties on the 29th July, 1942. The arbitrator allegedly gave his award some time in the first week of February, 1943. This award turns out to be an oral one though the plaintiff under a mistaken notion stated in his replication that it was in writing. It is further alleged that, in accordance with the award of the arbitrator, the defendant Chandmal who was one of the proprietors of Messrs. Chand Bros. , gave the plaintiff a post-dated cheque no. D 70180 dated 24-2-1943 for Rs. 17500/- on the Palai Central Bank Ltd. . Delhi, in full settlement of the account of this partnership business. This cheque was presented by the plaintiff to the said bank on the 1st March, 1943, but it was dishonoured by the bank as they had no funds to the credit of the defendant chandmal in their bank. The plaintiff's case further was that thereafter he sent a notice to the defendants to pay the aforesaid amount as the cheque had been dishonoured by the bank. To this, a reply came from the defendants that the cheque in question had never in fact been passed in favour of the plaintiff and that the Bikaner account still remained unsettled, and, therefore, the defendants were under no liability to pay the amount asked for. Thereupon on the 26th April, 1943, the plaintiff O. P. Verma filed a suit for the recovery of Rs. 17500/-from the defendants in the court of the commercial Sub-Judge Delhi on the basis of the dishonoured cheque. This suit was brought under Order 37 of the Code of Civil Procedure. The defendants through their counsel Mr. Ranjit Singh put in an application for leave to defend the suit on the ground that the cheque was a forged one. It seems that it was the case of the plaintiff before the Sub-Judge that the plaintiff had given a receipt on the back of the counter-foil of the cheque in question in the defendants' cheque book. The case was, therefore, adjourned by the Sub-Judge to the 27th July, 1943, in order to enable the defendants to file the counter-foil of the dishonoured cheque. On the 27th July, 1943, the defendants did not put in appearance in the court of the Sub-Judge, and they appear to have sent a telegram to say that they were ill. The court naturally took no notice of the telegram. The defendants' counsel does not seem to have appeared at this hearing, or if he appeared, he probably said that he had no instructions. Thereupon the learned Judge dismissed the application for leave to defend and granted an ex parte decree for Rs. 17500/-in favour of the plaintiff with costs and future interest at 6 per cent. per annum from the date of the institution till the date of realisation. The case of the plaintiff further was that, after obtaining this decree, he was able to realise a sum of Rs. 20/- only from the defendants by execution in the Delhi court, and the balance of Rs. 17480/-together with costs and interest were still due to him. Thereafter, the plaintiff filed the present suit in the court of the District judge of the former State of Kotah where the defendants were living. This suit was filed on the 7th November, 1944, on the basis of the foreign judgment for the recovery of a sum of Rs. 17480/- as principal plus a sum of Rs. 1052/4/-as costs plus a sum of Rs. 1487/8/- as interest upto the 4th November, 1944, in all amounting to Rs. 20,019/12/ -. The plaintiff averred that the defendants had their immovable property in the State of Kotah and were also living and carrying on business there and consequently that court had the jurisdiction to entertain the suit. The plaintiff also claimed interest on the amount of the decree at the rate of eight annas per cent. per mensem. The defendants filed their written statement on the 7th December, 1944, wherein they pleaded ignorance of the decree obtained by the plaintiff from the court at Delhi. It was, however, admitted that a sum of Rs. 20/- had been got attached and recovered by the plaintiff from the defendants. Furthermore, the defendants stoutly resisted the suit on the plea that the court at Delhi which was a foreign court qua the defendants, who were resident, If the Kotah State, had no jurisdiction to pass a decree aeainst them, nor had they ever submitted to the jurisdiction of that court. It was further contended that the judgment of the aforesaid foreign Court was not given on the merits of the case, and, therefore, it was not binding on the defendants. The plaintiff, apparently in order to steer clear of the difficulties with which he might be confronted on the ground of the judgment of the foreign court at Delhi not being held conclusive, filed an amended plaint on the 9th February, 1945, which is at pages 1 to 3 of the paper-book. In this plaint, he based his suit alternatively on the original cause of action namely the cheque dated the 24th february, 1943. In paragraph nine of the plaint, therefore, it was stated that the cause of action against the defendant accrued on the 24th February, 1943, and also on the 27th July, 1943, which is the date of the judgment of the court at Delhi. In paragraph seven of the plaint, the plaintiff made the following averment : "that the defendant led evidence before the Delhi court to the effect that the cheque was forged, but, failed to prove the said allegations regarding the genuineness of the said cheque, hence the judgment of delhi Court which declared the cheque as genuine, relying on the evidence of the plaintiff, is on merits and binding on the parties. It is binding upon the defendants on law as well as on facts. " In answer to this plaint, the defendants filed their written statement on the 29th march, 1945. The partnership business was admitted between the parties though we may point out that, according to the evidenc led by the parties, this business really was between the defendants on the one hand and the plaintiff's wife on the other. The defendants also admitted that they had received a notice from the plaintiff after the cheque had been dishonoured, and they further admitted that a reply was given by them to the plaintiff as mentioned in para three of the plaint. This reply was that no cheque had been given to the plaintiff by the defendants and that the account of the partnership had not been settled at all. The defendants also admitted that the plaintiff had filed a suit in the Delhi court but denied the rest of the allegations made by the plaintiff in paragraph four of his plaint. They, however, admitted that they had asked for an adjournment telegraphically and that the same had not been allowed. It was further contended by the defendants in their additional pleas that defendant Gehrilal was the sole proprietor of Messrs. Chand Bros. and that his son Chandmal was not a proprietor of this business, and all that he did or could do was to help his father in the business, from time to time, in the routine work of the partnership. It was, therefore, hotly denied that Chandmal had any right to admit any claim outstanding against the firm or to issue a cheque in settlement of the accounts of the firm and thereby fasten any liability on defendant Gehrilal, and it was maintained that Gehrilal himself had never given anv cheque to the plaintiff in connection with the settlement of this partnership business. The case of the defendants was that the accounts of the partnership had never been settled, and, therefore, there was no occasion for their giving a cheque tor Rs. 17500/-to the plaintiff, nor was any such amount due from the defendants to the plaintiff. This brings us to the most important part of the defendants' case as to how the cheque in question came to be given to the plaintiff. Paragraph five of the written statement contains the defendants' version on this aspect of the case. This version is that the defendants firm Messrs. Chand Bros. had received a crossed cheque for a big amount from the Alwar State. This cheque could not be encashed but could only be credited into an account of Messrs. Chand Bros. Defendant Chandmal, therefore, went to Delhi with this cheque. He already knew the plaintiff who had an account with the Palai Central Bank, Delhi. The plaintiff helped Chandmal to get his account opened in the said bank. According to the defendants, a balance of Rs. 20/- only was outstanding in their favour in this account and the account had to be closed. It is further stated that Chandmal had purchased ten seers of Niwar worth rs. 20/- from the factory of the plaintiff and gave him a cheque for Rs. 20/-in lieu of the purchase. The defendants also say that they had asked the plaintiff to close the account after having drawn the amount of Rs. 20/-from the bank. This cheque, however, was not encashed. Thereafter the plaintiff came to Kotah and disclosed that the cheque had not been encashed, and, strangely enough, he is also reported to have said that the amount outstanding in the bank in favour of the plaintiff was really twenty rupees and a few annas, and, therefore, the account could not be closed. The suggestion obviously is that the plaintiff asked for a blank cheque which the defendant chandmal gave him after signing the same, and that he did so completely relying on the good faith of the plaintiff. The plaintiff, however, abused this faith and filled the cheque for Rs. 17500/ -. It may be mentioned here that the cheque, apart of course from the signature, was type-written, and this is not disputed at this stage. As the original cheque was not on this record, it having been filed in the Delhi court, we thought it fit to send for the same on an application presented to us by the defendants at the close of the arguments but we have not received it up to this time, and we do not feel disposed to postpone our judgment any further. We may make it clear, however, that the identity of the cheque in suit was really never in dispute between the parties, nor was it disputed that the cheque in question bears the signature of defendant Chandmal. It may also be pointed cut here that this cheque in original was produced by C P W 1 Hukamchand, a Record-keeper of judicial records. Delhi, before the Commissioner who was appointed to record the evidence of certain witnesses living in Delhi and then it was taken back by him. Resuming the defendants' story, his further version is that when defendant Gehrilal went to Delhi he had stayed with the plaintiff at the latter's house from the 7th June, 1942, to the 24th June, 1942, and it was during this period that the plaintiff had spirited away his cheque-book which was lying in his (defendant's) trunk and the said defendant came to know of this on the 27th July 1943, when the plaintiff who had Stated in the Delhi Court that he had given a receipt for the cheque on the counter-foil thereof openly boasted having come out of the court that the defendant's attempt to produce the counter-foil would be altogether vain as it was in the plaintiff's possession. In short, therefore, the defendants' case was that Chandmal had given a blank cheque to the plaintiff in the circumstances mentioned above, and with a view to have their account in the bank closed, that the plaintiff had fabricated this cheque and further that the counter-foil of this cheque was not available with him as the plaintiff had stolen it away some time in June, 1942, when the defendant stayed at his house in Delhi. In paragraph nine of the written statement, the defendants stated that they had in their possession a paper Ex. D-6 (this is not signed by any body) containing an abstract of the partnership account, which was prepared by the plaintiff himself and which he had passed on to Khema Singh, a director of messrs. Green Bus Company, and that according to this account, there was a net profit of Rs. 3678/9/- only in the partnership business and that half of this profit amounting to Rs. 1839/4/6 fell to the plaintiff's share. According to this account, the plaintiff's investment in the partnership business was to the tune of Rs. 3426// 6 only. In other words, all that the plaintiff would have been entitled to on this accounting was a sum of Rs. 3426/-/6 plus Rs. 1839/5/6 total Rs. 5265/6/ -. It was, therefore, contended that the allegation of the plaintiff that he was entitled to rs. 17500/- as a result of this partnership business was quite baseless. The defendants' case is that when this account was submitted to the said Khema singh, the latter replied that the papers of the Green Bus Co. bad been sent to the income-tax office, and until and unless they were received back, nothing further could be done. The Green Bus Co. had, however, received back these books on the 6th August, 1943, and a telegram to that effect was received from Khema Singh. Thereupon defendant Geharilal went to Delhi in October, 1943. The defendants' case further is that at that time they and the plaintiff had appointed Khema Singh as an arbitrator to settle the accounts of the partnership business. The case of the defendants is that Khemasingh had decided that Messrs. Chand Bros. do pay to the plaintiff a round sum of Rs. 9000/-as profits of the Bikaner business subject to the condition that the plaintiff would clear the accounts in connection with the partnership business at Fatehgarh and Kanpur and pay off the due to the defendants. The contention of the defendants is that the plaintiff had not cleared the Kanpur and Fatehgarh accounts, and, therefore, the defendants were not liable to pay anything to him. A point was made by the defendants in paragraph eleven of their written statement that in the plaint in his litigation at Delhi the case of the plaintiff was that the defendants had given a post-dated cheque to the plaintiff whereas in his amended plaint toe bad mentioned that the cheque had been given to him on the 24th February, 1943. We may mention at once that the plaintiff cleared this point in his replication and admitted that he had received a post-dated cheque dated the 24th February, 1943, and that in fact this cheque had not been received on the 24th February, 1943, and that the alleged discrepancy was due to a trifling clerical error; inasmuch as the Hindi word was mentioned for after the date 24-2-43 in para two of the plaint. We think that nothing serious turns on this point. Another point made by the defendants in their written statement was that the plaintiff had failed to mention in his plaint who was the arbitrator appointed by the parties and whether his appointment was oral or written and that it had also not been mentioned on what date he gave the award and whether the award was oral or written and, therefore, the defendants were unable to give any reply on this point. Yet another point which is of some importance is that the defendants now denied that a sum of Rs. 20/-had been attached and recovered from them in execution of the judgment of the Delhi Court, although they had clearly admitted this in their earlier written statement dated the 7th December, 1944. Lastly, the question of the binding nature of the judgment of the court at Delhi was again raised as in the previous written statement. We need not repeat this objection as we have already indicated it above.
(3.) THE plaintiff filed a replication on the 10th April, 1945, in which he clearly admitted that the partnership in question had taken place with his wife and not with himself, and that it had been mentioned by sheer mistake in paragraph one of the plaint that the partnership had taken place between him and the defendants. As already stated, the plaintiff also admitted that the cheque that he had received from the defendants was a post-dated one. As regards the award, it was averred that S. P. Singh was appointed an arbitrator on the 29th July, 1942, and that a reference to him was made by both Gehrilal and O. P. Verma vide Ex. P-3. It was further stated that as decided by the aforesaid arbitrator the defendants were to pay Rs. 17500/-by cheque to O. P. Verma on behalf of Mrs. Verma and that a cheque had been given by the defendants under the signature of chandmal on behalf of Messrs. Chand Bros. in pursuance of this award. It was also mentioned that the award was made in writing a1though this turns out to be incorrect, and the plaintiff's explanation is that he had somehow thought that the award had been made in writing. In fact, it had not been so made as it eventually turned out. The plaintiff also produced two letters Exs. P-2 and P-4 dated 16th june 1942 and 17th February, 1943, respectively (alleged to proceed from defendant Gehrilal) in support of his version. As regards the authority of Chandmal to give a cheque on behalf of Messrs. Chand bros. , the plaintiff's contention was that both Gehrilal and Chandmal, being father and son, were the owners of this business, and that Chandmal was the person who usually operated the accounts of the firm in the various banks. The plaintiff further emphatically denied the allegation made by the defendants that a blank cheque had been given to him and that he had later manipulated, it to foist a false liability on the defendants. The plaintiff also denied that the defendant Gehrilal had stayed with him during the month of June, 1942, as alleged by the latter, or that the former had ever pilfered the defendants' cheque book. As to the question of jurisdiction, the plaintiff's case was that the court at Delhi had jurisdiction, and that in any case the defendants had submitted to the jurisdiction of that court. It was further contended that the judgment of that court was given on merits and was, therefore, binding on the defendants. On the 23rd April, 1945, defendant Gehrilal filed a further written statement in which he admitted that the letter Ex. P-3 had been written by him. His contention, however, was that although this letter had been written, S. P. Singh was never made an arbitrator and he could not be made one as he was the plaintiff's own brother. Explaining the circumstances under which this letter came to be written, the defendant went on to state that they (defendants) had some trouble with the green Bus Co. as regards the dues that they had to receive from them. S. P. Singh, however, told them that he had a relative of his who was a big contractor and that he had plenty of influence with Messrs. Green Bus Co. and that he would get their money paid to them. In these circumstances, S. P. Singh further asked them to execute a document appointing him as an arbitrator and assured them that if they executed the same, he would get their monies paid to them. This defendant's case further was that he thus wrote the document but he had kept it with himself and that he (Gehrilal) and S. P. Singh then went to that relative of S. P. Singh but they were not able to meet him. They also went to messrs. Green Bus Co. asking for the payment, but they, expressed their inability as their books were not with them having been sent to the Income-tax department. According to the defendant, this document Ex. P-3 was in his papers when he was staying at the house of the plaintiff. This defendant, it will be recollected, states to have stayed with the plaintiff for a number of days in June, 1942. The grievance of the defendant in effect is that this paper had also been pilfered from his possession then. As regards the documents Exs. P-2 and P-4, his case is that they did bear his signatures but they were not written by him and were forged by tearing off certain papers which had been signed by him and which had some blank space above the signatures. He further stated that the plaintiff must have taken out certain papers which had been signed by him from his files when he was staying with the plaintiff. On these pleadings, the following issues were framed by the trial court : (1) Whether the court of Sub-Judge Delhi had no jurisdiction to hear this suit? (2) Whether the foreign judgment dated 27th July, 1943, is final and binding? (3) Whether the parties appointed an arbitrator on 29th July, 1942, for the decision of the partnership accounts and the arbitrator found Rs. 17500/- due to the plaintiff from the defendants? (4) Whether the defendants gave a cheque to the plaintiff on the 24th february, 1943, for the said amount after accepting the award? (5) Whether the defendant Chandmal passed a blank cheque to the plaintiff in payment of the price of Niwar purchased from the plaintiff's factory and for clearing the Bank account but the plaintiff forged it for rs. 17500/-? (6) Whether Chandmal is not a proprietor of Chand Brothers and he had no authority to pass a cheque and accept the liability on behalf of the firm? ;