The Appeal vs "Once The Execution Of The ...
2023 Latest Caselaw 3908 AP

         THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO

                      APPEAL SUIT NO.150 OF 2016

JUDGMENT:

1. The Appeal, under Section 96 of the Code of the Civil Procedure, is

filed by the appellants/defendants challenging the decree and Judgment

dated 15.09.2014 in O.S.No.1687 of 2009 passed by the learned VI

Additional Senior Civil Judge, Visakhapatnam (for short, „the trial

Court‟). The Respondent is the plaintiff, who filed the suit in

O.S.No.1687 of 2009 seeking recovery of Rs.7,25,333/- with subsequent

interest and costs from the defendants based on the promissory note.

2. The parties will hereinafter be referred to as arrayed before the trial

Court.

3. The facts leading to the present Appeal, in a nutshell, are as under:

(a) The defendants, who are husband and wife respectively, jointly

borrowed Rs.5,00,000/- from the plaintiff on 12.02.2008 for the

business purpose and to purchase lands, agreeing to repay the

same with interest @ 24% p.a. jointly executed the promissory

note in favour of the plaintiff. As the defendants did not choose

to pay the due amount under the above promissory note,

despite repeated demands and even after the issuance of legal

notice dated 30.11.2009; hence, the plaintiff was constrained to

file the suit.

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4. The 2nd defendant adopted the 1st defendant‟s written statement,

wherein the defendants contended that during the year 2007, the

plaintiff approached the 1st defendant (only a mediator) to acquire lands

in NGR Puram village from various ryots by purchasing an extent of

Ac.8.00 cents @ Rs.4,900/- per cent. The plaintiff paid some amounts to

the land owners towards advance from out of the sale consideration.

Subsequently, the plaintiff did not pay the remaining sale consideration

to various land owners and insisted them to refund the amount as there

is a downfall in the real estate business. The land owners did not pay the

amount as the plaintiff failed to perform his obligation. Therefore, the

plaintiff insisted the 1st defendant to exercise his influence and see that

the advance amounts shall be refunded to him. The 1st defendant

expressed his inability and advised the plaintiff to pay the balance

amount and obtain registration. Then, the plaintiff developed a grudge

against the 1st defendant and fabricated not only the suit promissory

note, but also other promissory notes by forging the defendants‟

signatures and filed the suit. Subsequently, the defendants have been

taking separate action for defamation etc., against the plaintiff. No

consideration was passed and there is no creditor and debtor

relationship between them.

5. Based on the above pleadings, the trial Court framed the following issues:

(1) Whether the plaintiff is entitled to recover the suit amount or not? (2) Whether the suit promissory note is true, valid and binding on the defendants or not?

(3) To what relief?

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6. During the trial, on behalf of the plaintiff, P.Ws.1 to 3 were

examined and got marked Exs.A1 to A.4. On behalf of the defendants,

D.Ws.1 to 4 were examined and got marked Exs.C.1 to C.12.

7. After the trial completion and hearing the arguments of both sides,

the trial Court decreed the suit for Rs.7,25,333/- against the defendants

1 and 2 with costs and subsequent interest @ 12% p.a., from the date of

suit till the date of decree and thereafter @ 6% p.a., from the date of

decree till the date of realization on the principal amount of

Rs.5,00,000/-.

8. Sri Aravala Rama Rao, learned counsel representing the

appellants/defendants put forth an argument asserting that the

respondent/plaintiff has no capacity to lend amounts under 12

promissory notes and no consideration is passed. The trial Court failed

to see that the 1st appellant acted as a mediator and obtained sale

agreement from himself and other Ryots in favour of plaintiff and later,

the plaintiff did not come forward to pay the balance sale consideration

and insisted on returning the advance, but the Ryots did not accept the

same. Therefore, the plaintiff bore grudge against the defendants and

created the promissory notes by forged the appellants‟ signatures. The

defendants never executed any promissory note in plaintiff‟s favour and

there was no necessity for them to borrow amounts and the Ex.A.1 is a

created document. The trial Court erred in holding that the plaintiff

proved the execution of promissory note based on the expert opinion; the

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1st defendant failed to prove the existence of the agreement; once the

execution of promissory note is proved, the court shall presume that it is

supported by consideration. The trial Court failed to see that the burden

lies upon the plaintiff to prove the suit promissory note is duly supported

by consideration; the attestors and scribe are the followers of the

plaintiff; PW.1 is having Ac.2.00 cents of land and in fact, there is no

evidence to show this promissory note amount in his audit to pay

income tax and there are no income tax returns filed by the plaintiff.

9. Per contra, Sri P.V.Ramana, learned counsel representing the

respondent/plaintiff contends that the trial Court correctly appreciated

the facts of the case and reached a correct conclusion. The reasons given

by the trial Court do not require any modifications.

10. Having regard to the pleadings in the suit and the findings

recorded by the Trial Court, the following points would arise for

determination:

1) Is the Trial Court justified in holding that the execution of Ex.A.1 promissory note on receipt of consideration amount by the defendants in favour of the plaintiff?

2) Whether the Judgment passed by the trial Court needs any interference?

POINT NOs.1 & 2:

11. The plaintiff is examined as P.W.1. The 1st defendant is examined

as D.W.1. The 2nd defendant is the wife of 1st defendant. To prove the

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Ex.A1 suit transaction, the plaintiff also got examined P.W.2-Ch.

Bhaskara Rao/Attestor, and P.W.3-V.Gowreswara Rao. P.Ws.1 to 3

deposed that both the defendants borrowed Rs.5,00,000/- from the

plaintiff on 12.02.2008 and executed Ex.A1 promissory note on receipt of

consideration amount thereunder. Evidently, the plaintiff got issued a

legal notice [Ex.A2] to the defendants calling upon them to pay the

amount payable under Ex.A1 promissory note with interest. To show the

receipt of the legal notice, the plaintiff relied on Ex.A3 and Ex.A4

acknowledgements. It is the defendants' stand that the plaintiff forged

the defendants' signatures and fabricated Ex.A1 promissory note.

Evidently, P.W.1 and D.W.1 jointly carried on the coconut and cashew

business for about 14 to 15 years as partners, and 1st defendant is an

advocate by profession. P.W.1 was cross-examined regarding his

financial capacity to lend the amount covered under Ex.A1. The evidence

of P.W.1 shows that he owns Ac.2.00 of the land. According to his

evidence, the suit transaction occurred at Lawsonsbay colony, Jalaripet,

at his house. The record also discloses that the plaintiff filed suits

against the defendants based on the other six promissory notes.

12. P.W.2 testified in cross-examination that the defendants borrowed

amounts from the plaintiff twelve times in 2007-2008 within a gap of one

or two months. At eight times, the defendants borrowed amounts of

Rs.5,00,000/- each and the remaining promotes concerned, D.1 and D.2

borrowed Rs.2,00,000/- each under two promissory notes and

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Rs.4,00,000/- under the remaining two promissory notes. The evidence

of P.W.2 coupled with Ex.A1 shows that he attested the promissory note.

13. P.W.3, the Scribe of the promissory note, also deposed that D.1

and D.2 executed twelve promissory notes in 2007-2008. P.W.3

expressedignorance as to whether there are suits filed by the plaintiff

other than six suits. The cross-examination of P.Ws.1 to 3 appears to be

regarding the other transactions also. It is not much relevant and proper

to deal with the contentions regarding the other transactions.

14. It is the defendants case that during the year 2007, the plaintiff

approached D.1 to acquire lands in NGR Puram village from various

ryots to the extent of Ac.8.00 @ Rs.4900/- per cent, and the 1st

defendant acted as mediator; the plaintiff paid some amounts to land

owners and subsequently there was a downfall in the real estate

business; and the plaintiff was unable to pay the balance amount, and

insisted the land owners refund the amount, but they did not pay the

amount; plaintiff insisted 1st defendant to exercise his influence and

1stdefendant expressed his inability and the 1st defendant advised the

plaintiff to pay the balance amount, the plaintiff developed a grudge

against D.1 and fabricated the pronote by forging the defendant‟s the

signature. Having taken such pleas, defendants should not dispute the

financial capacity.

15. To establish their case, the defendants got examined D.W.2-G.

Chinna Rao and D.W.3-L.Appala Naidu. D.Ws.2 and 3 supported the

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defendant's stand in the chief examination. However, as noted correctly

by the trial Court, their accounts diverged during cross-examination. In

contrast to the earlier version, D.W.2‟s cross-examination revealed a

completely different version. He testified that the transaction had

occurred solely between himself and D.1 with no sale transaction taking

place between him and the plaintiff in 2007. DW.2‟s testimony indicated

that the plaintiff acquired approximately Ac.8.00 of the land from his six

paternal uncles. Notably, D.1 has raised questions regarding the

plaintiff‟s failure to pay the remaining sale amount. Additionally, D.W.2

revealed he had often enquired with D.1 due to the sale transaction

between him and D.1. Upon cross examination, D.W.2‟s testimony did

not align with the defendants‟ case as contended in the suit.

16. Regarding the DW.3‟s cross examination, he also affirmed that he

lacked personal knowledge concerning the financial transactions

involving the plaintiff and D.1. In contrast, the 1st defendant failed to

show that the plaintiff entered into sale transactions with the farmers of

NGR Puram accompanied by an advance payment to those farmers. If

there is truth in the 1st defendant‟s version; he could have examined the

farmers, whoentered into agreement with the plaintiff. As such, this

Court finds that the defendants failed to establish the plea of developing

a grudge against him. Furthermore, the defendants have not provided a

substantial basis for the alleged grudge against the plaintiff. Notably, the

1st defendant has not asserted that he has undertaken the responsibility

of collecting amounts from the farmers. It becomes difficult to accept the

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defendants‟ contention that the plaintiff forged the promissory notes.

Furthermore, there is no indication from the defendants that the

disputes arose between them and the plaintiff concerning their coconut

and cashew business.

17. Whenever a party disputes the signature on the particular

document, two remedies are open to him either to request the Court to

compare the signatures or to file an application to send the document to

the expert for comparison. No doubt, the Handwriting Expert's opinion is

not the final word on the issue and is not conclusive, but it can be taken

as a corroborative piece of evidence. As there is a serious dispute about

the genuineness of signatures on the Ex.A1 promissory note, the Expert

opinion would go a long way in resolving the controversy. An Expert is

not a witness of fact, and his evidence is advisory.The defendants

examined D.W.4-Narendra Singh, an Expert, whose evidence was

recorded by an Advocate-Commissioner and Ex.C1 to Ex.C12 documents

were marked through the Expert. The Expert gave his opinion, stating

that the disputed signatures of Q.1 and Q.2 are quite similar to the

admitted signatures available on Vakalat, Suit summons and specimen

signatures obtained in open Court. In his opinion, the signatures were

written freely in disputed signatures and do not show any sign of

imitation or disguise. The similarities are seen in the formation of 'S', „m‟

'h', 'l', and 'i', as well as habit of writing Simhachalam. The similar habit

of the apex of „h‟, „k‟, execution of „m‟, as well as combination of „ha‟, „la‟,

„Si‟. The Expert offered comprehensive reasoning to support his

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conclusion. No substantive evidence was brought forth to cast a doubt on

the Expert‟s testimony.

18. In Ram Narain v. State of Uttar Pradesh1, the Hon‟ble Apex

Court considered Section 45 of the Evidence Act and the circumstances

under which the evidence of an expert can be accepted by the Court and

concluded as under:

"...But this opinion evidence, which is relevant, may be worthy of acceptance if there is internal or external evidence relating to the document in question supporting the view expressed by the expert. If after comparison of the disputed and admitted writings by the Court itself, when the presiding officer is familiar with that language, it is considered safe to accept the opinion of the expert then the conclusion so arrived at cannot be assailed on special leave on the mere ground that comparison of handwriting is generally considered as hazardous and inclusive and that the opinion of the handwriting expert has to be received with consideration caution."

19. In Vadrevu Annapurnamma v. Vadrevu Bhima Sankara Rao and

Others2, the Composite High Court of Andhra Pradesh at Hyderabad

observed thus:

"There are many factors which have to be taken into consideration in effecting a comparison of the two signatures, and although a Court could apply its own eyes and its own mind to determine whether a particular signature is resembling another it would be going beyond the ordinary limits of the capacity of a Court to constitute itself as a Handwriting Expert and try to compare the signature without all the gadgets and devices which are available to a Handwriting Expert, besides the lack of expert knowledge which a Handwriting Expert possesses." The above legal position makes it clear that the expert's opinion is not excluded from the purview of examination and it was opined that it will help the Court

AIR 1973 SC 2200

1960 AIR (AP) 359

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in exercising power of comparison under Section 73 of the Evidence Act."

20. At this stage, it is apposite to refer to State of Maharashtra v.

Sukhdev Singh3, wherein it was held as follows:

"In cases where the reasons for the opinion are convincing and there is no reliable evidence throwing a doubt, the uncorroborated testimony of a handwriting expert may be accepted."

"It would, therefore, not be fair to approach the opinion evidence with suspicion but the correct approach would be to weigh the reasons on which it is based. The quality of his opinion would depend on the soundness of the reasons on which it is founded. But the court cannot afford to overlook the fact that the science of identification of Handwriting is an imperfect and frail one as compared to the science of identification of fingerprints."

"No hard and fast rule can be laid down in this behalf but the Court has to decide in each case of its own merits what weight it should attach to the opinion of the expert."

21. In order to satisfy myself, I have seen the admitted and disputed

signatures of the defendants. I have no reason to doubt the Expert‟s

opinion, as the signatures appear similar. The evidence of DW.4 - Expert,

therefore, is duly corroborated by the evidence of PWs.2 and 3.

22. The Expert opinion does not conflict with the evidence of P.Ws.1 to

3 regarding the execution of the promissory note by the defendants. The

reasons for the opinion are convincing, and there is no reliable evidence

throwing doubt. The report of the Expert cannot be overlooked by taking

into consideration that the science of identification of Handwriting is an

imperfect and frail one. This Court finds no valid reason to differ the

Expert opinion. There was no acceptable direct testimony which was

(1992) 3 SCC 700

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destructive of the Expert‟s opinion. There were no features also which

made the Expert‟s opinion unreliable.

23. The evidence of PW.1 to PW.3 clearly shows that the defendants

have subscribed their signatures on the Ex.A.1-promissory note and

received the consideration. Once those materials were available,

naturally, the presumption under section 118 of the Negotiable

Instruments Act would come into play.

24. In G. Venkata Rama Subbaiah Vs. D. RasoolNaik4, the composite

High Court of Andhra Pradesh held thus :

"Once the execution of the promissory note is admitted or proved, then it is presumed to be supported by consideration unless contrary is proved. The burden is on the defendant to rebut the same by adducing convincing evidence. Unless the defendant rebuts the presumption by adducing convincing rebuttal evidence, the evidential burden would not shift back to the plaintiff who has legal burden only after adducing such convincing rebuttal evidence, it can be held that thereafter the presumption under Section 118 does not come to the rescue of the plaintiff."

25. In a decision Bonalaraju V. S. Sarupula Srinivas5, the composite

High Court of Andhra Pradesh held that:

"once execution is proved the presumption under Section 118 of N.I. Act that it is supported by consideration automatically applies and the contention that the plaintiff is not only to establish the execution but also establish passing on the consideration is rejected".

2003 (4) ALT 414

2006(2) ALD 202

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26. In a decision Abbisetti Krishnamoorthy V. Singasani

Raghuramaiah (died) per L.R.s6, the composite High Court of Andhra

Pradesh held that:

"Section 118 of the N.I Act shows that the presumption attached to passage of consideration (as is the subject matter of this Appeal) just like other presumption also is clearly rebuttable and it is for the defendant to satisfy the Court that in a given case, the presumption cannot be drawn".

27. Having regard to the evidence, which is adverted to supra, this

Court views that the defendants do not show satisfactory and reliable

evidence or circumstance to disbelieve the evidence of PWs.1 to 3

regarding the execution of the Ex.A.1 promissory note by the defendants

and passing of consideration. The evidence of PWs.1 to 3 is consistent

regarding the execution of the Ex.A.1 promissory note by the defendants

on receipt of the consideration amount. Though PWs.1 to 3 were

subjected to lengthy cross-examination, nothing was elicited to discredit

their evidence. The plaintiff and his witness have no reason to fabricate

the suit promissory notes. PWs.2 and 3 have no reasons to depose

falsehood against the defendants‟ interest. They gain nothing by

supporting the plaintiff‟s case unless there is a truth. However, even the

rebuttal could be given by direct evidence or by proving the

preponderance of probabilities.

28. In the present case, the defendants have not rebutted the

presumption, even by the preponderance of probabilities. The evidence of

PWs.1 to 3 establishes the execution of Ex.A.1 promissory note. The

2011(5) ALT 143

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burden lies on the defendants to prove the non-existence of consideration

by bringing on record such facts and circumstances, which would lead

the Court to believe the non-existence of the consideration. Suppose the

defendants have discharged the onus of proof showing that the existence

of consideration was improbable or doubtful and the execution of the

promissory note, the onus would be shifted to the plaintiff. Then they will

be obliged to prove the existence of the consideration.

29. On studied scrutiny, it is seen that the defendants have not

produced any evidence to discharge the onus on him. The defence taken

by the defendantsis not substantiated. The defendants have failed to

prove their contention regarding non-passing of consideration under

Ex.A.1 by leading cogent evidence. The presumption under section 118 of

the Negotiable Instruments Act 1881 is a statutory one, and unless it is

rebutted, it has to be presumed that consideration has passed.

30. For the reasons stated above, this Court is of the opinion that the

plaintiff is able to establish the execution of the suit promissory note in

his favour by the defendants after receipt of the consideration amount

thereunder.

31. After careful consideration, the trial Court had adequately

appreciated the evidence. There is no reason for this Court to arrive at a

different conclusion than the one arrived at by the trial Court. I am of the

opinion that the findings arrived at by the trial Court are absolutely

correct, and no justifiable reasons have been shown by the

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appellants/defendants for arriving at different conclusions. I agree with

the conclusion reached at by the trial Court.

32. Accordingly, the Points are answered in favour of the plaintiff by

holding that the Trial Court is justified in holding that the defendants

executed the suit promissory note and received the consideration amount

there under. Given the preceding discussion, the view taken by the trial

court does not call for any interference and this Appeal fails and is

hereby dismissed. The impugned Decree and Judgment passed by the

trial court is upheld.

33. As a result, the Appeal is hereby dismissed without costs by

confirming the Decree and Judgment dated 15.09.2014 in O.S.No.1687

of 2009, passed by the learned VI Additional Senior Civil Judge,

Visakhapatnam.

Consequently, miscellaneous petitions pending, if any, in this

Appeal shall stand closed.

_________________________________ JUSTICE T. MALLIKARJUNA RAO

Date:22.08.2023 SAK/MS

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A.S.No.150 of 2016

THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO

APPEAL SUIT NO.150 OF 2016

Date:22.08.2023

MS