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Madras High Court
Hon'ble M. Thanikachalam, J.
S. A. No. 502 of 1993
Decided on 30.11. 2004
M. Nallusamy
versus
K. Subramaniam
Counsel :
Mr. V. Srikanth for Appellant
Mr. S. P. Subramanian for Respondent
The central legal point established in the judgment is the presumption of consideration for negotiable instruments under Section 118 of the Negotiable Instruments Act and the requirement for acceptable evidence to rebut this presumption.
Headnote:
Promissory Note - Dispute over Consideration - Negotiable Instruments Act - Section 118 - Summary: The court considered the dispute over the promissory note and its consideration. It analyzed the evidence and the provisions of the Negotiable Instruments Act, particularly Section 118, which provides a presumption of consideration for negotiable instruments. The court emphasized the need for acceptable evidence to rebut this presumption and highlighted the defendant's inconsistent defense. The court ultimately restored the judgment and decree of the trial court.
Fact of the Case:
The plaintiff sought a money decree based on a promissory note, which the defendant disputed, alleging lack of direct money transaction and disputing the signature and thumb impression. The trial court decreed in favor of the plaintiff, but the First Appellate Court overturned the decision.
Finding of the Court:
The court found that the execution of the promissory note was proved and emphasized the presumption of consideration under the Negotiable Instruments Act. It highlighted the defendant's inconsistent defense and the lack of evidence to rebut the presumption.
Issues: Dispute over promissory note consideration, reversal of trial court's decision, and the application of the Negotiable Instruments Act.
Ratio Decidendi: The court emphasized the need for acceptable evidence to rebut the presumption of consideration under the Negotiable Instruments Act and considered the defendant's inconsistent defense.
Final Decision: The court allowed the appeal, setting aside the decree and judgment of the First Appellate Court and restoring the judgment and decree of the trial court.
M. Thanikachalam, J. : The successful plaintiff before the trial Court, having failed to sustain the success before the First Appellate Court has come to this Court as appellant, for the restoration of the decree obtained by him in O.S. No. 211 of 1989 on the file of the District Munsif Court, Thiru chengode.
2. The plaintiff/ appellant moved the trial Court seeking a money decree on the basis of a promissory note dated 17.8.1986, for a sum of Rs. 10,000/-, which contemplates interest also, contending that the same was executed by the defendant for consideration, despite issue of notice, the defendant, who is not entitled to the benefits of any Debt Relief Act, has failed to repay the same and therefore, a decree should be granted for the recovery of the amount.
3. The respondent/defendant questioning the genuineness of the suit promissory note and alleging that he had no direct money transaction with the plaintiff and in a way disputing the signature and thumb impression in the suit promissory note, disputed the liability; further contending that there was chit transaction between the parties and on one occasion, he became the prized subscriber, where he had affixed his thumb impression and signature in several blank pronotes, to ensure prompt repayment of the installment and if at all that should have been used, because of the fact this defendant intervened on behalf of his brother demanding the plaintiff and Ramakrishnan to discharge the promissory note under which the plaintiff and one Ramakrishnan had borrowed some amount from his brother.
4. The learned District Munsif. Thiruchengode, considering the rival contentions as well as the oral evidence of PW 1 and DW 1 supported by respective exhibits, took the view that Ex. A 1 is the promissory note executed by the defendant, for the consideration of Rs. 10,000, agreeing to pay the same with interest thereon, but failed to repay the same despite demand. By taking this view, the suit came to be decreed on 9.4.1991, under which the defendant was directed to pay the suit claim with subsequent interest and cost, which was challenged by the respondent/defendant before the Second Additional District Judge, Salem in A.S. No. 139 of 1992.
5. The learned II Additional District Judge, considering the submissions made by either counsel as well as mainly relying upon Ex. B 4, came to the conclusion, that the suit promissory note was not supported by consideration, whereas it has come into existence, without consideration, during the chit transaction, in which the defendant had participated in the chit and became successful bidder. In this view, unable to agree with the case of the plaintiff, as well as the reasoning assigned by the trial Court, the First Appellate Court, upset the finding of the District Munsif, thereby allowing the appeal, dismissed the suit with cost, which is under challenge in this appeal.
6. While admitting the second appeal, this Court had formulated the following substantial question of law, for consideration :
"Whether the lower appellate Court was justified in reversing the judgment of the trial Court, especially when the plea of the defendant in Court was contrary to the written statement and prima facie Ex.D 4 is of doubtful origin, and hence he approached the appellate Court on this score had resulted in grave miscarriage of Justice".
7. Heard the learned counsel for the appellant, Mr. V. Srikanth and the learned counsel for the respondent, Mr. S.P. Subramaniam.
8. Ex. A 1 is the promissory note dated 17.8.1986 said to have been executed by the defendant in favour of the plaintiff, for a sum of Rs. 10,000/-, agreeing to repay the same with interest thereon, on demand. As evidenced by Ex. A2, on 17.3.1989, the plaintiff demanded the amount due under Ex.A1 through lawyer's notice, which instead of realizing the amount, elicited a reply-dated 8.5.1989 (Ex B2). Thus, the plaintiff/ appellant unable to realize the amount outside the Court, moved the foru
