The presumption of consideration under Section 118 of the Negotiable Instruments Act applies once execution of the promissory note is established, placing the burden on the Defendant to rebut this presumption.

JUDGMENT :

T. MALLIKARJUNA RAO, J.

1. The Appeal, under Section 96 of the Code of the Civil Procedure, 1908 (for short, ‘C.P.C.’), is filed by the Appellant/1st Defendant, challenging the decree and Judgment dated 20.10.2009 in O.S. No. 184 of 2003 passed by the learned IV Additional Senior Civil Judge (Fast Track Court), Visakhapatnam (for short ‘the trial Court’). 1st Respondent is the Plaintiff, who filed the suit in O.S. No. 184 of 2003 seeking recovery of Rs. 4,46,519/- with interest and costs from the Defendants based on the promissory note. The case against the 2nd Respondent/2nd Defendant was dismissed for default on 08.06.2005.

2. Referring to the parties as arrayed in the suit is expedient to mitigate potential confusion and better comprehend the case.

3. The factual matrix, necessary and germane for adjudicating the contentious issues between the parties inter se, may be delineated as follows:

On 14.02.2001, the Defendants borrowed Rs. 3,00,000/- from the Plaintiff to cover their family expenses and settle various debts. They executed a promissory note on the even date, agreeing to repay the principal amount along with interest @ 24% per annum. Despite numerous demands for repayment by the Plaintiff, the Defendants have consistently failed to meet their repayment obligations.

4. The 1st Defendant filed a written statement that refutes the claims presented in the plaint. She asserts that she never borrowed any money from the Plaintiff and did not execute the promissory note. The husband of the 1st Defendant, K. Venugopal Rao, borrowed Rs. 50,000/- in March 2001 from Sitharamanjaneya Financiers for his business. The partners of the financing firm, Nagireddy and Surireddy, obtained three blank promissory notes from her husband, with the Defendants 1 and 2 acting as guarantors for this loan. The 1st Defendant further claims that her husband repaid nearly Rs.40,000/- however, the finance company has not returned the blank promissory notes they retain. She alleges that the finance company, taking advantage of these blank notes, fabricated the current promissory note with the assistance of others and initiated the suit through the Plaintiff, a partner in the finance company. On 01.07.2002, Surireddy issued a legal notice to the Defendants demanding repayment of Rs.90,000/-, to which they responded through their counsel, denying the contents of the notice. Following ongoing harassment from Surireddy, on 16.02.2003, Venugopal Rao sent a telegram outlining the situation. Subsequently, on 03.03.2003, the 1st Defendant and her husband issued a registered notice, a copy of which was forwarded to the Commissioner of Police. On 31.03.2003, they sent another notice to Surireddy demanding the return of the blank promissory notes, which he failed to do. The 1st Defendant contends that the present suit has been filed with ulterior motives and objectives.

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

(1) Whether the suit promissory note is true, valid and binding on the Defendants?

(2) To what relief?

6. During the trial, on behalf of Plaintiff, PWs. 1 to 3 were examined and marked Ex.A.1. On behalf of Defendants, DWs. 1 to 3 was examined and marked Exs.B.1 to B.9 documents.

7. After completing the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs for Rs.4,46,519/- against the 1st Defendant only, together with subsequent interest at 12% per annum from the date of suit till the date of decree and after that interest at 6% per annum from the date of decree till realization on the principal sum adjudged, i.e. Rs.3,00,000/-. The suit claim against 2nd Defendant was already dismissed for default.

8. I have heard learned counsel appearing on behalf of the respective parties at length and have gone through the Judgment and findings recorded by the learned trial Court while decreeing the suit. I have also re-appreciated all the evidence on record, including the deposition of witnesse