Research › Search › Judgment

Madras High Court · body

2000 DIGILAW 440 (MAD)

A. Palanisamy v. M. Kuppusamy

2000-04-17

A.SUBBULAKSHMY

body2000
Judgment : The unsuccessful plaintiff in the trial court is the appellant herein. 2. The case of the plaintiff is as follows: On 29. 1979 at Erode town the defendant borrowed Rs.40,000 from the plaintiff for the development of his business as hand loan and promised to repay the sum within short time. The defendant in lieu of the discharge of the said loan, issued 2 account payee cheques for Rs.25,000, dated 30.4.1982 drawn on Canara Bank, New Delhi and for Rs.15,000, dated 37. 1982 on the same Bank respectively to the plaintiff. 3. The first cheque was presented for encashment through Canara Bank, Erode, for collection and it was dishonoured. After the issue of the second cheque the defendant informed the plaintiff not to present the second cheque to the bank for collection as he intended to settle the amount due, under the hand loan, in person. As promised the defendant did not settle the account on the hand loan. By issue of two cheques the defendant has acknowledged his liability under the hand loan. In spite of several demands the defendant did not pay the amount and hence the plaintiff filed this suit for recovery of a sum of Rs.40,000 and interest thereon. .4. The defendant filed written statement, contending that he did not borrow Rs.40,000 from the plaintiff as hand loan and the defendant never issued two cheques as an acknowledgment of his liability even assuming that the hand loan issued is barred by limitation. The defendant has issued the two cheques to help the plaintiff at the relevant time as he represented that he needed those cheques to pacify the creditors and not intended for any encashment. .5. On the above pleadings the trial court framed five issues, tried the suit and dismissed the suit with costs. Aggrieved against the judgment and decree the plaintiff as come forward with this appeal. The point for consideration is: .Whether the plaintiff is entitled for the amount claimed. 6. .5. On the above pleadings the trial court framed five issues, tried the suit and dismissed the suit with costs. Aggrieved against the judgment and decree the plaintiff as come forward with this appeal. The point for consideration is: .Whether the plaintiff is entitled for the amount claimed. 6. The learned counsel for the plaintiff contended that the defendant received the hand loan of Rs.40,000 and only towards the receipt of the hand loan he gave two cheques and the first cheque was dishonoured and before the issue of the second cheque the defendant asked the plaintiff not to present it to the bank because he would settle it and the defendant did not settle that amount and so the plaintiff is entitled for the amount claimed. 7. The learned counsel for the defendant submits that the defendant never received Rs.40,000 as hand loan and the cheques were issued by the defendant only to pacify the creditors and it was not intended to be encashed and so the plaintiff is not entitled for the amount claimed. 8. The plaintiff as P.W.1 speaks in evidence that the defendant received a cash of Rs.40,000 for the business purpose. The loan is only a hand loan. P.W.1 says that the defendant promised to repay the amount within three or four months but he did not pay that amount and he gave two cheques towards the discharge of that amount for Rs.25,000 and Rs.15,000, Ex.A-1 and Ex.A-2. Ex.A-1 was presented and it was dishonoured as per Ex.A-3. P.W.1 says that at the request of the defendant he did not pay that amount. The defendant disputes with regard to the receipt of this hand loan. P.W.1 states that he paid that amount from his agricultural income and for giving this loan of Rs.40,000 there are no documents and he states that as the defendant promised to return that amount within four months he gave it as a hand loan and he also did not demand any interest. Even though there are no documents to evidence the payment of Rs.40,000 by the plaintiff to the defendant the letter correspondence between the plaintiff and the defendant prove that there is some liability on the part of the defendant. .9. Ex.A-9 is the letter written by the defendant to the plaintiff. Even though there are no documents to evidence the payment of Rs.40,000 by the plaintiff to the defendant the letter correspondence between the plaintiff and the defendant prove that there is some liability on the part of the defendant. .9. Ex.A-9 is the letter written by the defendant to the plaintiff. In Ex.A-9 the defendant has stated that it is not his intention to dodge whatsoever and the only help he needs is some breathing help to come out of the present situation and if he is having any doubt with the defendant the plaintiff can check all the records of the hatchery. In Ex.A-10, letter written by the defendant to the plaintiff, the defendant has stated the he would solve the crisis amicably and he sincerely feels that he will be able to honour his commitment and asked him to bear with him and let him try his best. In Ex.A-11, letter the defendant has stated to the plaintiff that he is prepared to honour his commitment as discussed with him in person. Likewise, in Ex.A-12 letter addressed by the defendant to the plaintiff the defendant has stated that he is eager to pay all at the earliest, which will give enough room to work peacefully. It is further stated in Ex.A-12 that the defendant has no honoured the payment to Canara Bank but further he has written the letter, explaining the circumstances for the inability. In Ex.A-13, addressed by the defendant to the plaintiff the defendant has stated that he thought of coming to the plaintiff after getting confirmation with whatever amount he can afford to give the plaintiff and one Jayamangai Agencies also asked for interest and since the defendant was not having any money he gave them two cheques for two instalments with the hope that he can honour it since there is a gap of thirty days. Ex.A-13 shows that the defendant also used to give cheques for the amount due from him. In Ex.A-18, letter addressed by the defendant to the plaintiff the defendant has stated that the moment he gets any fund she will rush to Erode and he is quite positive that he will get it. Ex.A-13 shows that the defendant also used to give cheques for the amount due from him. In Ex.A-18, letter addressed by the defendant to the plaintiff the defendant has stated that the moment he gets any fund she will rush to Erode and he is quite positive that he will get it. In Ex.A-14, letter addressed by the defendant to the plaintiff the defendant has stated that he finds it very difficult and things are bad and he may receive an order and he will not delay even one day the moment even if there is development. In Ex.A-15, letter addressed by the defendant to the plaintiff the defendant has stated that his efforts are giving results, there is a silver lining but it may take few more days, the moment he gets the fund he would rush up to Erode and asked the plaintiff to bear with him till that time. In Ex.A-7, letter addressed by the defendant to the plaintiff the defendant, has stated that he has received the information from the bank that the sanction token would be sent from Bangalore shortly and as soon as he gets some positive response he would send the payment. He has further stated that T.O. form enclosed and he need not worry about the delay and the defendant would definitely come to plaintiffs rescue but to his bad luck he could not honour him immediately. In Ex.A-18, letter addressed by the defendant to the plaintiff the defendant has stated that he is positive and to honour the commitment at least by 15th January if things go well and therefore was proceeding to Coimbatore to meet a financier. In Ex.A-16 letter the defendant has written to the plaintiff that the money will be returned within a week and once again he feels sorry to give him the trouble. Ex.A-4 is the legal notice issued by the plaintiff to the defendant demanding his payment. 10. These letters of correspondence proves that the defendant owes some liability to the plaintiff and the defendant has also promised to discharge his liability soon. In those letters the defendant has expressed his liability and his sufferings he is undergoing and also expressed his inability to pay the amount in time. 10. These letters of correspondence proves that the defendant owes some liability to the plaintiff and the defendant has also promised to discharge his liability soon. In those letters the defendant has expressed his liability and his sufferings he is undergoing and also expressed his inability to pay the amount in time. Even though there is no specific mention in these correspondences with regard to these hand loan of Rs.40,000 the letter correspondences between the plaintiff and the defendant clearly reveals that the defendant owes some liability to the plaintiff and he was also interested to discharge his liability. The Ex.A-13 letter also proves that for the amount due from the defendant, the defendant also used to give cheques. P.W.1s evidence proves that the defendant received handloan of Rs.40,000 and only to discharge that loan of Rs.40,000 he gave Ex.A-1 and Ex.A-2 cheques to the plaintiff. The fact that the defendant gave Ex.A-1 and Ex.A-2 cheques to the plaintiff proves that the defendant borrowed hand loan of Rs.40,000 and only to discharge that Rs.40,000 the defendant gave two cheques Ex.A-1 for Rs.25,000 and Ex.A-2 for Rs.15,000. The issue of these two cheques Ex.A-1 and Ex.A-2 by the defendant to the plaintiff proves the receipt of hand loan of Rs.40,000 by defendant from the plaintiff and only because of that the defendant has given Ex.A-1 and Ex.A-2 cheques to the plaintiff. Otherwise, there was no necessity at all for the defendant to give those cheques to the plaintiff. .11. In the written statement the defendant has alleged that he gave those two cheques to pacify the plaintiffs creditors. So it is evident that the defendant has admitted with regard to the issue of these two cheques Ex.A-1 and Ex.A-2 to the plaintiff but the explanation given by the defendant for giving these two cheques Ex.A-1 and Ex.A-2 is not at all a convincing one. The defendant states that he gave those two cheques but they were not intended to be encashed and it is only to pacify the plaintiffs creditors. The reason given by the defendant for the issue of cheques is far fetched and it is not at all a convincing one. What the defendant means, for pacifying the plaintiffs creditors, he gave the cheques is not at all understandable and there is no proper explanation on the side of the defendant with regard to the issuing of the cheques. What the defendant means, for pacifying the plaintiffs creditors, he gave the cheques is not at all understandable and there is no proper explanation on the side of the defendant with regard to the issuing of the cheques. Ex.A-1 and Ex.A-2 cheques are for a huge amount of Rs.40,000. If really those cheques were not intended to be encashed it is not known, for what purpose those cheques were given. So the explanation offered by the defendant is suspected and is not an acceptable one. So the issue of cheques under Ex.A-1 and Ex.A-2 clearly proves the borrowing of the amount of Rs.40,000 by the defendant from the plaintiff as hand loan. The trial court has come to the conclusion that the plaintiff has not stated in the plaint with regard to those letter correspondences between the parties and so it can be concluded that the defendant did not borrow any amount and Ex.A-1 and Ex.A-2 cheques were also not true. 12. The learned counsel for the defendant submitted that there is no pleading at all in the plaint with regard to those letter correspondences and without such pleadings the filing of those letter correspondences by the defendant is of no avail and no weight it can be attached to the contents of those letters filed in this case. He relies upon the decision of this Court in Nalluswamy Reddiar v. Marammal , (2000)1 MLJ. 621 : (2000)1 C.T.C. 484 wherein this Court has held that: “the evidence cannot be let in, to prove knowledge on earlier agreement to transferee in the absence of plea regarding notice.” In the decision cited supra this Court has observed that the second defendant therein had stated that he is bona fide purchaser for valuable consideration without notice and that the first plaintiff had not only to plead but also to prove that the second defendant had knowledge of the alleged agreement to sell in his favour. In any event, the plaintiff had to plead to prove that the second defendant, subsequent purchaser had notice of the agreement in favour of the first plaintiff and as already pointed out that there is no such plea and consequently no amount of evidence could be looked into. 13. In any event, the plaintiff had to plead to prove that the second defendant, subsequent purchaser had notice of the agreement in favour of the first plaintiff and as already pointed out that there is no such plea and consequently no amount of evidence could be looked into. 13. In the instant case the plaintiff has stated that he made several attempts to repay the hand loan and ultimately issued a registered notice and at the time of trial the plaintiff has filed this letter correspondence. The letter correspondence are inter parties. Only the letters written by the defendant to the plaintiff were marked at the time of trial. There is specific averment in the plaint that there were several demands made by the plaintiff on the defendant and the defendant did not pay that amount. Those letters were filed at the time of trial by the plaintiff and all those letters were written by the defendant to the plaintiff so it cannot stated that there was no knowledge on the part of the defendant with regard to the letters. At the time of taking the evidence of D.W.1, D.W.1 himself has admitted in his evidence about the letters Ex.A-7, Ex.A-8, Ex.A-9 and Ex.A-10 to Ex.A-17 and all those letters were written by him. So the oral evidence of the defendant proves that these letters were written by him only. The clear admission on the part of the defendant with regard to those letters Ex.A-7 to Ex.A-17 establishes that the defendants are the authors of those letter and its contents are within his knowledge. So the defendant is well aware of these document as I have already indicated. These letter correspondences are inter-parties and the defendant has also admitted in his evidence with regard to the letter correspondents and the clear admission of the defendant that he only wrote those letters proves that he is the author of those letters. So by no stretch of imagination it can be stated that no weight can be attached to those letters, since there is no pleading in the plaint with regard to those letters. Nothing out of the knowledge of the defendant was filed at the time of trial. The documents are within the knowledge of the defendant. So by no stretch of imagination it can be stated that no weight can be attached to those letters, since there is no pleading in the plaint with regard to those letters. Nothing out of the knowledge of the defendant was filed at the time of trial. The documents are within the knowledge of the defendant. If the plaintiff wants to act upon and plead, which is strange and not within the purview of the case then of course it can be contended that without such plea the plaintiff cannot raise at the time of trial. Only the letters written by the defendant were sought to be filed and marked at the time of trial. For marking documents inter-parties it is not necessary and that there must be pleadings in the plaint with regard to these letter correspondences. So the argument of the learned counsel for the defendant that the evidence cannot be let in the absence of plea does not hold good. 14. Apart from the fact that the defendant borrowed hand loan of Rs.40,000 from the plaintiff, the defendant has given Ex.A-1 and Ex.A-2 cheques towards the discharge of that loan for the specific amount of Rs.40,000. The defendant has given those cheques under instrument which is an instrument under the Negotiable Instruments Act. Until the contrary is proved, every negotiable instrument which is duly made or deemed to have been made should prima facie be held to be one supported by consideration. The Ex.A-1 and Ex.A-2 cheques are instruments under the Negotiable Instruments Act and the presumption under Sec.118 of the Negotiable Instrument Act squarely applies for this case the Division Bench of this Court in T.Ramaprasada Rao and S.Ratnavel Pandian, JJ. V.R.S.R.M.Ramaswami Chettiar v. Sridevi Talkies V.R.S.R.M.Ramaswami Chettiar v. Sridevi Talkies V.R.S.R.M.Ramaswami Chettiar v. Sridevi Talkies , (1976)1 MLJ. 22 has held that “Until the contrary is proved, every negotiable instrument which is duly made or deemed to have been made should prima facie be held to be one supported by consideration. Presumption under Sec.118 of the Negotiable Instrument Act, shifts the burden of proof in the second sense, that is, the burden of establishing a case shifts to the defendant, the defendant may adduce direct evidence to prove that the promissory note was not supported by consideration and if he adduced acceptable evidence, the burden again shifts to the plaintiff, and so on. It is therefore clear that the burden is ambulatory at one time it is on the plaintiff, and according to the proof and circumstances, it shifts on to the shoulders of the defendant.” The Privy Council in R.Shanmuga Rajeswara Sethupathi v. Chidambaram Chettiar and others R.Shanmuga Rajeswara Sethupathi v. Chidambaram Chettiar and others R.Shanmuga Rajeswara Sethupathi v. Chidambaram Chettiar and others , A.I.R. 1938 P.C. 123 has held that: “Where a promissory note has been given, consideration is to be presumed and the burden to prove that there was no consideration for the promissory note in upon the executant.” In Mani Charan Panigrahi and others v. Radhamadhab Pande and others Mani Charan Panigrahi and others v. Radhamadhab Pande and others Mani Charan Panigrahi and others v. Radhamadhab Pande and others , A.I.R. 1991 Ori. 248 it has been held that: “Under Sec.118(a) of the Negotiable Instruments Act, the presumption that every negotiable instrument was made or drawn for consideration and execution of promissory note admitted or duly proved and hand note can be presumed to be fully supported by consideration mentioned therein. In Thirumalai Iyengar v. Subha Raja , (1962)1 MLJ. 193 this Court has held that: “the statutory presumption under Sec.118 of the Negotiable Instruments Act is mandatory and the recital in a negotiable instrument as to the passing of consideration is no doubt prima facie evidence of such consideration having passed and the parties to the instrument are bound by the recital till the contrary is proved. 15. As indicated earlier, the defendant has admitted with regard to the issue of two cheques Ex.A-1 and Ex.A-2 to the plaintiff. But the defendant contends that those cheques were given only to pacify the creditors of the plaintiff. The defendant has not let in any evidence that the issue of those two cheques were not in connection with the hand loan and it was for pacifying the creditors of the plaintiff as contended by him in the written statement. So, the reason given by the defendant being not acceptable and the giving of those cheques which is an instrument under the Negotiable Instruments Act being admitted, the plaintiffs claim has to be decreed. The presumption under Sec.118 of the Negotiable Instrument Act continues in all its rigour until the contrary is proved. So, the reason given by the defendant being not acceptable and the giving of those cheques which is an instrument under the Negotiable Instruments Act being admitted, the plaintiffs claim has to be decreed. The presumption under Sec.118 of the Negotiable Instrument Act continues in all its rigour until the contrary is proved. The plaintiff has let in evidence that the defendant received hand loan of Rs.40,000 and the defendant has issued Ex.A-1 and Ex.A-2 cheques only for discharging that hand loan and when Ex.A-1 cheque was presented to the Bank, it was dishonoured by the Bank. The presumption under Sec.118 of the Negotiable Instruments Act squarely applies and the plaintiffs case has been clearly proved in this case. Except the vague contention raised in the written statement and the evidence of D.W.1, absolutely there is no evidence, on the side of the defendant, to prove that he is not liable for the suit claim. A perusal of the oral and documentary evidence proves that the plaintiff is entitled for the suit claim. The dismissal of the suit by the trial court on the ground that there is no plea with regard to those letters and also the defendant did not obtain any written document for the hand loan is not sustainable, in as much as the defendant has issued the cheques under the Negotiable Instruments Act to the plaintiff towards the handloan of Rs.40,000. The claim of the plaintiff has been clearly proved in this case by oral as well as documentary evidence and hence I hold that the plaintiff is entitled for the decree. The reasons and the conclusion arrived at by the trial court are not sound and hence liable to be set aside. 16. In the result, the appeal is allowed and the judgment and decree passed by the trial court are set aside. The suit is decreed with costs as prayed for.