Madras High Court
Nagaraj vs Mayilsamy on 23 September, 2025
Author: G.R.Swaminathan
Bench: G.R.Swaminathan
A.S(MD)No.261 of 2024
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved On : 30.04.2025
Pronounced On : 23.09.2025
CORAM
THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN
and
THE HONOURABLE MR.JUSTICE M.JOTHIRAMAN
A.S(MD)No.261 of 2024
and
C.M.P.(MD)No.13586 of 2024
Nagaraj .... Appellant / Defendant
Vs.
Mayilsamy ... Respondent / Plaintiff
Prayer : Appeal Suit filed under Section 96 of Civil Procedure Code, to allow
the appeal by setting aside the Judgment and decree dated 30.04.2024 made in
O.S.No.154 of 2017 on the file of the Additional District Court, Dindigul.
For Appellant : Mr.T.Antony Arulraj
For Respondent : Mr.Mayilsamy
1/11
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A.S(MD)No.261 of 2024
JUDGEMENT
(Judgment of the Court was made by G.R.SWAMINATHAN, J.)
This first appeal is directed against the Judgment and decree dated
30.04.2024 made in O.S.No.154 of 2017 on the file of the Additional District
Court, Dindigul. It is a suit for recovery of money.
2. The case of the plaintiff is as follows:-
The defendant had borrowed a sum of Rs.40,00,000/- to meet his urgent
expenses on 26.01.2015. He executed Ex.A1-pro note in the presence of the
witnesses. He had agreed to repay the same with interest at the rate of 12% per
annum. Since he did not pay either the principal amount or the interest in spite
of the repeated demands, the suit for recovery came to be filed.
3. The defendant filed written statement denying the whole transaction.
He contended that he never borrowed any amount from the plaintiff. He also
denied the execution of the suit pro note. The defendant would further state
that he had no necessity or need to borrow from the plaintiff. Based on the rival
pleadings, the court below framed the following issues:-
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“1. Whether the pronote dated 26.01.2015 was executed by the
defendant?
2. Whether the said pronote was supported by passing of
consideration?
3. Whether the plaintiff is entitled to recovery the suit amount
with interest as prayed for ?
4. To what other reliefs are the parties entitled?”
4. The plaintiff examined himself as P.W.1. The attestors of the pronote
were also examined. Thus, totally four witnesses were examined on the
plaintiff's side. Pronote was marked as Ex.A1. The defendant examined
himself as D.W.1. The handwriting expert was examined as D.W.2 and her
opinion was marked as Ex.C1. After considering the evidence on record, the
learned trial Judge came to the conclusion that the execution of the pro-note
was proved and that it was also supported by consideration. The suit was
decreed as prayed for. The defendant was directed to repay the said amount of
Rs.52,72,000/- with subsequent interest at the rate of 7.5% per annum on the
principal amount of Rs.40,00,000/- from the date of filing of the suit till the
date of decree. Interest was to run at the rate of 6% per annum on the principal
amount from the date of decree till the date of realization. Aggrieved by the
said Judgment and decree, this appeal came to be filed.
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5. When the case was listed in March, we referred the matter for
mediation. But mediation failed. Thereafter, the case was taken up on
24.04.2025 and 28.04.2025 and the case was argued on either side. Even
though the parties could not arrive at any consensus to resolve the issue, we felt
that even though the suit transaction may not be true, there was some other
transaction out of which there was some account of liability on the part of the
appellant. We therefore called upon the appellant to make the statement before
this Court as to whether he would still make any payment to the plaintiff even
if this first appeal is allowed in his favour. Pursuant to the nudging given by
this Court, the appellant filed an affidavit. He stated that there was a dealing
with one person at Usilampatti. The plaintiff is said to have paid a sum of Rs.
10,00,000/- to the said person and settle the appellant's liability. Since
difference of opinion arose between the appellant and the plaintiff as to how
much he should pay, the present suit came to be instituted.
6. Even while reiterating that the suit pro-note is a fabricated document,
the appellant undertook to pay a sum of Rs.20,00,000/- to the plaintiff towards
full and final settlement of all claims which the plaintiffs may have against him.
We indicated to the learned counsel for the plaintiff that even at this stage if
compromise is arrived at, we would direct the registry to refund the Court fee
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paid by the appellant to the tune of Rs.2,20,000/- to the plaintiff and thus, the
plaintiff would get some more amount. The learned counsel for the plaintiff /
respondent took time and on 29.04.2025, he reported no instructions. We
directed the Registry to print the name of the plaintiff and list the matter today.
Today, the plaintiff appeared in person and stated that he wants time to engage
another counsel. We made it clear to the plaintiff that the matter had already
been argued and that we are not inclined to grant further time. It was obvious
that the plaintiff sought adjournment only to avoid this Bench.
7.The point that arises for consideration is whether the plaintiff had
proved the due execution of the pro-note. In the written statement, the
appellant had categorically stated that he did not borrow a sum of
Rs.40,00,000/- as claimed by the plaintiff. He also denied having signed in the
suit pro-note. A specific plea was taken in the written statement that the
signature found in the pro-note is not that of the defendant. When the suit pro-
note has been assailed as a fabricated document, it was incumbent on the
plaintiff to prove the same. But interestingly, the defendant took steps to have
the pro-note referred for obtaining the handwriting expert's opinion.
Accordingly, reference was made and Ex.C1-report dated 17.03.2023 was
given by D.W.2.
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8. The expert opinion is to the effect that the questioned signature was
compared with the admitted signature and it was opined that the person who
wrote the admitted signature is not the author of the disputed signatures. The
reasoning sheet was also enclosed along with the opinion. But the trial Court
did not go by the expert opinion because comparison was made with the
defendant's signature in a sale deed that was executed four years earlier.
According to the learned trial Judge, the opinion given by the expert by
comparing the signatures after a gap of four years cannot be safely relied upon.
The learned trial Judge chose to go by the testimony of P.W.1 to P.W.4 which
was to the effect that the defendant signed Ex.A1-pro-note in their presence.
The learned trial Judge also invoked the presumption under Section 118 of the
Negotiable Instruments Act. The court below also went by the fact that the
plaintiff's children are employed abroad and that he had the wherewithal. We
are not able to endorse the approach of the trial Court. It is true that the plaintiff
and the defendant hail from the same village and that the plaintiff as well as the
attestors and also the scribe of the pro-note are known to the defendant. But it
is not for the defendant to ascribe reason as to why the attestors as well as the
scribe have chosen to support the plaintiff. In civil proceedings, the standard
of proof is one of preponderance of probabilities. The defendant by seeking
reference to the handwriting expert and by getting opinion from the expert in
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his favour has discharged the onus cast on him. The trial court had summarily
brushed aside the testimony of the expert. The pro-note is dated 26.01.2015.
But the suit was filed on 21.09.2017. The suit has been filed straight away. It
was not preceded by any notice. Of-course, there is no legal requirement or
stipulation that the money suit has to be necessarily preceded by issuance of
notice. But the fact is that no notice was given.
9. The Hon'ble Supreme Court in the decision reported in 2025 SCC
OnLine SC 793 (The Correspondent, RBANMS Educational Institution v.
B.Gunashekar & anr) held as follows :
“(A) Whenever, a suit is filed with a claim that Rs. 2,00,000/-
and above is paid by cash towards any transaction, the courts must
intimate the same to the jurisdictional Income Tax Department to
verify the transaction and the violation of Section 269ST of the
Income Tax Act, if any,
(B) Whenever, any such information is received either from the court
or otherwise, the Jurisdictional Income Tax authority shall take
appropriate steps by following the due process in law,
(C) Whenever, a sum of Rs. 2,00,000/- and above is claimed to be
paid by cash towards consideration for conveyance of any
immovable property in a document presented for registration, the
jurisdictional Sub-Registrar shall intimate the same to the
jurisdictional Income Tax Authority who shall follow the due process
in law before taking any action,
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(D) Whenever, it comes to the knowledge of any Income Tax
Authority that a sum of Rs. 2,00,000/- or above has been paid by way
of consideration in any transaction relating to any immovable
property from any other source or during the course of search or
assessment proceedings, the failure of the registering authority shall
be brought to the knowledge of the Chief Secretary of the State/UT
for initiating appropriate disciplinary action against such officer who
failed to intimate the transactions.
The above decision highlights the importance of carrying on high value
financial transactions only through instruments or through banking channels. In
this case, according to the plaintiff, cash was kept in his house and then handed
over to the defendant. The plaintiff would further claim that the amount was
withdrawn from the bank. It was further asserted that the transaction was
reflected in the income tax returns. But neither pass book nor the I.T returns
were marked. The solitary document marked on the side of the plaintiff was the
suit pro-note (Ex.A1).
10.The plaintiff claims that he gave a sum of Rs.40,00,000/- to the
defendant. This is a huge sum. The fact that the plaintiff's children are
employed abroad is not a sufficient circumstance to come to the conclusion that
he had the wherewithal to lend a sum of Rs.40,00,000/-. Even though the
defendant might not have challenged the capacity of the plaintiff, if the plaintiff
had proved his overall financial resources, that would lend assurance and could
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be one more factor for us to hold that the suit transaction is probable. The
appellant/defendant had totally denied the suit transaction. According to him,
he had dealing only with a person in Theni. Therefore, no onus lay on the
defendant. The burden of proof lay only on the plaintiff. As already noted, the
expert report is adverse to the claim of the plaintiff. When the passing of
consideration itself is doubtful, the oral testimony of the witnesses cannot fill
up the gap. The court below has treated the testimony of the witnesses
examined on the side of the plaintiff as gospel truth. We therefore conclude
that the due execution of the suit pro-note is not proved. The reasons given by
the court below are absolutely unsatisfactory. The impugned Judgment and
decree stand set aside. However, in view of the undertaking given by the
appellant, we direct the appellant to deposit a sum of Rs.20,00,000/- to the
credit of O.S.No.154 of 2017 on the file of the Additional District Court,
Dindigul, within a period of eight weeks from the date of receipt of copy of this
judgment. If the plaintiff is agreeable to abide by this Judgment and decree, he
can withdraw the same towards full and final settlement of all his claims
against the appellant. The said amount will lie in court deposit for a period of
four months in an interest bearing account. If the plaintiff has not withdrawn
the said amount by then, it is open to the appellant herein to take back the
amount deposited by him with accrued interest.
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11.This Appeal Suit is disposed of on the above terms. No costs.
Consequently, connected miscellaneous petition is closed.
[G.R.S., J.] [M.J.R., J.]
23.09.2025
Index : Yes / No
Internet : Yes/ No
rmi/SKM
To:
The Additional District Court, Dindigul.
Copy to:
The Record Keeper, V.R. Section,
Madurai Bench of Madras High Court, Madurai.
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G.R.SWAMINATHAN, J
and
M.JOTHIRAMAN, J.
rmi/SKM
23.09.2025
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