The execution of a promissory note is presumed valid under Section 118 of the Negotiable Instruments Act, shifting the burden to the defendant to prove lack of consideration.

JUDGMENT :

Challenging the decree and judgment of the trial Court decreeing the suit in O.S.No.96 of 2014 dated 24.02.2020 for recovery of a sum of Rs.8,50,000/- with interest at the rate of 12% per annum from the date of promissory note till the date of realization of the entire amount, the present appeal came to be filed.

2. The parties are arrayed as per their own ranking before the trial Court.

3. Brief background of the case is as follows :

The suit has been filed for recovery of a sum of Rs.10,23,400/- with future interest at the rate of 24% per annum on the principal of Rs.8,50,000/- till the realization of the entire amount with costs of the suit. The plaintiff is engaged in the manufacturing of Wed grinder and Motor Pump set and marketing the same. The defendant is doing scrap business and running a foundry. He is known to the plaintiff for the past 10 years. During the first week of May 2013, the defendants approached the plaintiff for financial assistance to the tune of Rs.8,50,000/-. Accordingly, the defendant borrowed the said amount from the plaintiff on 10.05.2013 agreeing to repay the amount with interest at the rate of 24% per annum and executed a promissory note on the same day. Inspite of the repeated demands, as the amount has not been paid, the suit has been filed.

4. It is the contention of the learned learned counsel for the defendant that he has not borrowed any amount. According to him, the plaintiff is running an unregistered chit. The defendant has also subscribed in some of the groups of the chit and the plaintiff issued a book containing the numbers of the chit group and he is regular in payment of chit instalments. The chit was completed in the year 2012. While joining the chit, the plaintiff has has obtained some of agreements from the defendant for the payment made by him. Further, the chit amount has been paid before 2012. Hence, according to him, the signatures obtained in the chit transaction has been fabricated. Hence disputed the claim.

5. Based on the above pleadings, the trial Court framed the following issues :

1. Whether the defendant borrowed Rs.8,50,000/- from the plaintiff on 10.05.2013 by executing a demand promissory note?

2. Whether the defendant is liable to pay a sum of Rs.10,23,400/- together with interest at 24% per annum on Rs.8,50,000/- as claimed by the plaintiff?

3. For what other reliefs are the parties entitled to?

6. On the side of the plaintiff, the plaintiff examined himself as P.W.1 and Ex.A.1 and Ex.A.2 have been marked. On side of the defendant, the defendant had examined himself as D.W.1 and no documents have been marked on his side. On the basis of evidence and materials, the trial Court has decreed the suit. Challenging the same, the present appeal has been filed.

7. The main contention of the learned counsel appearing for the appellant is that the execution of the promissory note has not been established and the attestors of the promissory have not been examined by the plaintiff. Further, the plaintiff has not proved his financial capacity to advance a sum of Rs.8,50,000/- and no income tax returns have been filed in this regard. It is his contention that the promissory note has been fabricated.

8. Whereas, it is the contention of the respondent that as the execution of the promissory note has not been denied, the question of examining the attesting witness does not arise at all. The execution of the promissory note has been proved and there is no rebuttal evidence on the side of the defendant Therefore, the statutory presumption available under section 118 of the Negotiable Instruments Act will get attracted.

9. In the light of the above submissions, the the following points arise for consideration in this appeal:-

1. Whether the suit promissory note is a result of fabrication?

2. Whether the suit promissory note is not supported by any consideration?

10. Points 1 and 2 :

It is the specific stand of the plaintiff that the defendant had borrowed a sum of Rs.8,50,000/- on 10.05.