JUDGMENT :

(Prayer: Second appeal filed under Section 100 of C.P.C., against the decree and judgment of the Principal District Judge, Thanjavur passed in A.S.No.5 of 2008 dated 19.12.2008 reversing the decree and judgment of the Additional Subordinate Judge, Thanjavur passed in O.S.No.116 of 2006 dated 07.01.2008.)

1. This second appeal arises out of a money suit. According to the plaintiff, the defendant availed cash loan from him by executing a promissory note and that he failed to repay the same even after receiving the suit notice. The suit was filed to recover the amount with interest. The trial court decreed the suit. The first appellate court reversed the decision of the trial court and dismissed the suit after holding that presumption under Section 118 of the Negotiable Instruments Act, 1881 could not be invoked when the transaction did not conform to the mandate set out in Section 269SS of the Income Tax Act, 1961.

2. The second appeal was admitted on the following substantial questions of law :

“1.Whether the finding of the first appellate court that the plaintiff is not entitled to recover the suit amount on the basis of Ex.A1 promissory note is perverse ?

2. Whether the plaintiff can be non-suited on the ground of non-adherence to the provisions of the Income Tax Act, 1961?”

3. The case of the plaintiff was that the defendant borrowed a sum of Rs.1,50,000/- from him on 20.07.2004 by executing Ex.A.1 promissory note undertaking to repay the same with interest @ 18% p.a. Since the defendant did not make any payment either towards principal or interest in spite of repeated demands, the plaintiff issued notice dated 26.09.2006 (Ex.A.2) which elicited Ex.A3 reply notice dated 08.10.2006. In the reply, the defendant not only denied the notice averments but also projected a different version. Since his demand was not complied with, the plaintiff filed the aforesaid suit for recovering a sum of Rs.2,00,000/- from the defendant with interest. The defendant filed written statement controverting the plaint averments. Based on the divergent pleadings, the trial Court framed the necessary issues. The plaintiff examined himself as P.W.1 and the attestor of the promissory note, namely, Paramasivam as P.W.2. Ex.A1 to Ex.A3 were marked. The defendant examined himself as D.W.1 and one Ganesan as D.W.2. One Senthilkumar who was shown as the scribe in Ex.A1 was examined as D.W.3. Ex.B.1 and Ex.B.2 were marked. After considering the evidence on record, the trial Court by judgment and decree dated 07.01.2008 decreed the suit as prayed for. Aggrieved by the same, the defendant filed A.S.No.5 of 2008 before the Principal District Judge, Thanjavur. By the impugned judgment and decree dated 19.12.2008, the first appellate Court set aside the decision of the trial Court and allowed the appeal and dismissed the suit. Challenging the same, this second appeal came to be filed.

4. The learned counsel appearing for the appellant reiterated all the contentions set out in the memorandum of grounds and called upon this Court to answer the substantial questions of law in favour of the appellant and set aside the impugned judgment and decree and restore the decision of the trial Court.

5. During the pendency of the appeal, the defendant passed away and his legal heirs have been brought on record as respondents 2 to 4. Their counsel submitted that the impugned judgment and decree do not call for any interference. In response to the suit notice, the defendant had given a detailed reply vide Ex.A.3. The plaint did not meet the defence projected in the said reply. It is rather cryptic. By examining himself and two other witnesses including the scribe of the pro-note, the defendant effectively rebutted the presumption raised against him. Thereafter, the onus shifted back to the plaintiff. The plaintiff was therefore obliged to establish that the consideration actually passed under Ex.A.1 promissory note. The learned counsel placed reliance on the decisions reporte