Plaintiff must establish passing of consideration for promissory notes, and failure to do so shifts evidential burden to plaintiff

JUDGMENT:

1. The Appeal, under Section 96 of the Code of the Civil Procedure, is filed by the appellant/defendant challenging the decree and Judgment dated 15.03.2012 in O.S.No.539 of 2008 passed by the learned IV Additional Senior Civil Judge, Guntur (for short, ‘trial court’). Respondent is the plaintiff in the said suit, who filed the suit in O.S.No.539 of 2008 seeking recovery of Rs.6,86,666/-with interest and costs from the defendant based on two promissory notes.

2. The parties will hereinafter be referred to as arrayed before the trial Court.

3. The facts leading to the present Appeal, in a nutshell, are as under:

Plaintiff has been working as Manager in Sai Renuka Lodge, Jinna Tower Center, Guntur, owned by Desu Veera Raghavamma @ Lalitha and her sister Vuggirala Venkayamma @ Laxmi, who is the wife of Pothuraju Venkateswarlu. The defendant was involved in real estate business along with Venkateswarlu and used to visit the lodge frequently. The plaintiff purchased 5 plots through the defendant but due to differences that arose later, the plots could not be conveyed to the plaintiff. As a result, the plaintiff requested the defendant to return the amount received for the plots. As the defendant had no ready money, he executed two promissory notes for Rs.2,00,000/-each on 05.05.2005, agreeing to repay the same with interest @ 24% p.a. The defendant did not pay the amount as promised and kept postponing the payment citing ongoing disputes between the business partners. Plaintiff waited for payment, but as three years approached and with no settlement in sight, the plaintiff filed the suit.

4. In the written statement, the defendant contends that the suit is filed in collusion with V.Srinivasa Rao to have wrongful gain. There was no prior demand made before the suit was filed. He lacks wordly wise knowledge, having only completed education upto SSC. He did real estate business in the name of Renuka Real Estate along with Srinivasa Rao and Pothuraju Venkateswarlu. Due to his close relationship with them and their better education, he used to follow their instructions. They convinced him that his signature was necessary for real estate transactions and trusted them and signed on blank papers including blank promissory notes. Later, differences arose with Srinivasarao and the defendant stopped his business. When he asked for the papers containing his signatures, Srinivasarao and Venkateswarlu informed him that the papers had been torn into pieces and there was nothing to worry about. On enquiry, the defendant learnt that they had been using the signed papers to create forged documents and file suits in the name of their nominees. Previously, the Srinivasarao had filed several suits in various courts. The defendant filed his written statements and contested those suits. Plaintiff never approached the defendant and never paid any amount to this defendant. As such, there is no basis for him to choose to return any advance amount and offer to execute promissory notes does not arise.

5. Based on the above pleadings, the trial Court framed the following issues:

(1) Whether the plaintiff is entitled for the suit amount with interest thereon?

(2) To what relief?

6. During trial, on behalf of the plaintiff, P.Ws.1 to 4 were examined and Exs.A1 to A.6 were marked. On behalf of the defendant, D.W.1 was examined and Exs.B1 to B.3 were marked.

7. After completion of trial and hearing the arguments of both sides, the trial Court decreed the suit with costs for Rs.6,86,666/-, and the defendant shall pay the same together with interest @ 6% p.a., on Rs.4,00,000/-from the date of suit till payment.

8. Sri Ghanta Sridhar, learned counsel for the appellant/defendant contends that the suit promissory notes are concocted and pointed out lack of correlation between the pleadings and the plaintiff’s evidence. Even if it is assumed that the appellant executed the suit promissory notes, they are considered void as they were materially altered making them fall