Ashok Kumar vs Mrs.Latha

Aggrieved over the dismissal of the suit filed for recovery

of a sum of Rs.10,82,250/- with subsequent interest at 12% per

annum on a pronote dated 1.7.2009, the present appeal came to

be filed by the plaintiff.

For the sake of convenience, the parties are arrayed as per

their own ranking before the trial Court.

Brief facts of the plaintiff''s case is as follows:- The

defendant has borrowed a sum of Rs.9,75,000/- on 1.7.2009 from

the plaintiff , to meet her business and family requirements, and

executed a promissory note in favour of the plaintiff, agreeing to

repay the same on demand with interest at 12% per annum.

Thereafter, the defendant had been avoiding the plaintiff and she

had never paid any interest so far and when the plaintiff

approached the defendant during the second week of May 2010

and demanded the principal sum back together with accrued

interest up to date, she was quoting lame excuses. Hence, the

plaintiff has issued a legal notice on 17.5.2010. However, the

defendant has not chosen to repay the amount but she had sent a

false reply. Hence the suit.

The defendant in the written statement denying the

borrowal of Rs.9,75,000/- and execution of pronote. It is the

contention of the defendant that there was no privity of contract

between the plaintiff and defendant. She does not even know the

plaintiff. She never borrowed any money from the plaintiff nor

executed any pronote in favour of the plaintiff. The pronote is a

fabricated one. While there was cordial relationship between

defendant and her husband, her husband obtained her signature

and thumb imprission in blank stamp papers, plain papers and

cheques for the purpose of business transaction. Her husband and

one Vetrivel were close friends. As soon as the defendant came to

know about the fact that her husband had handed over some blank

documents to Vetrivel, she had issued legal notice to the said

Vetrivel on 4.3.2010 and 4.5.2010 and also issued a publication on

5.5.2010, in this regard. Besides this the defendant has also filed a

suit against the said Vetrivel in respect of Minor''s property in

O.S.No.36 of 2010. The said Vetrivel, taking advantage of the

signature and thumb impression of the defendant available in the

blank paper, had created a forged document and filed this suit.

Hence, she prays for dismissal of the suit.

On the basis of the above pleadings, the following issues

were framed by the learned trial Court:-

Whether the plaintiff is entitled to recover sum of Rs.9,75,000/- with subsequent interest at the rate of 12% p.a till date of realization?

Whether the suit pronote dated 1.7.2009 is forged as stated in the statement?

To what relief if any the plaintiff is entitled to?

On the side of the plaintiff P.W.1 to P.W.3 were

examined and marked documents Ex.A1 to A4. On the side of the

defendant D.W.1 was examined and marked documents Ex.B1 to

B3.

The learned trial Court on the basis of the evidence and

materials, came to the conclusion that the plaintiff failed to prove

the execution of documents and also the passing of consideration

of Rs.9,75,000/- and accordingly, dismissed the suit . Aggrieved

over the same, the present appeal came to be filed by the plaintiff.

The main contention of the learned counsel for the

appellant is that the learned trial Court has wrongly placed burden

on the plaintiff to prove the execution of pronote by the defendant.

P.W.1 to P.W.3 have categorically spoken about the execution of

the pronote. Once the execution is proved, the burden shifts on the

defendant to rebut the same. But absolutely there is no evidence

whatsoever available on record to show that the defendant has

brought on evidence to dislodge the legal presumption attached to

the pronote. Hence, it is the contention of the learned counsel for

the appellant that P.W.1 to P.W.3 have not only spoken about the

execution of the pronote but also spoken about the passing of

consideration. Therefore, the learned trial Court has wrongly

placed burden on the plaintiff. Hence, prayed for allowing the

appeal. In support of his contention, the learned counsel for the

appellant has relied upon the judgment reported in Murugesan v.

Subramania Gounder [1997 (III) CTC 478].

It is the contention of the learned counsel for the

Respondent that the defendant is a house wife borrowing such

huge amount of Rs.9,75,000/- is highly improbable. The plaintiff is

a Real Estate Broker advancing such huge amount is highly

improbable. P.Ws. 1 to 3 are interested witnesses and they are

close friends to the plaintiff. Therefore, their evidence alone is not

sufficient to prove execution of pronote. P.W1''s evidence also

clearly show that passing of consideration is highly improbable and

it is also admitted that one Vetrivel is conducting the case. The

same is probablize the case of the defendant. Hence, submitted

that the learned trial Court has assessed the entire evidence on

record and came to the right conclusion and hence prayed for

dismissal of the suit.

In the light of the above submissions, now the points

that arise for consideration are:-

Whether the pronote dated 1.7.2009 is duly executed by the defendant?

Whether the pronote is not supported by any consideration?

Whether the plaintiff is entitled for recovery of suit amount?

To what relief ?

Points 1 to 4:- It is the definite case of the plaintiff that

the defendant has borrowed a sum of Rs.9,75,000/- from the

plaintiff on 1.7.2009 and she has executed a pronote in favour of

the plaintiff agreeing to repay the same on demand with interest at

12% per annum. It is well settled that initial burden is always on

the plaintiff to prove the execution of the pronote. Once execution

of the pronote is proved by the plaintiff then the statutory

presumption available under Section 118 of the Negotiable

Instruments Act comes into operation in favour of the plaintiff as

to passing of consideration as to date etc. But the defendant may

also dislodge the statutory presumption. To dislodge the legal

presumption the defendant need not always produce direct

evidence. Even the circumstance or preponderance of probabilities

itself is sufficient to dislodge the legal presumption attached to the

defendant. Once the defendant is able to show that preponderance

of probabilities to dislodge the legal presumption the burden again

shifts on the plaintiff to establish the passing of consideration.

In the light of the above settled principles of law, now

the pleadings when carefully perused, it is the case of the plaintiff

that the defendant has executed a pronote Ex.A1 on 1.7.2009. In

entire evidence P.W.1 has spoken about the execution of the

pronote by the defendant. Apart from that P.W.2 one Tmt.Santhi

said to be the attesting witness in the pronote and P.W.3 the scribe

of the pronote Mr.Mohankumar were also examined on the side of

the plaintiff. P.W.2 has asserted that pronote was executed by the

defendant on 1.7.2009 in the house of the plaintiff besides signing

the document, she put her thumb impression. P.W.3 has also

asserted that he obtained the signature as well as thumb

impression of the defendant on the pronote. The evidence of P.W.2

and P.W.3 though indicate that they are close friends of P.W.1,

they seen the defendant for the first time only on the date of

execution of the Ex.A1 pronote. They have clearly spoken about the

witnessing the defendant signing the document in their presence.

The purpose of examination of the attesting witnesses is to prove

the identity of the person who put the signature on the document.

The evidence of P.W.2 and P.W.3 clearly show that the defendant

has signed the document Ex.A1 at the relevant time. On a careful

perusal of the pronote Ex.A1 coupled with the evidence of P.Ws. 2

and 3 this Court could safely conclude that Ex.A1 has been duly

executed by the defendant and the initial burden on the part of the

plaintiff has been discharged in proving the execution of the

pronote.

In view of the same, now the onus shifts on the

defendant to show that there is no passing of consideration. The

statutory presumption available under Section 118 can be rebutted,

for such rebuttal there need not be any direct evidence. Any

circumstance or preponderance of probabilities itself is sufficient to

dislodge the legal presumption. In the above background the

evidence of P.W.1 when carefully seen though P.W.1 has stated in

the chief examination that the defendant had borrowed

Rs.9,75,000/- for her business and family requirements, on

1.7.2009 and executed pronote, his chief examination is

contradictory with the cross-examination. The cross-examination of

P.W.1 when carefully perused P.W.1 has admitted that the

defendant is a house-wife and she was not doing any business and

her husband was doing business. Whereas P.W.1 in his chief-

examination and pleadings has pleaded as if the defendant has

borrowed money for her business and family requirements. Cross-

examination of P.W.1 itself clearly show that she is only house-

wife, she is not doing any business. Similarly, cross-examination of

P.W.1 also clearly show that only her husband alone doing business

and demanded the amount for the repair of the vehicle and also for

education expenses of his son and therefore, he has advanced

money. The cross-examination of P.W.1 when carefully seen the

same would clearly indicate that the defendant has never

demanded any amount from the plaintiff at that point of time. The

contradictory evidence of P.W.1 itself clearly show that the alleged

passing of consideration on the pronote executed by the defendant

is highly doubtful. This fact is further fortified by the fact that in

Ex.A1 pronote the address of the defendant was shown as if she

was residing at Door No.53, Vijayaraghavan Nagar, Jakir Amma

Palayam. This pronote is said to have been executed on 1.7.2009.

The cross-examination of P.W.1 clearly show that the defendant in

fact was not residing in the address mentioned in the pronote and

she was residing at Omalur Road, Salem, behind the Petrol Bunk

for the past four years. The evidence of P.W.1 in the cross-

examination was recorded on 16.3.2011 i.e., two years from the

date of pronote. If really the defendant was residing at Salem for

the past four years, at the relevant time there was no need for the

plaintiff to mention a different address of the defendant in the

pronote. This aspect is clearly create doubt as to passing of

consideration.

It is further to be noted that P.W.1 was doing Real

Estate Broker business and his evidence also shows that he does

not have any record to show that he was doing the said business.

He never involved in the money transaction and he knows the

defendant''s husband since he has arranged to purchase one vehicle

to the husband of the defendant. Further his evidence also shows

that only the defendant''s husband has requested to advance money

at the relevant time. The defendant was not doing any business.

When all these facts taken together, advancing huge amount of

Rs.9,75,000/- to the defendant who is the house-wife, without any

business on her own, is highly doubtful. It is also the admission of

P.W.1 that after this case one Sampath has also filed a case

against the defendant on the basis of a cheque and also admitted

that one Vetrivel is financing for conducting this suit.

P.W.2 in her evidence though spoken about the signing

of the document by the defendant, the cross-examination of P.W.2

clearly shows that her evidence also doubtful about the entire

transaction. She is not even able to remember her own door

number. Further, from evidence of P.W.2 and P.W.3 it is very clear

that they have seen the defendant only for the first time at the

time of execution of pronote. Be that as it may, the evidence of

P.W.1 itself shows that passing of consideration is highly

improbable in this case. The evidence of P.W.1 itself show that he

has advanced money only as requested by the husband of the

defendant and not by the defendant. All these facts clearly show

that passing of consideration has not been proved in a manner

known to law. The improbabilities found in the evidence on the

side of the plaintiff itself clearly dislodge the legal presumption

attached to Ex.A1. Though the execution of pronote has been

proved by examining P.W.2 and P.W.3, the factum of passing of

consideration has not been established by the plaintiff. Therefore,

once the pronote is found to be without consideration does not

create an obligation of payment between the parties to the

transaction as per Section 43 of the Negotiable Instruments Act. In

Kundan Lal v. Custodian, Evacuee property [AIR 1961 SC 1316],

the Hon''ble Apex Court has held as follows:-

"Section 118 lays down a special rule of evidence

applicable to negotiable instrument. The

presumption is one of law and thereunder a court

shall presume inter alia, that the negotiable

instrument or the endorsement was made or

endorsed for consideration. In effect, it throws the

burden of proof of failure of consideration on the

maker of the note or the endorser, as the case may

be."

The question how the burden can be discharged is

stated in Chapter XII of the Evidence Act. It has two meanings:

one, the burden of proof as a matter of law and pleading and the

other the burden of establishing a case. From the above judgment

to dislodge the burden even admission in the oral evidence of the

opposite party itself is sufficient.

The learned counsel for the appellant has placed

reliance upon the judgment of this Court reported in R.Kamaiam

v. K.K.Kumarasamy [2008 (2) CTC 177]. A perusal of the above

judgment makes it clear that the defendants did not make any

evidence to establish their plea. Since the oral evidence was not

sufficient this Court has decreed the suit on pronote. Whereas in

this case the circumstances and admission of P.W.1 itself clearly

dislodge the legal presumption attached to Ex.A1. Hence the above

judgment is not applicable to the facts of the present case.

The circumstances brought out in the cross-examination

of P.W.1 clearly show that the defendant has dislodged the legal

presumption. Therefore, the burden again shifts on the plaintiff to

prove the passing of consideration. Absolutely there is no materials

and evidence available on record to show that the plaintiff had

capacity to pay the huge amount of Rs.9,75,000/- at the relevant

time. No bank account or passbook has been filed to show that in

fact he had capacity to mobilize such huge funds. Ex.B1 is the

publication issued by one Vetrivel against the defendant in respect

of some agreement. This publication was issued on 30.4.2010.

Ex.B2 is also a publication issued by the defendant as against

Ex.B1. Ex.B3 has been filed to show that one Sampath said to be

close friend of Vetrival also filed another case against the

defendant. Though these documents were not germane for

consideration the admission of P.W.1 that Vetrivel is also interested

in the case clearly probabilize the defence theory that the plaintiff

is only name lender and he has failed to prove the passing of

consideration. Therefore, Ex.A1 cannot be enforceable in the Court

of law. The points are answered accordingly.

In the result, the appeal is dismissed with costs. The

judgment and decree of the trial Court is confirmed. Consequently,

C.M.P.No.1 of 2011 is closed.