P.Anand Kumar vs N.Ravindran

The suit was for money on a promissory note. The suit was decreed by the trial court. The decree was reversed by the first appellate court. The plaintiff is in second appeal.

The case of the plaintiff may be stated as follows : From him was borrowed Rs 40,000/- on 17.12.1999 by the defendant. On the same day he executed a promissory note in favour of the plaintiff. The former handed over the title deed of his property to the latter on 25.12.1999. A demand was made. The amount was not paid. Therefore the suit.

The defendant had the following defence : He did not execute the promissory note in favour of the plaintiff. Nor did the former receive any consideration under any promissory note. The defendant had entrusted with the plaintiff some signed blank papers in relation to a chit transaction between the plaintiff and the father of the defendant. The title deed was handed over to the plaintiff by the defendant for the purpose of obtaining a loan of Rs 5000/-.

Both sides adduced evidence. PWs 1 and 2 and DW1 were examined. Exts A1 to A4 were marked. As already said, the trial court decreed the suit and the said decree was reversed by the appellate court.

Heard Sri.Jacob Sebastian, the learned counsel for the plaintiff/appellant. The respondent/defendant was served with notice, but he did not enter appearance.

The substantial question of law formulated at the time of admitting the appeal is extracted below :

"Whether the lower appellate court erred in dismissing the suit based on Ext A1 promissory note when the initial burden cast on the plaintiff to prove due execution of the pronote and passing of consideration has been discharged invoking also the presumptions under Sections 118 and 139 of the Negotiable Instruments Act and when the defendant has not been able to rebut the presumption, but observing that the plaintiff is not even aware of the one other witness to the promissory note when there is no second witness to the promissory note and when there was actually only one witness to the promissory note ?

Ext A1 is the suit promissory note. Its execution is denied by the defendant. The burden to prove its execution is certainly on the plaintiff. In order to prove the execution of Ext A1, the plaintiff gave evidence as PW1 and he examined the witness to the promissory note as PW2. The lower appellate court disbelieved PW1 on the ground that he was not even aware who was Narayanan who was the second witness to the promissory note. The evidence of PW2 was not accepted by the appellate court since he said that he signed the promissory note as a witness eight months before his examination in court. Therefore, according to the learned appellate judge, the promissory note was not signed by PW2 at the time of its execution.

The first appellate court proceeded as if two witnesses signed the promissory note. But it was not so. I have perused the promissory note. There is only one witness in it. He is PW2. One Narayanan who, according to the learned appellate judge, was the second witness to the promissory note was not a witness at all to it. What you find in the promissory note is the signature purported to have been put by the defendant on a revenue stamp worth one rupee. Beneath the revenue stamp it is shown that the signatory is the son of K.Narayanan. Narayanan was mistook by the learned appellate judge as a witness and concluded that the plaintiff was not even aware as to who the second witness to the promissory note was.

The evidence of PW1 on execution of the promissory note was disbelieved by the first appellate court. PW1 spoke that from him was borrowed Rs 40,000/- by the defendant on 17.12.1999 and issued Ext A1 promissory note for the said sum. PW1 maintained in cross-examination too his stand in his examination-in-chief. I do not see anything to disbelieve the evidence of PW1 that he lent Rs 40,000/- to the defendant on getting Ext A1 executed. The only reason stated by the first appellate court to disbelieve PW1 is not at all supportable for reasons stated in the immediately preceding paragraph of this judgment.

PW2 also spoke to the execution of Ext A1 promissory note by the defendant. The learned appellate judge stated that PW2 came to the court after studying the case well. The evidence of PW2 that he had studied the matters involved in the case does not mean beyond that he knew the facts of the case. His evidence that he had come to the court several times to give evidence is not a ground to disbelieve him. It is true that he spoke that he signed Ext A1 as a witness approximately eight months before his examination in court. That part of the evidence of PW2 cannot be magnified to disbelieve him. It can only be taken as a mistake on his part. But for that, there is nothing in the evidence of PW2 to suspect his evidence. The first appellate court was not justified in rejecting the oral evidence of PW2 solely for a mistake on his part.

The plaintiff proved his case of executing Ext A1 promissory note by the defendant. Handing over of the title deed of the defendant to the plaintiff is not much material inasmuch as, admittedly, no equitable mortgage was created. As against the pleadings and evidence on the side of the plaintiff, what is available on the other side are inconsistent versions. The defendant stated two transactions in the written-statement. One is a chit transaction between his father and the plaintiff. Another one was a transaction pertaining to Rs 5000/-. The amount of Rs 5000/- was not received as per the written-statement. But it was received going by the recitals in Ext A4 reply notice sent by the defendant. The chit transaction is not mentioned in Ext A4 reply notice. The defendant admitted his signature in Ext A1 by contending that he gave to the plaintiff signed blank stamp papers. That apart, he wrote paragraph 6 of his written-statement admitting his signature in the promissory note. When he went to the witness box, he denied his signature thrice; once in his examination-in-chief and twice in his cross-examination. He denied his signature contrary to his pleadings admitting his signature in Ext A1. The pleadings and evidence of the plaintiff shall certainly be preferred to the pleadings and evidence of the defendants.

The plaintiff did discharge his burden to prove the execution of Ext A1 promissory note by the defendant. The suit was dismissed by the appellate court on an erroneous appreciation, rather misappreciation, of the evidence adduced on the side of the plaintiff. The execution of Ext A1 is proved. The document is backed by the presumption under Sec.118 of the Negotiable Instruments Act. The trial court was right in decreeing the suit. The first appellate court went wrong in reversing the decree granted by the trial court.

The second appeal is allowed. The decree and judgment of the first appellate court are set aside. The decree granted by the trial court is restored. The suit stands decreed in favour of the plaintiff and against the defendants for Rs 40,000/- (forty thousand only) with interest thereon at the rate of 12% per annum from the date of suit till today and thereafter at 6% per annum till realization. The plaintiff is entitled to costs in all the three courts.