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2009 DIGILAW 299 (PNJ)

Balbir Singh v. Harbans Singh

2009-02-10

MAHESH GROVER

body2009
Judgment Mahesh Grover, J. 1. This Regular Second Appeal is directed against the judgments and decrees dated 13.8.2004 and 11.1.2005 passed respectively by the additional Civiljudge (Senior Division), Patiala (hereinafter described as the trial Court)and the District Judge, Patiala (referred to hereinafter as the First Appellate Court)whereby the suit of the plaintiff-respondent was decreed and the appeal of the defendant-appellant was dismissed. 2. The respondent filed a suit for recovery of Rs.3,21,250/- against the appellant by alleging that the latter had borrowed an amount of Rs.2,50,000/- from the former which was agreed to be repaid along with interest at the rate of 2% per month. A pronote and receipt dated 16.5.1998 were alleged to have been executed by the appellant in favour of the respondent. Since the appellant failed to pay the principal amount along with interest calculated at the rate of 18% per annum with effect from 16.5.1998 to 15.12.1999, the respondent made the aforesaid prayer. 3. The appellant contested the suit and controverted the allegations against him. He denied the execution of the pronote and the receipt. It was pleaded that he was an agriculturist and was selling the produce at the shop of the respondent, who was a commission agent and since he stopped selling the produce, the case has been foisted upon him. It was further averred that during the course of business, the respondent had obtained company signatures of the appellant which have been abused. 4. Both the parties went to trial on the following issues: (1) Whether the plaintiff is entitled for decree of recovery of the suit amount with interest as prayed for?-OPP (2) Relief. After appraisal of the evidence brought before it, the trial Court upheld the pronote Exhibit PI and receipt Exhibit p2 and, therefore decreed the suit as prayed for by the respondent. In appeal, the First Appellate Court affirmed the findings recorded by the trial Court. Hence, this appeal. 5. Learned Counsel for the appellant, while assailing the findings recorded by the trial Court and the First Appellate Court, contended that the respondents case as set up by him, cannot be believed as correct because he was a commission agent and had admitted in his testimony as PW2 that he was maintaining Bahi entries and that in those entries for the relevant period when the pronote is alleges to have been executed, there is amount outstanding against the appellant. He further contended that this aspect of the matter has been totally ignored by the Courts below and therefore, the findings which have been recorded are perverse. It was also contended by the learned Counsel for the appellant that the presumption under Sec.118 of the Negotiable Instruments act, 1881 (for short, the Act), as applicable to the negotiable instruments, is a rebuttable presumption and that the courts below have not taken into consideration the cogent evidence which the appellant had led to rebut the presumption of law against him and have to the contrary, recorded a finding purely on the basis of this presumption which has further aggravated the perversity in the findings. To support his contentions, learned Counsel for the appellant placed reliance on Kundan Lal rallaram V/s. Custodian, Evacuee Property, bombay. 6. No one has put in appearance on behalf of the respondent despite the fact that the matter was shown in the list of regular cases and also reflected in the warning list. 7. I have thoughtfully considered the contentions of the learned Counsel for the appellant and have carefully gone through the record. The relevant part of Sec.118 of the Act reads as under: "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 such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated on transferred for consideration. " 8. A reading of the above extracted provision of law raises a clear presumption regarding the negotiable instruments, but is not ipso facto that from every presumption so raised, an inference has to be drawn against the person whose liability is reflected in the instrument. This presumption is rebuttable as held by the Supreme Court in Kundan Lal Rallaram V/s. Custodian, evacuee Property, Bombay (supra ). The relevant observations of Their Lordships are reproduced below: "section 118 lays down a special rule of evidence applicable to negotiable instrument. The presumption is one of law and thereunder a Court shall presume inter alia, that the negotiable instrument or the endorsement was made or endorsed for consideration. In effect, it throws the burden of proof of failure of consideration on the maker of the note or the endorser, as the case may be. The presumption is one of law and thereunder a Court shall presume inter alia, that the negotiable instrument or the endorsement was made or endorsed for consideration. In effect, it throws the burden of proof of failure of consideration on the maker of the note or the endorser, as the case may be. The phrase burden of proof has no meanings-one, the burden of proof as a matter of law and pleading and the other the burden of establishing a case, the former is fixed as a question of law on the basis of the pleadings and is unchanged during the entire trial, whereas the latter is not constant but shifts as soon as a party adduces sufficient evidence to raise a presumption in his favour. The evidence required to shift the burden need not necessarily be direct evidence, i. e. , oral or documentary evidence or admissions made by opposite party; it may comprise circumstantial evidence or presumptions of law or fact". 9. In the instant case, if one is to examine the evidence on record, it has been admitted by PW2-Harbans Singh that he is a commission agent and that the appellant was selling his crop at his shop and that he had also discontinued the same. A commission agent necessarily in the course of business maintains the Bahi entries and this fact has also been admitted by the respondent in his testimony. The Bahi entries for the relevant period were also produced by him before the Court and at the asking of the Court. It revealed two sets of accounts of one shop- (i) regarding the son of the appellant and the second regarding appellant himself. There were no signatures of the appellant and there was no amount due against him. The relevant extract of the statement of PW2-Harbans Singh is reproduced below. "i have brought the Bahi pertaining to the year 1998-99. It is correct that page nos.2, 3, 6, 7 are lying blank. The account of Balbir Singh defendant is mentioned on the next page of page 8. It is correct that on page 8 there is account of Gurmit Singh son of Balbir singh. It is correct that at page 9 there is account of Darshan Singh. My munim maintains the Bahi. There are account of one person on one page. The account of Balbir Singh defendant is mentioned on the next page of page 8. It is correct that on page 8 there is account of Gurmit Singh son of Balbir singh. It is correct that at page 9 there is account of Darshan Singh. My munim maintains the Bahi. There are account of one person on one page. It is correct that at page 8 there are two accounts, one Gurmit Singh son of balbir Singh and second of Balbir singh of Nanaksar. Parent name of balbir Singh of Nanaksar is not mentioned. It is correct that there is no signature of Balbir Singh. On one side the amount is credited and on the other side the amount is debited. It is correct that I have not brought the Bahi today in the morning, as I had no knowledge for bringing the Bahi and I was directed by the Court to bring the bahi afternoon and now I have brought the same after lunch. It is wrong to suggest that I was directed by the court to brought (sic bring) the Bahi on the Last date of hearing. In this bahi, which I have brought today, there is no other account of Balbir singh defendant. There is no other bahi except which I have brought today in the Court for the year 1998-99. It is correct that the entries in the Bahi are not in my hand. The Photostat copy of the same is marked X. As per this account, there is no balance against balbir Singh. It is correct that there is no page marking in the Bahi after page no.51. Other papers in the Bahi are lying blank. " 10. It has also come in evidence that hukam Chand was the person, who had scribed the pronote and receipt. However, he has not been examined. There is also contradictions in the statement of PW2 harbans Singh. In his cross examination, he, in one breath, stated that the amount of rs.2,50,000/- was withdrawn from the Bank and in the same breath, he stated that the amount was lying at his house as he had sold his land on 13.5.1998. There is no evidence by the respondent to show that such sale was effected by him. He has also admitted in his cross-examination that he had not shown his sale proceeds in the income tax return. There is no evidence by the respondent to show that such sale was effected by him. He has also admitted in his cross-examination that he had not shown his sale proceeds in the income tax return. All this tends to lend a shade of grey to the story put forward by the respondent. 11. The cumulative effect of the above discussion points out to the one fact that presumption under Sec.118 of the Act stands rebutted effectively and that the entire case set up by the respondent seems to be a concoction. 12. Therefore, the questions of law which arise for determination in this appeal are: (1) Whether the Courts below were justified to decree the suit of respondent only on the basis of presumption drawn under Section 118 (a) of the Negotiable instruments Act, 1881, when the same stood rebutted by way of cogent evidence? (2) Whether the findings of the Courts below are perverse and are based on mere conjectures and surmises? (3) Whether the findings of the Courts below are based on misreading and misconstruing the evidence on record. 13. In view of my detailed observations as mentioned above, the aforementioned questions of law stand answered and it is held that presumption under Sec.118 of the Act was rebutted and since the evidence led by the parties was not read in true perspective, the same has led to the perverse findings. 14. Resultantly, the appeal is accepted and the impugned judgments and decrees of the Courts below are set aside and the suit of the respondent is dismissed. Appeal allowed.