Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Mad) 596

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
G.R.SWAMINATHAN, R.KALAIMATHI, JJ.
R. Lingasekar – Appellant
Versus
P. Balakannan – Respondent
A.S(MD)No.128 of 2018 and C.M.P(MD)No.16351 of 2025
Decided On : 27-01-2026

Advocates appeared:
For the Appellants/Petitioners: Mr.Raguvaran Gopalan
For the Respondents: Mr.Isaac Mohanlal Senior Counsel for M/s Isaac Chambers

Presumption of validity under Section 118 of the Negotiable Instruments Act remains unrefuted by the defendant, affirming enforceability of promissory note despite claims of fabrication.

Headnote:(A) Code of Civil Procedure, 1908 - Section 96 - Negotiable Instruments Act, 1881 - Sections 138 and 142 - Dishonour of cheque - Plaintiff established loan through promissory note of Rs.35,00,000/- and subsequently issued post-dated cheque for Rs.39,42,000/-, returned due to insufficient funds - Defendant contended that promissory note was fabricated, but did not sufficiently rebut presumption of its validity under Section 118 - Appeal dismissed, trial court's decree upheld. (Paras 10, 28)

(B) Presumption of consideration - Section 118 of the Negotiable Instruments Act establishes a rebuttable presumption in favor of holder in due course, which the defendant failed to dispel despite admitting signature on promissory note. (Paras 21, 28)

Facts of the case:
Plaintiff lends Rs.35,00,000/- to defendant, who issues a promissory note and a post-dated cheque. Cheque dishonored, leading to suit for recovery based on promissory note. Defendant denies borrowing, claims document was forged. (Paras 1, 3, 10)

Findings of Court:
The trial court upheld the execution of the promissory note and found in favor of the plaintiff, confirming the legality of the debt. (Paras 28)

Issues: The main issues were whether the presumption of consideration was rebutted by the defendant and the authenticity of the suit promissory note. (Paras 10)

Ratio Decidendi: The court found that the presumption under Section 118 of the Negotiable Instruments Act was not rebutted, and the trial court's judgment was affirmed. (Paras 21, 28)

Result: Appeal dismissed, upholding trial court's decree.

Table of Content
1. nature of the loan transaction (Para 1 , 3 , 4 , 10 , 11)
2. evidence supporting the execution of the promissory note (Para 5 , 6 , 13 , 19)
3. burden of proof and presumption in negotiable instruments act (Para 8 , 21)
4. impact of procedural rules on evidence admission (Para 26 , 27 , 28)
5. final judgment and decree (Para 29)

JUDGMENT :

R.KALAIMATHI, J.

This Appeal Suit is preferred by the defendant against the Judgment and Decree dated 27.03.2017 passed in O.S.No.163 of 2013 on the file of the II Additional District Judge, Tiruchirappalli.

2. Parties are indicated herein as per their litigative status and ranking before the trial Court.

3. According to the plaintiff, P.Balakannan, S/o G.Paramasivam Pillai of Trichy, the defendant borrowed a sum of Rs.35,00,000/- (Rupees Thirty Five Thousand Only) on 05.01.2013 from the plaintiff for his urgent family expenses and on the same date, executed a promissory note in favour of the plaintiff agreeing to pay the said sum borrowed on demand with interest at 24% per annum either to the plaintiff or to his order. After repeated demands made by the plaintiff, the defendant issued a post-dated cheque in the first week of July 2013 drawn on Indian Overseas Bank, K.Sathanur Branch for Rs.39,42,000/- inclusive of interest due up to date. The date of the cheque is 12.07.2013. The said cheque was presented to the State Bank of India, Main Branch at Tiruchirappalli on 12.07.2013 and on 13.07.2013, the cheque was returned with endorsement “Fund Insufficient”. Accordingly, the plaintiff filed a Criminal Complaint against the defendant under Section 138 and 142 of the Negotiable Instruments Act, 1881 .

3.1. After the dishonour of cheque, on 25.07.2013, the plaintiff caused to issue legal notice to the defendant herein. The defendant gave a reply through his lawyer on 02.08.2013 with vexatious averments. The proceedings before the Judicial Magistrate is pending in S.T.C.No.1042 of 2013. As the defendant is arranging to alienate his immovable properties, the plaintiff laid the suit for recovery of money due from the defendant.

3.2. The contention of the defendant is that the plaintiff is not known to him and that the plaintiff is a person set up by one Baskar. The suit promissory note is concocted on a blank stamped papers and a blank cheque was signed by the defendant and given to the said Baskar are absolutely false. The plaintiff does not know the said Baskar. The defendant has been close friend of the plaintiff since fifteen years. Hence, the suit is laid for recovery or money based on promissory note.

4. Written statement and additional written statement have been filed, wherein, the defendant would inter alia contend that the plaint details are denied as false and incorrect. The defendant borrowed a sum of Rs.5,00,000/- (Rupees Five Lakhs only) on 27.06.2011 with interest at the rate of 48% per annum from one Baskar S/o Venkidachalam and the defendant executed a several unfilled non- judicial stamp papers, unfilled green sheets, unfilled two promissory notes and four unfilled blank signed cheques drawn on Indian Overseas Bank, K.Sathanur Branch, Tiruchirappalli and handed over to the said Baskar. The said promissory notes and the said cheque leaves and other documents as stated above were issued to the said Baskar by the defendant and the same were concocted and fabricated by the plaintiff.

4.1. The defendant settled the amount of Rs.5,00,000/- with interest in the month of October 2012 to the said Baskar at the residence of the defendant in the presence of Murugesan, S/o Veeraiyan and Muthusamy S/o Singaram. When the defendant demanded to the said Baskar to return back the above said blank papers signed by the defendant, it is stated by the him that the documents are kept at his house and promised to return back the above said documents.

4.2. Taking advantage of the same, the said Baskar has misused one of the blank cheques and blank promissory note signed by the defendant and fabricat