2012 Supreme(Mad) 1282
High Court of Judicature at Madras
G. RAJASURIA
M/s. Tamil Nadu Finance Corporation, by its Partner V. Subramaniam
Versus
K.B. Pandurangan(died) & Others
A.S.No.635 of 1991
Decided on: 12-03-2012
For the Appellant:C. Chinnasami, Sr. counsel for M/s. Haja Mohideen Gisthi, Advocate.
For the Respondents: R1 died, R2, R4 to R8, No Appearance, R3, Paper publication effected.
Headnote:A. INTEREST ACT, 1978 - Section 3 - Whether 25% interest per annum claimed by plaintiff and awarded by lower court is justificable - Whether pendente lite interest awarded at rate of 18% also was justified eventhough there was no reference in records that loan transaction was for commercial purpose - Plaintiff who has chosen to claim more interest should have been careful in getting it recorded that transaction for commercial purpose - But in pleadings nothing could be seen that loan was for commercial purpose - In a contract, if interest rate is unconscionable and usurious, court has got power to interfere - Rate of interest reduced from 25% to 18% from date of pronote till date of filing of suit - 6% per annum towards pendente lite and post decreetal stage would meet ends of justice - Decree and Judgment of trial court stands modified - No costs.
B. NEGOTIABLE INSTRUMENTS ACT, 1881 - Section 118 - Suit based on promissory note - Defendant resisted that there was no loan transaction based on pronote - but he borrowed a sum of Rs.11,000/- from plaintiff by creating mortgage by deposit of title deeds - After deducting service charges a sum of Rs. 9,829/- was paid by plaintiff to defendant by way of cheque - Trial court partly decreed suit by holding that suit promissory note was supported by consideration only to tune of Rs. 11,000/- out of Rs. 20,000/-. Hence this Appeal - Burden of Proof was on defendant to prove that suit promissory note was not supported by consideration to a tune of Rs.9000/- out of Principal sum of Rs. 20,000/- - Defendant failed to produce positive evidence - He would place reliance on entries in ledger book of plaintiff - Evidence can be in any form but that evidence should be consistent to that point - Section 138 of Negotiable Instruments Act contains a rebuttable presumption, but it should be adducing clinching evidence - There is no connection between loan transaction and entries - Merely because of on date of plaint, there was a ledger entry, it cannot be assumed that said entry was relating to suit transaction - Defendant trying to create a cloud in mind of court about suit transaction cannot be taken as evidence in rebuttal within meaning of Section 138 of Negotiable Instruments Act - Trial court by conjectures and surmises partly decreed suit - Decree of trial court modified - No costs.
Result : Appeal modified.
1. This appeal is focussed by the plaintiff in the suit, as against the judgement and decree dated 25.3.1983 passed by the Principal Subordinate Judge, Coimbatore, which was one for recovery of money.
2. This is a very old appeal of 20 years old. The original defendant died pending appeal and his L.Rs have been brought on record, but no one has appeared before this Court, despite service of notice having been effected as per law.
3. The parties, for the sake of convenience, are referred to hereunder according to their litigative status and ranking before the trial Court.
4. A recounting and recapitulation of the relevant facts absolutely necessary and germane for the disposal of this appeal would run thus:
(i) The appellant/plaintiff filed the suit for recovery of a sum of Rs.37,800/- based on the suit promissory note.
(ii) The original defendant resisted the suit by pleading that there was no loan transaction based on pro-note, but he borrowed only a sum of Rs.11,000/- from the plaintiff and in consideration of the same, he created a mortgage by deposit of title deeds in favour of the plaintiff. In fact, after deducting service charges, a sum of Rs.9,829.75 was paid by the plaintiff to the defendant by way of cheque on 28.9.1977. In such a case, the suit claim is bad in law and accordingly, the defendant prayed for the dismissal of the suit.
(iii) Whereupon the trial Court framed the issues.
(iv) During trial, on the plaintiff's side, one Rengasamy examined himself as P.W.1 and Exs.A1 to A9 were marked. On the defendants' side, the original defendant examined himself as D.W.1 and marked Exs.B1 to B9.
(v) Ultimately, the trial Court decreed the suit partly holding that the suit promissory note was supported by consideration, only to a tune of of Rs.11,000/-, out of Rs.20,000/-as claimed in the suit.
5. Being aggrieved by and dissatisfied with the same, the plaintiff filed this appeal on various grounds.
6. The learned counsel for the appellant/plaintiff, by placing reliance on the grounds of appeal, would develop his arguments, the pith and marrow of them would run thus:
(i) The trial Court fell into error in holding as though the suit promissory note was not supported by consideration to a tune of Rs.9,000/-out of Rs.20,000/, which finding of the trial Court is totally against Section 118 of the Negotiable Instruments Act.
(ii) The evidence of P.W.1 as found set out in the judgement of the trial Court itself would amply make the point clear that the trial Court was misled by the defendant, by pointing out certain entries, which were not related to the suit transaction.
(iii) In the absence of any evidence adduced on the side of the defendant, the trial Court was not justified in rejecting the part of the claim of the plaintiff.
Accordingly, the learned counsel for the appellant/plaintiff would pray for decreeing the suit in entirety.
7. The records would reveal that the appeal was filed in the year 1983; however, it was numbered only in the year 1991. When this Court called for records from the trial Court, the reply was to the effect that the relevant part-III records were destroyed by the District Court, as per Rules and only the following documents were sent to this Court:
8. The learned counsel for the appellant/plaintiff also would submit that they are not having any certified copies of the deposition as well as the documents marked and there is no possibility of re-constituting those records also; however he would entreat and implore that from the available materials, the appeal might be disposed of.
9. The original defendant died and his LRs have not entered appearance, despite, as pointed out above, they having been served as per law, including service by publication as far as R3 is concerned.
10. The points for considerations are as follows:
(i) Whether the trail Court was justified in rejecting part of the claim of the plaintiff, without adhering to Section 118 of the Negotiable Instruments Ac