Madras High Court
Selvaraj vs Pugalenthi on 4 September, 2024
Author: B.Pugalendhi
Bench: B.Pugalendhi
SA(MD)No.546 of 2024
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 04.09.2024
CORAM
THE HONOURABLE MR.JUSTICE B.PUGALENDHI
SA(MD)No.546 of 2024
Selvaraj ... Appellant/Appellant /Plaintiff
Vs.
Pugalenthi ...Respondent/Respondent/Defendant
PRAYER: Second Appeal is filed under Section 100 of the Code of Civil
Procedure, 1908, as against the judgment and decree made in AS.No.11 of 2017
on the file of the Additional Sessions and District Judge, Virudhunagar dated
26.02.2021 confirming the judgment and decree made in OS.No.41 of 2005 on
the file of the Subordinate Judge, Virudhunagar dated 22.04.2016.
For Appellant : Mr.S.M.Mohan Gandhi
For Respondent : Mr.S.Pon Senthilkumaran
JUDGMENT
This second appeal is arising out of the concurrent findings of the Courts
below in OS.No.41 of 2005 and in AS.No.11 of 2017. The appellant is the
plaintiff, who had instituted the suit as against the respondent / defendant in
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OS.No.41 of 2005 before the Sub Court, Virudhunagar for recovery of money
pursuant to a promissory note Ex.A1.
2.The case of the plaintiff is that the defendant borrowed a sum of
Rs.1,60,000/- from the plaintiff on 07.11.2002 for the purpose of improving his
business and executed a promissory note Ex.A1 with an assurance that the
amount would be returned together with interest @ 12 % per annum. However
the defendant did not repay principle and did not pay the interest. Therefore the
plaintiff caused a legal notice through his counsel on 16.10.2004 to the
defendant demanding repayment of the money. The defendant did not repay the
amount, but issued a reply notice dated 05.11.2004 denying the execution of the
promissory note. Therefore, the appellant filed the suit seeking recovery of
money from the respondent. During the trial before the trial Court the plaintiff
was examined as PW1. He marked the promissory note dated 07.11.2002 as
Ex.A1, the copy of the legal notice dated 16.10.2004 as Ex.A2 and the reply
notice issued by the defendant on 05.11.2004 as Ex.A3. The defendant had
taken a specific stand that the plaintiff is a stranger to him and was set up by
one Ramasamy for the issue between Ramasamy and Manoharan. According to
the defendant the defendant had given security for the money borrowed by one
Manohar from Ramasamy in the year 2001. Ramasamy is a money lender.
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Manoharan borrowed a sum of Rs.60,000/- from Ramasamy in the month of
August 2001 and this defendant stood as surety for the said loan amount.
The said Manoharan had repaid the amount. However there was some interest
due. Ramasamy demanded huge interest towards the principle amount and
therefore, Manoharan lodged a complaint before the Superintendent of Police,
Virudhunagar under the Tamil Nadu Prohibition of Charging Exorbitant Interest
Act and during the enquiry Ramasamy settled the issue amicably in order to
avoid the criminal prosecution. Ramasamy also issued a receipt to Manoharan
on 23.03.2004 as full and final settlement. In that receipt the defendant is the
witness to the document. The said Ramasamy, who was aggrieved on the steps
taken by Manoharan by lodging a complaint, set up this plaintiff for filing this
suit as against the defendant under the impression that the defendant was
backing Manoharan. With this averment the reply notice was also issued on
05.11.2004. The defendant examined himself as DW1 and the said Manoharan
as DW2. However no document was marked on the side of the defendants.
The defendant also attempted to mark certain documents, however, it was not
accepted by the trial court that those document were Xerox copies.
3.Considering the evidence adduced, the trial Court dismissed the suit
that (i) the contents of Ex.A1 are written in black ink and the signature of this
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defendant is in blue ink; (ii) the Court by comparing the signature of the
defendant in Ex.A1 with the deposition of the defendant found that the
defendant could not have written the contents of Ex.A1 ; (iii) though specific
stand was taken by the defendant by rebutting the execution of the document
Ex.A1 for any consideration, the plaintiff failed to examine the attestor to the
promissory note by name Palanivel; (iv) the defendant has taken a specific plea
that the plaintiff is a Cooliee and he is not having sufficient means to lend this
much of Rs.1,60,000/- to the defendant; (v) this promissory note was also
executed on 07.11.2002 for a period of one month with a condition that the
defendant should repay the borrowed money. However the plaintiff had not
demanded this amount for two years and had issued a notice Ex.A2 only on
16.10.2004; (vi) The plaintiff, who is not having any source of income is said to
have lent money of Rs.1,60,000/-, but has not demanded this money for two
years and thus the defendant has rebutted the presumption and therefore, the
plaintiff has to prove his case; (vii) the plaintiff has not adduced proper
evidence for the difference in the colours of the writings in Ex.A1 and for non-
examination of attestor to Ex.A1; (viii) The plaintiff has taken a specific stand
that the contents in the Ex.A1 was written by the defendant himself. However
the same was also found to be false. Therefore, the trial Court applied the
principle under Section 114 (g) of the Indian Evidence Act dismissed the suit.
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4.Challenging the dismissal of the suit, the plaintiff preferred an appeal
in AS.No.11 of 2017 before the I Additional District and Sessions Court,
Virudhunagar and it was also dismissed by its judgment and decree dated
26.02.2021. As against these concurrent findings of the counts below, this
second appeal is filed on the following substantial questions of law.
i.Whether the Courts below are justified in not drawing legal
presumption available under Section 118 of Negotiable Instruments Act in
favour of the Appellant / Plaintiff in spite of the respondent / defendant
admitted the signature in Ex.A1 suit promissory note?
ii. Whether Courts below are justified in shifting the burden in appellant .
Plaintiff in spire of proving the respondent's signature over the suit promissory
note?
iii.Whether the Courts below are justified in dismissing the suit on the
ground that the respondent / defendant rebutted the presumption especially
when there is no witness examine in this regard?
5.The learned Counsel for the appellant submits that the defendant has
admitted his signature in the document Ex.A1 and therefore, the presumption
under Section 118 of the Negotiable Instruments Act, 1981 is on the defendant
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and not on the plaintiff. However, the trial Court and the appellate Court have
erred in taking a decision that the presumption has been shifted on the plaintiff.
He also submits that as per Section 20 of the Negotiable Instruments Act, in the
event promissory note is given in blank, then the presumption is still against the
defendant and this aspect has not been considered by the trial Court as well as
by the appellate Court. Without comparing the signatures of the defendant and
his handwriting through an expert, the trial Court is not justified in arriving at
the conclusion that the contents of the Ex.A1 are not written by the defendant.
6.This Court considered the submissions of the learned Counsel for the
appellant, the substantial questions of law raised in the grounds of appeal and
also the grounds raised in this second appeal.
7.The main contention of the learned Counsel for the appellant is that
once the signature in Ex.A1 is admitted by the defendant, the presumption
would be applicable and the burden is on the defendant to rebut the
presumption. But in this case though the signature has been admitted by the
defendant, he has taken a specific plea that this document was given to one
Ramasamy as security for the money which was parted to one Manoharan
[DW2] in the year 2001 for the amount Rs.60,000. In this regard there was
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some negotiations in the police station between the Ramasamy and Manoharan
and the amount has been settled. He also produced certain documents for this
transaction between Ramasamy and Manoharan and since they were Xerox
copies, it was not marked. It is the case of the plaintiff that this document
Ex.A1 was written by the defendant himself and therefore, Section 20 of the
Negotiable Instruments Act will not be applicable to this case.
8.The specific case of the plaintiff is that the promissory note was
executed by the defendant on his own handwriting. The contents of the Ex.A1
was written in black ink and signature was in blue ink. The contents of the
Ex.A1 was compared by the trial Court, which is permissible under
Section 73 of the Indian Evidence Act. Admittedly this appellant is a daily wage
employee in a textile mill and he is not having any source to part with this
amount. This stand was taken by the defendant in his reply dated 05.11.2004 as
well as in his written statement. However the plaintiff did not establish his
source of income. This promissory note was also executed with a condition that
this amount has to be returned within a period one month with interest @ 12 %
per annum. The plaintiff, who is said to have lent the amount on 07.11.2002 has
not taken any steps till 16.10.2004 for demanding this money.
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9.In similar circumstances this Court in Narayana Sathiya Siva
Senathipathi Vs Natarajan [AS.No.188 of 2010 dated 11.07.2017] has decided
the issue by following the ratio laid down by the Hon'ble Supreme Court as
under:
“17. Now, it is to be seen whether the presumption has
been rebutted by the defendant. On the question of rebuttal the
Hon'ble Supreme Court in Kundan Lal Rallaram Vs. Custodian,
Evacuee Property, Bombay reported in AIR 1961 SC 1316,
referring to the provisions under Section 118 of the Negotiable
Instrument Act and Section 101 of the Evidence Act, held as
follows:-
4. To appreciate this argument it would be necessary to
notice at the outset the scope of the presumption under Section
118 of the Negotiable Instruments Act and also the different
methods available to a person against whom such a
presumption is drawn to rebut the same. The relevant part of S.
118 of the Negotiable Instruments Act reads:
Until the contrary is proved, the following presumption
shall be made:-
(a) that every negotiable instrument was made or drawn
for consideration, and that every such instrument, when it has
been accepted, indorsed negotiated or transferred, was
accepted, indorsed, negotiated or transferred for consideration.
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5. ..... Therefore, the burden initially rests on the plaintiff
who has to prove that the promissory note was executed by the
defendant. As soon as the execution of the promissory note is
proved the rule of presumption laid down in Section.118 of the
Negotiable Instruments Act helps him to shift the burden to the
other side. The burden of proof as a question of law rests,
therefore, on the plaintiff; but as soon as the execution is
proved, Section 118 of the Negotiable Instruments Act imposes
a duty on the court to raise a presumption in his favour that the
said instrument was made for consideration. This presumption
shifts the burden of proof in the second sense, that is, the burden
of establishing a case shifts to the defendant. The defendant
may adduce direct evidence to prove that the promissory note
was not supported by consideration, and if he adduced
acceptable evidence, the burden again shifts to the plaintiff, and
so on. The defendant may also rely upon circumstantial
evidence and, if the circumstances so relied upon are
compelling, the burden may likewise shift again to the plaintiff.
He may also rely upon presumptions of fact, for instance those
mentioned in Section 114 and other sections of the Evidence Act.
Under Section 114 of the Evidence Act.
18. From the above, declared position of law, it is clear
that the defendant case rely upon, even the circumstantial
evidence to rebutt the presumption. I had followed the said
Judgment of the Hon'ble Supreme Court in G. Vasantha Versus
Maharaja Kallash Benefit Fund Ltd, reported in [2017 (2) CTC
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625]. If we are to analyse the evidence available on record, in
the light of the legal position summarised by the Hon'ble
Supreme Court, it is seen that the evidence of the plaintiff
himself is sufficient to hold that the presumption under Section
118 stood rebutted. From the evidence, extracted above it is
seen that the plaintiff claims that he had the money. He claims
the source of funds through the sale of the properties in
November 1999. The sale deed or deeds have not been
produced. The promissory Note is dated 15.12.2002. Therefore,
it is almost three years after the sale and it is highly improbable
that the plaintiff who is a business man retained the money for
three years for advancing the same to the defendant. The very
fact that the plaintiff has not shown this sum of Rs.10,00,000/-
in his income tax return would militate against his claim.
19.Again the plaintiff deposed that he had taken the
money from his brother-in-law, three days prior to the lending.
This evidence, belies the claim of the plaintiff that he had the
money namely the proceeds of the sale deed executed by the
plaintiff in the year 1999 and the same was advanced to the
defendant in the December 2002. Again, the plaintiff has
deposed that he kept the money only in the ancestral house and
hence the pro note was executed in his ancestral house instead
of Tiruppur. This conflicting evidence on the part of the plaintiff
would itself, in my considered opinion is enough to rebutt the
statutory presumption created under section 118 of the
Negotiable Instrument Act. This court in Murugesan Vs.
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Subramaniya Goundar and others [1997 (3) CTC 478]
observed that the defendant cannot take advantage of the
weakness of the case of the plaintiff. At the same time, when the
plaintiff's evidence is totally unbelievable and it is
improbablised the plaintiff's case, I do not think, the plaintiff
could be entitled to a decree, despite such improbable
evidence.”
Ultimately the case of the plaintiff was rejected by this Court.
10.By following the ratio laid down in the above case and by considering
the available evidence, this Court is of the view that there is no error in the
impugned judgments and accordingly, this second appeal is dismissed.
No costs.
04.09.2024
index : yes/ no
dsk
To
1.The Additional Sessions and District Judge,
Virudhunagar
2.The Subordinate Judge,
Virudhunagar.
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B.PUGALENDHI., J
dsk
04.09.2024
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