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IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. JAYACHANDRAN, J.
K. Selvaraj - Appellant
Versus
K. Tamilselvan - Respondent
Appeal Suit No. 325 of 2019 & C.M.P. Nos. 11027 of 2019 & 676 of 2020
Decided On : 05-03-2021
Negotiable Instruments Act - Section 118 - The execution of a pronote creates a presumption of borrowing and debt. The burden of proof is on the party seeking to rebut this presumption.
Fact of the Case:
The plaintiff filed a suit for recovery of money based on a pronote. The defendant claimed that the pronote was given as security for a loan and denied borrowing any money from the plaintiff. The trial court held that the defendant failed to prove his claim and presumed the execution of the pronote. The appellant argued that the trial court failed to properly appreciate the evidence and that the burden of proof was on the plaintiff to show that the pronote was executed in his favor. The appellant relied on various judgments to support his argument. The respondent argued that the defendant and his witness failed to provide a plausible explanation for the handing over of the pronote to a third party. The court held that the presumption under Section 118 of the Negotiable Instruments Act was strongly against the defendant and that the attempt to rebut the presumption was not plausible. The court distinguished between pronotes and cheques, stating that pronotes are executed to create liability while cheques are issued to discharge liability. The court dismissed the appeal and allowed the respondent to work out his remedy before the Execution Court.
Finding of the Court:
Ratio Decidendi:
Result:
JUDGMENT :
Prayer: Appeal Suit has been filed under Section 96 of the Civil Procedure Code, 1908 against the judgment and decreed dated 09.01.2019 made in O.S.No.40 of 2011 on the file of the learned Principal District Court, Namakkal.
1. The appellant is the defendant in the suit. The suit was for recovery of money based on pronote dated 10/08/2008 for a sum of Rs.9,50,000/-. The Trial Court decreed the suit directing the defendant to pay the suit amount Rs.12,47,983/- with subsequent interest at the rate of 9% per annum for the principle amount Rs.9,50,000/- from the date of decree.
2. The case of the plaintiff is that, the defendant borowed Rs.9,50,000/- to meet out his urgent business and family expenses and promised to repay it on demand with 12% interest per annuam. Also, he executed a pronote Ex.A-1 in the presence of witnesses. In spite of several demand, the defendant failed to repay the promised amount.
3. The defendant denied the suit claim stating that the said pronote was actually signed and given to one Ramasamy during the period 1991-1998 as security for the loan, he availed from Ramasamy for his lorry transport business. He cleared the loan of Rs.30,000/- in the year 1998. When he asked Ramasamy to return the signed blank pronote, he said that it is misplaced and got mixed up with his other documents. He promised to return it as soon as he able to trace it. On trust, he left the blank pronote with Ramasamy. The father of the plaintiff and Ramasamy were working together as Teachers in the Government School at Manickampalayam. The said Ramasamy has given the original pronote to the plaintiff's father. The plaintiff is his neighbouring land owner. From him, he never borrowed money and after he joined service as School Teacher, he had no necessity to borrow money from anyone. Further, the plaintiff has no means to lend such a huge money as loan. He himself in the matrimonial proceedings initiated against him by his wife had admitted that he has no means to pay her and he himself depending on his father for his survival. So, surprised on receiving the suit summon from the Court, he met the plaintiff and enquired him, why he has filed suit against him, when he never borrowed any money from him. The plaintiff admitted that he got the blank pronote from Ramasamy and had filed this suit, since he want to wreck vengeance against him for unnecessarily interfering in his family dispute with his wife.
4. Before the trial Court, the plaintiff marked the pronote as Ex.A-1 and examined one of the attesting witness to the pronote as PW-2. The defendant examined the said Ramasamy as DW-2 and marked the counter filed by the plaintiff in the M.C.No.54/2016 initiated by the wife of the plaintiff, where the plaintiff has stated that he have no wherewithal to pay maintenance to his wife.
5. The trial Court held that the contention of the defendant that the pro-note was given to Karichipalayam Ramasamy towards the loan for a sum of Rs.30,000/- obtained from him by the defendant, is not proved by the defendant and as per Section 118 of the Negotiable Instrument Act., the defendant has not proved the contrary and hence, the execution of Ex.A1-suit pro-note is presumed.
6. Learned counsel appearing for the appellant submitted that the trial Court failed to appreciate the fact and evidence properly. The burden of rebuttable under Section 118 of the Negotiable Instruments Act is the preponderance of probability. The defendant through his documentary evidence as well as his witness DW-2, has rebutted the presumption cast on him under Section 118 of the Negotiable Instruments Act. Particularly, the suit pronote-Ex.A1 proved to be given to DW-2 and not to the plaintiff. While so, it is the burden of the plaintiff to prove that it was executed in his favour for consideration mentioned in the pronote. The plaintiff had not produced any evidence to show that he gave Rs.9,50,000/- to the defendant. He had admitted that the content in the counter filed b
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