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1956 DIGILAW 110 (MP)

Radheyshyam Chironjilal Agrawal v. Kashinath Balkishan

1956-10-20

DIXIT

body1956
ORDER : The plaintiff-non-applicant has filed a suit in the Court of Civil Judge First Class for the recovery of Rs. 1020/- from the applicant on the basis of a promissory note said to have been executed by him in favour of the plaintiff on 23rd September 1954. The defendant, while admitting that the promissory note was signed by him, has pleaded that there was no consideration in support of the note. After the filing of the written statement, the plaintiff in answer to one of the interrogatories served upon him stated that the amount stated in the promissory note was not actually given to the defendant but that the amount was at the instance of the defendant debited to his account and credited to the account of Nandram Naraindas. The trial Judge framed an issue whether the promissory note was not supported by consideration and placed on the defendant the burden of proving want of consideration. The defendant then applied for placing the burden of proof of this issue on the plaintiff on the ground that according to the plaintiffs reply the consideration for the promissory note was different from that recited in the negotiable instrument. The learned trial Judge rejected this prayer of the defendant. Hence this revision petition. 2. I have heard learned counsel for the parties. In my opinion this revision petition must be granted. Under S. 118 Negotiable Instruments Act, the court has to presume that every negotiable instrument was made or drawn for consideration. This presumption throws the burden of proving failure of consideration on the maker of the note. But where the plaintiff himself states facts which militate against the presumption, then the presumption is destroyed and the onus is shifted on to the plaintiff to prove that the promissory note was executed by the defendant for consideration. Here the promissory note recites the payment of Rs. 1000/- in cash to the defendant. It says The words " "clearly involve that an amount of Rs. 1000/- was actually paid to Radheshyam and the promissory note was for the repayment of this amount. The presumption which could have been drawn under S. 118 Negotiable Instruments Act was that the sum of Rs. 1000/- was paid to Radheshyam. But the plaintiff in the present suit has himself stated that the amount of Rs. 1000/- was actually paid to Radheshyam and the promissory note was for the repayment of this amount. The presumption which could have been drawn under S. 118 Negotiable Instruments Act was that the sum of Rs. 1000/- was paid to Radheshyam. But the plaintiff in the present suit has himself stated that the amount of Rs. 1000/- was not actually paid to Radheshyam, but that at the suggestion of the defendant the amount was debited to his account and credited to the account of Nandram Naraindas. The plaintiff has thus deprived himself of the presumption by stating facts contrary to the plain tenor of the promissory note. In such circumstances it is incumbent on the plaintiff to prove affirmatively that the defendant executed the promissory note in question for consideration. This view is amply supported by the decisions in Venkatareddi v. Nagireddi, AIR 1951 Mad 851 (A); Mt. Zohra Jan v. Mt. Rajan Bibi, 28 Ind Cas 402; (AIR 1915 Lah 86 (2)) (B); Veerappa v. Gurubasappa, AIR 1956 Mys 30 (C) and Fulchand v. Laxminarayan, AIR 1952 Nag 308 (D). In all these cases it has been held that under S. 118 of the Negotiable Instruments Act, the initial presumption is that the promissory note was executed for consideration and the onus lies on the executant to prove that no consideration was passed. But where the plaintiff himself sets up a case destroying the presumption by pleading facts contrary to the plain tenor of the promissory note, then it is impossible for the plaintiff to take recourse to the presumption and he must prove the consideration. In AIR 1951 Mad 851 (A) and AIR 1956 Mys 30 (C), the plaintiffs set up consideration different from the one recited in the negotiable instruments and it was held that the burden of proving want of consideration did not rest with the defendant but proof of consideration shifted on to the plaintiff. Mr. In AIR 1951 Mad 851 (A) and AIR 1956 Mys 30 (C), the plaintiffs set up consideration different from the one recited in the negotiable instruments and it was held that the burden of proving want of consideration did not rest with the defendant but proof of consideration shifted on to the plaintiff. Mr. Bhagwandas Gupta learned counsel for the non-applicant relying on Balkishandas v. Rambakas, AIR 1930 Nag 187 (E) and Premraj v. Nathmal, AIR 1936 Nag 130 (F) contended that under S. 118 Negotiable Instruments Act the burden of proving failure of consideration is always on the maker of the note and that it is not shifted by the mere fact that consideration or part of it was not paid in cash as stated in the note but in a different form. Those cases no doubt hold that a mere admission that the consideration was not the one recited in the negotiable instrument does not shift the burden of proof on to the plaintiff when the defendant denies consideration. With all deference to the learned Judges deciding those cases, I do not find myself in agreement with the view taken by them. These two decisions of Single Judges were not followed in AIR 1951 Mad 851 (A) and are contrary to the decision in AIR 1952 Nag 308 (D) where a Division Bench of the Nagpur High Court has held that the presumption arising under S. 118 of the Negotiable Instruments Act would be destroyed where the plaintiff states facts contrary to the plain tenor of the promissory note. For these reasons I would accept this revision petition and direct the trial Judge to recast the issue about consideration in the following manner :- "Whether the defendant executed the suit note for an amount credited to the account of Nandram Naraindas in the plaintiffs account books and debited to his own account in those account books." The burden of proof of this issue shall be on the plaintiff. Costs of this revision petition shall follow the result of the suit in the lower court.