IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
VENUTHURUMALLI GOPALA KRISHNA RAO, J.
K. Saraswathi W/o. Erama Reddy – Appellant
Versus
G. Munilakshmamma W/o. T. Brahmananda Reddy – Respondent
First Appeal No.660 of 2008
Decided on : 30-01-2024
C.P.C. - Recovery of Promissory Note - Section 96 of the Code of Civil Procedure - O.S. No.244 of 2003 - Summary Judgment
Fact of the Case:
The plaintiff filed a Suit for recovery of a sum of Rs.4,07,100/- being the principal and interest due on a promissory note dated 25.03.2000 executed by the defendant. The trial Court dismissed the suit, leading to the present appeal.
Finding of the Court:
The trial Court rightly appreciated the evidence and held that the suit promissory note is not true, valid, and not binding on the defendant.
Issues: Whether the suit promissory note is true, valid, and binding on the defendant? Whether the decree and judgment passed by the trial court needs any interference?
Ratio Decidendi: The plaintiff failed to discharge the legal burden of proving the consideration for the promissory note, and the evidence presented did not inspire confidence. The defendant provided plausible evidence to disprove the plaintiff's case.
Final Decision: The Appeal Suit is dismissed without costs, confirming the decree and Judgment dated 02.06.2008, in O.S.No.244 of 2003 passed by the learned Additional Senior Civil Judge, Tirupati.
JUDGMENT :
This Appeal, under Section 96 of the Code of Civil Procedure [for short ‘the C.P.C.’], is filed by the Appellant/plaintiff challenging the Decree and Judgment, dated 02.06.2008, in O.S. No.244 of 2003 passed by the learned Additional Senior Civil Judge, Tirupati [for short ‘the trial Court’]. The Respondent herein is the defendant in the said Suit.
2. The appellant/plaintiff filed a Suit for recovery of a sum of Rs.4,07,100/- being the principal and interest due on a promissory note dated 25.03.2000 executed by the defendant in favour of plaintiff for Rs.2,95,000/- and for costs.
3. Both the parties in the Appeal will be referred to as they are arrayed before the trial Court.
4. The brief averments of the plaint, in O.S. No.244 of 2003, are as under:
The defendant borrowed an amount of Rs.2,95,000/- from the plaintiff on 25.03.2000 to meet her family expenses and executed a promissory note on the same day in favour of plaintiff agreeing to repay the same with interest at 24% per annum. But inspite of demands made by the plaintiff, defendant did not choose to pay any amount and has been postponing the same on one pretext or other. Plaintiff got issued a legal notice to defendant on 08.10.2001. The defendant received the same and gave a reply with false averments and failed to repay the amount. Hence, the plaintiff is constrained to file the suit.
5. The defendant filed a written statement by denying all the averments mentioned in the plaint and further contended as under: -
The plaintiff is a stranger to the defendant and she never borrowed any amount from her and she being an employee drawing hand some salary and she has no necessity to borrow money from the plaintiff. She further contend that she worked at various places and she was working at Thukivakam from 09.08.2000 and was residing in house bearing D.No.19-9-29/B, Lakshmipuram, Tiruchanoor road, Tirupati. Prior to that, she worked at Pattiputtur of Vadamalapet from 28.11.1994 to 25.05.2000.
ii) The defendant further contend that her husband conducted private chits in Tirumala during 1996 and one Lakshmi, resident of Tirumala was a subscriber of chits. She got the chit worth of Rs.30,000/- in the auction dated 10.12.1996 when she agreed to forego Rs.6,000/-, but the husband of the defendant could not arrange the prize money, thereby the said Lakshmi has obtained two pronotes from the defendant, who is an employee towards the security of said prize amount. Out of the said two pronotes only one pronote was filled up and the other one is a blank pronote. The husband of defendant went to Gulf country and paid the prize money to said Lakshmi, but she failed to return the pronotes. The defendant has contend that she has got two letters written by said Lakshmi to prove the above chit transaction and as the said Lakshmi failed to return the pronotes, the defendant got issued a legal notice to said Lakshmi and Kumar on 29.09.2003. Even though both of them are staying in the same house, the notice addressed to the said Kumar was served and Lakshmi Could get the notice returned unserved, therefore, the defendant filed a private complaint before II Additional Munsif Magistrate, Tirupati which was referred to police and after completing the investigation the police have filed charge sheet against said Lakshmi and Kumar. While sending them for judicial custody, the police have mentioned that the said Kumar delivered blank pronote to the plaintiff herein.
iii) The defendant further contend that on the date of alleged execution of pronote, she was working at Boyalagada, Pattiputtur and not residing at 19.9.29/B, Lakshmipuram and she was transferred from Boyalagadda to Pallasamudram on 25.07.2000. She used to stay at the place where she was working, thereby the address shown in the suit pronote is in correct and she need not pay the suit amount and prayed the Court to dismiss the suit.
6. Based on the above pleadings, the trial Court framed the following issues:
(i) Whether the suit prono
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The plaintiff must discharge the legal burden of proving consideration for a promissory note, failing which the suit may be dismissed.
The appellate court found the promissory note valid and supported by consideration, reversing the trial court's dismissal of the suit.
The court upheld the validity of promissory notes, emphasizing the defendant's failure to prove forgery or lack of capacity to lend, thus confirming the trial court's judgment.
The main legal point established in the judgment is the presumption of consideration under Section 118 of the Negotiable Instruments Act and the burden of proof on the defendant to rebut this presump....
The court reaffirmed that the burden of proof regarding the authenticity of a promissory note lies with the party alleging forgery, and the evidence must be evaluated on the preponderance of probabil....
The presumption of consideration applies to promissory notes once execution is admitted, placing the burden on the defendant to prove otherwise.
The burden of proof lies with the plaintiff to establish the execution of the promissory note and passing of consideration, and the credibility of witnesses and consistency of evidence are crucial in....
The court affirmed the validity of a promissory note and clarified the burden of proof regarding consideration, modifying the interest awarded.
The presumption under Section 118 of the Negotiable Instruments Act arises when execution of a promissory note is established, placing the burden on the defendant to disprove the transaction.
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