Madras High Court
K. Selvaraj … vs V.Thangavelu on 18 October, 2024
2024:MHC:3592
S.A.No. 413 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
JUDGMENT RESERVED ON : 23 / 09 / 2024
JUDGMENT PRONOUNCED ON : 18 / 10 / 2024
CORAM:
THE HONOURABLE MR. JUSTICE R. SAKTHIVEL
S.A.NO.413 OF 2020
AND
CMP NO.8523 OF 2020
K. Selvaraj …Appellant/Appellant/Defendant
Versus
V.Thangavelu ... Respondent/Respondent/Plaintiff
PRAYER: Second Appeal filed under Section 100 of the Code of Civil
Procedure, 1908, praying to set aside the Judgment and Decree dated
February 17, 2020 made in A.S.No.25 of 2016 on the file of the Additional
District Judge, Namakkal District confirming the Judgment and Decree
dated November 4, 2015 made in O.S.No.40 of 2011 on the file of
Subordinate Court, Namakkal District.
For Appellant : Mr.R.Saseetharan
For Respondent : Mr.S.Saravana Kumar
for M/s.I.Abrar Md Abdullah
https://www.mhc.tn.gov.in/judis
Page No.1 of 18
S.A.No. 413 of 2020
JUDGMENT
This Second Appeal has been filed praying to set aside the
Judgment and Decree dated February 17, 2020, made in A.S.No.25 of
2016 on the file of the ‘Additional District Judge, Namakkal District’
(henceforth 'First Appellate Court'), whereby the Judgment and Decree
dated November 4, 2015 made in O.S.No.40 of 2011 on the file of
‘Subordinate Court, Namakkal District’ (henceforth 'Trial Court') was
confirmed.
2. The defendant who was unsuccessful before the Trial Court
as well as the First Appellate Court has preferred this Second Appeal. For
the sake of convenience, hereinafter, the parties herein will be denoted as
per their array in the Original Suit.
Plaintiff's Case
3. The case of the plaintiff is that on August 11, 2008 the
defendant borrowed a sum of Rs.1,50,000/- (Rupees One Lakh Fifty
Thousand only) from the plaintiff for urgent family and business expenses
by executing a Promissory Note. The defendant agreed to repay the loan
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amount together with interest at the rate of 12% per annum to the plaintiff.
Despite repeated demands, the defendant did not repay the principal
amount and the interest to the plaintiff. Hence, the plaintiff filed the Suit
for recovery of money with interest at the rate of 12% per annum.
Defendant's Case
4. The defendant filed Written Statement wherein it has been
averred that he never borrowed the said loan amount of Rs.1,50,000/- from
the plaintiff as alleged in the Plaint. The alleged Promissory Note is a
forged one. Both the plaintiff and the defendant were teachers well
acquainted with each other. The plaintiff and the defendant were also
partners in S.S. Finance and Umaiyal Finance. One Mr.Ashokan was
working as Manager in S.S.Finance. In S.S.Finance, the defendant was
allotted a chit amount in the year of 1996, for which, he executed two
blank Promissory Notes, one having S.S.Finance firm’s name thereon
while the other being a general one, and also affixed his thumb impression
thereon, as per the rules and practices of the finance. However, the said
S.S.Finance was dissolved before completion of the monthly chit. When
S.S.Finance was dissolved, the plaintiff took the said general blank pro-
note without the company’s name printed on it, stating that the plaintiff
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joined S.S.Finance only on the insistence of the defendant, and assured
that he would return the pro-note after collecting the amounts the debtors
owed him. With no other choice, the defendant reluctantly agreed. The
plaintiff, by using the said Promissory Note in a forged manner, filed the
Suit for recovery of money against the defendant without giving any notice
to the defendant. Starting in the year 2000, the defendant began using a
signature different from the one found in Ex-A.1. Accordingly, he prayed
to dismiss the suit.
Trial Court and First Appellate Court
5. At trial, on the side of the plaintiff, the plaintiff was
examined as P.W.1, and Ex-A.1 to Ex-A.3 were marked. On the side of the
defendant, the defendant was examined as D.W.1, one Mathiyazhagan and
one Natarajan were examined as D.W.2 and D.W.3 respectively, and Ex-
B.1 was marked. Pay Acquittance Register relating to the years 1996 -
1997 was marked as Ex-X.1 and Pay Acquittance Register pertaining to
the time period from April 2008 to December 2008 was marked as Ex-X.2.
6. After full trial, the Trial Court decreed the Suit by holding
that the defendant admitted the signature in Ex-A.1 - Promissory Note and
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hence, the onus is upon the defendant to prove his defence, but the
defendant failed to do so. Feeling aggrieved with the Judgment and Decree
of the Trial Court, the defendant preferred an appeal before the First
Appellate Court. The First Appellate Court after hearing both sides,
concurred with the aforesaid finding of the Trial Court and dismissed the
appeal confirming the Judgment and Decree of the Trial Court.
Substantial Questions of Law
7. Feeling aggrieved with the concurrent findings of the First
Appellate Court as well as the Trial Court, the defendant filed this Second
Appeal and the same was admitted on August 17, 2020 on the following
substantial question of law:-
"Whether the Courts below are right in decreeing the
suit without considering the effect of Ex.X1 and Ex.X2 and
the evidence of DW2 and DW3, which are part of the
records."
Arguments
8. Mr.R.Saseetharan, learned Counsel for the appellant /
defendant would argue that the plaintiff and the defendant were working as
Government Teachers, residing in the same locality and well acquainted
with each other. Further, the plaintiff and the defendant along with a few
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others were engaged in money lending business in the name and style of
‘S.S.Finance’, a Partnership firm, which among other things conducted
unregistered chit funds as per its own rules and practices. If no one bits for
a monthly chit, as per the rules and practices, a recipient was to be selected
through draw of lots.
8.1. In such a draw of lots, the defendant won the chit in the
year 1996 and received the corresponding chit amount. As per the rules
and practices, the defendant handed over to the Managing Partner, two
signed blank Promissory Notes, among which one alone had the name of
‘S.S.Finance’ printed on it and another was a general one. Later, when
S.S.Finance was dissolved before the completion of that chit, the plaintiff
obtained the said general blank Promissory Note with no name printed
thereon (Ex-A.1) from the Managing Partner and later forged it to file the
Suit. The defendant never borrowed a sum of Rs.1,50,000/- from the
plaintiff and there was no necessity to do so. Despite denial of the
execution of Ex-A.1 - Promissory Note, the plaintiff did not prove the
passing of consideration. Both the Trial Court and the First Appellate
Court miserably failed to appreciate the evidence available on record in the
right perspective, especially Ex-X.1 and Ex-X.2. Accordingly, he prayed to
allow the above Second Appeal.
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9. Per contra, Mr.S.Saravana Kumar, learned Counsel for the
respondent / plaintiff would argue that the defendant admitted the
signature found in Ex-A.1 - Promissory Note as his and hence, Ex-A.1
attracts the presumption under Section 118 of the Negotiable Instruments
Act, 1881. The defendant failed to rebut the said presumption. Further, the
defendant threatened the scribe & witness of Ex-A.1 preventing him from
deposing before the Court. The Trial Court as well as the First Appellate
Court after considering the entire facts and circumstances as well as the
evidence available on record rightly concluded that the defendant
borrowed a sum of Rs.1,50,000/- from the plaintiff. Accordingly, the Suit
was decreed in favour of the plaintiff. There is no warrant to interfere with
the concurrent findings. Accordingly, he prayed to dismiss the Second
Appeal.
Discussion
10. This Court has considered both sides’ submissions and
perused the records in light of the Substantial Question of Law.
11. The plaintiff and the defendant were both working as
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Government Teachers and were well acquainted with each other. While
they were in service, both were running a money lending business in the
name of ‘S.S.Finance’. P.W.1 in his evidence has admitted that he was a
Partner therein.
12. The plaintiff’s case is that the defendant borrowed a sum
of Rs.1,50,000/- from him by executing Ex-A.1 - Promissory Note. The
defendant’s case is that he never borrowed the said amount and never
executed Ex-A.1 - Promissory Note in favour of the plaintiff. The defence
taken by the defendant is that the plaintiff forged the Promissory Note
which the defendant had originally given to the Managing Partner of
S.S.Finance for the purpose of chit transaction as stated in the Written
Statement. Further defence is that, since the year 2000, the defendant has
been using a different signature from the one found in Ex-A.1- Promissory
Note; that Ex-X.1 and Ex-X.2 would vouch for the same; that the signature
contained in Ex-A.1 is that followed by the defendant before the year 2000
and hence, Ex-A.1 was made before the year 2000 and not in the year
2008 at the time of allegedly borrowing money from the plaintiff. In short,
the defendant's further defence is that if the defendant had really executed
Ex-A.1 in 2008, the Promissory Note would have borne the signature
found in Ex-X.2; however, the signature in Ex-A.1 matches the one in Ex-
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X.1.
13. Since the defendant has admitted his signature in Ex-A.1 -
Promissory Note, the plaintiff has discharged the initial burden on him and
the onus shifted onto the defendant to prove his defence. The defendant
attempts to prove his defence through Ex-X.1 and Ex-X.2. Ex-X.1 is the
Pay Acquittance Register pertaining to the years 1996 - 1997. Ex-X.2 is
the Pay Acquittance Register pertaining to the time period from April 2008
to December 2008. Ex-X.1 was marked through D.W.2 - Mathiyazhagan
who is a teacher at the Union Middle School while Ex-X.2 was marked
through Natrajan, who is the Head Master of Kadapalli Union Middle
School.
14. This Court has perused Ex-X.1 and Ex-X.2 and compared
the signatures found therein with the one found in Ex-A.1 by juxtaposing
them. The signature found in Ex-A.1 – Promissory Note matches with the
signature found in Ex-X.1 and appears to have been made
contemporaneously. It does not match the signature found in Ex-X.2. Ex-
X.2, when coupled with Ex-X.1, would suggest that the defendant has
changed his earlier signature found in Ex-A.1 sometime before April 2008.
https://www.mhc.tn.gov.in/judis
15. Further, the defendant produced Ex-B.1 - Minute Book of
his money lending business, pertaining to the years 1994 to 1995. Ex-B.1
contains defendant’s signature on multiple pages. Those signatures match
and appears to be contemporaneous with the one found in Ex-A.1-
Promissory Note. To be noted, the plaintiff, who admits that he is also a
partner at S.S.Finance, would have had several opportunities to have
observed the signatures of the defendant found in Ex-B.1.
16. The aforesaid facts makes the defendant’s defence that
Ex-A.1 was made before the year 2000 and not in the year 2008 and that
the plaintiff has forged the Promissory Note given to S.S.Finance for the
purpose of chit transaction, a probable one. Thus, the defendant has prima
facie established his defence and hence the onus now shifts onto the
plaintiff to prove the execution of Ex-A.1 - Promissory Note and pursuant
passing of consideration.
17. In Ex-A.1 - Promissory Note, one Kaaliannan has signed
as scribe cum witness. Despite the denial of execution of Ex-A.1 as well as
the passing of consideration by the defendant, the plaintiff has not
examined the said scribe cum witness. The reason attributed by the
plaintiff's side for the same is not satisfactory. The plaintiff’s side has
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stated that the defendant threatened the scribe cum witness of Ex-A.1
which is why, he refused to come forward to depose before the Court. The
contention of the plaintiff deserves to be rejected for the reason that the
plaintiff could have summoned the scribe cum attestor through Court. If
the summons were not obeyed the plaintiff could have taken coercive steps
against the said scribe cum witness through Court. The plaintiff has
miserably failed to take any such steps. Further, there is not even an iota of
evidence on record to suggest, let alone prove the passing of consideration.
18. Moreover, the plaintiff as P.W.1 in his cross-examination
has deposed that he lent money as hand loan without interest. However,
the same is contrary to the recitals of Ex-A.1 - Promissory Note as well as
the Suit Plaint. Further, he has deposed that only he and the defendant
were present when the alleged hand loan transaction took place; and that
he does not know in which school the defendant was working at the time
of the alleged hand loan transaction. Notably, even in his chief evidence,
the plaintiff has not deposed about the presence of the said scribe cum
witness or anyone else during the alleged hand loan transaction. The
inconsistent stand taken by the plaintiff, undermines and creates suspicion
in the plaintiff’s case. For ready reference, relevant extract from the cross-
examination of P.W.1 is hereunder:
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“ehd; Mrphpauhf ,Ue;J Xa;t[
bgw;Wtpl;nld;. ehd; gzp Xa;t[ bgw;w gpwF ve;j
bjhHpYk; bra;atpy;iy. ehd; 2006 tUlk; Xa;t[
bgw;nwd;. ehd; 95k; tUlk; efuhl;rp
cah;epiyg;gs;sp nfhl;il ehkf;fy;ypy; gzpapy;
,Ue;njd;. gpujpthjp vd;dplk; ifkhw;whf gzk;
th';fpdhh;. mij jpUk;g brYj;jhjjhy; ehd;
tHf;F jhf;fy; bra;Js;nsd;. gzk; th';fp 3
khjj;jpy; jUtjhf Twpdhh;. Mdhy; jutpy;iy.
ehd; ,Jtiuf;Fk; fld; bfhLj;jJk; ,y;iy.
th';fpaJk; ,y;iy. gpujpthjpf;F ifkhw;whf jhd;
gzk; bfhLj;njd;. tl;oapy;yhky; ehd;
ifkhw;whf bfhLj;njd;. Fwpg;gpl;l ehl;fSf;Fs;
bfhLj;Jtpl;lhy; tl;o fpilahJ. mjw;FgpwF
bfhLj;jhy; tl;o cz;L. gpujpthjp 3 khjj;jpw;Fs;
gzj;ij je;jpUe;jhy; flDf;F tl;o nfl;L ,Uf;f
khl;nld;. ehd; fld; bfhLf;Fk;nghJ tl;o gw;wp
ngrpf;bfhz;nlhkh vd;why; bfL njjpf;F gpwF 1.
2 khj';fs; jtwpdhy; tl;o tR{ypf;fg;gLk; vd;W
ngrg;gl;lJ. ifkhw;W fld; th';Fk;nghJ
flDWjp rPl;L bfhLj;jhh;. mjpnya[k; ehd;
jw;nghJ brhd;d thrfk; jhd; cs;sJ. ehd;
nkw;brhd;d thrf';fs; th.rh.M.1y;
fhzg;gltpy;iy. th.rh.M.1I fhspaz;zd; jhd;
vGjpdhh;. gzk; th';Fk;nghJ gzj;ij
juhtpl;lhy; ePjpkd;wj;jpy; tHf;F jhf;fy;
bra;ntd; vd;W ehd; brhy;ytpy;iy. ehd;
gzpapy; ,Uf;Fk;nghJ 95k; tUlk; epjpepWtdj;jpy;
g';Fjhuuhf ,Ue;njdh vd;why; me;j tUlk;
,Uf;ftpy;iy. Mdhy; 20 tUl';fshf
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epjpepWtdj;jpy; ,Ue;njd;. v!;.v!;.epjpepWtdj;jpd;
g';Fjhuuhf ,Ue;njd;. . . . . . . . . .
. . . . . . . . . . . . . . .
fld; bfhLf;Fk;nghJ eh';fs; ,Uth;kl;Lk;jhd;
,Ue;njhk;. gpujpthjp vd;dplk; nfl;Fk;nghJ
+.1/50/000 jhd; nfl;;lhh;. ehd; bfhLj;jJk;
+.1/50/000/-jhd;. ehd; fld;bfhLj;jjhf brhy;Yk;
njjpapy; ve;j gs;spapy; gzpapy; gpujpthjp
,Ue;jhh; vd;W bjhpahJ. th.rh.M.1y; vGjpatnu
jhd; rhl;rpahf ifbaGj;J nghl;Ls;shh;.
v!;.v!;.epjpepWtdj;ij Fwpj;J eltof;if
bjhpa[kh vd;why; vdf;F KGtJk; bjhpahJ. me;j
epjpepWtdj;jpd; eltof;iffis gpujpthjpna
ftdpj;J te;jhh;.
ePjpkd;w nfs;tp : v!;.v!;.epjpepWtdj;jpy;
gpujpthjp g';Fjhuuh ,Ue;jhuh
gjpy; : v!;.v!;.epjpepWtdj;jpd; KG eph;thfKk;
gpujpthjpaplk;jhd; ,Ue;jJ. ehDk; gpujpthjpa[k;
vj;jid epjpepWtd';fspy; g';Fjhuuhf ,Ue;njhk;
vd;why; v!;.v!;.epjpepWtdj;jpy; kl;Lk; jhd;
g';Fjhuuhf ,Ue;njhk;. ehd; g';Fjhuuhf ,Ue;j
epjpepWtdj;jpd; bgah; v!;.v!;.2 my;yJ v!;.v.ah
vd;W nfl;lhy; rhpahf epahgfkpy;iy. vd;dplk;
fhl;lg;gLk; g[j;jfk; v!;.v!;.2 epWtj;jpd; kpdpg[f;
vd;why; rhpjhd;. mjpy; cs;s gf;fk; 6 gp.th.rh/M-1
MFk;. mjpy; 7tJ g';Fjhuuhf 6k; gf;fj;jpy;
fhl;lg;gl;Ls;s bgah; vd; bgah; jhd;. mjpy; 1tJ
g';Fjhuuhf fhl;lg;gl;oUf;Fk; egh; gpujpthjp
vd;why; rhpjhd;/ . . ”
https://www.mhc.tn.gov.in/judis
19. Hence, this Court is of the view that the plaintiff has not
proved the execution of Ex-A.1 and pursuant passing of consideration. The
defendant’s admission that the signature in Ex-A.1 is his has to be seen
along with his defence. When neither the execution of the Promissory
Note nor the passing of consideration has been proved, given the defence
taken by the defendant, the mere fact that the defendant admitted his
signature in Ex-A.1 is not sufficient to invoke the presumption under
Section 118 of the Negotiable Instruments Act, 1881.
20. In view of the foregoing discussion, this Court is of the
view that the Trial Court as well as the First Appellate Court failed to
consider the relationship between the plaintiff and the defendant, other
facts and circumstances of the case as well as the evidence available on
record in the right perspective. The substantial question of law is answered
accordingly in favour of the appellant / defendant and against the
respondent/plaintiff.
Result:
21. In the result, this Second Appeal is allowed. The
Judgment and Decree dated February 17, 2020 made in A.S.No.25 of 2016
https://www.mhc.tn.gov.in/judis
on the file of the learned Additional District Judge, Namakkal District as
well as the Judgment and Decree dated November 4, 2015 made in
O.S.No.40 of 2011 on the file of learned Subordinate Judge, Namakkal
District, are hereby set aside. The Suit in O.S.No.40 of 2011 on the file of
learned Subordinate Judge, Namakkal District, is hereby dismissed. The
amount, if any, deposited by the appellant pursuant to the interim Order
passed by this Court in CMP No.8523 of 2020 dated August 17, 2020 shall
be refunded to the appellant. Considering the facts and circumstances of
the case, there shall be no order as to costs. Consequently, connected Civil
Miscellaneous Petition is closed.
18 / 10 / 2024
Index : Yes
Internet : Yes
Neutral Citation : Yes
Speaking Order
MSM/TK
To
1.The Additional District Judge
Namakkal District.
https://www.mhc.tn.gov.in/judis
2.The Subordinate Judge
Namakkal District.
https://www.mhc.tn.gov.in/judis
https://www.mhc.tn.gov.in/judis
R. SAKTHIVEL, J.
MSM/TK
Pre-Delivery Judgment made in
S.A.NO.413 OF 2020
18 / 10 / 2024
https://www.mhc.tn.gov.in/judis
