Hunsur, in OS no.188/2018, this appeal is filed.
2. Though, matter was listed for admission, since
law, matter was heard affording opportunity.
3. Sri YV Prakash, learned counsel appearing for Sri YK
from date of filing of suit till date of realization etc.
4. In plaint, it was stated, on 16.05.2016, defendant
witnesses. However, he failed to repay even after repeated
issued by plaintiff, leading to filing of suit.
5. On appearance, defendant filed written statement
denying plaint averments in toto. Specifically denying loan
when defendant subscribed to a chit for Rs.2,00,000/- in 2015.
when dispute arose about accounts. And though he did not pay
pay them and repeatedly asked for return of promissory note.
6. Based on pleadings, trial Court framed following:
1. Whether the plaintiff proves that the defendant
for his legal necessity borrowed a sum of
Rs.3,00,000/- by executing on demand
promissory note along with consideration
receipt on 16.05.2016 and has agreed to repay
the loan amount with interest at 1.50% per
annum?
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2. Whether the plaintiff further proves that
despite of repeated requests and demand the
defendant failed to repay the loan amount?
3. Whether the defendant proves his contentions
at para no.7 to 9 of his written statement?
4. Whether plaintiff is entitled for recovery of sum
of Rs.4,19,150/- with future interest at rate of
1.50% per month from the defendant from the
date of filing of suit till realization?
5. What order or decree?
7. In trial, plaintiff examined himself and two others
as PWs.1 to 3 and got marked Exhibits P1 to P6; while,
defendant examined himself and another as DWs.1 and 2 and
got marked Exhibits D1 to D3.
8. On consideration, trial Court answered issues no.1
and 2 in affirmative; issue no.3 in negative, issue no.4 partly in
affirmative and issue no.5 by decreeing suit.
9. Aggrieved, defendant preferred RA no.12/2022 on
various grounds, based on which, first appellate Court framed
following:
POINTS:
1. Whether the trial court is justified in answering
issue No.1 and 2 in the affirmative, issue No.3
in the negative, issue No.4 in the partly
affirmative by holding that the plaintiff has
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proved that the defendant for his legal
necessity borrowed a sum of Rs.3.00.000/- by
executing demand promissory, promissory note
by consideration receipt on 16.05.2016 and
agreed to pay the loan amount with interest
1.50% per month, and inspite of repeated
requests and demand. the defendant has failed
to pay the loan amount. Hence, the plaintiff is
entitled for the recovery of Rs.4.19.150/- with
future interest 6% per annum on an amount of
Rs.3,00,000/-from the date of suit till the date
of realization and the defendant has failed to
prove his contention at para No.7 to 9 of the
written statement?
2. Whether the judgment and decree of the, trial
court is arbitrary. baseless, capricious, devoid
of merits, erroneous, without being perverse
on the sound principle of law and warrants for
the interference by the instant court?
3. To what order or decree?
10. On consideration, it answered point no.1 in
negative, point no.2 in affirmative and point no.3 by allowing
appeal, setting aside judgment and decree passed by trial
Court. Aggrieved, plaintiff was in appeal.
11. It was submitted, defendant admitted signature on
on-demand promissory note and receipt (Exs.P1 & P2), but
contended that signatures were taken on blank promissory note
in connection with alleged chit transaction conducted by
plaintiff's wife, which was bald and unsupported by evidence.
On appreciation of oral and documentary evidence, trial Court
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decreed suit on 24.04.2022 awarding Rs.4,19,150/- with 6%
interest from date of suit. However, first appellate Court
reversed decree, relying mainly on stray admission by PW.1
mentioning Rs.6,00,000/- as amount lent. It was submitted,
admission of signature on Exs.P1 and P2 would attract
presumption under Section 118(a) of Negotiable Instruments
Act, 1881 ('NI Act', for short) and burden would shift on
defendant. When no rebuttal evidence was led, first appellate
Court erred in passing impugned judgment. In support of his
contention, learned counsel relied on decisions in case of Kapil
Kumar v. Raj Kumar reported in (2022) 10 SCC 281,
Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal
reported in (1999) 3 SCC 35.
12. For proposition that stray or inadvertent admission
cannot override pleadings and documentary evidence, learned
counsel referred to Sections 91 and 92 of Indian Evidence Act,
1872, and ratio laid down in Chikkam Koreswara Rao v.
Chikkam Subba Rao & Ors. reported in (1970) 1 SCC 558,
Parameswari Bai v. Muthojirao Scindia reported in 1980
SCC OnLine Kar 206 and Puttanna Shetty v. Padma Shetty
reported in 2007 SCC OnLine Kar 53.
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13. Insofar as contradictions regarding time and place
of execution of promissory note in depositions, it was
submitted, PWs.1 to 3 consistently stated Rs.3,00,000/- was
paid on 16.05.2016 in their presence. Therefore, minor
variation in deposition of PW.3 about earlier visit to plaintiff's
house would not materially affect execution of promissory note
near Court premises. Likewise, in case of correction of place of
execution of promissory note as 'Hunsur'. Failure to properly
appreciate above resulted in miscarriage of justice.
14. In light of above contentions, learned counsel
prayed for allowing appeal by answering following substantial
questions of law in favour of plaintiff:
1) Whether first appellate Court erred in not
considering presumptions under Sections 28
and 118 of NI Act, when defendant admitted
his signatures on Exs.P1 and P2.
2) Whether first appellate Court erred in ignoring
admissions and misread evidence, while
passing impugned judgment and decree?
3) Whether first appellate Court erred in relying
upon stray admission, instead of examining
evidence as a whole?
4) Whether first appellate Court was justified in
reversing findings without assigning proper
reasons?
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15. On other hand, Sri Prithvi Raj BN, learned counsel
for defendant opposed appeal.
16. Heard learned counsel and perused impugned
judgment and decree of both Courts.
17. This appeal is by plaintiff against divergent findings
in a suit for recovery of money on basis of Ex.P1 - promissory
note, wherein trial Court decreed suit, while first appellate
Court reversed same and dismissed suit.
18. As noted above, defendant opposed suit by
contending that Exs.P1 and P2 were not executed towards loan
transaction as claimed, but as 'security' in connection with chit
transaction run by plaintiff's wife.
19. As noted above, main ground of challenge is that
defendant admitted his signature on Exs.P1 and P2, which
would attract rebuttable presumption under Section 118 (a) of
NI Act; that Ex.P1 was drawn for consideration and that while
passing impugned judgment, on appreciation of evidence, trial
Court had held plaintiff proved execution of promissory note
and passing of consideration and defendant failed to produce
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material, such as chit subscription register, payment receipts or
independent evidence, to rebut presumption.
20. While passing impugned judgment and decree, first
appellate Court noted discrepancy with regard to place of
payment, PW.1 mentioning different amount as lent,
inconsistency in pleadings and possibility of prior financial
transactions.
21. A perusal of plaint reveals specific assertion that
defendant executed promissory note and receipt (Exs.P1 and
P2) on receipt of Rs.3,00,000/- from plaintiff and agreed to
repay it with monthly interest at 1.5%, but failed to repay even
on demand by plaintiff by issuing Ex.P3 - legal notice.
22. To establish same, plaintiff examined himself as
PW.1 and re-iterated above in his examination-in-chief. But in
cross-examination, he stated that on 16.05.2016, defendant
came to his house at 11.00 a.m. and asked for loan, which was
given to him on same day in presence of Venkategowda and
Prakash. He also stated that on receipt of loan, defendant had
executed Exs.P1 and P2 - promissory note and receipt written
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by Thyagaraj of Hunsur. He specifically stated payment of
Rs.6,00,000/- in currency notes of Rs.500/- denomination.
23. Though, said admission is sought to be explained as
stray, there is sufficient cross-examination about context of
said payment, wherein PW.1 states that said amount was
arranged by sale of coconuts and plantain. Therefore,
admission cannot be treated as stray.
24. In further cross-examination, PW.1 stated that
Exs.P1 and P2 were written in Court premises and transaction
also took place there itself. He pleads ignorance about purpose
for which loan was taken by defendant. And in cross-
examination about ink and handwriting on Exs.P1 and P2 being
different also, he pleads ignorance. It is significant to note that
cross-examination of PW.1 was done on two different dates and
there was no re-examination to offer explanation about error in
mentioning amount lent.
25. While, there can be no quarrel about presumption
under Section 118 of NI Act being rebuttable by setting up
cogent and probable defence as well as proposition that stray
admissions would have to yield to documentary evidence, in
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instant case, admission cannot be stated to be stray. Even on
reading of deposition of PW.1 in entirety, material inconsistency
insofar as amount lent is evident as also absence of proper
explanation. Therefore, ratio of decisions relied upon, will not
be attracted.
26. Under above circumstances, first appellate Court,
which is final Court for appreciation of evidence has taken note
of entire evidence on record and arrived at well reasoned
conclusion. Said conclusion cannot be stated either to be
without any basis or contrary to material on record. It cannot
therefore be held to suffer from perversity as would give rise to
substantial question of law.
In view of above, appeal is dismissed without being
admitted.
Sd/-
(RAVI V HOSMANI)
JUDGE
AV,GRD
List No.: 1 Sl No.: 25
