The burden of proof and legal presumption under Section 118 of the Negotiable Instruments Act in cases involving promissory notes.

P. DEVADASS, J.

1. In the Trial Court defendant won and in the 1st Appellate Court plaintiff won. In this Court, who is going to win, which we will decide appreciating the arguments of both sides and perusing the records of the case as well as the Judgments of the Courts below and also the decision cited.

2. It is a suit for recovery of money, instituted by the respondent/plaintiff based on Ex.A1, promissory note, dated 12.12.2000, for the principal sum of Rs. 23,000/- together with interest at the rate of 12% per annum, totaling to Rs. 29,210/-. The suit has been instituted, after the issuance of Ex.A2, notice, which has been acknowledged by the defendant under Ex.A3.

3. In the written statement, the defendant denied his execution of Ex.A1 and also disputed passing of consideration.

4. The Trial Court appreciated the evidence of P.Ws.1, 2 and D.W.1. It had doubted the execution of Ex.A1 and thus dismissed the suit.

5. However, 1st Appellate Court viewed the entire evidence from different angle. It believed the execution of Ex.A1 based on the evidence adduced and it had disbelieved the case of the defendant, thus, allowed the appeal and decreed the suit.

6. In the circumstances, the defeated defendant is before us.

7. The learned counsel for the appellant would contend that Ex.A1, which is stated to be a promissory note, it is not so, does not answer the description of a promissory note. Further, different reasons have been stated in Ex.A1, in plaint, in the evidence of P.Ws.1 and 2 as to the purpose of the borrowel.

P.W.2 is not sure when he has signed in Ex.A1 as attestor. Further, the year 2000 has been overwritten as 2006, thus, it is a material alteration. Further, full address has not been given in Ex.A1. Under the circumstances, the learned counsel for the appellant would submit that the plaintiff has not proved execution of Ex.A1.

8. On the other hand, the learned counsel for the respondent would submit that Ex.A1 has been endorsed on an adhesive stamp paper. It has all the essential ingredients of the promise to pay unconditionally which will fall under Section 4 of the Negotiable Instruments Act. In support of his contention, the learned counsel for the respondent would cite Essaki and another vs. S. Royappan, 1990 (2) MLJ 540.

9. The learned counsel for the respondent further submitted that the execution of Ex.A1 promissory note was in the year 2000, while the P.Ws. deposed in 2007, as human memory is not infallible as age goes, there is fading away of memory. However, the Trial Court blown out of proposition certain inconsequential matters as though they are very-very important matters, completely thrown away the plaintiff's case. P.W.2, scribe, is an illiterate. That is how the difficulty in writing Ex.A1. Top of it all, there is no reply from defendant to plaintiff's suit notice Ex.A2, which contains all the details of the plaintiff's case.

10. Ex.A1 is not in regular printed form of promissory note. It has been endorsed on a stamp paper. Execution in such stamp paper is valid (See – Essaki's 1990 (2) MLJ 540).

11. The essential ingredients for a promissory note under Section 4 of the Negotiable Instruments Act is that there must be promissor, promissee and unconditional promise to pay on demand. Ex.A1 contains all these characteristic features. Thus, it is a promissory note.

12. There were lot of confusion fairly for a long time as to the proving and disproving of a negotiable instrument, because of several conflicting decisions. In Bharat Barrel & Drum MFG. Go. vs. Amin Chand Payrelal, 1999 (3) SCC 35, the Honourable Apex Court laid down guidance with regard to proving and disproving of a negotiable instrument and application of Section 118 of Negotiable Instruments Act. The dictum of the Apex Court is that it is the first and foremost duty of the plaintiff to prove due execution of the promissory note. Once, it is so proved, arising of Section 118 of N.I. Act is automatic, which will also imply