Krishnamurthy vs Sivaji

T. Raja, J.—The appellant herein in S.A. No. 131 of 2007 filed a suit as plaintiff in O.S. No. 63 of 2002, on the file of the Sub Court,

Dharapuram, seeking for recovery of Rs. 1,36,000/-, with subsequent interest and costs. The appellant herein in S.A. No. 282 of 2007 filed a suit

as plaintiff in O.S. No. 26 of 2002, on the file of the Sub Court, Dharapuram, seeking for recovery of Rs. 1,23,100/-, with subsequent interest and

costs. Brief facts leading to the filing of the second appeals are given as under:-

The defendant-Sivaji borrowed a sum of Rs. 1,00,000/- each from both the appellants herein on 12.01.1999 and 22.02.2000 respectively for his

urgent family expenses and to that effect, he had executed a promissory note on the same date agreeing to repay the same with interest at the rate

of 12% per annum. But, when the plaintiffs/appellants herein requested the defendant/respondent herein to repay the loan amount, there was no

reply. Therefore, the plaintiffs issued a notice of demand on 18.12.2001 to the defendant and the same was received by him on 24.12.2001. Even

after receiving the notice, the defendant had neither issued any reply nor paid any amount towards the promissory notes. Therefore, the plaintiffs

were constrained to file the suits for the aforesaid relief.

The defendant also filed a written statement by taking a plea that no amount was borrowed from the plaintiffs either on 12.01.1999 or on

22.02.2000. In fact, on the said alleged dates, the defendant was working in the Neiveli Lignite Corporation as Deputy Chief Engineer. That apart,

it was further averred in the written statement that one Duraisamy of Poonivadi Village was also working under the defendant. The said Duraisamy

obtained permission for higher studies only in the evening College, but, violating the same, he studied in the regular course and thereby, he did not

attend the duty in the morning hours. For the said irregularity, a disciplinary proceeding was initiated against the said Duraisamy. In view of that. an

enmity between the defendant and the said Duraisamy had arisen. Subsequently, the said Duraisamy was also de-promoted from the post of

Executive Engineer to the post of Assistant Executive Engineer. Due to this. the plaintiffs, along with the said Duraisamy. being a relative to the

plaintiffs, prepared the suit promissory notice by appending the signature of the defendant. Therefore, it was averred that the promissory notes

being forged one, the suits filed for recovery of the above said amount should be dismissed. It was also further pleaded in the written statement that

even though the defendant received a notice from the counsel of the plaintiffs. since the defendant did not know as to who the plaintiffs, he was not

able to give any-suitable reply immediately. In the meanwhile. the plaintiffs filed the present suits. Only after receiving the summons, the defendant,

by collecting all the particulars, filed the written statement. It was also the case of the defendant that when he was serving as Deputy Chief Engineer

in Neyveli Lignite Corporation and drawing handsome salary, there was no necessity for the defendant to borrow the above said amount from the

plaintiffs.

On the side of the plaintiff in O.S.No. 63/2002, the plaintiff himself was examined as P.W. 1 and one Pappathi and Gandhi were examined as

P.Ws. 2 and 3. and 3 exhibits were marked as Exs. A1 to A3. On the side of the plaintiff in O.S.No. 26/2002, the plaintiff himself was examined

as P.W. 1 and one Subramaniam and Gandhi were examined as P.Ws. 2 and 3, and 3 exhibits were marked as Exs. A1 to A3. On the side of the

defendant in both suits, the defendant himself was examined as D.W. 1 and one Palani was examined as D.Ws. 2 and 5 exhibits were marked as

Exs. B1 to 5. On the pleadings and the materials placed, the learned trial Judge framed the following issues:-

i. Whether the plaintiff is entitled for the relief claimed in suit?

ii. To what relief?

The learned trial Judge, on appreciation of evidence produced by both sides, decreed the suits in favour of the plaintiffs. Aggrieved by the same,

when the appeals were preferred, the learned first appellate Court, by considering the case of the defendant that on the date of execution of these

two promissory notices viz., 12.01.1999 and 22.02.2000. he was working in the Neyveli Lignite Corporation, therefore, he could not have

executed the promissory notes that too in a place far away from NLC, reversed the findings rendered by the learned trial Court. As against the

same, the present second appeals have been filed by the plaintiffs.

This Court, at the time of entertaining the second appeals, framed the following substantial questions of law for consideration:-

INS. A.No. 131 of 2007

i) Has not the lower appellate Court committed an error of law in reversing the well merited judgment and decree of the trial Court without

assailing the various findings and reasoning given by the trial Court?

ii) Has not the lower appellate Court committed an error of law in view of the specific denial of the defendant in denying his own document and his

own signature found in the vakalath?

iii. Has not the lower appellate Court committed an error of law in not holding that Ex. A1 has been executed for valuable consideration and the

onus of the defendant to dispute the same and therefore the suit ought to have been decreed?

iv. Has not the lower appellate Court committed an error of law in wrongly relying upon the evidence of P.W. 2 and Exs. B4 and B5 which in fact

support the case of the appellant in view of the specific evidence given by D.W. 2?

v. Has not the lower appellate Court committed an error of law in holding that the appellant has not taken any steps to send the document in Ex.

A1 to the expert to prove the execution of the same by the defendant?

vi. Has not the lower appellate Court committed an error of law in not drawing inference in view of the fact that the respondent/defendant did not

send any reply after the receipt of the legal notice in Ex. A2?

INS. A. No. 282 of 2007

i) Has not the lower appellate Court committed an error of law in view of the specific denial of the defendant in denying his own document his own

signature found in the vakalath?

ii. Has not the lower appellate Court committed an error of law in not holding that Ex. A1 has been executed for valuable consideration and the

onus of the defendant to dispute the same and therefore the suit ought to have been decreed?

Learned counsel appearing for the appellants submitted that the learned first appellate Court by misplacing the law wrongly reversed the

judgments and decrees passed by the learned trial Court. According to him, in the ease of recovery of suit filed based on pro-note, the duty of the

plaintiff is to prove the execution of pro-note by sufficient oral and documentary evidence. Likewise, in both the cases, the plaintiffs producing

attestor, namely. P.W. 2, has established their case that the pro-notes were executed. Again, to support their cases, one another supportive

evidence P.W. 3 was also brought before the trial court, who also clearly mentioned about the execution and also passing of consideration of Rs. 1

lakh in each pro-notes. Therefore, when P.Ws. 2 and 3 have strongly deposed about the execution of pro-notes, the plaintiffs also going beyond

the execution of pro-notes, have also established before the Courts below that the defendant, even after the receipt of the notice dated

18.12.2001, conveniently kept quite even without giving any reply to the said notice. Therefore, it is not open to the defendant to say that he was

unaware of whereabouts of the plaintiffs to send the suitable reply.

In support his submission, he has also relied upon a judgment of this Court in T.G. Balaguru v. Ramachandran Pillai (2010 (2) MLJ 861) for a

proposition that when initial burden is discharged by the plaintiff, the burden shifts to the defendant to prove that the promissory note is not

supported by valid consideration. Therefore, mere defence plea of denial of signature in promissory note is not sufficient to rebut statutory

presumption raised u/s 118.

Further, he has also relied upon one another judgment of this Court in Abdul Hameed and others v. Senkottai Gounder and others (2009 (1)

MLJ 979) : (2008 AIHC 3061) for a proposition that if the attesting witnesses and the scribe depose on oath the relevant circumstances relating to

the execution of a promissory notice, it would not be necessary to call for expert opinion, because the Court is not invariably expected to call for

expert opinion in all cases, to find out whether the signature/thumb impression is genuine.

Per contra, learned counsel appearing for the respondent submitted that when the defendant has not executed any of these promissory notes, the

plaintiffs have miserably failed to move an application before the trial Court with a prayer to send these vital documents for an expert opinion.

Therefore, the learned first appellate Court has rightly reversed the judgment and decree passed by the learned trial Court holding that the

plaintiffs/appellants herein have miserably failed to prove their cases. Further, it was submitted that when the defendant has received two notices

from the plaintiffs, he was not able to send a reply immediately, for the reason that the defendant was not aware any of the plaintiffs. In the

meanwhile, when the defendant on receipt of notices started to prepare the reply to the said notices, the plaintiffs wrongly filed the suits, hence, the

defendant could not reply to the notice.

In his further submission, it was contended that when the defendant was working under Ncyveli Lignite Corporation as Deputy Chief Engineer,

one Duraisamy of Poonivadi Village, who is none other than the relatives of the plaintiffs, was also working under him. While working in the said

Corporation, the said Duraisamy obtained permission for studying higher course through Distance Education from the defendant, but, contradicting

the same, he studied in the evening college in regular course. On coming to know this fact the defendant initiated the disciplinary proceedings and

thereby, he was de-promoted to the post of Assistant Executive Engineer from the post of Executive Engineer. By utilizing this enmity, the plaintiffs

wrongly prepared the false pro-notes, as though the defendant has borrowed a sum of Rs. 1 lakh each from the plaintiffs at the rate of 12% interest

and again, they have not even produced the said Duraisamy before the trial Court to substantiate their case. On this basis, it was contended that

the learned first appellate Court has rightly held against the plaintiffs by reversing the judgment and decree passed by the learned trial Court, hence,

no interference is called for.

Heard the learned counsel appearing on either side and perused the materials available on record.

It is an admitted fact that the plaintiffs had issued notice dated 18.12.2001 calling upon the defendant to repay the borrowed amount of Rs. 1

lakh each taken from the plaintiffs. The defendant, who is also working as Deputy Chief Engineer in Neyveli Lignite Corporation, should have

immediately sent his reply with some denial, but, he has not replied to the notice. That apart, the defendant, by going into the witness box before

the trial Court, has completely taken inconsistent stand by denying not only his signature found in the promissory notes, but also his signature in

Vakalat filed before the Court, therefore, the learned trial Court looking at the inconsistent and self contradictory argument, by disbelieving the

entire defence made before the trial Court, has decreed the suits filed by the plaintiffs. On appeal, the learned first appellate Court, without taking

into account the case of the plaintiffs that they have proved their initial burden of execution of promissory notes, erroneously held that the plaintiffs

have failed to prove the execution of promissory notes. In this case, as rightly submitted by the learned counsel for the appellants, the law is well

settled that when initial burden is discharged by the plaintiff, the burden shifts to the defendant to prove that the promissory note is not supported

by valid consideration, therefore, it is for the defendant to rebut the presumption by successfully establishing that he did not receive any

consideration by direct evidence or by bringing on record the preponderance of probabilities. In this context, it is relevant to refer to para 18 of

T.G. Balaguru''s case (cited supra), which is held thus:

As soon as execution of promissory note is proved, rule of presumption laid down u/s 118 of Negotiable Instruments Act is to be raised that

promissory note is supported by consideration. Presumption u/s 118 of Negotiable Instruments Act is one of law and thereunder a Court shall

presume inter alia that negotiable instrument or the endorsement was made for consideration. Once statutory presumption is raised, onus of proving

absence of consideration is on the executant. When initial burden is discharged by the plaintiff, the burden shifts to the defendant to prove that the

promissory note is not supported by valid consideration. It is for the defendant to rebut the presumption by establishing that he did not receive

consideration by direct evidence or by bringing on record the preponderance of probabilities.

In this case, the defendant, having miserably failed to send a reply to the demand notice of the plaintiff and having denied his own documents

and his own signatures found in the vakalat as well as promissory notes, is not entitled to rebut the execution of promissory notes. Besides, it is well

settled through a catena of decisions that if the courts below have drawn a wrong inference from proved facts by applying the law erroneously or

have wrongly cast the burden of proof, the High Court, while exercising its power u/s 100. CPC, shall interfere with such erroneous findings. In the

case on hand, as I mentioned above, when the learned first appellate court has erroneously applied the law, I have no hesitation to interfere with

the impugned judgment. Moreover, a Division Bench of this Court, in Central Bank of India Vs. Antony Hardware Mart , dealt with the power of

the courts to compare the signature and after considering the scope of Sections 73 & 45 of the Indian Evidence Act, held that where the defendant

denies all signatures and attempts to defeat plaintiff''s claim, court can compare signatures and give its finding and it is not necessary that plaintiff

should take steps to get signature compared by an expert. In the present case, when the defendant failed to reply the pre-suit notice denying his

signatures found in the promissory note and deliberately denied his own signature that he appended in his vakalat namah filed to support his case,

the trial court having seen such unreasonable stand taken by the defendant, has clearly observed that when the defendant is entitled to deny his

signature in the pro-note, he has no locus standi to deny his own signature that he has affixed in his vakalat namah filed before court to defend his

case against the plaintiff. In these circumstances, as held by this court in the aforesaid judgment, the trial court has rightly compared the signatures

found in the pro-note, written statement and the vakalat namah and gave its finding that the defendant had appended his signature in the pro-note.

Even this vital aspect has been completely overlooked by the learned first appellate Court. In view of this inconsistent reasoning given by the

learned first appellate court, the impugned judgments and decrees are set aside. In result, the present second appeals are allowed, by answering

the substantial questions of law against the respondent. Consequently, the judgments and decrees passed by the learned trial Court are restored.

No Costs.