2002 (2) TMI 1358 - HC - Indian Laws

Summary

Issues Involved:
1. Fabrication of the promissory note.
2. Admission of signature on the promissory note.
3. Burden of proof regarding the authenticity of the promissory note.
4. Applicability of Section 20 of the Negotiable Instruments Act.
5. Presumption under Section 118 of the Negotiable Instruments Act.

Detailed Analysis:

1. Fabrication of the Promissory Note:
The defendant denied borrowing any amount from the plaintiff and claimed that the promissory note was fabricated. The defendant stated that he had signed two blank stamped papers under pressure from a shop owner, which were later converted into a promissory note by the plaintiff. The trial court found the promissory note to be fabricated and dismissed the suit.

2. Admission of Signature on the Promissory Note:
The defendant admitted his signature on the promissory note but denied the rest of the writings. The appellate court acknowledged the plaintiff had the means to pay the amount but dismissed the appeal due to inconsistencies in the plaintiff's evidence.

3. Burden of Proof Regarding the Authenticity of the Promissory Note:
The appellant argued that once the defendant admitted his signature, the burden shifted to the defendant to prove the promissory note was fabricated. The court discussed the legal implications of such an admission under Section 20 of the Negotiable Instruments Act, which allows the holder of an inchoate stamped instrument to fill in the blanks and negotiate the instrument.

4. Applicability of Section 20 of the Negotiable Instruments Act:
Section 20 of the Negotiable Instruments Act was central to the appellant's argument. This section allows the holder of an incomplete but signed instrument to complete it and claim the amount specified. The court noted that the plaintiff, being a "holder in due course," had the authority to fill in the blanks and make the instrument negotiable.

5. Presumption under Section 118 of the Negotiable Instruments Act:
The court also considered Section 118, which presumes the existence of consideration, the date, and the proper stamping of the instrument unless proven otherwise. The court found that the defendant failed to disprove these presumptions.

Conclusion:
The court concluded that the lower courts erred by not considering Sections 20 and 118 of the Negotiable Instruments Act and Sections 101 and 102 of the Evidence Act. The judgment and decree of the lower courts were set aside, and the appeal was allowed, thereby ruling in favor of the plaintiff. The court emphasized that the plaintiff, as a holder in due course, was entitled to fill in the blanks on the promissory note and recover the specified amount.