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2022 (1) TMI 1002 - HC - Indian LawsSuit for recovery of amount - suit promissory note supported by consideration or not - suit is bad for non-joinder of necessary parties and mis-joinder of the parties? - entitlement for suit amount or not - rebuttal of presumption or not - execution of the promissory note - HELD THAT - The nature of defence of the appellant and second respondent coupled with the evidence adduced on behalf of the first respondent established the execution of Ex.A1 suit promissory note on 01.02.2004 with such recitals therein. D.W. 1 and D.W. 3 gave out their version at the trialin consonance with the contents of Ex.A1. Further, the testimony of P.W. 1, P.W. 2 and intrinsic worth of Ex.A1 are that the appellant and second respondent had received ₹ 2.00 lakhs in cash from the first respondent on 01.02.2004 and executed the same. Admittedly, the wife of the appellant and the second respondent are partners in M/s. Uma Shankar Syndicate. This firm of which the second respondent is the managing partner and all the concerns, referred to above, which are either belonged to the first respondent or his family members and alleged associates are in the business purchasing cotton kappas from the farmers, ginning activity of the same, separating lint and seed and selling away the product to others - The material on record is also establishing that the appellant has been attending to all the trade transactions of his wife. It is also undisputed that there were several trade transactions between the appellant and the business concerns of the first respondent and that are associated with him. Exchange of money in such course of activities cannot be deemed unusual. The very defence of the appellant and the second respondent vouches this fact. Observations of both the Courts below are also to the effect that this alleged settlement is not evidenced by any document and that it was not reduced to writing. It is a right approach. If at all there were such transactions leading to the settlement, arriving at the liability of M/s. Uma Shankar Syndicate, it would have been reduced into writing, by all the parties concerned. Therefore, the question of securing different promissory notes either by P.W. 1 or in the name of others cannot arise in such circumstances - the effect of Section 118 of Negotiable Instruments Act that raises a presumption that a negotiable instrument is made or drawn for consideration is not diluted nor vanished. The transactions relied on by the appellant and the second respondent in this context are distinct and separate among the trading concerns of these parties. They do not in any manner indicate that Ex.A1 promissory note and the promissory notes concerned to other suits admittedly executed by the appellant and the second respondent had the genesis from such mediation on 01.02.2004. The identify of these transactions is distinct, different and quite discernable. The conclusion to draw is that the presumption under Section 118 of Negotiable Instruments Act is all pervasive in its effect, in this case. The testimony of P.W. 1 is thus supported by this presumption. Thus, sufficient proof is offered at the trial that under Ex.A1 the appellant and the second respondent have borrowed from the first respondent agreeing to such terms stated therein and made themselves liable - both the Courts below rightly rejected such defence and are justified in decreeing the suit. This Court is satisfied that this is not an instance where application of Section 100 CPC is invited. There are no such questions, much less substantial questions of law sought to be raised by the appellant in this second appeal to consider and determine - Appeal dismissed.
Issues Involved:
1. Whether the suit promissory note is supported by consideration. 2. Whether the suit is bad for non-joinder of necessary parties and mis-joinder of the parties. 3. Whether the plaintiff is entitled to the suit amount as prayed for. 4. To what relief is the plaintiff entitled. Issue-wise Detailed Analysis: 1. Whether the suit promissory note is supported by consideration: The appellant contended that the promissory note was executed as part of a mediation settlement and was not supported by consideration. However, the trial court, relying on Section 118 of the Negotiable Instruments Act, presumed the note was for consideration. The appellant and second respondent admitted execution of the note and its contents, which stated they borrowed ?2,00,000 in cash. The court found no credible evidence to rebut the presumption of consideration. The appellant's defense, including alleged mediation and partial payments, was unsupported by documentary evidence or credible testimony. The appellate court affirmed this finding, emphasizing the lack of documentation for the alleged mediation and the failure to produce key witnesses. 2. Whether the suit is bad for non-joinder of necessary parties and mis-joinder of the parties: The appellant argued that the suit was flawed due to non-joinder and mis-joinder of parties. However, the court found this contention unsubstantiated. The trial and appellate courts did not find any necessity to join additional parties or any mis-joinder that would affect the proceedings. The courts emphasized that the primary issue was the validity and consideration of the promissory note, which did not necessitate additional parties. 3. Whether the plaintiff is entitled to the suit amount as prayed for: The plaintiff, supported by the presumption under Section 118 of the Negotiable Instruments Act, established that the promissory note was for consideration. The appellant's claims of partial discharge through payments were found inconsistent and unsubstantiated by credible evidence. The courts noted that the alleged payments were not directly linked to the promissory note in question. The appellate court specifically addressed and dismissed the appellant's plea of partial discharge, confirming the trial court's decree in favor of the plaintiff. 4. To what relief is the plaintiff entitled: Both the trial and appellate courts concluded that the plaintiff was entitled to the suit amount. The courts decreed the suit as prayed, awarding the plaintiff the principal amount along with interest at 18% per annum. The appellate court meticulously reviewed the evidence and upheld the trial court's judgment, finding no substantial questions of law to warrant interference under Section 100 CPC. Conclusion: The second appeal was dismissed with costs, confirming the decrees of the trial and appellate courts. The courts upheld the presumption of consideration under Section 118 of the Negotiable Instruments Act, found no merit in the appellant's defenses, and affirmed the plaintiff's entitlement to the suit amount.
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