Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Mad) 1877

IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. Sakthivel, J.
K. Selvaraj - Appellant
Versus
V.Thangavelu - Respondent
S.A.NO.413 of 2020 and CMP NO.8523 OF 2020
Decided On : 18-10-2024

Advocates:
Advocate Appeared:
For the Appellant : Mr. R. Saseetharan
For the Respondent: Mr. S.Saravana Kumar for M/s.I.Abrar Md Abdullah

The mere admission of a signature on a Promissory Note does not invoke the presumption under Section 118 of the Negotiable Instruments Act without proof of execution and passing of consideration.

Headnote:(A) Code of Civil Procedure, 1908 - Section 100 - Second Appeal - The defendant borrowed Rs.1,50,000/- from the plaintiff, executing a Promissory Note. The defendant claimed the note was forged. The Trial Court and First Appellate Court decreed in favor of the plaintiff. The substantial question of law was whether the courts below considered the evidence properly. (Paras 6, 7, 20)

(B) Negotiable Instruments Act, 1881 - Section 118 - The defendant admitted the signature on the Promissory Note, but the court found insufficient evidence of execution and passing of consideration. The presumption under Section 118 was not invoked due to lack of proof. (Paras 19, 20)

Facts of the case:
The plaintiff claimed the defendant borrowed money and executed a Promissory Note, which the defendant denied, alleging forgery. (Paras 3, 4)

Findings of Court:
The courts below failed to consider the evidence and relationship between the parties adequately. (Paras 20)

Issues: Whether the courts below were correct in decreeing the suit without considering all evidence. (Para 7)

Ratio Decidendi: The court ruled that the mere admission of signature does not suffice to invoke the presumption under Section 118 without proof of execution and consideration. (Paras 19, 20)

Result: Second Appeal allowed; previous judgments set aside and suit dismissed.

JUDGMENT :

R. Sakthivel, J.

PRAYER: Second Appeal filed under Section 100 of the Code of Civil Procedure, 1908, praying to set aside the Judgment and Decree dated February 17, 2020 made in A.S.No.25 of 2016 on the file of the Additional District Judge, Namakkal District confirming the Judgment and Decree dated November 4, 2015 made in O.S.No.40 of 2011 on the file of Subordinate Court, Namakkal District.

This Second Appeal has been filed praying to set aside the Judgment and Decree dated February 17, 2020, made in A.S.No.25 of 2016 on the file of the ‘Additional District Judge, Namakkal District’ (henceforth 'First Appellate Court'), whereby the Judgment and Decree dated November 4, 2015 made in O.S.No.40 of 2011 on the file of ‘Subordinate Court, Namakkal District’ (henceforth 'Trial Court') was confirmed.

2. The defendant who was unsuccessful before the Trial Court as well as the First Appellate Court has preferred this Second Appeal. For the sake of convenience, hereinafter, the parties herein will be denoted as per their array in the Original Suit.

Plaintiff's Case

3. The case of the plaintiff is that on August 11, 2008 the defendant borrowed a sum of Rs.1,50,000/- (Rupees One Lakh Fifty Thousand only) from the plaintiff for urgent family and business expenses by executing a Promissory Note. The defendant agreed to repay the loan amount together with interest at the rate of 12% per annum to the plaintiff. Despite repeated demands, the defendant did not repay the principal amount and the interest to the plaintiff. Hence, the plaintiff filed the Suit for recovery of money with interest at the rate of 12% per annum.

Defendant's Case

4. The defendant filed Written Statement wherein it has been averred that he never borrowed the said loan amount of Rs.1,50,000/- from the plaintiff as alleged in the Plaint. The alleged Promissory Note is a forged one. Both the plaintiff and the defendant were teachers well acquainted with each other. The plaintiff and the defendant were also partners in S.S. Finance and Umaiyal Finance. One Mr.Ashokan was working as Manager in S.S.Finance. In S.S.Finance, the defendant was allotted a chit amount in the year of 1996, for which, he executed two blank Promissory Notes, one having S.S.Finance firm’s name thereon while the other being a general one, and also affixed his thumb impression thereon, as per the rules and practices of the finance. However, the said S.S.Finance was dissolved before completion of the monthly chit. When S.S.Finance was dissolved, the plaintiff took the said general blank pro-note without the company’s name printed on it, stating that the plaintiff joined S.S.Finance only on the insistence of the defendant, and assured that he would return the pro-note after collecting the amounts the debtors owed him. With no other choice, the defendant reluctantly agreed. The plaintiff, by using the said Promissory Note in a forged manner, filed the Suit for recovery of money against the defendant without giving any notice to the defendant. Starting in the year 2000, the defendant began using a signature different from the one found in Ex-A.1. Accordingly, he prayed to dismiss the suit.

Trial Court and First Appellate Court

5. At trial, on the side of the plaintiff, the plaintiff was examined as P.W.1, and Ex-A.1 to Ex-A.3 were marked. On the side of the defendant, the defendant was examined as D.W.1, one Mathiyazhagan and one Natarajan were examined as D.W.2 and D.W.3 respectively, and Ex-B.1 was marked. Pay Acquittance Register relating to the years 1996 - 1997 was marked as Ex-X.1 and Pay Acquittance Register pertaining to the time period from April 2008 to December 2008 was marked as Ex-X.2.

6. After full trial, the Trial Court decreed the Suit by holding that the defendant admitted the signature in Ex-A.1 - Promissory Note and hence, the onus is upon the defendant to prove his defence, but the defendant failed to do so. Feeling aggrieved with the Judgment and Decree of the Trial Court, the defenda