The presumption of consideration under Section 118 of the Negotiable Instruments Act applies once execution of the promissory note is established, shifting the burden to the defendant to prove non-existence of consideration.

JUDGMENT

This Second Appeal has been filed, challenging the concurrent findings of the Courts below, whereby the suit for recovery of money filed by the plaintiff was decreed and the appellant herein was directed to pay a sum of Rs.1,50,000/- with interest at the rate of 12% per annum from the date of plaint till the date of decree and thereafter at the rate of 6% from the date of decree till the date of realisation.

2. For the sake of convenience, the parties are referred as per their ranking in the Trial Court.

3. The defendant, for the purpose of meeting his family expenses borrowed a sum of Rs.1,50,000/- from the plaintiff and agreed to repay the same with interest at the rate of 12% per annum and also executed a promissory note on 15.05.2010, promising to repay the same on demand of the plaintiff. Subsequently, the plaintiff requested the defendant to repay the same but the defendant failed to respond, hence, the plaintiff has issued a legal notice on 23.11.2010, calling upon the defendant to repay the entire loan amount with interest. But the defendant though received the same has not come forward to repay the same thereby, the plaintiff has come forward to file the suit for recovery of money.

4. The defendant filed his written statement and contested the suit on the ground that he received only a sum of Rs.42,000/- along with his friend Kumar from one Raj on 15.12.2007. On the same day, they executed unfilled promissory note and handed over the same to his friend Kumar. Similarly, he had also executed an unfilled promissory note to one Rajasekar, Neiveli Township on behalf of P.K. Subramanian. Subsequently, his friend Kumar died and therefore, the defendant has repaid the entire loan amount borrowed through A.Kuravan Kuppam Ramachandran, Periyakurichi Selvam, Township Rajasekar and settled entire loan amount to Raj. These payments were made due to threat made by the said Raj. After repayment of the entire loan amount, he demanded to return of promissory note and the same was not returned back. Now with the help of plaintiff, the suit has been filed against the defendant. The defendant is a permanent employee of Neyveli Lignite Corporation Ltd., He never received any amount from the plaintiff and hence, he is not liable to pay any amount to the plaintiff.

5. Before the Trial Court, the plaintiff examined himself as P.W.1 and the attestors of promissory note were examined as P.W.2 and P.W.3 and Ex.P1 to Ex.P3 were marked. On the side of the defendants D.W.1 to D.W.4 were examined but no document marked on his side.

6. Based on the pleadings made by both parties, the trial Court has framed the following issues.

“1. Whether the plaintiff is entitled to get the suit amount?

2. Is the promissory note is true?

3. To what other relief the plaintiff is entitled for?”

7. The Trial Court after analysing the evidence and after hearing the arguments had accepted the case of the plaintiff that the defendant has executed promissory note but failed to repay the loan amount thereby, the defendant is liable to pay the entire claim amount.

8. Aggrieved over the Judgment and Decree the defendant has filed Appeal before the III Additional District and Sessions Court, Cuddalore, Vridhachalam. The appellate Court, after hearing both side arguments agreed with the findings of the trial Court and after independently analyzing the evidence, confirmed the Judgment and Decree of the Trial Court.

9. The Second Appeal has been filed by the defendant challenging the Judgments and Decree passed by the Trial Court and the Lower Appellate Court.

10. The Second Appeal was admitted and substantial questions of law also framed by this Court, as follows;-

“1. Whether the Courts below erred in law in decreeing the suit by drawing presumption under Section 118 of the Negotiable Instruments Act when the defendant's rebutted the said presumption by sufficient oral and documentary evidence and when the plaintiff failed to discharge the burden of proof after the rebuttal by th