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High Court Of Orissa
B. K. Behera And R. C. Patnaik, JJ.
ADIKANDA BEHERA - Appellant
Versus
DAINI KRISHNA MURTHY PATRA - Respondent
First Appeal 55 Of 1972
Decided On : 04/11/1983
NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 118(A) - REGISTRATION ACT, 1908 - SECTIONS 58(1)(C), 59, 60 - PROMISSORY NOTE - EXECUTION - ADMISSION OF CONSIDERATION - REBUTTAL OF PRESUMPTION - BURDEN OF PROOF - EVIDENCE ACT, 1872 - SECTION 115 - ADMISSION - CONCLUSIVENESS - REBUTTAL.
Fact of the Case:
Plaintiff filed a suit against the defendants for recovery of Rs. 5,000/- on the basis of a promissory note executed by them. The defendants denied receipt of consideration and claimed that the document was executed as a nominal security for a loan advanced by the plaintiff to a cooperative society.
Finding of the Court:
The court held that the presumption of consideration arising under Section 118(a) of the Negotiable Instruments Act, 1881, and the prima facie proof of payment under Sections 58(1)(c), 59, and 60 of the Registration Act, 1908, were rebutted by the admission of the plaintiff in a subsequent document (Ext. A) that the advance of Rs. 5,000/- was towards repayment of the outstanding loan owed by the cooperative society.
Issues: 1. Whether the defendants received consideration for the promissory note? 2. Whether the presumption of consideration under Section 118(a) of the Negotiable Instruments Act, 1881, and the prima facie proof of payment under Sections 58(1)(c), 59, and 60 of the Registration Act, 1908, were rebutted?
Ratio Decidendi: 1. The court relied on the admission of the plaintiff in Ext. A, which unequivocally stated that his advance of Rs. 5,000/- was towards repayment of the outstanding loan owed by the cooperative society. 2. The court held that the admission of the plaintiff in Ext. A was the best evidence on which the defendants could rely on to rebut the presumption of consideration and the prima facie proof of payment. 3. The court further held that the plaintiff did not make any attempt to prove that the admission contained in Ext. A was not true.
Final Decision: The court reversed the judgment and decree passed by the learned Subordinate Judge and allowed the appeal with costs throughout.
PATNAIK, J.
( 1 ) THIS is an appeal by defendant 1 against a joint decree passed against him and defendant 2 on a promissory note executed by them in favour of the plaintiff for a sum of Rupees 5,000. 00.
( 2 ) THE plaintiff alleged that defendants were his friends and being in need of money for household expenses, they approached him for a friendly accommodation. The plaintiff advanced a sum of Rs. 5,000. 00 on the basis of a promissory note dated 7-8-1967. The amount was received before the Sub-Registrar, Khallikotem and the document was registered. An endorsement to that effect was made by the Sub-Registrar. The defendants having failed to pay back in spite of repeated, demands, the suit was filed for the principal with interest. The plaintiff alleged that he was not a registered money-lender and the advance was by way of an accommodation. The defendants (the appellant and respondent 2) filed a joint, written statement. Their plea was one of denial of receipt of the consideration. They admitted execution; but pleaded that the document was a nominal one. They alleged that the plaintiff at the relevant time was serving as Supervisor in the Berhampur Central Co-operative Bank and was in charge of Beguniapada Circle. Beguniapada Service Co-operative Society, Borida Service Co-operative Society and Lachhipur Service Cooperative Society were under his jurisdiction. His duty, inter alia, was to receive loan applications from individual members of primary societies for sanction of loan by the Central Bank for ultimate disbursement to them through the primary societies. A primary societies to secure a fresh advance was required to repay the outstanding advances. The modus operand of the plaintiff was to secure private loans for the societies under his charge for payment of arrears so that the societies could be enabled to secure fresh loans. When loans were advanced by the Bank to the society he used to recover the amounts advanced by him privately to such societies. Thereby he used to make some personal gain for himself. Such advances to the societies were being done in collaboration with some friends, one of whom was Chaitana Panda, the Secretary of Begimiapada Service Co-operative Society. Borida Service Co-operative Society was in default. In order to be able to secure fresh loan, it had to clear up the outstanding. Towards the last week of June, 1967, the society obtained an accommodation loan of Rs. 13,000. 00 from one Chaitana Panda, The understanding was that the said amount would be returned after collection of the arrear loans from individual members of the society. Sometime later, the plaintiff received, an order of transfer to Chikiti circle. He gave out of Rs. 13,000. 00 advanced as loan to Borida Service Cooperative Society, Rs. 8,000. 00 was really advanced by Sri Chaitana Panda and the balance Rs. 5,000. 00 was in fact contributed by him. Defendant No. 1 was working as the Secretary of Borida Service Co-operative Society at that time. As the plaintiff was apprehensive that he might not get back the amount advanced by him, he insisted on a security from defendant 1 and his brother. In view of his authority, the defendants agreed to execute a nominal promissory note. Though it was agreed that defendant 1 would execute the document for and on behalf of the society, he learnt next day that the document purported to have been executed by them in their personal capacity. The document had not been read over and explained to them and they had subscribed their signatures to and executed the document in good faith. Having discovered the mischief, they approached the plaintiff who gave an undertaking in writing on 8-8-1967 to the effect that really no money was advanced, under the promissory note. It was really a document to ensure realisation of Rs. 5,000. 00.
( 3 ) THE plaintiff examined himself alone. Defendant 1 examined himself as D. W. 1. The scribe of the promissory note was examined as D. W. 2. Chaitana Panda who was
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