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2018 DIGILAW 1814 (MAD)

K. Sundararaj v. K. Periyasamy

2018-06-08

R.SUBRAMANIAN

body2018
JUDGMENT : 1. The defendant in OS. No.117 of 2002 is the appellant. The said suit was filed seeking recovery of a sum of Rs.2,13,799/-, being the principal of Rs.2,00,000/- due under a promissory note dated 02.10.2001 along with interest at 12% there on, for the period from 02.10.2001 to 29.04.2002, i.e. the date of filing of the suit and subsequent interest. According to the plaintiff, the defendant had borrowed a sum of Rs.2,00,000/- on 02.10.2001 and executed the suit promissory note agreeing to repay the amount at 12% interest. 2. The suit was resisted by the defendant contending that there is no borrowing and the plaintiff had no wherewithal to advance a sum of Rs.2,00,000/- on 02.10.2001. It is also claimed that the plaintiff was indebted to various banks and financial institutions on the said date. The defendant has also pleaded that the suit promissory note has been created, by one Muthusamy in collusion with the plaintiff and the suit filed by the said Muthusamy, on the basis of an alleged agreement of sale, said to have been executed by the defendant in OS No.137 of 1998 came to be dismissed. 3. The defendant would also contend that he has referred to handing over of five signed blank promissory notes to the said Muthusamy. The defendant had also pleaded that the said Muthusamy and the present plaintiff being neighbors, the said Muthusamy chosen to file the suit through the plaintiff. 4. At trial the plaintiff examined himself as P.W.1 and the Attestor and the scribe of the promissory notes as P.W.2 and P.W.3. The defendant examined himself as D.W.1 and filed Exhibits B1 to B11. 5. The Trial Court had framed the following issues: Any Other Language 6. The Trial Court on consideration of the evidence disbelieved the case of the defendant and concluded that the defendant had not discharged the burden of proof and the evidence that has been let in by the defendant was insufficient to dislodge the presumption created under Section 118 of the Negotiable Instrument Act and decreed the suit. Aggrieved the defendant filed an appeal in AS No.31 of 2007, on the file of the Principal District Judge, Erode. The learned Principal District Judge, upon hearing the arguments of counsel had framed the following point for determination. “Whether the Judgment and Decree of the Trial Court is liable to be set aside?” 7. Aggrieved the defendant filed an appeal in AS No.31 of 2007, on the file of the Principal District Judge, Erode. The learned Principal District Judge, upon hearing the arguments of counsel had framed the following point for determination. “Whether the Judgment and Decree of the Trial Court is liable to be set aside?” 7. The learned Appellate Judge after framing the above point for determination had chosen to refer to the judgments in Ramasami Moopar v. Ramaswami Moopanar and another, reported in 2002 (3) MLJ 808 and N.Rangasamy v. S.Ganesan, reported in 2003 (3) MLJ 70, relating to the scope of the presumption under Section 118 of the Negotiable Instrument Act. 8. Unfortunately, the learned Appellate Judge had not framed proper points for determination in the appeal and I find that there is a noncompliance with the mandatory requirements of Order 41 Rule 31 of the Code of Civil Procedure. Even assuming such non framing of proper point for determination is condonable, if it is found that the learned Appellate Judge had adverted to the evidence on record, considered the evidence independently and come to his own conclusion on the basis of the evidence such an exercise is totally absent in the judgment of the learned Appellate Judge. 9. After framing the only irrelevant point for determination, the learned Appellate Judge had gone on to refer to the two decisions, cited supra, and in paragraph 12 of the judgment refers to the documents that are filed by the defendant, but however, concludes, at the end of the para that the defendant has not discharge the burden of proof. Again at paragraph 13, the learned Appellate Judge after extracting the arguments of the learned counsel for the defendant based on Ex.B8 viz. plaint in OS. No.137 of 2002 which was filed on 03.06.2002, for recovery of money by Canara Bank against the plaintiff and the plaint in OS No.110 of 2004 marked as Ex.B9, which was also shown to have been filed on 03.06.2002 for recovery of money by Canara Bank against the plaintiff. After referring to those two documents, which according to the appellant have very great bearing on the financial ability of the plaintiff to advance a sum of Rs.2,00,000/- on the date of the suit promissory note i.e. 02.10.2001, the learned Appellate Judge had just concluded as follows: “However the defendant have admitted the signature in Ex.A1. After referring to those two documents, which according to the appellant have very great bearing on the financial ability of the plaintiff to advance a sum of Rs.2,00,000/- on the date of the suit promissory note i.e. 02.10.2001, the learned Appellate Judge had just concluded as follows: “However the defendant have admitted the signature in Ex.A1. The defendant have not discharge his burden of proof.” 10. I find this is a wholly unsatisfactory way of disposing of the First Appeal by the First Appellate Court which is the final Court of fact. The First Appellate Court, as a final Court of fact, is obliged to consider the evidence independently and assign its own reasons for its conclusions. Such an exercise is totally absent in the judgment impugned in the Second Appeal. 11. Mr.N.Manoharan, learned counsel appearing for the appellant would however contend that the suit being one for recovery of money on a promissory note, the execution of which is admitted, the Court need not dwell into the entire evidence and it is enough, if the Court examines as to whether the defendant has discharged the burden of proof. He would also draw my attention to the judgment of the Hon’ble Supreme Court in B.M.Basavaraj v. Srinivas S.Datta, reported in CDJ 2016 SC 1007. The said case related to Criminal proceedings for dishonour of Cheque. While dealing with the presumption under Section 139 of the Negotiable Instruments Act, 1881, the Supreme Court had observed as follows: “10. Once the appellant files a complaint on the basis that he was holding the aforesaid cheques as holder in due course which were admittedly given by the respondent to the appellant and the said cheques were dishonoured when they were presented for encashment to the Bank and he, further, is able to establish that due notice of the dishonor of the said cheques was given to the respondent as provided in law, there was a clear presumption in favour of the appellant that the money was due under the said cheques. It may be noted that there is no defence to the effect that the cheques were not issued by the respondent or the cheques do not bear its signature or they were not presented properly for encashment. 11. It may be noted that there is no defence to the effect that the cheques were not issued by the respondent or the cheques do not bear its signature or they were not presented properly for encashment. 11. In the aforesaid circumstances, it was not even necessary for the appellant to produce any document to the effect that it had fulfilled the obligation under the agreement which was entered into between the parties....” 12. There can be no two opinions about the scope of presumption created under Section 118 of the Negotiable Instrument Act. There can also be no two opinions about the position of law that the statutory presumption created under Section 118 is a rebuttable presumption. Atleast some evidence have been placed by the defendant, in order to rebut the said presumption. If only the appellate Court had considered the said evidence and concluded that such evidence is insufficient to rebut the presumption raised under Section 118 of the Negotiable Instrument Act, this Court could not have interfered with the said finding of the Appellate Court. 13. Unfortunately, in the case on hand, the Lower Appellate Court had not chosen to do that exercise. It merely referred to the documents and even without discussing the effect of the documents had concluded that the burden has not been discharged. This, in my considered opinion, is wholly unsatisfactory way of disposing of first appeal by a final Court of fact. 14. In these circumstances, I am constrained to allow the Second Appeal and set aside the judgment of the lower Appellate Court on the sole ground that the said judgment is not inconsonance with the provisions of Order 41 Rule 31 of the Code of Civil Procedure. The Appeal in AS No.31 of 2007 will stand remitted to the Lower Appellate Court to be heard afresh and disposed of in accordance with law. In view of the above, I am not going to the questions of law that were framed at the time of admission of the Second Appeal. The parties are directed to appear before the Lower Appellate Court viz. District Judge, Erode on 1st August of 2018. Consequently, the connected miscellaneous petition is closed. 15. In view of the above, I am not going to the questions of law that were framed at the time of admission of the Second Appeal. The parties are directed to appear before the Lower Appellate Court viz. District Judge, Erode on 1st August of 2018. Consequently, the connected miscellaneous petition is closed. 15. In view of the remand of first appeal to the Lower appellate Court, the appellant is entitled to the entire Court fees paid by him in terms of under Section 69(2) of the Tamil Nadu Court Fees and Suit Valuation Act, 1955.