A party seeking recovery under a promissory note must prove the validity of the note; failure to substantiate an endorsement leads to claims being barred by limitation.

JUDGMENT :

(SATHI KUMAR SUKUMARA KURUP, J.)

This Appeal is filed to set aside the Judgment and Decree dated 18.09.2012 made in A.S. No. 6 of 2012, on the file of the learned Principal District Judge, Namakkal confirming the Judgment and Decree dated 15.07.2011 made in O.S. No. 377 of 1997 on the file of the learned Sub Judge, Namakkal.

2. For the sake of convenience, the parties to this Appeal are referred to as per the status in the suit as “Plaintiff” and “Defendants” as the case may be.

3. The Defendants in O.S. No. 377 of 1997 are the Appellants in this Second Appeal. The suit in O.S. No. 377 of 1997 was filed for recovery of a sum of Rs.1,53,000/- representing Rs.1,00,000/- towards principal and Rs.53,000/- towards interest and costs

4. As per the plaint averments, the first Defendant – Chinnasamy Reddiar (since deceased) requested the Plaintiff for a loan of Rs.1,00,000/- to purchase a land. The first Defendant also agreed to pay Rs.2/- per Rs.100/- per month towards interest. Accordingly, the Plaintiff paid the amount on 15.09.1991 and upon receipt of the sum of Rs.1,00,000/- the first Defendant executed a demand promissory note, promising to pay the sum of Rs.1,00,000/- together with interest, on demand. After receiving the amount, on 04.09.1994, the first Defendant paid a sum of Rs.1,000/- which was duly given credit to the amount payable by the first Defendant. Thereafter, many demands have been made by the Plaintiff for repayment of the loan amount, but the first Defendant evaded and avoided to pay. Therefore, on 28.04.1997 and 17.07.1997, notices have been sent to the first Defendant demanding repayment of the amount. However, the first Defendant neither sent any reply nor repaid the amount. Therefore, the Plaintiff has filed the suit as against the first Defendant and his children, the Defendants 2 to 5 for recovery of a sum of Rs.1,53,000/-.

5. On receipt of summons, the first Defendant entered appearance and filed written statement denying the plaint averments. According to the first Defendant, he never approached the Plaintiff for a loan or received Rs.1,00,000/- on 15.09.1991. He also denied the execution of the promissory note and also the payment said to have been made on 04.09.1994 towards interest. The first Defendant also denied having made any endorsement on the reverse of the promissory note while making the payment of Rs.1,000/- on 04.09.1994. It was also stated that the amount of Rs.1,00,000/- alleged to have been made on 15.09.1991 and the suit was filed only in the year 1997. The suit is hit by the principles of limitation and only to save the limitation, it was alleged that on 04.09.1994, the first Defendant paid Rs.1,000/- towards interest.

6. It was further stated that the first Defendant is none other than the husband of the Plaintiff's own sister. The Plaintiff is a money lender carrying on business in the name and style of “Levadevi” in Nallipalayam, Namakkal District. On 29.04.1990, the first Defendant borrowed Rs.50,000/- from the Plaintiff and executed a blank promissory note. The first Defendant also paid interest for the sum of Rs.50,000/- borrowed from the Plaintiff. Subsequently, on 06.03.1994, the first Defendant paid the entire principal amount of Rs.50,000/- to the Plaintiff and demanded for the return of blank promissory note. However, the Plaintiff did not return the promissory note but assured to return it within 2 or 3 days.