Supreme Court of India
THE STATE BANK OF INDIAversusSHRI YUMNAM GOURAMANI SINGH
- Citation
- 1993 INSC 242
- Decided
- 20 July 1993
- Disposal
- Appeal(s) allowed
- Bench
- KULDIP SINGH
Holding
Entries in a bank's books of account, when corroborated by other admissible evidence, satisfy the requirements of Section 34 of the Evidence Act and can be used to establish liability.
Summary
The State Bank of India sued Yumnam Gouramani Singh for recovery of a loan amount and the trial court decreed a partial sum of Rs.9,962.91 with interest. The High Court reversed this decision, holding that the bank's books of account were not corroborated by any other evidence and thus could not establish liability under Section 34 of the Evidence Act. On appeal, the Supreme Court examined whether the entries in the books, together with the testimony of witnesses, satisfied the requirement of corroboration. It found that the depositions of witnesses 5, 7 and 8, along with the written admissions of the defendant, adequately corroborated the book entries. Consequently, the Court set aside the High Court judgment, restored the trial court decree, and allowed the bank's appeal.
Issues considered
- Whether entries in the bank's books of account constitute sufficient evidence of a loan liability without corroboration under Section 34 of the Evidence Act
- Whether the respondent borrowed Rs.15,000, Rs.10,000 and utilized an overdraft facility as alleged
- Whether the respondent had repaid Rs.11,300 against the alleged loans
- Whether the partners of the Engineering Corporation are liable for the respondent's debts
Legislation cited
- Indian Evidence Act, 1872s. 3, s. 34
Subjects
EvidenceBooks of accountSection 34CorroborationBank loan recoveryCivil procedure
Judgment
THE STATE BANK OF INDIA A
v.
<,
SHRI YUMNAM GOURAMANI SINGH
JULY 20, 1993
[KULDIP SINGH AND P.B. SAWANT, JJ.] B
Evidence Act, 1872:-Section 34-Entries in the books of account and
other corroborative evidence-Evidentiary value of
Evidence Act, 1872:-Section 3-Appreciation of evidence-Entries in C
the books of account and other corroborative evidence-Evidentiary value.
Appellant-bank instituted a suit for recovery of a sum of Rs.
44,852.35 from tbe respondent.
The trial court decreed the suit partly. It held that the bank was D
entitled to recover a sum of Rs.9,992.91 with interest at tbe rate of 7 1/2
per cent for tbe period from 22.9.1960 till the date of recovery.
The appellant and the respondents filed appeals before tbe High
Court against the trial Court's order.
E
The High Court by a common judgment allowed tbe appeal of tbe
respondent and dismissed the appeal of tbe appellant-bank. Hence tbis
appeal by tbe bank by Special leave before this Court.
Allowing the appeal, tbis Court
F
HELD: 1.1. The trial court held that the re.spondent - defendant
borrowed the sums of Rs.15,000, Rs.10,000 and also availed of tbe over-
draft current account facility with tbe bank. (311-G]
1.2. The High Court reversed the findings of the trial court primarily G
on the ground that there was no evidence on the record to corroborate tbe
books of accounts which were produced by the appellant before the trial
court. (312-B-C]
1.3. The High Court fell into patent error in reaching tbe conclusion
that there was no evidence to corroborate the books of accounts. (312-D] H
309
'
310 SUPREME COURT REPORTS [1993] SUPP. 1 S.C.R.
A 1.4. Apart from the entries of the books of accounts there was ample
evidence on the record to corroborate the said entries. P.Ws.5,7 and 8 have
in their detailed depositions corroborated the entries in the books of
account. Even otherwise issues nos. 3,4 and 7 were not contested by the
respondent - defendant. In his written statement, he admitted that he took
B the alleged loans from the Manipur State Bank which merged in the State
Bank of India. [313-E-F]
1.5. The trial court on the basis of the entries in the books of
accounts and other corroborative evidence reached the conclusions that
the appellant was entitled to a decree for a sum of Rs.9,962.91 with interest
C at the rate of 7 1/2 per cent per annum from September 1960 till the
recovery of the said amount. There is no ground to interfere with the
finding of the trial court. [313-G-H; 314-A]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2964 of
1984.
D
From the Judgment and Order dated 19.8.1977 of the Gauhati High
Court in First Appeal No. 8 of 1972.
Rajiv Shakdhar and S.S. Shroff (For Mis. Suresh A. Shroff and Co.)
E for the Appellant.
A. Sharan for R.P. Singh for the Respondent.
The Judgment of the Court was delivered by
KULDlP SINGH, J. State Bank of India at Imphal, Manipur, in-
f stituted a suit for recovery of a sum of Rs.44,852.35 from Yumnam
Gouramani Singh. The trial court by its judgment dated December 31, 1971
decreed the suit partly and held that the bank was entitled to recover a
sum of Rs.9,962.91 with interest at the rate of 7 1/2 per cent for the period
from September 22, 1960 till the recovery of the amount. Being aggrieved
G by the judgment of the trial court, the bank as well as Yumnam Gouramani
Singh filed appeals before the High Court. The High Court disposed of
both the appeals by a common judgment dated.August 19, 1977. The High
Court allowed the appeal of Yumnam Gouramani Singh and dismissed the
suit of the bank. The appeal filed by the bank was, as a consequence,
H dismissed. This appeal by the State Bank of India is against the judgment
S.B.l. v. Y.G. SINGH [KULDIP SINGH, J.] 311
of the High Court. A
Ten issues were framed by the trial court. Issue Nos.3, 4 and 7 were
as under:
"3. Did the defendant borrow from the Manipur State Bank
Ltd. Rs.15,000 on 16.3.1954, Rs.10,000 on 19.9.1955 and draw and B
overdraft showing a debit balance of Rs.943813/2 on 21.U.1956?
4. Has the defendant paid Rs.11,300 as being not covered in
the account filed by the Plaintiff?
7. Is the defendant not liable for the debts as they are being
c
payable by the partners of the Engineering Corporation?"
The trial court dealt with the above quoted issues in the following
manner:
D
"Issue Nos. 3, 4 and 7. The learned counsel for the Plaintiff
does not press for these issues, moreover, the defendant in his
written statement, admits that he took the said 3 loans from the
Manipur State Bank. Further, the defendant has not led evidence
to show that a sum of Rs.11,300 had already been repaid against
the aforesaid loans. Again Ext.A/2, N3 and N4 show that the E
defendant, on his personal capacities, took the aforesaid by
mortgaging his properties. Further the promissory notes Ext.A/9,
NB and the letters of continuity, Ext.NW, N7 also show that the
defendant is personally liable for re-payment of the loan. There-
fore, the partners of the Engineering Corporation cannot be made F
liable for repayment of the said loans. The three issues are there-
fore decided against the defendent."
It is thus obvious that the trial court decided issues 3, 4 and 7 in
favour of the appellant - plaintiff and held that the respondent - defendant
borrowed the sums of Rs.15,000, Rs.10,000 and also availed of the overdraft G
current account facility with the bank. The trial court decreed the suit in
the following terms:
"In view of my findings, in the above issue the plaintiff is entitled
to a sum of Rs.56,047.52 (loan amount plus interest till September H
312 SUPREME COURT REPORTS (1993] SUPP.1 S.C.R.
A 1960) less the amount already paid by the defdt. towards the
repayment of the loan. As per schedule of the plaint the defendant
had already repaid a sum of Rs.46,084.62. The plaintiff is therefore
entitled to recover a sum of Rs.9,962.91. The plaintiff is also liable
·to recover interest on the said amount of Rs.9,962.91 at the rate
B of 7 1/2 per cent per annum for -the period from 22.9.60 till the
• recovery of the amount subject to the maximum of the said amount
from the defendant on payment of necessary court fee."
The High Court reversed the findings of the trial court primarily on
C the ground that there was no evidence on the record to corroborate the
books of accounts which were produced by the appellant before the trial
court. Relying upon section 34 of the Evidence Act, the High Court held
that the entries in the books of account alone are not sufficient evidence
to charge the respondent with liability. The High Court further held that
since there was no evidence on the record to support the entries in the
D books of account, the case against the respondent was not proved. We do
not agree with the High Court. We are of the view that the High Court fell
into patent error in reaching the conclusion that there was no evidence to
corroborate the books of accounts. The High Court itself discussed the
evidence, other than the books of accounts, as under:
E
"In the instant suit, the material evidence on the point is the
evidence of P. Ws. 5, 7 and 8 at the relevant time, was the General
Manager of the Manipur State Bank. He proves the application
made by the Defendant for a loan of Rs.15,000 for which he
F executed a mortgage deed, Ext. N3. He has also proved Ext.NS,
the pronote and Ext. A/7 the letter.of continuity executed by the
defendant by way of security for the above amount. Similarly, he
proves the application by the defendant for another sum of Rs.
10,000 which, he says, was sanctioned, and for which the Defendant
executed Ext. N2, the deed of mortgage, and Ext.N9 the pronote
G and Ext. NlO, the letter of continuity. He further proves that a
loan account was opened in respect of the loan of Rs.10,000 and
he also proves Exts. Nl3, N14 and N15. Ext. N13 is the copy of
the loan account of the defendant with the State Bank of Manipur.
At the top of the account, is recorded: "Limit Rs. 15,000." Ext.
H N14 is a\opy of the loan register of the Manipur State Bank with
S.B.I. v. Y.G. SINGH [KULDIP SINGH,J.) 313.
respondent. At the op of the account is mentioned: "Limit A
Rs.10,000." Ext.N15 is a copy of the Current Account Ledger of
the Manipur State Bank with the Defendant.
P.W.5 is an employee of the State Bank of India at Imphal. At
the relevant time, be was an employee of the Manipur State Bank.
He proves the Defendant's Application Ext. N7 for the accom- B
modation of a loan of Rs. 15,000 and also proves the corresponding
promissory note, Ext. NB, and mortagage deed, Ext. N3. Similarly,
he proves another application of the defendant for accommodation
of a loan of Rs. 10,000 and also proves the corresponding promis-
sory note," Ext. N9, and the letter of continuity, Ext. N10. Similary C '
he proves another application by the Defendant for the accom-
modatoin of Joan of Rs.15,000 together with mortgage deed, Ext.
N4 and the promissory note, Ext. Nll and the letter of continuity,
Ext. N12, by way of security.
P.W.7 is the Development Officer of the State Bank of India. D
He deposes that he certified Exts.N13, N14 and N15 to be the .
true accounts of the Manipur State Bank, in respect of the defen-
dant. Admittedly, Exts.N13, Nl4 and N15 were not prepared by
him or under his supervision."
E
It is thus obvious that apart from the entries of the books of account
there was ample evidence on the record to corroborate the said entries.
P.Ws. 5, 7 and 8 have in their detailed deposition corroborated the entries
in the books of account. Even otherwise, issues nos.3, 4 and 7 were not
contested by the respondent - defendant. In his written statement, be
admitted that be took the alleged Joans from the Manipur State Bank which
F
merged in the State Bank of India.
The learned counsel for the appellant - bank also contended. that the
trial court was not justified in granting a decree for a sum of Rs.9,962.91
instead of Rs.44,852.34 claimed by the bank. We do not agree with the G
learned counsel. The trial court on the basis of the entries in the books of
acoounts and other corroborative evidence reached the conclusions that
the appellant was entitled to a decree for a sum of Rs.9 ,962.91 with interest
at the rate of 7 1/2 per cent per annum from September, 1960 till the
recovery of the said amount. We see no ground to interfere with the finding H
314 SUPREME COURT REPORTS (1993) SUPP.1 S.C.R.
A of the trial court.
We allow the appeal, set aside the judgment of the High Court and
restore the judgment of the trial court dated December 31, 1971. We
decree the suit of the plaintiff in terms of the trial court judgment. The
appellant shall be entitled to the costs which we quantify as Rs.5,000.
V.P.R. Appeal allowed
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