Madras High Court
T.K.Kulandaivelu vs K.P.Nallusamy on 30 April, 2021
S.A.(MD)No.54 of 2014
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 30.04.2021
CORAM:
THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN
S.A.(MD)No.54 of 2014
and
M.P.(MD)No. 1 of 2014
T.K.Kulandaivelu ... Appellant
-Vs-
K.P.Nallusamy ...Respondent
PRAYER: Second Appeal is filed under Section 100 of the Civil Procedure
Code, against the Judgment and Decree passed by the learned Additional
Sub Judge, Karur, dated 18.03.2013 made in A.S.No.92 of 2012 reversing
the Decree and Judgment made in O.S.No.278 of 2004, dated 20.07.2010 by
the learned Additional District Munsif, Karur.
For Appellant : Mr.S.Madhavan
for Mr.M.Karthikeyavenkitachalapa
For Respondent : Mr.V.Nagarajan
JUDGMENT
The plaintiff in O.S.No.278 of 2004 on the file of the Additional
District Munsif Court, Karur is the appellant in this appeal. According to
the plaintiff, the defendant borrowed a sum of Rs.50,000/- from him and for
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S.A.(MD)No.54 of 2014
consideration so received, the defendant executed the suit promissory note-
Ex.A1 on 20.07.1994. The defendant agreed to repay the same on demand
with interest. However, the defendant did not pay any amount either
towards principal or towards interest. Therefore, the plaintiff caused to
issue Ex.A2-Notice dated 25.07.1996. It was received by the defendant.
The defendant issued Ex.A4 reply on 26.08.1996 denying the averments set
out in the suit notice. Since the demand set out in the suit notice was not
complied with, the plaintiff filed the suit in question in July 1997. It was
numbered as O.S.No.212 of 1997. It was later renumbered as O.S.No.284
of 2004.
2.The defendant filed his written statement denying the plaint
allegations. According to the defendant, he never borrowed any amount
from the plaintiff let alone on 20.07.1994. The stand of the defendant is
that the plaintiff was originally conducting an unregistered chit business.
When the defendant had bid for the prize money on one occasion, his
signature was taken in a blank pro-note for security purpose and that the
same had been misused. The defendant pleaded that the suit pro-note is a
rank forgery. The learned trial Munsif framed the necessary issues. The
plaintiff examined himself as P.W.1 and the scribe as P.W.2 and the attestor
as P.W.3. Ex.A1 to Ex.A4 were marked. The defendant examined himself
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S.A.(MD)No.54 of 2014
as D.W.1. No document was marked on the side of the defendant. After
considering the evidence on record, the learned trial Munsif by Judgment
and decree dated 20.07.2010 decreed the suit and directed the defendant to
pay a sum of Rs.87,205/- together with interest at the rate of 6% on the
principal sum of Rs.50,000 from the date of plaint till the date of
realization. Aggrieved by the same, the defendant filed A.S.No.92 of 2012
before the Additional Sub Court, Karur. The Appellate Court, by Judgment
and Decree dated 18.03.2012, set aside the Judgment and decree passed by
the trial Court and allowed the first appeal. Challenging the same, this
second appeal came to be filed. The second appeal was admitted on the
following substantial questions of law:-
(a) Whether the lower Appellate Court is justified in coming to the
conclusion that the defendant rebutted the presumption regarding the
execution of Exhibit A1 in terms of Section 118 of Negotiable Instruments
Act?
(b) Whether the lower Appellate Court committed an error in not
considering the version of P.W.1 which categorically proves the case of the
plaintiff and that the lower Appellate Court failed to consider that the
plaintiff has proved his case without any iota of doubt and hence the burden
of proof will shift to the defendant and the defendant has the onus to prove
his case as per Sections 101 and 102 of the Indian Evidence Act?
(c) Whether the lower Appellate Court is right in allowing the appeal
when the defendant had categorically admitted his signature in Exhibit A1
Promissory Note, whether the lower Appellate Court is correct in shifting
the burden of proving Exhibit A1 promissory note on to the appellant?
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S.A.(MD)No.54 of 2014
(d) Whether the lower Appellate Court is justified in coming to the
conclusion that when the burden cast upon the plaintiff has been shifted to
the defendant by virtue of his admitting signature in Exhibit A1, whether
the lower Appellate Court is correct in law in relying upon the nugatory
contentions of the defendant and thereby deciding in his favour?
3.Heard the learned counsel on either side.
4.The learned counsel appearing for the appellant reiterated all the
contentions set out in the memorandum of grounds and submitted that since
the defendant had admitted the signature found in Ex.A1-pro-note, the trial
Court rightly drew the presumption under Section 118 of the Negotiable
Instruments Act. In as much as the said presumption was not rebutted, the
trial Court rightly decreed the suit. He would point out that the first
appellate Court without any basis reversed the well considered decision of
the trial Court. He called upon this Court to answer the substantial question
of law in favour of the appellant and allow this appeal by restoring the
Judgment and decree passed by the trial Court.
5.Per contra, the learned counsel appearing for the respondent
submitted that the first Appellate Court was justified in reversing the
Judgment and Decree passed by the trial Court. He would submit that the
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S.A.(MD)No.54 of 2014
impugned Judgment passed by the first Appellate Court contains solid
reasons for holding that the suit was liable to be dismissed. There were too
many contradictions in the testimony recorded on the side of the plaintiff.
In particular, there were glaring contradictions in the deposition of the
plaintiff and the scribe and the attestor.
6.The learned counsel for the respondent in particular placed reliance
on the following circumstances:-
The plaintiff who examined himself as P.W.1 admitted that he
borrowed money from one Dhanam Finance and lent the same to the
defendant. He was unable to state on which date, or day, on which, the
suit pro-note was executed. He was unable to say in which color-ink,
the defendant had put his signature. The attesting witness P.W.3
Muthusamy is a close relative of P.W.1. Though the scribe
Narayanasamy claims that he knew the plaintiff for more than 15
years, he does not know the residential address of the plaintiff or that
of the attestor. The scribe also stated that the promissory note was
brought only by the plaintiff. P.W.3 also did not know the date on
which the loan was advanced. There is inconsistency between the
witnesses as to who brought the pro-note and the revenue stamp. P.W.3
also stated that it was Nallusamy who signed first in the promissory
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S.A.(MD)No.54 of 2014
note and thereafter, P.W.2 signed in the pro-note. P.W.3 also did not
know the purpose for which the loan was taken. The first Appellate
Court held that the evidence of P.W.1 to P.W.3 are contrary to each
other and they do not inspire the confidence of the Court. The
Appellate Court felt that there was considerable suspicion regarding
execution and attestation and passing of consideration under Ex.A.1-
pro-note. The first Appellate Court came to the conclusion that
presumption under Section 118 of the Negotiable Instruments Act
could not have been drawn in the facts and circumstances of the case.
The learned counsel for the respondent therefore pressed for dismissal
of the second appeal and for sustaining the Judgment and decree
passed by the First Appellate Court.
7.I carefully considered the rival contentions and went through the
evidence on record. The suit in question has been laid on the strength of the
promissory note. In the written statement itself, the defendant had admitted
his signature in the promissory note. His only defence is that when the
defendant handed over the promissory note, it was blank. In other words, in
a blank promissory note, his signature was taken. The defendant would
explain that the plaintiff was conducting an unregistered chit business and
that at the time of disbursing the prize money, the plaintiff was the habit of
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S.A.(MD)No.54 of 2014
taking signature in the blank pro-note from the subscribers of the chit
group. The defendant had also handed over the suit pro-note only under
such circumstances. Since the relationship between the parties came under
strain, the plaintiff had chosen to misuse the suit promissory note and filed
the suit on that basis.
8.The learned counsel appearing for the appellant drew my attention
to the decision of the Madras High Court reported in (2006) 2 MLJ 42
(N.S.Arumugam Vs.Trishul Traders). The Division Bench in the said
decision held as follows:-
“12.We heard learned counsel for the appellant/plaintiff. The main
thrust of the submission made by the learned counsel is that exhibit A1, being
a negotiable instrument, the plaintiff is entitled to the benefit of the legal
presumption available under Section 118 of the Negotiable Instruments Act.
Though the legal presumption is that exhibit A1 cheque is supported by
consideration and the burden is on the defendants to prove that exhibit A1
cheque was not supported by consideration and the burden is on the
defendants to prove that exhibit A1 cheque was not supported by
consideration the trial Court had wrongly thrown the burden on the plaintiff
and thereby has committed an error of law. Further, he submitted that the
defendants have not discharged the burden of proof that exhibit A1 cheque is
not supported by consideration. Learned counsel further submitted that the
evidence adduced by the defendants is contrary to their pleadings in the
written statement. Learned Counsel for the appellant by relying upon a
Judgment reported in Kundal Lal Rallaram Vs. Custodian, Evacuee Property
AIR 1961 SC 1316, submits that Section 118 of the Negotiable Instruments
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S.A.(MD)No.54 of 2014
Act laid down a special rule of evidence applicable to negotiable instruments
and the presumption is one of law and thereunder a court shall presume, inter
alia, that the negotiable instrument or the endorsement was made or endorsed
for consideration and in effect it throws the burden of proof of failure of
consideration on the makers of the note or the endorser, as the case may be.”
9.In the case on hand also, the signature in the suit pro-note has been
admitted. Therefore, the approach laid down in the aforesaid decision will
have to be adopted. The trial Court was justified in drawing presumption
under Section 118 of the Negotiable Instruments Act in favour of the
plaintiff/appellant herein. The question that next arises is whether the
presumption had been successfully rebutted by the defendant. The first
Appellate Court had referred to a host of discrepancies found in the
testimony of the witnesses for the plaintiff to come to the conclusion that
the presumption had been rebutted and Ex.A1-pro-note was not established.
It is true that there are contradictions in the answers given by the witnesses.
In my view, they do not really go to the root of the matter. As rightly argued
by the learned counsel for the appellant, the pro-note has been executed
way back in the year 1994. Witnesses were examined only in March 2010.
Thus, there has been a gap of almost 16 years between the date of execution
of the suit pro-note and the examination of the witnesses in the Court.
In view of the efflux of time, the memories are likely to fail. The
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S.A.(MD)No.54 of 2014
contradictions noted in the deposition of the witnesses by the First
Appellate Court are not really material. The only way the defendant could
have rebutted the presumption is to show that the plaintiff was running the
chit business and that, when he had bid for the prize money, the suit pro-
note was taken.
10.If such evidence had been successfully adduced by the defendant,
then, presumption can be said to have been rebutted. In the case on hand,
the defendant had only put formal questions during the cross examination
of P.W.1. No witness was examined on the side of the defendant. No
documentary evidence was adduced. If really, the plaintiff was running the
chit business as alleged, there would definitely be some documentary
evidence available. No such document was marked by the defendant.
11.The plaintiff had categorically stated that the defendant was none
other than his nephew. The plaintiff had originally stated that the defendant
was the son of his elder brother. Later, the plaintiff clarified that the
defendant was his cousin's son. But the fact remains that the defendant and
the plaintiff are close relatives. Hence, there is no merit in the contention
that the witnesses examined on the side of the plaintiff are relatives. In
view of the relationship between the parties namely the plaintiff and the
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S.A.(MD)No.54 of 2014
defendant, the fact that the attestor is also a relative pales into
insignificance. The first Appellate court has unnecessarily given
importance to minor contradictions. I therefore answer the first substantial
question of law in favour of the appellant. The first appellate Court went
wrong in concluding that the defendant rebutted the presumption regarding
execution of Ex.A1. Once the first substantial question of law is answered
in favour of the appellant, it is not necessary to go into the other substantial
questions of law.
12.According to P.W.1, the pro-note was a typed one. But P.W.2 had
deposed that the pro-note was written down by him. While cross-
examining P.W.1, the defendant had suggested that the relationship between
the plaintiff and the defendant was not cordial. The plaintiff on the other
hand replied that after the said transaction, the relationship came under
strain. The defendant had not sent any communication to the plaintiff
calling upon the plaintiff to return the blank pro-note retained by him. If
the defendant had sent such communication demanding return of the signed
blank pro-note and such a document had been marked, that would have
gone a long way in establishing the defence of the defendant. Of-course,
the defendant had to rebut the presumption only on a balance of
probabilities. In this case, except examining himself, no other evidence has
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S.A.(MD)No.54 of 2014
been adduced by the defendant. It is for this reason I hold that the
defendant had not rebutted the presumption drawn against him under
Section 118 of the Negotiable Instruments Act.
13.In this view of the matter, the impugned Judgment and decree
passed by the First Appellate Court is set aside. The Judgment and decree
passed by the trial Court is restored. The second appeal is allowed. No
costs. Consequently, connected miscellaneous petition is closed.
30.04.2021
Internet : Yes/No
Index : Yes/No
rmi
To
1.The Additional Sub Judge, Karur,.
2.The Additional District Munsif, Karur.
3.The Section Officer,
Vernacular Records,
Madurai Bench of Madras High Court,
Madurai.
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S.A.(MD)No.54 of 2014
G.R.SWAMINATHAN, J.
rmi
Judgment made in
S.A.(MD)No.54 of 2014
and
M.P.(MD)No. 1 of 2014
30.04.2021
https://www.mhc.tn.gov.in/judis/
