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2005(1) Bankmann 163
MADRAS HIGH COURT
S. Sardar Zackria Hussain, J.
Ayyakannu Gounder — Appllant
versus
Virudhambal Ammal. — Respondent
S.A. Nos. 231 and 266 of 1994
Decided on 29.11.2004
For the Appellant:Mr. V. Raghavachari, Advocate.
For the Respondent:Mrs. P. V. Rajeswari for Ms. J. Juliet Pushpa, Advocates.
IMPORTANT POINT
Promissory note executed without consideration rebuts presumption available under Section 118 of the
Act.
Headnote:Negotiable Instruments Act, 1881—Section 118—Suit for recovery based on promissory notes—Promissory note executed within a short span of one week, in favour of mother-in-law and daughters-in-law casts doubt about passing of consideration—Failure to prove assignment—Assignors also not examined—Defendant’s reply to legal notice questioning circumstances under which promissory notes were executed without consideration rebutted presumption under Section 118 of the Act—Judgments and decrees in both suits set aside.
Held: The very fact that all the promissory notes came to be executed within a short span of one week, viz., one promissory note in favour of mother-in-law and two promissory notes in favour of daughters-in-law ‘ ~ throws a doubt with regard to the passing of consideration for the said promissory notes and it appears there is truth in the case of the defendant that without receiving any amount, he executed the promissory notes on the basis of which both the suits have been filed.
The plaintiff has also not proved the assignment in his favour. Though as per the endorsement on the promissory notes in both the suits, both the promissory notes have been assigned in favour of the plaintiff, and both of which have been marked as Ex. A-2 in both the suits and in which it is written that after receiving the entire amount due towards principal and interest both the assignments were made in favour of the plaintiff, the plaintiff as P.W. 1 in her evidence has stated that she paid only the principal amount for both the promissory notes in obtaining assignment. Both the assignors have also not been examined despite the fact the defendant clearly denied in the reply notice about the execution as well as the receipt of the consideration.
It is well settled that the plaintiff cannot pick holes in the defendant’s case to establish his case. The definite case has been taken by the defendant right from the beginning and by sending reply on 9.8.1986 to the lawyer notice caused by the assignors in both the suits on 16.4.1986 that under what circumstances the promissory notes came to be executed without receiving consideration by the defendant and as such, the defendant has clearly rebutted the presumption under Section 118 of the Negotiable Instruments Act as held by this Court in 2000 M.L.J. 682 (cited supra).
(Paras 23, 24 & 25)
Result: Appeal allowed.
S. Sardar Zackria Hussain, J.—The defendant in O.S. Nos. 117 of 1988 and 130 of 1988 on the file of the District Munsif Court, Thirukoilur, who was unsuccessful before the first Appellate Court, has filed both these appeals.
2. The parties are described as per their rankings in the suits.
3. The respondent/plaintiff filed both the suits to recover the amount due on the suit promissory notes.
4. As per plaint in O.S. No. 117 of 1988, it is the case of the plaintiff that the defendant on borrowing a sum of Rs. 8,500/- from Rammohan Mud-aliar’s wife Mallika Ammal of Madavilakam village, Thirukoilur Taluk, who is the daughter-in-law of the plaintiff, executed a promissory note in that suit on 9.2.1985 agreeing to repay the same with interest at 12% per annum. The said Mallika Ammal assigned the suit promissory note in favour of the plaintiff on 7.1.1988 after receiving the principal and interest due on the said promissory note. Despite several demands and in spite of the lawyer notice dated 21.1.1988, which was received by the defendant, the amount due was not paid. Since the defendant is an agriculturist, the suit O.S.No.117 of 1988 was filed claiming the amount due with future interest at 9% per annum.
5. The suit O.S. No. 117 of 1988 was resisted by the defendant in the written statement denying the execution of the promissory note in that suit on 9.2.1985 for Rs. 8,500/- in favour of Mallika Ammal after receiving the amount and that it was assigned to the plaintiff after receiving the amount due towards principal and interest. It is further stated that when the defendant demanded Rs. 10,000/- on 17.4.1973, plaintiff’s husband Amirthalinga Mudaliar agreed to lend which is repayable with interest at 36% per annum and with a view to pay interest properly, by adding a sum of Rs. 10,000/-, the defendant is to execute mortgage deed for Rs. 20,000/- in favour of his brother-in-law Panchatchara Mudaliar and also execute promissory note for Rs.20,000/- in favour his wife, the plaintiff. Accordingly by executing the mortgage deed and promissory note, the defendant borrowed the sum of Rs. 10,000/- from the plaintiff’s husband. On 16.2.1985 when the amount was calculated, the defendant had to pay Rs. 5,000/- towards principal and interest for
which amount by adding a sum of Rs. 4,000/-, the defendant executed a promissory note for Rs. 9,000/- on 16.2.1985, in which the defendant signed on two revenue stamps and also signed below the revenue stamps. On 16.4.1986 the plaintiff caused a notice to the defendant demanding amount due on the promissory note dated 16.2.1985 executed by the defendant; and for the amount due on the promissory note executed in favour of the Mallika Ammal for Rs. 8,500/- on 9.2.1985; and for the amount due on the promissory note executed on the same date in favour of Jayarani Ammal, which were suitably replied. The plaintiff filed a suit in O.S. No. 567 of 1986 to recover the amount due on the basis of the promissory note dated 16.2.1985 which was contested by the defendant by filing written statement and in view of such enmity, the plaintiff and her husband along with family members joining together sent notices dated 21.1.1988 and 25.1.1988 stating that the plaintiff got assignment of the promissory notes executed in favour of Mallika Ammal and Jayarani Ammal, which were also replied. The plaintiff’s husband is in Government service and also doing money lending business and so he obtained the promissory notes in favour of his two daughters-in-law fraudulently and thereafter created the assignment in favour of his wife, the plaintiff. The defendant did not execute the promissory note either to Mallika Ammal or to Jayarani Ammal and also no amount was received either from Mallika Ammal or from Jayarani Ammal.
6. In the suit O.S. No. 117 of 1988, the plaintiff examined herself as P.W.1 and her younger brother one Panchatcharam as P.W. 2, who is an attestor in the promissory note in that suit and also another atte
