Needs Great Care: Kerala HC Cautions On Comparing Signatures Based On Photocopy When Original Document Is Absent, Calls It 'Slippery Slope'

The Kerala High Court recently cautioned that comparing signatures based on photocopy, in the absence of an original document, is a “slippery slope” and should be done with great care and circumspection.It thus set aside an order lifting the conditional attachment of property owned by a hospital in favour of a lawyer, which was based on the comparison of signatures in the lawyer's suit for recovery of an amount loaned by him to the hospital's managing director and a purported agreement of sale entered between parties.The trial court had found that the lawyer's signature in his recovery suit was similar to the agreement allegedly entered by him with the hospital's MD for sale of the hospital. The appellant-plaintiff was the lawyer of respondent no. 2–defendant who in turn is the Managing Director of respondent no. 1-defendant MSS Hospital and Nursing College Pvt Ltd. The respondent defendants had availed loans and had mortgaged a flat and certain properties. In the litigation between the Bank and the respondent-defendants, when the court therein ordered immediate payment of Rs.50 lakhs towards the loan account, the MD requested his lawyer to lend him Rs. 45 lakhs. The lawyer agreed. Subsequently, the hospital was wound up and sold to one M/s.Sunrise Institute of Medical Sciences Pvt Ltd. and from its sale proceeds, the loan was cleared. However lawyer's loan of Rs 45 lakh was not paid to him. Pertinently, in the sale agreement the MD had entered into with the M/s.Sunrise Institute, the liability to the lawyer had been shown as a liability of the hospital which is to be paid off by the M/s.Sunrise Institute. Since the amount was not repaid by the MD, nor by M/s.Sunrise Institute, the lawyer filed a suit for recovery. A conditional order of attachment was ordered by the Sub Court. The defendants argued that Rs.45 lakhs received from the lawyer "was in fact not a loan to clear off the Bank dues as alleged", but an "advance" amount paid by the lawyer pursuant to an agreement dated April 23, 2023 wherein he had agreed to purchase the hospital for Rs. 14 Crores. The defendants alleged that since the lawyer had failed to keep his part of the bargain, the MD had to sell the hospital to M/s.Sunrise Institute. They contended that it was the lawyer "who had drafted the relevant sale agreement" in August 2023, pursuant to which the hospital was sold to M/s.Sunrise Institute.The sub court heard the parties and on a "comparison of the signatures" of the lawyer in the "plaint" and in the April 23, 2023 agreement found on the threshold, that the "signatures had been put in by one and the same person and hence the contention that the amount of Rs.45 lakhs was paid by the plaintiff towards advance purchase money for the purchase of the 1st defendant hospital was prima facie valid". The sub court found that subsequently when the hospital was sold to M/s.SunriseInstitute, the Rs.45 Lakhs due to the lawyer had been specifically mentioned along with other liabilities enumerated in Annexure C of the sale agreement which the defendants entered into with M/s.Sunrise Institute. Sub court found that MD cannot be made liable to pay any amount to the lawyer and consequently, the conditional attachment granted earlier was lifted.Challenging this, the lawyer filed an appeal before the High Court.Before the high court, the lawyer denied entering into the April 23, 2023 agreement with MD for purchasing the hospital for Rs. 14 crores. He said that the exercise of comparing signatures by the sub-court and drawing a prima facie conclusion therefrom leading to the lifting of attachment is an illegal and improper exercise. He further claimed that the April 23, 2023 agreement is subsequent to the transfer of Rs. 45 Lakhs by the lawyer to the respondents. Meanwhile the respondents argued that Rs.45 lakhs transferred by the lawyer to MD was "only an advance of the purchase price" i.e. Rs. 14 crore. At the outset, Justice Syam Kumar VM noted that the respondents never "denied the receipt" of Rs.45 lakhs from the lawyer. Since they had argued that this amount was paid towards advance for sale consideration for purchasing the hospital and the same was mentioned in an agreement, the sub court examined the veracity of it.It said that the moot question was the genuineness and veracity of the April 23, 2023 agreement, which can only be decided by a detailed appreciation of evidence. However, the High Court opined that with regard to the similarity of signatures the Sub Court ought to have exercised great care and caution. It said, “Before arriving at a conclusion regarding the similarity of signatures, though prima facie, substantial caution and care ought to have been adopted by the Sub Court. It is even more so in cases where the parties are already known to each other and have had transactions between them prior to the execution of the document. Further, as rightly contended by the counsel for the plaintiff, in view of the advanced technology...

Needs Great Care: Kerala HC Cautions On Comparing Signatures Based On Photocopy When Original Document Is Absent, Calls It 'Slippery Slope'

Gyanvi Khanna

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