Defendant to rebut the presumption.

The Judgment was delivered by :

Mohamed Ali, the appellant herein is the defendant in the suit for recovery of money on promissory notes.

2. Abdul Sinab, the responent herein, filed a suit against the appellant contending that he had advanced money by himself to the appellant and he had also got the promissory notes assigned from third parties and those assignors had also advanced money to the defendant/appellant. The trial Court dismissed the suit. However, the lower appellate Court decreed the suit in favour of the plaintiff-respondent. Hence, the present Second Appeal by the defendant/appellant.

3. The case of the plaintiff is this :-

"The defendant obtained a loan of Rs. 9,000/- on 2-10-1988 and another loan of Rs. 9,000/- on 7-10-1988 and executed promissory notes in favour of one Abdul Rafi. On 11-9-1989, the said Abdul Rafi assigned the right of collecting the same on the promissory notes in favour of the plaintiff. The defendant obtained a loan of Rs. 9,000/- on 1-12-1988 and another Rs. 9,000/- on 25-12-1988 from one Mohammed Gani and executed promissory notes. These promissory notes were assigned by the said Mohammed Gani on 23-12-1989 in favour of the plaintiff. Besides these amounts, the defendant received Rs. 9,000/- each on various dates, namely, 14-1-1989, 21-1-1989, 25-1-1989 and 29-1-1989 and executed promissory notes in favour of the plaintiff. Since these amounts were not paid, the appellant/plaintiff issued a notice on 26-12-1990. The defendant sent a reply stating that he gave 10 signed blank promissory notes to one Basheer Ahemed on 7-1-1989, since as a subscriber of chits conducted by the said Basheer Ahemed, being the successful bidder, he took chit for Rs. 45,000/- and by way of security to discharge the balance amount, he signed in those promissory notes and there is no relationship as creditor and debtor between them and as such, the plaintiff would not be entitled to the recovery of money, as there is no consideration passed on to the defendant either by the plaintiff or by the assignors."Hence, the suit."

4. The case of the defendant is this :-

"The defendant never received money either from the plaintiff or from the assignors.

He was one of the subscribers of the chits conducted by Basheer Ahemed, who was the tenant under the defendant. He joined in 3 chits for a value of Rs. 30,000/- each on 7-1-1989. Being successful bidder in the auction, he took the chit for Rs. 45,000/-. In order to get the security from him for payment of the balance chit amount periodically, the said Basheer Ahemed obtained his signature in the blank promissory notes containing Rs. 9000/- each. After payment of the chit amount, he requested Basheer Ahemed to give back the promissory notes. But, the said Basheer Ahemed evaded from handing over the said promissory notes. Subsequently, the said Basheer Ahemed informed him that he handed over the promissory notes to the plaintiff. To this effect, he had also given a written note to the defendant. Therefore, the suit is liable to be dismissed."

5. On the basis of these pleadings, necessary issues were framed by the trial Court. On plaintiff's side, the plaintiff examined himself as P.W. 1 and two others as P.Ws. 2 and 3 and Exs. A-1 to A-14 were marked. On the side of the defendant, the defendant was examined as D.W. 1 and Ex.B-1 was marked. As noted above, the trial Court dismissed the suit. But, the lower appellate Court allowed the appeal filed by the respondent/plaintiff and decreed the suit.

6. In this Second Appeal, the following substantial questions of law have been raised in the Grounds of Appeal :-

(i) Whether the lower appellate Court is right in drawing presumption under Section 118 of the Negotiable Instruments Act, which the facts of the case disproves the existence of debtor and creditor relationship?

(ii) Whether the lower appellate Court ought not to have dismissed the suit when the plaintiff had failed to produce the books of accounts to establish the suit tra