The presumption of consideration in promissory notes under the Negotiable Instruments Act is rebuttable, placing the burden on defendants to prove non-existence of consideration.

Judgment :

VENUTHURUMALLI GOPALAKRISHNA RAO, J.

This second appeal is filed aggrieved against the Judgment and decree dated 08-3-2022 in A.S.No.203 of 2017 on the file of the VII Additional District Judge, Visakhapatnam, Visakhapatnam District, confirming the Judgment and decree dated 24-8-2017 in O.S.No.93 of 2015 on the file of the VI Additional Senior Civil Judge, Visakhapatnam.

2. The appellants herein are the defendants 1 and 2 and the respondent herein is the plaintiff in O.S.No.93 of 2015 on the file of the VI Additional Senior Civil Judge, Visakhapatnam.

3. The plaintiff initiated action in O.S.No.93 of 2015 on the file of the VI Additional Senior Civil Judge, Visakhapatnam, with a prayer for recovery of a sum of Rs.5,99,660/- being the principal and interest due on a promissory note dated 20-01-2012 for Rs.3,50,000/- executed by the defendants in favour of the plaintiff agreeing to repay the same with interest and for costs.

4. The learned VI Additional Senior Civil Judge, Visakhapatnam, decreed the suit with costs. Felt aggrieved of the same, the unsuccessful defendants in the above said suit filed the aforesaid appeal before the first appellate Court. The learned VII Additional District Judge, Visakhapatnam, dismissed the first appeal by confirming the judgment and decree passed by the trial Court. Aggrieved thereby, the unsuccessful defendants/appellants approached this Court by way of second appeal.

5. For the sake of convenience, both parties in the second appeal will be referred to as they are arrayed in the original suit.

6. The case of the plaintiff, in brief, as set out in the plaint averments in O.S.No.93 of 2015, is as follows:

(a) It is pleaded that the defendants are husband and wife and both of them jointly borrowed an amount of Rs.3,50,000/- from the plaintiff on 20-01-2012 for the purpose of their family necessities and executed a demand promissory note in favour of the plaintiff agreeing to repay the same with interest at 24% per annum to the plaintiff or his order on demand. In spite of repeated requests made by the plaintiff, the defendants did not choose to repay any amount and postponing the same on some pretext or the other. When the plaintiff demanded the defendants for repayment of the amount due under the above said promissory note, in discharge of partial legally enforceable debt, the 1^st defendant issued a cheque drawn on Co-operative Bank Limited, Main Branch, Visakhapatnam, for a sum of Rs.3,00,000/- in favour of the plaintiff towards part satisfaction of the principal amount.

(b) It is further pleaded that surprisingly, the said cheque was returned with an endorsement “Funds Insufficient ” on 12-3-2014. The plaintiff filed a complaint under Sections 138 and 142 of the Negotiable Instruments Act, 1881, before the Judicial Magistrate of First Class, Kothavalasa, against the 1^st defendant and the same is pending. Hence, the suit is filed against the defendants for recovery of the promissory note amount along with subsequent interest and costs.

7. The defendants filed a written statement denying the contents of plaint averments and further contended as follows:

It is contended that there is no cause of action for the suit and they denied the alleged cause of action. The defendants never borrowed any amounts from the plaintiff, much less the alleged amount of Rs.3,50,000/- nor executed any promissory note dated 20-01-2012 in favour of the plaintiff. It is further contended that the 1^st defendant never issued any cheque to the plaintiff, much less the cheque bearing No.314941, dated 16-12-2013. The alleged pronote is a fabricated one and rank forged one. It is further contended that in view of financial disputes in between the plaintiff and the 1^st defendant in respect of real estate transactions, the present suit and the complaint under the provisions of N.I. Act were filed to harass not only the 1^st defendant but also his wife, who is the 2^nd defendant. Therefore, it is prayed to dismiss the suit with c