Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Mad) 2655

IN THE HIGH COURT OF JUDICATURE AT MADRAS
V.SIVAGNANAM, J.
J.Kathiresan - Appellant
Versus
M.N.Balamurugan - Respondent
A.S.No.89 of 2018 and CMP.No.2402 of 2018
Decided on : 02-04-2025

Advocates:
Advocate Appeared:
For the Appellant : Mr.T.Balaji
For the Respondent: Mr.T.S.Vijayaraghavan

The court upheld the validity of a promissory note securing a loan, emphasizing the burden of proof on the defendant to negate the presumption of consideration under the Negotiable Instruments Act.

Headnote:(A) Negotiable Instruments Act - Sections 20, 118 - Suit for recovery of money - Defendant borrowed Rs.20,00,000/- agreeing to repay with interest at 18% p.a. - Defendant failed to repay; alleged promissory note executed, but claimed as blank security - Court found promissory note valid, enforceable, and signed - Judgment and decree of trial court upheld, appeal dismissed with costs. (Paras 10, 22, 23)

(B) Burden of proof - Once a signed promissory note is presented, the burden lies on the defendant to establish lack of consideration when it is presumed to be supported by prior consideration. (Paras 22)

Facts of the case:
Plaintiff lent Rs.20,00,000/- to defendant for gold business secured by a promissory note. Defendant claimed amounts were given for security purposes without repayment, leading to suit for recovery. (Paras 5, 15)

Findings of Court:
The promissory note executed by the defendant is valid, enforceable, and proved to be for consideration based on evidence presented. (Paras 23)

Issues: 1) Validity of the promissory note dated 30.08.2008. 2) Entitlement of plaintiff to the claimed amount. (Para 10)

Ratio Decidendi: The trial court correctly applied the presumption of consideration under Section 118 of the Negotiable Instruments Act, finding that the defendant failed to rebut this presumption, thus validating the promissory note. (Paras 22, 23)

Result: Appeal dismissed with costs.

Table of Content
1. defendant borrowed money from plaintiff. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. trial court decreed suit based on evidence. (Para 8 , 9)
3. discussion on the enforceability of the promissory note. (Para 10)
4. defendant challenges trial court's decision. (Para 11)
5. plaintiff defends the trial court's decree. (Para 12 , 17 , 18 , 19)
6. evidence supports promissory note validity. (Para 14 , 15 , 16 , 20 , 21)
7. no grounds to interfere; appeal dismissed. (Para 22 , 23)

JUDGMENT :

Aggrieved over the Judgement and Decree dated 23.11.2016 passed in O.S.No.186 of 2009 by the 1^st Additional District Judge, Salem, the defendant has preferred the appeal suit.

2. For the sake of convenience, the parties are referred to as per their rankings in the trial Court.

3. Suit for recovery of money.

4. The defendant in O.S.No.186 of 2009 on the file of the 1^st Additional District Court, Salem, is the appellant herein and the plaintiff is the respondent herein.

5. The plaintiff's case is as follows:

The defendant borrowed a sum of Rs.20,00,000/- (Twenty lakhs only) for his gold business from the plaintiff on 30.08.2008 agreeing to repay the same on demand with interest at 18% per annum to the plaintiff. The defendant executed an on – demand note in the presence of witnesses on the same date. Thereafter, the defendant had not paid any amount either towards interest or principal in spite of repeated demands.

5.1.While so, on 30.11.2008, when the plaintiff approached the defendant requesting payment and warned him of further action if the amounts are not paid, the defendant with a view to defeat and defraud the claim of the plaintiff, sent a letter on 03.12.2008 to the plaintiff and the witnesses in the pro – note viz., Vivekanandan as though the defendant and his brothers signed blank twenty rupees papers and a blank green sheet on 23.3.2001 as security for the gold received. In reply, the plaintiff sent a letter on 30.12.2008 stating the real facts. Immediately thereafter, the defendant sent an advocate notice on 31.12.2008 as though they have not executed the pro-note. The plaintiff sent a reply notice calling upon the defendant to pay the amount on 5.1.2009 along with a Xerox copy of the pro-note, as requested by the defendant. As the defendant is thus committing fraudulent acts in order to cheat and defraud the claim of the plaintiff, the plaintiff has no other go, but to file the suit for recovery of the amounts and thus, plead to decree the suit.

6. The defendant filed a written statement and denied all the allegations contained in the plaint and contended that it is utterly false to say that the defendant borrowed a sum of Rs.20,00,000/- on 30.08.2008 and this defendant agreeing to repay the same with interest at the rate of 18% p.a. and it is imagination to say that the defendant had executed a suit pronote, for the said consideration received in the presence of witnesses. The defendant never executed any suit pronote and he never borrowed any amount. The plaintiff gave the total weight grames of Gold to the defendant because he is a goldsmith and manufacturing new ornaments, and he received necessary charges and handed over all the ornaments to the plaintiff. On the basis, when the plaintiff gave gold grames net weight, he received empty N.J.S. Stamp papers, blank pronotes, green sheets with the defendant's signature. As per the above transactions, the defendant completed his work and handed over all the ornaments and asked his empty stamp papers with signature, empty pronote with signature, but the plaintiff never return the above papers, hence this defendant has filed a suit for the relief of mandatory injunction to return the entire documents in O.S.No.1312/2008 and the same is dismissed. The suit is barred by Limitation Act and the plaintiff is not entitled to get any relief on the basis of created fabricated blank pronote and the Non judicial Stamp paper. So, the suit is absolutely barred by limitation Act and thus, pleaded to dismiss