The burden of proof in establishing the execution of the promissory note and the receipt of consideration lies with the defendant once the signature is admitted.

R. Subramanian, J.

The plaintiff in OS.No.253 of 1997 is the appellant. The suit was laid for recovery of a sum of Rs. 25,400/- said to be due on a promissory note executed by the defendant on 19.10.1994, acknowledging a borrowing of a sum of Rs. 20,000/- and agreeing to pay interest at 12% per annum. The plaintiff had restricted the claim for interest at 9% per annum. According to the plaintiff, the defendant did not repay the money borrowed despite repeated demands which necessitated issuance of legal notice on 08.01.2009. Though, the said notice was received by the defendant, the defendant neither chose to comply with it, nor sent any reply. Hence, the plaintiff had come forward with the suit seeking recovery of money as aforesaid.

2. The defendant filed a written statement contending that the promissory note was not supported by consideration. According to the defendant, he had borrowed a sum of Rs. 20,000/- from the plaintiff and had executed two blank promissory notes. It is claimed that using the two blank forms signed by the defendant, the plaintiff has created two promissory notes and has filed two suits in OS.Nos.253 and 258 of 1997 against the defendant. It is also contended that the defendant had paid a sum of Rs. 16,000/- in discharge of the borrowing. On the above contentions, the defendant sought for dismissal of the suit.

3. At trial, the plaintiff examined himself as PW1 and marked Exs.A1 to A4 and the defendant apart from examining himself as DW1 examined one Sivaperumal as DW2.

4. The learned trial Judge, on framing the relevant issues concluded that the plaintiff has not proved execution of the promissory notes and on the said conclusion dismissed the suit. Aggrieved, the plaintiff filed an appeal in AS.No.104 of 2002. The appellate Court also concurred with the findings of the trial Court. Hence, the plaintiff had come forward with the above Second Appeal. At the time of admission, the following question of law was framed:-

whether the Courts below are right in placing the burden on the plaintiff to establish the execution of the document and the receipt of consideration when the defendant had admitted his signature in the pronote and the receipt of consideration?

5. I have heard Mr.M.V.Krishnan, learned counsel appearing for the appellant and despite this appeal having been adjourned for hearing the respondent, the learned counsel for the respondent was not present to argue the Second Appeal.

6. Mr.M.V.Krishnan, learned counsel appearing for the appellant would mainly contend that the Courts below were not right in holding that the plaintiff has not proved the execution of the promissory note by the defendant. Taking me through the written statement, filed in the suit, Mr.M.V.Krishnan, would submit that the signature of the defendant in the suit promissory note has been admitted. It is the contention of the defendant that the plaintiff had obtained two blank forms while lending a sum of Rs. 20,000/- and has created two promissory notes each for a sum of Rs. 20,000/-. Therefore, according to Mr.M.V.Krishnan, once the execution of the document is admitted and the defendant takes a plea that the promissory note was an inchoate negotiable instrument, it is for him to prove failure of consideration. He would also invite my attention to Section 20 of the Negotiable Instruments Act to contend that a person signing a blank instrument or an inchoate negotiable instrument thereby gives an authority to the holder of the instrument to fill up the same, make a negotiable instrument and sue upon it.

7. Mr.M.V.Krishnan, would also rely upon the judgment of the Hon'ble Supreme Court in Bharat Barrel and Drum Manufacturing Company Vs. Amin Chand Payrelal reported in, (1999) AIR SC 1008, wherein, the Hon'ble Supreme Court had held that when the defendant takes a plea that the promissory note was executed for a collateral security and not for consideration received, it is for the defendant to prove absence of consideration