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TMI Blog2021 (10) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... note is perverse ? 2.Whether the plaintiff can be non-suited on the ground of non-adherence to the provisions of the Income Tax Act, 1961?" 3.The case of the plaintiff was that the defendant borrowed a sum of Rs. 1,50,000/- from him on 20.07.2004 by executing Ex.A.1 promissory note undertaking to repay the same with interest @ 18% p.a. Since the defendant did not make any payment either towards principal or interest in spite of repeated demands, the plaintiff issued notice dated 26.09.2006 (Ex.A.2) which elicited Ex.A3 reply notice dated 08.10.2006. In the reply, the defendant not only denied the notice averments but also projected a different version. Since his demand was not complied with, the plaintiff filed the aforesaid suit for recovering a sum of Rs. 2,00,000/- from the defendant with interest. The defendant filed written statement controverting the plaint averments. Based on the divergent pleadings, the trial Court framed the necessary issues. The plaintiff examined himself as P.W.1 and the attestor of the promissory note, namely, Paramasivam as P.W.2. Ex.A1 to Ex.A3 were marked. The defendant examined himself as D.W.1 and one Ganesan as D.W.2. One Senthilkumar who was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first appellate court was justified in holding that since the transaction did not conform to the said statutory scheme, presumption under Section 118 of the Negotiable Instruments Act cannot be pressed into service. The first appellate court had given convincing reasons to non-suit the plaintiff. The learned counsel would further add that the questions raised by the appellant are broadly factual in nature and therefore, the matter did not warrant interference under Section 100 of C.P.C. He sought dismissal of the second appeal. 6.I carefully considered the rival contentions and went through the evidence on record. 7. The learned counsel for the respondent contended that the plaint is defective as it is silent on the defence set out in the reply notice. I find no merit in this submission. Order VII Rule 1 of CPC sets out the particulars that should be contained in a plaint. Along with other things catalogued in the said provision, the plaint should contain the facts constituting the cause of action and when it arose. There is no need to deal with the defence of the defendant in the plaint. It is quite possible that a defendant may not stick to the stand taken earlier. Even in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he failed to take a definite stand. Muruganandham who was also referred to in the written statement was not examined. In fact, it was he who was the second attestor of the suit promissory note. 9.It is true that the scribe Senthilkumar was examined by the defendant. In his proof affidavit, he stated that some two years ago, two persons came to his office and told him to write out a promissory note as if the milk vendor Mahadevan borrowed money from N.Ramamoorthy. D.W.3 had stated that the details were furnished by those two individuals. He of course stated that money was not handed over in his presence. He also stated that he did not go to anybody's house and that the promissory note was written in his office only. In my view, this testimony of D.W.3 far from undermining the case of the plaintiff, reinforces the same. Of course, certain contradictions had been elicited during the cross examination of the witnesses examined on the side of the plaintiff as regards the exact venue where the transaction had taken place. Those discrepancies are rather minor and do not really go to the root of the matter. 10.The first appellate court non-suited the plaintiff primarily on the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r deposit or specified sum, where the person from whom the loan or deposit or specified sum is taken or accepted and the person by whom the loan or deposit or specified sum is taken or accepted, are both having agricultural income and neither of them has any income chargeable to tax under this Act." It was held in Kumari A.B. Shanthi (alias) Vennira Adai Nirmala v. Assistant Director of Inspection, Investigation [1992 LW (Crl) 400] that it is only the borrower who is put under an obligation to take the loan in the manner specified in the provision. The lender is not brought within its fold. 12.Section 118 of the Negotiable Instruments Act, 1881 is as follows : "Presumptions as to negotiable instruments Description: Until the contrary is proved, the following presumptions shall be made:-- (a) of consideration:-- 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; (b) as to date:-- that every negotiable instrument bearing a date was made or drawn on such date; (c) as to time of acceptance: that ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no statutory provision anywhere that the court is relieved of the duty to make the said presumption if the transaction in question is not in consonance with the provisions of the Income Tax Act. Therefore, the approach adopted by the first appellate court is bereft of any legal foundation. 14.In case after case, it has been held that merely because the transaction in question has not been shown in the income tax returns, it would not be rendered void. If the lender has advanced a certain amount which ought to have been reflected in the tax returns but he failed to disclose the same in his returns, that would not exonerate the borrower from the liability to repay. The default committed by the lender may attract penal action from the department. But his right to recover the amount from the borrower cannot be extinguished. (vide Dr.Jagannath Ganesh Hegde Vs. In Depth Entertaining Arts Private Limited 2016 SCC Online Bom 10400). Right to recover the money lent is a valuable civil right that is recognised both by common law as well as statute. It can be made unenforceable only by statutory intervention. For instance, law of limitation can render a claim otherwise valid unenforce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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