2022 (8) TMI 817 - HC - Indian Laws

Dishonor of Cheque - validity of suit pro-note dated 12.04.2012 - entitlement to suit amount - Admission of signature - preponderance of probabilities - rebuttal of presumption - HELD THAT - The case of the respondent is that the appellant had borrowed a sum of Rs.10,00,000/- from him on 12.04.2012 and executed a promissory note as well as the cheque. Since the appellant has not repaid the money, the respondent has sent legal notice and filed the suit. In order to substantiate his case, the respondent was examined as P.W.1 and also examined two other witnesses. Though the main defence taken by the appellant is that he has not borrowed any money from the respondent, he had borrowed a sum of Rs.7,00,000/- from one Sri Rajalakshmi Finance. The said Rajalakshmi Finance set up the respondent to file the suit as well as the criminal complaint under Section 138 of the Negotiable Instruments Act in C.C.No.324 of 2017, before the learned Fast Track Court at Magisterial Level, Karur and the same is pending. A careful perusal of the entire materials, pleadings, oral and documentary evidence, shows that the appellant has not denied the signature found in Ex.A1-Promissory note, but the denial is that the promissory note was not given to the respondent and it was given to Sri Rajalakshmi Finance while borrowing a sum of Rs. 7,00,000/- as loan. Once the signature is admitted and execution is proved by the appellant by examining the independent witnesses, there is a presumption that the appellant has executed a promissory note for the valuable consideration. Therefore, under Section 118 of the Negotiable Instruments Act, no doubt, the said presumption is rebuttable presumption. The appellant has not rebutted the said presumption in the manner known to law. No doubt, the appellant need not prove his defence by direct evidence, it can be substantiated through preponderance of probabilities. Once execution and signature found in Ex.A1 are proved, the onus will be shifted to the appellant. Therefore, in this case, a reading of the materials, oral and documentary evidence show that the appellant admitted the signature and he has not substantiated his defence as taken in the written statement and as already stated, the appellant has not examined any of the independent witnesses for proving that the suit promissory note was not given to the respondent and it was given to Rajalakshmi Finance. Onus of proof lies only on the appellant. It is the duty of the appellant to discharge his onus and therefore, under these circumstances, since, the first appellate Court is a fact finding Court it can re-appreciate the entire materials and give independent findings and this Court does not find any merit in the appeal and there is no perversity or any good reason for interfering with the judgment and decree passed by the trial Court and the appeal is liable to be dismissed - appeal dismissed.

Summary

Issues:
Challenge to judgment and decree of District Court, Karur in O.S.No.08 of 2014.

Analysis:
1. Issue 1 - Validity of Suit Pro-Note:
The respondent filed a suit against the appellant for recovery of money, alleging a loan of Rs.10,00,000/- borrowed on 12.04.2012 with a promissory note. The appellant denied borrowing any amount and claimed the promissory note was with Sri Rajalakshmi Finance. The trial judge decreed the suit based on evidence, including admission of signature on the promissory note by the appellant.

2. Issue 2 - Entitlement to Suit Amount:
The respondent sought recovery of Rs.12,56,533/- with interest. The appellant argued that the promissory note was not given to the respondent but to the finance company. The trial court found the appellant failed to prove this claim, shifting the onus to the appellant to rebut the presumption under Section 118 of the Negotiable Instruments Act.

3. Issue 3 - Relief for Plaintiff:
The trial court decreed in favor of the respondent, ordering the appellant to pay the claimed amount with interest. The appellant's defense of not borrowing from the respondent and the involvement of the finance company were not substantiated, leading to the dismissal of the appeal by the High Court.

The judgment emphasized the importance of proving claims and defenses in legal proceedings. The appellant's failure to provide substantial evidence to counter the presumption under the Negotiable Instruments Act resulted in the dismissal of the appeal. The court upheld the trial court's decision, confirming the judgment and decree in favor of the respondent, highlighting the need for clear and convincing evidence to support legal claims in cases of financial transactions and loan agreements.