G.Apparao, vs Puvvada Venkanna,Died Per Lr Rr2 ...
2022 Latest Caselaw 1725 AP

        HON'BLE SRI JUSTICE SUBBA REDDY SATTI

                  APPEAL SUIT No.76 of 2006

JUDGMENT:-

      Assailing the judgement and decree dated 30.11.2005

passed in OS No.158 of 2004 on the file of learned Additional

Senior Civil Judge, Kurnool, plaintiff filed the above appeal.


2.    For brevity and clear understanding the parties to the

appeal are referred to as they are arrayed in the plaint.


3.    The plaintiff filed the suit for the recovery of an amount of

Rs.5,14,932/-, principal amount being 3,00,000/-, basing on

four promissory notes dated 06.06.2001 and two promissory

notes dated 16.07.2001.


4.    In the plaint it was contended inter alia that plaintiff and

defendant, residents of Vijayawada, are acquainted with each

other; that plaintiff being a mechanic came over to Kurnool for

business; that defendant approached the plaintiff at Kurnool on

06.06.2001 for loan of Rs.2,00,000/- for his family necessities

and executed four promissory notes each for Rs. 50,000/- on

06.06.2001 agreeing to repay the same with interest at 24% per

annum; that defendant again borrowed Rs. 1,00,000/- from the

plaintiff for his family necessities and executed two promissory

notes for Rs. 50,000/- each on 16.07.2001 agreeing to repay the

same with interest at 24% per annum; that in spite of demand

and legal notice dated 18.05.2004, defendant failed to repay the
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money      and     sent     reply   dated   25.05.2004       denying   the

transactions and hence, filed the suit for recovery of amount.


5.    Defendant filed written statement and contented inter alia

that the court at Kurnool had no territorial jurisdiction to

entertain the suit; that no consideration was passed under the

promissory notes and the attestors belonged to Vijayawada.


6.    It was further contented that plaintiff and defendant's

father did kerosene business and used to sell the kerosene to

truck drivers in Vijayawada, who in turn used kerosene instead

of diesel, for long period; that plaintiff calculated the quantity in

barrel at 200 litres however used to supply 170 litres; that

during the course of carrying above said business plaintiff

insisted for security and hence defendant's father gave eight

blank printed promissory notes duly signed by the defendant as

collateral security; that no transaction took place as alleged in

the plaint and the Court at Kurnool has no jurisdiction; that

truck drivers reported the mischief to the police and hence the

business was abandoned and plaintiff shifted residence to

Kurnool;    that      outstanding    amount    in     the   business   was

discharged       by   the    defendant's    father,    however,   dispute

continued over payment of interest; that plaintiff has no

capacity to lend the amount; that plaintiff is in possession of

eight blank promissory notes which were given as collateral

security and they were not returned; that to the notice issued by
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plaintiff, suitable reply was issued and he prayed the Court to

dismiss the suit.


7.    During the course of trial, plaintiff examined himself as

P.W.1 and got examined scribe of 6 promissory notes as P.W.2.

Exs.A-1 to A-10 were marked. On behalf of the defendant, he

examined himself as D.W.1. However, no documents were

marked.


8.    The Trial Court on consideration of oral and documentary

evidence dismissed the suit with costs by judgement dated

30.11.2004. Aggrieved by the said judgment the above appeal

was filed.


9.    Heard, Sri J.M.U.V.Prasad learned counsel appearing for

appellant     and   Sri    M.Balasubrahmanyam        learned   counsel

appearing for respondents. Pending appeal, sole respondent died

and his legal representatives were brought on record as

respondents 2 to 4 by order, dated 19.12.2008 passed in

A.S.M.P.No.1022 of 2007.

10. The learned counsel for the appellant would contend that

the evidence of P.W.1 and P.W.2 is consistent with regard to

execution of Exs A-1 to A-6, passing of consideration and

payment of amount. The observations of Court below, went

against appellant, with regard to attestors coming from

Vijayawada to Kurnool and writing on promissory notes using

the same pen etc., are without proper appreciation of evidence.

Thus, the learned counsel prayed the Court to allow the appeal.

11. The learned counsel for the respondents would contend

that Lower Court appreciated the oral and documentary

evidence properly and no interference is called for by this Court

and prayed the Court to dismiss the appeal.

12. In view of the contentions raised by both the counsel and

material on record, the following points would arise for

consideration:

1. Whether no consideration was passed under the suit promissory notes, Exs.A-1 to A-6 as pleaded by the respondents?

2. Whether the plaintiff had the capacity to pay the amount under Exs.A-1 to A-6?

3. Whether the promissory notes were executed at Kurnool?

4. To What Relief?

Point Nos.1 and 2:

13. Since these points are interrelated, they are answered

together.

14. Averments in the plaint indicate about borrowing of

amount by the defendant and execution of promissory notes

under Exs.A-1 to A-6. Apart from examining plaintiff himself as

P.W.1, he also got examined scribe of all the promissory notes

as P.W.2.

15. As the defendant admitted execution of Exs.A-1 to A-6,

whether the presumption under Section 118 of the Negotiable

Instruments Act, 1881 (for short 'N.I. Act') would be available to

the plaintiff basing on the evidence let in by the plaintiff is to be

considered.

16. According to P.W.1., he is a lorry mechanic and earning

Rs.50/- to Rs.150/- per day from his shop. He also further

deposed that he had no other income. He also deposed that he

did not draw the amount lent under Exs.A-1 to A-6.

17. A perusal of evidence of P.W.1 indicates that he could earn

Rs.50/- to Rs. 150/- per day. A person earning Rs.50/- to

Rs.150/- per day in the normal course may not be in a position

to lend huge amount of Rs. 2,00,000/- and Rs. 1,00,000/-.

Inspite of specific plea of defendant that the plaintiff had no

capacity to pay huge amount, appellant/plaintiff failed to

adduce cogent evidence qua his capacity to lend the amount,

except the evidence referred to supra. This circumstance

probablizes the falsity in the contention of plaintiff that

defendant received amount under Exs A-1 to A-6. At the same

time, the above deposition of P.W.1 in cross examination

supports the version of defendant that plaintiff had no capacity

to pay huge amount and that no consideration under Exs.A-1 to

A-6 was passed. In fact by eliciting the earning capacity of

plaintiff, defendant discharged his burden and hence rebutted

the presumption available to the plaintiff under Section 118 of

N.I.Act.

18. The Hon'ble Apex Court dealt with presumption and

burden of proof in Bharat Barrel and Drum Manufacturing

Company vs. Amin Chand Payrelal1 held that

Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would dis-entitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as existence of negative evidence is neither possible nor contemplated and even if led is to be seen

AIR 1999 SC 1008

with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption the defendant has to bring on record such facts and circumstances, upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist."

19. As stated supra, a person earning Rs. 50/- to Rs.150/-

per day, unless explains his means or source of income, shall

not be in a position to lend Rs. 2,00,000/- and further sum of

Rs.1,00,000/- within a span of one and half month. Plaintiff

could not explain his source of income to lend the same to the

defendant. Thus, defendant discharged the initial onus of proof

that payment of consideration under Exs A-1 to A-6 was

improbable or doubtful. Therefore, the onus shifted to the

plaintiff, but he could not prove his capacity to pay the amount

and also passing of consideration under Exs A-1 to A-6.

20. Execution of 4 promissory notes for Rs. 2 lakhs and 2

promissory notes for Rs 1 lakh also creates any amount of

suspicion in the mind of the Court as to execution of Exs.A-1 to

A-6. Normally, any prudent person, upon lending the amount,

would get one promissory note executed in his/her favour, for

the amount so lent. In the instant case plaintiff could not

explain under what circumstances he made defendant to

execute six promissory notes for Rs.50,000/- each. The evidence

of scribe of Exs.A-1 to A-6 is no way helpful to plaintiff.

21. A perusal of the promissory notes shows that Exs.A-1 to

A-4 were executed on one date and Exs.A-5 and A-6 were

executed nearly 40 days thereafter. However, writing indicates

that all the promissory notes were scribed with the same pen

but amount and date were scribed by a separate pen. No

satisfactory explanation was offered to clear the ambiguity.

22. All the circumstances narrated supra amply proved that

plaintiff had no capacity to lend Rs.2,00,000/- and Rs.1,00,00/-

on the respective dates. Thus, the plaintiff failed to discharge

the burden of passing of consideration under Exs.A-1 to A-6 and

his capacity to lend such huge amount. Thus, these points are

answered against the plaintiff.

Point No.3:

23. The evidence on record shows, Exs A-1 to A-6, blank

signed promissory notes were given to plaintiff as security at a

time when business was conducted by plaintiff and defendant's

father at Vijayawada. After abandoning the business, plaintiff

shifted to Kurnool and pressed those blank signed Exs.A-1 to

A-6 into service. Since the plaintiff started residing at Kurnool,

he filed the suit at Kurnool though the blank signed promissory

notes were given as collateral security at Vijayawada. Evidence

of P.W2, scribe, also does not inspire confidence of Court. Thus,

this Court is of the opinion that Exs.A-1 to A-6 were not

executed at Kurnool. This point is answered accordingly.

Point No.4:

24. In view of discussion supra, this Court finds no merit in

the appeal and hence, the same is liable to be dismissed.

25. Accordingly, this appeal is dismissed. However, no costs.

As a sequel, pending miscellaneous petitions, if any, shall stand closed.

_______________________________ JUSTICE SUBBA REDDY SATTI Date : 11.04.2022

IKN

HON'BLE SRI JUSTICE SUBBA REDDY SATTI

APPEAL SUIT No.76 of 2006 11.04.2022

IKN