Madras High Court
Sri Prasanna Lakshmi Finance vs N.Rangasamy on 13 November, 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 13.11.2024
CORAM:
THE HONOURABLE MS.JUSTICE R.N.MANJULA
S.A.No.851 of 2014
Sri Prasanna Lakshmi Finance,
a Registered Firm Rep. by his
Managing Partner N.N.Rangasamy,
22-D, Lakshmi Mission Works Pirivul
Periyanaickenpalayam,
Coimbatore 641 020.
... Appellant / Plaintiff
Vs.
N.Rangasamy ... Respondent / Defendant
Prayer: Second Appeal is filed under Section 100 of the Code of Civil
Procedure, to set aside the judgment and decree of the learned II Additional
Subordinate Judge of Coimbatore dated 29.04.2009 in A.S.No.43 of 2008
reversing the judgment and decree of the learned II Additional District
Munsif of Coimbatore dated 27.06.2007 in O.S.No.1968 of 2004.
For Appellant : Mr.V.Nicholas
For Respondent : Mr.B.Nedunchezhiyan
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JUDGMENT
This Second Appeal has been filed to set aside the judgment and
decree of the learned II Additional Subordinate Judge of Coimbatore dated
29.04.2009 in A.S.No.43 of 2008 reversing the judgment and decree of the
learned II Additional District Munsif of Coimbatore dated 27.06.2007 in
O.S.No.1968 of 2004.
2. Heard Mr.V.Nicholas, learned counsel for the appellant and
Mr.B.Nedunchezhiyan, learned counsel for the respondent and perused the
materials available on record.
3. The appellant is the plaintiff who has filed a suit for recovery of
money on the basis of the promissory note alleged to have been executed by
the defendant on 09.11.1996. The Trial Court has decreed the suit and in the
First Appeal preferred by the defendant, the First Appellate Court allowed
the First Appeal and reversed the judgment of the Trial Court and dismissed
the suit. Aggrieved over that, the plaintiff has preferred this Second Appeal.
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4. The short facts pleaded in the plaint are as follows:
On 09.11.1996, the defendant had borrowed a sum of Rs.40,000/-
from the plaintiff and executed a promissory note on the same date by
agreeing to repay the said amount with interest at the rate of 36% per annum
to the plaintiff. Despite several demands have been made by the plaintiff, the
defendant did not pay any amount to the plaintiff and tried to sell his only
available property to some third party. Hence, the plaintiff has issued a legal
notice to the defendant on 15.03.1999. The defendant received the same and
failed to repay the said amount. Therefore, the plaintiff has filed a suit for
recovery of money.
5. The short facts pleaded in the written statement are as follows:
The defendant had not borrowed a sum of Rs.40,000/- from the
plaintiff on 09.11.1996 and executed a promissory note. The plaintiff firm is
run by one Rangasamy who is the relative of the defendant and the plaintiff
is also running a Chit Company. Rangasamy used to give hand loans and
those particulars will be entered in the small pocket note by calculating the
loans on daily basis. During the month of March 1997, the defendant has
approached Rangasamy for a loan of Rs.30,000/- and the plaintiff has paid a
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sum of Rs.30,000/- on 13.03.1997 by obtaining a blank promissory note
from the defendant as a security for the loan.
5.1. If the defendant was in urgent need of money, he was in
compelling circumstances to sign the blank promissory note and hence, he
signed the same. The defendant has paid Rs.300 per day by way of repaying
the loan even as per his pocket note account, a sum of Rs.26,675/- has been
collected. Thereafter, during December 1997, the defendant has paid the
entire balance due to the plaintiff. However, the plaintiff did not issue any
receipt, but promised to return the blank promissory note. Thereafter, the
plaintiff has filed a vexatious suit by forging the blank promissory note. As
the plaintiff has filed a vexatious suit, it is liable to be dismissed.
6. After hearing the rival submissions, the Trial Court has framed the
following issues:
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bjhif bfhLf;f ntz;Lkh>
3.thjpf;F vd;d ghpfhuk; fpilf;Fk;>
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7. During the course of the trial, on the side of the plaintiff, P.W.1
was examined and Exs.A1 to A4 were marked. On the side of the defendant,
D.W.1 and D.W.2 were examined and Exs.B1 and B2 were marked.
8. The one and only contention raised by the plaintiff is that the First
Appellate Court has misconstrued the import of Section 118 of Negotiable
Instruments Act and did not appreciate the fact that once execution of the
promissory note is admitted, the presumption would be that consideration
has also been passed in favour of the defendant. As the defendant did not
prove the contrary, it is not correct for the Lower Appellate Court to allow
the Appeal thereby to dismiss the suit.
9. On perusal of the judgment of the First Appellate Court, it is seen
that there is a discussion with regard to Section 118 of Negotiable
Instruments Act along with Section 114 of the Indian Evidence Act. Both
Section 114 of Indian Evidence Act and Section 118 of Negotiable
Instruments Act would speak about the initial presumption of some other
facts when the fundamental fact is admitted.
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10. In the case in hand, the defendant did not deny the execution of
the promissory note and all that he had contented before the Court was that
the promissory note has been executed only by way of security on
13.03.1997, on which date, he was compelled to receive the loan of
Rs.30,000/- from the plaintiff and which was also repaid by him
subsequently. According to the defendant, the blank promissory note
executed by him has been misused by the plaintiff according to his own
whims. The contention of the defendant was that the loan amount availed
from the plaintiff who is the financier would be on daily basis by keeping the
pocket note book to make entries in this regard. So the defendant has
claimed that he has totally paid Rs.26,675/- upto 22.08.1997 at Rs.300/- per
day towards repayment of Rs.30,000/- availed by him from the plaintiff on
13.03.1997.
11. The learned First Appellate Court has appreciated Ex.B1 pocket
note book produced by the defendant. While examination of P.W.1, he also
admitted the receipt of loan of Rs.30,000/- by the defendant from him on
13.03.1997 and the relative entries made in this regard in Ex.B1. But the
plaintiff claimed that a sum of Rs.30,000/- has been received by the
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defendant as a personal loan and that has got no connection to the
promissory note. According to the plaintiff, the promissory note is dated
09.11.1996. Had the plaintiff given a loan of Rs.30,000/- on 09.11.1996, it
is difficult to presume that the plaintiff has advanced another sum of
Rs.30,000/- on 13.03.1997. When the earlier loan itself is not repaid and
pending, no person would give further loan to the person who had already
committed default or who has got pending dues towards earlier loan.
12. Apart from the above entries, the entries in Ex.B1 was admitted
by P.W.1. The defendant's witness D.W.2 has also deposed in his evidence
that though he has attested his signature in the promissory note as an
attesting witness, he did not see any amount being given to the defendant.
Even he has stated that only during 4th month of 1997, he was called by the
plaintiff to affix his signature as an attesting witness. D.W.2 has stated in his
evidence that the defendant was very much available when he was affixing
his signature but he did not see that the plaintiff is giving the said amount to
the defendant. It is further stated that the other witness Babu is also not
available and he did not affix his signature in his presence. Further the
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evidence of D.W.2 is that the promissory note was blank and it was not
filled.
13. No doubt as per Section 118 of the Negotiable Instruments Act
when a party has admitted the execution of the promissory note, the initial
presumption would be on the plaintiff that the defendant had executed
promissory note for the consideration stated in the promissory note. But that
presumption is only an initial presumption and it can become a conclusive
only when the defendant fails to prove the contrary.
14. In the instant case, the defendant has proved the contrary by
producing Ex.B1 entry admitted by P.W.1 and unshakable evidence of
D.W.2. Those evidences would serve as a rebuttal evidence against the initial
presumption. In such case, the burden would be once again shifted upon the
plaintiff to prove that the promissory note is supported by consideration and
that advance amount of Rs.40,000/- was given only on 09.11.1996 and that
the defendant has executed a promissory note only by getting the said
consideration. But the plaintiff did not discharge the above burden shifted on
him and hence, the First Appellate Court has rightly held that the plaintiff
has not proved his case.
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15. As the Trial Court did not properly appreciate the evidence on
record by applying Section 118 of Negotiable Instruments Act in proper
perspective, the error was rectified by the First Appellate Court by making
correct appreciation of Section 118 of Negotiable Instruments Act. In the
background of the evidence and facts proved during the trial, the substantial
question of law will not even arise. As the First Appellate Court has rightly
appreciated the merits of the judgment of the Trial Court by construing and
applying the principles of Section 118 presumption and thereafter, allowed
the First Appeal by reversing the judgment of the Trial Court, I do not find
any merit in the arguments advanced by the learned counsel for the
appellant / plaintiff in this Second Appeal.
16. In the result, this Second Appeal is dismissed and the judgment
and decree of the learned II Additional Subordinate Judge of Coimbatore
dated 29.04.2009 in A.S.No.43 of 2008, is confirmed. No costs.
Speaking order / Non-speaking order 13.11.2024
Index : Yes / No
Neutral Citation : Yes / No
gsk
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R.N.MANJULA, J.
gsk
To
1. II Additional Subordinate Judge,
Coimbatore.
2.II Additional District Munsif,
Coimbatore.
13.11.2024
https://www.mhc.tn.gov.in/judis
