Mahankali Naga Raju vs Pippalaneni Padmavathi Kalyani
2023 Latest Caselaw 4477 AP

           THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO

                    APPEAL SUIT NO.699 OF 2010

JUDGMENT:

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

filed by the appellant/plaintiff challenging the decree and Judgment dated

17.06.2012 in O.S.No.146 of 2009 passed by the learned I Additional

District Judge, Guntur (for short, 'the trial court'). The appellant is the

plaintiff, who filed the suit in O.S. No.146 of 2009 seeking recovery of

Rs.20,16,000/- with interest and costs from the defendant based on the

promissory note. The respondent is the defendant in the said suit.

2. It is expedient to refer to the parties as they are initially arrayed in

the suit to mitigate any potential confusion and have a clearer

comprehension of the case.

3. The factual matrix, necessary and germane for adjudicating the

contentious issues between the parties inter se, may be delineated as

follows:

The defendant borrowed Rs.16,00,000/- from the plaintiff on

07.07.2008, agreeing to repay the same with interest @ 24 % per

annum and executed the suit promissory note. After that, the

plaintiff demanded the defendant to refund the amount.

However, the defendant did not respond. Hence, the plaintiff

issued a notice on 13.07.2009 to the defendant, calling upon

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him to pay under the suit promissory note. The defendant

received the notice on 17.07.2009 and did not respond.

4. In the written statement, the defendant contended that the plaintiff

is acquainted with the defendant through her husband's friends' circle.

The plaintiff and her husband have a strained relationship. The plaintiff

lacked the financial capacity to lend such a huge amount. She denied the

execution of the promissory note and claimed that the promissory note

was fabricated and her signature was forged. Upon receiving the notice,

the plaintiff was contacted, questioned and cautioned regarding legal

consequences both criminal and civil. The plaintiff promised to withdraw

the notice and refrained from seeking any monetary claims. Consequently,

she chose not to take any action. But, to the defendant's surprise, the

plaintiff filed the suit, which is liable to be dismissed.

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

(1) Whether the suit promissory note is true, valid and binding on the defendant?

(2) To what relief?

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

examined and marked Exs.A.1 to A.3. On behalf of the defendant, the 1st

defendant herself was examined as D.W.1, and no documents were

marked.

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

the trial Court dismissed the suit with costs.

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8. I have heard learned counsel appearing on behalf of the respective

parties at length and have gone through the Judgment and findings

recorded by the learned trial Court while dismissing the suit. I have also

re-appreciated the entire evidence on record, including the deposition of

relevant witnesses examined by both sides.

9. Sri V.V.Anil Kumar, learned counsel representing the

appellant/plaintiff, asserts that the trial Court's Judgment is vitiated by

incorrect evaluation of the evidence, erroneous application of legal

provisions and conclusions based on mere speculations. He points out

that the trial Court erred in observing that DW.1/respondent had lodged a

complaint against the plaintiff approximately one month before filing the

present suit and probably, that could have been the reason for PW.1 to

initiate the present suit; the trial Court erred in holding that the suit

promissory note in question is not authentic and legally valid is

erroneous; the trial Court has the authority to compare signatures, it

should have allowed the respondent's application to refer the document to

handwriting expert, instead of comparing the signatures by itself; the trial

Court misconstrued the testimonies of PWs.2 and 3; the trial Court

finding regarding PW.1's source of income and his family situation are

purely speculative and without factual basis.

10. Per contra, Ms Kirthi Teja Kondaveeti, learned counsel representing

the respondent/defendant, argued that the trial Court correctly

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appreciated the case facts and reached a correct conclusion. The reasons

given by the trial Court do not require any interference.

11. Having regard to the pleadings in the suit, the findings recorded by

the Trial Court and in light of the rival contentions and submissions made

on either side before this Court, the following points would arise for

determination:

1) Whether the Trial Court is justified in holding that the Ex.A.1 suit promissory note is not true, valid and not binding on the defendant?

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

POINT NOs.1 & 2:

12. The defendant's stand in the written statement is that the Ex.A.1

suit promissory note does not bear her signature. The burden is on the

plaintiff to establish the execution of the promissory note by the defendant

and passing of consideration. To prove the Ex.A.1 transaction, the plaintiff

himself examined as PW.1 and examined the scribe and attestor of Ex.A.1

promissory note as PWs.2 and 3.

13. The PW.1's evidence shows that he is doing real estate business,

and his annual income is about Rs.10,00,000/-. PW.1's testimony shows

that he sold his mother's property in 2005 and invested the same in the

business. The defendant contends that the plaintiff cannot lend her a

huge amount of Rs.16,00,000/-. Questioning the plaintiff's financial

capacity, the defendant has elicited specific facts to establish his financial

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position is not so good to lend such a huge amount. PW.1's testimony

reveals that his father is a night watchman in the Endowments

Department; one of his brothers is a Mechanic, and another brother works

as a temporary employee in the Endowments Department. It is not the

plaintiff's evidence that he has property, even after selling his mother's

property. As pointed out by the trial Court, the plaintiff's family members

are working as night watchmen in the Endowments Department,

mechanics and temporary employee in the Endowments Department. It is

the PW.1's evidence that all of them are living in a joint family, and his

joint family income is only Rs.5,00,000/- per annum; all the expenses for

his family are about Rs.10,00,000/- per annum; his father and mother are

suffering from heart diseases. In the facts of the case, the trial Court

observed that it is quite improbable that PW.1 could have lent

Rs.16,00,000/- to the defendant. Though PW.1 claims that he had

business transactions with the defendant since 2005, no evidence is

placed in support of the said contention. PW.1 also admitted that he has

no proof to substantiate the same. After appreciating the PW.1's evidence

in cross-examination, the trial Court concluded that PW.1 failed to

establish his financial capacity to lend Rs.16,00,000/- to the defendant.

14. To prove the Ex.A.1 transaction, PW.2 (Tangillapally Aravind

Maharshi) testified that he had financial dealings with PW.1; he along with

PW.1, went to the defendant's house, where the defendant and her

husband were present, and they paid the amount to the defendant; then

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he scribed the Ex.A.1 promissory note and the attestors were called and

they signed on it. After appreciation of PW.2's testimony in cross-

examination, the trial Court concluded that even according to PW.2's

version, the attestors were not present when the amount was paid under

Ex.A.1 transaction.

15. As per the testimony of PW.3 (Bainaboina Baji Babu), when he went

to the defendant's house, PW.1 and the defendant and her husband were

present, but he did not speak to the presence of the same. According to

PW.3's testimony, Ex.A.1 was scribed by the defendant after receiving the

money; then, he attested it and returned to his house. So, based on

PW.3's testimony, the trial Court found that the evidence of PWs.1 to 3

concerning the execution of the Ex.A.1 promissory note is mutually

contradicting and probablizing the defendant's contention that Ex.A.1 is

fabricated. After scrutiny of the evidence of PWs.1 to 3, this Court finds

that the trial Court has correctly appreciated the evidence of PWs.1 to 3.

16. The DW.1's evidence shows that she filed a complaint against the

plaintiff one month before the filing of the suit. It is to be remembered that

the said evidence was elicited in the cross-examination. No further cross-

examination was held to disprove the said DW.1's evidence. The

particulars of complaint are not elicited. It is not the plaintiff's case that

such disputes emerged in connection with Ex.A.1 transaction.

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17. The trial Court judgment shows that the defendant has filed an

application to send Ex.A.1 promissory note to handwriting expert, firstly

to find out the age of the revenue stamp paper and then compare her

signatures at the fag end, but the trial Court felt that no useful purpose be

served by sending the Ex.A.1 promissory note to the handwriting expert.

The trial Court observed regarding the disputed signature of the defendant

as follows:

"The disputed signature of the defendant on Ex.A.1 is compared with her admitted signatures on her vakalath, written statement, summons served on her through Court and by post and the signatures obtained from her in the open Court in the presence of both the counsel. It can be safely concluded that the signature on Ex.A.1 is not similar to the admitted signature of the defendant on all the above mentioned documents available in the Court. The signature of the defendant in the served summons, vakalath, written statement, her deposition and the signatures obtained in the open Court are similar, whereas the signature on Ex.A.1 is a clear piece of forgery. The gap between the initials 'P P' and the gap between the initials and her name Kalyani, the slant of the letters K, the freeness in the writing PP Kalyani, the ending of the signature with a stroke dragged from the letter 'Y' and ending with a curve upwards are dissimilar when compared to the admitted signatures of the defendant. So, the contention of the defendant that Ex.A.1 is forged is proved to be true."

18. This Court also thoroughly compared the defendant's signatures

that were admitted and disputed signatures found in Ex.A.1. As rightly

observed by the trial Court, the admitted and denied signatures were

dissimilar. The trial Court also rightly observed that despite taking a plea

in the written statement and cross-examining of DW.1, PW.1 did not

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bother to make mention in his evidence regarding his financial capacity to

possess Rs.16,00,000/- to enable him to lend it to the defendant.

19. In Bharat Barrel and Drum Manufacturing Company vs Amin Chand Payrelal1, the Hon'ble Apex Court was held thus :

".........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......."

20. The standard of proof evidentially is principles of preponderance of

probability. Inference of preponderance of probability can be drawn from

the materials on record and by references to the circumstances upon

which reliance is placed.

21. The defendant has discharged the initial evidential burden by

providing plausible evidence that raises doubt about the genuineness of

the promissory note and passing of consideration. As a result, the

presumption under section 118 of N. I Act disappears and becomes

functus officio, and the evidential burden shifts to the plaintiff, who also

has the legal burden arising out of the pleadings to prove the

consideration. After carefully considering the entire evidence, the plaintiff

has not discharged the legal burden; as such, he cannot again rely on the

presumption of sec.118 of N. I Act. The evidence adduced by the plaintiff

(1999) 3 SCC 35

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regarding the payment of consideration at the time of execution of Ex.A.1

promissory note cannot be accepted.

22. After careful consideration, the trial Court had adequately

appreciated the evidence. There is no compelling reason for this Court to

arrive at a different conclusion than the one arrived at by the trial Court.

The trial Court findings regarding the evaluation of evidence are correct. I

concur with the conclusions reached by the trial Court.

23. Accordingly, the Points are answered in favour of the defendant by

holding that the Trial Court findings that the suit promissory note is not

true and valid and not binding on the defendant, holds good. Given the

preceding discussion, the view taken by the trial court does not call for

any interference, and this Appeal fails, and the impugned Decree and

Judgment passed by the trial court is upheld.

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

confirming the Decree and Judgment in O.S. No.146 of 2009, dated

17.06.2010, passed by the learned I Additional District Judge, Guntur.

Miscellaneous petitions pending, if any, in this Appeal, shall stand closed.

_________________________________ JUSTICE T. MALLIKARJUNA RAO

Date: 25.09.2023 SAK

TMR, J A.S. No.699 of 2010

THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO

APPEAL SUIT NO.699 OF 2010

Date: 25.09.2023

SAK