Madras High Court
Athiyappan vs Sankar on 24 June, 2025
Author: Sathi Kumar Sukumara Kurup
Bench: Sathi Kumar Sukumara Kurup
A.S.No.542 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 24.06.2025
CORAM:
THE HON'BLE MR.JUSTICE SATHI KUMAR SUKUMARA KURUP
Appeal Suit. No.542 of 2022
and
C.M.P.No.20251 of 2022
Athiyappan ... Appellant
Versus
Sankar ... Respondent
Prayer:- First Appeal filed under Section 96 of Civil Procedure Code to set
aside the Judgment and Decree dated 23.02.2022 passed in O.S.No.26 of 2019
by the learned III Additional District and Sessions Judge, Kallakurichi.
For Appellant : Mr.Vignesh Venkat
for Ms.Anu Ganesan
For Respondent : Mr.N.Manoharan
JUDGMENT
This First Appeal has been filed to set aside Judgment and Decree dated
23.02.2022 passed in O.S.No.26 of 2019 by the learned III Additional District
and Sessions Judge, Kallakurichi.
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2. The learned Counsel for the Appellant submitted that the
Appellant is the Defendant in O.S.No.26 of 2019 on the file of the learned III
Additional District and Sessions Judge, Villupuram at Kallakurichi. Before
filing the Suit, the Plaintiff had issued pre-suit notice which was properly
replied by the Defendant. It is the contention of the learned Counsel for the
Appellant that the Defendant had executed a sale agreement in favour of the
relative of the Plaintiff/wife. Subsequently, the sale agreement was cancelled
and proper sale deed was executed. At that time, they had obtained signature
from the Defendant. Based on which, the Suit promissory note had been put
into use for filing this Suit. The Defendant had clearly denied having availed
any loan on the alleged date. During trial, the learned Counsel for the
Defendant had cross-examined the Plaintiff as P.W-1. In his evidence, P.W-1
had clearly admitted that he had not shown the amount lent to the Defendant as
loan in his income tax returns. Further, it is the contention of the learned
Counsel for the Appellant that in the course of the trial, P.W-2 and P.W-3 were
examined who are attesting witnesses. They had stated that the promissory
note was returned in the office of the document-writer nearby Taluk Office.
3. It is his further submission that the date mentioned in the
Promissory Note is 30.10.2016 was a Sunday. Therefore, it is unbelievable to
have executed a promissory note for a huge amount of Rs.10,00,000/- having
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been issued to the Defendant. In the course of the trial, the learned III
Additional District and Sessions Judge, Villupuram at Kallakurichi rejected the
defence of the Defendants stating that the reply to the pre-Suit notice he had
stated a different defence. In the written statement he had stated different
defence. In the evidence he had stated a very different defence. Therefore, the
defence of the Defendants was rejected by the learned Judge and the Suit was
decreed. The learned Counsel for the Appellant invited the attention of this
Court to Section 43 of the Negotiable Instruments Act and placing reliance on
the cross-examination of P.W-1 which itself creates doubt in the mind of the
Court. For which he relied on the following decisions:-
(i) In the case of M.S.Narayana Menon Vs. State of Kerala and Ors.
reported in MANU/SC/2881/2006, it has been observed as follows:-
“17. Applying the said definitions of 'proved' or 'disproved' to
principle behind Section 118(a) of the Act,the Court shall presume a
negotiable instrument to be for consideration unless and until after
considering the matter before it, it either believes that the consideration
does not exist or considers the non-existence of the consideration so
probable that a prudent man ought, under the circumstances of the
particular case, to act upon the supposition that the consideration does not
exist. For rebutting such presumption, what is needed is to raise a probable
defence. Even for the said purpose, the evidence adduced on behalf of the
complainant could be relied upon.
18. A Division Bench of this Court in Bharat Barrel & Drum
Manufacturing Company v. Amin Chand Payrelal [(1999) 3 SCC 35]
albeit in a civil case laid down the law in the following terms:
"Upon consideration of various judgments as noted hereinabove, the
position of law which emerges is that once execution of the promissory note
is admitted, the presumption under Section 118(a) would arise that it is
supported by a consideration. Such a presumption is rebuttable. The
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Defendant can prove the non-existence of a consideration by raising a
probable defence. If the Defendant is proved to have discharged the initial
onus of proof showing that the existence of consideration was improbable
or doubtful or the same was illegal, the onus would shift to the Plaintiff
who will be obliged to prove it as a matter of fact and upon its failure to
prove would disentitle him to the grant of relief on the basis of the
negotiable instrument. The burden upon the Defendant of proving the non-
existence of the consideration can be either direct or by bringing on record
the preponderance of probabilities by reference to the circumstances upon
which he relies. In such an event, the Plaintiff is entitled under law to rely
upon all the evidence led in the case including that of the Plaintiff as well.
In case, where the Defendant fails to discharge the initial onus of proof by
showing the non-existence of the consideration, the Plaintiff would
invariably be held entitled to the benefit of presumption arising under
Section 118(a) in his favour. The Court may not insist upon the Defendant
to disprove the existence of consideration by leading direct evidence as the
existence of negative evidence is neither possible nor contemplated and
even if led, is to be seen with a doubt."
21. What would be the effect of a presumption and the nature thereof
fell for consideration before a Full Bench of the Andhra Pradesh High
Court in G. Vasu v. Syed Yaseen Sifuddin Quadri [AIR 1987 AP 139]. In
an instructive judgment, Rao, J. (as His Lordship then was) speaking for
the Full Bench noticed various provisions of the Evidence Act as also a
large number of case laws and authorities in opining:
"From the aforesaid authorities, we hold that once the Defendant
adduces evidence to the satisfaction of the Court that on a preponderance
of probabilities there is no consideration in the manner pleaded in the
plaint or Suit notice or the Plaintiff's evidence, the burden shifts to the
Plaintiff and the presumption 'disappears' and does not haunt the
Defendant any longer."
It was further held:
"For the aforesaid reasons, we are of the view that where, in a Suit
on a promissory note, the case of the Defendant as to the circumstances
under which the promissory note was executed is not accepted, it is open to
the Defendant to prove that the case set up by the Plaintiff on the basis of
the recitals in the promissory note, or the case set up in Suit notice or in
the plaint is not true and rebut the presumption under S.118 by showing a
preponderance of probabilities in his favour and against the Plaintiff. He
need not lead evidence on all conceivable modes of consideration for
establishing that the promissory note is not supported by any consideration
whatsoever. The words 'until the contrary is proved' in S. 118 do not mean
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that the Defendant must necessarily show that the document is not
supported by any form of consideration but the Defendant has the option to
ask the Court to consider the non-existence of consideration so probable
that a prudent man ought, under the circumstances of the case, to act upon
the supposition that consideration did not exist. Though the evidential
burden is initially placed on the Defendant by virtue of S.118 it can be
rebutted by the Defendant by showing a preponderance of probabilities
that such consideration as stated in the pronote, or in the Suit notice or in
the plaint does not exist and once the presumption is so rebutted, the said
presumption 'disappears'. For the purpose of rebutting the initial evidential
burden, the Defendant can rely on direct evidence or circumstantial
evidence or on presumptions of law or fact. Once such convincing rebuttal
evidence is adduced and accepted by the Court,having regard to all the
circumstances of the case and the preponderance of probabilities, the
evidential burden shifts back to the Plaintiff who has also the legal burden.
Thereafter, the presumption under S. 118 does not again come to the
Plaintiff's rescue. Once both parties have adduced evidence, the Court has
to consider the same and the burden of proof loses all its importance."
(ii) In the case of G.Pankajakshi Amma & ors. Vs. MathaiMathew
(D) thr. L.Rs. And Ors. reported in MANU/SC/1158/2004 it has been held as
follows:-
“13. There is any reason also why the impugned judgment cannot be
upheld. According to the 1st Respondent these transactions were to be
unaccounted transactions. According to the 1st Respondent, all these
amounts are paid in cash. If these are unaccounted transactions then they
are illegal transactions. No. Court can come to the aid of the party in an
illegal transaction. It is settled law that in such cases the loss must be
allowed to lie where it falls. In this case as these are unaccounted
transactions, the Court could not have lent its hands and passed a decree.
For these reasons also the Suit was required to be dismissed.”
(iii) In the case of Ramkumar Vs. Chelladurai reported in
MANU/TN/5600/2021 it has been observed as follows:-
“3. The Respondent herein preferred the private complaint in
C.C.No.179 of 2011, on the file of the learned Judicial Magistrate, Fast
Track Court, Thiruthuraipoondi alleging that the Appellant had borrowed a
sum of Rs.10,00,000/- from the Respondent on 07.11.2009, and handed
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over a blank signed post dated cheque for Rs.10,00,000/- drawn on the
Indian Bank, Thiruthuraipoondi in Cheque No.937169, dated 16.11.2009.
When the postdated cheque was presented for encashment with the Lakshmi
Vilas Bank, Thiruthuraipoondi Branch and the same was returned on
17.11.2009 with a bank memo as insufficient funds. He issued advocate
notice on 12.12.2009 to the Appellant and the Appellant received the same
on 16.12.2009. But he had not given any reply. The Respondent knowing
very well that there is no sufficient funds in his account, he had issued the
postdated cheque to cheat the Respondent. Hence the complaint.
12. The Apex Court in the decision reported in CDJ 2005 SC 752
[G.Pankajakshi Amma & others Vs.Mathai Mathew (D) Thr.Lrs &
Another], it has been held that:-
".....In these circumstances, it was absolutely necessary for the 1st
Respondent to produce his books of accounts particularly as he has
admitted that he was doing money-lending business and no Court can come
to the aid of the party in an illegal transaction. It is settled law that in such
cases the loss must be allowed to lie where it falls. In this case as these are
unaccounted transactions, the Court not have lent its hands and passed a
decree. For these reasons also the Suit was required to be missed. In the
above view, the impugned Judgment is set aside. The order of the trial
Court is restored.
27. As per the answer elicited in the cross-examination of P.W.1, he
has not maintained any accounts for the payment he has made and various
loans he has given to 30 other persons and hence in respect of the amount
alleged to have been given by the private complaint is appears to be
unaccounted amount. Thus, the alleged liability to re-pay an unaccounted
loan amount admittedly, not disclosed in Income Tax Returns cannot be
legally recovered liability. If such a liability is held to be legally
recoverable debt, it will rendered the explanation to Section 138 of
Negotiable Instrument Act nugatory.”
(iv) In the case of B.Mahadevan Vs. K.Velmurugan reported in
MANU/TN/5601/2022 it has been observed as follows:-
“12. PW.1, in his evidence stated that the demand for Rs.20,00,000/-
was made by the Appellant/Defendant only on 09.09.2006 and the said
amount was paid immediately. He further deposed that he had shown
payment of Rs.20,00,000/- to Appellant/Defendant in his income tax returns
and he was ready to produce those income tax returns before the Court.
However, he failed to produce income tax returns before the Court to prove
that Rs.20,00,000/- was really paid to Appellant/Defendant and the same is
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reflected in his legal accounts. In fact, the Appellant/Defendant raised the
plea that he never received Rs.20,00,000/- from the Respondent. The amount
of Rs.20,00,000/- is not a small amount for the Respondent to pay it
immediately on demand. A reading of evidence of PW.1, shows immediately
after the Appellant made a demand for payment of Rs.20,00,000/-, the
Respondent paid the said amount to him, he has not explained from where he
got Rs.20,00,000/-. Whether he withdrew the amount from the bank or
borrowed the amount from others, etc., were not explained. when the Suit
transaction involves heavy amount, the same should have been reflected in
the income tax returns of the Respondent/Plaintiff. The Respondent could
have proved the genuineness of transaction by producing his income tax
returns before the Court. The Respondent/Plaintiff, who is in possession of
best evidence, namely, the income tax return, failed to produce the same.
Therefore, it is appropriate to draw adverse inference against him. Unless
the Respondent/Plaintiff produce his income tax return before the Court and
prove the alleged money transaction between the Respondent and Appellant
is a genuine and legal transaction, he is not entitled to get a decree for
recovery of money from the Court of law. Here, the Respondent failed to
produce the best evidence and prove the genuineness of the transaction.
13. It would be appropriate to refer to the observations of Apex Court
in 2004(12) SCC 83[G.Pankaja Lakshmi Amma Vs. Mathai Mathew] which
mandates Courts shall not extend it's helping hand to a party engaged in
illegal transactions.
.... According to the 1st Respondent, all these amounts are paid in
cash. If these are unaccounted transactions then they are illegal
transactions. No Court can come to the aid of the party in an illegal
transactions. It is settled in law that in such cases loss must be allowed lie
where it falls. In this case
as there are unaccounted transactions, the Court could not have lent it's
hands and passed a decree. In the present case on hand transaction involved
is heavy amount of Rs.20 lakhs. Though PW.1, in his cross examination said
the money transaction is reflected in his income tax returns and he is ready
to produce relevant income tax returns before Court to prove legality of
transactions, for the reason best known to him, he failed to produce income
tax returns before the Court to prove legality of transaction. Therefore,
Court has to draw adverse inference against Respondent/Plaintiff and
presume that the Suit transaction was not reflected in his income tax returns
and hence even assuming Respondent paid any amount to Appellant on
09.09.2006, it could only be treated as illegal, unaccounted transaction.
Hence, the Respondent is not entitled to a decree from Court of law.”
(v) In the case of C.Balu and Ors. Vs. N.Saravanan and Ors. reported
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in MANU/TN/7052/2022 it has been held as follows:-
“20.The Appellate Court has also held that the payment of the loan as
such is not proved by the complainant. The Appellate Court held that the
capacity and the sources of the huge sums of Rs.1,20,00,000/- (Rupees One
Crore and Twenty Lakhs only) is not properly appreciated by the Trial
Court and allowed the Appealon that ground also. Even though once the
accused admits the signature in the cheque, there is a presumption as to the
legally enforceable debt, the accused can also discharge the presumption by
letting in his own evidence as well as cross-examination of the complainant
or by producing such materials. In this case, the following circumstances
are established which prove the defence:-
(i) The complainant had admitted that he is not in a position to file or
produce income tax details in respect of the loan amounts advanced which is
a huge amount of Rs.1,20,00,000/- (Rupees One Crore and Twenty Lakhs
only).
(ii) Except for producing the cheque, not even promissory note or supporting
documents in corroboration of advancing the loan is produced by the
complainant.
(iii) The entire transaction is to said be by way of cash.
( i v ) It is admitted by the complainant himself on 08.01.2013 only, he had,
on account of the falsification of account and breach of trust, canceled eight
powers of attorney, which is granted by him in favour of the accused in
respect of Akshaya Residential plots. If that be the situation within one week,
one month and two months thereafter, the version of the complainant that he
advanced huge amount that too without any document, is absolutely
unbelievable and it does not inspire the confidence of this Court.
(v) Similarly, when such huge amounts are being advanced proper accounts
have to be maintained and the complainant should not only prima facie, at
least, plead about the source of income, but, also should be in a position to
produce income tax details and other accounts.”
The Hon'ble Supreme Court of India, in G.Pankajakshi Amma v.
Mathai Mathew4, has held that in these types of matters, the Court cannot
give aid to such complainants. It is useful to extract the relevant paragraph
No.10, which reads as under:-
“10. There is any reason also why the impugned judgment cannot be
upheld. According to the 1st Respondent these transactions were to be
unaccounted transactions. According to the 1st Respondent, all these
amounts are paid in cash. If these are unaccounted transactions then they
are illegal transactions. No Court can come to the aid of 4 (2004) 12 SCC
83 : 2004 SCC OnLine SC 408 at page 85 the party in an illegal transaction.
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It is settled law that in such cases the loss must be allowed to lie where it
falls. In this case as these are unaccounted transactions, the Court could not
have lent its hands and passed a decree. For these reasons also the Suit was
required to be dismissed. ”
Therefore, he seeks to set aside the judgment and decree granted by the
learned III Additional District and Sessions Judge, Villupuram at Kallakurichi.
4. The trial Court had on appreciation of evidence had rejected the
Defence of the Defendant on the ground that in the reply notice, he had stated
different defence. In the written statement, he had stated another defence in the
evidence before the trial Court as Defendant's evidence. He had given out a
third interpretation which is different from the reply notice and which is
different from the written statement. Therefore, the learned trial Judge had
rejected the evidence of the Defendant as he had on each stage of the
transactions and the trial stated varying defence which are contradictions to
earlier defence available in the reply notice and in the written statement,
thereby rejected the evidence of the Defendant.
5. Even though the Plaintiff is not expected to prove the contents of
promissory note with a witness to corroborate the same, the Plaintiff had
examined two witnesses to prove the transactions on the promissory note.
Therefore, the learned trial Judge had on appreciation of evidence decreed the
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Suit. Now in the Appeal, the Appellant claims that the Plaintiff had not proved
his case by furnishing Income Tax Returns to prove that he had never resources
to lend huge amount of Rs.10,00,000/-.
6. As per the submission of the learned Counsel for the Respondent,
the Defendant had borrowed Rs.10,00,000/- and executed a Suit promissory
note on 30.10.2016. The Defendant neither paid the principal nor the interest.
Therefore, the Plaintiff issued pre-Suit notice dated 18.01.2019 to the
Defendant. The Defendant received the notice and sent a reply dated
24.01.2019 denying the contents of the notice on behalf of the Plaintiff.
Therefore, the Plaintiff had filed the Suit on 09.04.2019 for recovery of
Rs.20,18,000/- with subsequent interest. As per the notice sent by the
Defendant as reply notice, it was stated that the Defendant and his wife had
executed the sale agreement in favour of the Plaintiff's wife. Also, they had
executed unfilled signed promissory note and also signed unfilled cheque.
Later, the wife of the Plaintiff obtained a sale deed from the Defendant and his
wife. After obtaining a sale deed, the wife of the Plaintiff failed to return the
promissory note and the blank cheque issued by the Defendant and his wife.
The Suit was filed at the instigation of one Govindaraj, who is the maternal
uncle of wife of the Plaintiff.
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7. On the averments in the written statement and the Plaint, the
learned III Additional District and Sessions Judge, Villupuram at Kallakurichi
had framed the following issues:-
(i) Whether the Suit promissory note dated 30.10.2016 is
true and executed for valuable consideration?
(ii)Whether the Plaintiff is entitled to the Suit amount?
8. The Plaintiff examined himself as P.W-1 and marked documents
as Ex.A-1 to Ex.A-3. Ex.A-1 is the Suit promissory note, the witnesses to the
Suit promissory note were examined as P.W-2 and P.W-3. The Defendant
examined himself as D.W-1 and marked documents under Ex.B-1 to Ex.B-3.
Besides, he had also examined another witness by D.W-2. On appreciation of
evidence, the learned III Additional District and Sessions Judge, Villupuram at
Kallakurichi, had decreed the Suit on the following findings:-
“Execution of the promissory note is not in dispute. The
evidence of P.W-1 was corroborated by P.W-2 and P.W-3. The
transaction between the Defendant with one Govindaraj has nothing
to do with the Suit transaction. The Defendant has taken
prevaricative defences and failed to prove none of them.
The evidence of D.W-2 did not support the case of the
Defendant. No steps were taken by the Defendant to get back the
promissory note either by issuing a legal notice or by giving a
Police Complaint.”
9. The submissions of the Defendant as Appellant before this Court
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is that P.W-1 had deposed that the date of lending money was 30.12.2016
whereas under Ex.A-1, the date of promissory note is dated 30.10.2016. The
Plaintiff had not taken any action between 30.10.2016 and 09.04.2019. The
Plaintiff had neither proved his financial capacity nor shown the transaction in
his IT returns. The Plaintiff has to fail under Section 43 of the Negotiable
Instruments Act. The Defendant had filed CMP.No. 4460 of 2023 under Order
XLI, Rule 27 of the Civil Procedure Code to mark the sale agreement dated
27.02.2013 entered into between the Defendant with Govindaraj. Based on the
above points, the Appellant has submitted that the legal presumption under
Section 118 of the Negotiable Instrument Act had been rebutted.
10. The submission of the learned Counsel for the
Appellant/Defendant before the trial Court is answered by the learned Counsel
for the Respondent(Plaintiff before the trial Court). Ex.A-1 is dated
30.10.2016. Whereas, P.W-1 had inadvertently mentioned the date of borrowal
and the date of promissory note as 30.12.2016. Immediately, he corrected it in
the cross-examination itself. The learned Judge had recorded it as follows:-
“th/rh/M/1y; njjpia ehe;jhd; Twpndd;. jkpH; njjpia vij
itj;J vGjpdhu; vd;W vdf;F bjupahJ/ ehd; 30/12/2016 vd;W
Fwpg;gpl;L brhd;ndd; vd;W brhd;dhy; rupjhd;/ gpd;du; rhl;rp
30/10/2016 vd;W Twpajhf Twpdhu;/”
11. Even otherwise, the date and year were given correctly. Due to the
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passage of time, P.W-1 would have referred to the month as “12” instead of
“10”. It is a well-settled position of law that human memory is not so strong to
recollect each and every minute aspect and to depose like a parrot. P.W-1 has
given evidence after five years. Be that as it may, the date given in the
document(Ex.A-1) would speak for itself.
12. Neither the date of borrowal nor the capacity of the Plaintiff to
lend money were disputed in the written statement. In fact, pleadings in the
written statement are bereft of any details and vague. He has taken mutually
contradictory and destructive pleas in the reply notice, written statement and in
the course of evidence.
13. Right to maintain silence has no application in civil Suit. The
Defendant has taken a specific defence, which he has to prove it by letting in
evidence. Otherwise, an adverse inference has to be drawn under Section 114
(g) of the Indian Evidence Act.
14. During the course of evidence of the Defendant as D.W-1 and
equally in the arguments now, the Appellant/Defendant has gone to the extent
of denying the signature/left thumb impression. It shows the audacity of the
Defendant. Having taken such a plea in the belated stage of the trial, he did not
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take any steps to get an expert opinion from the handwriting/fingerprint
experts. P.W-2 and P.W-3 are the witnesses in Ex.A-1. As per Section 4 of the
Negotiable Instruments Act, no need to examine the witnesses to prove the
execution of the promissory note. Fortunately, the Plaintiff had examined both
the witnesses as P.W-2 and P.W-3. In fact, nothing has been elicited to
discredit their evidence or even suggested motive against them. The Plaintiff is
a businessman. It was elicited in the cross-examination of P.W-1 about his
financial capacity as under:-
“ehd; yhupfis itj;J ouhd;!;nghu;l; bjhHpy; bra;J tUfpnwd;.
mjd; K:yk; te;j tUkhdj;jpd; mog;gilapYk;. tPl;oypUe;j gzj;ij
bfhz;Lk; gpujpthjpf;F U:/10.00.000-?k; bfhLj;njd;/ th/rh/M/1y; 2
rhl;rpfs; ifbahg;gkpl;Ls;shu;fs;/ th/rh/M/1y; rPDthrd; vd;gtUk;
uhkyp';fk; vd;gtUk; rhl;rp ifbahg;gkpl;Ls;shu;fs;/”
15. The Plaintiff is neither a moneylender nor doing any illegal
business. His capacity to pay the amount was never questioned. Merely
because the transaction had not been reflected in the Income Tax Returns, it
cannot be treated as “unaccounted money”. The Hon'ble Bombay High Court
in 2023 SCC Online Bom 1708 held that non-disclosure of the transaction in
the IT Returns does not amount to rebuttal of the presumption.
16. Execution of Ex.A-1-promissory note is not in dispute
The Defendant had categorically admitted the execution of the
promissory note and a cheque in his reply notice under Ex.A-3 and in the
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written statement.
17. Once the execution is admitted, then the Plaintiff is entitled to
draw a legal presumption under Section 118 of the Negotiable Instruments Act
as to the passing of consideration.
18. Where a promissory note is shown to be admitted and bears the
date and place of its execution, presumptions attach that it was executed at the
place and on the date it mentions.
19. Initial burden lies on the Plaintiff had been discharged and the
Court shall raise a presumption in favour of the Plaintiff that the Suit
promissory note was for consideration.
20. Prevaricate stand taken by the Defendant:-
In Ex.A-5-Reply notice, the Defendant has stated as follows:-
“vkJ fl;rpf;fhuu; j';fs; fl;rpf;fhuu; K:yk; mtuJ
tpahghuj;jpw;fhf Rkhu; 5 tUlj;jpw;F Kd;g[ j';fs; fl;rpf;fhuupd;
kidtp bry;tpapd; jha;khkh nfhtpe;juh$; vd;gtuplk; fld; bgw;wpUe;jhu;
vd;Wk;/ nkw;go fld; bjhiff;F nkw;go nfhtpe;juh$; vd;gtu; nfl;Lf;
bfhz;ljw;fpz';f vkJ fl;rpf;fhuUk; mtuJ kidtpa[k; mtu;fSf;F
brhe;jkhd kidfis nkw;go nfhtpe;juh$; vd;gtUf;F bgaustpy; xU
tpw;fpiua cld;gof;if Mtzj;jpid vGjpf;bfhLj;jhu;fs; vd;Wk;
nkw;go fld; bjhifapid nkw;go j';fs; fl;rpf;fhuuhd r';fu;
Kd;dpd;W th';fp bfhLj;jhu; vd;Wk; vkJ fl;rpf;fhuu; TWfpwhu;/
mj;jUzj;jpy; vkJ fl;rpf;fhuuplk; tl;o bjhiff;fhf ntz;o btw;Wg;
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gpuhk;rup nehl;oy; ifbahg;gKk;/ btw;Wf; fhnrhiya[k; bgw;Wf;bfhz;lhu;
vd;W vkJ fl;rpf;fuhu; TWfpwhu;/ nkw;go flid igry; bra;Jbfhz;L
ghf;fp bjhifapid vkJ fl;rpf;fhuu; brYj;j ntz;oapUe;jjhy;
mjw;fhf fle;j 10/12/2018 njjpapy; nkw;go fpiua cld;gof;if
Mtzj;jpid uj;J bra;J bfhz;L j';fs; fl;rpf;fhuupd; kidtp
bry;tp bgaUf;F mnj brhj;jpid j';fs; fl;rpf;fhuu; fpiuak;
bgw;Wf;bfhz;lhu; vd;Wk; vkJ fl;rpf;fhuu; TWfpwhu;/ mj;jUzj;jpy;
vkJ fl;rpf;fhuuplk; bgw;wpUe;j nkw;go btw;W gpuhk;rup nehl;Lk; btw;W
fhnrhiya[k; vkJ fl;rpf;fhuu; nfl;l nghJ njo jUtjhf Twptpl;L
jpUk;g bfhLf;ftpy;iy vd;Wk; vkJ fl;rpf;fhuu; Twfpwhu;/”
21. In the written statement, the Defendant has stated as under:-
“thjp kidtpaplj;jpy; gpujpthjpa[k;. gpujpthjpapd; kidtpa[k;
fpiua cld;gof;if Vw;gLj;jpf; bfhz;l rkaj;jpy; btw;Wgpuhk;rup
nehl;oYk; btw;W fhnrhiyapYk; ,e;j gpujpthjp ifbaGj;J bra;J
bfhLj;jhu;/ gpd;g[ fpiuak; bgw;W gpwF thjp kidtp btw;Wgpuhk;rup
nehl;oida[k; btw;W fhnrhiya[k; jpUk;g jutpy;iy nkw;go thjpapd;
kidtp nkw;go Mtz';fis njo jUtjhf Twpajd; ngupd; gpujpthjp
ek;gp ,Ue;Jtpl;lhu;/ ,t;thW ,Uf;ifapy; thjp gpujpthjpf;F fld;
bfhLf;f tha;g;gpy;iy ,e;j thjpapd; jhthtpw;F ahbjhU Kfhe;jpuKk;
fpilahJ/”
22. In the cross-examination, D.W-1 has stated
“thjpia vd;Dila ez;gu;. mtiu. vdf;F fle;j 10
tUl';fshf bjupa[k;/ vdf;Fk;. thjpf;Fk; ,ilna ve;j tpnuhjKk;
,y;iy/ th/rh/M/1y; cs;s ifbahg;gKk;. ifnuifa[k; vd;Dilajpy;iy
vd;Wk;. nkw;go th/rh/M/1 bgha;ahf n$hof;fg;gl;lJ vd;W vd;Dila
gjpYiuapy; brhy;ytpy;iy vd;W brhd;dhy; rupjhd;/ ehd; btw;W
flDWjprPl;oy; ifbaGj;Jk;. ifnuifa[k; nghl;Lf;bfhLj;jjhft[k;. mjd;
gad;gLj;jp th/rh/M/1 n$hoj;jjhf ehd; fl;rp bra;fpd;nwdh vd;why;
,y;iy/
mtuplkpUe;J ehd; fld; vJt[k; bgwtpy;iy/ me;j
flDWjpr;rPl;L th/rh/M/1y; tpy;iyapy; cs;s ifbahg;gKk; mjw;Fnky;
cs;s ifnuifa[k; vd;Dilajy;y vd;W vd;Dila vjpu;tHf;Fiu
kw;Wk; gpukhz thf;FK:yj;jpy; ehd; brhy;ytpy;iy vd;why; mJ
rupay;y/”
23. The Defendant had taken all the defences available under the sky
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to avoid his legal liability to repay the loan amount. The fact that D.W-1 has
disowned his plea in the written statement would expose the conduct of the
Defendant, which is relevant under Section 52 of the Indian Evidence Act.
24. No nexus between Ex.A-1 and Ex.B-1 (Sale deed):-
The Suit was filed on the basis of Ex.A-1-promissory note and not on
the basis of Ex.B-1 sale deed in the name of the Plaintiff's wife or on the basis
of the sale agreement sought to be produced in CMP.No.4460 of 2023.
25. The Plaintiff was neither a party to Ex.B-1 nor the sale agreement
dated 27.02.2013. It was not a Suit filed which was filed on the basis of sale
agreement or sale deed relied upon by the Defendant. The Suit is for recovery
of money due under Ex.A-1.
26. The learned Counsel for the Respondent relied on the ruling
reported in CDJ 2016 SC 1007 in the case of BM Basavaraj Vs. Srinivasa
Datta. The relevant portion reads as follows:-
“10. Once the Appellant files a Complaint on the basis that he
was holding the aforesaid cheques as holder in due course which were
admittedly given by the Respondent to the Appellant and the said
cheques were dishonoured when they were presented for encashment to
the Bank and he, further, is able to establish that due notice of the
dishonour of the said cheques was given to the Respondent as provided
in law, there was a clear presumption in favour of the Appellant that
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the money was due under the said cheques. It may be noted that there
is no defence to the effect that the cheques were not issued by the
Respondent or the cheques do not bear its signatures or they were not
presented properly for encashment.
11. In the aforesaid circumstances, it was not even necessary for
the Appellant to produce any document to the effect that it had fulfilled
the obligation under the agreement which was entered into between the
parties. The case was founded on the dishonour of the two cheques and
not on the basis of the said agreement. Further, it was not a civil Suit
which was filed on the basis of the said agreement or any demand was
raised for money on the ground that the agreement had been fulfilled.
The case is that the payment was not released. It is here where the
High Court has fell in legal error.”
27. The Suit was filed well in time:-
Ex.A-1 is dated 30.10.2016. The Suit was filed on 09.04.2019. It was
filed within a period of three years as per Article 22 of the Limitation Act.
28. The Defendant in the written statement claims that the Plaintiff
had not taken any steps for more than two and half years. It is not a Suit for
specific performance to prove readiness and willingness throughout. The Suit
for recovery of money is based on an instrument duly executed and signed by
the Defendant and not an equitable remedy.
29. Section 43 of the Negotiable Instruments Act.
The submission made on the basis of Section 43 of the Negotiable
Instrument Act is totally misconceived. Section 118 of the Negotiable
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Instruments Act raises a legal presumption. A meaningful reading of Sections
20, 87 and 118 of the Negotiable Instruments Act makes it amply clear that a
person who signs a promissory note remains liable unless he adduces evidence
to rebut the presumption that the promissory note had not been issued for a
debt or in discharge of a liability.
30. If the promissory note is duly signed, towards some payment, the
holder may fill up the amount and other particulars. The onus would still be on
the Defendant to prove that the promissory note was not in discharge of a debt
by adducing evidence. Even if a blank promissory note, voluntarily signed and
handed over by the Defendant, which is towards some payment, would attract
presumption under Section 118 of the Negotiable Instruments Act, in the
absence of any cogent evidence to show that the promissory note was not
issued in discharge of a debt.
31. The learned Counsel for the Respondent relied on the ruling in the
case of Bir Singh Vs. Mukesh Kumar reported in (2019) 4 SCC 197. The
relevant portion reads as follows:-
“32.The proposition of law which emerges from the judgments
referred to above is that the onus to rebut the presumption under
Section 139 that the cheque has been issued in discharge of a debt or
liability is on the accused and the fact that the cheque might be post
dated does not absolve the drawer of a cheque of the penal
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consequences of Section 138 of the Negotiable Instruments Act.
33. A meaningful reading of the provisions of the Negotiable
Instruments Act including, in particular, Sections 20, 87 and 139,
makes it amply clear that a person who signs a cheque and makes it
over to the payee remains liable unless he adduces evidence to rebut
the presumption that the cheque had been issued for payment of a debt
or in discharge of a liability. It is immaterial that the cheque may have
been filled in by any person other than the drawer, if the cheque is duly
signed by the drawer. If the cheque is otherwise valid, the penal
provisions of Section 138 would be attracted.
34. If a signed blank cheque is voluntarily presented to a payee,
towards some payment, the payee may fill up the amount and other
particulars. This in itself would not invalidate the cheque. The onus
would still be on the accused to prove that the cheque was not in
discharge of a debt or liability by adducing evidence.
35. It is not the case of the Respondent-accused that he either
signed the cheque or parted with it under any threat or coercion. Nor is
it the case of the Respondent-accused that the unfilled signed cheque
had been stolen. The existence of a fiduciary relationship between the
payee of a cheque and its drawer, would not disentitle the payee to the
benefit of the presumption under Section 139 of the Negotiable
Instruments Act, in the absence of evidence of exercise of undue
influence or coercion. The second question is also answered in the
negative.
36. Even a blank cheque leaf, voluntarily signed and handed
over by the accused, which is towards some payment, would attract
presumption under Section 139 of the Negotiable Instruments Act, in
the absence of any cogent evidence to show that the cheque was not
issued in discharge of a debt.
37. The fact that the Appellant-complainant might have been an
Income Tax practitioner conversant with knowledge of law does not
make any difference to the law relating to the dishonour of a cheque.
The fact that the loan may not have been advanced by a cheque or
demand draft or a receipt might not have been obtained would make no
difference. In this context, it would, perhaps, not be out of context to
note that the fact that the Respondent-accused should have given or
signed blank cheque to the Appellant- complainant, as claimed by the
Respondent-accused, shows that initially there was mutual trust and
faith between them.
38. In the absence of any finding that the cheque in question was
not signed by the Respondent-accused or not voluntarily made over to
the payee and in the absence of any evidence with regard to the
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circumstances in which a blank signed cheque had been given to the
Appellant-complainant, it may reasonably be presumed that the cheque
was filled in by the Appellant-complainant being the payee in the
presence of the Respondent-accused being the drawer, at his request
and/or with his acquiescence. The subsequent filling in of an unfilled
signed cheque is not an alteration. There was no change in the amount
of the cheque, its date or the name of the payee. The High Court ought
not to have acquitted the Respondent-accused of the charge under
Section 138 of the Negotiable Instruments Act.
39. In our considered opinion, the High Court patently erred in
holding that the burden was on the Appellant-complainant to prove that
he had advanced the loan and the blank signed cheque was given to
him in repayment of the same. The finding of the High Court that the
case of the Appellant-complainant became highly doubtful or not
beyond reasonable doubt is patently erroneous for the reasons
discussed above.”
32. Regarding additional evidence under Order XLI, Rule 27 of CPC
filed by the Appellant in CMP.No.4460 of 2023, the learned Counsel for the
Respondent had relied on the ruling reported in (2012) 8 SCC 148 in the case
of Union of India Vs. Ibrahim Uddin. The relevant portion reads as follows:-
“36. The general principle is that the Appellate Court should
not travel outside the record of the lower Court and cannot taken any
evidence in Appeal. However, as an exception, Order 41 Rule 27 of
CPC enables the Appellate Court to take additional evidence in
exceptional circumstances. The Appellate Court may permit additional
evidence only and only if the conditions laid down in this Rule are
found to exist. The parties are not entitled, as of right, to the admission
of such evidence. Thus, the Provision does not apply, when on the
basis of the evidence on record, the Appellate Court can pronounce a
satisfactory Judgment. The matter is entirely within the discretion of
the Court and is to be used sparingly. Such a discretion is only a
judicial discretion circumscribed by the limitation specified in the Rule
itself. (vide K.Venkaramaiah Vs. A. Seetharama Reddy (AIR 1963 SC
1526), Municipal Corpn. Of Greater Bombay Vs. Lala Pancham (AIR
1965 SC 1008), Soonda Ram Vs. Rameshwarlal ((1975) 3 SCC 698 :
AIR 1975 SC 479) and Syed Abdul Khader Vs. Rami Reddy ((1979) 2
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SCC 601 : AIR 1979 SC 553).
37. The Appellate Court should not ordinarily allow new
evidence to be adduced in order to enable a party to raise a new point
in Appeal. Similarly, where a party on whom the onus of proving a
certain point lies fails to discharge the onus, he is not entitled to a fresh
opportunity to produce evidence, as the Court can, in such a case,
pronounce Judgment against him and does not require any additional
evidence to enable it to pronounce Judgment. (vide Haji Mohammed
Ishaq Vs. Mohd. Iqbal and Mohd. Ali and Co. ((1978) 2 SCC 493: AIR
1978 SC 798)
38. Under Order 41 Rule 27 CPC, the Appellate Court has the
power to allow a document to be produced and a witness to be
examined. But the requirement of the said Court must be limited to
those cases where it found it necessary to obtain such evidence for
enabling it to pronounce judgment. This provision does not entitle the
appellate Court to let in fresh evidence at the appellate stage where
even without such evidence it can pronounce judgment in a case. It
does not entitle the appellate Court to let in fresh evidence only for the
purpose of pronouncing judgment in a particular way. In other words,
it is only for removing a lacuna in the evidence that the appellate Court
is empowered to admit additional evidence. (Vide Lala Pancham (AIR
1965 SC 1008)).
39. It is not the business of the appellate Court to supplement the
evidence adduced by one party or other in the lower Court. Hence, in
the absence of satisfactory reasons for the non-production of the
evidence in the trial Court, additional evidence should not be admitted
in Appealas a party guilty of remissness in the lower Court is not
entitled to the indulgence of being allowed to give further evidence
under this Rule. So a party who had ample opportunity to produce
certain evidence in the lower Court but failed to do so or elected not to
do so, cannot have it admitted in appeal. (Vide State of U.P Vs.
Manbodhan Lal Srivastava (AIR 1957 SC 912) and S.Rajagopal Vs.
C.M.Armugam (AIR 1969 SC 101)).
40. The inadvertence of the party or his inability to understand
the legal issues involved or the wrong advice of a pleader or the
negligence of a pleader or that the party did not realise the importance
of a document does not constitute a “substantial cause” within the
meaning of this Rule. The mere fact that certain evidence is important,
is not in itself a sufficient ground for admitting that evidence in appeal.
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41. The words “for any other substantial cause” must be read
with the word “requires” in the beginning of the sentence, so that it is
only where, for any other substantial cause, the appellate Court
requires additional evidence, that this Rule will apply e.g when
evidence has been taken by the lower Court so imperfectly that the
appellate Court cannot pass a satisfactory Judgment.
42. Whenever the appellate Court admits additional evidence it
should record its reasons for doing so (sub-rule (2)). It is a salutary
provision which operates as a check against a too easy reception of
evidence at a late stage of litigation and the statement of reasons may
inspire confidence and disarm objection. Another reason of this
requirement is that, where a further Appeal lies from the decision, the
record of reasons will be useful and necessary for the Court of further
Appeal to see, if the discretion under this Rule has been properly
exercised by the Court below. The mission to record the reasons must,
therefore, be treated as a serious defect. But this provision is only
directory and not mandatory, if the reception of such evidence can be
justified under the Rule.
43. The reasons need not be recorded in a separate order
provided they are embodied in the judgment of the appellate Court. A
mere reference to the peculiar circumstances of the case, or mere
statement that the evidence is necessary to pronounce judgment, or that
the additional evidence is required to be admitted in the interests of
justice, or that there is no reason to reject the prayer for the admission
of the additional evidence, is not enough compliance with the
requirement as to recording of reasons”.
In the light of the above reported decisions, the learned Counsel for the
Respondent sought to dismiss this Appeal.
Point for consideration:-
Whether the Judgment and Decree dated 23.02.2022
passed in O.S.No.26 of 2019 by the learned III Additional
District and Sessions Judge, Kallakurichi is to be set aside as
perverse as it is not based on proper appreciation of evidence
and based on presumption under Section 118 of Negotiable
Instruments Act and not based on preponderance of
probabilities of the Defence of the Defendant?
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33. Heard the learned Counsel for the Appellant and the learned
Counsel for the Respondent.
34. Perused the records, depositions of P.W-1 to P.W-3 and D.W-1
and D.W-2, the documents under Ex.A-1 to Ex.A-3 and Ex.B-1 to Ex.B-3 and
the judgment dated 23.02.2022 passed in O.S.No.26 of 2019 by the learned III
Additional District and Sessions Judge, Villupuram at Kallakurichi.
35. From the rival submissions, it is found that the Plaintiff had issued
pre-suit notice under Ex.A-2 dated 08.01.2019 which was received by the
Defendant. The Defendant had sent a reply under Ex.A-3 dated 24.01.2019
stating that there was no transaction between the Plaintiff and the Defendant.
As per Ex.A-3 the transaction was between the wife of Defendant and the
maternal uncle of the wife of the Plaintiff. When the Defendant sought money
as loan, the Plaintiff was instrumental in introducing the maternal uncle of his
wife to lend the money required by the Defendant. At that stage, the maternal
uncle of the wife of the Plaintiff, Govindaraj sought a sale agreement from the
wife of the Defendant and an unfilled, signed promissory note from the
Defendant and an unfilled duly signed blank cheque from the Defendant.
Subsequently, the wife of the Plaintiff obtained sale deed from the wife of the
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Defendant. At that stage, the Defendant sought return of duly signed unfilled
promissory note and duly signed unfilled blank cheque from the wife of the
Plaintiff. She informed the Defendant that she would search it and hand it over
to the Defendant. Till the date of issuance of statutory notice Ex.A-2, she had
not handed over the promissory note and the blank cheque. The promissory
note was put into effect and Suit had been instituted against the Defendant.
That is the contents of the reply notice under Ex.B-3/Ex.A-3. In the written
statement, he had stated the same facts. In the evidence, he had denied the
signature on the promissory note and blank cheques. During cross-
examination, he had stated that he had not stated in the written statement that
the Plaintiff had instituted the Suit based on the forged signature of the
Defendant. Therefore, it is the contention of the learned Counsel for the
Plaintiff that the Defendant had at each stage of the transaction and the Suit
made mutually distructive defences. Now, in the Appeal, the Defendant had
filed Civil Miscellaneous Petition disputing the signature in the promissory
note. The claim of the Defendant as Appellant is that the Plaintiff failed to
prove that he had the wherewithal to lend huge amount of Rs.10,00,000/- as
loan. He had not filed Income Tax Returns to prove the wherewithal.
Therefore, the Suit ought to have been dismissed by the learned trial Judge.
Instead, the Suit was decreed without considering those facts.
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36. As rightly pointed out by the learned Counsel for the Plaintiff as
Respondent in the Appeal, the Defendant has to plead his defence. Without
pleading, any evidence let in by the Defendant has no evidentiary value. What
is now stated or attempted in the Appellate stage is that the Plaintiff has no
wherewithal, the Plaintiff has not produced Income Tax Returns. The
signature on the promissory note is not that of the Defendant. Therefore, it is to
be sent to forensic experts are all as an afterthought after the trial and after the
pronouncing of judgment.
37. As per the ruling cited by the learned Counsel for the Respondent
in Haji Mohammed Ishaq Vs. Mohd. Iqbal and Mohd. Ali and Co. ((1978) 2
SCC 493: AIR 1978 SC 798) and State of U.P Vs. Manbodhan Lal
Srivastava (AIR 1957 SC 912) and S.Rajagopal Vs. C.M.Armugam (AIR
1969 SC 101)) and Municipal Corpn. Of Greater Bombay Vs. Lala
Pancham (AIR 1965 SC 1008), the Appellate Court is expected to reassess the
evidence that was available before the trial Court. The Appellate Court shall
not show leniency to the party to the Suit who had not been indulgent to prove
his case before the trial Court. He should not be given leniency and to
pronounce judgment in a particular way by affording opportunity to the party
who was not indulgent before the trial Court by adducing evidence both the
oral and documentary evidence. In the light of such rulings, the Defendant
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before the learned III Additional District and Sessions Judge, Villupuram at
Kallakurichi was not diligent in prosecuting his defence. Particularly, he had
made varying defences at various points of time. In the written statement, he
denied the contents of the pre-Suit notice claiming that there was no transaction
between the Plaintiff and the Defendant. The transaction was between the
Defendant and the maternal uncle of the Plaintiff's wife. In the written
statement, he claims to have executed sale agreement deed, blank promissory
note, blank cheque in favour of the wife of the Plaintiff. In the evidence as
deponent, Defendant had not at all placed evidence as per the pleadings in the
written statement. He had made a different oral evidence which is not in
conformity with the pleadings. Therefore, while assessing and appreciating
evidence, the learned III Additional District and Sessions Judge, Villupuram at
Kallakurichi had rejected the defence of the Defendants. As per the Evidence
Act, the person who knocks on the door of the Court seeking Judgment in his
favour has to prove his case. Here, the Plaintiff had filed a Suit and expected
the Court to grant a decree in his favour. Therefore, he is duty bound to prove
his case as per Section 101 of the Indian Evidence Act and he had let in
evidence by discharging the burden cast upon him by marking Ex.A-1 to Ex.A-
3 and adducing oral evidence through P.W-1 to P.W-3. Therefore, the burden
shifts on the Defendant, the Defendant has to let in evidence, as per the
pleadings, to prove his defence as per Sections 102 and 103 of the Indian
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Evidence Act. Accordingly, the Defendant in this case had let in evidence
under Sections 102 and 103 of Indian Evidence Act. On assessment of
evidence, the learned III Additional District and Sessions Judge found out that
the evidence of the Defendant was not as per Sections 102 and 103 of the
Indian Evidence Act. The Defendant failed to prove what was pleaded by him
in the written statement and had given evidence which is not as per the
pleadings. Therefore, it is to be treated as abandonment of the pleadings in the
written statement by the Defendant. Therefore, the learned III Additional
District and Sessions Judge had rightly rejected the evidence of the Defendant
and decreed the Suit. In the Appeal, now the Defendant seeks to adduce
additional evidence against the Plaintiff by filing CMP.No.4460 of 2023.
38. As per the reported ruling relied by the learned Counsel for the
Plaintiff as Respondent in this Appeal in Haji Mohammed Ishaq Vs. Mohd.
Iqbal and Mohd. Ali and Co. ((1978) 2 SCC 493: AIR 1978 SC 798) and
State of U.P Vs. Manbodhan Lal Srivastava (AIR 1957 SC 912) and
S.Rajagopal Vs. C.M.Armugam (AIR 1969 SC 101)) and Municipal Corpn.
Of Greater Bombay Vs. Lala Pancham (AIR 1965 SC 1008), the Appellate
Court shall not show leniency to a party who was not indulgent before the trial
Court. The Defendant had the opportunity to prove his defence during trial, he
was not indulgent. He had let in evidence by not restricting himself to the
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pleadings. He had let in evidence which is irrelevant to the pleadings in the
written statement. Before filing the written statement, he should have been
careful in drafting the written statement. He should have focused it on his
defence and made it clear his valuable defence that having filed a vague written
statement and attempted to let in evidence without reference to the contents of
the written statement and after having suffered a decree, the Defendant cannot
be permitted to let in evidence distracting and destroying the evidence of the
Plaintiff, expecting the Court to pronounce the judgment in his favour rejecting
the evidence of the Plaintiff before a trial Court. He should have exercised his
right of defence with due diligence before the learned III Additional District
and Sessions Judge, Villupuram at Kallakurichi during trial. He had not
exercised his right diligently. He cannot be permitted now in Appeal though he
denied his signature in the promissory note and sought to refer the matter to
Forensic Department for obtaining expert opinion regarding the signature and
thumb impression.
39. As per the reported ruling State of U.P Vs. Manbodhan Lal
Srivastava (AIR 1957 SC 912) and S.Rajagopal Vs. C.M.Armugam (AIR
1969 SC 101)), the Defendant cannot be permitted to let in evidence at the
stage of appeal, reversed the well-reasoned Judgment of the learned III
Additional District and Sessions Judge, Villupuram at Kallakurichi based on
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whatever is available as material before the learned III Additional District
Judge alone had to be taken by this Court. Therefore, CMP has to be rejected
in the light of the reported ruling cited by the learned Counsel for the
Respondent in the Appeal.
40. The ruling relied by the learned Counsel for the Defendant as
Appellant before this Court stating that income tax returns having been not
filed, the Plaintiff is not entitled to get a decree will not hold good in the facts
of this case. The Defendant had not pleaded the wherewithal of the Plaintiff to
lend such huge amount to the Defendant. When the Defendant had not pleaded
or questioned the capability of the Plaintiff to lend such huge amount, he
cannot be permitted to raise it in Appeal as an afterthought. What was pleaded
in the written statement was not proved by the Defendant. He had deposed
evidence contrary or irrelevant to the contents of the written statement and
Defendant's evidence.
41. When the Defendant in a Civil Suit takes different stand at every
stage of the proceeding, automatically, the Court has to draw adverse inference
against the conduct of the Defendant and rightly reject the defence of the
Defendant when the Defendant has not stuck to his defence in the written
statement.
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42. As per the reported ruling of the Hon'ble Bombay High Court that
the non-filing of the income tax returns cannot be considered as unaccounted
money. The non-discretionary of the transaction of Income Tax does not
amount to rebuttal of presumption. When the Defendant failed to give
resources of the Plaintiff, he cannot be permitted to cite the ruling in support of
his oral argument at the Appellate stage. The Defendant had not discharged the
burden cast upon him under Sections 102 and 103 of Indian Evidence Act to let
in evidence in support of the pleadings in the written statement. When the
Defendant had not discharged the burden cast upon him, he cannot be
permitted to rely on the ruling which will support him at the appellate stage.
Based on the reference to IT returns without pleadings even in the Appeal, the
Defendant cannot be permitted to raise those defence which were not pleaded
in the written statement.
43. In the written statement, the Defendant claimed that he had
executed a blank promissory note on request of the Plaintiff's wife.
Subsequently, he executed sale deed in favour of wife of Plaintiff. At that
time, he sought return of the blank promissory note. Plaintiff and his wife
informed the Defendant that the promissory note is missing. When they trace
it, they will hand over the same to Defendant. They did not hand over to
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Defendant. Instead they filed the suit. The Defendant examined himself as
D.W-1. During cross-examination, he had replied to the suggestion of the
learned Counsel for the Plaintiff stating he had repaid the loan to Plaintiff.
Therefore, the evidence of Defendant was contradictory to the contents of the
written statement. Therefore, the rulings cited by the learned Counsel for the
Defendant as Appellant before this Court - (i) M.S.Narayana Menon Vs. State
of Kerala and Ors. reported in MANU/SC/2881/2006; (ii) G.Pankajakshi
Amma & ors. Vs. MathaiMathew (D) thr. L.Rs. And Ors. reported in
MANU/SC/1158/2004; (iii) Ramkumar Vs. Chelladurai reported in
MANU/TN/5600/2021; (iv) B.Mahadevan vs. K.Velmurugan reported in
MANU/TN/5601/2022 and C.Balu and Ors. Vs. N.Saravanan and Ors.
reported in MANU/TN/7052/2022 will not helpful to this case as the same is
without pleadings in the written statement regarding the resources of the
Plaintiff. Therefore, the Judgment of the learned III Additional District Judge,
Villupuram at Kallakurichi rejecting the evidence of the Defendant based on
presumption under Section 114 of the Indian Evidence Act is found proper and
well-reasoned Judgment. It does not warrant any interference by this Court
exercising discretion as Appellate Court under Order XLI of CPC does not
warrant any interference by this Court.
44. The Judgment of the learned III Additional District Judge,
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Villupuram at Kallakurichi is not based on presumption under Section 118 of
the Negotiable Instruments Act and it is based on proper appreciation of
evidence. The Plaintiff had adduced evidence and discharged the burden cast
upon him under Section 101 of the Indian Evidence Act. As per Section 118
of the Negotiable Instruments Act, the promissory note is not in dispute, the
Court has to draw presumption in favour of the holder of the Negotiable
Instruments. Therefore, not only presumption under Section 118 of the
Negotiable Instruments Act but also on proper appreciation of evidence of the
parties before the trial Court, the learned Judge had decreed the Suit.
45. The learned III Additional District Judge, Villupuram at
Kallakurichi in the Judgment in O.S.No.26 of 2019 dated 23.02.2022 had
analysed the evidence and arrived at a clear conclusion that the Defendant
failed to prove his defence. Therefore, the claim of the Defendant as Appellant
that the the learned III Additional District Judge failed to consider the evidence
in proper perspective and failed to consider the preponderance of probability of
the defence of the Defendant is rejected. The Defendant failed to establish the
preponderance of probability in this case while changing his defence at every
stage in the reply notice, in the written statement and in the Defendant's
evidence. Therefore, the learned III Additional District Judge had drawn
adverse inference against the Defendant and rightly rejected the defence of the
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Defendant when he had let in evidence not meeting out the pleadings in the
written statement.
46. The attitude of the Defendant in filing CMP.No.4460 of 2023
seeking permission of the Appellate Court to adduce evidence, denying his
signature and thumb impression in the Suit promissory note and seeking
comparison of the signature at the appellate stage cannot be accepted as there is
no such pleading in the written statement. Based on additional evidence of the
Defendant and without pleadings, expecting the Court to dismiss the Suit
cannot at all be accepted in the light of the reported rulings in the case of State
of U.P Vs. Manbodhan Lal Srivastava (AIR 1957 SC 912) and S.Rajagopal
Vs. C.M.Armugam (AIR 1969 SC 101)).
47. In the light of the above discussions, the point for consideration
is answered against the Defendant and in favour of the Plaintiff. The
Judgment and decree dated 23.02.2022 passed in O.S.No.26 of 2019 by the
learned III Additional District and Sessions Judge, Villupuram at Kallakurichi
is based on proper appreciation of evidence. It is not based on mere
presumption under Section 118 of the Negotiable Instruments Act. It is based
on evidence, based on preponderance of probabilities of the case. The same
does not warrant any interference by this Court.
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In the result, this First Appeal is dismissed with costs throughout. The
Judgment of the learned III Additional District and Sessions Judge, Villupuram
at Kallakurichi in O.S.No.26 of 2019, dated 23.02.2022 is confirmed.
Consequently, connected Miscellaneous Petition is closed.
24.06.2025
dh
Index : Yes/No
Internet : Yes/No
Speaking/Non-speaking order
To
1. The III Additional District and Sessions Judge,
Villupuram at Kallakurichi
2. The Section Officer,
V.R.Section,
High Court, Madras.
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SATHI KUMAR SUKUMARA KURUP, J.,
dh
Judgment in
24.06.2025
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