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2021 DIGILAW 1563 (MAD)

T. K. Kulandaivelu v. K. P. Nallusamy

2021-04-30

G.R.SWAMINATHAN

body2021
JUDGMENT : The plaintiff in O.S.No.278 of 2004 on the file of the Additional District Munsif Court, Karur is the appellant in this appeal. According to the plaintiff, the defendant borrowed a sum of Rs.50,000/- from him and for consideration so received, the defendant executed the suit promissory note- Ex.A1 on 20.07.1994. The defendant agreed to repay the same on demand with interest. However, the defendant did not pay any amount either towards principal or towards interest. Therefore, the plaintiff caused to issue Ex.A2-Notice dated 25.07.1996. It was received by the defendant. The defendant issued Ex.A4 reply on 26.08.1996 denying the averments set out in the suit notice. Since the demand set out in the suit notice was not complied with, the plaintiff filed the suit in question in July 1997. It was numbered as O.S.No.212 of 1997. It was later renumbered as O.S.No.284 of 2004. 2. The defendant filed his written statement denying the plaint allegations. According to the defendant, he never borrowed any amount from the plaintiff let alone on 20.07.1994. The stand of the defendant is that the plaintiff was originally conducting an unregistered chit business. When the defendant had bid for the prize money on one occasion, his signature was taken in a blank pro-note for security purpose and that the same had been misused. The defendant pleaded that the suit pro-note is a rank forgery. The learned trial Munsif framed the necessary issues. The plaintiff examined himself as P.W.1 and the scribe as P.W.2 and the attestor as P.W.3. Ex.A1 to Ex.A4 were marked. The defendant examined himself as D.W.1. No document was marked on the side of the defendant. After considering the evidence on record, the learned trial Munsif by Judgment and decree dated 20.07.2010 decreed the suit and directed the defendant to pay a sum of Rs.87,205/- together with interest at the rate of 6% on the principal sum of Rs.50,000 from the date of plaint till the date of realization. Aggrieved by the same, the defendant filed A.S.No.92 of 2012 before the Additional Sub Court, Karur. The Appellate Court, by Judgment and Decree dated 18.03.2012, set aside the Judgment and decree passed by the trial Court and allowed the first appeal. Challenging the same, this second appeal came to be filed. Aggrieved by the same, the defendant filed A.S.No.92 of 2012 before the Additional Sub Court, Karur. The Appellate Court, by Judgment and Decree dated 18.03.2012, set aside the Judgment and decree passed by the trial Court and allowed the first appeal. Challenging the same, this second appeal came to be filed. The second appeal was admitted on the following substantial questions of law:- (a) Whether the lower Appellate Court is justified in coming to the conclusion that the defendant rebutted the presumption regarding the execution of Exhibit A1 in terms of Section 118 of Negotiable Instruments Act? (b) Whether the lower Appellate Court committed an error in not considering the version of P.W.1 which categorically proves the case of the plaintiff and that the lower Appellate Court failed to consider that the plaintiff has proved his case without any iota of doubt and hence the burden of proof will shift to the defendant and the defendant has the onus to prove his case as per Sections 101 and 102 of the Indian Evidence Act? (c) Whether the lower Appellate Court is right in allowing the appeal when the defendant had categorically admitted his signature in Exhibit A1 Promissory Note, whether the lower Appellate Court is correct in shifting the burden of proving Exhibit A1 promissory note on to the appellant? (d) Whether the lower Appellate Court is justified in coming to the conclusion that when the burden cast upon the plaintiff has been shifted to the defendant by virtue of his admitting signature in Exhibit A1, whether the lower Appellate Court is correct in law in relying upon the nugatory contentions of the defendant and thereby deciding in his favour? 3. Heard the learned counsel on either side. 4. The learned counsel appearing for the appellant reiterated all the contentions set out in the memorandum of grounds and submitted that since the defendant had admitted the signature found in Ex.A1-pro-note, the trial Court rightly drew the presumption under Section 118 of the Negotiable Instruments Act. In as much as the said presumption was not rebutted, the trial Court rightly decreed the suit. He would point out that the first appellate Court without any basis reversed the well considered decision of the trial Court. In as much as the said presumption was not rebutted, the trial Court rightly decreed the suit. He would point out that the first appellate Court without any basis reversed the well considered decision of the trial Court. He called upon this Court to answer the substantial question of law in favour of the appellant and allow this appeal by restoring the Judgment and decree passed by the trial Court. 5. Per contra, the learned counsel appearing for the respondent submitted that the first Appellate Court was justified in reversing the Judgment and Decree passed by the trial Court. He would submit that the impugned Judgment passed by the first Appellate Court contains solid reasons for holding that the suit was liable to be dismissed. There were too many contradictions in the testimony recorded on the side of the plaintiff. In particular, there were glaring contradictions in the deposition of the plaintiff and the scribe and the attestor. 6. The learned counsel for the respondent in particular placed reliance on the following circumstances :- The plaintiff who examined himself as P.W.1 admitted that he borrowed money from one Dhanam Finance and lent the same to the defendant. He was unable to state on which date, or day, on which, the suit pro-note was executed. He was unable to say in which color-ink, the defendant had put his signature. The attesting witness P.W.3 Muthusamy is a close relative of P.W.1. Though the scribe Narayanasamy claims that he knew the plaintiff for more than 15 years, he does not know the residential address of the plaintiff or that of the attestor. The scribe also stated that the promissory note was brought only by the plaintiff. P.W.3 also did not know the date on which the loan was advanced. There is inconsistency between the witnesses as to who brought the pro-note and the revenue stamp. P.W.3 also stated that it was Nallusamy who signed first in the promissory note and thereafter, P.W.2 signed in the pro-note. P.W.3 also did not know the purpose for which the loan was taken. The first Appellate Court held that the evidence of P.W.1 to P.W.3 are contrary to each other and they do not inspire the confidence of the Court. The Appellate Court felt that there was considerable suspicion regarding execution and attestation and passing of consideration under Ex.A.1- pro-note. P.W.3 also did not know the purpose for which the loan was taken. The first Appellate Court held that the evidence of P.W.1 to P.W.3 are contrary to each other and they do not inspire the confidence of the Court. The Appellate Court felt that there was considerable suspicion regarding execution and attestation and passing of consideration under Ex.A.1- pro-note. The first Appellate Court came to the conclusion that presumption under Section 118 of the Negotiable Instruments Act could not have been drawn in the facts and circumstances of the case. The learned counsel for the respondent therefore pressed for dismissal of the second appeal and for sustaining the Judgment and decree passed by the First Appellate Court. 7. I carefully considered the rival contentions and went through the evidence on record. The suit in question has been laid on the strength of the promissory note. In the written statement itself, the defendant had admitted his signature in the promissory note. His only defence is that when the defendant handed over the promissory note, it was blank. In other words, in a blank promissory note, his signature was taken. The defendant would explain that the plaintiff was conducting an unregistered chit business and that at the time of disbursing the prize money, the plaintiff was the habit of taking signature in the blank pro-note from the subscribers of the chit group. The defendant had also handed over the suit pro-note only under such circumstances. Since the relationship between the parties came under strain, the plaintiff had chosen to misuse the suit promissory note and filed the suit on that basis. 8.The learned counsel appearing for the appellant drew my attention to the decision of the Madras High Court reported in (2006) 2 MLJ 42 (N.S.Arumugam Vs.Trishul Traders). The Division Bench in the said decision held as follows:- “12. We heard learned counsel for the appellant/plaintiff. The main thrust of the submission made by the learned counsel is that exhibit A1, being a negotiable instrument, the plaintiff is entitled to the benefit of the legal presumption available under Section 118 of the Negotiable Instruments Act. The Division Bench in the said decision held as follows:- “12. We heard learned counsel for the appellant/plaintiff. The main thrust of the submission made by the learned counsel is that exhibit A1, being a negotiable instrument, the plaintiff is entitled to the benefit of the legal presumption available under Section 118 of the Negotiable Instruments Act. Though the legal presumption is that exhibit A1 cheque is supported by consideration and the burden is on the defendants to prove that exhibit A1 cheque was not supported by consideration and the burden is on the defendants to prove that exhibit A1 cheque was not supported by consideration the trial Court had wrongly thrown the burden on the plaintiff and thereby has committed an error of law. Further, he submitted that the defendants have not discharged the burden of proof that exhibit A1 cheque is not supported by consideration. Learned counsel further submitted that the evidence adduced by the defendants is contrary to their pleadings in the written statement. Learned Counsel for the appellant by relying upon a Judgment reported in Kundal Lal Rallaram Vs. Custodian, Evacuee Property AIR 1961 SC 1316 , submits that Section 118 of the Negotiable Instruments Act laid down a special rule of evidence applicable to negotiable instruments and 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 and in effect it throws the burden of proof of failure of consideration on the makers of the note or the endorser, as the case may be.” 9. In the case on hand also, the signature in the suit pro-note has been admitted. Therefore, the approach laid down in the aforesaid decision will have to be adopted. The trial Court was justified in drawing presumption under Section 118 of the Negotiable Instruments Act in favour of the plaintiff/appellant herein. The question that next arises is whether the presumption had been successfully rebutted by the defendant. The first Appellate Court had referred to a host of discrepancies found in the testimony of the witnesses for the plaintiff to come to the conclusion that the presumption had been rebutted and Ex.A1-pro-note was not established. It is true that there are contradictions in the answers given by the witnesses. In my view, they do not really go to the root of the matter. It is true that there are contradictions in the answers given by the witnesses. In my view, they do not really go to the root of the matter. As rightly argued by the learned counsel for the appellant, the pro-note has been executed way back in the year 1994. Witnesses were examined only in March 2010. Thus, there has been a gap of almost 16 years between the date of execution of the suit pro-note and the examination of the witnesses in the Court. In view of the efflux of time, the memories are likely to fail. The contradictions noted in the deposition of the witnesses by the First Appellate Court are not really material. The only way the defendant could have rebutted the presumption is to show that the plaintiff was running the chit business and that, when he had bid for the prize money, the suit pronote was taken. 10.If such evidence had been successfully adduced by the defendant, then, presumption can be said to have been rebutted. In the case on hand, the defendant had only put formal questions during the cross examination of P.W.1. No witness was examined on the side of the defendant. No documentary evidence was adduced. If really, the plaintiff was running the chit business as alleged, there would definitely be some documentary evidence available. No such document was marked by the defendant. 11. The plaintiff had categorically stated that the defendant was none other than his nephew. The plaintiff had originally stated that the defendant was the son of his elder brother. Later, the plaintiff clarified that the defendant was his cousin's son. But the fact remains that the defendant and the plaintiff are close relatives. Hence, there is no merit in the contention that the witnesses examined on the side of the plaintiff are relatives. In view of the relationship between the parties namely the plaintiff and the defendant, the fact that the attestor is also a relative pales into insignificance. The first Appellate court has unnecessarily given importance to minor contradictions. I therefore answer the first substantial question of law in favour of the appellant. The first appellate Court went wrong in concluding that the defendant rebutted the presumption regarding execution of Ex.A1. Once the first substantial question of law is answered in favour of the appellant, it is not necessary to go into the other substantial questions of law. I therefore answer the first substantial question of law in favour of the appellant. The first appellate Court went wrong in concluding that the defendant rebutted the presumption regarding execution of Ex.A1. Once the first substantial question of law is answered in favour of the appellant, it is not necessary to go into the other substantial questions of law. 12. According to P.W.1, the pro-note was a typed one. But P.W.2 had deposed that the pro-note was written down by him. While cross-examining P.W.1, the defendant had suggested that the relationship between the plaintiff and the defendant was not cordial. The plaintiff on the other hand replied that after the said transaction, the relationship came under strain. The defendant had not sent any communication to the plaintiff calling upon the plaintiff to return the blank pro-note retained by him. If the defendant had sent such communication demanding return of the signed blank pro-note and such a document had been marked, that would have gone a long way in establishing the defence of the defendant. Of-course, the defendant had to rebut the presumption only on a balance of probabilities. In this case, except examining himself, no other evidence has been adduced by the defendant. It is for this reason I hold that the defendant had not rebutted the presumption drawn against him under Section 118 of the Negotiable Instruments Act. 13. In this view of the matter, the impugned Judgment and decree passed by the First Appellate Court is set aside. The Judgment and decree passed by the trial Court is restored. The second appeal is allowed. No costs. Consequently, connected miscellaneous petition is closed.