' This appeal has been preferred by the appellant against the judgment and decree passed by the IInd Senior Civil Judge, Hyderabad on 8th July, 1976 for Rs,4,100 i.e. Rs,5,800 less amount paid Rs,1,700 against the respondent in Suit No,211 of 1970 which was brought for recovery of Rs,29,500 by the appellant.
' Relevant facts for the purposes of disposal of this appeal briefly stated are that with the appellant, a banking company at its Market Branch, the respondent No,1 a firm consisting of two partners: (i)
Zahir Muhammad, and (ii) Noor Muhammad, the respondents Nos.2 and 3, respectively had a current Account No,429, wherein as in September, 1966 a sum of Rs,5,765.10 was outstanding against the said firm. In order to regularize the said account, the respondent No,1 opened a new loan Account No,55 in the same branch of the appellant y borrowing from it Rs,5,800 which was utilized in clearing the amount of Rs,5,765.10 outstanding against it in Account No,429. The last mentioned account thus was settled and closed.
2. The respondent No,Z, Zahir Muhammad one of the partners of the respondent No,1 firm, was also a partner in the firm known as Modern Construction Company. The other two partners in this firm were Qadir Ahmed and Umardaraz (besides Zahir Muhammad). This firm was constituted on 15th June, 1986 and was duly registered with the Registrar of Firm. It also at the relevant time, had current Account No,194 with the appellant's Market Branch.
3. On 23rd February, 1967, it is admitted that in this account as on 23rd February, 1967, a sum of Rs,16,284 was outstanding against Modern Construction Company. According to the appellant at the request of Zahir Muhammad the respondent No,2, the common partner in the above named two firms this outstanding amount (Rs,16,284) was transferred to the loan Account No,55 in the name of the respondent firm. The account No,194 was thus closed.
' In the loan Account No,55 which continued to be operated by the respondent No,2 on behalf of the respondent No,1, a sum of Rs,29,500 including interest remained oustanding as on 30th June, 1970.
This amount having not been paid in spite of demands the appellant instituted the suit for recovery of the same with costs and interest.
' In plaint it was also pleaded that the respondent made part payments on 15th May, 30th November, 1967 and 26th March, 1968 and also executed and delivered promissory Note (Exh.6) for Rs,40,000 payable to the appellant/plaintiff, Letter of Arrangement Exh.68 and Hypothecation Deed Exh.69 in respect of the stock in trade for Rs,40,000 by way of security. Letter of the same date executed by Modern Construction Company for repayment of the outstanding loan amount by monthly instalments of Rs,1,000 was also produced as Exh.70.
4. The respondents Nos.1 and 2 namely Modern Sanitaryware and Zahir Muhammad contested the suit. The respondent No,3 Noor Muhammad, however, chose to remain absent and thus was proceeded against ex parte. The respondents Nos.1 and 2 in the written statement while denying their liability, pleaded that the Account No,194 was in the name of Modern Construction Company and that the answering defendant No,1/respondent No,1 or his partner or anyone of the partners never consented orally or in writing to the amalgamation of Account No,194 with any other Account and that the transferring of debit amount of Rs,16,284 from the said Account (A/c No,194) to the loan Account No,55 which was of another firm was without authority. Certain other pleas were also raised in the written statement which need not be repeated here as the same are reflected in the issues framed on which the parties went to trial. The issues framed by the trial Court are reproduced below:--
(1) Was the defendant firm dissolved? If so, when and with what effect on this suit?
(2) Was the balance of current Account No,194 of Messrs Modern Construction Company brought over and debited in loan Account No,55 with the consent and authority of the defendant firm, if not, what its effect on the suit?
(3) Has the plaintiff any cause of action?
(4) Is the suit barred by time?
(5) What amount if any is due to the plaintiff and from which of the defendants?
(6) To what relief, if any, is the plaintiff entitled to?
(7) Whether the defendant Zahir was account holder in A/c 55?
(8) Whether the defendant made any part payment of suit amount in 1966-67 and 1969?
(9) What should the decree be?
5. The appellant examined Abdul Ghafoor (Exh.60) an employee of the bank in its Market Branch, Hyderabad and produced documents which have been marked as Exh. Nos.67 to 72. The respondents in defence examined the respondent No,2 Zahir Muhammad as Exh.68 and also produced Nizar Ali Khoja (Exh.90) an Officer in appellant-bank who produced statements of accounts marked Exhs. Nos.91 to 94.
' The trial Court on the evidence on record and after hearing the Advocates by judgment and decree passed on 8-7-1976 partly decreed the suit for Rs,5,800 less Rs,1,700 and allowed interest at 9% per annum from 30-9-66.
6. Aggrieved by the judgment and decree passed as abovementioned on 8th July, 1976, this appeal has been preferred under section 96 of the Civil Procedure Code.
7. The evidence on record shows that Zahir Muhammad was a common partner in the two firms namely the respondent No,1 Modern Sanitaryware and also in the firm of Messrs Modern Construction Company and was the person who dealt with the appellant-bank on behalf ,,of the said firms and operated the accounts of the firms.
' It is also established by the evidence of the witness Abdul Ghafoor (Exh.66) that in September, 1966 in the Account No,429 which was in the name of respondent No,1 firm/Modern Sanitaryware, a sum of Rs,5,765.10 was outstanding and that the said account was regularized by opening a new loan Account No,55 in the same branch of the appellant-bank. In this account Rs,5,800 were advanced as loan by the bank and the amount so advanced as loan was utilized in clearing the outstanding (Rs,5,765.10) in Account No,429. This statement of the witness is corroborated by the statement of account of loan Account No,55 produced as Exh.72. Significant fact to note here is that the respondent's own witness Nizar Ahmed Khoja, 'an Officer of the appellant-bank also produced a copy of the statement of loan Account No,55 as Exh.94 which also proves the above fact. This statement of account Exh.94 produced by respondent's own witness, further supports the statement of Abdul Ghafoor Exh.66 that Rs,16,284 which were outstanding in Account No,194 in the name of Modern Construction Company were transferred on 23rd February, 1967 in the Loan Account No,55 of respondent No,1/Modern Sanitaryware. Such entries exist in the statement of account Exh.72 produced by Abdul Ghafoor appellant's witness as well as in Exh.94 statement of account produced by the respondents' own witness Nizar Ali Khoja.
8. The only question which now remains for decision is the plea raised by the appellants/plaintiffs that the debit entry of Rs,16,284 was transferred from the Account No,194 (which was in the name of Modern Construction Company) to the Loan Account No,55 (of the respondent No,1/Modern Sanitaryware). The defence plea was that no instructions were given by Zahir Muhammad, the respondent No,2 for transfer of debit entry of Rs,16,284 from account No,194 in the Loan Account No,55 of the respondent No,1 firm.
' The learned trial Court has not accepted the plea of the appellant that such transfer of the entry of Rs,16,284 was with the consent or at the instruction of the respondent No,2 Zahir Muhammad on the sole 'ground that there is no consent or instructions in writing of Zahir Muhammad for amalgamation of the two accounts, meaning thereby that the entry was not transferred in the new Loan Account No,55 on written instruction of Zahir Muhammad. This reasoning could not b accepted as the bank could validly act even on oral instructions of one of the partners (Zahir Muhammad) of the firm. I have not been shown that Zahir Muhammad had no authority to do so nor have been shown as to why the bank would wrongfully transfer the entry from th Account No,194 of Modern Construction Company to the Loan Account No,55 of respondent No,1/Modern Sanitaryware particularly when Zahi Muhammad was the main partner who was dealing with the bank in respect of all the accounts and by making such transfer entries th bank was not in any manner benefited.
' Significant fact also to note here is that the disputed debit entry of Rs,16,284 was carried over from Account No,194 to the Loan Account No,55 on 23rd February, 1967 and sometime thereafter on 30th November, 1967 the respondent No,1 executed promissory note Exh.67 promissing to pay Rs,40,000 to the appellant-bank and also executed letter of delivery of pronote (Exh.68) and deed of hypothecation Exh.69. Letter Exh.70 was also executed by the other firm Modern Construction Company agreeing to repay the payment outstanding against the respondent No,1, in monthly instalments of Rs,1,000. All these documents were executed on 30th November, 1967 when against the defendants were outstanding only Rs,23,198.39. Obviously the promissory note and other documents Exhs.67 to 69 were executed by the respondent No,1 and Exh.70 was executed by Modern Construction Company through common partner the respondent No,2 (Zahir Muhammad) as the appellant-bank had granted loan/overdraft facility of Rs,40,000 to the respondent No,1 to secure outstanding amount which had swelled due to transfer of debit entry from Account No,194.
The letter Exh.70 executed by Modern Construction Company (after transfer of debit entry of Rs,16,284 from its account to Account No,55 promissing to clear the dues of respondent No,1 by payment of Rs,1,000 per month completely knocks out the plea set up by the respondents that the said entry was made without the consent of Modern Construction Company.
9. It is relevant to note ,here that certified copy of statement of Loan Account No,55 was produced by Abdul Ghaffar plaintiff's witness (Exh.66) to which no objection was taken by the Advocate for the respondents/defendants, and thus the said copy was marked as Exh.72. Its veracity was also not challenged. The learned trial Court, however, disregarded this document on the mere ground that it did not bear the certificate as is required by the provisions of Bankers Books Evidence Act. It is obvious that the learned Judge had fallen in error as no objection was taken by the respondents at the earliest when the copy of the Statement of Account was produced and marked as Exh.72.
The said respondents subsequently could not have been allowed to raise the plea that it did not bear the certificate in the form prescribed by Bankers Books Evidence Act.
' Here it may further be noted that the respondents/defendants' own witness Nizar Ali Khoja, an officer in the plaintiff/appellant-bank, also produced copy of statement of Account No,55. No one objected to its production and to its being marked as Exh.94. This aspect of the case also the learned trial Court omitted to take into consideration.
10. The discussion of evidence as above leads to the only reasonable conclusion that the two sisters firms had no objection rather it was with their consent that the two accounts i.e. Account No,194 and the new Loan Account No,55 in the same market branch of the appellant-bank were amalgamated and thus the debit entry of Rs,16,284 was carried over from Account No,194 to Account No,55.
' The denial by Zahir Muhammad that the Account No,194 of Modern. Construction Company was not merged with Account No,55 of the respondent No,1, with his consent could not be accepted as this witness in my opinion has not come out with the truth and cannot be relied upon. It would be noticed that in his cross-examination this witness even went to the extent of stating that the documents Exhs.67, 68 and 69 were executed by him for Modern Construction Company whereas these documents clearly show that the same were executed on behalf of the respondent No,1.
11. The upshot of the above discussion is that this appeal succeeds and that the suit is accordingly decreed for Rs,29,500 with costs. The interest, however, shall be payable by the defendant to the plaintiff/ appellant at the rate of 9% per annum as mentioned in the promissory note Exh.67 for the period as prayed in the plaint i.e. From the date of filing of the suit till payment.
' It appears that though the appellant had been granted decree for Rs,5,800 they in the memo. Of appeal affixed court-fee stamps on the entire amount claimed in the suit. In the circumstances the appellant shall be entitled to proportionate costs only after taking into consideration the amount for which the suit was partly decreed and on which no court-fee sought to have been paid by them.