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Andhra Pradesh High Court
Vanga Surya Rao - Appellant
Versus
Guttula Gopalakrishna - RESPONDENT
Decided On: 07-28-99
The presumption under Section 118 of the Negotiable Instruments Act applies in this case and that the defendant had failed to rebut the presumption of consideration.
Headnote:
NEGOTIABLE INSTRUMENTS ACT - PRESUMPTIONS AS TO NEGOTIABLE INSTRUMENTS - SECTION 118 - REBUTTABLE PRESUMPTION - EXECUTION OF PROMISSORY NOTE - FORGERY - BURDEN OF PROOF - EXPLANATION OF CIRCUMSTANCES - CONSIDERATION.
Fact of the Case:
The plaintiff filed suits for recovery of money based on promissory notes executed by the defendant's mother, Vanga Suramma. The defendant denied the execution of the notes and claimed they were forged. The trial court decreed the suits, holding that the notes were genuine and that the defendant was liable for the debts incurred by his mother.
Finding of the Court:
The court held that the presumption under Section 118 of the Negotiable Instruments Act, which presumes that a negotiable instrument was made or drawn for consideration and that it was accepted, indorsed, negotiated, or transferred for consideration, applies in this case. The court found that the plaintiffs had proved the execution of the promissory notes and that the defendant had failed to rebut the presumption of consideration. The court also held that the defendant's explanation that the notes were forged was not credible and that he was liable for the debts incurred by his mother.
Issues: 1. Whether the suit promissory notes are valid and the defendant is liable thereunder? 2. How far the explanation given by the defendant is permissible under Section 118 of the Act?
Ratio Decidendi: The court held that the presumption under Section 118 of the Negotiable Instruments Act applies in this case and that the defendant had failed to rebut the presumption of consideration. The court also held that the defendant's explanation that the notes were forged was not credible and that he was liable for the debts incurred by his mother.
Final Decision: The court dismissed the appeals and upheld the trial court's decree.
( 1 ) THESE three appeals arise out of the claims under promissory notes executed by late Vanga Suramma and on the basis of which the suits filed by the respective respondents were decreed.
( 2 ) AS No. 3169 of 1985 is filed by the defendant against the judgment and decree in OS No. 313 of 1984 dated 9-4-1985 on the file of the Subordinate Judge at Kakinada. The suit was filed by the respondent-G. Nageswara Rao on 21-11-1979 for recovery of Rs. 29,708-33 basing on the pronote dated 25-4-1978 for the loan of Rs. 25,000. 00 repayable with 12% interest per annum. Initially, the suit OS No. 313 of 1984 was filed against Vanga Suramina and subsequent to her death. Vanga Surya Rao was impleaded as the legal representative, who figured as the sole defendant in the latter two suits. Thus, the defendant-appellant is one and the same in all the three matters.
( 3 ) AS No. 3013 of 1985 is filed by the defendant against the judgment and decree in OS No. 315 of 1984 dated 9-4-1985 filed by the respondent-G. Gopal Krishna on 25-4-1981 for recovery of Rs. 27,200. 00 on the pronote dated 25-4-1978 for the loan of Rs. 20,000. 00 repayable with interest at 12% per annum.
( 4 ) AS No. 3016 of 1985 is filed by the defendant against the judgment and decree in OS No. 314 of 1984 dated 9-4-1985 on the file of the Subordinate Judge, Kakinada filed by Nagireddy Veeraswamy on 23-3-1981 for recovery of Rs. 20,400 on the pronote dated 21/03/1978 for the loan amount of Rs. 15,0007- repayable with interest at 12% per annum.
( 5 ) PENDING the appeals, the appellant-defendant died and his legal representatives were brought on record. Subsequently, the second appellant died and on a memo dated 13-6-1999 filed by the Counsel of the appellants 3 and 4 who are already on record are treated as the legal representatives of the appellant No. 2. The respondent-plaintiff in AS No. 3069 of 1985 died pending the appeal and his legal representatives were brought on record.
( 6 ) THE claims and defence in the plaints and the written statements run on the similar lines in all the three matters. Therefore for the sake of convenience these matters are being disposed of together even though the lower Court has passed three judgments and the parties are referred to as the plaintiffs and the defendant.
( 7 ) THE suit claims mainly rest on the allegations that the defendant Vanga Surya Rao is the only son of one Vanga Bala Rcimaiah and his wife Vanga Suramina. Under a settlement deed of the year 1914 executed by late Vanga Bala Ramaiah. Suramina became entitled to the immovable properties of her husband absolutely. But that time the son was not bom and Suramma enjoyed the properties in her own right. However, later on in view of heavy liabilities incurred by her son, she had to borrow various amounts from different persons for the purpose of discharging the debts incurred by her son. Thus she borrowed Rs. 25,000. 00 Rs. 20,000. 00 and Rs. 15,000. 00 under the pro-notes dated 25-4-1978, 25-4-1978 and 21-3-1978 respectively providing repayment with interest at 12% per annum. While Suramma was alive the demands were made by the plaintiffs but were not complied. However, the notice issued by the plaintiffs was replied with false allegations that the thumb mark of Vanga Suramma was obtained by Vanga Lakshmana Reddy on the pronotes by playing fraud on her and the same are not supported by consideration, but the said allegations are not correct. Suramma died subsequently and the defendant being the sole legal representative and enjoying her properties, is liable for payment of the debts. Hence the suits.
( 8 ) THE defendant in his written statement contested the claims on the ground that the allegation as to settlement of property of the year 1914 with absolute rights on Suramma is not correct. In fact the said settlement only confers life interest Surama and the vested remainder to the issues that may be born subsequent to the date of the deed. The defendant being
