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TMI Blog2018 (5) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... g evidence can be weighed to determine which way the issue can be decided, the abstract question of burden of proof becomes academic. Where, in a suit on a promissory note, the case of the defendant as to the circumstances under which the promissory note was executed is not accepted, it is open to the defendant to prove that the case set up by the plaintiff on the basis of the recitals in the promissory note, or the case set up in suit notice or in the plaint is not true and rebut the presumption under Section 118 by showing a preponderance of probabilities in his favour and against the plaintiff. He need not lead evidence on all conceivable modes of consideration for establishing that the promissory note is not supported by any consideration whatsoever. In view of admission of execution of the Ex.A1 promissory note, the burden is on the defendant to prove his case. Besides himself, the defendant examined DWs.2 to 4 to show that the said Mohana Rao was in the habit of lending money, but did not speak of non-passing of consideration - That borrowing of higher amount was also not proved by the defendant in the instant case by producing any documentary evidence. In view of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er price and in that transaction the defendant has to pay an amount of ₹ 33,900/- as on 01.09.1988 and interest accrued thereon up to 01.09.1989 came to ₹ 8,136/-. The defendant also borrowed an amount of ₹ 20,000/- on 29.05.1988 and the interest accrued thereon came to ₹ 10,500/- calculated up to 31.08.1989. The defendant further stated that he borrowed an amount of ₹ 10,000/- on 06.01.1989 and the interest came to ₹ 3,134/- calculated up to 31.08.1989. He also borrowed an amount of ₹ 5,000/- on 07.01.1989 and the interest came to ₹ 1,564/- as on 31.08.1989. The defendant and the said B.V.V.R. Mohana Rao did business in fire works during Diwali season of 1988. In that connection the defendant borrowed ₹ 8,600/- and the interest came to ₹ 3,612/- calculated up to 31.08.1989. When the said Mohana Rao gave pressure, threatened and coerced the defendant to execute fresh promissory notes on 01.09.1989, he executed the promissory notes in the name of his mother, Bolla Sathemma, W/o Subba Rao for ₹ 43,900/- by putting the excess amount of ₹ 10,000/- and the plaintiff made a material alteration in the said promissory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same, the oral evidence of DWs.2 to 4 to the effect that the said Mohana Rao was in the habit of getting promissory notes executed in favour of his family members for excess amount than lent was not taken into consideration. It was also observed that DWs.2 to 4 are well acquainted with the defendant and their oral evidence cannot be relied upon. Since the plaintiff proved the execution of Ex.A1 by examining one of the attestors, the trial Court came to the conclusion that the suit promissory note was proved, valid and supported by consideration. With regard to plea of small farmer and his entitlement to the benefit of Act 45 of 1987 and 1 of 1990, in view of the admission of the defendant that he is having one medical shop and two kirana shops at Gannavaram and in the absence of any evidence of ownership of agricultural lands by the defendant, the plea of small farmer was rejected. Accordingly, the suit was decreed, by judgment and decree dated 22.01.1999, for a sum of ₹ 88,400/- with future interest at 12% p.a. Challenging the said judgment and decree, the above appeal was filed. In the present appeal, the point that falls for consideration is whether, in the facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the said Rama Mohana Rao obtained a pronote for ₹ 65,000/-, which includes ₹ 43,600/- borrowed with interest at ₹ 10,000/- and the balance amount of ₹ 11,400/-. He admitted the execution of pronote in the name of the plaintiff. DW.2 denied his presence at the time of negotiations between Bolla Rama Rao and the defendant. DW.3 who is the supplier of eggs stated that he used to borrow money from Bolla Rama Rao. He stated that himself, defendant and Bolla Rama Rao were only present at the time of execution of Exs.B15 and 16. Similarly, DW.4 stated that he borrowed the amount from B. Rama Rao and discharged the said amount. He is an agriculturist and doing fishing business. Thus, the plaintiff did not enter the witness box and PW.1 who stated that he is acquainted with the facts of the case deposed on behalf of the plaintiff. One of the attestors was examined as PW.2. The defendant admitted the execution of the promissory note, but disputed the attestation and consideration. In Vidhyadhars case (supra) the plaintiff filed a suit against the defendants for redemption of the mortgage by conditional sale or in the alternative for a decree of specific per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar into the witness box and states his own case on oath and does not offer himself to be cross examined by the other side, a presumption would arise that the case set up by him is not correct as has been held in a series of decisions passed by various High Courts and the Privy Council beginning from the decision in Sardar Gurbakhsh Singh v. Gurdial Singh (AIR 1927 PC 230). This was followed by the Lahore High Court in Kirpa Singh v. Ajaipal Singh (AIR 1930 Lahore 1) and the Bombay High Court in Martand Pandharinath Chaudhari v. Radhabai Krishnarao Deshmukh (AIR 1931 Bombay 97). The Madhya Pradesh High Court in Gulla Kharagjit Carpenter v. Narsingh Nandkishore Rawat (AIR 1970 Madh Pra 225), also followed the Privy Council decision in Sardar Gurbakhsh Singh's case (supra). The Allahabad High Court in Arjun Singh v. Virender Nath (AIR 1971 Allahabad 29) held that if a party abstains from entering the witness box, it would give rise to an inference adverse against him. Similarly, a Division Bench of the Punjab and Haryana High Court in Bhagwan Dass v. Bhishan Chand (AIR 1974 Punj and Har 7), drew a presumption under Section 114 of the Evidence Act against a party who did not enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the receipts of the monies under the said promissory notes. He also admitted the execution of two separate receipts/vouchers in favour of the plaintiff, but stated that the promissory notes and the receipts/vouchers were not executed at Calcutta within the jurisdiction of the Court but the same were executed out side the jurisdiction of the Court. He also pleaded that he repaid the sum covered by the promissory notes in due course and thus they were discharged. The plaintiff returned the promissory notes duly discharging it to the defendant. In the said suit, the plaintiff did not come to the witness box. The Accountant also was not called for evidence. He placed reliance on Section 114, illustration (g) of the Indian Evidence Act. In this connection, the Calcutta High Court observed as follows: 10. I do not understand how this decision of the Privy Council establishes the proposition made by Dr. Das that under the facts of the instant case before me for non-calling of Bejoy Kumar Karnani and the Accountant Kundu I shall draw the adverse inference which the Privy Council was pleased to draw by non-calling the second widow of Jawalla Singh. In the instant case, Sanak Chandra B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows: 11. Section 118 of the Act deals with the presumptions as to negotiable instruments. One of such presumptions is, that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration. This presumption is based upon a principle and is not a mere technical provision. The principle incorporated being, inferring of a presumption of consideration in the case of a negotiable instrument. A Full Bench of the Rajasthan High Court in Heerachand v. Jeevraj (AIR 1959 Raj. 1) held that, presumption, therefore, as to consideration is the very ingredient of negotiability and in the case of negotiable instrument, presumption as to consideration has to be made. A Full Bench of the Andhra Pradesh High Court in G. Vasu v. Syed Yaseen Sifuddin Quadri (AIR 1987 Andhra Pradesh 139) while dealing with the words until the contrary is proved held that it was permissible for the Court to look into the preponderance of the probabilities and the entire circumstances of the particular case. After referring to Sections 3, 4 and 101 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the negative probable may shift the burden on to the other party (Jones, quoted in A Sarkar on Evidence, 12th Edition, p. 870). The second principle which is relevant in the context is the one stated in S.106 of the Evidence Act. That section states that when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him. It is very generally stated that, where the party who does not have the evidential burden, such as the plaintiff in this case, possesses positive and complete knowledge concerning the existence of fact which the party having the evidential burden, such as the defendant in this case, is called upon the negative or has peculiar knowledge or control of evidence as such matters, the burden rests on him to produce the evidence, the negative averment being taken as true unless disapproved by the party having such knowledge or control. The difficulty or proving a negative only relieves the party having the evidential burden from the necessity of creating a positive conviction entirely by his own evidence so that, when he produces such evidence as it is in his power to produce, its probative effect is enhanced by the silence of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note, or in the suit notice or in the plaint does not exist and once the presumption is so rebutted, the said presumption disappears. For the purpose of rebutting the initial evidence burden, the defendant can rely on direct evidence on circumstantial evidence or on presumptions of law or fact. Once such convincing rebuttal evidence is adduced and accepted by the Court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the plaintiff who has also the legal burden. Thereafter, the presumption under Section 118 does not again come to the plaintiffs rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance. 12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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