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Reportabl e

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 130  OF 2013 (Arising out of S.L.P. (C) No. 13950 of 2009)

M/s. Gian Chand & Brothers and Another ... Appellants

Versus

Rattan Lal @ Rattan Singh         ...Respondent  

J U D G M E N T

Dipak Misra, J.

Leave granted.

2. In this appeal, the assail is to the legal soundness of  

the judgment and decree dated 26.2.2009 in R.S.A.  

No. 1570 of 2008 passed by the learned single Judge  

of  the  High  Court  of  Punjab  and  Haryana  at  

Chandigarh whereby it overturned the decision of the  

learned Additional District Judge, Kurukshetra in Civil

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Appeal No. 96 of 2006 dated 12.03.2008 wherein the  

judgment  and decree  dated  20.07.2006  passed  by  

the  learned  Additional  Civil  Judge  (Sr.  Division),  

Pehowa was partially modified.

3. The facts which are necessary to be stated are that  

the  plaintiffs-appellants  (hereinafter  referred  to  as  

“plaintiffs”)  had initiated  a  civil  action  forming the  

subject matter of CS No. 337 of 2004 in the court of  

Additional  Civil  Judge  (Sr.  Division),  Pehowa  for  

recovery of a total sum of Rs.10,45,620/- along with  

pendente  lite  and  future  interest  at  @18%  per  

annum.  It was the case of the plaintiffs that plaintiff  

No.  1  is  a  registered  partnership  firm carrying  the  

business of commission agent for sale and purchase  

of food grains in Shop No. 69, New Green Market at  

Anaj  Mandi  in  Pehowa  and  plaintiff  No.  2  is  the  

partner of the said partnership firm.  The plaintiff firm  

advances  money  to  the  agriculturists  and  charges  

commission  on  the  sale  price  of  the  agricultural  

produce  sold  as  determined  by  the  market  

committee.  For the aforesaid purpose, it has been  

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maintaining  the  books  of  accounts  in  the  regular  

course  of  business.   The  respondent-defendant  

(hereinafter referred to as “the defendant”) had been  

maintaining  regular  and  long  standing  current  

account with the plaintiffs.  The defendant had taken  

advance from time to time from the plaintiffs which  

he  had  promised  to  return  at  the  shop  of  the  

plaintiffs.   All  the transactions between the parties  

were  entered  in  the  books  of  accounts  which  

reflected  that  as  on  30.4.2002,  a  sum  of  

Rs.5,80,000/-  stood  in  the  name  of  the  defendant  

towards  outstanding  balance  and  he  had  

acknowledged the same under his signature in the  

corresponding account entry in the account books of  

the  plaintiffs.  The  defendant  neither  returned  the  

money nor brought any agricultural produce for sale  

to  the  shop  of  the  plaintiffs  till  27.5.2003.   The  

plaintiffs served a legal notice on 26.2.2004 on the  

defendant to make good the payment and also made  

repeated requests requiring him to pay the dues, but  

all  requests  and  demands  went  in  vain  and  

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eventually, on 18.8.2004, he refused to comply with  

the  request.   Being  put  in  such  a  situation,  the  

plaintiffs  were  compelled  to  institute  the  suit  on  

19.8.2004 wherein they claimed Rs.9,72,670/- which  

included the total amount lent to the defendant at  

various times and Rs.72,950/- towards interest till the  

date of filing of the suit and further claimed pendente  

lite  and  future  interest  @ 18% per  annum.   Be  it  

noted,  the borrowings for  the financial  years 2002-

2003  and  2003-2004  were  reflected  in  the  “rokar  

bahi”.   

4. A written statement was filed by the defendant which  

consisted  of  two  parts,  namely,  preliminary  

objections and reply on merits.   In  the preliminary  

objections,  it  was  stated  that  the  suit  was  not  

maintainable; that the father of the defendant was a  

customer of the plaintiffs’ firm but the defendant had  

nothing to do with the plaintiffs; that if there was any  

liability,  it  was  of  Kewal  Krishan  and  not  of  the  

defendant; that the plaintiffs had no locus standi to  

file the suit and it  was defective for  non-joinder of  

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parties; and that no cause of action arose against the  

defendant.   As  far  as  the  merits  are  concerned,  

reference was made to every paragraph of the plaint  

and in oppugnation, it was stated that some of the  

averments were false.  As far as the other averments  

were concerned, the defendant denied them due to  

lack of knowledge.  

5. The learned trial Judge, on the basis of the pleadings,  

framed five issues.   The principal  issues that  were  

really  addressed  on  contest  were  whether  the  

plaintiff  was  entitled  to  recover  an  amount  of  

Rs.10,45,620/- along with interest pendente lite and  

future interest @ 18% per annum; that whether the  

suit  of  the  plaintiff  was  not  maintainable  in  the  

present form; that whether the plaintiff had no locus  

standi and cause of action to file and maintain the  

suit; and that whether the suit of the plaintiff was bad  

for non-joinder of necessary parties.

6. Be it noted, on behalf of the plaintiffs including the  

partner of the plaintiffs’  firm, three witnesses were  

examined  and  13  documents,  namely,  copy  of  

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ledger,  bahi,  copy  of  ledger  of  S.T./C.S.T.,  copy  of  

Form-A, Form-C, copy of resolution dated 31.10.1993  

and copy of  the  certificate  dated 28.07.2005 were  

brought in the evidence and marked as exhibits.  The  

defendant  examined  himself  as  DW-1  and  did  not  

produce any documentary evidence.

7. The learned trial Judge, considering the evidence on  

record,  came to  hold  that  the   plaintiffs  had been  

able to establish that the firm was engaged in the  

business of a commission agent which lends money  

to  the  agriculturists;  that  the  business  transaction  

with the  plaintiff’s firm had not been denied by the  

defendant; that the bahi entries had been produced  

on record by the  plaintiffs to show that the amount  

was advanced to the defendant and the said entries  

had the stamp and signatures of the  defendant; that  

the  plea of the defendant that his signatures on the  

bahi entries were fraudulently obtained had not been  

substantiated; that the transactions in dispute were  

numerous and extended over a number of years and  

there  was  no  reason  not  to  lend  credence  to  the  

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genuineness  of  the  books  of  accounts;  that  the  

plaintiffs had the locus standi to file the suit and the  

cause of action had arisen to initiate a civil  action  

and that the plea that the suit was defective for non-

joinder of parties had really not been pressed.  Being  

of this view, the learned trial Judge opined that the  

plaintiffs  were  entitled  to  recover  the  amount  of  

Rs.10,45,620/-  along  with  pendente  lite  and  future  

interest @ 6% per annum and, accordingly, decreed  

the suit.

8. Grieved by the aforesaid judgment and decree, the  

defendant  preferred  a  Civil  Appeal  wherein  it  was  

contended that when the signatures in the books of  

accounts were denied, it was obligatory on the part  

of  the  plaintiffs  to  get  the  same  examined  by  a  

handwriting expert; that the signatures in the books  

of accounts had been forged by the plaintiffs;  that  

certain  entries  did  not  bear  the  signatures  of  the  

defendant; that the plaintiffs had failed to show why  

such  a  huge  amount  had  been  advanced  to  the  

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defendant; and that the learned trial Judge had fallen  

into error by decreeing the suit of the plaintiffs.   

9. The first appellate court, considering the contentions  

raised before it, came to hold that the plaintiffs had  

placed  reliance  on  the  ledger  entries  which  were  

maintained  in  the  regular  course  of  business;  that  

from  Exhibit  P-2,  it  was  vivid  that  a  sum  of  

Rs.5,80,000/-  was  taken  in  cash  by  the  defendant  

and  it  had  his  signatures  and  that  the  aspect  of  

forgery has not been pleaded and, in any case, had  

not been proven at all; and that except two entries,  

namely, Exh. P-4 and P-9, the defendant had signed  

in  all  the  entries  which  were  maintained  in  the  

regular  course  of  business;  that  the  written  

statement  was  absolutely  evasive  and  no  plea  of  

forgery  being  taken,  the  challenge  that  the  

signatures  were  obtained  fraudulently  or  by  any  

other method or undue relationship did not warrant  

consideration and, in any case, the onus did lie on  

the defendant which was not discharged.

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10. On the aforesaid  base,  it  opined that  the plaintiffs  

were entitled to recover  the amount excluding the  

sums  covered  under  those  two  entries  along  with  

proportionate  interest  and,  accordingly,  partly  

allowed the appeal and modified the judgment and  

decree of the learned trial Judge.          

11. Being  dissatisfied,  the  defendant  preferred  second  

appeal  and  the  learned  single  Judge  framed  four  

substantial  questions of  law,  namely,  (i)  whether  a  

suit  for  recovery  could  be  decreed  when  the  

pleadings and evidence led by the plaintiffs were at  

substantial variance; (ii) whether the plaintiffs could  

be  said  to  have  established  its  case,  particularly  

when  the  defendant  had  denied  the  factum  of  

borrowing any sum and the signatures on the cash  

book  and  no  evidence  including  document/finger  

print expert was led by the plaintiffs to establish the  

signatures of the defendant in the account books; (iii)  

whether it was obligatory on the part of the plaintiff  

to prove the alleged signatures of the defendant in  

the cash book when they had been disputed; and (iv)  

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whether  the  admission  of  the  defendant  could  be  

assumed in the absence of clear and unambiguous  

admission of the party to the litigation.

12. The High Court referred to paragraphs 6 and 7 of the  

plaint  and Exhibits  P-1,  P-2,  P-3,  P-7,  P-9 and P-10  

and noticed the variance of the amounts mentioned  

therein and further opined that when the signatures  

had been denied, the onus was on the plaintiffs to  

examine  a  handwriting  expert  to  establish  the  

veracity of the signatures to bring home the plea set  

up by the plaintiffs in the plaint.  It also ruled that the  

courts below had fallen into error in holding that the  

onus  to  prove  the  falsity  was  on  the  defendant.  

Analyzing the documents and evidence, the learned  

single  Judge  came  to  hold  that  the  averments  as  

pleaded  in  the  plaint  and  the  evidence  in  support  

thereof  were  at  variance  with  each  other  and  the  

evidence did not substantiate the claim and the onus  

to prove the accounts and rokar bahi having not been  

discharged,  the  judgments  of  the  fora  below were  

unsustainable.  Hence, the present appeal.

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13. We have heard Mr. Gautam Narayan, learned counsel  

for the appellants.  Despite service of notice, there  

has been no appearance on behalf of the respondent.

14. On a careful reading of the judgment, it is noticeable  

that the High Court has observed that the findings  

returned  by  the  courts  below  are  perverse  and,  

accordingly,  jurisdiction  under  Section  100  of  the  

Code  of  Civil  Procedure  could  be  exercised.   The  

perversity has been noticed on two counts, namely,  

incorrect placing of onus on the defendant to prove  

that the signatures had been forged more so when  

there  was  denial  of  the  same  and  second,  the  

variance  in  the  pleadings  and  the  evidence  as  

regards the amounts in question were not appositely  

taken note of.  Thus, we are required to see whether  

the approach of the learned single Judge in annulling  

the judgments of the courts below is correct on the  

aforesaid  grounds  which,  according  to  him,  reflect  

perversity of approach.

15. First, we shall deal with the onus to prove in such a  

case.   The plaintiffs,  in paragraphs 4 and 5 of  the  

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plaint,  have  categorically  asseverated  that  the  

defendant  used  to  avail  advance  money  from  the  

plaintiffs  with  the  promise  to  bring  his  agriculture  

produce for sale at their shop and the said amount  

had  been  duly  entered  in  the  books  of  accounts  

which  the  defendant  had  acknowledged  under  his  

signatures  in  the  corresponding  entries.   The  

Accountant  of  the  firm,  PW-1,  has  proved  various  

entries  and  they  have  been  marked  as  exhibits.  

There  had  been  no  objection  when  the  signatures  

were  stated  to  be  that  of  the  defendant.   It  is  

admitted  by  him  that  Exh.  P-9  did  not  bear  the  

signature of the defendant.  It is worthy to note that  

nothing has been put to him in the cross-examination  

about the signatures.  The partner of the firm, PW-2,  

has testified the signatures in the entries.   He has  

clearly  stated  that  he  was  able  to  identify  the  

signatures.  The defendant had examined himself as  

DW-1 and had only stated that he had no dealings  

with the plaintiffs but his father was a customer of  

the  firm.   He  had  disputed  to  have  signed  any  

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entries.  In the cross-examination, he has admitted  

his signatures on the written statement and stated  

that  he  did  not  remember  whether  at  the  time of  

purchase, his signatures were taken or not.   

16. As noticed earlier, the High Court has held that the  

fora  below  erroneously  placed  the  onus  on  the  

defendant to disprove his signatures.  On a careful  

scrutiny  of  the  evidence,  it  is  manifest  that  the  

signatures  are  proven  by  the  witnesses  and  they  

have been marked as exhibits without any objection.  

It is interesting to note that in paragraphs 6 and 7 of  

the  plaint,  it  was  averred  that  the  defendant  had  

given  the  acknowledgement  of  amount  under  his  

signature in the corresponding entry in the books of  

accounts.  While replying to the same, the defendant  

has said that the arguments in para 6 of the plaint  

are  wrong  and  denied  in  view  of  the  preliminary  

objections.   It  is  apt  to  note  that  the  preliminary  

objections pertained to bald denial of liability, lack of  

locus standi to file the suit, non-joinder of parties and  

lack  of  cause  of  action.   Thus,  there  was  no  plea  

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whatsoever as regards the denial of signature or any  

kind of forgery or fraud.  The High Court, as we find,  

has  observed  that  the  plaintiffs  should  have  

examined a handwriting expert.   The plaintiffs  had  

asserted that there was an acknowledgement under  

the signatures of the defendant.  There was no denial  

by the defendant about the signatures; and further,  

the  acknowledgements  had  been  proven  without  

objection.   Only  in  the  examination-in-chief,  the  

defendant  had  disputed  the  signature  and  in  the  

cross-examination he has  mercurially  deposed that  

he does not remember to have signed at the time of  

any purchase.   

17. It is well settled principle of law that a person who  

asserts a particular fact is  required to affirmatively  

establish it.   In  Anil Rishi  v.  Gurbaksh Singh1,  it  

has been held that the burden of proving the facts  

rests  on  the  party  who  substantially  asserts  the  

affirmative  issues and not  the  party  who denies  it  

and  the  said  principle  may  not  be  universal  in  its  

1 (2006) 5 SCC 558

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application and there may be an exception thereto.  

The purpose of referring to the same is that if  the  

plaintiff  asserts  that  the  defendant  had  

acknowledged the signature,  it  is  obligatory  on his  

part  to  substantiate  the  same.   But  the  question  

would  be  what  would  be  the  consequence  in  a  

situation where the signatures are proven and there  

is an evasive reply in the written statement and what  

should be construed as substantiating the assertion  

made by the plaintiff.

18. In  Krishna  Mohan  Kul  v.  Pratima  Maity  and  

others2, it has been ruled thus: -

“When fraud,  misrepresentation or undue  influence is  alleged by a  party  in  a suit,  normally,  the  burden is  on  him to  prove  such  fraud,  undue  influence  or  misrepresentation.”

19. In Shashi Kumar Banerjee and others v. Subodh  

Kumar Bannerjee since deceased and after him  

his  legal  representatives  and  others3,  a  

Constitution Bench of this Court, while dealing with a  

mode of proof of a will under the Indian Succession  

2 (2004) 9 SCC 468 3 AIR 1964 SC 529

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Act, observed that where the caveator alleges undue  

influence, fraud and coercion, the onus is on him to  

prove the same.   

20. In  A.  Raghavamma  and  another  v.  A.  

Chenchamma  and  another4,  while  making  a  

distinction  between  burden  of  proof  and  onus  of  

proof, a three-Judge Bench opined thus: -

“There is an essential distinction between  burden of proof and onus of proof : burden  of proof lies upon the person who has to  prove a  fact  and it  never  shifts,  but  the  onus of proof shifts.  The burden of proof in  the present case undoubtedly lies upon the  plaintiff to establish the factum of adoption  and  that  of  partition.   The  said  circumstances do not alter the incidence of  the burden of proof.  Such considerations,  having  regard  to  the  circumstances  of  a  particular  case,  may  shift  the  onus  of  proof.   Such  a  shifting  of  onus  is  a  continuous  process  in  the  evaluation  of  evidence.”

21. The  present  case  is  not  one  such  case  where  the  

plaintiffs  have chosen not to adduce any evidence.  

They have examined witnesses, proven entries in the  

books  of  accounts  and  also  proven  the  

acknowledgements  duly  signed  by  the  defendant.  

4 AIR 1964 SC 136

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The  defendant,  on  the  contrary,  except  making  a  

bald  denial  of  the  averments,  had  not  stated  

anything else.   That apart,  nothing was put  to the  

witnesses  in  the  cross-examination  when  the  

documents  were  exhibited.   He  only  came  with  a  

spacious plea in his evidence which was not pleaded.  

Thus, we have no hesitation in holding that the High  

Court  has  fallen  into  error  in  holding  that  it  was  

obligatory on the part of the plaintiffs to examine the  

handwriting  expert  to  prove  the  signatures.   The  

finding that the plaintiffs had failed to discharge the  

burden is absolutely misconceived in the facts of the  

case.

22. The said aspect can be looked from another angle.  

Rules 3, 4 and 5 of Order VIII form an integral code  

dealing with the manner in which allegations of fact  

in  the  plaint  should  be  traversed  and  the  legal  

consequences flowing from its non-compliance.  It is  

obligatory on the part of the defendant to specifically  

deal with each allegation in the plaint and when the  

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defendant denies any such fact, he must not do so  

evasively but  answer the point  of  substance.   It  is  

clearly  postulated  therein  that  it  shall  not  be  

sufficient  for  a  defendant  to  deny  generally  the  

grounds  alleged  by  the  plaintiffs  but  he  must  be  

specific with each allegation of fact (see Badat and  

Co., Bombay v. East India Trading Co.5).

23. Rule 4 stipulates that a defendant must not evasively  

answer the point of substance.  It is alleged that if he  

receives  a  certain  sum  of  money,  it  shall  not  be  

sufficient  to  deny  that  he  received  that  particular  

amount, but he must deny that he received that sum  

or  any  part  thereof,  or  else  set  out  how much he  

received,  and  that  if  an  allegation  is  made  with  

diverse  circumstances,  it  shall  not  be  sufficient  to  

deny it along with those circumstances.  Rule 5 deals  

with specific denial and clearly lays down that every  

allegation  of  fact  in  the  plaint,  if  not  denied  

specifically or by necessary implication, or stated to  

5 AIR 1964 SC 538

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be not  admitted  in  the  pleading  of  the  defendant,  

shall be taken to be admitted against him.

24. We have referred to the aforesaid Rules of pleading  

only to highlight that in the written statement, there  

was  absolutely  evasive  denial.   We  are  not  

proceeding to state whether there was admission or  

not, but where there is total evasive denial and an  

attempt  has  been  made  to  make  out  a  case  in  

adducing  the  evidence  that  he  was  not  aware  

whether the signatures were taken or not, it is not  

permissible.  In this context, we may profitably refer  

to a two-Judge Bench decision in  Sushil Kumar  v.  

Rakesh  Kumar6 wherein,  while  dealing  with  the  

pleadings of election case, this Court has held thus: -

“73. In  our  opinion,  the  approach  of  the  High  Court  was  not  correct.   It  failed  to  apply the legal principles as contained in  Order 8 Rule 3 and 5 of the Code of Civil  Procedure.   The High Court  had also not  analysed the evidence adduced on behalf  of the appellant in this behalf in detail but  merely  rejected  the  same  summarily  stating  that  vague  statements  had  been  made by some witnesses.  Once it is held  that the statements made in paragraph 18  of  the  election  petition  have  not  been  

6 (2003) 8 SCC 673

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specifically  denied  or  disputed  in  the  written  statement,  the  allegations  made  therein  would  be  deemed  to  have  been  admitted, and, thus, no evidence contrary  thereto  or  inconsistent  therewith  could  have been permitted to be laid.”

25. We  may  state  with  profit  that  in  the  said  case,  

reliance  was  placed  on  Badat  and  Co.  v.  East  

India Trading Co. (supra).

26. Scrutinized thus, the irresistible conclusion would be  

that the defendants could not have been permitted  

to lead any evidence when nothing was stated in the  

pleadings.  The courts below had correctly rested the  

burden of proof on the defendant but the High Court,  

in an erroneous impression, has overturned the said  

finding.

27. Another aspect which impressed the High Court was  

the variance in the pleadings in the plaint and the  

evidence adduced by  the  plaintiffs.   To  appreciate  

the  said  conclusion,  we  have  keenly  perused  

paragraphs 6 and 7 of the plaint and the evidence  

brought on record.  It is noticeable that there is some  

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variance  but,  as  we  perceive,  we  find  that  the  

variance is absolutely very little.  In fact, there is one  

variation,  i.e.,  at  one  time,  it  is  mentioned  as  

Rs.6,64,670  whereas  in  the  pleading,  it  has  been  

stated as Rs.6,24,670 and there is some difference  

with regard to the date.  In our considered view, such  

a variance does not remotely cause prejudice to the  

defendant.  That apart, it does not take him by any  

kind of  surprise.   In  Celina Coelho Pereira (Ms)  

and  others  v.  Ulhas  Mahabaleshwar  Kholkar  

and  others7,  the  High  Court  had  non-suited  the  

landlord on the ground that he had not pleaded that  

the  business  of  the  firm  was  conducted  by  its  

partners,  but  by  two  other  persons  and  that  the  

tenant had parted with the premises by sub-letting  

them to the said two persons under the garb of deed  

of  partnership  by  constituting  a  bogus  firm.   This  

Court observed that there is substantial pleading to  

that  effect.   The  true  test,  the  two-Judge  Bench  

observed, was whether the other side has been taken  

by surprise or prejudice has been caused to him.  In  7 (2010) 1 SCC 217

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all circumstances, it cannot be said that because of  

variance  between  pleading  and  proof,  the  rule  of  

secundum  allegata  et  probate would  be  strictly  

applicable.  In the present case, we are inclined to  

hold that it cannot be said that the evidence is not in  

line with the pleading and in total variance with it or  

there  is  virtual  contradiction.   Thus,  the  finding  

returned  by  the  High  Court  on  this  score  is  

unacceptable.

28. The next aspect which requires to be addressed is  

whether  the  books  of  accounts  could  have  been  

rejected by the High Court on the ground that the  

entries  had  not  been  proven  due  to  dispute  of  

signatures solely on the foundation that the plaintiff  

had not examined the handwriting expert when there  

was a denial of the signature.  We have already dealt  

with the factum of signature,  the pleading and the  

substance in the evidence.  The plaintiff  No. 2,  his  

accountant  and  other  witness  have  categorically  

stated  that  the  books  of  accounts  have  been  

maintained in the regular  course of  business.   The  

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same has not been disputed by the defendant.   In  

such a circumstance, we may profitably reproduce a  

few  lines  from  Commissioner  of  Income  Tax,  

Delhi  v.  Woodward  Governor  India  Private  

Limited8: -

“One more principle  needs to be kept in  mind.   Accounts  regularly  maintained  in  the course of business are to be taken as  correct  unless  there  are  strong  and  sufficient reasons to indicate that they are  unreliable.”

29. Applying the said principle to the pleadings and the  

evidence on record, we find no reason that the books  

of  accounts  maintained by  the plaintiff  firm in  the  

regular course of business should have been rejected  

without any kind of rebuttal or discarded without any  

reason.

30. In view of the aforesaid analysis,  we conclude and  

hold  that  the High Court  has  erroneously  recorded  

that  the findings returned by the courts  below are  

perverse and warranted interference and, therefore,  

the judgment rendered by it is legally unsustainable  

8 (2009) 13 SCC 1

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and, accordingly, we allow the appeal, set aside the  

judgment of the High Court and restore that of the  

courts below.  In the facts and circumstances of the  

case, there shall be no order as to costs.

……………………………….J. [K. S. Radhakrishnan]

……………………………….J.                                            [Dipak Misra]

New Delhi; January 08, 2013

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