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2026 Supreme(Mad) 2558
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
P.B.BALAJI, J.
T.R.Krishnamoorthy - Appellant
Versus
K.Kuppusamy - Respondent
S.A.(MD)No.434 of 2022, C.M.P.(MD)No.5314 of 2022
Decided On : 10-07-2026
For the Appellant : Mr.H.Lakshmi Shankar
For the Respondent: Mr.S.Vinod Sathya Lazar
When execution of a promissory note is admitted, a statutory presumption of consideration arises. The burden rests on the defendant to provide a probable defense to rebut this. Appellate courts will not disturb concurrent findings of fact unless they are perverse or lack supporting evidence.
Headnote:(A) Negotiable Instruments Act - Section 118 - Civil Procedure Code - Section 100 - Order 41 Rule 27 - Promissory note - Presumption of consideration - Burden of proof - Concurrent findings of fact - Scope of appellate interference - Admission of additional evidence - The legal presumption under the governing act is rebuttable, requiring the defendant to establish a probable defense to shift the burden of proof back to the plaintiff - (Para 17, 18).
(B) Appellate Jurisdiction - Scope and ambit - High Court under Section 100 cannot re-appreciate evidence to reach a different conclusion when findings of facts by subordinate courts are concurrent and are not perverse or devoid of evidence - (Para 17).
(C) Procedural Law - Additional evidence - Applications under Order 41 Rule 27 should not be entertained to allow parties to improve their case or fill gaps after failing to pursue opportunities during the trial phase - (Para 15, 16).
Facts of the case:
A plaintiff initiated a suit for recovery of money based on an executed promissory note. The defendant contended that the instrument was a misused blank document obtained during unrelated business transactions. Despite the defendant admitting to the signature and execution of the instrument, he sought to introduce additional evidence, including digital recordings, in the appellate court to challenge the evidence of witnesses, which was rejected by the subordinate courts.
Findings of Court:
The courts held that the admission of the execution of the promissory note shifted the burden to the defendant to prove the absence of consideration, which he failed to do. The appellate court correctly exercised its jurisdiction to deny the admission of additional evidence as the applicant failed to demonstrate due diligence during the trial. The concurrent findings were based on substantial evidence and were not deemed perverse.
Issues: Whether the defendant successfully rebutted the statutory presumption of consideration and whether the appellate court was correct in rejecting the applications for the admission of additional evidence under the relevant procedural rules.
Ratio Decidendi: Once the execution of a promissory note is admitted, a mandatory legal presumption of consideration arises. To rebut this, the defendant must provide a probable and convincing defense. Appellate courts are prohibited from re-appreciating evidence in successive appeals unless the findings are perverse, and requests for additional evidence should be denied if the party failed to exercise due diligence during the trial.
Result: Appeal dismissed; lower court judgments confirmed.
| Table of Content |
|---|
| 1. introduction of case, parties, and substantial questions of law. (Para 1 , 2 , 3) |
| 2. parties argument regarding promissory note execution and evidence. (Para 4 , 5 , 6 , 7 , 8) |
| 3. evidence analysis and burden of proof in promissory note suits. (Para 9 , 10 , 11 , 12 , 13) |
| 4. admissibility and standards for introducing additional evidence. (Para 14 , 15 , 16) |
| 5. rebuttal of presumption under section 118 negotiable instruments act. (Para 17 , 18 , 19 , 20) |
JUDGMENT :
P.B.BALAJI, J.
The unsuccessful defendant in a suit for recovery of money based on a promissory note is the appellant, challenging the concurrent findings of the Trial Court as well as the First Appellate Court.
2.I have heard Mr.H.Lakshmi Shankar, learned Counsel for the appellant and Mr.S.Vinod Sathya Lazar, learned Counsel for the respondent.
3.The Second Appeal was admitted by me on 08.04.2026, on the two following substantial questions of law:
“(i) Whether the Courts below are justified in concluding that the appellant / defendant failed to rebut the legal presumption of Ex.A.1 promissory note in the light of the documents filed by the defendant, particularly Ex.B.2, Ex.B.3, Ex.B.4, Ex.B.5, Ex.B.6 & Ex.B.11 that prove that actual issue between plaintiff and defendant and whether the Courts below were justified in ignoring those documents that were not disputed?
(ii) Whether the First Appellate Court's reasoning for rejecting the application in I.A.No. 229 of 2016, I.A.No.229 of 2016, I.A.No.103 of 2017 & I.A.No.2 of 2019, filed under Order 41 Rule 27 CPC, without adverting to the contents in those documents and their impact prima facie to the case of the plaintiff and by ignoring Order 41 Rule 28 of CPC sustainable in law?”
4.Mr.H.Lakshmi Shankar, learned Counsel for the appellant would revolve his submissions based on the two substantial questions of law that have been framed for consideration. According to Mr.H.Lakshmi Shankar, the defendant was a broker who brought customers to the plaintiff who was dealing with sale of second-hand vehicles and in the course of business, it was the practice of the plaintiff to take signatures of the defendant in blank papers. Inviting my attention to the lawyer's notice issued by the appellant on 11.02.2008, to which admittedly, there was no reply on the side of the respondent / plaintiff, Mr.H.Lakshmi Shankar, would contend that the Courts below failed to divert their attention to the effect of the said notice, the allegations and claims contained therein and ought to have seen that it was only an after-thought and more as a measure of revenge that the suit claim has been made, misusing the signed blank promissory note available with the plaintiff.
5.Mr.H.Lakshmi Shankar, would take me through the various documents in Exs.B.2 to B.6 and B.11 and would contend that the documentary evidence produced on the side of the defendant clearly pointed out to the fact that there was no money due and payable by the defendant to the plaintiff and if really any money was due and payable, when serious allegations were hurled against the plaintiff, even in 2007, he would have certainly replied to the said notice and would not have kept quite. He would also refer to the evidence of the alleged witnesses P.W.2 & P.W.3 and according to Mr.H.Lakshmi Shankar, the witnesses to the pro-note dated 25.06.2007 and scribe, were stock witnesses and their evidence was totally uninspiring and also unworthy of any credence. He would also take me through the application taken out under Order 41 Rule 27 CPC, before the First Appellate Court and would contend that in the interest of justice, the First Appellate Court ought to have entertained the said application and given an opportunity to the appellant to rebut the presumption with regard to the pro-note having been executed for consideration.
6.Mr.H.Lakshmi Shankar, in support of his contentions would also rely on the decision of the Hon'ble Supreme Court in the case of Bharat Barrel and Drum Manufa
