IMPORTANT POINT
The main legal point established in the judgment is the application of Section 118 of the Negotiable Instruments Act, which creates a presumption in favor of the plaintiff once the execution of a promissory note is proved, and places the burden on the defendant to rebut the presumption by bringing evidence to show that no consideration was passed through the promissory note.

JUDGMENT :

(Prayer: Second Appeal filed under Section 100 of C.P.C. against the judgment and decree dated 09.03.2012 made in AS.No.65 of 2008 on the file of Sub-ordinate Judge, Ariyalur, reversing the judgment and decree dated 10.07.2008 made in OS.No.512 of 2004 on the file of District Munsif Court, Jeyankondam.)

1. The defendant in the suit is the appellant before this Court on appeal. The second appeal is filed challenging the judgment and decree dated 09.03.2012 made in AS.No.65 of 2008 on the file of Sub-ordinate Judge, Ariyalur, reversing the judgment and decree dated 10.07.2008 in OS.No.512 of 2004 on the file of District Munsif Court, Jeyankondam.

2. For the sake of convenience, the parties are referred to as per their ranking before the Trial Court.

3. According to the plaintiff, on 01.10.2001, the defendant borrowed a sum of Rs.30,000/- as a loan, agreeing to repay along with interest at 12% per annum and executed the promissory note in Ex.A.1. Even after repeated demands, the loan amount was not repaid. The plaintiff issued the legal notice on 06.05.2002 for which there was no reply, therefore, the plaintiff has come up with the suit for recovery of money.

4. The defendant resisted the suit by filing the written statement contending that no consideration passed through Ex.A.1 and that the defendant had borrowed money from the plaintiff's father Sundaraj Mudaliar who is a money lender. In respect to that debt, pursuant to the decree obtained in OS.No.192 of 2000, in the E.P.No.124 of 2001, an order of attachment of defendant's salary was obtained by him and in respect of the settlement of the debt, the defendant along with one Kaliyaperumal went to plaintiff's father's Advocate office at Jayankondam. After negotiation, the defendant accepted to pay Rs.15,000/- for which the blank promissory note was signed and handed over to the plaintiff's father. Later the loan in the execution proceedings was settled, and his advocate also sent the letter to the Indian Bank intimating the settlement of the account. Since after receiving the legal notice, the defendant met the plaintiff's father in person, and as he informed that the promissory note will be returned after settling the amount, he did not send any reply. As such there is no amount due payable by the defendant and sought for dismissal of the suit.

5. During trial, the plaintiff examined herself as PW.1 and Ex.A.1 to Ex.A.3 were marked. On the side of the defendant, DW.1 to DW.4 were examined and Ex.B.1 to Ex.B.5 were marked.

6. After analysing the evidence, the Trial court, by judgment and decree dated 10.07.2008, dismissed the suit. The Trial court found that the Advocate sent a letter in Ex.B.1 informing that the dues in respect of the E.P.No.124 of 2001 was settled and as such, the promissory note issued in respect of settlement of that amount was closed and thereby the defendant had rebutted the presumption. Whereas, the plaintiff did not prove that the consideration was passed through the promissory note. Aggrieved, the plaintiff filed appeal in AS.No.65 of 2008 on the file of Subordinate Judge, Ariyalur.

7. The Lower Appellate Court after reappraising the evidence allowed the appeal and decreed the suit. Aggrieved, the defendant is before this court on appeal.

8. This Court, by order dated 19.11.2012, admitted the second appeal and framed the following substantial questions of law.

“a) Whether the learned Subordinate Judge has failed to see that once the defendant shows by evidence that the suit promissory note was not supported by consideration in the manner stated in the promissory note or plaint the evidential burden shifts to the plaintiff and the legal burden of the plaintiff is revived and the presumption under section 118 of the Negotiable Instruments Act disappears as held in 21 MLJ?

b) Whether on the basis of the evidence of Ex.B.1 the letter given by the Advocate Suresh Kumar, examined as DW.4, on behalf of the plaintiff's father that the suit promissory note in