1999 (3) TMI 653 - SC - Indian Laws

Summary

Issues Involved:
1. Right of Respondent No.1 to institute an appeal in the High Court.
2. Relationship of debtor and creditor between the appellant and respondent No.1.
3. Applicability of Section 8 of the Orissa Money Lenders Act.
4. Determination of agency between respondent No.2 and respondent No.1.
5. Justification of the trial court's and High Court's findings on the transaction and liability.

Detailed Analysis:

1. Right of Respondent No.1 to Institute an Appeal in the High Court:
The appellant contended that respondent No.1 had no right to appeal in the High Court since the trial court had already decreed the suit against respondent No.2. The High Court modified the trial court's decree and held both the appellant and respondent No.2 jointly and severally liable. The Supreme Court upheld this, referencing Para 9 of the plaint which sought a decree against both defendants, indicating a legitimate and reasonable prayer for joint and several liability. The Court noted that Order 1 Rule 3 and Order 2 Rule 3 of the Civil Procedure Code allow for joinder of parties and causes of action to avoid multiplicity of suits.

2. Relationship of Debtor and Creditor Between the Appellant and Respondent No.1:
The appellant argued that there was no debtor-creditor relationship with respondent No.1, as the loan was advanced personally by respondent No.2. However, the Supreme Court found that since the money was withdrawn from respondent No.1's account, he had a cause of action against both the appellant and respondent No.2. The High Court's decision to hold both defendants liable was justified.

3. Applicability of Section 8 of the Orissa Money Lenders Act:
The appellant raised a plea under Section 8 of the Orissa Money Lenders Act, arguing that respondent No.1 was not a registered money lender at the time of the loan. The Supreme Court did not find merit in this argument, as the primary issue was the unauthorized withdrawal from respondent No.1's account, not the legality of the money lending business.

4. Determination of Agency Between Respondent No.2 and Respondent No.1:
The trial court dismissed the case against the appellant, finding no agency relationship between respondent No.2 and respondent No.1. However, the Supreme Court disagreed, noting that respondent No.2 was authorized to operate respondent No.1's bank account and issued the cheque to the appellant at his instance. The appellant did not present himself for cross-examination, leading to an adverse presumption under Section 114 of the Evidence Act, reinforcing the agency relationship.

5. Justification of the Trial Court's and High Court's Findings on the Transaction and Liability:
The trial court found that the transaction was directly between respondent No.2 and the appellant, dismissing the case against the appellant. The High Court reversed this, holding both liable. The Supreme Court supported the High Court's decision, emphasizing that the appellant's failure to testify weakened his defense. The Court cited precedents that non-appearance of a party as a witness justifies an adverse inference against them.

Conclusion:
The Supreme Court dismissed the appeal, affirming the High Court's judgment that both the appellant and respondent No.2 were jointly and severally liable for the sum of Rs. 8,400/-. The Court emphasized the principles of joinder of parties and causes of action, adverse presumption due to non-appearance in the witness box, and the legitimacy of respondent No.1's appeal.