Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Mad) 2330

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
N. SESHASAYEE, P. VADAMALAI, JJ.
R. Singaravadivelan - Appellant
Versus
Durai Senthil - Respondent
A.S. (MD) No. 126 of 2024, C.M.P. (MD) No. 6651 of 2024
Decided On : 08-11-2024

Advocates:
Advocate Appeared:
For the Appellant : R. Venkatesh
For the Respondent: K. Mahendran

Execution of a promissory note raises a presumption of consideration; failure to rebut this presumption results in liability for the debt.

Headnote:(A) Negotiable Instruments Act, 1881 - Section 118 - Recovery of money suit based on promissory note - The plaintiff established the defendant's signature on the promissory note amounting to Rs.55,00,000/- and stated it was executed for consideration - Trial Court decreed in favor of the plaintiff. (Paras 3, 9, 22, 24)

(B) Presumption of consideration - Under Section 118, once execution is admitted, a presumption of consideration arises, shifting the burden to the defendant to disprove this presumption, which the defendant failed to do. (Paras 6, 18, 21)

(C) Non-examination of a crucial witness - The defendant’s failure to call the friend and alleged initial lender to testify is critical to his defense. (Paras 12, 23)

Facts of the case:
Plaintiff alleged the defendant borrowed Rs.55,00,000/- through a promissory note on 06.05.2015; the defendant claimed the loan was from another person and denied the debt.

Findings of Court:
The promissory note is established as genuine, and the defendant did not provide sufficient evidence to rebut the presumption of consideration.

Issues: The court addressed whether the note was valid and the impact of the defendant’s non-examination of key witnesses.

Ratio Decidendi: The court emphasized the necessity of proving the validity of the promissory note and the implications of failing to rebut presumptions as per Section 118 of the Negotiable Instruments Act.

Result: Appeal dismissed.

Table of Content
1. appellant's appeal against trial court judgment. (Para 1 , 2 , 3)
2. factual background of the loan agreement. (Para 5 , 6 , 23)
3. legal presumptions in promissory note cases. (Para 8 , 15 , 17)
4. arguments presented by both parties regarding the validity of the promissory note. (Para 10 , 12)
5. defendant's arguments on signature and consideration. (Para 11 , 13 , 14)
6. the presumption of consideration arises under section 118 of the negotiable instruments act. (Para 18)
7. transaction legality and enforcement in court. (Para 20 , 21)
8. conclusion of the court and dismissal of appeal. (Para 24 , 25)

JUDGMENT :

P. VADAMALAI, J.

This Appeal Suit is directed against the judgment and decree passed in O.S.No.42 of 2018 on the file of the learned III Additional District Judge, Thanjavur at Pattukottai.

2. The appellant is the defendant in O.S.No.42 of 2018 on the file of the III Additional District Court, Thanjavur at Pattukkottai. The respondent is the plaintiff in that suit.

3. The respondent/plaintiff filed the suit in O.S.No.42 of 2018 for recovery of money based on Ex.A.1- Promissory Note, dated 06.05.2015 against the appellant/defendant. The appellant/defendant contested the suit. The suit was decreed in toto by the trial Court.

4. For the sake of convenience, the parties are referred to as per their rank before the trial Court.

5. The brief facts are as below:

(a) The case of the plaintiff is straightforward, wherein he alleged that the defendant was engaged in the business of film distribution, that on 06.05.2015, he had borrowed Rs.55,00,000/- (Rupees Fifty Five Lakhs Only) from him for his business purposes under Ex.A.1 - Promissory Note, dated 06.05.2015. He made repeated demands for the repayment of the sum and the defendant evaded repayment. Eventually, the plaintiff issued Ex.A.2 - Suit Notice, dated 05.12.2017, which was received by the father of the defendant. As the amounts were not forthcoming, he laid the suit for recovery of the said sum with interest.

(b) The case of the defendant is that there is no privity of contract between him and the plaintiff, that on 06.05.2015, he borrowed a sum of Rs.10,00,000/- (Rupees Ten Lakhs Only), not from the plaintiff, but from one Thirunavukkarasu, who, according to him, was his (defendant’s) friend and left with him a blank signed stamp paper. It appears that there were some transactions between the plaintiff and Thirunavukkarasu and the plaintiff is alleged to have barged into the house of Thirunavukkarasu and removed many documents from the latter’s house and it appears he had also got the signed blank stamp paper left by the defendant with Thirunavukkarasu and clandestinely filled the same and has laid the suit for recovery of money. Indeed, few weeks after the defendant borrowed money, to be precise, on 17.06.2015, he tendered Rs.10,00,000/- (Rupees Ten Lakhs Only) to Thirunavukkarasu and on his instruction, he had deposited the said sum into the account of a certain Senthil.

6. The trial Court framed the following issues upon the pleadings of both parties:

''(1) Whether the defendant had borrowed a loan of Rs.55,00,000/- from the plaintiff on 06.05.2015 and executed the suit pronote as stated by plaintiff is true?

(2) Whether the averments stated in the written statement by the defendant is true?

(3) Whether the suit promissory note is created by the plaintiff through one Thirunavukkarasu as stated by the defendant is true?

(4) Whether the plaintiff is having cause of action to the suit?

(5) Whether the plaintiff is entitled the reliefs as prayed for?

(6)To what other reliefs, the plaintiff is entitled to?''

7. The dispute went to trial and during trial, the plaintiff examined himself as P.W.1 and also examined the second attesting witness as P.W.2. On his side, the defendant entered into the witness box and examined himself as D.W.1. While the plaintiff produced Ex.A.1 to Ex.A.6, the defendant had produced Ex.B.1, dated 11.03.2023, a bank statement of the defendant. It