Judges : P.GOVINDA NAIR,K.SADASIVAN
ALEX MATHEW - Appellant
Versus
PHILIP - Respondent
Case No : A. S. No. 733 of 1972
Decided On : 03/20/1973
Advocates Appeared :
Panicker; Poti; For Appellant P. Balagangadhara Menon; For Respondent
Presumption of Consideration - Negotiable Instruments - Negotiable Instruments Act, 1881 - S.118(a), S.118(b) - Summary of Acts and Sections: The court discussed the presumption of consideration under S.118(a) of the Negotiable Instruments Act, 1881 and its interpretation. It highlighted that the presumption is only that every negotiable instrument was made or drawn for consideration, without indicating the nature of the consideration. The court also emphasized that failure to prove the particular consideration pleaded by the plaintiff does not automatically rebut the presumption. The judgment referenced various decisions and conflicting opinions on the matter, ultimately confirming the decree granted by the trial court against the appellant based on the presumption of consideration arising from the execution of cheques.
Fact of the Case:
The respondent claimed that the appellant and his father be jointly and severally made liable for the amount claimed in the plaint. The trial court found that the case pleaded by the plaintiff regarding borrowings by the defendants was not true, but still granted a decree against the appellant based on the cheques issued in favor of the respondent.
Finding of the Court:
The court confirmed the decree granted by the trial court against the appellant, emphasizing that the execution of the cheques raised the presumption of consideration, and thus, the liability of the appellant.
Issues: The issues in the suit revolved around whether the defendants had borrowed money from the plaintiff as alleged and whether the defendants were jointly and severally liable for the plaint amount.
Ratio Decidendi: The court emphasized that the failure to prove the particular consideration pleaded by the plaintiff does not automatically rebut the presumption of consideration under S.118(a) of the Negotiable Instruments Act, and confirmed the decree against the appellant based on the presumption arising from the execution of cheques.
Final Decision: The court confirmed the decree granted by the trial court against the appellant and dismissed the appeal, directing the appellant and the respondent to bear their costs throughout.
1. This is an appeal by the second defendant in a suit for money instituted by the respondent in which the respondent claimed that the appellant and his father, the first defendant is the suit, be jointly and severally made liable for the amount claimed in the plaint. The trial court found that the case pleaded by the plaintiff that there had been borrowings by the first and second defendants, as pleaded in Para.6, 7 and 8 of the plaint for the purpose of the business conducted by the first and second defendants is not true, and that the first defendant bad not borrowed any amounts as pleaded by the respondent. Issues 1 and 3, in the suit, are in these terms:
1. Whether the defendants have borrowed money from the plaintiff as alleged? 3. Whether the defendants are jointly and severally liable for the plaint amount?"
2. These issues were found against the respondent. However a decree was given to him against the appellant for the plaint amount on the basis of the cheques Exts P2 to P6 that were admittedly issued by the appellant in favour of the respondent. The appellant has "admitted that he issued those cheques in favour of the respondent. We shall later refer to the case of the appellant relating to the circumstances in which those cheques were issued.
3. Shortly stated, the contention raised on behalf of the appellant is that the case that the respondent pleaded having been found against by the trial court and the finding of the trial court in this regard having become final-the respondent has not filed any appeal from the decree the suit should have been dismissed even against the appellant. The respondent, on the other hand, sought to support the decree on the basis of the presumption arising under S.118(a) of the Negotiable Instruments Act, 1881 (for short the Act).
4. The case has been argued elaborately and a number of decisions have been referred to Certain aspects may be taken to be well settled. These are, that the presumption that can be drawn under S.118(a) of the Act is only that every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration. The presumption does not indicate the nature of the consideration. The presumption under the section is not that the consideration stated in the instrument is the consideration for the document; but that merely that the instrument is supported by consideration. This is the view that has been taken by the Bombay High Court in the decision in Tarmahomed Haji Abdul Rehman v. Tyeb Ebrahim Bharamchari (AIR. 1949 Bom. 257) and this view has been accepted by this Court in its decision in Kunhikalandar v. Abdul Khader (1971 KLT. 620). Decisions have been brought to our notice, wherein it has been laid down that when a plaintiff pleaded a consideration different from that stated in the negotiable instrument and failed to prove the particular consideration pleaded, the presumption available under S.118(a) will not be available to him. We need not attempt to consider the correctness of this view, because the negotiable instrument with which we are concerned (the cheques Exts. P2 to P6) does not contain as is to be expected any statement regarding the consideration for these cheques.
5. There has been conflict of opinion on the question whether the failure on the part of a plaintiff to prove the particular case relating to consideration that he pleaded would result automatically in the rebuttal of the presumption under S.118(a). One view is that the mere failure on the part of the plaintiff to prove the particular form of consideration that he pleaded does not rebut the presumption. This is the view taken by the Bombay High Court in the decision that we have already referred to, AIR. 1949 Bom. 257. We shall only refer in addition to the warning sounded by Sulaiman, J. as he then was, in Lal Girwar Lal v. Dau Dayal (57
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