# RAM JANKI DEVI & ANR v. M/S. JUGGILAL KAMLAPAT - **Citation:** [1971] 3 S.C.R. 573 - **Court:** Supreme Court of India - **Decided:** 1971-01-28 - **Bench:** G. K. Mitter, A. N. Ray - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ram-janki-devi-anr-v-m-s-juggilal-kamlapat-5198 - **Pages:** 9 ## Headnote 573 Deposit and Loan-Difference between-Tests-Demand for part of loan whether sftlrts limitation. Two groups known as the Singhania group and the Gupta Group were partners in M/ s. India Supplies. Both were also interested in the ;business of Lakshmi Ratan Cotton Mills. In the present litigation the GJpta group was represented by the appellants and the Singhania group bY the respondent. In the year 1942 Lakshmi Rattan Cotton Mills was the creditor of Ml s. India Supplies for the approximate sum of Rs. 4,00,000. Lakshmi Ratan Cotton Mills was a debtor to the respondent for the approximate sum of Rs. 4,00,000. Lakshmi Ratan Cotton Mills demanded the sum of Rs. 4,00,000 from India Supplies. India Supplies could not repay Lakshmi Ratan Cotton Mills. Thereafte\' India Supplies proposed that the respondent should deposit a sum of Rs. 4,00,000 with India Supplies to wipe out the indebtedness of the India Supplies to Lakshmi Ratan Cotton Mills. The responook) under the entry 30 September, 1942 shows that according to the letter of India Supplies the sum of Rs. 4,00,000 was deposited in the name of lndil\ Supplies. The other books of account of the plaintiff are khata (ledger) and nakalbahi (journal). The respondent also relied on the pass book entry being Ex-A-4 which shows that a sum of Rs. 4,00,000 was withdrawn on 30 September, 1942 by the appellant from the respondent as a banker and along with the interest from time to time the amount of Rs. 4,00,000 stood with the appellant in the deposit account. The balance-sheet of the appellant as on 30 June, 1943 being Ex.A-4 showed that a sum. of Rs. 4,00,000 was unsecured loan from the respondent. Counsel on behalf of the appellant contended that the use of the word 'deposit by itself occurr4tg eit~er in the roznamcha or in the letter dated 29 September, 1942 wntten by Ram Ratan Gupta would not be decisive of the question whether it was a case of deposit of the sum of Rs,_ 4,00,000 by the respondent with the appt'~llant under an agreement that the same would be paid on D F. G H JANK! DEVI V. JUGGILAL (Ray, J.) 577 A demand. At one stage in the proceedings there was a controversy as '(O whether Ram Ratan Gupta had authority to bind the appell:mt by the letter dated 29 Sep~mber, 1942. There i> evidence that Ram Ratan Gupta looked after the business of the appellant and acted on behalf of the firm of the appellant in ordinary mercantile transaction. Counsel for the appellant in all fairness did B not question the authority of Ram Ratan Gupta to bind the firm of the appellant. c D E F G H It was said by counsel for the appellant that there were six principal reasons to indicate that it was a case of an ordinary loan of Rs. 4,00,000 and not an instance of the sum of Rs. 4,00,000 being deposited by the respondent with the appellant under an agreement that the same would be paid on demand. The primary and pre-eminent point emphasized by the appellant was the backgJ'OUnd of the transaction between M/s India Supplies on the one hand and Lakshmi Ratan Cotton Mills on the other, that moneys were lent and advanced by Lakshmi Ratan Cotton Mills to India Supplies from time to time and aU that happened was that in place of Lakshmi Ratan Cotton Mills the respondent became the creditor of the firm of the appellants. There was just a substitution of the creditor debitor relationship by substituting the respondent in place of Lakshmi Ratan Cotton Mills as the creditor. Secondly, it was said that there was never any payment of money in cash and adjustment entries were made in thei books of the respondent. Thirdly, monies were not given notionally for the convenience of the respondent banker. Fourthly, monies were required by the appellant for his own business because Lakshmi Ratan Cotton Mills refused to help the appellant any more. Fifthly, Ex. A-4 the pass book would show that it was a case of advance of Rs. 4,00,000 by the respondent to the appellant, and finally, the appellants were not bankers and therefore it was improbable that the respondents who were bankers would deposit with the traders the sum of Rs. 4,00,000. Counsel for the appellant relied on the deci~ion of this Court in V. E. A. Annama/ai Chettiar & Anr, v. S. V. V. S. Veerappa Chettiar(') in support of the proposition that the answer to ihe question as to whether it was a loan or deposit would not deoend merely on the terms of the document but had to be judged from !he intentfon of the parties and the circumstances of the case. That 1s manifestly the correct approach. The case of a deposit is something: more than a mere loan of money. It will depend on .the facts of each case whether the transaction ~ clothed with the character of a deposit of money. The surrounding circumstances, the relationship and character of the (1) A.T.ll, 195H.C 12 S78 SUPREME COURT REPORTS [1971] 3 S.C.R. transaction and the manner in which parties treated the .transA • action will throw light on the 'true form of the transaction. The Judicial Committee in Nawab Major Sir Mohammad Akbar Khan v. Attar Singh & Ors. ( 1) spoke of the distinction between the deposit and loan to be that the two terms were not mutually exclusive but that a deposit not for a fixed term did not B seem to impose an immediate obligation on the deposi~ee to seek <>ut the depositor and repay him. Though documentil bl' themselves are not conclusive of the question th~y have th~ evidentiary value and if they. corroborate the oral evidence the Importance of the documents is magnified. The letter Ex. A-5 bears the date 29 September, 1942 and is conC temporaneous with the entire transaction between the appellant and the respondnt. The letter was as follows :- "Messrs. Juggilal Kam!apat Koth!, Cawnpore. Dear Sirs, D As per my talk with Sir Padampat !shall thank you to credit a sum of Rs. 4 lacs (Rupees four lacs only) to the account of Messrs Lakshmirafan Cotton Mills Co. Ltd. and debit the same to the account of India Supplies as deposit at the usual rate of interest as agreed upon by the partners of the said firm. E .. Thanking you, Yours faithfully, Sd/- R. Ra'1n Gupta". The intrinsic evidence in the letter is that the sum of Rs. 4,00,000 F was debited to India Supplies as deposit. The words "debited as deposit" were criticised by counsel for the appellant to be meaningless. Too much precision cannot always be expec~ed in. regard to use of foreign language by merchants and traders m their short memorandum. The character of deposit is an inherent impression in the writing. The rozmancha rbfers to the letter and is therefore G corroborative of the letter and the terms th~reof. The letter further shows that the terms were agreed to by the partners of the firm namely, the partners of India Supplies and of She respondent. The' respondent's partner Padampat Singhania gave oral evidence and substantiated the terms of the letter and the respqndenfs case. Padampat Singhania was the person. on ~ehalf of the respond.ent H who carried on the negotiations. H1s·ev1dence was therefore llllportant. The appellants did not examine themselves and did not (I) 63 I.A. 279. A B c D E JANK! DEVI V. JUGGJLAL (Ray, J.) 579 give any evidence challenging the oral testimony of the respondent's partner. On the contrary, _the correctness of the letter Ex. A-5 was accepted by the appellants' witness Ram Ratan Gupta the author of the letter. The roznamcha entry was proved by Gopi Kishan Saraugi a munim of the plaintiff. The roznamcha entry was as follows :- ' "4,00,000 India Supply Ke nam Asoj Badi Chhat : 30-9-42 Lakshmiratan Cotton Mill Ki Chithi se apke nam mada deposiot karaya panna 2486" His evidence was that the books wer~ systematically kept on 'mahajani' system in connection with the business. The witness proved the Khata, the raznamcha and the nakalbahi entries. In cross-exanrination of Gop_i Kishan Saraugi it was suggested that the entry under the date 30 September, 1942 in the roznamcha was not written at the same time. The suggestion was that there was interpolation of the words "deposit karaya" in the roznamcha entry. In cross-examination of Padampat Singhania questions were asked about the rokar, khata, nakal bahi and roznamcha entries. Padampat Singhania said that the entry of Rs. 4,00,000 was not recorded in the daily cash book but was recorded in the roznamcha. He also said that credit and debit entries were made in the roznamcha. Padampat Singhania said that the entries were made by Gopi Kishan Jaipuria who was in a dying condition at the time the witness gave evidence. It was suggested to Padampat Singhania that the words "deposit karaya" in the roznamcha entry were not written at the same sitting. Padampat Singhania denied that, Counsel for the appel- . lant contended that in the absence of Gopi Kishan Jaipuria the F account books were not proved. This is unacceptable for two reasons. First, the account books were shown in cross-examination of Padampat Singhania and question were asked on the same. It is not open to the appellant to complain of lack of proof of account books when the documents are shown to the witness in cross-examination. Secondly, both Padampat Singhania and Gopi G Kishan Saraugi spoke of the proper maintenance and keeping of books of account and that it was not possible 1lo arrange the presence of the writer of the entry. Suggestion of tampering is a serious one. The original entries were called for from the High Court. We had occasion to look into the originals. We are in agreement with the High Court that the suggestion of fabrication is utterly unmeritious. The words 'deposit karaya' appear without H any doubt to have been written at the same time as the rest of thti writing. It is in evidence that the reference to the page of th¢ panna under that entry was written later inasmuch as the page 580 SUPREME COURT REPORTS [1971] 3 S.C.R. of the panna was put on when the panna was put on when the A panna book was writte!l. The most important documentary evidence of the appellant namely. their book of account was not produced. These books of the appellant would have shown how they treated the transaction, namely, whether it was a case of deposit or loan. The irresistible infffence from the non-production of books of the appellant would arise that they would have supported the respondents caS!l and that is why they were not produced. The appellant's contention that the background of the transaction was mercantile loan, would be more a conjectu_re than a conclusion to be arrived at._ The financial transactions between the respondent and Lakshmi Ratan Cotton Mills were running accounts. It would be more consistent to hold that by allowing India Supplies a deposit of Rs. 4,00,000 India Supplies would be relieved of the situation of repaying the money immediately. It is precisely :,Ccause of the then inability of India Supplies to repay Lakshmi Ratan Cotton Mills that the parties resorted to the mode of having the use of the money by · way of deposit.· The transaction was between the appellant, the respondent and Lakshmi Ratan Cotton Mills. All figured in the transaction. A more loan of Rs. 4,00,000 would not have sufficed the needs of the appellant who were then unable to pay the dues of Lakshmi Ratan Cotton Mills. Some of the partners of the appellant and the respondent in B c D · ·the year 1942 were common. It would be more explicable and E natl1ral course of events that monies would be kept in deposit with the appellant in order to·enable them to have financial ac.commodation without immediate worry of repay!Il·~nt. The mere fact t)lat money in specie was not paid· would not be destructive of deposit The respondent acted as bankers. The way in which t.he respondent made entries in the pass ~ook of the appellant is· · F consistent with thdr roznamcha, khata and nakal bahi books. It was not a case of the respondent giving loan to the appellant for the obvious reason that the history of the transactions between the appellant and Lakshmi. Rantan Cotton Mills shows that the appellant.hat! to be j:¥1t on a footing of financial stability by giving the appellant the use of the sum of Rs. 4.00,000 for a long time. The absence of any negotiable instrument is significant. A hundi G or a promissory note would have been consistent with the case of a loan. The relationship between the P?rt.ies, the surrounding circumstances at the time of the transaction, the pecuniary position of the appellant are all overwhelming feafures to corroborats the oral as well as the documentary evidence of the respondent that the amount was deposited with the appellant. H The award dated 18 January, 1944 has also a tale to tell. There were disputes between the partners of the various businesses_ ,in A c n E F G H JANK! DEVI V. JUGGILAL (Ray, J.) 581 which the Singhania and Gupta groups were interested. These disputes were before the arbitrators. One of the terms in the award was that the award in respect of Lakshmi Ratan Cotton Mills and India Supplies "do not cover the advances which either party or their separate firms may have made. to all or any of them or their moneys which may be in deposit with them and they shall be payable and paid in their usual course". This direction in the awlird shows that there were advances which were in the nature of deposit and were not covered by the award. The award would have evidentiary value to show as to how the parties treated and understood their financial dealings. It is· also significant t!hat when the respondent demanded the money by a letter dated 27 April 1953 (Ex. 7) the appellant in their reply dated 5/6 May, 1953 (Ex. 6) totally denied the claim. The respondent set out aII the facts of deposit of the money with the appellant. The a12peIIant never said that it was a· case of advancing loan. The non-production of the appellant's accounts coupled with the appellan~ staying away from the witness box indicates the inherent infirmities in the appellant's case. Counsel for the appellant conten