The presumption of consideration under Section 118 of the Negotiable Instruments Act, 1881, can be rebutted by evidence that the defendant had no capacity to lend the amount and that the promissory notes were given as collateral security for a business that was abandoned.

JUDGMENT

Subba Reddy Satti, J. - assailing the judgement and decree dated 30.11.2005 passed in OS No.158 of 2004 on the file of learned additional Senior Civil Judge, Kurnool, plaintiff filed the above appeal.

2. For brevity and clear understanding the parties to the appeal are referred to as they are arrayed in the plaint.

3. The plaintiff filed the suit for the recovery of an amount of Rs.5,14,932/-, principal amount being 3,00,000/-, basing on four promissory notes dated 06.06.2001 and two promissory notes dated 16.07.2001.

4. In the plaint it was contended inter alia that plaintiff and defendant, residents of Vijayawada, are acquainted with each other; that plaintiff being a mechanic came over to Kurnool for business; that defendant approached the plaintiff at Kurnool on 06.06.2001 for loan of Rs.2,00,000/- for his family necessities and executed four promissory notes each for Rs. 50,000/- on 06.06.2001 agreeing to repay the same with interest at 24% per annum; that defendant again borrowed Rs. 1,00,000/- from the plaintiff for his family necessities and executed two promissory notes for Rs. 50,000/- each on 16.07.2001 agreeing to repay the same with interest at 24% per annum; that in spite of demand and legal notice dated 18.05.2004, defendant failed to repay the money and sent reply dated 25.05.2004 denying the transactions and hence, filed the suit for recovery of amount.

5. Defendant filed written statement and contented inter alia that the court at Kurnool had no territorial jurisdiction to entertain the suit; that no consideration was passed under the promissory notes and the attestors belonged to Vijayawada.

6. It was further contented that plaintiff and defendant's father did kerosene business and used to sell the kerosene to truck drivers in Vijayawada, who in turn used kerosene instead of diesel, for long period; that plaintiff calculated the quantity in barrel at 200 litres however used to supply 170 litres; that during the course of carrying above said business plaintiff insisted for security and hence defendant's father gave eight blank printed promissory notes duly signed by the defendant as collateral security; that no transaction took place as alleged in the plaint and the Court at Kurnool has no jurisdiction; that truck drivers reported the mischief to the police and hence the business was abandoned and plaintiff shifted residence to Kurnool; that outstanding amount in the business was discharged by the defendant's father, however, dispute continued over payment of interest; that plaintiff has no capacity to lend the amount; that plaintiff is in possession of eight blank promissory notes which were given as collateral security and they were not returned; that to the notice issued by plaintiff, suitable reply was issued and he prayed the Court to dismiss the suit.

7. During the course of trial, plaintiff examined himself as P.W.1 and got examined scribe of 6 promissory notes as P.W.2. Exs.a-1 to a-10 were marked. On behalf of the defendant, he examined himself as D.W.1. However, no documents were marked.

8. The Trial Court on consideration of oral and documentary evidence dismissed the suit with costs by judgement dated 30.11.2004. aggrieved by the said judgment the above appeal was filed.

9. Heard, Sri J.M.U.V.Prasad learned counsel appearing for appellant and Sri M.Balasubrahmanyam learned counsel appearing for respondents. Pending appeal, sole respondent died and his legal representatives were brought on record as respondents 2 to 4 by order, dated 19.12.2008 passed in a.S.M.P.No.1022 of 2007.

10. The learned counsel for the appellant would contend that the evidence of P.W.1 and P.W.2 is consistent with regard to execution of Exs a-1 to a-6, passing of consideration and payment of amount. The observations of Court below, went against appellant, with regard to attestors coming from Vijayawada to Kurnool and writing on promissory notes using the same pen etc., are without proper appreciation of evidence. Thus, the l