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Issues Involved:
1. Whether the trial court properly appreciated the scope of Sections 20 and 118 of the Negotiable Instruments Act and applied it in the factual circumstances of this case? 2. Whether the concept 'burden of proof' was properly applied in dismissing the suit? 3. Whether the finding of the trial court that the plaintiff did not prove that he had financial wherewithal to lend a sum of Rs.3 lakhs is based on sound reasons and whether the reliance placed by it on the judgment of the criminal court in the related cheque transaction was proper? 4. Whether there is any perversity or illegality in the judgment and decree of the trial court? Summary: Issue 1: Application of Sections 20 and 118 of the Negotiable Instruments Act The court emphasized that the initial burden of proof lies on the defendant to establish that there was no consideration for the promissory note. The defendant admitted to signing a printed promissory note format, which implied a prima facie authority to complete the negotiable instrument. The court held that the defendant failed to discharge this initial burden, thereby shifting the burden back to the plaintiff to prove the consideration. Issue 2: Burden of Proof The court observed that the trial court failed to properly apply the concept of 'burden of proof.' The plaintiff presented evidence, including his bank passbook and income tax returns, to demonstrate his financial capacity to lend Rs.3 lakhs. The trial court's reliance on the plaintiff's inability to prove agricultural income was misplaced, as the plaintiff's father owned agricultural land, and agricultural income is not taxable. Issue 3: Financial Wherewithal and Reliance on Criminal Court Judgment The trial court's finding that the plaintiff did not have the financial capacity to lend Rs.3 lakhs was not based on sound reasoning. The plaintiff's bank passbook showed substantial withdrawals shortly before the lending date, and his income as an LIC agent was also established. The trial court's reliance on the criminal court's judgment related to a bounced cheque was deemed inappropriate, as civil and criminal proceedings are based on different standards of proof. Issue 4: Perversity or Illegality in the Trial Court's Judgment The court found that the trial court's judgment was perverse and illegal. The trial court was overly influenced by the defendant's unsubstantiated claims and failed to appreciate the evidence presented by the plaintiff. The court also noted that the defendant's wife, who was central to the defense's case, was not examined as a witness, weakening the defendant's position. Conclusion: The appeal was allowed, and the trial court's judgment and decree were set aside. The court awarded the plaintiff Rs.3,00,000 with interest at 18% per annum from the date of the promissory note till the date of the suit, 12% per annum from the date of the suit till the date of decree, and 6% per annum from the date of decree till realization, along with proportionate costs throughout. However, there was no order as to costs for the appeal.
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