Madras High Court
M.Sethupathy vs R.Velusamy on 14 September, 2022
A.S.No.513 of 2011
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 14.09.2022
CORAM :
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
A.S.No.513 of 2011
1. M.Sethupathy
2. P.Mylsamy Gounder ... Appellants
Versus
R.Velusamy ... Respondent
Prayer: Appeal Suit filed under order 41 R 1 r/w Section 96 of the Code of
Civil Procedure to set aside the judgment and decree, dated 18.11.2009 made in
O.S.No.766 of 2004 on the file of the learned Additional District Judge (Fast
Track Court No.1) at Coimbatore.
For Appellants : Mr.S.Mukund
for M/S.Sarvabhauman Associates
For Respondent : Mr.K.Krishnan
https://www.mhc.tn.gov.in/judis
1/11
A.S.No.513 of 2011
JUDGMENT
This Appeal Suit arises out of the judgment and decree, dated 18.11.2009
in O.S.No.766 of 2004 passed by the learned Additional District Judge (Fast
Track Court No.1) at Coimbatore, in and by which, the suit filed by the
respondent/plaintiff for recovery of money based on the suit pronote, Ex.A-1,
was decreed in part that is to say, while allowing the principle amount, the
interest was allowed to the tune of 12% per annum. Aggrieved by the same, the
appellants/defendants have filed the present Appeal Suit.
2. The case of the respondent/plaintiff is that the appellants/defendants
are the relatives of the respondent/plaintiff. They used to periodically borrow
the amounts from the respondent/plaintiff and repay the same in respect of their
financial businesses. Therefore, on 11.11.1999, the appellants/defendants
borrowed a sum of Rs.4,00,000/- and in consideration thereof, executed a
pronote promising to repay the same with interest at the rate of 30% per annum
and thereafter failed and neglected to repay the same. The respondent/plaintiff
issued a pre-suit notice in Ex.A-2 and even though the second appellant/second
defendant received the same, no reply or positive response was made on behalf
of the appellants/defendants and hence the suit.
https://www.mhc.tn.gov.in/judis
A.S.No.513 of 2011
3. The appellants/defendants resisted the suit by contesting that it is false
to state that they borrowed a sum of Rs.4,00,000/- as on 11.11.1999 and
executed the suit pronote. But, however, during the earlier transactions, some
of the unfilled pronotes were left with the respondent/plaintiff which have been
now misused and the present suit is filed. It is also the contention of the
appellants/defendants that the respondent/plaintiff has suppressed about the
earlier transactions and suit being filed and therefore, those transactions being
material in nature, the suit has to be dismissed. It is the further case of the
appellants/defendants that if the entire case is taken into consideration, the
appellants/defendants were neither present in Coimbatore nor executed the suit
pronote at Coimbatore and therefore, the jurisdiction is also not there in the
Trial Court to entertain. The respondent/plaintiff filed a reply, wherein, the
details of the earlier borrowing transactions were pleaded in detail and an
additional written statement was also filed by the appellants/defendants in
respect of those earlier transactions in detail and it is the case of the
appellants/defendants that the respondent/plaintiff have concocted those
documents and promissory notes, taking advantage of the possession, in which,
the unfilled promissory notes were in the hands of the respondent/plaintiff. A
reply statement was also filed to additional written statement by the
respondent/plaintiff.
https://www.mhc.tn.gov.in/judis
A.S.No.513 of 2011
4. On such pleadings, the Trial Court framed the following issues and
additional issue:-
(i) Whether the defendants executed the suit
pronote or not?
(ii) Whether the suit pronote was given as
security and not for consideration?
(iii) Whether the plaintiff is entitled of the suit
amount with interest at the rate of 30%?
(iv) What relief, if any, the plaintiff is entitled
to?
Additional issue:-
(i) Whether the suit pronote is true, valid,
enforceable by law?
5. On the said issues, the parties let in evidence. On the side of the
respondent/plaintiff, the respondent/plaintiff examined himself as P.W.1 and
his brother Ramasamy Gounder was examined as P.W.2. On behalf of the
respondent/plaintiff, Exs.A-1 to A-14 were marked. Thereafter, on behalf of
the appellants/defendants, the first appellant/defendant examined himself as
https://www.mhc.tn.gov.in/judis
A.S.No.513 of 2011
D.W.1. No documents were marked on the side of the appellants/defendants.
The Trial Court proceeded to hear the learned Counsel on either side and after
appraising the evidence on record in detail, answered the issues in favour of the
respondent/plaintiff and against the appellants/defendants by holding that the
appellants/defendants have borrowed the amount and have executed the
promissory note and that the respondent/plaintiff is entitled to recovery of the
amount. However, in respect of the interest alone, restricted it to 12% per
annum both from the date of pronote and also post decree. Aggrieved by the
same, the present Appeal Suit is filed by the appellants/defendants herein.
6. Heard Mr.S.Mukund, learned Counsel appearing on behalf of the
appellants/defendants and Mr.K.Krishnan, learned Counsel appearing on behalf
of the respondent/plaintiff.
7. The learned Counsel for the appellants/defendants would submit that
the signature of the appellants/defendants in the vakalath as well as the pronote
differs even to the naked eye and especially when the appellants/defendants
have pleaded that the respondent/plaintiff never borrowed the amount and
executed the pronote, the burden is on the respondent/plaintiff to have the
signatures verified by appropriate expert. In the absence of proof of execution
https://www.mhc.tn.gov.in/judis
A.S.No.513 of 2011
of the promissory notice, the Trial Court ought not to have relied upon the
presumption under Section 118 of the Negotiable Instruments Act, 1881 and
therefore, the judgment and the decree of the Trial Court is erroneous. This
apart, even from the reply notice filed and the letters in Exs.A-7 and A-8,
which were marked before the Trial Court, it is clear that the pleadings of the
respondent/plaintiff as if they borrowed the amount at Coimbatore and
executed the pronote on 11.11.1999 has been falsified and therefore, the Trial
Court ought to have rejected the entire case as it suffers from suppressio veri
and suggestio falsi. Therefore, the learned Counsel would submit that in this
case, since there is no other evidence for parting with the money, the Trial
Court erred in decreeing the suit.
8. Per contra, Mr.K.Krishnan, the learned Counsel appearing on behalf of
the respondent/plaintiff would submit that in this case, even as per paragraph
No.3 of the written statement, the appellants/defendants have admitted their
signatures and it is their specific case that the suit promissory note is fabricated
by the respondent/plaintiff misusing the signature in the blank promissory notes
handed over during the previous transactions. Therefore, effectively, the
appellants/defendants are admitting their signatures in the promissory note.
Once the signatures in the promissory note are admitted, then the presumption
https://www.mhc.tn.gov.in/judis
A.S.No.513 of 2011
under Section 118 of the Negotiable Instruments Act, 1881 comes into force
and it is for the appellants/defendants to establish that they had actually not
received the consideration as contained in the promissory note. He would point
out that except for the ipse dixit of the appellants/defendants as contained in the
written statement, the appellants/defendants have not let in any other evidence
in support of their claim nor from the cross-examination of the
respondent/plaintiff, they were able to elicit anything. He would submit that
not specifically mentioning of the earlier transactions between the
respondent/plaintiff and the appellants/defendants were not material in nature
and in any event, they were duly brought on record by way of reply statement,
to which, the appellants/defendants were also permitted to file an additional
written statement. As a matter of fact, Exs.A-7 and A-8 would actually lend
credence to the transactions and therefore, he would submit that the Trial Court
has rightly decreed the suit and prayed for dismissal of the appeal.
9. I have considered the rival submissions made on behalf of either side
and perused the material records of this case. Admittedly, the suit is based on a
pronote. The suit promissory note is marked as Ex.A-1 by the
respondent/plaintiff. According to the respondent/plaintiff, the
appellants/defendants borrowed a sum of Rs.4,00,000/- and failed to repay
https://www.mhc.tn.gov.in/judis
A.S.No.513 of 2011
either the principal or the interest. As rightly contended by the learned Counsel
for the respondent/plaintiff, it is seen from the very written statement itself that
the appellants/defendants have admitted their signatures in the promissory note.
Therefore, once the signatures are admitted, I am afraid that I can accept the
contention of the learned Counsel for the appellants/defendants that the
respondent/plaintiff should have compared the signatures by appropriate hand
writing/forensic expert and should have proved the same. The said
contingency will arise if only the appellants/defendants have denied the
signatures in the promissory note. Once the execution is admitted, the
respondent/plaintiff's case is clothed with the presumption under Section 118 of
the Negotiable Instruments Act, 1881. Therefore, it is for the
appellants/defendants to rebut the said presumption to the level of
preponderance of probability. In this case, the respondent/plaintiff, apart from
the promissory note, had also marked Ex.A-2, pre-suit notice, for which also,
there is no reply. Similarly, the letter written by the first appellant/defendant in
Exs.A-7 and A-8 also further lends credence and corroborates the loan being
disbursed by the suit promissory note. In that view of the matter and
considering the findings of the Trial Court that the appellants/defendants have
done nothing to rebut the presumption, I am of the view that no exception
whatsoever can be taken to the findings of the Trial Court. In view of the
https://www.mhc.tn.gov.in/judis
A.S.No.513 of 2011
above, I answered the issue No.1 that the appellants/defendants executed the
suit promissory note. The issue No.2 is also answered by holding that the
promissory note was not given as security, but, for the consideration of
borrowal of a sum of Rs.4,00,000/-. The additional issue No.1 i.e., Whether the
suit pronote is true, valid, enforceable by law, is also answered in favour of the
respondent/plaintiff and against the appellants/defendants. As far as the issue
No.3 is concerned, the Trial Court has ordered the interest at the rate of 12%
per annum as against the claim rate of 30% per annum. It is the case of the
respondent/plaintiff that the borrowings were for the business of the
appellants/defendants that they were involved in finance and other businesses.
Considering that the borrowing is for the commercial purpose, I hold that the
award of interest at the rate of 12% per annum by the Trial Court does not
require any interference and the said issue is also answered accordingly.
10. In view thereof, I hold that the Appeal Suit is without any merits and
as such, the same is dismissed. The costs, as far as the Appeal Suit is
concerned, is made easy, while the costs ordered in respect of the suit in favour
of the respondent/plaintiff will remain. Consequently, M.P.No.1 of 2011 is
closed.
https://www.mhc.tn.gov.in/judis
A.S.No.513 of 2011
14.09.2022
Index : yes/no
Speaking order/Non-speaking order
grs
To
The Additional District Judge (Fast Track Court No.1),
Coimbatore.
https://www.mhc.tn.gov.in/judis
A.S.No.513 of 2011
D.BHARATHA CHAKRAVARTHY. J.,
grs
A.S.No.513 of 2011
14.09.2022
https://www.mhc.tn.gov.in/judis
