2006 Supreme(MP) 1013
IN THE HIGH COURT OF MADHYA PRADESH
A. K. SHRIVASTAVA, J.
Shyamrao
Versus
Champalal.
S. A. No. 549 of 1992
Decided On : 5-9-2006.
V. P. Verma, for Appellant.
The central legal point established in the judgment is the requirement to prove the execution of a promissory note and passing of consideration, as per Section 118 of the Negotiable Instruments Act, to establish a claim.
Headnote:
Promissory Note - Loan Dispute - Negotiable Instruments Act, 1881 - Section 118
Fact of the Case:
The plaintiff claimed that the defendant took a loan and executed a promissory note, while the defendant denied the loan and stated that the plaintiff had given him money to develop land.
Finding of the Court:
The court found that the execution of the promissory note and the passing of consideration were not proved, and therefore dismissed the plaintiff's suit.
Issues: Dispute over the execution of a promissory note and passing of consideration.
Ratio Decidendi: The court emphasized the principles of Section 118 of the Negotiable Instruments Act, stating that the presumption of consideration passing can be rebutted by the defendant proving that no consideration was passed. In this case, the defendant's denial of the execution of the promissory note led to the dismissal of the suit.
Final Decision: The appeal was dismissed as the execution of the promissory note and passing of consideration were not proved.
2. In brief, the suit of the plaintiff is that the defendant/respondent took a loan of Rs. 2,000/- from the plaintiff on 5-4-1978 and executed a promissory note in his favour. It was agreed between the parties that defendant shall pay interest at the rate of Rs. 1% per month and agreed that whenever the plaintiff will demand the principal amount and the amount of interest, the same shall be paid by the defendant. The plaintiff made demand to pay the principal amount as well as interest several times to the defendant, but, he avoided to repay the said amount. Thus, the plaintiff is entitled to realise Rs. 2,000/- principal amount and the interest at the rate of Re. 1% per month w.e.f. 5-4-1978 to 4-4-1980 i.e. for 36 months which comes to Rs. 720/-. In this manner a suit for realization of Rs. 2720/- was filed by the plaintiff on 4-4-1981.
3. The defendant/respondent by filing written statement denied the plaint averments. In para 1 it has been specifically denied that defendant took a loan of Rs. 2,000/- and on that date executed a promissory note and has accepted the interest at the rate of Re. 1%. In para 2 it has been pleaded by the defendant that the plaintiff is having one field. However, he does not know how the land is to be cultivated, as a result of which since defendant is an agriculturist, he (plaintiff) requested defendant to make the land cultivable. Plaintiff pacified the defendant that after making the land cultivable, he may cultivate the same for five years and the plaintiff will give half share of the total agricultural produce to him every year. It was also stated by the plaintiff that the entire expenses to develop the land and make the same to be cultivable, shall be born by him (plaintiff). Plaintiff also accepted that he shall bear the cost of fertilizer. In order to meet out these expenses, plaintiff gave Rs. 2,000/- to the defendant. The defendant being an illiterate rustic villager, trusted the pacification stated to him by the plaintiff. In order to develop the land of plaintiff, whatever the amount was given by the plaintiff, the same was taken by the defendant. The plaintiff obtained signatures of the defendant on some papers. The defendant developed the land of the plaintiff and made it cultivable. He also cultivated the said land for two years. However, in third year, the plaintiff took the possession of the land from the defendant and gave it to his son Shyamlal to cultivate the same. However, when defendant requested plaintiff to clear the account, he (plaintiff) told that he is not required to pay anything to the defendant.
4. By amending the written statement, para 6-A has been added in the written statement and it has been pleaded that defendant is an aboriginal agriculturist and is having less than two hectare of unirrigated land. Therefore, whatever the amount has been given to him prior to 16-8-1982, the same cannot be realised by the plaintiff and no suit can be filed for its realisation in view of provisions of M.P. Gramin Rin Vimukti Adhiniyam, 1982. This plea has been raised as an alternative plea.
5. Learned trial Judge on the basis of the evidence placed on record framed specific issue 1(a) and (b) in regard to execution of the promissory note dated 5-4-1978 and giving loan of Rs. 2,000/- as well as entitlement of interest at the rate of Re. 1% per month. The trial Court on the basis of the evidence placed on record while deciding this issue specifically held that the execution of promissory note dated 5-4-1978 and obtaining loan of Rs. 2,000/- is not proved and, therefore, plaintiff is not entitled to realize interest at the rate of Re. 1% from the defendant.
6. Learned trial Judge on the basis of the evidence placed on record, dismissed the suit of the plaintiff.
7. The plaintiff, feeling aggrieved b