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TMI Blog2024 (10) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again to the plaintiff, had held that direct evidence of absence of consideration is not the only mode of proving absence of consideration. Surrounding circumstances and probabilities can also be relied upon by the Court to non suit the plaintiff on the ground of absence of consideration. A holistic reading of the evidence of PW1 and PW2 impels us to believe the version of the defendant. Once it is found that the version in defence is more probable, it is necessary to look for something more than the mere oral evidence of PW1 to establish the passing of consideration. Unfortunately for the plaintiff, the evidence of PW2 is also not very helpful. His evidence contradicts the evidence of the plaintiff. Therefore, it is clear that the plaintiff has not established passing of consideration and the presumption under Section 118 stood rebutted by the prevailing circumstances. The findings of the trial Court which do not reflect the impact of the evidence on record, are not sustained. The Appeal Suit stands allowed with costs. - THE HONOURABLE MR.JUSTICE R.SUBRAMANIAN AND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs.20,00,000/-, the defendant offered to execute a second mortgage in respect of the property that was covered by the simple mortgage dated 18.10.2013. However, the plaintiff insisted upon some other property security. The defendant came forward with the suggestion to deposit the original title deeds of the property belonging to his brother situate at Kanchipuram as security for repayment of the entire loan. The plaintiff, believing the defendant's assurance, obtained a promissory note on 25.12.2017, wherein, the defendant promised to repay the sum of Rs.20,00,000/- with interest at 24% per annum. It is also claimed that the original sale deed dated 28.08.2006 relating to the property situate at Kancheepuram was also deposited as security. To his dismay, the defendant neither repaid the loan covered by the mortgage deed nor the loan covered by the promissory note. During October 2020, the defendant met the plaintiff and pleaded sometime in view of the outbreak of the pandemic. The plaintiff agreed to wait subject to the defendant making a token payment of not less than Rs.5,000/- and endorsing the same on the promissory note. According to the plaintiff, the defendant who agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 23.10.2015 which was cancelled and demand promissory note for Rs.20,00,000/- dated 25.12.2017 for valid consideration? 3. Whether the plaintiff is entitled for interest at the rate of 24% per annum on the principal amount from 25.12.2017? 4. Whether the plaintiff is entitled for decree as claimed in the suit? 5. Whether else reliefs the parties are entitled to? 6. At trial, on behalf of the plaintiff, he was examined as PW1 and one Prabakar was examined as PW2. Exs.A1 to A7 were marked. On the side of the defendant, the defendant was examined as DW1 and no other document was marked. On a consideration of the evidence on record, the learned trial Judge concluded that the promissory note Ex.A4 is supported by consideration and hence, the defendant is liable to the suit claim. The trial Court heavily relied upon the fact that the defendant admitted his signatures in the suit promissory note in view of the presumption under Section 118 of the Negotiable Instruments Act, 1881. The trial Court faulted the defendant for not letting in any other evidence except his oral evidence. On the above conclusions, the learned trial Judge decreed the suit. Aggrieved, the defendant is on appeal. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstrate without any further proof that the promissory note is not supported by consideration. 10. Further reliance is also placed by the learned counsel on the cross examination of PW1, where, he admits that he was just 21 years old in 2015 when he claims that the actual lending started and that he has not filed any document to show part payments were made prior to 25.12.2017 namely, the date of execution of the promissory note. The following questions and answers is heavily relied upon by the learned counsel to contend that the entire claim is fictitious: ''Ques : I put it to you that you have not filed any document to show that you have made payment to the defendant on 25.12.2017? Ans : I have not filed document to show that on 25.12.2017 what amount I have paid to the defendant. But on 25.12.2017 the defendant had executed Ex.A4 promissory note. Ques : I put it to you that you did not have such a source and means to pay such a huge amount of Rs.20 Lakhs to the defendant? Ans : I deny the suggestion. Even during my student life, I was doing small business and also avail financial help from my parents and grand parents, friends and thereby I had a source.'' 11. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel. 13. We have considered the rival submissions. 14. On the arguments of the counsel for the parties, the following point arises for determination: Whether the trial Court was justified in invoking the presumption without adverting to the conflicts and contradictions in the evidence of PW1 and PW2 as well as between the proof affidavits filed in chief examination and the cross examination of the plaintiff as PW1. On the Point No doubt, Section 118 of the Negotiable Instruments Act, 1881, enacts the presumption as to consideration once the execution of the promissory note is admitted, but the said presumption is rebuttable. How the said presumption could be rebutted is laid down by the Hon'ble Supreme Court in Bharat Barrel Drum Manufacturing Company's case referred to supra. The Hon'ble Supreme Court while dealing with the said question, had observed as follows: ''12. Upon consideration of various judgments as noted herein above, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kewise shift again to the plaintiff, had held that direct evidence of absence of consideration is not the only mode of proving absence of consideration. Surrounding circumstances and probabilities can also be relied upon by the Court to non suit the plaintiff on the ground of absence of consideration. 16. If we are to examine the evidence on record in the light of the above observations of the Hon'ble Supreme Court, we find the following features: (i) The plaintiff had claimed that his father had lent a sum of Rs.5,00,000/- to the defendant in 2013 and the defendant has neither repaid the interest nor the principal. (ii) The plaintiff would state that though he was reluctant to advance further sum to the defendant, he had agreed to do so on the recommendation of the defendant's brother sans any security. (iii) The plaintiff who was aged about 23 years at the time of the lending and claimed that his father was a money lender, had chosen to advance monies without even obtaining any acknowledgment of borrowing from the defendant. (iv) The plaintiff though claims that he was an income-tax assessee, he has not produced his income-tax returns and he has answered in the negative t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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