SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Article Pause Article
judgment-img

1990 Supreme(Ker) 493

High Court of Kerala
P.K. Shamsuddin, J.
T Kutty Sankaran Nair - Appellant
Versus
Isappan Joseph - Respondent
A.S. No. 264 of 1984
Decided On : 20-09-1990

The main legal point established is that under S.118 of the Negotiable Instruments Act, there is a presumption of consideration for every negotiable instrument, and the burden is on the defendant to prove the absence of consideration to rebut the presumption.

Headnote:

Promissory Note - Consideration - Negotiable Instruments Act - S.118

Fact of the Case:

Plaintiff filed a suit on a promissory note against the defendant for non-payment of the amount. Defendant denied passing of consideration for the promissory note.

Finding of the Court:

The court found that the defendant failed to establish that no consideration had passed for the promissory note, and the presumption under S.118 of the Negotiable Instruments Act continued in favor of the plaintiff.

Issues: The main issue was whether the defendant successfully rebutted the presumption of consideration under S.118 of the Negotiable Instruments Act.

Ratio Decidendi: The court emphasized the principles under S.118 of the Negotiable Instruments Act, stating that the defendant must prove that no consideration had passed to rebut the presumption. Even if the plaintiff fails to prove the specific consideration mentioned in the promissory note, the presumption continues, and the plaintiff can succeed unless the defendant rebuts the presumption by establishing the absence of consideration.

Final Decision: The court set aside the judgment and decree of the lower court, allowing the appeal and decreeing the suit in favor of the plaintiff.

JUDGMENT

P.K.Shamsuddin, J.

1. Plaintiff in O. S. No. 8 of 1983 on the file of the Court of Subordinate Judge, Ottappalam, is the appellant. The suit is on a promissory-note.

2. Defendant executed a promissory-note in favour of the plaintiff on 8-2-1982 for Rs. 18,000/- undertaking to return the money on demand together with interest at 12% per annum for value received in cash. Defendant did not pay the amount inspite of demand and hence the suit.

3. Defendant admitted the execution of the promissory-note but denied the passing of consideration. On a consideration of the evidence in the case, the court below held that the promissory-note is not supported by consideration.

4. In this appeal, learned counsel for the appellant has challenged the finding of the court below. Ext. A1 is the promissory-note dated 8-2-1982 executed by the defendant for Rs. 18,000/-. The document recites that consideration was paid in cash for the purpose of constructing a kayyala and for other works in the properties purchased as per document Nos. 244, 245 and 246 of 1982. Defendant denied having received any consideration under Ext. A1. According to the defendant Ext. A1 happened to be executed in a peculiar circumstance. On the date of registration of the assignment deeds, plaintiff stated that there was a balance of consideration of Rs. 18,000/-. In order to see that registration of the assignment deed was not avoided at the instance of the plaintiff, the defendant signed the promissory-note which was prepared by the plaintiff. Ext. B1 dated 6-2-1982 is the sale deeds executed by the plaintiff in favour of the defendant, Ext. B2 of the same date is the sale deed executed by the plaintiff in favour of Annamma, the wife of the defendant, and Ext. B3 dated 8-2-1982 is another sale deed executed by one Ganapathi Nair in favour of the defendant. All these documents were registered on 8th February 1982.

5. Ext. A1, being a negotiable instrument, there is a presumption under S.118 of the Negotiable Instruments Act that it was executed for consideration. In the circumstances the burden is on the defendant to establish that there was no consideration passed. Defendant was examined as D. W. 1. In his evidence be staled that he did not get any amount by way of consideration for executing the promissory-note. According to him, the plaintiff insisted that if only the plaintiff executed Ext. A1 he would get the sale deeds Exts. B1 to B3 registered and that in order to avoid 'greater evil' his father asked him to sign the document Ext. A1. He gave evidence that the plaintiff demanded Rs. 18,000/- as balance of consideration for the assignments under documents Exts. B1 to B3. D. W. 1 stated that Ext. B4 dated 26-10-1982 is a notice sent by him pointing out fraud committed by the plaintiff. It may however be noticed that Ext. B4 was sent more than eight months after the execution of Ext. A1 promissory-note. Further Ext.B4 does not state that Ext. A1 promissory-note was executed without any consideration or that fraud was committed by the plaintiff in getting Ext. A1. It has come out in evidence that the plaintiff had sent a notice demanding the promissory-note amount. Admittedly Ext. A3 dated 16-6-1982 is the letter sent by the defendant in reply to the said notice. In Ext. A3 the defendant stated that his father was in Kottayam Medical College and that he would let the plaintiff know about the matter after his return. It is significant to note that there is no denial of passing of consideration or the liability under Ext. A1. If no consideration had passed as alleged by the defendant, I do not find any reason for the defendant not to send a notice stating that Ext. A1 was obtained under coercion and that he was not liable to pay the said amount immediately after the registration was over and after Ext. A1 was executed. Ext. B4 was sent several months after execution of Ext. A1 promissory-note and in Ext. B4 the defendant only makes certain complaints regarding the surve





















Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
whatsapp-icon Back to top