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2006 DIGILAW 738 (KAR)

SIDDANNA GOUDA v. YALLAPPAGOUDA

2006-09-11

K.L.MANJUNATH

body2006
ORDER The petitioner is the defendant in O.S. No. 24 of 1997 before the Civil Judge (Junior Division), Bagalkot. 2. The respondent instituted the suit for recovery of Rs. 44,250/- with future interest at the rate of ,24% per annum from the date of the suit till the date of realisation. According to the plaint averments, the defendant borrowed a sum of Rs. 35,000/- from the plaintiff as hand loan on 2-1-1996 by executing a deed and has failed to repay the amount as demanded. Therefore, he filed the suit for recovery of the money based on the document executed by the defendant. 3. The defendant contested the suit denying the execution of the document dated 2-1-1996. According to him, he has not borrowed any money from the plaintiff and the plaintiff by creating a document has filed a suit on false and frivolous grounds. According to him the document relied upon by the plaintiff is a bond and inadmissible in evidence unless the until the duty and penalty as per the provisions of Section 34 of the Karnataka Stamp Act, 1957 is paid. 4. The defendant-petitioner also filed an application as I.A. No. VI under Sections 33 and 34 of the Karnataka Stamp Act to direct the plaintiff to pay the duty and penalty treating the suit document as a bond. The request of the petitioner has been rejected by the Trial Court by holding that the suit document is not a bond and it is a promissory note. Being aggrieved by the said order, the present petition is filed by the defendant. Though the respondent is served, respondent is unrepresented. 5. I have heard Sri VR. Datar, on merits of the writ petition. 6. According to Mr. Datar, considering the pith and substance of the suit document, the suit document cannot be termed as a promissory note under Negotiable Instruments Act, 1881 and it has to be treated as a bond and defined under Section 2(1)(ab) of the Karnataka Stamp Act, 1957. Therefore, he contends that the order of the Trial Court has to be quashed. In this background, this Court has to examine whether the suit document can be termed as a promissory note as per the provisions of the Negotiable Instruments Act or as a bond as defined under Section 2(1)(ab). 7. Copy of the suit document is produced before me. In this background, this Court has to examine whether the suit document can be termed as a promissory note as per the provisions of the Negotiable Instruments Act or as a bond as defined under Section 2(1)(ab). 7. Copy of the suit document is produced before me. It is styled as a hand loan document, which reads as hereunder: 8. From the reading of the above document it is clear to the Court that the defendant is said to have executed the document in favour of the plaintiff having borrowed a sum of Rs. 35,000/- as hand loan agreeing to repay the same on demand by the plaintiff by obtaining an acknowledgement for having repaid the amount failing which he can proceed with the property and recover the same. It contained the signature of six witnesses. 9. The learned Counsel for the petitioner contending that it is not an unconditional document for repayment and since six persons have signed as witnesses to the document, it cannot be termed as a promissory document. According to him, it is on a stamp paper of Rs. 10.But on a perusal of this document it is clear to the Court that the document is written on a stamp paper of Rs. 10/- and the signature of the defendant is also on the revenue stamps. It is not the case of the learned Counsel for the petitioner that the Revenue stamps on which the petitioner's signature is found is insufficient. 10. It is also not in dispute that unconditionally the defendant has agreed to repay the amount of Rs. 35,000/- to the plaintiff on demand at any time and at any place, but the only condition incorporated in that if the amount is not paid on demand, the plaintiff can proceed to file a suit and recover the same from the property. 11. Now let me examine the definition of promissory note. The promissory note is defined under Section 4 of the Negotiable Instruments Act, 1881, which reads thus: "A promissory note is an instrument in writing (not being a Bank note or currency note) containing an unconditional undertaking signed by the maker to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument". 12. 12. The terms and conditions of the suit document are in terms of the definition of the promissory note because this document is in writing containing an unconditional undertaking signed by the defendant to pay a sum of Rs. 35,000/- to the plaintiff. Just because it contained the signature of six attestors and giving a liberty to the plaintiff to proceed against his property in the event he fails to pay the amount on demand cannot be considered as a promissory note. 13. The learned Counsel for the petitioner contends that the suit document is a bond relying upon Section 2(1)(ab)(ii), which reads as herein: "Any instrument attested by a witness and not payable to order or bearer, whereby a person obliges himself to pay money to another". 14. From a reading of this clause, it is clear to this Court that if an instrument is attested by a witness, not payable to order or bearer, and whereby he obliges himself to pay another, such document has to be considered as a bond. In the suit document it is clear that on demand the petitioner has to pay the money to the respondent and the suit document does not prevent the plaintiff to endorse the document to any other person. In other words, there is no prohibition for the plaintiff to transfer the same to any other person of his choice. Therefore, the suit document cannot be considered as a bond. 15. It is no doubt true that in the case of promissory note there is no necessity to get the document attested. Similarly, if the witnesses attest the document, it cannot be held that it is not a promissory note. In other words, there is no prohibition to get the document attested in terms of a promissory note. Therefore, this Court does not see any reason to interfere with the order. 16. At this stage, the learned Counsel for the petitioner apprehends that due to the observation's made by this Court, the Trial Court may presume as if the petitioner has executed then suit document. But it is made very clear that in the beginning of the order that the petitioner has denied the execution of the suit document. Therefore, burden is always on the respondent-plaintiff to prove the execution of the document. 17. Accordingly, the Writ petition is rejected. Rule is discharged.