The court confirmed that once a plaintiff establishes the execution of a promissory note, the burden shifts to the defendant to disprove its validity; failure to do so upholds the note's legal presumption under Section 118.

JUDGMENT :

(R. SAKTHIVEL, J.)

This Second Appeal is directed against the Judgment and Decree dated December 16, 2013 passed in A.S.No.77 of 2013 by the 'Principal District Court, Erode' ['First Appellate Court' for brevity], whereby the Judgment and Decree dated June 29, 2012 passed in O.S.No.126 of 2010 by the 'Sub Court, Gobichettipalayam' ['Trial Court' for brevity] was confirmed.

2. For the sake of convenience, hereinafter, the parties will be referred to as per their array in the Original Suit.

PLAINTIFF'S CASE

3. Case of the plaintiff is that the defendant borrowed a sum of Rs.2,50,000/- from the plaintiff for his cultivation expenses, on January 28, 2008 and executed a Promissory Note in favour of the plaintiff agreeing to repay the same with interest at the rate of Re.1/- per Rs.100/- per month. Despite repeated demands made by the plaintiff, the defendant neither paid interest nor the principal amount. Hence, the plaintiff issued a legal notice on August 11, 2010 and the same was received by the defendant on August 12, 2010. The defendant sent a reply on August 17, 2010 with false averments. Hence, the plaintiff filed the Suit seeking money decree.

DEFENDANT'S CASE

4. The defendant filed a written statement denying the execution of Promissory Note and borrowing money from the plaintiff. According to the defendant, the Suit Promissory Note is entirely false and fabricated in collusion with the plaintiff's brother - G.Natesan. It is further averred that the plaintiff's brother - G.Natesan filed a Suit in O.S.No.20 of 2006 on the file of Trial Court on the basis of a Sale Agreement allegedly executed by the defendant. The defendant contested the said Suit by taking a plea of forgery. After full-fledged trial, the defendant’s contention was upheld and the Suit was dismissed with costs. Aggrieved, the plaintiff's brother - G.Natesan preferred A.S.No.75 of 2009 before the District Court, Gobichettipalayam and the same was dismissed after hearing both sides. Hence, the plaintiff's brother - G.Natesan and the plaintiff colluded together and created the Suit Promissory Note. The defendant reiterates that the signature found in the Suit Promissory Note is forged one and he never borrowed money from the plaintiff. The defendant's further case is that the plaintiff being a daily wage labourer earning only a sum of Rs.200/- per day, has no sufficient income or wherewithal to lend a sum of Rs.2,50,000/- to the defendant. Hence, the defendant prayed to dismiss the Suit.

TRIAL COURT

5. Based on the above pleadings, the parties went to Trial and the Trial Court framed the following issues:

“(i) Whether the Suit pro-note (Sic) is forged one?

(ii) Whether the plaintiff is entitled for Suit amount as claimed?

(iii) To what other reliefs?”

6. At trial, plaintiff - G.Kandasamy was examined as P.W.1, and one Ramasamy, who is a witness to Suit Promissory Note along with one Velusamy, who is a Scribe thereto was examined as P.W.2 and P.W.3 respectively, and Ex-A.1 to Ex-A.4 were marked on the side of the plaintiff. On the side of the defendant, defendant / Chinnappa Gounder was examined as D.W.1 and one Saravanakumar – Village Administrative Officer was examined as D.W.2 and Ex-B.1 to Ex-B.6 were marked.

7. After full-fledged trial, the Trial Court concluded that the plaintiff discharged his burden by way of examining P.W.2 and P.W.3, and the evidence of P.W.1 to P.W.3 prima facie prove the execution of the Suit Promissory Note. Since, the plaintiff discharged his initial burden, the Suit Promissory Note attracts the presumption under Section 118 of the Negotiable Instruments Act, 1881. Further, the plaintiff proved