The execution of a negotiable instrument, once the signature is proved or admitted, shifts the burden of proof to the maker. Consideration is presumed in the case of negotiable instruments and need not be proved independently.

V. S. Deshpande, J.

( 1 ) ORDER XXXVII rule 3 Civil Procedure Code read as follows :-

"3. Defendant showing defence on merits to have leave to appear- (1) The Court shall, upon application by the defendant, give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to support the applcation. (2) Leave to defend may be given unconditionally or subject to such terms as to payment into Court, giving security, framing and recording issues or otherwise as the Court thinks fit. "

( 2 ). Rules 3 (1) lays down two sets of circumstances the existence of either of which would entitle the Court to give leave to appear and to defend the suit. The defence must disclose either of these two circumstances, namely, (1) which would make it incumbent on the holder to prove consideration or (2) such other facts as the Court any deem sufficient to support the application. If leave is to be granted for any of the above two reasons it may be either unconditional or conditional. But if any of the above to reasons is not apparent from the defence pleaded by the defendant in the written statement and/or documents on record, then the leave has to be refused. At this stage only the averments of the defendants and other admitted documents on record have to be seen. The averments of the defendant may be assumed to be true unless they are rebutted by other admitted facts on record. At this stage there is no question of appreciation of evidence or believing or disbelieving the averments of the parties.

( 3 ). The suit before the trial judge was based on two documents which are hundis stamped with stamps of Rs. 5 00 each The document are stamped and are dated 12th August, 1972. Bach of them is in favour of the plaintiff for a sum of Rs 10,00000. Each of them is admitted to bear the signatures of the defendant. The plaintiff sues for the recovery of Rs 20,400. 00 being the consideration of the hundis namely Rs. 20,000. 00 plus interest at Rs. 1. 00 per cent per annum. In defence the defendant stated that he had signed blank hundis on the stamp forms. He said that this was as a collateral secuirty for the price of goods which the defendant was buying from a partnership firm of which the plaintiff was a partner. He said that the price was paid up by him to the partnership on 11th August, 1972 and nothing was therefore due to the plaintiff on the basis of these two hundis . He, therefore, sought the leave of the Court to appear and defend the suit under Order XXX Vll rule 2 Code of Civil Procedure

( 4 ). The only question for decision befora the trial court was whether leave should be granted (either unconditional or conditional) or whether it should be refused. As stated above the powers of the trial court in deciding this question had to he exercised solely in accordance with the criteria laid down in Order XXXVII rule3 (1) reproduced above. The trial court purported to grant unconditional leave to detend the suit for the following reasons stated in its own words.

"thus, it will be a case where the pliantiff will be required to prove consideration for the hundis which are alleged to have been signed by the defendant in blank as collateral security for the goods supplied by Messrs. Nav Bharat Conduits to the defendant. Therefore, in any opinion, it is a fit case to grant unconditional leave to the defendant which is accordingly granted "

( 5 ). It will be seen that leave was granted by the trial court solely on the first ground stated in rule 3 (1), namely, that the defence had disclosed facts as would make it incumbent on the holder to prove consideration. The trial court did not make any reference to the alternative rea. son laid down by rule 3 (1), namely, other facts as the court may deem sufficient to support the application.

( 6 ). For the success of this revision application under section 115 Civil Procedure

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