The main legal point established in the judgment is the rebuttable nature of the presumption under Section 118 of the Negotiable Instruments Act and the burden on the defendant to disprove the presumption by raising a probable defense.

1. The plaintiff in O.S.No.201 of 1998, on the file of the Principal Sub - Court, Kumbakonam is the appellant.

2. The suit was instituted on Ex.A.1 Promissory Note, whereunder on 15.06.1998 defendant /respondent is stated to have received Rs.1,00,000/- from the plaintiff promising to repay it with 24% interest p.a. It was attested to by one Sivasankaran and Anbalagan. Since the amount was not paid, on 09.10.1998 plaintiff issued Ex.A.2 (= Ex.B.1) notice to the defendant. It was acknowledged by him under Ex.A.3. However, neither he paid the amount nor replied him. Hence, the suit was filed.

3. The claim was resisted by the defendant filing a written statement, wherein he had stated that he did not know who the plaintiff is, he has no necessity to borrow Rs.1,00,000/- from him executing a promissory note. Defendant knows one Gurumurthy of Innambur Village in Kumbakonam Taluk, borrowed amounts on different dates from him, totalling Rs.1,90,000/-, paid him Rs.1,74,750/-through Anbalagan, Lab Technician and Sivasankaran, an employee of Thanjavur Co-op. Marketing Federation, only a small amount was due, after several years, Gurumurthy demanded the balance, defendant had sold his house and settled the loan amount. Defendant also guaranteed the loan of one Raja, but he had absconded. In the circumstances, defendant had executed 3 or 4 promissory notes and Gurumurthy promised him not to take any action on those promissory notes. However, using one of them plaintiff had filed this suit. After the receipt of his lawyer notice, when defendant contacted Gurumurthy, he promised him no further action. So, he is not liable to pay any amount to the plaintiff.

4. Trial Court framed necessary issues, tried the suit, plaintiff Sivaprakasam examined himself as P.W.1 and the attestator Anbalagan as P.W.2 and marked Exs.A.1 to A.3, while defendant Dhandapani examined himself as D.W.1 and marked Exs.B.1 to B.3.

5. Considering the above evidence and the rival submissions, the trial Court decreed the suit with 12% interest p.a. with pro-costs.

6. Aggrieved, defendant appealed to the Principal District Court, Thanjavur in A.S.No.28 of 2006. The First Appellate Court taking note of the fact that on the basis of Ex.A.1 and a pronote in favour of Gurumurthy, both have engaged same Advocate; inconsistent evidence of P.W.2 regarding the place of execution of Ex.A.1; as per the Income Tax Act, after 30.06.1984, more than Rs.20,000/-has to be paid only by cheque, but, plaintiff states that he had paid the entire amount in cash; on the date of trial, Gurumuruthy was also present in the trial Court; plaintiff is also not able to say the litigation expenses of the suit, thus, the appellate Court held that the presumption under Section 118 of the Negotiable Instruments Act will not arise and thus, dismissed the suit. In the circumstances, plaintiff had directed this second appeal.

7. According to the learned counsel for the appellant, defendant has admitted his execution of the suit promissory note. In such circumstances, the presumption under Section 118 of the Negotiable Instruments Act will arise.

Cited –

(i) MOHAMMED ALI Vs. ABDUL SINAB [2001 (1) CTC 281] and

(ii) NATARAJAN Vs. MARAPPA GOUNDER [AIR 2005 MADRAS 90]). Defendant did not dislodge this presumption. The First Appellate Court has misread the evidence, not viewed the matter in proper perspective and wrongly set aside the well reasoned judgment of the trial Court.

8. On the other hand, the learned counsel for the respondent would submit that defendant can disprove the case of the plaintiff either by adducing independent evidence or based on the evidence of plaintiff. Plaintiff has to prove his payment of money and execution of promissory note by the defendant. (Cited BHARAT BARREL & DRUM MFG. CO. Vs. AMIN CHAND PAYRELAL [1999 (3) SCC 35] andJANAKIRAMAN CHETTIAR Vs. NARASIMHAN [2001 (2) CTC 268]) But, plaintiff did not do so. Thus, the First Appellate Court has correctly set aside the judg