Allahbad High Court
M.P.SAXENA
Birbal Singh - Appellant
Versus
Harphool Khan - Respondent
Decided On : 07/09/1975
NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 118 - EXECUTION OF PROMISSORY NOTE - BURDEN OF PROOF - ADMISSION OF THUMB IMPRESSIONS ON BLANK PAPER - NO PRESUMPTION OF CONSIDERATION.
Fact of the Case:
Plaintiff filed a suit for recovery of Rs. 1,500/- on the basis of a promissory note and a receipt executed by the defendants. The defendants denied execution of the documents and claimed that their thumb impressions were obtained on blank papers for a different purpose.
Finding of the Court:
The court held that the plaintiff failed to prove execution of the promissory note and the receipt. The court also held that the defendants' admission of thumb impressions on blank papers did not amount to an admission of execution. Therefore, no presumption of consideration could be raised under Section 118 of the Negotiable Instruments Act, 1881.
Issues: 1. Whether the plaintiff proved execution of the promissory note and the receipt? 2. Whether the defendants' admission of thumb impressions on blank papers amounted to an admission of execution? 3. Whether a presumption of consideration could be raised under Section 118 of the Negotiable Instruments Act, 1881?
Ratio Decidendi: 1. The burden of proving execution of a promissory note lies on the plaintiff. 2. Mere admission of thumb impressions on blank papers does not amount to an admission of execution. 3. A presumption of consideration under Section 118 of the Negotiable Instruments Act, 1881 can only be raised if execution of the promissory note is proved.
Final Decision: The court dismissed the plaintiff's appeal and upheld the lower court's decision to dismiss the suit.
2. The plaintiff-appellant had filed a suit for the recovery of Rs. 1,500/- on the basis of a pronote and a receipt dated 11-6-1962 for Rs. 1,000/- alleged to have been executed by the defendants and carrying an interest at the rate of one and a half per cent per mensem. Nothing was said to have been paid towards this loan.
3. The defendant No. 1 alone contested the suit, inter alia, on the grounds that the defendants neither borrowed any amount nor executed the pronote and the receipt in suit; that the plaintiff had to get a joint wall of the parties re-constructed and the defendants were to bear half costs. In that connection the plaintiff obtained their thumb impressions on blank papers. It was alleged that they had paid Rs. 230/- to the plaintiff as their contribution towards the cost of the construction of the wall.
4. The learned trial court held that the pronote and the receipt were executed by the defendants for consideration of Rs. 1,000/- and that nothing was paid towards it. He, therefore, decreed the suit for the recovery of Rs. 1000/-with pendente lite and future interest at the rate of Rs. 6/- per cent. The decretal amount was, however, allowed to be paid by six monthly instalments of Rs. 300/- each.
5. The defendants filed an appeal reiterating the pleas taken in the written statement. The learned District Judge, Meerut, held that the plaintiff had failed to prove execution of the pronote and the receipt as well as its consideration. Therefore, the appeal was allowed and the suit was dismissed with costs of both the courts.
6. The plaintiff has now come up in second appeal and the main point pressed before this Court is that the execution of the pronote and the receipt was not only proved by him but was also admitted by the defendant No. 1 and under Section 118 of the Negotiable Instruments Act the learned first appellate court should have raised a presumption in favour of consideration and it was wrong in placing the burden on the appellant to prove consideration when it should have been done by the defendants.
7. The point has been argued at great length from both sides. I have given my anxious consideration to the whole matter and have no hesitation to say that in a case based on pronote the initial burden lies on the plaintiff to prove execution of the pronote and when this burden is discharged it is then that the court shall raise a presumption in favour of the plaintiff for holding that the pronote was for consideration and it will be for the
defendants to rebut that presumption. The same principle was laid down in the case of Kundan Lal Ralla Ram v. Custodian Evacuee Property, Bombay, (AIR 1961 SC 1316). Before proceeding further it may be considered as to what the word "execution" signifies. In Shaikh Ebadut Ali v. Muhammad Fareed, 35 Ind Cas 56 = (AIR 1916 Pat 206) it was held that the word "execution" consists in signing a document written out, read over and understood and does not consist of merely signing a blank paper. The same view was taken in the cases of Mirza Gorganj v. Bhola Mal Nibalchand, (AIR 1934 Lah 293 (2)) and Pirbhu Dayal v. Tula Ram, (AIR 1922 All 401 (2) ). Therefore, the first question which arises for consideration is whether the execution of the pronote was proved by the plaintiff or admitted by the defendants. The plaintiff examined himself and one Pheru, the marginal witness of the pronote. Both of them contradicted each other on material points to the extent that the learned first appellate court was justified in rejecting their evidence. According to the plaintiff, the said advance was made by him in his Kothri which is north facing. He immediately resiled from this statement and gave out that the money was advanced at the house of Mithan Lal, the scribe of the pronote and the receipt. A
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