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2014 DIGILAW 4414 (MAD)

C. R. Shankar v. N. Alagappan

2014-11-25

R.MAHADEVAN

body2014
JUDGMENT Second Appeal has been filed against the judgment and decree dated 11.09.2006 made in A.S.No.97 of 2006 on the file of the learned VII Additional District Judge, City Civil Court, Chennai, reversing the judgment and decree passed by the learned XVII Assistant Judge, City Civil Court, Chennai, dated 11.01.2005 passed in O.S.No.5630 of 2000. 2. It is the case of the plaintiff before the trial court that the defendant borrowed a sum of Rs.45,000/- from the plaintiff by executing a promissory note dated 27.11.1997, at Chennai, in favour of the plaintiff promising to repay the amount with interest at 24% per annum on demand. Despite repeated demands and legal notice dated 23.03.2000 issued by the plaintiff, the defendant failed and neglected to repay the principal and interest amount. Hence, the suit for recovery of a sum of Rs.74,190/- with interest at 24% per annum on Rs.45,000/- from the date of the suit till realisation. 3. The defendant filed written statement denying the execution of promissory note by him and his liability to repay the amount, issuance of legal notice by the plaintiff etc. The defendant submitted that he is working as clerk in Indian Overseas Bank and earning nearly Rs.15,000/- per month. He further submitted that the construction business run by his wife was ruined long back and there is no such business and the defendant was in no way connected with the erstwhile construction business of his wife. He further denied that the suit is filed within the period of limitation and that the defendant is not entitled to any benefit under the Debt Relief Act. There is no cause of action for this suit. The suit is to be dismissed with costs. 4. Before the trial Court, the plaintiff was examined as P.W.1 and one Manonmani, the Handwriting Expert, was examined as P.W.2 and documents Exs.A1 to A7 were marked. On the side of defendant, the defendant himself was examined as D.W.1 and no document has been marked. On consideration of the materials available on record, the trial Court found that the suit promissory note was executed in two different inks and hence, the genuineness of the same could not be considered with and thus, dismissed the suit. On the side of defendant, the defendant himself was examined as D.W.1 and no document has been marked. On consideration of the materials available on record, the trial Court found that the suit promissory note was executed in two different inks and hence, the genuineness of the same could not be considered with and thus, dismissed the suit. Aggrieved over the same, the plaintiff filed an appeal before the first appellate Court in A.S.No.97 of 2006, wherein the first Appellate Court found that the signatures found in the promissory note as well as other documentary evidences are one and the same and thus, decided the case in favour of the plaintiff and accordingly, decreed the suit in favour of the plaintiff. Aggrieved defendant has filed the present Second Appeal. 5. The second appeal was admitted on the following substantial question of law:- "Whether Ex.A1 promissory note is invalid in law due to material alteration?". 6. Heard the learned counsel for the appellant and perused the materials available on record. There is no representation on behalf of the respondent for several hearings. Hence, this Court is constrained to dispose of the appeal, on the basis of the arguments advanced by the learned counsel for the appellant and the materials available on record. 7. The learned counsel for the appellant submitted that the execution of suit promissory note was specifically denied by the appellant in his written statement and evidence before the trial court, but the first appellate Court did not properly consider the factum of execution of the alleged promissory note, wherein two different inks were used. The learned counsel further submitted that in the absence of not producing any evidence to prove the passing of consideration, the first appellate Court ought to have drawn adverse inference that the promissory note was not executed in favour of the plaintiff. In support of his contention, the learned counsel has relied on the following judgments reported in (i) AIR 1961 SC 1316 (Kundan Lal Rallaram V. Custodian, Evacuee Property) (ii) AIR 1986 Andhrapradesh 120 (Janyantilal Goel V. Smt. Zubeda Khanum). 8. In support of his contention, the learned counsel has relied on the following judgments reported in (i) AIR 1961 SC 1316 (Kundan Lal Rallaram V. Custodian, Evacuee Property) (ii) AIR 1986 Andhrapradesh 120 (Janyantilal Goel V. Smt. Zubeda Khanum). 8. Perusal of the above judgments would clearly show that it is the duty of a party to a suit to produce the important documents, which are in possession of him and if the duty is not discharged, the Court may draw the presumption under Section 114 of the Evidence Act, to arrive at a conclusion against that party and the relevant portion in AIR 1961 SC 1316 (Kundan Lal Rallaram V. Custodian, Evacuee Property) is as follows:- "6. We shall now notice some relevant decisions. The Privy Council in Murugesan Pillai V. Gnana Sambandha Pandara Sannadhi observed: "A practice has grown up in Indian Procedure of those is possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof and failing, accordingly, to furnish to the courts the best materials for its decision. With regard to third parties that may be right enough they have no responsibility for the conduct of the suit; but with regard to the the parties to the suit it is in their Lordships' opinion, an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the court the written evidence in their possession which would throw light upon the proposition." 7. The same rule was reaffirmed in Rameshwar Singh V. Bajit Lal Pathak and was approved by this Court in Hiralal V. Badkulal. These three decisions lay down that it is the duty of a party to a suit in possession of important documents to produce them in court and if that duty is not discharged the court may as well draw the presumption which it is entitled to do under Section 114 of the evidence Act. A Division Bench of the Madras High Court in Narayana Rao V. Venkatappayya considered the interactioin of the provisions of Section 118 of the Negotiable Instruments Act and Section 114 of Evidence Act in the matter of rebuttal of the presumption under the former section. A Division Bench of the Madras High Court in Narayana Rao V. Venkatappayya considered the interactioin of the provisions of Section 118 of the Negotiable Instruments Act and Section 114 of Evidence Act in the matter of rebuttal of the presumption under the former section. After considering the earlier decisions, including those of the Privy Council, Varadachariar J.., summarised the law at P.311 thus:- "It has to be borne in mind that, when evidence has been adduced on both sides, the question of onus is a material or deciding factor only in exceptional circumstances, of Yellappa Ramappa Naik V. Tippanna and that even the onus discharged by direct evidence adduced by the defendat; Muhammed Sharif Khan Bishambar Das V. Ismail. Not merely can the court base its conclusiion on the effect of the evidence taken as a whole but it may also draw adverse inferences agaisnt a party who being a in a position to adduce better evidence deliberately abstains from do so; Murugasen Pillai V. Gnana Sambandha Pandara Sannadhi, Guruswami Nadar V. Gopalaswai Odayar and Raghavendra rao V. Venkataswai Nayakan." 8. Now let us apply this legal position to the facts of the case. In this case the appellant evidence before the Deputy Custodian. His evidence discloses the following facts: The appellant was doing business in radios and gramophones in Karachi in partnership with one Sarup Singh; he transferred his shop to his friend Iqubal Hussain with the consent of the landlord without consideration and the stock in trade for consideration to Abdul Satar Ahmed bhoy; he did not remember the name of the landlord whose permission he took before transferring the shop to Iqbal Hussain; he sold all his goods to Abdul Satar Ahmedbhoy who was a stranger to him and took form him a sum of Rs.96-1-0 in cash and took form him an endorsement in his favour of the promissory note for Rs.37,000/- executed by another who was also a stranger to him; he prepared a list of articles in the shop at the time of valuation, but the list was not produced; he admitted that he had accounts and that they might be in Delhi, but did not produced them; he stated that the whole business was managed by his partner, Sarup Singh and though the partner is alive and in India, he did not examine him as a witness. The aforesaid evidence discloses the circumstances under which the stock in trade of the appellate was transferred to Abdul Satar Ahmedbhoy and the promissory note was endorsed in his favour. It also establishes that the appellant had documentary evidence as well as oral evidence to prove that consideration passed, but he willfully withheld them. The said circumstantial evidence and the willfully withholding of the material evidence in the case would be legal evidence on the basis of which the Custodian -- General held that the presumption raised under Section 118 of the Negotiable Instruments Act was rebutted. The Custodian -- General stated in his order as follows:- "It cannot be denied that prima facie a negotiable instrument which had been endorsed shall be taken to have been drawn for consideration. But if there is evidence to prove that there was no consideration for the endorsement then there can be no presumption to that effect. As I have set out above the evidence and the circumstances of the case negative the fact that the promissory note was endorsed for consideration." In AIR 1986 Andhrapradesh 120 (Janyantilal Goel V. Smt. Zubeda Khanum), the Hon'ble Apex Court has held as under:- " 6. Now, a look at Ex.A1 pro note itself makes it apparent that the date, which is a different ink, that is, other than the ink that has been used for body of the pro-note, is a subsequent introduction into the document. This insertion also amounts to ' material alteration', as it takes in not only a case where certain thing which is already written has been altered or erased, but also a new insertion, (See A. Subba Reddy V. Neelapa Reddi, AIR 1966, Andh Pra. 267) 7. The second aspect, which is more crucial, is -- who should discharge the burden of proving that the document is materially altered. This too is well settled that the person, who is in the custody of the document subsequent to its execution, should there by any alteration, has to discharge the burden of establishing that it is not altered. 10. On the above conspectus and on the scrutiny of Ex.A1, I have no manner of doubt whatsoever to hold that the date 23.04.1974' has been inserted later and this has not been explained by the plaintiff. If that be so, the instrument must be held to be void." 9. 10. On the above conspectus and on the scrutiny of Ex.A1, I have no manner of doubt whatsoever to hold that the date 23.04.1974' has been inserted later and this has not been explained by the plaintiff. If that be so, the instrument must be held to be void." 9. In the case on hand, the respondent had not produced any proper evidence to prove that he parted with the amount. Moreover, the respondent, being an auditor, who admitted in his cross-examination of maintaining accounts and filing Income Tax returns, which would reflect the alleged loan amount to the appellant on 27.11.1997, failed to produced the same before the court to prove the passing of consideration. When passing of the consideration was not properly proved, there is no point in relying upon the disputed promissory note, so as to arrive at a conclusion. Further, the execution of promissory note was also not supported by any attesting witness and there is no reason for filling the promissory note with two different inks and different handwriting. Therefore, Ex.A1 is an invalid one due to such material alteration. Accordingly, the substantial question of law is answered in favour of the appellant and against the respondent. 10. In the result, this second appeal is allowed and the judgment and decree of the First Appellate Court in A.S.No.97 of 2006 dated 11.09.2006 are set aside, thereby, the judgment and decree passed by the Trial Court in O.S.No.5630 of 2000 dated 11.01.2005 are confirmed. Connected Miscellaneous Petition is closed. No costs.