IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
V. Gopala Krishna Rao, J.
M. Sarojamma – Appellant
Versus
Maladri – Respondent
Appeal Suit No. 554 of 2002
Decided On : 16-07-2024
(A) Code of Civil Procedure, 1908 - Section 96 - Promissory Notes - Suit for recovery of amount due on two promissory notes executed by the defendant - The trial Court held the promissory notes to be true and valid, dismissing the defendant's claims of forgery and lack of capacity to lend - The plaintiff provided sufficient evidence to support the validity of the notes, while the defendant failed to substantiate her claims. (Paras 1, 12, 18, 20)
(B) Burden of Proof - The burden lies on the defendant to prove the non-existence of consideration for the promissory notes, which she failed to do - The presumption under Section 118 of the Negotiable Instruments Act applies, supporting the plaintiff's claim. (Paras 18, 19)
Facts of the case:
The plaintiff filed a suit for recovery of Rs.2,30,762/- based on two promissory notes executed by the defendant, who denied the execution and claimed forgery. The trial Court found in favor of the plaintiff.
Findings of Court:
The trial Court's judgment was upheld, confirming the validity of the promissory notes and the plaintiff's entitlement to the claimed amount.
Issues: The main issues were the authenticity of the promissory notes and the plaintiff's capacity to lend money.
Ratio Decidendi: The court ruled that the promissory notes were valid and binding, emphasizing the defendant's failure to prove her claims against the plaintiff.
Result: Appeal Suit is dismissed confirming the decree and Judgment dated 03.01.2001.
JUDGMENT :
V. Gopala Krishna Rao, J.
1. 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 03.01.2001, in O.S. No. 39 of 1999 passed by the learned Principal Senior Civil Judge, Kurnool [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.2,30,762/- being the principal and interest due on two promissory notes dated 10.05.1998 and 23.05.1998 executed by the defendant in favour of plaintiff for Rs.96,000/- and Rs.94,000/- respectively 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. 39 of 1999, are as under:
The defendant borrowed an amount of Rs.96,000/- from the plaintiff on 10.05.1998 for her legal necessities and executed a promissory note on the same day in favour of plaintiff agreeing to repay the same with interest at 24% per annum. Again the defendant borrowed an amount of Rs.94,000/- from the plaintiff on 23.05.1998 for her legal necessities 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 several demands made by the plaintiff, the defendant did not choose to pay any amount. Hence, Plaintiff got issued a legal notice to defendant demanding her to pay the amount covered under two pronotes, but the defendant neither paid the amount nor gave any reply to the notice issued by the plaintiff. 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 name is Sarojamma, but not Saroja as described in the plaint. The plaintiff is a close friend of one A.Manikya Rao. The defendant's daughter was given in marriage to the son of Manikya Rao. The marriage was performed in the year 1998, even prior to 1998 Manikya Rao is known to the family of defendant. After the marriage of defendant's daughter with the son of Manikya Rao, disputes arose between the two families and the said Manikya Rao in collusion with the plaintiff, has created these two pronotes by forging the signatures of the defendant in the pronotes. The plaintiff has no capacity to lend any amount much less suit amount. This defendant never borrowed any amount from the plaintiff 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 true and genuine?
(ii) Whether the plaintiff has no capacity to lend the amount?
(iii) Whether the plaintiff is entitled to suit amount as prayed for?
(iv) 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 to Ex.A6 and Ex.X1 to Ex.X6 were marked. On behalf of the Defendant DW1 was examined and Ex.B1 to Ex.B6 were marked.
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 03.01.2001, 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 Smt. Kopparthi Sumathi, learned counsel for appellant. None appeared for the respondent.
10. The learned counsel for appellant would contend that the plaintiff is not having sufficient capacity to pay the pronotes amount to the appellant and the Ex.A1 and Ex.A2 pronotes are fabricated documents, the learned trial Judge failed to appreciate the evidence on record in a proper manner and came to wrong conclusion and decreed the suit and she further contend that the appeal may be allowed by setting aside the decree and judgment passed by the learned trial Judge.
11. Having regard to the pleadings in the suit,
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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 presumption of consideration applies to promissory notes once execution is admitted, placing the burden on the defendant to prove otherwise.
The court affirmed the validity of a promissory note and clarified the burden of proof regarding consideration, modifying the interest awarded.
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 presumption of consideration under Section 118-A of the Negotiable Instruments Act applies unless disproven by the defendants.
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.
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 under Section 118-A of the Negotiable Instruments Act applies unless disproven by the defendants.
The court upheld the trial Court's judgment confirming the validity of the promissory note and the plaintiff's entitlement to recovery, emphasizing the burden of proof on the plaintiff.
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