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IN THE HIGH COURT OF MADRAS
(Madurai Bench)
A.Selvam J
A.Anbukkarasu v. K.Santhanam,
AS(MD)No.245 of 2009 dtd. 22.9.2010
For Applt. : Mr.K.Periyasamy
For Respt. : Mr.R.G.Shankar Ganesh
Ratios
a. A party raising the defence of fraud, undue influence or coercion as defence to his case should specially aver the details of such fraud, undue influence or coercion in his pleadings.
b. When the validity of any transaction or contract is challenged on the ground that the consent was procured by undue influence, the initial burden of proving undue influence lies upon the person who pleads it. But, if the transaction appears to be unconscionable, the burden shifts upon the person who relies upon it.
c. If a pronote is executed for the past consideration, it would be a good consideration for the execution of that pronote and binding on the person executing it.
Headnote:(A)Negotiable Instruments Act, 1881(26 of 1881)-Sec.118-Indian Contract Act, 1872(9 of 1872)-Sec.15, 16, 17-Code of Civil Procedure, 1908(5 of 1908)-O.VII R.1-Money suit-Promissory note-Execution-Coercion-Undue influence-Fraud-Consideration-Burden of proof-Pleadings-Necessity-Plaintiff had sought to recover money due on the pro note allegedly executed by the defendant-Defendant contended that out of enmity, on a complaint by the plaintiff, he was taken by the police to the police station where the police asked him to pay certain sum to the defendant and to ensure payment, the police got from him a blank signed pronote which was fraudulently used to create the suit pronote-When the trial Court decreed the suit, the defendant preferred the appeal-Parties stood by their stands-Held, the defendant did not narrate the details of the fraud and coercion committed by the plaintiff in the plaint and in the absence of detailed averments, court would not presume coercion, fraud and undue influence-When there was some amount due from the defendant, presumption of consideration under Sec.118 could be drawn-Appeal was dismissed.
(B)Indian Contract Act, 1872(9 of 1872)-Sec.15, 16, 17-Code of Civil Procedure, 1908(5 of 1908)-O.VII R.1-Suit-Pleadings-Coercion-Undue influence-Fraud-Consideration-Details-Necessity-A party raising the defence of fraud, undue influence or coercion as defence to his case should specially aver the details of such fraud, undue influence or coercion in his pleadings.
In the light of the discussion on the basis of the sections mentioned supra, it is needless to say that fraud, threat and undue influence are not synonymous. Each act is having its own distinct feature and one has no connection with other Act. Further it is made clear that details of fraud, threat and undue influence must be specifically averred in the pleadings. In the instant case on the side of the appellant/defendant it has been simply stated that the suit pronote has come into existence by exercising fraud, threat and undue influence. But no details of fraud, threat and undue influence have been mentioned in the written statement and that itself has completely debilitated the entire defence taken on the side of the appellant/defendant. Para 24
(C)Indian Contract Act, 1872(9 of 1872)-Sec.16-Indian Evidence Act, 1872(1 of 1872)-Sec.103-Contract-Enforcement-Undue influence-Burden of proof-When the validity of any transaction or contract is challenged on the ground that the consent was procured by undue influence, the initial burden of proving undue influence lies upon the person who pleads it. But, if the transaction appears to be unconscionable, the burden shifts upon the person who relies upon it.
By way of vivisecting Section 16 of the Contract Act, 1872, the Court can easily deduce that for invoking the provision of the said section, following aspects must be present.
(a) there must be a fiduciary relationship between the parties
(b) one party is in a position to dominate will of other
(c) party who is having dominating position has obtained unfair advantage
Unless these conditions are established, question of undue influence does not arise. Further it is made clear that initial burden of proving undue influence lies upon the person who pleads it. Further it is also made clear that if a transaction appears to be unconscionable, then the burden shifts upon the person who relies upon it. Para 26
(D)Negotiable Instruments Act, 1881(26 of 1881)-Sec.118-Indian Contract Act, 1872(9 of 1872)-Sec.2(e)-Negotiable instruments-Promissory note-Execution-Consideration-Past consideration-Validity-Binding nature-If a pronote is executed for the past consideration, it would be a good consideration for the execution of that pronote and binding on the person executing it.
Even though on the date of execution of the suit pronote dated 28.07.2007 consideration has not been passed to the defendant, it is needless to say that as per section 2 (e) of the Indian Contract Act 1872, past consideration is also a good consideration. Therefore, it is needless to say that the defence taken on the side of the appellant/defendant to the effect that the suit pronote is not supported by consideration also goes out without merit. Para 31
2. The respondent herein as plaintiff has instituted Original Suit No.177 of 2007 on the file of the trial Court praying to pass a money decree for a sum of Rs.6,20,616/- on the basis of the suit pronote dated 28.07.2007, wherein the present appellant has been shown as sole defendant.
3. The averments made in the plaint are that on 28.07.2007 the defendant has received a sum of Rs.5,75,000/- from the plaintiff so as to meet out his urgent needs and also family expenses and to that extent he has executed the suit pronote. The defendant has not repaid anything either towards principal or towards interest. Under the said circumstances the present suit has been instituted for the relief sought for in the plaint.
4. In the written statement it is averred that it is false to contend that on 28.07.2007 the defendant has received a sum of Rs.5,75,000/- from the plaintiff so as to meet out his urgent needs and also family expenses and to that extent he executed the suit pronote in favour of the plaintiff. The defendant has never borrowed anything from the plaintiff much less Rs.5,75,000/- . The plaintiff is the close relation of the defendant. The plaintiff wanted to reside in a portion of the residential house of the defendant. Considering the close relationship, the defendant has permitted the plaintiff to occupy a portion of his residential house and for the convenient enjoyment of the plaintiff he made some alterations and repair works. The plaintiff has demanded a sum of Rs.1,50,000/- from the defendant for the works done by him. Due to that a despair has arisen between them. The plaintiff has lodged a complaint against the defendant by way of demanding Rs.1,50,000/- before the Inspector of Police, Melur and the defendant has been directed to come to police station by the Inspector of Police, Melur for enquiry on 28.07.2007. After conducting enquiry the Inspector of Police, Melur has directed the defendant to pay a sum of Rs.75,000/- to the plaintiff and the Inspector of Police has also compelled the defendant to put his signature on a blank pronote and promised to return the same on payment of Rs.75,000/- by the defendant to the plaintiff. By believing the words of the Inspector of Police, Melur the defendant has put his signature on a blank pronote on 28.07.2007. No amount has been filled up in the said pronote. Next day the defendant has met the Inspector of Police, Melur and asked him to issue a xerox copy of blank pronote and accordingly he has given the same, wherein the defendant has found as if the said blank pronote has come into existence for a sum of Rs.5,75,000/-. The defendant has questioned the Inspector of Police, Melur and proposed to take action against the Inspector of Police, Melur. The defendant has not received any amount from the plaintiff and the suit pronote is not supported by consideration and the same has been obtained from the defendant by exercising fraud, threat and undue influence at the police station. There is no merit in the suit and the same deserves dismissal.
5. On the basis of the rival pleadings raised on either side, the trial Court has framed necessary issues and after considering the evidence available on record has decreed the suit as prayed for. Against the Judgment and decree passed by the trial Court, the present appeal has been preferred at the instance of the defendant as appellant.
6. The consistent case of the plaintiff is that the defendant has received a sum of Rs.5,75,000/- from the plaintiff on 28.07.2007 so as to meet out his urgent needs as well as family expenses and to that extent he has executed the suit pronote and since he failed to discharge his liability the present suit has been instituted.
7. The definite stand taken on the side of the defendant is that the plaintiff
