Madras High Court

M.C.Ravikumar vs V.Sukuna Venkatesh on 10 February, 2025

Author: N.Sathish Kumar

Bench: N.Sathish Kumar

                                                                                       A.S.No.101 of 2022

                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                  DATED: 10.02.2025

                                                          CORAM

                                  THE HON'BLE MR.JUSTICE N.SATHISH KUMAR

                                                     A.S.No.101 of 2022
                     M.C.Ravikumar                                              ... Appellant/Plaintiff
                                                            -vs-

                     V.Sukuna Venkatesh                                   ... Respondent/Defendant
                     Prayer: Appeal Suit is filed under Section 96 of CPC r/w Order XLI Rule 1
                     of CPC r/w Order IV Rule 4 of the Madras High Court Appellate Side
                     Rules, 1965 to set aside the judgment and decree passed in O.S.No.12840 of
                     2010 dated 21.04.2015 by the VI Additional Judge, City Civil Court at
                     Chennai and decree the suit as prayed for with costs throughout.
                                          For Appellant       : Mr.K.Shakespeare

                                          For Respondent      : No Appearance

                                                           *****

                                                     JUDGMENT

Aggrieved over the dismissal of the suit filed for recovery of

money on the basis of a Pronote dated 10.01.2007, the unsuccessful plaintiff

has filed the present appeal.

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2. The case of the plaintiff is that the defendant had borrowed a

sum of Rs.15,00,000/- for her family expenses and also for improvement of

her business and also to meet her other requirements and executed a Pronote

dated 10.07.2007. As the amount is not paid, the plaintiff has issued a legal

notice dated on 03.10.2007. Despite notice, the defendant did not pay the

money. Hence, the plaintiff filed a suit in O.S.No.12840 of 2010 before the

City Civil Court, Chennai.

3. According to the defendant, she had no personal business

with the plaintiff and she is only a house wife. She has stated that her

husband had borrowed a hand loan from the plaintiff for S.V.Home for

aged, a registered Charitable Trust. The loan of Rs.5,00,000/- was borrowed

after deducting interest of Rs.90,000/- and the loan amount was duly

discharged by her husband. She has further stated that at the time of availing

loan by her husband, as a security, a blank Promissory Note was issued on

the plaintiff's insistence and on assurance given by the plaintiff that it would

be returned back immediately after receipt of the loan amount by the Trust

or by her husband. Despite discharge of the loan, the plaintiff failed to hand

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over the Pronote and instituted a suit with an intention to grab money from

the defendant by misusing the blank Pronote.

4. On the side of the plaintiff, the plaintiff himself was

examined as P.W.1 and Ex.A1 to Ex.A6 were marked. The defendant has

examined herself as D.W.1 and marked 7 documents as Ex.B1 to Ex.B7 and

her husband was examined as D.W.2.

5. The Trial Court has dismissed the suit on the ground that no

scribe or attesting witness has been examined by the plaintiff to prove the

passing of consideration. The Trial Court in fact has not considered the

positive admission made by the defendant in respect of execution of the

Pronote. Once a Pronote has been executed, it is for the defendant to bring

out the probabilities so as to dislodge the legal presumption, which has not

been done. Therefore, the judgment of the Trial Court is not valid in the eye

of law.

6. Despite the name printed in the cause list, none appeared on

behalf of the defendant.

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7. Points for consideration is as to,

i) whether the First Appellate Court is right in shifting the

burden on the plaintiff to prove the execution of Pronote, despite the

admission made by the defendant?;

ii) whether the defendant has proved the discharge as pleaded

in the written statement?

8. Heard the learned counsel for the appellant and perused the

material documents available on record.

9. The suit had been filed based on the Pronote marked as

Ex.A1 dated 10.01.2007. The contention of the defendant was that at the

time of her husband availing loan for a Charitable Trust, she had given a

Pronote as a security on the insistence and assurance given by the plaintiff.

Though it is the stand taken by the defendant that only a blank Pronote has

been issued as a security, the fact remains that once a person issues a blank

cheque, it authorizes the holder to make an entry to fill up the same. Section

20 of The Negotiable Instruments Act, 1881 reads as under:

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“20. Inchoate stamped instruments -

Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount; provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.”

10. Such blank cheque is an instrument and can be filled up by

the holder or filed in evidence. Therefore, it cannot be said that the Pronote

is not supported by any consideration. Once the execution of the document,

particularly, a Pronote has been admitted by the defendant, the legal

presumption available under Section 118 of the Negotiable Instruments Act,

1881 will attract automatically as to the passing of consideration, etc. The

burden is automatically shifted on the defendant to dislodge the legal

presumption. Of course, to discharge the legal presumption, there need not

be any direct evidence always. Even circumstances or by way of admission

or probabilities and the cross examination can be taken note of to dispel the

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said legal presumption. Whereas a stand has been taken by the defendant in

this case that her husband borrowed a sum of Rs.5,00,000/- and discharged

Rs.4,10,000/- and at that stage only, the document in Ex.A1 came to be

filed.

11. It is relevant to note that in the evidence of D.W.1, she has

clearly stated that the entire amount has been settled by her husband.

However, when her husband was examined as D.W.2 before the Court, he is

not in a position to place any material to prove the so-called discharge. In

fact, the details of his Bank account, current account or relatives' account

have not been produced and the discharge of the amount has not been

established. Therefore, having executed the pronote by the defendant, it is

for the defendant to dislodge the legal presumption. Having taken a plea of

discharge made by her husband, it is for her to establish the same, which has

not been done. On the basis of an evasive denial, the statutory presumption

available under Section 118 of the Negotiable Instruments Act, 1881 cannot

be invoked, unless there are materials brought on record. The order of the

Trial Court, shifting the burden on the plaintiff to establish the passing of

consideration is totally against the settled position of law.

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12. It is worthwhile to refer the judgment of the Apex Court in

the case of Kundan Lal Rallaram Vs. The Custodian, Evacuee Property

Bombay, reported in AIR 1961 SC 1316, wherein in Paragraph No.5, it was

held as follows:

“5. ... The phrase' "burden of proof" has two meanings — one the burden o proof as a matter of law and pleading and the other the burden of establishing a case; the former is fixed as a question of law on the basis of the pleadings and is unchanged during the entire trial, whereas the latter is not constant but shifts as soon as a party adduces sufficient evidence to raise a presumption in his favour. The evidence required to shift the burden need not necessarily be direct evidence i.e., oral or documentary evidence or admissions made by opposite party; it may comprise circumstantial evidence or presumptions of law or fact. To illustrate how this doctrine works in practice, we may take a suit on a promissory note. Under Section 101 of the Evidence Act, "Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exist". 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

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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, "The court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case". Illustration (g) to that section shows that the court may presume that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it. A plaintiff, who says that he had sold certain goods to the defendant and that a promissory note was executed as consideration for the goods and that he is in possession of the relevant account books to show that he was in possession of the goods sold and that the sale was effected for a particular consideration, should produce the said account books, for he is in possession of the same and the defendant certainly cannot be expected to produce his documents. In those circumstances, if such a relevant evidence is withheld by the plaintiff, Section 114 enables the court to draw a presumption to the effect that, if produced, the said accounts would be unfavourable to the plaintiff. This presumption, if raised by a court, can under certain circumstances rebut the presumption of law raised under Section 118 of the Negotiable Instruments Act. Briefly stated, the burden of proof may be shifted by presumptions of law or fact, and presumptions of law or presumptions of fact may be rebutted not only by direct or circumstantial evidence but also by presumptions of law or fact. We are not concerned here with irrebuttable presumptions of law.”

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13. Applying the above ratio, if the given case is considered,

the plaintiff has established the execution and he has discharged the initial

burden to prove the execution and in such view of the matter, it is for the

defendant to rebut such presumption, which she has not done. Therefore, the

judgment and decree passed by the Trial Court is liable to be set aside.

14. In the result, the present Appeal Suit is allowed and the

judgment and decree passed in O.S.No.12840 of 2010 dated 21.04.2015 by

the VI Additional Judge, City Civil Court, Chennai is hereby set aside. The

money suit is decreed as prayed for by the plaintiff with interest at the rate

of 12% from the date of Pronote till the date of decree and thereafter @ 6%

till its realisation along with costs.

10.02.2025 Index: Yes / No Internet: Yes / No ar