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High Court of Judicature at Madras
THE HONOURABLE MRS. JUSTICE R. BANUMATHI
T.G.Balaguru
Versus
Ramachandran Pillai
Second Appeal No.92 of 2007
Decided on : 08-01-2010
(B)Negotiable Instruments Act, 1881(26 of 1881)-Sec.118- Negotiable Instruments-Promissory note-Consideration-Execution-Burden of Proof-Shifting-Direct evidence-Presumption-In a suit on negotiable instruments, to shift the burden of proof on the defendant, direct evidence of the plaintiff is not necessary.
Evidence required to shift the burden upon the Defendant need not necessarily be by direct evidence or oral or documentary evidence. Evidence of PWs.1 and 2 are sufficient to raise presumption under Section 118 of Negotiable Instruments Act. Para 15
(C)Negotiable Instruments Act, 1881(26 of 1881)-Sec.118- Negotiable Instruments-Promissory note-Holder in due course-Presumption-Examination-The holder of negotiable instrument is presumed to be the holder in due course and his examination is not necessary to prove his authority to hold such instrument.
Under Section 118(g) of Negotiable Instruments Act, holder of negotiable instrument is presumed to be the holder in due course. Each and every one of holder of negotiable instrument to enforce payment. In view of the presumption under Section 118 (g) of Negotiable Instruments Act, non-examination of Thiagarajan is not fatal to Plaintiff’s case.
Para 17
(D)Negotiable Instruments Act, 1881(26 of 1881)-Sec.118- Negotiable Instruments-Consideration-Execution-Proof-Presumption-Rebuttal-Once the execution of the negotiable instrument is proved by the plaintiff, it is for the defendant to rebut the presumption by establishing that he did not receive consideration by direct evidence or by bringing on record the preponderance of probabilities.
Presumption under Section 118 of Negotiable Instruments Act is one of law and thereunder a Court shall presume inter alia that negotiable instrument or the indorsement was made for consideration. Once statutory presumption is raised, onus of proving absence of consideration is on the executant. When initial burden is discharged by the Plaintiff, the burden shifts to the Defendant to prove that promissory note is not supported by valid consideration. It is for the Defendant to rebut the presumption by establishing that he did not receive consideration by direct evidence or by bringing on record the preponderance of probabilities. Para 18
(E)Negotiable Instruments Act, 1881(26 of 1881)-Sec.118- Negotiable Instruments- Consideration-Execution-Proof-Presumption-Rebuttal-Signature-Denial of signature- Mere plea of denial of signature in the negotiable instrument is not sufficient to rebut the statutory presumption raised under Section 118 of Negotiable Instruments Act.
Presumption could be rebutted either by circumstantial evidence or by oral evidence. Mere defence plea of denial of signature in Ex.A1 promissory note is not sufficient to rebut the statutory presumption raised under Section 118 of Negotiable Instruments Act. Para 20
(F) Indian Evidence Act, 1872(1 of 1872)-Sec.73-Signature-Comparison-Court-Courts should be extremely slow in venturing an opinion as to the genuineness of the signature available in any document on the basis of mere comparison.
As per Section 73 of Indian Evidence Act, Court is competent to compare the disputed writings of a person with the other writings which are admitted or proved to be his writings. Section 73 of Indian Evidence Act gives express power to the Court to compare the disputed handwriting with admitted writings. Appellate Courts are also the competent to exercise powers under Section 73 of Evidence Act. Such comparison by the Court is with a view to appreciate the other evidence available on record on the question of writings. Prudence demands that Court should be extremely slow in venturing an opinion on the basis of mere comparison. Court should be slow to base its conclusion on such mere comparison. Para 23
(G) Code of Civil Procedure, 1908(5 of 1908)-Sec.34- Interest-Interest pendent lite- Court-Power-The matter of awarding pre-suit interest is a matter of substantive law and the award of interest pendente lite and from the date of decree is discretionary- Judicial discretion in awarding interest pendente lite has to be exercised on sound judicial principles so as to advance the cause of justice. The matter of awarding pre-suit interest is a matter of substantive law. In the suit promissory note [Ex.A1], Defendant agreed to repay the amount with interest at the rate of 24% p.a. Courts below awarded pre-suit interest at contractual rate of 24% p.a. In so far as interest pendente lite, award of interest from the date of suit to the date of decree is entirely discretionary. Judicial discretion in awarding interest pendente lite has to be exercised on sound judicial principles so as to advance the cause of justice. Para 26
(H) Code of Civil Procedure, 1908(5 of 1908)-Sec.34- Interest-Interest pendent lite- Commercial transaction-Even if the contract rate of interest is more, in the case of a transaction which is not a commercial transaction, the Court will be justified in awarding interest at 6% p.a. from the date of decree to the date of realisation.
Grant of interest from the date of decree to the date of payment is also discretionary. Even if the contract rate of interest is more, in the case of a transaction which is not a commercial transaction, the Court will be justified in awarding interest at 6% p.a. from the date of decree to the date of realisation. Awarding interest pendente lite by the trial Court at the rate of 24% p.a. and future interest at the rate of 9% p.a. is unreasonable and is to be reduced. Para 28
This Second Appeal arises out of concurrent findings of Courts below decreeing Plaintiffs suit for recovery of amount of Rs.1,17,900/-with subsequent interest based on promissory note. Unsuccessful Defendant is the Appellant.
2. Case of Plaintiff is that Appellant-Defendant borrowed a sum of Rs.50,000/- from one Thiyagarajan and executed Ex.A1 promissory note [19.06.1997] and the said promissory note was endorsed in favour of Plaintiff for consideration. Further case of Plaintiff is that Defendant paid Rs.100/- on 16. 2000 and the said payment was endorsed in the suit promissory note. After issuing pre-suit notice, Plaintiff filed the suit for recovery of suit claim of Rs.1,17,900/- along with subsequent interest and cots.
.3. Resisting the suit, Defendant filed written statement denying execution of any promissory note. Defendant raised plea that he never knew Thiyagarajan and that Thiyagarajan connived with one Murugesan Pillai and filed the suit. Defendant also pleaded that any amount more than Rs.20,000/-ought to have been paid by way of cheque and therefore, the suit is not maintainable.
4. On the above pleadings, trial court framed four Issues. On the side of Plaintiff, Plaintiff himself was examined as PW1 and attester of suit promissory note one Sekar was examined as PW2. Exs.A1 and A2 were marked. On the side of Defendant, Defendant was himself examined as DW1. No document was marked on the side of Defendant. Specimen signature of Defendant was marked as Ex.X1.
5. Upon consideration of oral and documentary evidence and exercising power under Section 73 of Indian Evidence Act, trial Court compared the disputed signature of the Defendant in Ex.A1 promissory note with his admitted signature in the Written Statement and Vakalat and Ex.X1 and arrived at the conclusion that the disputed signature in Ex.A1 promissory note is that of the Defendant. Since plea of forgery had been taken by the Defendant, trial Court held that defence plea regarding incapacity of Thiyagarajan to pay the amount will not be an issue arising for determination and on those findings, trial Court decreed Plaintiffs suit.
6. Being aggrieved by the decree of suit, Defendant filed A.S.No.31/2005 before Principal District Court, Nagapattinam. Lower Appellate Court also held that Plaintiff has proved borrowal of amount of Rs.50,000/- by the Defendant on 19.06.1997 from the said Thiyagarajan and also payment of Rs.100/- on 15.06.2000 acknowledging the liability and thereby reviving the limitation. Holding that Ex.A1 promissory note and endorsement in the promissory note is genuine and valid, lower Appellate Court confirmed the Judgment of trial Court and dismissed the Appeal preferred by the Defendant.
7. Being aggrieved by the concurrent findings of Courts below, unsuccessful Defendant has filed this Second Appeal. At the time of admission the following substantial questions of law were formulated for consideration:-i) Whether the Courts below are right in decreeing the suit without appreciating ingredients under the provisions of Sections 118, 121 and 122 of the Negotiable Instruments Act? ii) Whether the Courts below are right in accepting the contention of the respondent that the burden lies with the defendant? iii) Whether the Courts below failed to consider under Section 118 of the Negotiable Instruments Act that the burden of proof switches to the plaintiff once the signature and genuineness of the pro-note (Ex.A1) were disputed by the defendant?
.8. Contending that Defendant never borrowed any amount from one Thiyagarajan and executed Ex.A1 suit promissory note and that the said Thiyagarajan never endorsed the suit promissory note infavour of Plaintiff, Mr.S.Saravanan, learned counsel for the Appellant has submitted that Courts below failed to note that comparison of signature arises only when the original payee of the pronote is examined. Learned counsel for the Appellant further contended that Plaintiff has not proved that he is
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