2019 (5) TMI 1923 - HC - Indian Laws

Dishonor of Cheque - contra evidence let in by the respondents/defendants to disprove the execution of the pronote or not - production of statement in support of their pleading set out in the written statement - burden to prove - HELD THAT - The burden is upon the defendants that the suit promissory note was given by the deceased G.Pandurangan only in the said Finance Firm, but the defendants did not adduce any evidence to substantiate the aforesaid plea. Further, if really the said G.Pandurangan had not executed the suit promissory note in favour of the plaintiff, the first defendant would have sent a reply to Ex.A2 notice. Further, she would have entered into the witness box and subjected herself for cross examination - Once it is proved that the suit promissory note has been executed by thedeceased G.Pandurangan, as per Section 118 of the Negotiable Instruments Act, it has to be presumed that the said promissory note is supported by consideration. It is to be pointed out that it is not the case of the defendants that the deceased G.Pandurangan had any bad habits and he would have used the said amount for any illegal purpose. Therefore, it has to be presumed that he borrowed the amount only for the benefit of the family. Therefore, the defendants are bound to discharge the said debt from and out of the estate left by the deceased G.Pandurangan which is in their hands - the trial Court had rightly decreed the suit. Further, though the plaintiff had claimed interest at the rate of 24% till the date of the suit, the trial Court taking into consideration the transaction is not a commercial transaction, it has reduced the interest and directed the defendants to pay the interest at the rate of 12% per annum for the principal and subsequent interest at the rate of 6% per annum. But the first Appellate Court without appreciating the evidence in a proper perspective had erroneously reversed the findings of the trial Court and therefore, the Second Appeal has to be allowed. The Second Appeal is allowed with costs.

Summary

Issues Involved:
1. Execution of the promissory note by the deceased.
2. Liability of the legal heirs to discharge the debt.
3. Bar of limitation.
4. Evidentiary burden and adverse inference.

Issue-wise Detailed Analysis:

1. Execution of the Promissory Note by the Deceased:
The plaintiff claimed that the deceased borrowed ?30,000 and executed a promissory note on 07.06.2007, agreeing to repay with 24% interest per annum. The defendants denied the execution and authenticity of the promissory note, asserting that the signatures were not those of the deceased and alleging fabrication by the plaintiff. The trial court found the promissory note genuine and supported by consideration, whereas the appellate court dismissed the suit, citing insufficient evidence from the plaintiff. The High Court noted that the plaintiff provided oral and documentary evidence, including a lawyer's notice received by the first defendant, who did not respond or provide rebuttal evidence, leading to an adverse inference against the defendants.

2. Liability of the Legal Heirs to Discharge the Debt:
The plaintiff argued that the legal heirs (defendants) were liable to discharge the debt from the estate of the deceased. The trial court agreed, directing the defendants to pay the principal amount with interest from the estate. The appellate court reversed this decision. The High Court, however, reinstated the trial court's judgment, emphasizing that the legal heirs are responsible for the deceased's debts from the estate in their possession.

3. Bar of Limitation:
Both the trial and appellate courts concurred that the suit was not barred by limitation. The promissory note dated 07.06.2007 and the suit filed on 07.06.2010 were within the permissible period. The High Court upheld this finding, confirming that the suit was timely.

4. Evidentiary Burden and Adverse Inference:
The plaintiff presented evidence (Exs.A1 to A4) and testified as PW1, establishing the execution of the promissory note. The defendants did not produce any evidence or witnesses to counter the plaintiff's claims. The appellate court's dismissal was based on the plaintiff's failure to produce handwriting expert evidence or witnesses to the promissory note. The High Court highlighted that the defendants' failure to enter the witness box or respond to the lawyer's notice warranted an adverse inference against them. The High Court concluded that the promissory note was executed by the deceased and was supported by consideration, thus reinstating the trial court's decree.

Conclusion:
The High Court allowed the Second Appeal, set aside the appellate court's judgment, and restored the trial court's decree, directing the defendants to pay the principal amount with interest from the estate of the deceased. The judgment emphasized the legal heirs' liability, the validity of the promissory note, and the evidentiary burden, ultimately ruling in favor of the plaintiff.