ORDER Hari Swarup, J. - This is Defendant's second appeal arising out of a suit for recovery of a sum of Rs. 1372 on the basis of a promissory note dated 27-6-60. Both the courts have decreed the suit against the Defendant. 2. Learned Counsel for the Appellant has contended that the court below was in error in drawing a presumption u/s 118 of the Negotiable Instruments Act (hereinafter called the Act) about the consideration for the promissory note. The promissory note stated that it was for cash consideration. In the plaint, however, the Plaintiff put forward the case that the cash was advanced on an earlier occasion and a promissory note was executed by the Defendant on 28-6-57, the amount of this promissory note was not paid up and hence the present promissory note was executed on 27-6- 60 and the consideration for the letter promissory note was the money due under the earlier promissory note. 3. Learned Counsel has contended that once the Plaintiff's case itself is against the plaint tenor of the promissory note, no presumption can arise u/s 118 of the Act to the effect that the present negotiable instrument was made or drawn for consideration. Reliance has been placed on the cases Radhey Shyam v. Kedar Nath AIR 1927 MB 82 and G. Venkatareddi Vs. P. Nagireddi, AIR 1951 Mad 851 for the proposition that no presumption can arise. It was held in the case of V. Reddy v. N. Reddy (supra): When the Plaintiff does not want to rely upon the original recital of the promissory note but wants to set up a different form of consideration, he ought to prove a consideration and the burden is initially on him rather than on the Defendant who denies consideration. The same view was taken in the case of Radhey Shyam v. Kedar Nath (supra). Learned Counsel for the Appellant has, further placed reliance on the case of AIR 1952 308 (Nagpur) in which it was observed: In a suit on a promissory note it is not neoessary to aver consideration or to prove it. The Court places the burden upon the Defendant to prove want of consideration.
Learned Counsel for the Appellant has, further placed reliance on the case of AIR 1952 308 (Nagpur) in which it was observed: In a suit on a promissory note it is not neoessary to aver consideration or to prove it. The Court places the burden upon the Defendant to prove want of consideration. But in a case where the Plaintiff does not rely upon the promissory note 'per se' but pleads certain facts in his plaint which militate against the presumption naturally arising from the document...the presumption is displaced by the act of the Plaintiff himself. No case has been cited by learned Counsel for the Respondent in which a contrary view might have been taken. 4. Section 118 of the Act lays down a rule of evidence. It says: 118. Until the contrary is proved, the following presumptions shall be made: (a) that every negotiable instrument was made or drawn for consideration and that every suoh instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration.... The question of burden of proof cannot be decided in vacuo. It has always to be considered with respect to and in the context of the pleadings of the parties. The presumption of burden of proof contemplated in Section 118 of the Negotiable Instruments Act can also not be considered without regard to the pleadings of the parties. The issue in the present case, on which the Plaintiff came to court, was not that the promissory note was executed for cash consideration paid on the date of the execution of the note, but that the money had been paid earlie and a promissory note was executed at that time and the present promissory note was executed only in lieu thereof. If the Plaintiff's pleadings themselves are that the averment of cash payment mentioned as consideration in the promissory note is incorrect, it would not be possible to decree the suit merely on the presumption contained in Section 118 of the Act. Section 118 of the Act only means that what appears, on the face of a negotiable instrument is presumed to be true. The presumption is a rebuttable presumption. The presumption of consideration is rebutted by the Plaintiff himself when he pleaded otherwise.
Section 118 of the Act only means that what appears, on the face of a negotiable instrument is presumed to be true. The presumption is a rebuttable presumption. The presumption of consideration is rebutted by the Plaintiff himself when he pleaded otherwise. The burden will thus be on the Plaintiff to establish the facts alleged in the plaint to justify that the promissory note was for valid consideration. 5. But though the court below took the view that the presumption was available to the Plaintiff u/s 118 of the Act, it has given a finding about existence of consideration as well on the basis of evidence. It has relied on the statements of the Defendants witness and on the admission made by the Defendant in the earlier suit for holding that money was due under the earlier promissory note on the date the promissory note in suit was exeouted. On the basis of the evidenoe in the case, the pleadings of the Defendant and the Defendant's admission in the earlier suit, the court below has recorded the following finding: The evidence on record and circumstances and probabilities of the case fully prove that the Defendant had borrowed Rs. 1000/- in cash and that the pronote was not executed for any other collateral purposes as alleged by the Defendant. After the parties have led evidence, the question of burden of proof disappears and a valid finding of fact can be recorded by the court in a consideration of the evidence as led by the parties. Hence, even though the burden of proof lay on the Plaintiff in this case to prove consideration for the promissory note, the finding of the court below concludes the matter. The decree, therefore, cannot be deemed to be contrary to law. 6. The appeal is accordingly dismissed, but in the circumstances of the case, parties will bear their own costs.