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1978 DIGILAW 3 (GAU)

Beni Madhab Nath and others v. Juyandra Nath Barman and another

1978-01-13

K.LAHIRI

body1978
Judgement JUDGEMENT :- Beni Madhab (since dead) brought an action on a handnote executed by the defendants for a sum of Rs. 1290/-, claiming recovery of the amount with interest. The handnote recited passing of cash consideration and the same was reiterated by the plaintiff in his pleading giving details as to how and why the money had to be borrowed by the defendants. According to the plaint, on 8-2-1967 the defendants were to purchase a parcel of land from Smt. Pranmohine Debi, wife of the present plaintiff (since substituted as appellant on the death of Beni Madhab). The defendants had not had enough money to cover the consideration payable to Pranmohini and hence they had to borrow the amount of Rs. 1290/- from Beni Madhab on executing the handnote and in turn they (the defendants) paid the same to the plaintiffs wife, Pranmohini. Total claim of the plaintiff stood at Rs. 1770/-, adding the interest on the amount. The case of the defendants was that no cash consideration had passed; the handnote was nothing but a security taken by the plaintiff for payment of the balance of the consideration amount that the defendants had agreed to pay to Smt. Pranmohini on due delivery of the demised land. According to the defendants a sale deed was executed in their favour by Pran-Mohini evidencing a sale of an area of land measuring 3 kethas and 15 lechas and payment of the entire consideration amount had been shown in the sale deed but, however, Pranmohini and Beni Madhab were not in a position to deliver possession of the entire land on the data of the execution of the sale deed and assured the defendants to deliver the entire land. As such, the defendants did not pay a part of the consideration amounting to Rs. 1290/-. The defendants assured payment of the amount on due delivery of the entire land. As a security for the payment of the part of the consideration of the sale amounting to Rs. 1290/-, the handnote was executed. As the vendor and/or Beni Madhab could only deliver 2 kathas 18 lechas of land out of 3 kathas and 15 lechas, the defendants claimed that they were not liable to pay the balance of consideration amount stipulated in the sale deed and as such, they were not liable to pay the amount of Rs. 1290/-, the handnote was executed. As the vendor and/or Beni Madhab could only deliver 2 kathas 18 lechas of land out of 3 kathas and 15 lechas, the defendants claimed that they were not liable to pay the balance of consideration amount stipulated in the sale deed and as such, they were not liable to pay the amount of Rs. 1290/- secured as payable under the handnote. In short, the plea of the defendants was that there was no passing of the cash consideration; the handnote was executed as security for the payment of the part of the consideration money of the land which remained unpaid and the liability of the payment of the amount being entirely dependent upon the question of delivery of possession of the entire land and the plaintiff having failed to fulfil the part of his contract viz., to deliver possession of the entire land, was not entitled to the amount secured by the handnote. 2. However, the consistent claim of the plaintiff was that he had paid the consideration in cash (vide paras 1 and 3 of the plaint), 3. At the trial the following issues were framed : "1. Whether the suit is maintainable ? 2. Whether the suit is bad for non-joinder of parties ? 3. Whether the consideration amount stated in the handnote passed in cash ? 4. Whether the defendants are entitled to a compensatory cost, and, if so, to what extent ? 5. What relief, if any, are the parties entitled to ?" 4. The Munsiff decided the issues in favour of the plaintiff and decreed the suit. On appeal, the judgement and decree of the trial court were set aside. The appellate court held that there was a clear admission of the plaintiff that the defendants having failed to pay the entire consideration of the sale amount had executed the handnote for the unpaid part of the consideration amount. It held that the case of the plaintiff as to the passing of cash consideration was unreliable and decided the issue No. 3 against the plaintiff holding that no cash consideration had actually passed in respect of the handnote and the same was executed only for payment of the unpaid portion of the consideration stipulated in the sale deed. It held that the case of the plaintiff as to the passing of cash consideration was unreliable and decided the issue No. 3 against the plaintiff holding that no cash consideration had actually passed in respect of the handnote and the same was executed only for payment of the unpaid portion of the consideration stipulated in the sale deed. The appellate Court on facts held that the defendants were liable to pay the amount stated in the handnote on obtaining possession of the entire area of the land purchased by them from the plaintiffs wife and as the plaintiff and/or his wife Pranmohini could only deliver possession of an area measuring 2 kathas and 18 lechas out of the total area of 3 kathas 15 lechas, the plaintiff was not entitled to recover the amount of Rs. 1290/-. The first appellate Court held on appreciation of facts that (1) no cash consideration passed between the parties as stated in the handnote; (2) the handnote was executed as a security for the payment of the consideration amount in lieu of the unpaid part of the consideration of the sale deed; and (3) as the vendor of the land had to deliver the entire land and could only deliver a part of it, the plaintiff was not entitled to recover the amount stipulated in the handnote. 5. Mr. B.K. Das, the learned counsel for the appellants has submitted before me that the first appellate court has misconceived the provisions of S.118(a) of the Negotiable Instruments Act, 1881. According to the learned counsel, the findings that no cash consideration had actually passed in respect of the handnote are questions of law and can be agitated before this Court in a second appeal. Secondly, the learned counsel submits that even if a particular consideration is mentioned in a negotiable instrument and that consideration is found to be false and some other consideration is set up, it is the duty of the court to take into consideration the other consideration in deciding whether the defendant has discharged the burden cast upon him by S.118 of the said Act. 6. In my opinion, the statutory presumption envisaged under S.118(a) of the Negotiable Instruments Act, 1881, is a rebuttable presumption. 6. In my opinion, the statutory presumption envisaged under S.118(a) of the Negotiable Instruments Act, 1881, is a rebuttable presumption. After the execution of the handnote is proved, the rule of presumption laid down in S.118 of the Act comes into play and shifts the burden on the defendants. Thereafter, under S.118 of the Negotiable Instruments Act the Court is to draw a presumption in favour of the plaintiff that the instrument was made for consideration. The defendant may adduce direct evidence to prove that the promissory note was not supported by consideration and if he adduces acceptable evidence the burden shifts back to the plaintiff. Besides direct evidence the defendant may rely on circumstantial evidence and may also rely upon presumption of fact, namely, those mentioned in S.114 of the Indian Evidence Act or other similar provisions of law raising presumption of fact in his favour. Therefore, on proof of the execution of the document, the presumption raised in favour of the plaintiff may be discharged by the defendant by adducing (1) direct evidence; (2) circumstantial evidence and (3) by relying upon the presumptions of fact. Therefore the presumption of law can be rebutted by the defendant in the manner set forth above and once the same is rebutted, the burden of proof shifts to the plaintiff. In the instant case, the appellate Court has considered the admission of the plaintiff that the stated consideration, namely, the cash consideration did not pass between the parties. The court also considered that the Title Suit No. 44 of 1969 had been instituted and withdrawn by Mst. Pranmohini and in the said suit the plaintiff had deposed that the defendants had failed to pay the entire consideration amount of the sale and they executed the present handnote for the unpaid part of the consideration. As such, on perusal of the evidence on record, both direct and circumstantial, the appellate Court concluded that no cash consideration had actually passed. As such, on perusal of the evidence on record, both direct and circumstantial, the appellate Court concluded that no cash consideration had actually passed. Further on appraisal of evidence, direct and circumstantial, the trial court held that the plaintiff was not entitled to get the consideration stated in the handnote as it was in lieu of unpaid part of the sale consideration and that there was an agreement that the defendants would pay the amount in question only on delivery of possession of the entire area of land sold by Pranmohini (wife of the plaintiff) and the plaintiff or Pranmohini had failed to deliver the entire area of the demised land and as the defendants could not obtain possession of the entire area they were not liable to pay the amount in question. The handnote was taken as a mere security for the payment of the consideration stated as "paid" in the sale deed. 7. Whether a statutory presumption is rebutted by the evidence adduced is a pure question of fact. Shah, J. as he then was, in Official Receiver v. Abdul Shakoor in AIR 1965 SC 920 , held as follows (at p. 923) : "The District Court inferred from the fact found that the statutory presumption under S.118 of the Negotiable Instruments Act had been weakened and the burden which lay upon the insolvent was discharged and it was not open to the High Court exercising jurisdiction under S.75(1) Proviso 1, nor even under Proviso 2, of the Provincial Insolvency Act to set aside the judgement of the District Court for it is well settled that the question whether a statutory presumption is rebutted by the rest of the evidence is a question of fact : Wali Mohammad v. Mohammad Baksh, 57 Ind App 86 at p. 92 : (AIR 1930 PC 91 at p. 93)". (Emphasis supplied). As such, the question whether statutory presumption is rebutted by the rest of the evidence, is a question of fact. I have no jurisdiction to reappraise or reappreciate the same. However, the counsel for the appellants has not questioned during the course of the argument that any of the findings of the appellate court was perverse or not based on evidence. In the result, I reject the first contention of the learned counsel for the appellants. 8. I have no jurisdiction to reappraise or reappreciate the same. However, the counsel for the appellants has not questioned during the course of the argument that any of the findings of the appellate court was perverse or not based on evidence. In the result, I reject the first contention of the learned counsel for the appellants. 8. Now let me deal with the last contention of the learned counsel for the appellants. The plaintiffs case is that the consideration mentioned in the negotiable Instrument, in fact, passed at the time of the making of the instrument. The plea of the passing of cash consideration has been pleaded by the plaintiff in his pleading and an issue was struck. The plaintiff having proved the execution of the instrument the burden shifted on the defendants to prove failure of consideration. The parties went to evidence as to the said consideration and the court disbelieved the plaintiffs case. In the present suit, the claim for recovery of the money on the handnote was that the amount was borrowed in cash and the plaintiff alleged the same in his plaint. The court found that the recital of the consideration in the handnote was admittedly false. The presumption as to the consideration shifted to the plaintiff. It has been held in Tarmahomed v. Tyeb Ebrahim, reported in AIR 1949 Bom 257 that if a particular consideration is mentioned in a negotiable instrument and that consideration is found to be false and some other consideration is set out, that is a factor which the court would take into consideration in deciding whether the defendant has discharged the burden cast upon him by Section 118. But, it has been held as well that it is a very different thing to say that merely because the consideration mentioned in the negotiable instrument turns out to be false, therefore; the statutory presumption is rebutted and the burden is drawn upon the plaintiff to prove the consideration. The language of Section 118(a) clearly shows that when a consideration is set up in the plaint being different from that set out in the document, is of no consequence. The language of Section 118(a) clearly shows that when a consideration is set up in the plaint being different from that set out in the document, is of no consequence. It has been held in Tarmahomed (supra) that the presumption that is raised under Section 118 is not in respect of the consideration mentioned in the negotiable instrument but the presumption is in favour of there being a consideration for the negotiable instrument, any consideration which is a valid consideration in law. I respectfully agree with the view expressed by Chagla C. J., as he then was, that merely because the consideration mentioned in the instrument turns out to be wrongly described, the presumption in favour of the plaintiff is not destroyed. The presumption that is raised under Section 118 is not in respect of the consideration mentioned in the negotiable instrument, but the presumption is in favour of their being a consideration for the negotiable instrument, any consideration which is a valid consideration in law. 9. In the instant case, the court has found the consideration set forth in the instrument to be false. In the pleading of the plaintiff as well, the plaintiff took up the plea of passing of cash consideration. Under these circumstances, a question arises as to whether the onus of proof of consideration other than that of original one pleaded would be on the plaintiff. In my opinion, in a case where the plaintiff asserts in the plaint a particular form of consideration and the same is found to be false, the party is forbidden to plead any other new consideration. It would amount to making out a new case which was never pleaded by the party. This view finds support in Siddik Mahomed Shah v. Mt. Saran (AIR 1930 PC 57(1)). Trojan and Co. v. Nagappa Chettiar ( AIR 1953 SC 235 ) and Sheodari Rai v. Suraj Prasad ( AIR 1954 SC 758 ). 10. Therefore, when the nature of the consideration appears to be the same as stated in the negotiable instrument and asserted by the plaintiff to be the same in his pleading, in my opinion, on the proof that the said consideration did not pass, the party is not entitled to nor the court can make out a new case for the party. As such, when the positive case of the appellant was passing of cash consideration and the same was found to be false, the question of consideration of some other nature or character cannot arise in the instant case. 11. Be that as it may, in the instant case we are not very much concerned with the aforesaid principles of law or difference of views expressed between the Bombay and Calcutta High Courts vide AIR 1949 Bom 257 and AIR 1943 Cal 22 on the one side and Lahore and Punjab High Courts in AIR 1927 Lah 864, AIR 1915 Lah 86 (2) and AIR 1960 Punj 500 on the other. In the instant case, the appellate court has considered that there was no passing of the consideration stated in the negotiable instrument and pleaded in the plaint and further held that the negotiable instrument had to be executed as a security for the unpaid part of the said consideration referred to above. The Court below has held that as the defendants did not get possession of the entire area purchased by them, the plaintiff was not entitled to get the money secured by the Negotiable Instrument. In the present case, the appellate court has found that the story of passing of cash consideration was false and that the defendants are not liable to pay the amount in view of the failure on the part of the plaintiff to perform their part of the agreement, which the plaintiff was bound to do before getting the amount in question. 12. In the result, I hold that the findings of the court below are correct and justified and do not require any interference at this end. 13. The appeal is dismissed with costs. Appeal dismissed.