Nachattar Singh vs Kewal Singh

Ajay Kumar Mittal, J.—This regular second appeal filed by the defendant is directed against the judgment and decree dated 24.4.2007 passed by the first appellate Court vide which the appeal filed by him challenging the judgment and decree dated 19.1.2005 passed by the trial Court decreeing the suit of the plaintiff for recovery of Rs. 2,00,000/- along with interest at the rate of 12-1/2% per annum from the date of execution of the pronote i.e. 17.1.2001, till realization was partly accepted by only reducing the rate of interest to 9% from 12-1/2% per annum.

Sans unessentials, the facts of the case are that the plaintiff filed a suit for recovery of Rs. 2,00,000/- along with interest at the rate of 2% per month on the averments that on 17.1.2001, the defendant approached him for obtaining a loan of Rs. 2,00,000/-which was advanced to him with the stipulation of returning the same on demand along with interest at the rate of 2% per month. The defendant executed the pronote and receipt dated 17.1.2001 in favour of the plaintiff in token of the said loan which was got scribed from Jagpal Singh. The loan amount was received by the defendant in the presence of the witnesses of the pronote and receipt as well as the scribe thereof. It was pleaded that when the plaintiff demanded the loan amount, the defendant failed to repay the same as well as the interest accrued thereon and that gave rise to the filing of the suit.

To controvert the stand of the plaintiff, the defendant filed a written statement raising various preliminary objections therein. It was pleaded that the defendant had neither obtained a loan of Rs. 2,00,000/- from the plaintiff nor executed any pronote and receipt. It was further pleaded the defendant and his son were agriculturists and they used to bring their crops in the Hard and Sauni season to the shop of M/s Naranjan Lal Bansal, Commission Agent, New Grain Market, Barnala and Naranjan Lal was maintaining the accounts of the said firm and used to get their signatures on the blank pronote and receipt. It was also pleaded that when the firm had refused to render the account with the defendant, a dispute arose between them and the son of the defendant filed a civil suit titled as "Jeet Singh v. Naranjan Lal and Ors." wherein the firm gave a writing dated 8.11.2001, mentioning clearly that nothing was due towards the defendants, his wife and son. According to the defendant, the plaintiff in connivance with M/s Naranjan Lal Bansal had got prepared a false and frivolous pronote and receipt. The other averments made in the plaint were denied and a prayer for dismissal of the suit was made.

The trial Court, on appreciation of the oral as well as the documentary evidence led by the parties came to the conclusion that the plaintiff gave a loan of Rs. 2,00,000/-to the defendant and, therefore, he was entitled to recover the loan amount along with interest at the rate of 12-1/2% per annum. Accordingly, the trial Court vide, judgment and decree dated 19.1.2005 decreed the suit of the plaintiff for recovery of Rs. 2,00,000/-along with interest at the rate of 12-1/2% per annum from the date of the execution of the pronote, i.e. 17.1.2001, till realization of the decretal amount. Feeling aggrieved, the defendant went in appeal and the lower appellate Court upholding the findings of the trial Court regarding availing of loan by the defendant from the plaintiff dismissed the appeal with a modification to the extent that the plaintiff would be entitled to recover the loan amount of Rs. 2,00,000/- along with interest at the rate of 9% per annum from the date of the execution of pronote i.e. 17.1.2001, till the date of realization.

I have heard the learned Counsel for the parties and perused the impugned judgments of the courts below.

Mr. Bains, learned Counsel for the appellant has submitted that since the defendant had denied the due execution of the pronote and receipt, no presumption u/s 118 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the Act") could have been drawn against the defendant-appellant and placed reliance on the judgments reported in Kundan Lal Rallaram v. Custodian evacuee Property, Bombay AIR 1961 S.C. 1316, Bharat Barrel and Drum Manufacturing Company Vs. Amin Chand Payrelal, , G. Vasu v. Syed Yaseen Sifuddin Quadri 1987 A.L.T. 1 Saftarsab v. B. Allaiah 2006 2 Crimes 259 and of this Court in Chandan Lal Joura Vs. Amin Chand Mohan Lal and Others, According to the learned Counsel, the appeal raises substantial questions of law for fie consideration of this Court.

On the other hand, Ms. Preeti Khanna, learned Counsel for the respondent argued that both the courts have on appreciation of the oral as well as the documentary evidence concurrently arrived at the conclusion that the pronote and receipt were duly executed by the defendant and that the consideration had also passed on to him, therefore, no interference is called for in the regular second appeal. According to the learned Counsel, the appeal raises no substantial questions of law.

After giving my thoughtful consideration to the arguments of the learned Counsel for the parties, I do not find any merit in this appeal.

u/s 118 of the Act, certain presumption have been raised regarding every negotiable Instrument, until the contrary is proved. Section 118 of the Act reads thus:

Presumption as to negotiable instruments.- Until the contrary is proved, the following presumptions shall be made-

(a) of consideration - that every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration.

(b) as to date - that every negotiable instrument bearing a date was made or drawn on such date;

(c) as to time of acceptance - that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;

(d) as to time of transfer - that every transfer of a negotiable instrument was matfe before its maturity;

(e) as to order of indorsements - that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;

(f) as to stamps - that a lost promissory note, bill of exchange or cheque was duly stamped.

(g) that holder is a holder in due course - that the holder of a negotiable instrument is a holder in due course:

provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.

Section 118 of the Act lays down a special rule of evidence applicable in respect of the negotiable instruments. On a plain reading of aforesaid provision, it clearly emerges that certain presumptions are attached to a negotiable instrument, until the contrary is proved. It is, however, essential that before these presumptions can be drawn, the execution of the instrument has to be proved either by admission of the defendant or by leading of cogent and convincing evidence by the plaintiff. Under the said provision, the Court shall presume certain facts regarding consideration, as to date, as to time of acceptance, as to time of transfer, as to order to indorsement, as to stamps and that holder is a holder in due course, which is rebuttable. According to it, a court shall presume inter alia that the negotiable instrument or the indorsement was made or indorsed for consideration.

On the basis of rule of evidence, the initial burden is on the plaintiff to prove the due execution of the negotiable instrument/pronote by the defendant. As soon as the execution is proved, the presumption available to the plaintiff immediately arises in his favour that the said instrument was made for consideration. This presumption shifts the burden of proof on the defendant and he may have to adduce evidence to establish that the negotiable instrument/pronote was not supported by consideration and in case he succeeds in leading cogent and convincing evidence the burden again shifts to the plaintiff and so on.

Now, adverting to the facts of the present case, the plaintiff has examined PW-1 Bachan Singh and PW-2 Jaspal Singh who have signed the pronote as attesting witnesses and have supported the case of the plaintiff. Besides them, the plaintiff himself has appeared as PW-3. They have proved due execution of the pronote, Ex.P-1 and receipt, Ex.P-2 by the defendant. Moreover, the defendant had admitted his signatures on these documents but his plea was that his signatures were taken on blank promotes and receipts as the same were required for surety purposes but were later on misused by the plaintiff. On the other hand, the defendant had examined DW-1 Rajinder Kumar HC and himself appeared as DW2. DW-1 had tendered his affidavit Ex.DW1/A deposing that he remained posted as Reader to DSP-Gurjit Singh, Internal Intelligence Cell, Chandigarh and on 25.9.2003 he was working as Reader with DSP Gurjit Singh who was posted at Sherpur and he used to see him while writing and signing and, thus, he can identify his signatures as well as handwriting and that the enquiry report, Ex.D-1 in criminal file No. 499 of 29.4.2004, State v. Naranjan Lal and Ors. FIR No. 358 of 22.9.2003 under Sections 420/120-B of Indian Penal Code was prepared by him at the asking of DSP Gurjit Singh and was signed by the said DSP. Further, the defendant while appearing as DW2 had tendered his affidavit, Ex.DW2/A, reiterating the entire facts of the written statement. The defendant instead of leading any material evidence had merely relied upon the enquiry report Ex.D-1, which was in respect of some dispute inter se between the parties on the basis of the FIR registered in 2003. Both the courts on appreciation of the evidence available on record had concurrently come to the conclusion that there was no deceit, fraud or misrepresentation in execution of the pronote and receipt. No fallacy could be noticed in the aforesaid finding recorded by the courts below.

Once the execution of the pronote and receipt (Ex.P-1 and Ex.P-2) respectively stood proved, the presumption u/s 118 of the Act is available to the plaintiff and it was for the defendant to have convinced the courts by leading cogent evidence that no consideration had passed. Again, the defendant has failed to establish by producing clinching evidence which could have established his plea that the pronote was without consideration. The findings recorded by the courts below being based on evidence cannot be interfered with in exercise of jurisdiction u/s 100 of the Code unless the same is initiated being based on misreading or non-consideration of relevant evidence on record.

Suffice it to notice that the judgments relied upon by the learned Counsel for the appellant were rendered in the facts of their own cases though the principle of law laid down therein relating to interpretation of Section 118 of the Act and the presumption that arises thereunder is well established and there are no two opinion about the same. The said judgments are of no help or cannot "come to the rescue of the appellant in the facts and circumstances of the case. As recorded above, the due execution of the pronote (Ex.P-1) and receipt (Ex.P-2) has been held to be proved and die defendant-appellant having failed to adduce any direct or circumstantial evidence to establish the plea of deceit or fraud or that no consideration had passed, no benefit could be derived by him from the said judgments.

No question of law much less a substantial question of law arises in this appeal for determination of this court.

In view of what has been stated above, there is no merit in this appeal and the same is hereby dismissed. There shall, however, be no order as to costs.