Goa High Court
TITO MENEZES, J. C.
Joseph Mariano Santos Pinto - Appellant
Versus
Aires Concocao Rodrigues - Respondents
Second Appeal No. 15 of 1972
Decided On : 6 August 1975
NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 118(A) - CONSIDERATION - PAST DEBT AS CONSIDERATION FOR PROMISSORY NOTE - VALIDITY.
Fact of the Case:
Plaintiff sued to recover the sum of Rs. 500/- due to him on a promissory note dated February 16th, 1967, payable on demand. The defendant admitted owing the plaintiff Rs. 485/- for a she-buffalo purchased in May 1966, but claimed that the promissory note was executed without consideration.
Finding of the Court:
The court held that the past debt was sufficient consideration for the promissory note, and that the defendant was liable to pay the amount due on the note.
Issues: Whether a sum of money due some time prior to the execution of the pro-note can be good consideration for the issuance of a pro-note.
Ratio Decidendi: The court relied on Section 118(a) of the Negotiable Instruments Act, which provides a special rule of evidence in the case of negotiable instruments contrary to the case of an ordinary contract. The party denying consideration has to prove want of consideration or, in other words, to rebut the presumption that the negotiable instrument was made or drawn for consideration. The statutory presumption in favour of there being a consideration for every negotiable instrument continues unless it is rebutted.
Final Decision: The appeal was allowed, the order of the District Judge was set aside, and the order of the trial Court was restored. The respondent was ordered to pay the costs throughout.
2. The plaintiff filed a suit to recover the sum of Rs. 500/- due to him on a promissory note dated February 16th, 1967. The pro-note was payable on demand. It was alleged by the plaintiff in the plaint that the sum due on the pro-note was borrowed by the respondent/defendant from the plaintiff. In paragraphs 2 and 3 of the written statement the defendant states :-
2. The plaintiff and the defendant were, dealing with the business of she-buffaloes. The defendant had purchased from the plaintiff the last she-buffalo in or about May, 1966 and that the defendant was in arrears to the plaintiff an amount of Rs. 485/- from the purchase of she-buffalo in or about month of May. 1966. The plaintiff induced the defendant to execute a promissory note dated 16-2-1967, even though the defendant did not receive any consideration on 16-2-1967. The defendant states that as no consideration is passed to him on the day of execution of promissory note, he is not obliged to pay any sum to the plaintiff and consequently the defendant is not liable to pay any interest.
3. The defendant denies that he has not paid any money to the plaintiff. The defendant states that on the execution of the promissory note dated 16-2-1967 about 4 months thereafter, the defendant paid to the plaintiff a sum of Rs. 300/-out of 485/-.
3. As for the payment of Rs. 300/- alleged to have been made by the defendant to the plaintiff there is no issue framed in the Appellate Court and the point was not at all considered. From the evidence on record, it is seen that the defendant was not serious about the alleged payment of Rs. 300/-. Besides his bare statement that that sum was given by him to the plaintiff there is nothing to corroborate his statement.
4. The learned District Judge came to the conclusion that though the plaintiff had stated that the consideration for the pro-note was given in cash, he had to admit in the course of evidence that the consideration was the price of a she-buffalo sold by the plaintiff to the defendant and that therefore there was no consideration for the pro-note.
5. I must admit that there is variance in the plaint and the evidence on record, but the defendant has in his written statement clearly admitted that he owed to the plaintiff a sum of Rs. 485/- on account of a she-buffalo purchased by him in May 1966 and that the plaintiff induced the defendant to execute the said
promissory note. The argument of the defendant however is that as the consideration did not pass on the day the promissory note was executed, he was not obliged to pay any sum to the plaintiff. It is evident that before the plaintiff proceeded to prove his case the real issue was whether the money which the defendant owed to the plaintiff on account of the she-buffalo purchased by the defendant in May 1966 was sufficient consideration for the promissory note executed on 6-2-1967. The general rule is that the plaintiff is bound by his pleadings but the only reason for this rule is that a party will be seriously prejudiced if his opponent is allowed to substantiate a case different from that pleaded. From the principles laid down in Gendli v. Joynal, 26 Cal WN 294 = (AIR 1922 Cal 254); Bankey v. Gudo, AIR 1930 Pat 476; Ghulam v. Azim Bibi, 139 Ind Cas 662 = (AIR 1932 Lah 570); Danmmu v. Narasingh, AIR 1940 Pat 187; Ratanshani v. Bannuji, AIR 1925 Nag 434; Ananda Chandra v. Bhojalal, ILR 50 Cal 292 = (AIR 1923 Cal 142) it follows that every variance between pleading and proof is not necessarily fatal and a slight variance will not be regarded as such. Every such variance should be carefully watched to see that the opposite party is not taken by surprise. As in all such cases, the real test is whether the other party has been taken by surprise. Where there has been no surprise and the parti
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