Kerala High Court
Paneer Selvam vs Siby Thomas on 19 November, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE K. BABU
FRIDAY, THE 19TH DAY OF NOVEMBER 2021 / 28TH KARTHIKA, 1943
RSA NO. 972 OF 2009
AGAINST THE JUDGMENT AND DECREE DATED 29.07.2008 IN AS 37/2005
OF SUB COURT,KATTAPPANA
AGAINST THE JUDGMENT AND DECREE DATED 21.12.2004 IN OS
164/2002 OF MUNSIFF COURT, PEERUMEDU
APPELLANT/RESPONDENT/PLAINTIFF:
PANEER SELVAM, S/O CHINNAMUTHU,
AGED 36 YEARS, RESIDING AT C.K.NILAYAM,
LANDRUM KARA, LAKSHMICOVIL P.O.,
PEERMADE VILLAGE, PEERMADE TALUK,
IDUKKI DISTRICT.
BY ADVS.
SRI.T.A.UNNIKRISHNAN
SRI.P.P.BIJU
RESPONDENT/APPELLANT/DEFENDANT:
SIBY THOMAS,
S/O KURUVILA THOMAS,
CHAVARAPUZHA HOUSE, MLAMALA KARA,
PEERMADE VILLAGE, PEERMADE TALUK
BY ADV SRI.A.C.DEVASIA
SRI.RIJO LALY JOSE
THIS REGULAR SECOND APPEAL HAVING BEEN HEARD ON
19.11.2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
RSA NO.972 OF 2009
2
K.BABU, J.
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R.S.A. No.972 of 2009
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Dated this the 19th day of November, 2021 urgent
JUDGMENT
The plaintiff is the appellant in this Regular Second
Appeal.
2. The plaintiff instituted a suit for realising money
on the strength of a promissory note dated 16.11.2000. He
pleaded that the defendant had borrowed a sum of
Rs.70,000/- from the plaintiff by executing a promissory note
agreeing to repay the amount with interest on demand.
However, even after repeated requests, the defendant failed
to repay the amount due to the plaintiff.
3. The defendant resisted the claim. Defendant
admitted that he had affixed signature in promissory note
(Ext.A1). However, he contended that he had not executed
the promissory note as pleaded by the plaintiff. According to
the defendant, on 10.11.2001, he had borrowed a sum of
Rs.10,000/- from the plaintiff for business purposes and at
RSA NO.972 OF 2009
the time of borrowing the money, he had handed over a
signed blank stamp paper to the plaintiff, which was later
converted as a promissory note by the plaintiff.
4. On the side of the plaintiff, PW 1 was examined
and Ext.A1 was marked. DWs 1 and 2 were examined on the
side of the defendant.
5. The Trial Court decreed the suit allowing the
plaintiff to recover the plaint amount with interest at the rate
of 18% per annum from the date of suit.
6. The defendant challenged the decree of the Trial
Court in appeal before the First Appellate Court in
A.S.No.37/2005. The First Appellate Court set aside the
decree of the Trial Court holding that the plaintiff failed to
establish the execution of Ext.A1 promissory note.
7. Being aggrieved by the judgment and decree of
the First Appellate Court, the plaintiff is before this Court in
this Second Appeal under Section 100 of the Code of Civil
Procedure.
8. On 17.11.2009, this Court admitted the appeal
and formulated the following substantial question of law:-
RSA NO.972 OF 2009
"Whether in the light of the admission of signature in
Ext.A1 and the evidence let in by the parties, was
the First Appellate Court justified in holding that the
due execution of Ext.A1 is not proved and reversing
the judgment and decree of the Trial Court."
9. Heard Sri.T.A.Unnikrishnan, the learned counsel
for the appellant/plaintiff and Sri. Mathew Devasia, the
learned counsel for the respondent/defendant.
10. The short question that falls for consideration is
whether the First Appellate Court was right in holding that
the reverse onus clauses as provided under Sections 118 and
139 of the Negotiable Instruments Act, 1881, have not come
into operation even when the defendant admitted his
signature in Ext.A1 promissory note.
11. The defendant admitted his signature in Ext.A1
promissory note. He contends that, while borrowing a sum of
Rs.10,000/- from the plaintiff, he had handed over a blank
signed stamp paper to the plaintiff, which was subsequently
converted as a promissory note for the purpose of instituting
the original suit.
12. In Rangappa v. Mohan [AIR 2010 SC 1898], the
Apex Court held that when the signature on a cheque is
RSA NO.972 OF 2009
admitted, the statutory presumptions under Sections 118
and 139 of the Negotiable Instruments Act come into play.
13. In Bir Singh V. Mukesh Kumar [(2019) 4 SCC
197], the Apex Court held that even a blank cheque leaf,
voluntarily signed and handed over by the accused, which is
towards some payment, would attract presumption under
Section 139 of the Negotiable Instruments Act, in the
absence of any cogent evidence to show that the cheque was
not issued in discharge of a debt.
14. In Kalamani Tex v. P. Balasubramanian [2021 (2)
CTC 357 : 2021(219) AIC 184] , the Apex Court, while
dealing with the drawing of statutory presumptions under
Sections 118 and 139 of NI Act, held thus:
"14. Adverting to the case in hand, we find on a plain
reading of its judgment that the trial Court completely
overlooked the provisions and failed to appreciate the
statutory presumption drawn under Section 118 and
Section 139 of NIA. The Statute mandates that once
the signature(s) of an accused on the
cheque/negotiable instrument are established, then
these 'reverse onus' clauses become operative. In
such a situation, the obligation shifts upon the
accused to discharge the presumption imposed upon
him. This point of law has been crystalized by this
Court in Rohitbhai Jivanlal Patel v. State of
Gujaratmanu/sc/0393/2019 : (2019) 18 SCC 10, p 18
in the following words:
"In the case at hand, even after
purportedly drawing the presumption
RSA NO.972 OF 2009
under Section 139 of the NI Act, the trial
court proceeded to question the want of
evidence on the part of the complainant
as regards the source of funds for
advancing loan to the accused and want
of examination of relevant witnesses
who allegedly extended him money for
advancing it to the accused. This
approach of the trial court had been at
variance with the principles of
presumption in law. After such
presumption, the onus shifted to the
accused and unless the accused had
discharged the onus by bringing on
record such facts and circumstances as
to show the preponderance of
probabilities tilting in his favour, any
doubt on the complainant's case could
not have been raised for want of
evidence regarding the source of funds
for advancing loan to the appellant
accused.....""
15. The legal position settled by the Apex Court is that
once signature on the negotiable instrument is established
then the reverse onus clauses become operative, and in such
a situation the obligation shifts upon the respondent/
defendant to discharge presumption imposed upon him.
16. The statutory presumptions are rebuttable in
nature. In Ragappa v. Mohan (supra), the Apex Court held
that the reverse onus clauses impose an evidentiary burden
and not a persuasive burden. In Ragappa v. Mohan (supra)
and in M.S.Narayana Menon Alias Mani v. State of Kerala and
RSA NO.972 OF 2009
another [(2006) 6 SCC 39], the Apex Court held that inorder
to rebut the presumption under Sections 118 and 139 of the
NI Act, the standard of proof required is that of preponderance
of probabilities and not mere possibility.
17. As the First Appellate Court set aside the judgment
and decree of the Trial Court on the ground that the plaintiff
failed to prove the execution of Ext.A1, the question
whether the defendant established a probable defence
meeting the standard of preponderance of probability was
not considered.
18. The First Appellate Court, being the final fact
appreciating Court, has to record a finding as to whether the
defendant established a probable defence meeting the
standard of preponderance of probability. In the absence of
such a finding, this Court is of the view that there had not
been an effectual adjudication of the lis in the First Appellate
Court.
19. Therefore, the matter is liable to be remitted to
the First Appellate Court for fresh consideration. Resultantly,
the judgment and decree of the First Appellate Court are to
RSA NO.972 OF 2009
be set aside.
20. This Court is of the view that the remand was
caused not by the fault of the appellant/plaintiff and hence,
the appellant is entitled to refund of the Court fee remitted.
In the result:-
(i) The Regular Second Appeal is allowed by
way of remand.
(ii) The judgment and decree dated 29.07.2008
in A.S.No.37 of 2005 on the file of the
Subordinate Judge's Court, Kattappana, are
set aside.
(iii) The matter is remanded to the Subordinate
Judge's Court, Kattappana, for fresh
consideration in accordance with law.
(v) The Court fee remitted by the appellant is
ordered to be refunded to him as provided
in Section 67 of the Kerala Court Fees and
Suit Valuation Act, 1959.
(iv) The parties shall appear before the
Subordinate Judge's Court, Kattappana, on
RSA NO.972 OF 2009
17.12.2021.
(v) The Court below shall dispose of the appeal
expeditiously, at any rate, within three
months from the date scheduled for the
appearance of the parties.
(vi) The parties are directed to bear their
respective costs.
Sd/-
K.BABU
JUDGE
VPK
