1978 (6) TMI 170 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the promissory notes are fully supported by consideration.
2. What amounts were actually advanced.
3. Whether the second defendant executed the promissory notes along with the first defendant.
4. Liability of the defendants to pay the suit claim.
5. Relief entitled to the plaintiff.
6. Validity of the execution of the suit promissory notes by the first defendant.

Issue-wise Detailed Analysis:

1. Whether the promissory notes are fully supported by consideration:
The court found that the promissory notes were fully supported by consideration. The first defendant admitted the execution of the promissory notes but contended that only Rs. 7000 was advanced in cash as against Rs. 11500. The court noted the absence of any reply to the suit notice (Ex. A. 4) by the defendants, which weakened their position. The presumption under Section 118 of the Negotiable Instruments Act that every negotiable instrument was made or drawn for consideration was upheld, and the defendants failed to prove the absence of consideration.

2. What amounts were actually advanced:
The trial court held that the amounts due under the promissory notes were supported by consideration, and the plaintiff was entitled to Rs. 11500 with interest at 12 percent per annum. The first defendant's admission of the execution of the promissory notes and the lack of substantial evidence from the defendants to refute the consideration led to this conclusion.

3. Whether the second defendant executed the promissory notes along with the first defendant:
The court found that the second defendant, represented by Moshin Bhai, executed the promissory notes along with the first defendant, represented by Mallick. The defendants' mere denial of Moshin Bhai's signature was insufficient without any substantial evidence to support their claim. The court inferred that the defendants had not produced the admitted signatures of Moshin Bhai, which would have been favorable if they existed.

4. Liability of the defendants to pay the suit claim:
The court held that the amounts due under the promissory notes had to be paid by defendants 1 to 4. The trial court rejected the plea of non-execution by defendants 2 to 4 and upheld the presumption of consideration under Section 118 of the Negotiable Instruments Act.

5. Relief entitled to the plaintiff:
The plaintiff was entitled to a decree for Rs. 11500 with interest at 12 percent per annum and proportionate costs. The trial court's judgment was upheld, and no fresh investigation of facts was necessary as the plea was based on the evidence already on record.

6. Validity of the execution of the suit promissory notes by the first defendant:
The court found that the promissory notes were validly executed by the first defendant. The validity of the execution was not contested in the written statement, and no evidence was provided to substantiate the absence of liability. The trial court's finding on this issue was upheld.

Additional Analysis on the Signature of Moshin Bhai:
The appellants contended that the signature of Moshin Bhai did not bind them, particularly regarding Ex. A. 3. The court examined whether the signature of Moshin Bhai indicated the responsibility of the firm. The general principle of law and the provisions under Section 27 of the Negotiable Instruments Act were considered, which state that partners are mutual agents and can bind the firm by their acts. However, in this case, the court found that Ex. A. 3 did not disclose the firm's liability as it was signed by Moshin Bhai merely as "partner of M. M. Abbas and Bros," which was a description and not an indication of the firm's liability. The appeal was partly allowed, and the plaintiff was entitled to costs as the appellants substantially failed.

Conclusion:
The appeal was partly allowed, with the court accepting the appellants' case regarding Ex. A. 3, which was not binding on defendants 2 to 4. The plaintiff was entitled to costs as the appellants substantially failed in their contention.