Madhya Pradesh High Court
Balram Farakya vs Laxminarayan on 18 September, 2025
NEUTRAL CITATION NO. 2025:MPHC-IND:27421
1 FA-96-2002
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE BINOD KUMAR DWIVEDI
ON THE 18th OF SEPTEMBER, 2025
FIRST APPEAL No. 96 of 2002
BALRAM FARAKYA
Versus
LAXMINARAYAN
Appearance:
Shri Veer Kumar Jain - Senior Advocate with Shri Namit Jain -
Advocate for the appellant.
None for the respondent.
JUDGMENT
With the consent of the learned counsel for the appellant the matter
is heard finally.
The appellant/plaintiff has challenged the judgment and decree
dated 17.10.2001 passed by II Additional District Judge, Mandsaur in
C.O.S.No.1B/2000 whereby the suit filed by the appellant/plaintiff for
recovery of Rs.40,001/- with interest @ 2.5% per month has been
dismissed.
2. The case of the plaintiff as mentioned in the plaint is that on
11.04.1997, the respondent/defendant took a loan of Rs.40,001/- from
him had agreed to pay interest @ 2.5% per month. While obtaining the
said loan the respondent had executed Promissory Note (Ex.P-1). When
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the respondent did not repay the aforesaid amount with interest, the
appellant filed suit for recovery.
3. In the written statement, the respondent/defendant refuted the
claim as raised in the plaint and averred that no cash amount was paid to
the respondent by the appellant. It is further stated that appellant had
handed over his garlic to the respondent for being sold and after sale of
the said garlic, the respondent was to pay to the appellant the sale
proceeds after deducting his commission. The Promissory Note in
question was got executed just to ensure the payment of sale proceeds of
garlic. It has further been stated in the written statement that the said
Promissory Note (Ex.P-1) while executed was blank. The
respondent/defendant further pleaded that though he sold the garlic, but
could not recover the sale proceeds thereof. Since the appellant was
insisting for payment therefore, the sale deed of the land bearing Survey
No.765 area 0.006 Hectare of village Balaguda the value of which was
Rs.80,000/- was executed in favour of the appellant without obtaining
any consideration. Thus, the value of garlic was adjusted in the sale
deed. It was further stated that the appellant has misused the blank
Promissory Note and filed the present suit. A plea against the appellant
was also raised that he is a money lender.
4. The learned trial Court on the pleadings of the parties framed
as many as six issues and after opportunity of tendering oral as well as
documentary evidence to the parties vide impugned judgment and decree
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dismissed the suit of the plaintiff/appellant which gives rise to the
present appeal.
5. Learned counsel for the appellant submits that the judgment
passed by the trial Court is vulnerable, as it is not based on due
appreciation of evidence. Despite the fact that Promissory Note was
undisputedly executed by the respondent in favour of the appellant,
which attracts a presumption under Section 118 of the Negotiable
Instruments Act, 1881, the same has been discarded. No witness was
examined on behalf of the respondent that the for consideration of sale
deed executed by the respondent in favour of the appellant has not been
received. Despite that consideration paid to the respondent while
executing the Promissory Note (Ex.P-1) has been set off with
consideration of sale deed. It is further submitted that the sale deed
(Ex.D-1) was executed for consideration of Rs.80,000/-. Nothing has
been pleaded or proved by the respondent that what happened to the rest
of the amount as Promissory Note was only for Rs.40,001/-. The trial
Court has erred in holding that sale deed (Ex.D-1) was sale transaction
and was not subject matter of the present suit. Parties to the sale deed
were also not the parties to the present suit. The learned trial Court
contrary to the contents of the document, sale deed (Ex.D-1) has erred in
holding that the sale deed was executed without any consideration. This
finding of fact is also erroneous that presumption in favour of the
appellant has been rebutted by the respondent by way of cogent
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evidence. The learned trial Court has committed a serious error in
holding that the transaction was of Rs.40,000/- only and not for
Rs.40,001/- therefore, the witness examined to prove the Promissory
Note could not be believed. There was no material alteration in the
Promissory Note and receipt; therefore, the finding with regard to
overwriting in the receipt (Ex.P-2) is also not correct. Undue importance
has been given to an insignificant difference of Rs.1/- in the Promissory
Note and the alleged transaction incorporated in the Promissory Note.
Since the respondent has stated that he had signed the blank Promissory
Note therefore, no question for making any change/addition/alteration
arises.
5.1 Learned counsel further submits that false story narrated by
the respondent has been relied upon while dismissing the suit. The
findings on the issues that appellant is a money lender are also perverse.
No cogent evidence has been tendered in this regard. He further submits
that no documentary and definitive evidence was on record with regard
to any earlier loan transaction. Despite that wrong finding has been
recorded with regard to the effect that the appellant is a money lender.
Even otherwise Money Lenders Act, 1934 has no application in such a
transaction. The trial Court wrongly disbelieved the witnesses examined
on behalf of the appellant. The trial Court failed to appreciate that in
such private transactions witnesses are always known and related to the
parties. Thus, their evidence could not have been disbelieved on this
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5 FA-96-2002
ground alone. The trial Court has erred in holding that the respondent
has adduced the best evidence while discarding the evidence adduced on
behalf of the appellant. A concocted story with regard to the transaction
of garlic between the parties has been believed without any basis.
Adverse inference under Section 114 of the Evidence Act has been
wrongly drawn against the appellant. The evidence led on behalf of the
respondent by examining Ratan Singh (DW-2) and Ravi Singh (DW-3)
is without any pleading which cannot be relied upon. On this
miscellaneous ground, learned counsel prays for allowing the appeal by
setting aside the impugned judgment and decree.
6. Heard and considered the submissions of the learned counsel
for the appellant and perused the record.
7. It is not in dispute that respondent/defendant has signed the
Promissory Note (Ex.P-1). The case of the plaintiff is that he has lend
out Rs.40,001/- to the respondent with interest @ 2.5% per month and in
pursuance thereof he has executed the Promissory Note (Ex.P-1). Since
the money was not repaid therefore, he has filed the suit.
8. The case of the respondent is that it is not a case of borrowing
money mentioned in the Promissory Note (Ex.P-1), but actually the
appellant/plaintiff was given garlic for sale and when he could not sell it
on time and appellant pressed for sale proceeds of garlic, he has signed
the blank Promissory Note (Ex.P-1). He has further pleaded that to repay
the amount of consideration when he was pressurized by the
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appellant/plaintiff, he got the sale deed (Ex.D-1) registered in favour of
the appellant/plaintiff.
9. The appellant/plaintiff to prove his case examined himself
along with Mohanlal (PW-2) and Vishnu (PW-3), whereas to rebut the
case of the plaintiff and to prove his specific pleadings,
respondent/defendant has examined himself as DW-1 and in his support
also examined Ratan Singh (DW-2) and Ravi Singh (DW-3). It is also
not in dispute that Narsinghlal and Mannalal S/o Badrilal and Narmada
Bai W/o Badrilal had executed sale deed (Ex.D-1) in favour of the
appellant for Rs.80,000/-. The case of the appellant/plaintiff in this
regard has been that this was a different transaction and sale deed (Ex.D-
1) was not to discharge the liability arising out of Promissory Note
(Ex.P-1), but in paragraph 10 of his cross examination he has stated that
Rs.40,000/- was lend out by his wife and sale deed (Ex.D-1) was got
registered by the respondent in this behalf. It was upto the appellant to
prove that it was different transaction in pursuance whereof this sale
deed (Ex.D-1) was got registered. The best evidence would have been
the account books maintained by him, but he has not produced the
document in this regard therefore, the evidence of the respondent that to
discharge the liability in Promissory Note (Ex.P-1) sale deed (Ex.D-1)
was executed has rightly been relied upon by the trial Court. The learned
trial Court has rightly taken note of the aforesaid admission by the
appellant in paragraph 10 of his cross examination in paragraph 18 of the
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judgment.
10. The case of the respondent/defendant is that he signed the
blank Promissory Note (Ex.P-1) to assure the appellant repayment. From
perusal of the details filled up in the Promissory Note (Ex.P-1), there is
apparent over writing in the figures of the amount which has been
changed from Rs.4,000/- to Rs.40,000/-. This discrepancies has been
taken note by the trial Court in paragraph 22 of the judgment. The
discrepancies in the evidence of the so called witnesses who have also
been found to be near relatives of the appellant have also been rightly
taken note of the trial Court along with difference in the amount in
the Promissory Note (Ex.P-1) and narration given by them though it is
only Rs.1/-. In the facts and circumstances of the case, this could not
have been ignored and the trial Court has taken note of it for rebutting
the case of the appellant/plaintiff in paras 22 to 26 of the judgment.
11. Even though appellant has denied the suggestions about him
to be money lender, but the trial Court reached to the conclusion from
the evidence adduced on behalf of the respondent/defendant with
specific mention of statement of Ratan Singh (DW-2) and Ravi Singh
(DW-3) that appellant is money lender. The presumption under Section
114 of the Evidence Act has been inferred against the appellant and
presumption which is in favour of the Promissory Note (Ex.P-1) under
Section 118 of the Negotiable Instruments Act has also been found to be
rebutted by the evidence led on behalf of the respondent/defendant.
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12. The objections raised on behalf of the appellant that why
respondent executed sale deed for consideration of Rs.80,000/- when
only Rs.40,000/- was due to him has not been explained which falsifies
the contents raised on behalf of the respondent that sale deed (Ex.D-1)
was not for discharging the debt which was incorporated in
the Promissory Note (Ex.P-1) is not of any consequence.
13. In the facts and circumstances of the case, this Court is of the
considered view that respondent by leading cogent documentary and oral
evidence has rebutted the presumption of the Negotiable Instruments Act
in favour of the appellant and thus succeeded to prove that after
execution of the sale deed (Ex.D-1) no amount remained due to be paid
to the appellant. After considering the factual matrix and evidence
adduced in this case, the trial Court concluded that appellant has failed
to prove his case. This Court does not find any factual and legal error in
arriving at the finding recorded by the trial Court.
14. Resultantly, this appeal being devoid of substance, fails and
is hereby dismissed.
15. Let decree be drawn in terms of the judgment. A copy of the
judgment be sent to the trial Court for necessary compliance. Record be
also sent back to the concerned trial Court.
(BINOD KUMAR DWIVEDI)
JUDGE
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RJ
