Dr.Koneru Vijayakumar vs Smt. Vadlamudi Rama Devi
2021 Latest Caselaw 3288 AP

           HON'BLE SRI JUSTICE M. VENKATA RAMANA

                  SECOND APPEAL No.126 of 2012
JUDGMENT:

This is a defendant's second appeal.

2. The respondent as the plaintiff laid the suit in O.S.No.1030 of

2007 on the file of the Court of the learned Principal Senior Civil Judge,

Vijayawada for recovery of Rs.4,23,000/- with costs and future interest,

on the foot of a promissory note.

3. The case of the respondent is that the appellant borrowed

Rs.1,50,000/- in cash from her on 13.01.2000 for his business purpose

agreeing to repay the same with interest at 24% p.a. and executed the

suit promissory note on the same day. Further case of the respondent is

that, on 10.01.2003 and on 05.01.2006 the appellant paid Rs.1,000/- each

in cash to her and endorsed on the obverse of the suit promissory note

and thereafter, when the appellant failed to repay the amount due in spite

of repeated demands, she was constrained to cause a legal notice to him

dated 29.08.2007 to which the appellant got issued a reply dated

08.09.2007 with false allegations. In those circumstances, the respondent

claimed that she had instituted the suit against him for recovery of the

amount.

4. The appellant resisted the claim of the respondent mainly

denying the execution of the suit promissory note and also two payment

endorsements thereon attributed to him. His further contention is that the

respondent was working for him in Cheritasri Hospitals at Vijayawada from

whom he had no necessity to borrow and that the suit claim stood barred

by time. He also raised a contention at the trial that the person, who MVR,J S.A.No.126 of 2012

instituted the suit in the name of the respondent, was not the real alleged

creditor and attributed impersonation not only to the person represented

as the respondent (plaintiff) at the trial but also the person, who is

referred as the defendant at the trial stage or as the borrower in the suit

promissory note.

5. The trial Court settled the following issues for trial basing on the

pleadings:

"1. Whether the suit promissory note dated 13.01.2000 is true, valid and binding on the defendant?

2. Whether the part payment endorsements dated 10.01.2003 and 05.01.2006 on the back side of the suit promissory note are true, valid and binding on the defendant?

3. Whether the suit promissory note dated 13.01.2000 lacks necessary ingredients of a promissory note as defined under Section 4 of the Negotiable Instruments Act?

4. To what relief?"

6. The parties went to trial, where the respondent examined

herself as P.W.1, attestors to both the payment endorsements as P.W.2

and P.W.3 respectively, while relying on Ex.A1 to Ex.A6. The appellant

examined himself as D.W.1 and no documents were exhibited on his

behalf.

7. On the material and the evidence, the learned trial Judge

rejected the defence of the appellant and accepted the claim of the

respondent and basing on the evidence let in by her, decreed the suit as

prayed.

8. The appellant preferred A.S.No.16 of 2009 on the file of the

Court of the learned XII Additional District Judge (FTC), Vijayawada

against this decree and judgment. By the decree and judgment dated MVR,J S.A.No.126 of 2012

19.09.2011, the learned appellate Judge dismissed the same confirming

the decree and judgment of the trial Court.

9. In these circumstances, the appellant presented the second

appeal.

10. This second appeal was admitted and the substantial questions

of law, basing on which this second appeal stood admitted are as follows:

"1. Whether the judgment and decree dated 19.09.2011 passed in A.S.No.16 of 1999 is sustainable under law when the suit pronote is admittedly incomplete as per the evidence of P.W.1 and suit pronote Ex.A1 is hit by section 4 of the N.I.Act?

2. Whether plaintiff discharged her burden under Section 101 of Evidence Act and whether the suit can be decreed when the execution of pronote and consideration are not proved by examined attestors in pronote Ex.A1?"

11. Sri P.Rajesh Babu, learned counsel for the appellant, and Sri

Sai Gangadhar Chamarthy, learned counsel for the respondent, addressed

arguments.

12. The essential question to consider is in relation to proof of

Ex.A1-promissory note, payment endorsements thereon-Ex.A2 and Ex.A3

and liability if can be fastened to the appellant thereon, upon appreciation

of evidence, bearing in mind the effect of burden of proof under Sections

101 and 102 of the Evidence Act.

13. In a suit of this nature, where essentially execution of not only

the suit promissory note but also the payment endorsements is denied,

the legal burden of proving the transactions solely rests on the plaintiff,

namely, the respondent herein and it can never shift to the defendant,

namely, the appellant herein. Upon discharge of such legal burden, upon

satisfactory evidence proving the document and the transactions, the MVR,J S.A.No.126 of 2012

evidential burden shifts to the defendant, namely, the appellant herein, to

probablise his defence in preponderance of probability.

14. Ex.A1 is the suit promissory note executed for Rs.1,50,000/-

agreeing to repay the same with interest at 24% p.a. thereon on demand.

The execution of this suit promissory note is attributed to the appellant,

who is a neuro-physician and Chairman and Director of Charita Sri

Hospitals. The contents of this promissory note are that it was self-scribed

by the executant, namely, the appellant. One Sri V.Narayana attested it.

At the trial, P.W.1, namely, the respondent deposed in respect of

execution of Ex.A1 and the transaction thereunder. It is in consonance

with the case set up by her in the pleadings and also explaining the

transaction under Ex.A1.

15. The sole attestor to Ex.A1 promissory note was not examined

at the trial nor is there any reference to his presence in the testimony of

P.W.1 during that transaction. P.W.1 not only in her examination-in-chief

but also in cross-examination stood to ground in explaining the

circumstances, when Ex.A1 was executed by the appellant borrowing

Rs.1,50,000/- from her agreeing to such terms stated therein. She further

explained that the amount paid thereunder to the appellant was a part of

earnings of her husband, who was a contractor and out of her agricultural

income.

16. Admittedly, she worked in the hospital run by the respondent

as an office assistant as is established by Ex.A7-certificate issued by the

appellant himself dated 16.04.2002. Sincerity in work of the respondent is

vouched in Ex.A7. Pertinent to note that Ex.A7 was issued subsequent to

Ex.A1. Therefore, nature of the respondent being sincere as a positive MVR,J S.A.No.126 of 2012

attribute has to be considered in this context, against whom, by then

obviously the appellant had no grouse nor could attribute any animus to

fabricate a document like Ex.A1, foisting signatures.

17. A promissory note is not a compulsory attestable document nor

proof of such transaction requires to be by examining the attestors as well

as the scribe, if any, to it. If the evidence of the propounder of this

promissory note, namely, creditor or the plaintiff is satisfactory and is

sufficient, there is no reason why such testimony cannot be relied on.

18. One circumstance standing in favour of the respondent is

referred to above basing on Ex.A7, which was issued during the period in

between the date of Ex.A1 and payment endorsement-Ex.A2, namely,

13.01.2000 and 10.01.2003.

19. Added feature in this context is that this promissory note was

scribed by the appellant himself. This promissory note is in printed

proforma. Blanks therein were filled up, according to the respondent, by

the appellant himself. Description of the parties appearing thereon is not

in full shape. However, having regard to the fact that there is no dispute

as to identity in between these parties, particularly having regard to

Ex.A7, such omission cannot have any bearing.

20. Sri Rajesh Babu, learned counsel for the appellant, basing on

the contents of Ex.A1 contended that it is an incomplete document and in

view of Section 4 of the Negotiable Instruments Act, it has no effect nor

can be looked into to bring any liability of the appellant.

21. Adverting to this legal position, Sri Rajesh Babu, learned

counsel for the appellant, relied on B. Jaya Raghava Naidu vs. MVR,J S.A.No.126 of 2012

B. Rama Subba Reddy1, where, in this context, it is observed in Para-20

as follows:

"20. The legal position that emerges from the case law discussed above is that negotiability of the document is the main feature of a promissory note while the certainty of the sum payable and an unconditional undertaking signed by the maker are the other two important requirements to be satisfy for the document to fall within the description of the promissory note."

22. It is desirable to consider what is section 4 of the Negotiable

Instruments Act. It reads as under:

"4. "Promissory note."--A "Promissory note" is an instrument in writing (not being a bank-note or a currency-note) containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument."

23. It defines promissory note being an instrument in writing and

which is not a bank note or currency. It should contain an unconditional

undertaking signed by the maker. Sum of money thereunder to pay and

the person to whom it should be paid, is a certainty. Such payment shall

be either to his order or to the bearer of the instrument. Illustrations

appended to section-4 of the Negotiable Instruments Act are referring to

nature of promissory notes.

24. Section 13 of the Negotiable Instruments Act defines

'negotiable instrument'. It reads as under:

"13. "Negotiable instrument".--3[(1) A "negotiable instrument" means a promissory note, bill of exchange or cheque payable either to order or to bearer."

25. It includes a promissory note. What is negotiation is stated in

Section 14 of the negotiable Instruments Act and it reads as under:

"14. Negotiation.--When a promissory note, bill of exchange or cheque is transferred to any person, so as to constitute that person the holder thereof, the instrument is said to be negotiated."

.2011(2) ALT 24 MVR,J S.A.No.126 of 2012

26. A careful examination of these provisions of the Negotiable

Instruments Act in application to Ex.A1 promissory note, makes out that it

stands to such description. The predominant consideration stated not only

in Section 4 but also as to negotiability, being its one of principal features,

described in Sections 13 and 14 of this Act, leaves no manner of doubt, of

its nature. Thus, being a negotiable instrument with such characteristics it

can be enforced as such.

27. Even otherwise, if the contention of the appellant is accepted,

it being an incomplete instrument, the Negotiable Instruments Act did not

prohibit enforcing it in the manner stated in Section 20 therein relating to

inchoate stamped instruments. The defence of the appellant is only with

reference to want of contents in this promissory note describing the

parties thereto and not with reference to other characteristics.

28. Therefore, the premise sought to be made out by the appellant

is non existent having regard its nature, Ex.A1 is meeting the

requirements being a legal and enforceable negotiable instrument.

29. Ex.A2 and Ex.A3 are the payment endorsements on the

obverse of Ex.A1 promissory note dated 10.01.2003 and 05.01.2006

respectively, whereunder Rs.1,000/- each was paid . These payments are

attributed to the appellant.

30. P.W.2 attested the payment endorsement under Ex.A2. P.W.3

attested the payment endorsement under Ex.A3.

31. The respondent and these two witnesses clearly deposed in

respect of these payment endorsement transactions. Material was elicited MVR,J S.A.No.126 of 2012

in the cross-examination in effect proving the presence of these attestors

at the time of respective transactions.

32. One of the contentions of the appellants is that he is running a

hospital at Vijayawada with no necessity to borrow, particularly from a

subordinate like the respondent. Further contention of the appellant is

that P.W.2 is a lorry driver and it cannot be accepted that he would be the

witness, who was present at the time of the endorsement under Ex.A2,

having regard to the position the appellant occupies.

33. It is also contended for the appellant that P.W.3 is a friend of

the husband of the respondent. Therefore, when interested testimony is

available on record, according to the learned counsel for the appellant, no

credence as such could be attached in relation thereto.

34. Creditworthiness of the appellant stood exposed from the

statements elicited from him at the trial as D.W.1, in cross-examination.

Several suits were filed referred to in judgments of both the courts below,

where the instances were based on promissory notes, which were scribed

and executed by the appellant and where he had taken similar defence of

denial of execution of the promissory notes. On his own showing, all these

suits were settled in Lok Adalat for payment of Rs.18,00,000/-. Ex.A8 is a

publication taken out under Securitisation Act on behalf of State Bank of

Patiala taking over possession of the properties of the hospital claimed by

him, since it was found due Rs.48,92,092/-, which was payable by

27.08.2007. These instances are sufficient to reject the contention of the

appellant in this context.

35. When the testimony of P.W.2 and PW.3 is corroborating and

supporting the version of P.W.1 in relation to payment endorsements, MVR,J S.A.No.126 of 2012

there is no reason to reject such testimony. Contra to it, except the sole

testimony of the appellant as D.W.1, no other material is available.

36. The peculiarity in this case is that Ex.A1 to Ex.A3 are attributed

to the appellant, he being their author. In such circumstances, the burden

is very heavy on the appellant being the defendant in the suit, to

substantiate his defence as against the material placed by the respondent.

Intrinsic worth of Ex.A1 to Ex.A3 should be considered in this context to

aid the testimony placed by the respondent on record.

37. Both the Courts below observed that the appellant failed to

subject Ex.A1 to Ex.A3 to examination by a hand writing expert. The

learned counsel for the appellant contended that the burden is on the

respondent to prove due execution of Ex.A1 to Ex.A3 and the burden so

cast by the both the Courts below is improper. To support such

contention, the learned counsel for the appellant relied on Chatakondu

Govinda Rajulu vs. G. Sudha Madhuri and others2 . The facts

considered in the above decision are strikingly dissimilar than what is

observed in this case. It was not a case where the instrument was not

authored by the executant and circumstances were such that proof of the

transactions relating to promissory note was required, that were executed

by the borrower, who was no more by the date of trial.

38. The material on record in this case, particularly proof offered

by the respondent basing on Ex.A1, her testimony as P.W.1, Ex.A2 and

Ex.A3 and supporting testimony of P.W.2 and P.W.3, did establish such

. 2011(1) ALT 269 MVR,J S.A.No.126 of 2012

transactions. The legal burden in terms of Section 101 of the Evidence Act

on the respondent stood discharged thus.

39. When the testimony of D.W.1 is considered, namely, that of

the appellant, having regard to its nature and failure to present such

credentials of acceptance, it did not meet the requirement in these

circumstances to discharge such evidential burden placed on him in terms

of Section 102 of the Evidence Act.

40. One of the contentions of the appellant is that, a consistent

defence is presented from the time the reply notice was issued by him

and hence it requires acceptance. It is only a circumstance projecting the

interested version of the appellant and not otherwise. In this context, the

nature of defence set up by the appellant requires consideration. Apart

from denying the execution of Ex.A1 to Ex.A3 at the trial, without any

basis in the pleadings, he came up with the version as if the respondent is

not person in whose name Ex.A1 stood nor the executant of Ex.A1 is not

himself. That is to say, he tried to project an instance of impersonation. It

is a baseless defence and when it is not founded on the pleadings, it

requires rejection at once.

41. Therefore, rejecting the contention of appellant on

consideration of material, since the entire case revolves around

appreciation of evidence and fact based, as rightly pointed out for the

respondent, there are no such questions of law much less substantial

questions raised in this second appeal for consideration and

determination. This case did not meet the requirement under Section 100

CPC for this Court to reconsider the matter. Therefore, this second appeal

has to be dismissed confirming the judgments of both the Courts below.

MVR,J S.A.No.126 of 2012

42. In the result, this second appeal is dismissed confirming the

decrees and judgments of both the courts below. The appellant shall bear

his own costs throughout and shall pay costs throughout to the

respondent.

As a sequel, pending miscellaneous petitions, stand closed. Interim

Orders, if any, stand vacated.

________________________ JUSTICE M.VENKATA RAMANA Dt:01.09.2021 RR MVR,J S.A.No.126 of 2012

HON'BLE SRI JUSTICE M.VENKATA RAMANA

SECOND APPEAL Nos.126 of 2012

Dt:01.09.2021

RR