2022 (4) TMI 418 - HC - Indian Laws

Dishonor of Cheque - application of presumption, when execution of the so called pro-note is not admitted - defendant has the right to ask the Court to consider the non existence of the consideration so probable that a prudent man ought, under the facts and circumstances of the case, to act upon the supposition that consideration did not exist, or not - suit is barred by limitation or not, if no dates specified/pleaded for borrowing money in a money suit - suggestion put to a witness during cross-examination amount to an admission of the execution of the pronote, or not - shifting of burden of proof upon the appellant - application of statutory presumption under Section 118 2 of the Negotiable Instruments Act when execution is denied - burden of proving the passing of consideration is upon whom in a money suit or not - HELD THAT - The shifting the burden of proof depends upon the facts and circumstances of each case. In a case of pronote, there is an initial burden on the plaintiff which shifts on the defendant when the defendant admits execution of pronote. In the instant case, the defendant did not admit the execution of pronote. However, based on evidence, the Courts below have held that the execution of pronote is proved. As per the pronote, the amount was borrowed on the date of pronote. However, the pleading of the plaintiff is specific that the consideration for the pronote was the money borrowed by the defendant on various occasions. Therefore, the case of the plaintiff is that the suit pronote is supported by consideration. Merely because the plaintiff advanced loan to the defendant on various dates and the defendant executed the pronote subsequently in recognition of his liability, it cannot be said that the pronote is not supported by consideration. There is no difficulty in accepting the legal position that a statutory presumption is always rebuttable - However, in the present case, the plaintiff has taken meticulous efforts to prove the transaction. This Court justifies the findings of the Courts below that the pronote executed by the defendant is supported by consideration. In the instant case, no motive was specifically pleaded by the appellant against the plaintiff/respondent for filing the suit on the basis of pronote. In a suit based on pronote, the question regarding consideration cannot be decided merely on the basis of pleadings of parties. After considering the entire evidence on record, the Courts below have come to the conclusion that the suit pronote is supported by consideration. From the facts narrated, this Court is unable to agree with the appellant that the respondent/plaintiff has withheld any evidence to give room for drawing any adverse inference - this Court comes to the definite conclusion that the suit pronote was executed by the appellant/defendant in favour of the respondent/plaintiff and it was supported by consideration. In view of the concurrent findings of facts, this Court is unable to find a valid reason to interfere with the judgments and decrees of the Courts below. This Court is also unable to find substance in any of the substantial questions of law framed by the appellant, in view of the nature of the findings of the Courts below and the scope of Section 100 of CPC - the Second Appeal is liable to be dismissed for want of merits.

Issues Involved:

1. Application of presumption under Section 118 of the Negotiable Instruments Act.
2. Admissibility of the pronote as a negotiable instrument.
3. Suit being barred by limitation.
4. Reliance on suggestions during cross-examination as admissions.
5. Burden of proof regarding the execution and consideration of the pronote.

Issue-wise Detailed Analysis:

1. Application of presumption under Section 118 of the Negotiable Instruments Act:

The appellant contended that the courts below erred in applying the presumption under Section 118 of the Negotiable Instruments Act when the execution of the pronote was not admitted. The judgment clarified that the presumption under Section 118 applies once the execution of the pronote is proved. The courts found that the plaintiff had proved the execution of the pronote, and the appellant did not take steps to send the document for expert opinion. Thus, the presumption under Section 118 was correctly applied.

2. Admissibility of the pronote as a negotiable instrument:

The appellant argued that the pronote (Ex. A6) was not a negotiable instrument and thus, the presumptions under Section 118 of the N.I. Act should not apply. However, the court held that the pronote was supported by consideration, and the plaintiff had taken meticulous efforts to prove the transaction. The courts below justified that the pronote executed by the defendant was supported by consideration, making it admissible as a negotiable instrument.

3. Suit being barred by limitation:

The appellant contended that the suit was barred by limitation as the plaintiff did not specify the dates of borrowing. The court noted that the pronote contained a clause that the amount should be repaid on or before 01.02.2012, and the suit was filed within the limitation period. The courts below found that the suit was not barred by limitation.

4. Reliance on suggestions during cross-examination as admissions:

The appellant questioned whether the court could rely on suggestions put to a witness during cross-examination as admissions of the execution of the pronote. The court did not find this argument substantial enough to interfere with the findings of the lower courts, which were based on the overall evidence and not solely on cross-examination suggestions.

5. Burden of proof regarding the execution and consideration of the pronote:

The appellant argued that the burden of proving the passing of consideration was on the plaintiff. The court referenced the Supreme Court judgment in Kundan Lal Rallaram Vs. The Custodian Vs. Evacuee Property, which explained that the burden of proof shifts once the execution of the pronote is proved. The courts below found that the plaintiff had provided sufficient evidence to prove the execution and consideration of the pronote. The appellant's failure to provide contrary evidence meant the burden of proof remained unmet by the defendant.

Conclusion:

The court concluded that the plaintiff had proved the execution of the pronote and that it was supported by consideration. The appellant's arguments regarding the non-existence of consideration, the pronote not being a negotiable instrument, and the suit being barred by limitation were rejected. The court upheld the concurrent findings of the lower courts and dismissed the second appeal for lack of merit.

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