G. Asokan vs Chinnammal

M. Duraiswamy, J.—The above Appeal arises against the Judgment and decree in O.S. No. 205 of 2004 on the file of Additional District Court, Fast Track Court, Namakkal.

The Plaintiff is the Appellant and the Respondents were the Defendants in the Suit.

The Plaintiff filed the Suit in O.S. No. 205 of 2004 for preliminary decree claiming Rs. 9,71,500/- and on failure of the Defendants, to pay the said amount for passing a final decree directing the sale of the mortgaged property in. Court Auction and for realization of the debt amount.

The brief case of the Plaintiff in the Suit is as follows :

(a) According to the Plaintiff, on 10.12.1995, the First Defendant borrowed a sum of Rs. 5,00,000/- from him for her family expenses and for her son''s business and promised to repay the said amount with interest at Rs. 1/- per Rs. 100/- per month i.e., 12%. per annum and executed a Demand Promissory Note. On 13.12.1995, as collateral security for the amount borrowed, the First Defendant deposited her Title Deed with intent to create equitable Mortgage. On 15.12.1995, the First. Defendant executed a Memorandum confirming that the deposit of Title Deed was made with an intention to create equitable Mortgage.

(b) According to the Plaintiff, in spite of repeated personal demand made by the Plaintiff, the First Defendant failed to pay any amount towards Principal or Interest. Instead of repaying the loan amount, the First Defendant executed a Settlement Deed on 11.8.2003 in favour of the Defendants 2 & 3, who are her son''s Daughters. The Settlement Deed is a sham and nominal documents. In these circumstances, the Plaintiff filed the Suit.

The brief case of the First Defendant is as follows:

(a) According to the First Defendant, she did not borrow any amount from the Plaintiff and executed Pro-Note in his favour. The First Defendant d did not hand over the original documents on 13.12.1995 and the Memorandum dated 15.12.1995 is a false document. The left thumb impressions found in those documents are not that of the First Defendant. The First Defendant had stated that in the event of Court coming to the conclusion that the left thumb impressions found in the Memorandum and in the demand promissory note are that of the First Defendant, it is possible that the Plaintiff would have utilized the blank papers in which the First Defendant had affix her left thumb impressions at the time of running rig business Of., Nandhi Tube Wells.

(b)According to the First Defendant, there was no necessary for her to borrow a sum of Rs. 5,00,000/- from the Plaintiff. The Father of the Plaintiff viz., T.N. Gurusamy and the First Defendant''s son viz., M.K. Natarajan were very close relatives. Therefore, believing the said T.N. Gurusamy, the said M.K. Natarajan signed in various documents and also the First Defendant had affixed her left thumb impressions in the blank papers. Even in the alleged Memorandum, there was no mention about the place of execution of the document. Since the Suit was filed based on the Demand Promissory Note executed on 10.1 2.1995, the Suit is barred by limitation.

(c) According to the First Defendant, the alleged collateral security and the deposit of Title Deeds followed by the execution of Memorandum cannot in any event change the nomenclature of the Suit. The Settlement Deed executed in favour of Defendants 2 & 3 are not sham and nominal documents. The Defendants 2 & 3 are not necessary parties to the Suit. In these circumstances, the First Defendant prayed for dismissal or the Suit.

The brief case of the Second and Third Defendants are as follows :

According to the 2nd & 3rd Defendants, The First Defendant executed a Settlement Deed on 11.8.2003 in favour of the Defendants 2 & 3. The Defendants 2 & 3 are not liable to repay the debt amount to the Plaintiff, since the alleged borrowable was prior to the execution Settlement. Deed. There was no necessary for the First Defendant to execute the Suit Pro-Note, Mortgage Deed and Memorandum in favour of the Plaintiff The Suit is barred by limitation, since the Suit was filed based on the Suit Pro-Note. In these circumstances, the Defendants 2 & 3 prayed for dismissal of the Suit.

Before the Trial Court, on the side the Plaintiff 2 Witnesses were examined and 9 Documents Exs.A1 to A9 were marked and on the side of the Defendant, the First Defendant was examined as DW1, however, no document was marked.

The Trial Court after taking into consideration, the oral and documentary evidences of both sides, dismissed the Suit.

Aggrieved over the Judgment and decree of the Trial Court, the Plaintiff has filed the above Appeal.

Heard Mr. P. Valliappan, learned Counsel appearing for the Appellant, Mr. V.K. Vijayaraghavan, learned Counsel appearing for the First Respondent and Mr. P.T. Nalin Kumar, learned Counsel appearing for the Second and Third Respondents.

According to the Appellant/Plaintiff, The First Respondent/First Defendant approached him seeking a loan and offered to give the Suit property as security. Based on the request made by the First Respondent, the Plaintiff gave a sum of Rs. 5,00,000/- as loan and the First. Respondent executed Ex.A1-Pro-Note dated 10.1 2.1995 agreeing to repay the same with interest at 12% per annum. On 13.12.1 995, the First Respondent deposited the original Title Deed viz, Settlement Deed, dated 23.2.1985, which was marked as Ex.A2 with an intention to create equitable Mortgage. On 15.12.1995, the First Respondent executed a Memorandum confirming the equitable Mortgage which was marked as Ex.A3. The First Respondent had borrowed the money for her family expenses and for the business expenses of her son M.K. Natarajan.

According to the Plaintiff, since the First Respondent. failed to repay the loan amount, he has filed the present Suit. The Plaintiff also stated that the First Respondent executed a Settlement Deed in respect of the Suit. property in favour of the Respondent 2 & 3, which was marked as Ex.A4.

The First Respondent disputed the let thumb impressions found in Exs.A1 & A2 documents. In the Written Statement, the First Defendant had also stated that in the event. of the Court coming to the conclusion that the left thumb impressions found in the promissory note, Mortgage Deed and in the Memorandum are that of her left thumb impressions, it is possible that the Plaintiff would have utilized the blank papers in which the First Defendant. had affixed her left thumb impressions for different purposes.

According to the First Defendant, the Plaintiff''s Father T.N. Gurusamy and her son M.K. Natarajan were very close relatives and they were also running business. Therefore, she has given blank papers affixing her left. thumb impressions to the said T.N. Gurusamy. According to the First Defendant, it is possible that the Plaintiff would have used the said papers for filing the present Suit. The First Defendant also stated that the Plaintiff was not having means to advance money to her.

On a careful consideration of the materials available on record and on the submissions made by both the learned counsels, the following points arise for consideration in this Appeal :

(i) Whether the Appellant is entitled to a preliminary decree as prayed for ?

(ii) Whether the admission made by PW1 regarding the loan transaction is fatal to the case ?

The learned Counsel appearing on behalf the Appellant submitted that. the admission made by PW1 in the cross-examination to the effect that he did not lend money to the First Respondent based on Ex.A1-Pro-Note should not be taken in the isolation and interference should not be drawn from it-, that the admission made PW1 is only in respect of Ex.A1-Pro-Note and that. he advanced money based on equitable Mortgage viz., Exs.A2 & A3., that the First Respondent had admitted her left thumb impressions, therefore, the presumption under Section 118 of the Negotiable Instruments Act is attracted. In support of his contention, the learned Counsel for the Appellants relied upon the following Judgments :

(i) Veerasekhara Varmarayar v. Amirthavalliammal and others, AIR 1975 Mad.51, wherein the Division Bench of this Court held that the law does not compel the Plaintiff to file a rejoinder challenging the allegations made in the Written Statement The failure to file rejoinder cannot be treated as an admission of the Plea in the Written Statement.

(ii)Boramma v. Krishna Gowda and others, 2000 (3) MLJ 199 (SC), wherein, the Hon''ble Apex Court held that it will not be a sound rule of appreciation of evidence to pick up an answer from the cross-examination of a witness and draw interference taking it in isolation. The Court must see as to how consistent the testimony of the witness is and as to how what answer fits in with the rest of the evidence and probabilities of the case.

(iii) Swaminathan @ Selvam v. M. Kumar, 2007 (1) LW 797, wherein, this Court held that the presumptions of law or presumptions of fact may be rebutted not only by direct or circumstantial evidence, but also presumption of law or fact and the legal presumption raised under Section 114 of the Evidence Act against the Plaintiff will rebut the legal presumption that has arisen in favour of the Plaintiff under Section 118.

Countering the submissions made by the learned Counsel appearing for the Appellant, learned Counsel appearing on behalf of the Respondents submitted that in view of the admission made by the Plaintiff that he did not lend money to the First Respondent based on Ex.A1-Pro-Note is fatal to the case; that the Plaintiff did not. have sufficient money to advance such a huge amount of Rs. 5,00,000/- to the First Respondent in the year 1995. The learned Counsel also submitted that the Trial Court has rightly dismissed the Suit. In support of his contention, the learned Counsel for Respondents relied upon the following Judgments :

(i) Khetramohan Ray v. Udayanarayanan Panda and others, AIR 1991 Ori. 25, wherein the Orissa High Court held that when the Plaintiff claims that Defendant had taken a loan and had executed a Promissory Note, he is to prove that Defendant executed the same. If the Defendant would have admitted the execution of the Promissory Note, such fact is not necessary to be proved.

(ii)T.L. Sadagopan and 7 others v. T.N.K. Ramanujam and 10 others, 1993 (2) LW 387, wherein the. Division Bench of this Court following the Principle laid down in Thirumalai Iyengar v. Subba Raja, 1962 (1) MLJ 193, held that the duty of the Court is to give effect to the interference to be drawn from the evidence on record and it is not prevented from recording finding which may not be consistent with the pleadings of either party in the Suit.

(iii) A.S. Duraisamy Chettiar Sons v. S. Rathnaswamy Gounder, AIR 1992 Mad. 132. wherein this Court held that the Plaintiff, who as a professional money-lender, if be deliberately suppressed his Account Books, the Court was entitled to draw adverse inference that he had advanced money to the Defendant was to proved.

(iv)Kwamin Bassayin Omanhene Bententu, AIR 1937 PC 274, wherein the Privy Counsel held that where a person not knowing English has affixed his mark to a document written in English language, the onus to prove that the document was properly explained and interpreted to the per:ion affixing his mark so as to make him understand its true import is on the party relying on the document.

(v) N. Ethirajulu Naidu v. K.R. Chinnikrishnan Chettiar, AIR 1975 Mad. 333, wherein this Court held that where the Defendant admitted only that he put his signature on a blank piece of paper, which he alleged had possibly been utilized for fabricating the document, the onus of proving due execution must be thrown on the Plaintiff.

Though the Respondents raised the plea of limitation and mis-joinder of parties. However the Trial Court dismissed the Suit on the ground that Ex.A1-Pro-Note was not supported by consideration and the Plaintiff did not have wherewithal to advance loan.

The learned Counsel appearing for the Appellant submitted that the First Respondent had admitted the execution of Ex.A1-Pro-Note, Mortgage Deed and Ex.A3-Memorandum, therefore, presumption under Section 118 of the Negotiable Instruments Act shall attract. However, on a perusal of the Written Statement filed by the First Respondent it is clear that the first Respondent had not admitted the execution of the Suit Pro-Note, Equitable Mortgage and Ex.A3-Memorandum. In Paragraph No. 3 of the Written Statement, the First Respondent has specifically denied the execution of the documents. In Paragraph No. 4, the First Respondent has stated that in the event the left thumb impressions found in the documents are found to be that of her, it could be given by her to the Appellant''s father T.N. Gurusamy when the said T.N. Gurusamy and her son M.K. Natarajan were doing business. The First Respondent had stated that she would have given blank papers with her left thumb impressions to the said T.N. Gurusamy, which the Appellant would have utilized for filing the present Suit. Since the First Respondent did not admit the execution of the documents, the burden of prove is only on the Plaintiff to prove the due execution of Ex.A1-Pro-Note and other documents and also passing of consideration. Therefore, there will not be any presumption against the First Respondent under Section 118 of the Negotiable Instruments Act in the present case.

There is no dispute with regard to the ratio laid down in the Judgment relied upon by the learned Counsels appearing for the Appellant and Respondents. Applying the principles laid down in the above referred Judgments, it is clear that the burden of prove is only on the Respondent in proving the Suit claim.

In the present case the First Respondent had disputed the execution of the Suit Pro-Note and other documents by her. As next line of defense, she has stated that even in case the left thumb impressions found in the documents are found to be her in that case, the Respondent should have misused the blank papers given to his father T.N. Gurusamy for different purposes. Since the First Respondent had also taken such a defense, the burden of proof, with regard to the due execution of Ex.A1-Pro-Note and other documents is heavily on the Respondent. The Appellant was examined as PW1 and in his cross-examination he was stated that he did not lend money under Ex.A1-Pro-Note. In the cause of action paragraph, it has been stated that the Appellant has filed the Suit based on Ex.A1-Pro-Note dated 10.12.1995. When the Appellant himself admitted that he did not lend money to the First Respondent based on Ex.A1-Pro-Note, there is nothing remains to be adjudicated. The learned Counsel for the Appellant contended that the admission made by PW1 should not be taken in isolation and the statement made by PW1 would only mean that the Appellant had not advanced money solely on Ex.A1-Pro-Note and that he advanced money based on equitable Mortgage. Since the Suit has been filed based on Ex.A1-Pro-Note, the said contention cannot be accepted. That apart, in spite of the admission made by the Appellant, the said point as contended by the learned Counsel for the Appellant was not clarified by way of re-examination. If really the Appellant meant as contended by the learned Counsel for the Appellant, he would have clarified the said point by way of re-examination while deposing evidence. However it was not done. Therefore, the admission made by PW1 should be taken as it was made by him. Therefore, the Judgments relied upon the learned upon the learned Counsel for Appellant are not applicable to the facts and circumstances of the present case.

The Trial Court while dismissing the Suit found that the Appellant had no wherewithal to advance loan to the First Respondent. If the execution of Ex.A1-Pro-Note and other documents were proved by the Appellant by acceptable evidence, then the next point that might be necessary for deciding the matter would be whether he had wherewithal to advance loan to the First Respondent in the year 1995. In the case on hand, the execution of the documents was not proved by the Appellant by any acceptable evidence. That apart, since he himself admitted that he did not advance loan based on Ex.A1-Pro-Note, finding with regard to wherewithal is not required.

Applying the principles laid down in the Judgment relied upon by the learned Counsel for the Appellant, I am of the considered view that he Trial Court has rightly dismissed the Suit.

In these circumstances, I find no ground to interfere with the Judgment and Decree of the Trial Court. The Appeal is liable to be dismissed. Accordingly, the Appeal is dismissed. However, there shall be no order as to costs.