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2014 DIGILAW 4306 (MAD)

Naleena v. Arumugha Padayachi

2014-11-18

R.MAHADEVAN

body2014
Judgment 1. Plaintiff, who succeeded before the Trial Court in getting decree for recovery of money but, failed in appeal, is the appellant in the second appeal. 2. The case of the plaintiff before the Trial Court was that on 07.04.1992, the defendant borrowed a sum of Rs.45,000/- from the plaintiff by executing a promissory note agreeing to repay the same with interest at the rate of 12% per annum, but, since the defendant has not cared for repayment of the amount, a notice was sent to him on 08.03.1995, which was served on 16.03.1995, but, the defendant has neither replied the notice nor repaid the loan amount and hence, the present suit had been filed. 3. The suit was resisted by the defendant contending that the defendant did not borrow a sum of Rs.45,000/- on 07.04.1992 or any other date and he did not execute any promissory note in favour of the plaintiff and the plaintiff had no capacity to advance such an amount. By way of clarification, it is contended by the defendant that he had approached the husband of the plaintiff seeking a loan of Rs.5000/- for which, he was asked to collect a sum of Rs.3,800/- from one Ponmudi, who owed such amount to the husband of the plaintiff, and his signature was obtained by the defendant on a stamped blank paper on 28.02.1991 and accordingly, the plaintiff had collected such amount from Ponmudi and thereafter, the husband of the plaintiff paid a sum of Rs.2,000/- on 06.12.1991 and another sum of Rs.1,000/-on 11.12.1991 and thereby the defendant had availed a loan of Rs.6,800/-only from the husband of the plaintiff and even towards such loan, 30 bags of paddy at Rs.300/-per bag was delivered to him on 10.02.1992 and hence, the said loan was fully discharged. It is further contended by the defendant that on a misunderstanding that arose in the partnership business run by the defendant and the husband of the plaintiff in taking cashew from Forest Department in auction, in the year 1993, the husband of the plaintiff had fabricated the suit promissory note and hence, prayed for dismissal of the suit. 4. The Trial Judge framed the following issues:- i) Whether the suit promissory note is true, genuine, and after due consideration? ii) Whether the plaintiff has got means to lend the suit amount? 4. The Trial Judge framed the following issues:- i) Whether the suit promissory note is true, genuine, and after due consideration? ii) Whether the plaintiff has got means to lend the suit amount? iii) Is the defendant not liable to pay any amount to the plaintiff? iv) Whether the plaintiff is entitled to the suit claim? v) To what relief, the plaintiff is entitled? 5. Before the Trial Court, the plaintiff examined herself as PW1 while examining three more witnesses as PW2 to PW4 and marked six documents. The defendant examined himself as DW1 and marked four documents on his side. The Trial Court, on analysis of the oral and documentary evidence, decreed the suit as prayed for. On appeal, the appellate court, reversed the finding of the Trial Court and dismissed the suit. Aggrieved against the judgment and decree of the first appellate court, the present second appeal has been filed. 6. The second appeal has been admitted identifying the following questions to be the substantial questions of law involved in the second appeal: i) Whether the finding of the lower appellate court that the plaintiff has no means to advance loan amount to the defendant, is erroneous in view of purchase of lands made by the plaintiff under Exs.A4 to A6? ii) Whether the finding of the lower appellate court that the suit promissory note is fabricated one, is unsustainable considering the material evidence available on record? 7. The arguments advanced by Mr. R. Muralidharan, learned counsel for the appellant and by Mrs. R. Meenal, learned counsel appearing on behalf of the respondent are heard in detail. The materials available on record are also perused. 8. The suit is one for the relief of recovery of money. The plaintiff/appellant herein bases her claim on the suit promissory note, Ex.A1. The signature of the defendant found in Ex.A1 is not denied by the defendant. R. Meenal, learned counsel appearing on behalf of the respondent are heard in detail. The materials available on record are also perused. 8. The suit is one for the relief of recovery of money. The plaintiff/appellant herein bases her claim on the suit promissory note, Ex.A1. The signature of the defendant found in Ex.A1 is not denied by the defendant. But, the case of the defendant is that he had approached the husband of the plaintiff for a loan and in lieu of that, he had obtained the signature of the defendant on a blank stamped paper, which was later fabricated as the suit pronote especially when he had discharged such loan also by supplying agricultural produce and only due to the dispute and misunderstanding that arose between himself and the husband of the plaintiff, the suit came to be filed at the instigation of the husband of the plaintiff and the plaintiff never had means to lend the money to the defendant. 9. Therefore, the issue that has to be resolved is whether the suit promissory note is a genuine one and the plaintiff had means to lend money to the defendant. To prove the genuineness of the suit promissory note, the plaintiff has examined the attestors to the suit promissory note and she had filed sale deeds, Exs.A4 and A5 standing in her name to prove that she had means to lend the money. Such being the case, the lower appellate court had unnecessarily harped on different angles the suit promissory note when the signature on the suit promissory note was not denied by the defendant. 10. In the case of M.SHANMUGHAM v. S.RANGASAMY GOUNDER (2002-1-LW 541), it has been held that once execution of promissory note is admitted, the rule of presumption in Section 118 of N.I. Act operates and the burden shifts from the plaintiff to the other side, that the weight to be attached to the recitals will vary according to circumstances and the plea of the defendant that the recitals as to consideration was not filled up, assuming that it is true, would only result in holding that the document as inchoate stamped instrument under Section 20 of the Act and the defendant has given prima facie authority to the holder of the promissory note to make or complete it. 11. 11. In the case of MALLAVARAPU KASIVISWESWARA RAO v. THADIOKONDA RAMULU FIRM ( AIR 2008 SC 2898 ), a Division Bench of the Honourable Supreme Court has held that in a suit for recovery on the basis of pronotes, when execution of pronotes is proved, the executant would be entitled to benefit of presumption under Section 118(a). The relevant portion is as under:- “Under Section 118(a) of the Negotiable Instruments Act, the Court is obliged to presume, until the contrary is proved, that the promissory notice was made for consideration. It is also settled position that the initial burden in this regard lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances which would lead the Court to believe the non-existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal. In this connection, reference may be made to a decision of this Court in the case of Bharat Barrel & Drum Manufacturing Company vs. Amin Chand Payrelal (supra). In paragraph 12 of the said decision, this Court observed as under:- “Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its nonexistence was so probable that a prudent man would under the circumstances of the case, shall act upon the plea that it did not exist.........” 12. From the above decision, it is pellucid that if the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who would be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. It is also discernible from the above decision that if the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. 13. In the instant case on hand, the defendant had not denied his signature in the promissory note and the execution of the same for consideration. 13. In the instant case on hand, the defendant had not denied his signature in the promissory note and the execution of the same for consideration. Though it is the specific case of the defendant that the amount borrowed from the husband of the plaintiff was repaid by way of giving 30 bags of paddy at Rs.300/- per bag, there is absolutely no acceptable evidence to show that the debt was repaid by way of giving 30 bags of paddy. 14. In these circumstances, this Court is of view that since the defendant fails to prove the nonexistence of consideration by bringing on record such facts and circumstances which would lead this Court to believe the non-existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal, the plaintiff is entitled to the benefit of presumption arising under Section 118(a) of the Negotiable Instruments Act. 15. Therefore, the case of the defendant that the suit promissory note is a fabricated one cannot be accepted. On the other hand, the plaintiff has proved her means by producing the sale deeds, Exs.A4 and A5 standing in her name, as rightly concluded by the trial Court. When the defendant fails to discharge the initial onus of proof that he did not execute the promissory note and receive any money from the plaintiff or the husband of the plaintiff, the question whether the plaintiff has any means to pay the said amount does not arise. 16. In view of the above discussion in the light of the decisions cited above, the substantial questions of law are answered in favour of the plaintiff/appellant herein. 17. In the result, the second appeal is allowed. The judgment and decree of the first appellate court is set aside and the judgment and decree of the Trial Court is restored. No order as to costs.