IMPORTANT POINT
The presumption of validity of a promissory note under the Negotiable Instruments Act can only be rebutted by the defendant through substantial evidence, which was not provided.

JUDGMENT :

V.Gopala Krishna Rao, J.

This Appeal, under Section 96 of the Code of Civil Procedure [for short ‘the C.P.C.’], is filed by the Appellant/defendant challenging the Decree and Judgment, dated 06.04.2000, in O.S. No.680 of 1989 passed by the learned Additional Senior Civil Judge, Guntur [for short ‘the trial Court’]. The Respondent herein is the plaintiff in the said Suit.

2. The respondent/plaintiff filed the Suit for recovery of a sum of Rs.76,000/- being the balance of principal and interest due on a promissory note dated 20.11.1986 executed by the defendant in favour of one Ganta Udaya Lakshmi for Rs.40,000/- 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.680 of 1989, are as under:

The defendant borrowed an amount of Rs.40,000/- from one Ganta Udaya Lakshmi of Gudavalli on 20.11.1986 for her business purpose and executed a promissory note on the same day in favour of Ganta Udaya Lakshmi agreeing to repay the same, on demand, with interest at 24% per annum. But inspite of several demands made by Ganta Udaya Lakshmi, the defendant did not choose to pay any amount and the said Udaya Lakshmi transferred the suit pronote on 16.11.1989 in favour of the plaintiff. The plaintiff also tried to contact the defendant, but she was out of station, 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 defendant never borrowed any amount from Ganta Udayalakshmi and the suit pronote is rank forged one, in fact, the defendant did not know the said Udaya Lakshmi and the suit pronote with the forged signature of the defendant was brought into existence by the plaintiff and his men for wrongful gain 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 pronote is forged by the plaintiff?

(ii) Whether the defendant is a small farmer?

(iii) Whether the plaintiff is not entitled to suit amount?

(iv) Whether the defendant borrowed the suit amount for business purpose?

(v) To what relief?

7. During the course of trial in the trial Court, on behalf of the Plaintiff, PW1 and PW2 were examined and Ex.A1 and Ex.A2 were marked. On behalf of the Defendant DW1 was examined, but no documentary evidence was adduced on behalf of defendant.

8. After completion of the trial and on hearing the arguments of both sides, the trial Court decreed the suit with costs vide its judgment, dated 06.04.2000, against which the present appeal is preferred by the appellant/defendant in the Suit questioning the Decree and Judgment passed by the trial Court.

9. Heard Sri P.Rajasekhar, learned counsel for appellant and Ms.V.Bindu, learned counsel, representing Sri B.Adinarayana Rao, learned counsel for the respondent.

10. Having regard to the pleadings in the suit, the findings recorded by the trial Court and in the light of rival contentions and submissions made on either side before this Court, the following point would arise for determination:

Whether the trial Court is justified in decreeing the suit and whether the decree and judgment passed by the trial court needs any interference?

11. Point :

The case of the plaintiff is that the defendant borrowed an amount of Rs.40,000/- from one Ganta Udaya Lakshmi of Gudavalli on 20.11.1986 and executed Ex.A2 promissory note agreeing to repay the same with interest at 24% p.a. either to her or her order at Guntur and subsequently the said Udaya Lakshmi transferred the promissory note in the name of the plaintiff for collection and later on the defendant failed to discharge the suit debt and that the plaintiff is constrained to file the suit.

12. The suit is based on a promissory note said to have been executed by the defendant in favour of the transferor of the plaintiff by name Udaya Lakshmi, therefore, the burd