Madras High Court
S. Rajkumar vs A. Saraswathi on 31 October, 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 24.10.2025 Pronounced on : 31.10.2025
CORAM
THE HONOURABLE MR JUSTICE P.B. BALAJI
A.S.No.749 of 2023
&
C.M.P.No.26099 of 2023
S. Rajkumar ... Appellant
Vs.
A. Saraswathi ... Respondent
Prayer: Appeal Suit filed under Section 96 of the Code of Civil Procedure,
to set aside the Judgment and Decree dated 14.07.2023 made in O.S. No.
102/2020 on the file of the Hon'ble I Additional District Judge Court, Salem
and dismiss the said suit with cost .
For Appellant : Mr.J.Ramakrishnan
For Respondent : Ms.K.Indu Priya
for Mr.M.R.Vivekananthan
JUDGMENT
The defendant in a suit for recovery of money, based on a promissory
note, being aggrieved by the decree, directing the him to pay the plaintiff a
sum of Rs.13,12,657/-, together with interest at the rate of 18% per annum
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
prior to the suit, 9% per annum from the date of suit till the date of decree
and thereafter, at the rate of 6% per annum till the date of realization, is the
appellant.
2. I have heard Mr.J.Ramakrishnan, the learned counsel appearing
for the appellant/defendant and Ms.K.Indu Priya appearing for
Mr.M.R.Vivekananthan, learned counsel for the respondent/plaintiff.
3. Plaint Averments in Brief:-
The plaintiff is acquainted with the defendant. On 16.09.2018, the
defendant approached the plaintiff and requested financial assistance to the
tune of Rs.10,00,000/- to meet his urgent family expenses, undertaking to
repay the same within one year. The plaintiff agreed to lend the said sum,
provided the defendant would repay the same, together with interest at
Rs.1.50 per Rs.100/- per month. The defendant accepted the terms and on
the same day, the defendant had executed a promissory note. Despite
repeated demands made by the plaintiff, the defendant did not come forward
to pay any money. The plaintiff further came to know that the defendant was
making arrangement to alienate his property with an intention to defeat the
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
lawful claim of the plaintiff. In order to avoid such alienation of the
property, the plaintiff has chosen to institute the suit for recovery of money,
even without issuing a pre-suit notice.
4. Written Statement of the Defendant (in brief):-
The defendant denied the borrowing to the tune of Rs.10,00,000/-
from the plaintiff as alleged in the plaint. However, the defendant admitted
that he had borrowed a sum of Rs.2,00,000/- from the plaintiff. According
to the defendant, at the time of of borrowing the said sum, he signed an
unfilled promissory note, which was attested by the mother of the defendant.
5. According to the defendant, he had been paying interest on the
borrowed sum of Rs.2,00,000/- at the rate of 24% for a period of about 1 ½
years. Since he was unable to pay interest, he repaid the entire sum of
Rs.2,00,000/- by arranging funds from his own source, with the help of his
friends. However, despite receipt of the entire sum of Rs.2,00,000/-, the
plaintiff demanded further money towards interest. Since the defendant
refused to pay the same, the plaintiff refused to return the promissory note
and another blank signed stamp paper. The defendant denied the allegation
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
that the plaintiff made repeated demands for repayment and reiterated that
the plaintiff demanded further interest on the repaid amount of
Rs.2,00,000/-. Only because of the refusal of the defendant, the plaintiff has
used the unfilled promissory note and blank signed stamp papers to concoct
the suit claim. The defendant denies the allegations that he attempted to
alienate the property, in order to defeat the claim of the plaintiff.
6. Issues:
Based on the pleadings, the trial Court has framed the following three
issues:-
1.Whether the plaintiff is entitled for
recovery of suit claim amount as prayed for?
2.Is it true that the suit claim is false and
unenforceable one as alleged by the defendant?
3.To what other relief?
7. The decision of Trial:
The trial Court found that the defendant had admitted the execution of
the promissory note and failed to prove his defence that the borrowing was
Rs.2,00,000/- only and had fully discharged the same. On that basis, the trial
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
Court proceeded to decree the suit as prayed for, while restricting the
interest alone to 9% on Rs.10,00,000/- from the date of suit till the date of
decree and thereafter, at the rate of 6% per annum.
8. Mr.J.Ramakrishnan, learned counsel for the appellant would
submit that the plaintiff had failed to discharge the burden of passing of
consideration, when it was the specific case of the defendant that the
defendant had signed only a blank promissory note and that it has been
filled up by the plaintiff on his own volition and discretion. He further
contended that the plaintiff did not choose to even issue a notice before
filing the suit and therefore, the plaintiff could not be entitled to any interest
whatsoever, as there has been no demand made based on the promissory
note, which required the defendant to repay the money only on demand
made by the plaintiff.
9. It is the further contention of Mr.J.Ramakrishnan that though
the defendant had admitted execution of the promissory note, the specific
case of the defendant was that the borrowing was only a sum of
Rs.2,00,000/-. The defendant further submitted that the plaintiff did not
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
have the wherewithal to finance the huge sum of Rs.10,00,000/- and that the
defendant had successfully repaid the admitted sum. The counsel would
further contended that the presumption that the execution of the promissory
note was for consideration of Rs.10 lakhs has been rebutted, by showing
circumstantial and satisfactory evidence that the borrowing could not have
been for Rs.10,00,000/- and then the burden shifted back to the plaintiff to
establish passing of consideration.
10. Mr.J.Ramakrishnan, learned counsel for the appellant would
further submit that the defendant had also called upon the plaintiff to
produce Income Tax Returns, which could have served as evidence to prove
the actual amount lent by the plaintiff and for withholding such best
evidence, the Court ought to have drawn an adverse inference against the
plaintiff.
11. The learned counsel also relied upon and fortified his
contentions with the following decisions:
(i) S.L.P.(Civil) Diary No.1716 of 2025 dated 17.03.2025
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
(ii) Rajendran Vs. Kullappan reported in 2025 (1) MWN (Civil) 494
(iii) Thangarasu Vs. Arumugam reported in (2012) 3 MLJ 658
(iv) S.A.No.338 of 2017 A.Govindan & others Vs.
K.S.Jayanthakumar, which came to be confirmed by the Hon'ble Supreme
Court in S.L.P.(C) No.17868 of 2022 dated 06.02.2024.
12. Per contra, Ms.K.Indu Priya, learned counsel for the
respondent/plaintiff would submit that the contradictions that have been
pointed out in the cross-examination of the plaintiff's witnesses are not fatal
to the case of the plaintiff and that it was not sufficient ground to draw
adverse inference or to hold that the defendant rebutted the presumption
regarding passing of consideration.
13. The learned counsel for the respondent would further submit
that the plaintiff had established due execution of the promissory note and
the defendant had taken a false plea that he had repaid the alleged
borrowing of Rs.2,00,000/- and that there was no liability remaining to be
saddled upon the defendant's shoulder.
14. Ms.K.Indu Priya, learned counsel for the respondent further
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
contended that having taken a plea, the defendant paid interest at the rate of
24% for 1 ½ years and that a sum of Rs.2,00,000/- was also repaid, the
defendant failed to establish the same at trial and therefore, the trial Court
had rightly held that the defendant having admitted the execution of the
promissory note and having failed to prove the plea of discharge raised in
the written statement, the plaintiff was entitled to a decree as prayed for.
She would also state that even assuming that the defendant signed a blank
promissory note, in view of the provisions of the Negotiable Instruments
Act, the plaintiff is well within his right to fill up the promissory note and
further, PW.2 has been examined to establish the transaction itself,
including the due execution of the promissory note. In such circumstances,
Ms.K.Indu Priya, learned counsel for the respondent would pray for
dismissal of the appeal.
15. The learned counsel in order to fortify her submissions has
relied on the following decisions:-
(i) N.S.Arumugam Vs. Trishul Traders reported in 2005 SCC
Online Mad 806.
(ii) Bharat Barel & Drum Manufacturing Company Vs. Amin
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
Chand Payrelal reported in (1999) 3 SCC 35.
(iii) Vikram Singh Aanjana Vs. Prakashchandra Solanki reported
in 2024 SCC Online MP 2519.
(iv) Kandati Sarada Vs. Godthi Satish Chowdary and others
reported in 2024 SCC Online AP 4696.
16. I have carefully considered the arguments advanced by the
learned counsel for the parties.
17. The following points for consideration raised for decision in
this first appeal:-
(i) Whether the suit promissory note was
supported by a consideration of Rs.10,00,000/- or
Rs.2,00,000/-?
(ii) Whether the defendant has discharged
the debt payable under the said promissory note?
(iii) Whether the plaintiff has proved
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
execution of the suit promissory note?
(iv) Whether the defendant has successfully
rebutted the legal presumption attached to the suit
promissory note?
18. The defendant has admitted the execution of a blank
promissory note. However, it is the case of the defendant that he had
borrowed only a sum of Rs.2,00,000/- and not Rs.10,00,000/- as claimed by
the plaintiff. According to the defendant, he has promptly paid interest of
Rs.6000/- per month on the sum of Rs.2,00,000/- and unable to pay interest
periodically, he has arranged to repay the entire principal amount of
Rs.2,00,000/-. In this regard, there is absolutely no evidence available on
the side of the defendant to establish that he had borrowed only
Rs.2,00,000/-, or that he had promptly paid interest at the rate of 24% per
annum for 1 ½ years. Though the defendant also contended that the he had
repaid the entire amount and no further amount was due or payable, there is
no evidence to substantiate such a claim. The alleged repayment has not
been proved by any acceptable material or record. The plaintiff's case
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
supported by the written promissory note, remains unshaken, whereas, the
defendant's version is merely his ipse dixit, a self serving statement
unsupported by evidence, as revealed during the course of the trial. In view
of the above, there is no difficulty in holding that the plaintiff has
established the execution of the promissory note. The defendant, on his side,
has miserably failed to prove the alleged discharge of liability as pleaded in
the written statement.
19. Coming to the actual consideration for the promissory note, the
plaintiff's case is that a sum of Rs.10,00,000/- was lent on the date of
execution of the promissory note. In order to support the said pleadings, the
plaintiff, while examining herself in the witness box, has reiterated the same
in her proof affidavit.
20. In the cross-examination, the plaintiff stated that when the
defendant requested financial assistance, she did not immediately agree to
lend money and that she consulted her son-in-law and daughter before
lending the money. The plaintiff has also stated in cross-examination that
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
she had obtained financial assistance from her son-in-law in order to lend
the said amount to the defendant. Such a plea was not taken in the plaint in
the first instance. She has further stated that she had issued a pre-suit notice
which admittedly has not been done and in fact there is specific plea in the
plaint as to why the plaintiff did not sent a pre suit notice.
21. PW.2, the daughter of the plaintiff, is the scribe of the
promissory note. In her chief-examination, she deposed that on 16.09.2018
the defendant borrowed a sum of Rs.10,00,000/- from her mother and
executed the promissory note and that she had written the contents of the
promissory note and thereafter, the defendant signed the promissory note
and also affixed his left thumb impression. She also stated that the
defendant's mother signed the document as a witness. In cross-examination,
PW.2 has however, virtually given up the case of the plaintiff while
admitting that her mother requested her son-in-law i.e., the husband of the
PW.2, to arrange the funds to enable the plaintiff to lend money to the
defendant. PW.2 further states that, on the date of execution of the
promissory note, her mother lent only Rs.9,00,000/-, which alone was
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
available with her and that the remaining Rs.1,00,000/- was given by PW.2
and her husband, which was received by the defendant, a week later, from
her residence.
22. The evidence of PW.2, therefore, falsifies the plaint averments
as well as the evidence of PW.1 and PW.2 in chief examinations regarding
the lending of Rs.10,00,000/- to the defendant on the date of execution of
the promissory note. No doubt, the defendant has admitted the execution of
the promissory note and therefore, the initial burden to establish that the
promissory note was not supported by consideration or that the
consideration as mentioned therein was not actually passed, lies on the
defendant. It is settled law that the defendant cannot prove a negative and
therefore, it is permissible for the defendant to rebut the presumption of
passing of consideration, either by direct evidence or circumstantial
evidence.
23. On a conjoined reading of the evidence of PW.1 and PW.2, it
becomes evidence that the plaintiff has not spoken the truth. Though the
plaintiff claims that she lent the entire sum of Rs.10,00,000/- across which
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
the promissory note was executed, her own daughter stated that only
Rs.9,00,000/- was given on the date of execution of the promissory note and
that the remaining Rs.1,00,000/- was given a week later. This material
contradiction between the testimonies of PW.1 and PW.2 certainly goes to
the root of the matter, particularly concerning the passing of consideration.
24. I am unable to countenance the arguments of Ms.K.Indu Priya,
learned counsel for the respondent that these contradictions are not fatal to
the plaintiff's case. The Division Bench of this Court in R.Venkatesan @
Venkatesh Vs. Jitesh Kumar Jain reported in 2024 (5) CTC 580 has held
that though Section 118 of Negotiable Instruments Act, raises a presumption
as to the passing of consideration on the admission of execution of a
promissory note, the said presumption is only rebuttable. Relying on the
ratio laid down in Bharat Barel & Drum Manufacturing Company's case
this Court held that the defendant is entitled to rely upon circumstantial
evidence to rebut the statutory presumption and if such circumstances are
proved and found probable, the burden then shifts back to the plaintiff to
establish, by direct and cogent evidence, regarding passing of consideration.
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
The Hon'ble Division Bench has also reiterated that the Court must examine
the surrounding circumstances as well while examining whether the plea of
of passing of consideration has been proved or established.
25. This Court, in Govindan's case held that when both parties let
in evidence and the defendant has been successfully in rebutting the
presumption regarding passing of consideration, the burden of proof under
Section 118 of Negotiable Instruments Act, loses its importance and the
issue would become academic and thereafter, it is incumbent on the plaintiff
to prove the passing of consideration.
26. In Rajendran's case, this Court, examining whether the
defendant's evidence was sufficient to rebut the presumption regarding
consideration, held that if the defendant is able to establish the non-
existence of consideration by successfully raising a probable defence, then
the burden will be back on the plaintiff, to establish the passing of
consideration.
27. In Thangarasu's case as well, where the defendant, like in the
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
present case admitted to having signed the promissory note, but contended
that he had signed a blank promissory note, this Court held that proper
execution will have to be proved by the plaintiff to draw a presumption
under Section 118 of N.I.Act.
28. Coming to the decision that has been cited by the learned
counsel for the respondent, Ms.K.Indu Priya, in N.S.Arumugam's case, the
Division Bench of this Court held that the initial burden of proof always
rests on the plaintiff. Once execution of the instrument is established, the
duty is imposed on the Court to raise a presumption that the instrument was
made for consideration. Thereafter, the burden shifts to the defendant, who
must, by either direct or circumstantial evidence, acceptable to the Court,
prove that the negotiable instrument was not supported by consideration.
Unless and until the defendant successfully rebuts the presumption, the
burden does not get shifted back to the plaintiff. The Hon'ble Division
Bench further held that on the facts of the case before it that the defendant
had failed to rebut the presumption regarding passing of consideration.
29. The Hon'ble Supreme Court in Bharat Barel & Drum
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
Manufacturing Company case which in fact has been relied on by this Court
in the decision that has been relied by the counsel of the appellant, held that
initial burden always lies on the defendant to prove the non-existence of
consideration. It is open to the defendant to bring facts and circumstances
on record, which would lead the Court to believe non-existence of
consideration.
30. The Hon'ble Supreme Court further observed that such an
exercise could be done by the defendant, either by direct evidence or on the
preponderance of probability by showing that existence of consideration is
improbably doubtful or illegal. In Vikram Singh Aanjana's case, the High
Court of Madhya Pradesh held that mere minor contradictions in respect of
the amount in the statement of complaint or the evidence would not be
sufficient to dismiss the complaint. However, in that case, arising under the
Negotiable Instruments Act and on facts, the Madhya Pradesh High Court
found that the legal notice issued by the plaintiff was not even replied to and
there was no evidence adduced by the defendant by way of rebuttal.
31. In Kandati Sarada's case, the Andhra Pradesh High Court held
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
that minor discrepancies in the evidence are often attributable to errors of
observation or lapses of memory, particularly after a long lapse of time, and
such discrepancies, by themselves, do not normally affect the credibility of a
witness and that it is only where some differences are there, it would
advance the credibility of the evidence. In arriving at this conclusion, the
High Court applied the ratio laid down by the Hon'ble Supreme Court in
Bharat Barel & Drum Manufacturing Company and also R.Venkatesan @
Venkatesh's case.
32. In the present case, I see no reason not to accept the
submissions of the learned counsel for the appellant that the defendant has
successfully rebutted the presumption regarding passing of consideration.
There are no minor contradictions as strenuously contended by the learned
counsel for the respondent. The contradictions go to the very root of the
matter. The plaintiff came to Court with a case that she lent a sum of
Rs.10,00,000/- on the date of execution of promissory note. However, her
own daughter, who was the scribe of the promissory note, has virtually
demolished the case by deposing that only Rs.9,00,000/- was handed over
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
on the date of execution and Rs.1,00,000/- was given one week later that too
by the husband of PW.2 and PW.2, i.e., herself. These averments do not find
a place in the plaint. There is no pre-suit notice issued making demand for
repayment of amount borrowed. Though some reasons have been given in
the plaint, it was not substantiated in evidence. On the contrary, PW.1 stated
that she had given a pre-suit notice.
33. Further, PW.2 also admits that she is an income tax assessee
and that the borrowing pertained to her family's saree business and that the
entire income and expenditure is subject to the scrutiny of the Income Tax
Department. However, PW.2 claims that the amount lent to the defendant
has not been reflected in her income tax returns. Though the execution of
the promissory note can be inferred, through circumstantial evidence, the
evidence of PW.2 which contradicts both the pleading and the testimony of
PW.1 casts serious doubt on the claim regarding the passing of
consideration.
34. The defendant has been able to create serious doubt with regard
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
to the passing of consideration. In fact, the specific case of the defendant is
that he signed a blank promissory note. This Court, in Thangarasu's case,
held that presumption under Section 118 of N.I.Act, does not arise when
there is proof of signature obtained on a blank sheet of paper. In such event,
the plaintiff will have to establish not only execution of the promissory note,
but also passing of consideration. However, in the present case, the
evidence of PW.2 coupled with admissions of DW.1, clearly establishes the
factum of execution of the promissory note. However, at the same time, the
defendant has also successfully rebutted the presumption that the
consideration has reflected in the promissory note cannot be true.
35. In such circumstances, the trial Court ought to have found that
the burden of proving the sum of Rs.10,00,000/- shifted back to the
plaintiff. The plaintiff has not been able to establish the passing of
consideration to the tune of Rs.10,00,000/-. Therefore, the trial Court clearly
committed an error in holding that the plaintiff was entitled to a decree as
prayed for. At the same time, the defendant having admitted the execution
of the promissory note and borrowing Rs.2,00,000/- payable with interest at
24% has failed on his side to prove discharge of this admitted liability as
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
pleaded in the written statement. In such circumstances, the plaintiff cannot
be denied a decree for the admitted amount of Rs.2,00,000/-, repayment of
which has not been proved by the defendant.
36. In view of the pleadings and the evidence adduced at trial, this
Court is inclined to partly allow the appeal, setting aside the decree of the
trial Court and limiting the decree to a sum of Rs.2,00,000/- from the date of
execution of the promissory note, together with interest at 24% per annum
from the date of borrowing till the date of decree and thereafter, at the rate
of 6% per annum. The plaintiff is also entitled to proportionate costs in the
suit as well as the appeal.
37. Accordingly, this appeal is partly allowed. Consequently, the
connected Civil Miscellaneous Petition is closed.
31.10.2025
Speaking/Non-speaking : Yes/No
Index : Yes / No
Internet : Yes / No
rpl
To
The I Additional District Judge Court, Salem.
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
P.B. BALAJI,J.
rpl
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
31.10.2025
https://www.mhc.tn.gov.in/judis ( Uploaded on: 03/11/2025 09:37:01 pm )
