K. Sivakami vs S. Krishnan

A.C .Arumugaperumal Adityan, J.—The appeal has been directed against the decree and judgment in A.S. No. 165 of 1999, on the file of

Court of Principal District Judge, Dindigul. The unsuccessful defendant before the Courts below is the appellant herein.

The suit promissory note is alleged to have been executed by the defendant in favour of the plaintiff on 10.01.1993 for a sum of Rs. 35,000/-

with interest at 12% per annum. The defendant had failed to repay the debt, the plaintiff issued suit notice, dated 24.08.1993. The defendant has

issued a reply notice, dated 20.09.1993 containing frivolous contentions. The suit promissory note was not executed as a security, for the loan

borrowed by the defendant''s husband, from Mangalam Finance Chit Corporation at Palani, as alleged in the reply notice. The defendant''s

husband had no transaction with the Mangalam Finance at Palani, at any point of time. The defendant is an Income Tax Assessee. Hence, the suit.

The defendant in his written statement would contend that the defendant had not executed the suit promissory note on 10.01.1993 after

receiving a consideration of Rs. 35,000/-, as alleged in the plaint. The defendant does not know the plaintiff at any point of time. The defendant

had not executed any promissory note after receiving Rs. 35,000/-, as alleged in the plaint. At the instance of her husband, C.A. Kumar, the

defendant had signed in an unwritten promissory note. The plaintiff has concocted the suit promissory note only for the purpose of this case. The

defendant had married one C.A.Kumar, some 6-1/2 years back. The defendant is working as a Professor in a College, was getting more than Rs.

5,000/- per month, towards her salary. The defendant''s husband, C.A. Kumar, was not in cordial term with this defendant. The defendant''s

husband, C.A. Kumar, had joined in a chit by name, ''Mangalam Finance'', at Palani, had borrowed several loans from the said ''Mangalam

Finance'' and had also executed several promissory notes. The defendant''s husband has no means to pay the said loan amount. Since the

defendant was working as a Professor and was earning to realise the loan amount from the defendant''s husband, the plaintiff had threatened the

defendant''s husband to get a promissory note from this defendant as a security for the loan borrowed by him (C.A. Kumar). Only at the instance

of her husband, C.A. Kumar, the defendant had signed in an unfilled promissory note. The defendant''s husband also threatened to commit suicide,

if the defendant refused to sign in the said unfilled promissory note. Only under such circumstances, the defendant had signed in the unfilled

promissory note. The defendant is living separately from her husband from May-1993. After knowing this fact, the plaintiff only to realise the suit

amount, has filed this suit against this defendant, who had not received any amount under the suit promissory note from the plaintiff much less Rs.

35,000/-. For the suit notice received by her, the defendant had sent a suitable reply, dated 20.09.1993. Both the execution and passing of

consideration in respect of the suit promissory note is denied by this defendant. In the Mangalam Finance at Palani, apart from the plaintiff one

N.M. Natarajan, S.M. Vairam, Pandian, Jeganathan, Dhandapani are also partners. So far the defendant''s husband had paid Rs. 26,925/- to the

Mangalam Finance in order to discharge the loan from the said Mangalam Finance by him. The suit promissory note is a forged one, and hence,

the plaintiff is not entitled to any relief under the suit.

The plaintiff has filed a reply statement denying the averment in the written statement, contending that under the suit promissory note a sum of

Rs. 35,000/- was received by the defendant and that only to discharge the debt borrowed by the defendant''s husband, the suit promissory note

was executed by the defendant in favour of the plaintiff and that there was no connection between the plaintiff and the defendant''s husband, C.A.

Kumar.

The defendant has filed an additional written statement contending that she is not known to M.N. Natarajan and in his presence no amount was

paid to her, as contented by the plaintiff. On the above pleadings, the learned trial Judge has framed two issues for trial.

Before the trial Court, the plaintiff was examined as P.W.1 besides examining one of the witnesses of Ex.A1, suit promissory note, viz., Thiru.

Natarajan as P.W.2 and exhibited Exs.A1 to A3. On the side of the defendant, D.W.1 and D.W.2 were examined and Exs.B1 to B5 were

marked. The letter written by the defendant''s husband, C.A. Kumar to D.W.2, Muthumanickam were exhibited as Exs.X1 to X3.

After going through the evidence both oral and documentary, the learned trial Judge, has come to a conclusion that the plaintiff is entitled to a

decree on the basis of suit promissory note, has decreed the suit as prayed for. Aggrieved by the findings of the learned trial Judge, the defendant

has preferred an appeal in A.S. No. 165 of 1999, before the learned Principal District Judge, Dindigul, who, after giving due deliberations to the

submissions made by the learned Counsel on both sides and after scanning the evidence let in before the trial Court, finding no reasons to interfere

with the judgment of the learned trial Judge, has dismissed the appeal, thereby, confirming the decree and judgment of the learned trial Judge,

which necessitated the defendant to approach this Court by way of this Second Appeal.

The following substantial question of law are involved in the Second Appeal:

Whether the conditional admission of the signature alone in the promissory note will lead to the presumption of passing of consideration also u/s

118(a) of the Negotiable Instrument Act?

Will the burden of proof shift to the plaintiff if the normal presumption as to consideration is rebutted by the evidence of the defence.

Substantial Questions of Law Nos. 1& 2:

The plaintiff has filed the suit on the basis of Ex.A1, promissory note, alleging that the same was executed by the defendant on 10.01.1993 after

receiving the consideration of Rs. 35,000/- agreeing to pay interest at the rate of 12% per annum. The defence taken by the defendant is that her

husband, C.A. Kumar, had borrowed the loan from Mangalam Finance, Palani, on very many occasions and only as a security for the loan

borrowed from the plaintiff by her husband C.A. Kumar, the suit promissory note was executed by the defendant and that no consideration was

passed on to her but only to her husband C.A. Kumar. The learned trial Judge relying on the judgment in Bharat Barrel and Drum Manufacturing

Company Vs. Amin Chand Payrelal, has held that once execution of promissory note is admitted by the defendant, the presumption u/s 118(a) of

the Negotiable Instrument Act, is that the amount promissory note is valid by consideration, unless the plaintiff has rebutted the said presumption

by letting in further evidence on his side. Apart from examining himself as P.W.1, the plaintiff has also examined one of the witnesses to Ex.A1, suit

promissory note. Thiru. Natarajan as P.W.2, in his evidence, has categorically deposed that Ex.A1 promissory note was executed in his presence

by the defendant in favour of the plaintiff and at the time of execution of Ex.A1, the plaintiff had handed over Rs. 35,000/- to the defendant, who

had received the same. There is no recital in Ex.A1 as to the effect that only for a security, as a loan borrowed by the defendant''s husband

C.A.Kumar from Mangalam Finance, Palani, the suit promissory note was executed by the defendant. As rightly contended by the learned

Counsel appearing for the respondent that even after filing of the suit, the defendant had not sent any notice. The plaintiff contended that the suit

promissory note was executed only as a security for the loan borrowed by her husband C.A.Kumar from Mangalam Finance at Palani and that no

demand was made by the defendant from the plaintiff for return of the suit promissory note, Ex.A1. Further, the defendant, as D.W.1, would admit

in her deposition in the cross-examination that she has not filed any document to show that Mangalam Finance was conducting the chit and that her

husband was the subscriber of the said chit and had incurred a debt with the said Mangalam Finance. The defendant would depose in her evidence

that only at the instance of her husband, as a security, she had signed in the suit promissory note. But, the evidence of P.W.2, Natarajan is that the

defendant had executed the promissory note in the house of the plaintiff and Ex.A1 is supported by consideration to the tune of Rs. 35,000/-.

There is absolutely no material placed before the trial Court on the side of the defendant to show that Ex.A1, suit promissory note was not

supported by consideration. There is no rebuttal evidence let in by the defendant to show that Ex.A1, promissory note was not supported by

consideration. On the other hand, u/s 118(a) of the Negotiable Instrument Act, the presumption is that once the execution of the promissory note is

admitted, then it follows that it is supported by consideration. Both the Courts below have concurrently held that Ex.A1 is supported by

consideration and the defendant is liable to pay the suit amount.

The learned Counsel appearing for the appellant would contend that the trial Court has awarded 12% future interest for the suit promissory

note and admittedly, the suit loan was not for any commercial purpose. u/s 34 of the Code of Civil Procedure, the plaintiff can claim only 6% future

interest for the amount due under the suit promissory note, which was admittedly executed to discharge the family debt and also to meet the family

expenses. Under such circumstances, I am of the view that the plaintiff is entitled to only 6% future interest for the suit amount from the date of

decree till the date of realisation. Substantial Questions of Law Nos. 1 & 2 are answered accordingly.

In fine, the appeal is partly allowed with the following modification in the judgment of the learned trial Judge. The plaintiff is entitled to 6%

future interest from the date of decree till the date of realisation. In other respects, the decree of the first Appellate Judge in A.S. No. 165 of 1999,

on the file of Court of Principal District Judge, Dindigul, is confirmed. No costs.