The presumption of consideration under Section 118 of the Negotiable Instruments Act and the admissibility of account books under Section 34 of the Evidence Act.

JUDGMENT:- This appeal is by the defendant and is directed against the judgment and decree passed by the Subordinate Judge, Cachar, in Money Suit No. 21 of 1965.

2. The facts briefly are that the defendant borrowed from the plaintiff, on 31-7-63, Rs. 6,000/- by executing three hand-notes, each for Rs. 2000/- promising to repay the amounts on demand with interest at the rate of 5 per cent per month. According to the plaintiff the three hand-notes were executed by the defendant on the same date for the convenience of repaying the amounts. The plaintiffs further case is that the defendant borrowed another sum of Rs. 1,000/- from him on 17-5-64 without any document and promised to repay this sum also with interest. As the defendant has failed to pay the amount in spite of demands, the plaintiff has filed the present suit for Rs. 8,500/- inclusive of interest.

3. The defendant has filed a written statement resisting the plaintiffs suit. His material pleas are that he is a big businessman dealing in dry fish. The plaintiff also, at the relevant time, had business in dry fish, but he has closed his business in fish in preference to business of money-lending. His case is that he borrowed from the plaintiff Rs. 2,000/- on 14th Jaistha and Rs. 1000/- on 13th Ashara of 1370 B.S. without documents. The defendant again requested the plaintiff for a loan of Rs. 3,000/- but the plaintiff agreed to pay that amount later on and asked the defendant to execute the three hand-notes on 31-7-63 for Rs. 6,000, for the amount of Rupees 3,000/- already taken and for Rs. 3,000/-, which was promised to be paid later. According to the defendant, no money was paid on 31-7-63 except a small sum of Rs. 5/-. Later on, it is pleaded, the plaintiff paid him Rs. 2,500/- on 21st Sravana, Rs. 300/- on 2nd Sravana, and Rs. 200/- on 25th Sravana. In effect the defendant has admitted the receipt of Rs. 6000.00 Rs. 3000.00 before, and Rs. 3000/- after, the execution of the hand-notes. The defendant takes the plea of payment of Rs. 2250/- on different dates during 1370 B. S., and of Rs. 2060/- on different dates during 1371 B. S. According to him there was a balance of Rs. 1695/- only to be paid to the plaintiff, after he had paid Rs. 4310/- in all. He further pleads that after payment of Rs. 4310/-, he demanded back the two hand notes from the plaintiff in the later part of 1371 B. S., but the plaintiff refused to return the hand-notes and promised to return all the three hand-notes after the entire amount was paid. The defendant has stated " ...... as the defendant was aggrieved the plaintiff entered the payment in his A/C book". As the plaintiff did not return him the hand-notes he has stopped further repayment. The defendant has denied the oral loan of Rs. 1000/- alleged to have been taken on 17-5-64.

4. The learned Subordinate Judge has framed a number of issues of which we are concerned with issues Nos. 5 and 6. They are:

"5. Is the plea of payment by defendant true?

6. Is the story of giving an oral loan of Rs. 1000/- by plaintiff to defendant true?"

After trial he has rejected the pleas of the defendant and found the plaintiffs case proved and decreed the suit for Rs. 8,500/-, as claimed.

5. Let us first examine the plaintiffs claim of Rs. 6000/- based on the three hand-notes. Before that let us consider the law on the point.

6. Section 118 of the Negotiable Instruments Act provides a special rule of evidence in case of a promissory note. It, inter alia, provides:

"118. Until the contrary is proved, the following presumptions shall be made:

(a) that every negotiable instrument was made or drawn for consideration,...............".

In a suit on hand-note, if the execution thereof is admitted or proved, under Section 118 (a) of the Act, there shall be a presumption that the hand-note is for consideration, and the burden is on the defendant to prove the absence of consideration. In the instant case the defendant has admitted the execution of the three hand-notes pro