F. Francis Salsas vs A.G. Pareira

R.S. Ramanathan, J.—The defendant is the appellant. The plaintiff filed a suit for recovery of Rs. 10,00,000/- from the appellant on the

basis of the promissory note executed by the appellant on 21.03.2001 for a sum of Rs. 10,00,000/-.

The defendant contended that he borrowed only Rs. 5,00,000/- on 21.03.1997 and on 21.03.2001 he did not execute any promissory note or

receive Rs. 10,00,000/- as stated by the respondent and the respondent has no source of income and he is a money- lender and he had already

paid Rs. 4 lakhs towards the sum of Rs. 5 lakhs borrowed by him earlier and the respondent taking advantage of the various promissory notes

already executed by the appellant filed the present suit. Further the promissory note was altered materially and no consideration was passed under

the promissory note and it was also made clear in the notice issued by the respondent, wherein he has stated that on 21.03.2001 the appellant

executed a mortgage for a sum of Rs. 10,00,000/- and issued notice for the refund of that mortgage amount. In fine, the respondent denied the

execution of promissory note on 21.03.2001 and the receipt of consideration on the promissory note on that date.

The learned trial Judge framed the following issues:

Whether the defendant borrowed a sum of Rs. 10,00,000/- from the plaintiff and executed a promissory note on 21.03.2001 as mentioned in

the plaint or the defendant borrowed only Rs. 5,00,00,000/- from the plaintiff and executed promissory note on 21.03.1997 as mentioned in the

written statement?

Whether the defendant repaid the amount borrowed from the plaintiff?

Whether the plaintiff is entitled to get a decree as prayed for?

To what relief if any the plaintiff is entitled to?

The trial Judge after analysing the evidence both oral and document held that the promissory note executed by the appellant and the execution of

the promissory note was also proved by the respondent by examining the scribe and the appellant admitted the signature in the promissory note

and therefore, a presumption u/s 118 of the Negotiable Instruments Act can be drawn in favour of the respondent.

The learned Sub Judge also rejected the case of the appellant that he repaid Rs. 4,00,000/- towards the borrowal and decreed the suit as

prayed for.

The point for consideration in this appeal is whether any consideration was passed under the promissory note as alleged by the appellant?

In this appeal, the learned Counsel appearing for the appellant vehemently argued that on 21.03.2001 there was no passing of consideration and

in the suit notice issued by the respondent, he did not mention the promissory note, but he mentioned only the execution of a mortgage and

therefore, even according to the respondent/defendant, on 21.03.2001, promissory note was not executed and therefore, the present claim based

on the promissory note cannot be accepted and the presumption u/s 118 of Negotiable Instruments Act cannot be also drawn in favour of the

respondent. He further contended that the presumption u/s 118 of the Negotiable Instruments Act is only a rebuttable presumption and the

respondent on the basis of the pleadings and documents filed by the plaintiff has rebutted the presumption regarding the passing of consideration

and hence, the lower Court should not have accepted the case of the respondent that under the promissory note on 21.03.2001 consideration was

passed and ought to have dismissed the suit.

The learned Counsel for the appellant also relied upon the judgment reported in Bharat Barrel and Drum Manufacturing Company Vs. Amin

Chand Payrelal, 2006(4) MLJ 1734 in the case of K.V. Krishnan v. B.A. Damodaran and 2008(3)L.W. 878 in the case of R. Kamalam v. K.K.

Kumarasamy, in support of his contention.

According to the learned Counsel appearing for the appellant that the presumption u/s 118 of the Negotiable Instruments Act can be rebutted

by proving a probable defence that no consideration has passed as stated by the plaintiff and if the defendant is successful in discharging that initial

onus that the passing of consideration is doubtful, the onus would shift to the plaintiff who should prove it as a matter of fact.

Based on the above observations made in the judgment reported in Bharat Barrel and Drum Manufacturing Company Vs. Amin Chand

Payrelal, , the learned Counsel appearing for the appellant vehemently contested that there was no passing of consideration and he has rebutted the

presumption by raising a probable defence from the evidence of the plaintiff. It is no-doubt true that while issuing the suit notice, Ex.A2, the plaintiff

mentioned that on 21.03.2001 the defendant borrowed a sum of Rs. 10,00,000/- to meet the expenses in connection with building construction

and executed a mortgage deed. Having stated that the defendant had executed only a mortgage deed, this suit is filed on the promissory note dated

21.03.2001 when the execution of promissory note on that date was not stated in the suit notice, Ex.A2. In this case, it is to be seen whether any

amount was borrowed by the defendant from the plaintiff as alleged by the plaintiff.

The case of the plaintiff is that the defendant borrowed a sum of Rs. 10,00,000/- on 21.03.2001 and he executed a promissory note as per

notice and in the plaint, he has stated that for having received the consideration the defendant executed a promissory note. The promissory note

was marked as Ex.A1 and P.W.2 was examined to prove the execution of the promissory note by the defendant and his evidence was not at all

shattered by the defendant in cross examination. Further, the defendant did not deny the execution of the promissory note. The case of the

defendant is that he borrowed a sum of Rs. 5,00,000/- in the year 1997 and for that purpose he executed various promissory notes and towards

that loan of Rs. 5 lakhs, he paid 4 lakhs and hence he is not liable to pay the amount as claimed by the plaintiff. Ex.A3 is reply notice given by the

appellant wherein he admitted the borrowal of Rs. 5,00,000/- on 21.03.2001. It is stated in the reply notice that he did not receive Rs.

10,00,000/- from the plaintiff on 21.03.2001 but only Rs. 5,00,000/- for 24% interest for his business purpose. Therefore, the defendant admitted

in his reply notice that on 21.03.2001 he received Rs. 5,00,000/-, though in the written statement it was stated by him that he received Rs.

5,00,000/- on 21.03.1997. Therefore, even according to the admission of the defendant, there was passing of partial consideration on the date of

the execution of the promissory note and when there was passing of consideration, the burden is on the defendant to prove that he did not receive

the full consideration and he received only a lesser amount. That burden has not been discharged by the appellant in this case.

The next ground raised by the learned Counsel appearing for the appellant is that the plaintiff has no means to pay Rs. 10,00,000/- and without

proving that he has got means the plaintiff cannot succeed. The learned Counsel appearing for the appellant relied upon the judgment reported in

2006(4) MLJ 1734 in the case of K.V. Krishnan v. B.A. Damodran. In that reported case, this Honourable Court has come to the conclusion that

on the basis of evidence adduced by the defendant, consideration as stated in the promissory note was not passed and the lesser amount was

borrowed by the defendant. Further, in that case promissory note was not found to be a genuine document and created by the plaintiff and on that

basis the Court has dismissed the suit of the plaintiff. But in this case, in view of the admission by the defendant of having received Rs. 5 lakhs on

the promissory note, a valid presumption u/s 118 of the Negotiable Instrument Act can be raised in favour of the plaintiff. Further the plaintiff,

according to the defendant, is a money-lender and even in the year 1997 he borrowed Rs. 5,00,000/- from the plaintiff. Therefore, the admission

of the defendant/appellant would also prove the means of the plaintiff. The decision reported in 2008(2) L.W. 878 in the case of R. Kamalam v.

K.K. Kumarasamy only supported the case of the respondent and in that reported judgment, it has been held in para 12, which is extracted as

follows: ""In the present case, the existence of the consideration, mentioned in the suit promissory note, was denied by the defendant with reference

to the circumstances, which according to her, showed the non-existence of such consideration. The defendant has not substantiated her case that

the suit promissory note came to be executed as a security for the half of the investment made by the plaintiff in the firm and she has failed to prove

the circumstances upon which she relied. In the result, the defendant has not discharged the initial burden of proof by showing the non-existence of

the consideration and the onus of proof of the legal presumption in favour of the plaintiff could not be shifted and there is no obligation upon the

plaintiff to lead evidence to prove his case"".

Therefore, the above judgment instead of supporting the appellant''s case, supports the case of the respondent. Therefore, after going through

the entire records. I am of the opinion that there is no reason to interfere with the finding of the lower Court and I confirm the decree and judgment

of the trial Court and the appeal is dismissed. Consequently, connected Miscellaneous Petitions are also dismissed. No order as to costs.