IMPORTANT POINT
The appellate court found the promissory note invalid due to lack of consideration and conflicting evidence, leading to the dismissal of the plaintiff's suit.

JUDGMENT :

(V. Gopala Krishna Rao, J.)

1. The appeal is filed against the judgment and decree dated 29-4-2005 passed by the learned Senior Civil Judge, Kavali, in O.S. No.29 of 2001. The appellant is the defendant and the respondent is the plaintiff in the said suit. During the pendency of the appeal, the sole appellant died and the 2nd appellant herein, who is his wife, is brought on record as his legal representative by order dated 20-3-2024 in I.A. No.3 of 2024.

2. For the sake of convenience, the parties herein will be referred to as arrayed before the trial Court.

3. The case of the plaintiff as narrated in the plaint, in brief, is as follows:

(a) The suit is filed for recovery of Rs. 7,74,000/- together with subsequent interest and costs.

(b) It is pleaded that the defendant borrowed a sum of Rs. 4,50,000/- from one Kaliki Papi Reddy on 15-4-1998 and executed a promissory note on the same day in his favour undertaking to repay the same with interest at 24% per annum either to him or his order on demand. The defendant did not pay any amount due in spite of several demands. Therefore, the said Papi Reddy got issued a legal notice dated 24-02-1999 to the defendant calling upon him to repay the amount due. Though the defendant received the said notice, he failed to pay any amount nor did he send any reply thereof. The said Papi Reddy transferred the above promissory note in favour of the plaintiff for collection on 01-4-2001 at Kavali under transfer endorsement effected on the back of the said promissory note. The plaintiff informed the defendant of the transfer and demanded him to pay the amount due. The plaintiff also got issued a legal notice dated 11-4-2001. The defendant is not an agriculturist and therefore, rate of interest is claimed at 24% per annum. The defendant is not entitled to the benefits of Act No. 2/1990. Hence, the suit.

4. Brief averments in the written statement filed by the defendant are as follows:

(a) It is denied that the defendant borrowed a sum of Rs. 4,50,000/- from one Kaliki Papi Reddy on 15-4-1998 and executed a promissory note on the same day in his favour agreeing to repay the same with interest at 24% per annum either to Papi Reddy or his order on demand. It is also denied that the defendant did not pay any amount due in spite of several demands. It is admitted that Papi Reddy got issued a legal notice on 24-02-1999 to the defendant calling upon him to pay the amount due and the allegation in the said notice is denied. The defendant got issued a reply notice on 15-3-1999.

(b) It is contended that the defendant has no acquaintance with Papi Reddy, who is a close friend of Dr. Bysani Rama Rao and his brother Bysani China Malakondaiah. There was no need or necessity to borrow such huge amount of Rs. 4,50,000/- from Papi Reddy on 15-4-1998. Papi Reddy is just binamidar and name-lender and actual instigator and beneficiary of Dr. Bysani Rama Rao, who is running a pediatric clinic by name Sarala Clinic in Nellore. The defendant along with the said Bysani Rama Rao, Peteti Subba Rao and Shyam Krishna carried on a business viz., Sri Ranganadha Beverages Company Private Limited, Nellore, as distributors of Pepsi cool drinks for Nellore and Chittoor districts and sustained heavy losses. Since September, 1992, disputes arose among them and the said Bysani Rama Rao and Peteti Subba Rao started pressing the defendant to make good the loss sustained by them on the allegation that he is responsible for the loss.

(c) It is further contended that Peteti Subba Rao created an agreement of sale as though executed by the defendant in favour of himself, his brother and mother in respect of family property of the defendant and filed a suit in O.S. No.297 of 1997 on the file of Senior Civil Judge's Court, Nellore, for specific performance of agreement of sale. Dr. Bysani Rama Rao also filed a criminal complaint on 07-11-1993 against the defendant, Peteti Subba Rao and five others under Sections 406 and 420 of IPC in C.C. No.