Presumption rebutted on establishing defence.

JUDGMENT :- S. K. Songappa Gounder, the appellant herein, filed a suit on promissory note for recovery of a sum of Rs. 19,050/- with interest against the defendants. After trial, the suit was decreed only in respect of a sum of Rs. 5,000/- with interest. Challenging the same, the appellant/plaintiff filed an appeal before the lower appellate Court, which in turn dismissed the same. Hence, the Second Appeal.

2. According to the appellant/plaintiff, the 1st defendant on behalf of the 2nd defendant borrowed a sum of Rs. 15,000/- from the plaintiff and executed the suit promissory note. In spite of demand through notice dated 29-7-1993, the defendants failed to pay the said sum with interest. Hence, the suit was filed.

3. The suit was contested by the defendants by contending that the plaintiff started a chit transaction and the 2nd defendant joined as a subscriber. Every month, he paid Rs. 5,000/- towards chit subscription. The chit auction for the 7th instalment was held on 6-8-1990 and the 2nd defendant was the successful bidder. So, the 1st defendant received the chit amount from the plaintiff and executed the suit promissory note for Rs. 15,000/- on behalf of the 2nd defendant as security for the proper payment of the remaining three instalments. Subsequently, the 2nd defendant paid the 8th and 9th instalments. The last chit subscription was payable on 25-7-1993. Before the 2nd defendant could remit the last instalment and get back the promissory note given as security, the plaintiff issued the notice dated 29-7-1993 demanding the amount mentioned in the suit promissory note. A reply was immediately sent stating that the plaintiff would not be entitled to realise any amount under the promissory note except the last instalment of Rs. 5,000/-.

4. After framing the necessary issues, the trial commenced. The plaintiff examined himself as P. W. 1 and Exs. A-1 to A-4 were marked. On the side of the defendants, the 2nd defendant and the Accountant were examined as D. Ws. 1 and 2 respectively and Exs. B-1 to B-36 were marked.

5. After analysing the evidence, the trial Court accepted the case of the defendants and dismissed the claim of the plaintiff on the basis of the suit promissory note and decreed the suit only in respect of the amount of Rs. 5,000/-with interest at the rate of 9 per cent per annum.

6. The appellant/plaintiff filed an appeal before the lower appellate Court. Similarly, the defendants also filed a cross-objection challenging the decree in respect of interest at the rate of 9 per cent per annum on the sum of Rs. 5,000/- being the balance amount payable.

7. After hearing the learned counsel for the parties, the lower appellate Court dismissed both the appeal and the cross-objection and confirmed the judgment and decree rendered by the trial Court. Challenging the same, the appellant/plaintiff has filed this appeal.

8. The learned counsel for the appellant would mainly contend that under S. 118 of the Negotiable Instruments Act, once the execution of the Ex. A-1 promissory note was admitted by the respondents/defendants, it shall be presumed that the promissory note was executed on payment of consideration and it is for the drawer of the promissory note to establish his defence to show that the plaintiff would not be entitled to the decree on the said promissory note.

9. It is also submitted that the entries in Exs. B-1 to B-36 accounts books, which had been produced to show that the entire amounts relating to the chit transaction were paid back except Rs. 5,000/-, would not be sufficient to prove the case of the defence, as contemplated under S. 34 of the Evidence Act, since the author who made entries in the accounts books was not examined.

10. On these aspects, I heard the learned Counsel for the respondents.

11. I have carefully given my anxious consideration to the respective submissions.

12. There is no dispute over the legal aspect with reference to S. 118 of the Negotiable Instruments Act that once the executio