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TMI Blog2024 (11) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ot executed in favour of the plaintiff. The Apex Court in Kundan Lal Rallaaram vs. Custodian Evacuee Property, Bombay [ 1961 (3) TMI 100 - SUPREME COURT] declared that the Section 118 of the Negotiable Instruments Act lays down a special rule of evidence. It enables the Court to presume that the negotiable instruments or the endorsement was made or endorsed for consideration and the burden of proof of failure of consideration is thrown on the maker of the note or the endorser as the case may be. A Combined reading of the defendant side witnesses only shows that they have come up with the case that D.W.4-Raj acted like an agent for the plaintiff and through him, D.W.1 to D.W.3 have borrowed loans and promissory note executed by them and later it was misused by the plaintiff - In the absence of any proof establishing the collusion between the plaintiff and the said Raj, and in the absence of any repayment of loan as stated by the defendant in his evidence and pleadings, the evidence adduced on the side of the plaintiff's side, shall be placed on higher pedestal since their evidence is supported by the promissory note-Ex.A1 and consequent legal notice issued which was not replied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver the same to his friend Kumar. Similarly, he had also executed an unfilled promissory note to one Rajasekar, Neiveli Township on behalf of P.K. Subramanian. Subsequently, his friend Kumar died and therefore, the defendant has repaid the entire loan amount borrowed through A.Kuravan Kuppam Ramachandran, Periyakurichi Selvam, Township Rajasekar and settled entire loan amount to Raj. These payments were made due to threat made by the said Raj. After repayment of the entire loan amount, he demanded to return of promissory note and the same was not returned back. Now with the help of plaintiff, the suit has been filed against the defendant. The defendant is a permanent employee of Neyveli Lignite Corporation Ltd., He never received any amount from the plaintiff and hence, he is not liable to pay any amount to the plaintiff. 5. Before the Trial Court, the plaintiff examined himself as P.W.1 and the attestors of promissory note were examined as P.W.2 and P.W.3 and Ex.P1 to Ex.P3 were marked. On the side of the defendants D.W.1 to D.W.4 were examined but no document marked on his side. 6. Based on the pleadings made by both parties, the trial Court has framed the following issues. 1. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported the case of the defendant but from the other independent witnesses, the defendant has probabilized his case that he had received loan only from P.W.4 - Raj. Admittedly, the plaintiff has not proved the passing of consideration, by way of cash and by production of independent documents other than the promissory note. Since passing of consideration has not been established by the plaintiff, relying on presumption under Section 118 of the Negotiable Instruments Act is not proper. After examination of the defendant witnesses, the plaintiff has not discharge his burden of proof. Both the Courts erred in invoking Section 118 of the Negotiable Instruments Act in favour of the defendant in a case of this nature and thereby, prays to set aside the Judgment and decree. 12. Per Contra, the learned counsel appearing for the respondent/ plaintiff submits that there is no evidence to support the case of the defendant that he had executed a promissory note in favour of said Raj. Even it is admitted that if he had executed promissory note in favour of one Raj, there is no evidence to show that promissory note executed in favour of Raj is the suit promissory note produced by the plaintiff he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t entitled to once again reappreciate the evidence which were thoroughly analysed by the courts below. 16. The role of this Court while exercising jurisdiction under Section 100 of the Code of Civil Procedure has been considered by the Apex Court in various Judgments and in Hero Vinoth vs. Seshammal [2006 (5) SCC 545 : AIR 2006 SC 2234] has considered the various previous Judgments as held as follows: The principles relating to Section 100 of CPC, relevant for this case, may be summerized thus:- (i) An inference of fact from the recitals or contents of a document is a question of fact. But the legal effect of the terms of a document is a question of law. Construction of a document involving the application of any principle of law, is also a question of law. Therefore, when there is misconstruction of a document or wrong application of a principle of law in construing a document, it gives rise to a question of law. (ii) The High Court should be satisfied that the case involves a substantial question of law, and not a mere question of law. A question of law having a material bearing on the decision of the case (that is, a question, answer to which affects the rights of parties to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rum Manufacturing Company vs. Amin Chand Payrelal [1993 (3) SCC 35] the Apex Court has considered the scope of both Section 118 of Negotiable Instruments Act and burden of proof in paragraph No.12 it is observed as follows: 12. This Court in Kundan Lal Rallaaram v. Custodian Evacuee Property, Bombay MANU/SC/0422/1961 : AIR (1961) SC 1316 declared the Section 118 of the Act lays down a prescribed special rule of evidence applicable to negotiable instruments. The presumption contemplated thereunder is one of law which obliges the Court to presume, inter alia, that the negotiable instruments or the endorsement was made or endorsed for consideration and the burden of proof of failure of consideration is thrown on the maker of the note or the endorser as the case may be. Relying upon the law laid down in Rameshwar Singh v. Bajit Lal MANU/MH/0029/1929 : (1929)31BOMLR721 approved by this Court in Hiralal v. Badkulal MANU/SC/0004/1953 : [1953]4SCR758 , it was held: This section lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder a court shall presume, inter alia that the negotiable instrument or the endorsement was made or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se mentioned in Section 114 and other Sections of the Evidence Act. Under Section 114 of the Evidence Act The Court may presume the existence of any fact which it think likely to have happened, regard being had to the common course of natural events human conduct and public and private business, in their relation to the facts of the particular case. Illustration (g) to that Section shows that the Court may presume that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it. A plaintiff, who says that he had sold certain goods to the defendant and that a promissory note was executed as consideration for the goods and that he is in possession of the relevant account books to show that he was in possession of the goods sold and that the sale was effected for a particular consideration, should produce the said account books, for he is in possession of the same and the defendant certainly cannot be expected to produce his documents. In those circumstances, if such a relevant evidence is withheld by the plaintiff, S. 114 enables the Court to draw a presumption to the effect that, if produced, the said accounts would be unfavourable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption the defendant has to bring on record such facts and circumstances, upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist. We find ourselves in the close proximity of the view expressed by the Full Benches of the Rajasthan High Court and Andhra Pradesh High Court in this regard. 21. The defendant has made a genuine attempt by calling upon D.W.4-Raj to adduce evidence on his side and D.W.4 has deposed that he was employed at Neyveli Lignite Corporation Ltd. It was suggested to him that the defendant has borrowed a sum of Rs.45,000/- and executed unfilled promissory note and lodging of criminal complaint against P.W.4 but he denied all those facts. He had stated that he is one of the borrowers of the loan from the plaintiff and since he was not able to repay the same, decree has been passed against P.W.4. In the cross examination, he has also stated that the defendant has never borrowed any money from P.W.4 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supported by the promissory note-Ex.A1 and consequent legal notice issued which was not replied by the defendant. The defendant had come forward to lodge a complaint only the year 2011 that too, after decree being passed against him. 25. A Learned Single Judge of this Court in Kuppayammal Vs. A. Sitheswaran and Ors. in S.A. Nos. 281, 282, 283 and 284 of 1998, dated 30.06.2011 was considered the meaning for the word 'Execution' and applicability of Section 20 of the Negotiable Instruments Act, by importing definition of the word 'Executed' and 'Execution' stated in the Indian Stamp Act, 1899 as observed that once the signature or thumb impression are affixed in the promissory note, this Act is sufficient to fall within the definition of execution of promissory note. It is observed in following words in paragraph Nos.23 to 28 as follows : 23. The word executed was not defined in the Negotiable Instruments Act, but in the Indian Stamp Act 1899, section 2(12) deals with executed and execution and it is stated that executed and execution used with reference to instruments, mean signed and signature. Therefore, as per the Indian Stamp Act, when a person signed an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder. Therefore, as per section 20 of the Negotiable Instruments Act, authority was given to the holder of the blank promissory note by the executant to complete the same and the person signing such instrument is liable to any holder in due curse for such amount. According to me, this section can be considered only when the defendants prove to the satisfaction of the Court that they only gave blank promissory notes with their signatures and it was filled up by the plaintiffs later. 28. .I have already held that the defendants have not discharged that initial burden and they have only stated that they have given blank promissory notes with signatures and in the absence of any satisfactory proof and that they only gave the blank promissory notes with signature, having regard to the provision 2(12) and 2(14) of the Indian Stamp Act, even assuming the defendants have given blank promissory notes with signature, it will amount to execution. 26. Section 118(a) of the Negotiable Instruments Act would come into play, when the plaintiff is able to establish the proper execution ..... X X X X Extracts X X X X X X X X Extracts X X X X
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