Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Mad) 1779

IN THE HIGH COURT OF JUDICATURE AT MADRAS
P. DHANABAL, J.
M. Manoharan – Appellant
Versus
D. Nirmala – Respondent
S.A. No. 1064 of 2015, M.P. No. 1 of 2015
Decided On : 30-03-2026

Advocates Appeared:
For the Appellant : N. Krishnakumar
For the Respondent: T. Dhanyakumar

Admission of signatures on blank promissory notes does not prove execution of completed documents in plaintiff's favour; plaintiff must fully prove transaction where denied, especially with evidence of third-party involvement; burden does not shift without such proof.

Headnote:(A) Code of Civil Procedure, 1908 - Section 100 - Second Appeal - Suit for recovery of money based on promissory notes and equitable mortgage by deposit of title deeds - Trial court dismissed suit holding plaintiff failed to prove execution and consideration - First appellate court reversed, decreeing suit - High Court allowed second appeal, restoring trial court decree - Plaintiff must prove execution of documents in her favour where defendants deny transaction with her and claim dealings with her husband involving blank signed promissory notes and chit transactions - Evidence of plaintiff not consonant with pleadings; admission of signatures does not amount to execution of filled documents in her favour - Burden does not shift to defendants without full proof of execution - Suit barred by limitation where promissory notes from 1999 and suit filed in 2003 without proved mortgage extending period. (Paras 16-25)

(B) Evidence Act - Burden of Proof - Admission of signatures on blank promissory notes does not equate to admission of execution of completed documents - Plaintiff advancing money through husband, with documents obtained by him, fails to establish direct transaction - Defence probabilized where plaintiff's witnesses admit absence during execution and lack of knowledge of document filling. (Paras 23-24)

(C) Limitation Act - Suit on promissory notes payable on demand - Three-year limitation from date of execution applies absent proved continuing mortgage - No specific issue framed but court can dismiss on limitation where dates evident and execution disputed. (Para 22)

Facts of the case:
Plaintiff sued for recovery of Rs.5,78,400/- based on four promissory notes totalling Rs.2,95,000/- executed in 1999 with 24% interest, secured by equitable mortgage via deposit of title deeds. Defendants denied borrowing from plaintiff, claiming transactions with her husband involving Rs.1,35,000/- loan against chit subscriptions of Rs.3,40,000/-, blank signed promissory notes, and title deeds as chit security. Trial court dismissed suit for lack of proof; first appellate court decreed for plaintiff; second appeal to High Court.

Findings of Court:
Plaintiff failed to prove execution of promissory notes and mortgage deed in her favour; evidence inconsistent with pleadings and showed husband's involvement; defendants' defence credible; suit barred by limitation.

Issues: (1) Whether suit barred by limitation? (2) Whether signature admission equals document execution? (3) Whether burden shifts to defendants without full proof of execution?

Ratio Decidendi: Execution must be fully proved by plaintiff denying direct transaction; signature admission on blanks insufficient for execution in plaintiff's favour; limitation accrues from note dates without valid mortgage; appellate court cannot reverse on reappreciation ignoring pleading-evidence variance.

Result: Second appeal allowed; first appellate decree set aside; trial court decree restored. No costs.

Table of Content
1. plaintiff alleges loan and mortgage; defendants deny (Para 1 , 2 , 3 , 4)
2. trial court dismissed; appellate court reversed (Para 5 , 6 , 7 , 8 , 9)
3. substantial questions on limitation, execution, burden (Para 10 , 11 , 12 , 13 , 14)
4. plaintiff failed to prove execution and consideration (Para 15 , 16 , 17 , 18 , 19 , 20 , 21)
5. suit barred by limitation; signature not full execution (Para 22 , 23 , 24)
6. appeal allowed; trial court decree restored (Para 25 , 26)

JUDGMENT :

P. DHANABAL, J.

1. This Second Appeal has been preferred as against the decree and judgment passed by the learned District Munsif, Madurantakkam in O.S.No.98 of 2010 dated 29.07.2013.

2. The appellant herein is the defendant in the main suit and the respondent herein being plaintiff the filed suit for recovery of money based on the pronotes and mortgage and the trial Court dismissed the suit. Aggrieved by the said decree and judgment the respondent/plaintiff has preferred appeal before the first appellate court and the first appellate Court set aside the decree and judgment passed by the trial Court. Aggrieved by the same the defendants has preferred this second appeal.

3. The brief averment of the plaint are as follow:

On 06.09.1999 the defendants 1 and 2 borrowed a sum of Rs.75,000/- from the plaintiff and executed a promissory note dated 06.19.1999 promising to pay the said amount on demand with interest at the rate of 24% per annum. On the same day soon after the execution of the said promissory note the defendants 1 and 3 deposited the title deed with an intent to create equitable mortgage of the due payment of the amount due under the promissory note and for future advances and mortgaging the property set out in the B schedule. The defendants 1 and 2 executed a list dated 06.09.1999 depositing the title deed in respect of A schedule property. On the strength of the deposit of title deeds the defendants 1 and 2 borrowed a sum of Rs.75 lakhs on 04.10.1999, Rs.75,000/- on 10.12.1999 and Rs.70000/- on 20.12.1999 and executed three promissory notes dated 04.10.1999, 10.12.1999 and 20.12.1999 for the above said amounts and they agreed to pay a sum of Rs.24%interest per annum. Thereafter the defendants failed to repay the amount inspite of repeated demands by the plaintiff , therefore the plaintiff issued a notice dated 27.04.2001 and the first defendants refused to receive the notice but the second defendant sent reply dated 05.10.2022 with false averments. Therefore the plaintiff has filed the suit based on mortgage for a sum of Rs.578400/-

4. The brief averments of the written statement filed by the first defendant are follows:

The suit is not maintainable either in law or facts and the averments made in the plaint are denied as false. The defendants 1 and 2 never borrowed money from the plaintiff and the defendants had never seen the plaintiff and the defendants have not executed any promissory note in favour of the plaintiff, the alleged deposit of title deeds by the defendants is false. The defendants deny the execution of list dated 06.09.1999, there is no mortgage by the deposit of title deeds by the defendants in favour of the plaintiff as alleged in the plaint. The plaintiff has suppressed the true facts and filed the suit taking advantage of the blank promissory notes in which the defendants have signed and handed over to the husband of the plaintiff namely R.Dhandapani whom the defendants 1 and 2 had money dealings. The husband of the plaintiff is one of the partner of Victory Finance Chit Company at Beri Subramani Swami Kovil Street, Vellore . The said company carried on suspense chits.

4.1. The defendants 1 and 2 had chit transactions with the said company and deposited the title deeds of the properties dated 20.03.1989 as security for the chit transactions. The defendants 1 and 2 subscribed a chit for a sum of Rs. 5,00,000/- commenced on 11.10.1998 with the said company comprising of 25 monthly installments of Rs.5000/-each. When