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Rengarajan (Died) and Others Vs. Renugopal - Court Judgment

LegalCrystal Citation
CourtChennai Madurai High Court
Decided On
Case NumberS.A. Nos. 1572 & 1573 of 2000 & S.A. No. 1572 of 2000
Judge
AppellantRengarajan (Died) and Others
RespondentRenugopal
Excerpt:
.....s.krishnan] 10. per contra, the learned counsel for the respondent submitted that four promissory notes executed by the respondent in favour of the appellants, who are sons and sons-in-law of venkatasamy naicker and another son and son-in-law, were not supported by consideration. the said documents were executed by the respondent, by putting different dates as a security, for due repayment of rs.22,000/- found to be payable to venkatasamy naicker as on 12.10.1995. the said venkatasamy naicker is known to the respondent and therefore, believing him, he has executed five promissory notes as a security and handed over the same to venkatasamy naicker. no notice was issued before filing of the suits and only when the respondent sold some of his properties, venkatasamy naicker with fraudulent.....
Judgment:

(Prayer: Second Appeal is filed under Section 100 of Civil Procedure Code, against the judgment and decree dated 31.03.2000, made in A.S.No.79 of 1999 on the file of the Additional District Court, Dindigul, reversing the judgment and decree, dated 07.08.1998, made in O.S.No.126 of 1996, on the file of the District Munsif-cum-Judicial Magistrate Court, Vedasandhur.

Prayer:Second Appeal is filed under Section 100 of Civil Procedure Code, against the judgment and decree dated 31.03.2000, made in A.S.No.81 of 1999 on the file of the Additional District Court, Dindigul, reversing the judgment and decree, dated 07.08.1998, made in O.S.No.128 of 1996, on the file of the District Munsif-cum-Judicial Magistrate Court, Vedasandhur.)

Common Judgment:

1. These Second Appeals have been filed against the judgment and decree dated 31.03.2000, made in A.S.Nos.79 and 81 of 1999 on the file of the Additional District Court, Dindigul, reversing the judgment and decree, dated 07.08.1998, made in O.S.Nos.126 and 128 of 1996, on the file of the District Munsif-cum-Judicial Magistrate Court, Vedasandhur.

2. The issue involved in both the second appeals and the substantial questions of law are one and the same and therefore, both the second appeals are disposed of by this common judgment.

3. The appellants are the plaintiffs, who succeeded in the Trial Court, but lost in the first appellate Court. The respondent is the defendant.

4. Facts of the case:

(i) The appellants filed suits in O.S.Nos.126 and 128 of 1996 before the District Munsif-cum-Judicial Magistrate Court, Vedasandhur, for recovery of amounts. The respondent borrowed a sum of Rs.25,000/- and Rs.25,000/- from the appellants on 01.10.1995 and 07.02.1995 and executed promissory notes agreeing to repay the said amounts together with interest at 12% p.a. The respondent failed to pay principal and interest. Hence, the suit.

(ii) The respondent filed written statement and denied all the averments made by the appellants and submitted that the respondent did not borrow any amounts from the appellants. The respondent further submitted that he borrowed a sum of Rs.22,000/- from one Venkatasamy Naicker and as a security for repayment of the amount due, the respondent executed the suit promissory notes on 12.10.1995 in favour of the appellants and handed over the promissory notes to Venkatasamy Naicker. Apart from the suit promissory notes, he also executed three promissory notes, dated 01.10.1995, 20.01.1995 and 01.02.1995 for Rs.25,000/-, Rs.20,000/- and Rs.21,000/- respectively, but, did not receive any amount for the same. All the promissory notes were executed on 12.10.1995 only as a security for the amounts payable to Venkatasamy Naicker. One Lingappan, the elder son of the Venkatasamy Naicker was a partner in M/s.Renganathan Finance. The respondent in the year 1986, borrowed a sum of Rs.5,000/- and Rs.3,000/- from M/s.Renganathan Finance. In the year 1988, he borrowed Rs.7,500/- from Venkatasamy Naicker. A sum of Rs.9,300/- was due towards principal and interest and after he borrowed a sum of Rs.700/- from Venkatasamy Naicker and thus, a total amount payable to Venkatasamy Naicker was Rs.20,000/-. After paying interest for the said amount, on 12.10.1995, a sum of Rs.22,000/- was found to be due and payable by the respondent. For that sum only, on 12.10.1995, the respondent executed five promissory notes by mentioning different dates. For the four promissory notes, the respondent did not receive any amount and therefore, he is not liable to pay any amount. To cheat the respondent only, the appellants and Venkatasamy Naicker have filed five suits and attached 25 acres of the property of the respondent.

(iii) Based on the pleadings, the learned District Munsif-cum-Judicial Magistrate, Vedasandhur, framed necessary issues in both the suits.

(iv) Before the learned District Munsif-cum-Judicial Magistrate, the appellants examined themselves as P.W.1 and marked one document as Ex.A.1. The respondent examined himself as D.W.1 and one Rengasamy was examined as D.W.2 and no document was marked on behalf of the respondent.

(v) The learned District Munsif-cum-Judicial Magistrate, considering the pleadings, both oral and documentary evidence, arguments of the learned counsel for the parties, decreed the suit rejecting the contention of the respondent that the suit promissory notes were not supported by consideration and having admitted the execution of promissory note, failed to rebut the presumption under Section 118 of the Negotiable Instruments Act.

(vi) Against the said judgment and decree, dated 07.08.1998 the respondent filed A.S.Nos.79 and 81 of 1999 before the Additional District Court, Dindigul.

(vii) The learned District Judge, Dindigul, formulated necessary points for consideration and allowed the first appeals holding that the respondent has rebutted the presumption as contemplated under Section 118 of the Negotiable Instruments Act. The learned Additional District Judge also held that within the short period of nine months, there was no necessity for the respondent to borrow such huge amount of Rs.1,16,000/- for agricultural purpose.

5. Against the said judgments and decrees, dated 31.03.2000, the appellants have preferred these second appeals.

6. At the time of admitting the second appeals, this Court framed the following substantial questions of law:

1. Whether the Lower Appellate Court had not misplaced the burden of proof on the plaintiff when the execution of the promissory note is admitted by the respondent?

2. Whether the lower appellate Court had not miserably failed in its attempt to apply the principle under Section 20 and 118 of the Negotiable Instrument Act?

3. Whether the lower appellate Court is right in dismissing the suit believing the ipse-dixit of the defendant and whether its order is not based on surmise?

7. The learned counsel for the appellants contended that the learned Additional District Judge failed to consider Section 118 of the Negotiable Instruments Act in proper perspective. Mere denial of receipt of sale consideration will not amount to rebuttal of the presumption as contemplated under Section 118 of the Negotiable Instruments Act. The respondent must prove the failure of consideration by acceptable documentary and oral evidence. D.W.2 examined on behalf of the respondent has admitted that the respondent was in the habit of borrowing money and discharging the same. D.W.2 admitted that the respondent did not allege any grievance against the Venkatasamy Naicker and others. The respondent as D.W.1 has also admitted that after filing of the suits, he has to pay Rs.80,000/- as a loan. It is quite unbelievable that for Rs.22,000/- due to Venkatasamy Naicker, five promissory notes have been executed for a total sum of Rs.1,16,000/-. The respondent failed to prove that he borrowed monies from M/s.Renganathan Finance and paid Rs.21,500/- towards interest and also repaid principal amount and discharged the entire loan. So also, the stand of the respondent that he did not get any receipt for the amounts paid and did not get back the promissory notes, is unbelievable, as D.W.2, who had borrowed money from the M/s.Renganathan Finance, has admitted that for the amounts paid by him towards the loan, the M/s.Renganathan Finance issued receipts and returned the promissory note after he fully discharged the loan.

8. The learned counsel for the appellants further submitted that the learned Additional District Judge, Dindigul, erred in holding that there is no necessity to borrow Rs.1,16,000/- within a short period of nine months for agricultural purpose. The learned Additional District Judge without appreciating the pleadings, oral and documentary evidence, only on presumption and assumption, allowed the appeals and therefore, he prayed for setting aside the judgment and decree dated 31.03.2000, made in A.S.Nos.79 and 81 of 1999 and restore the judgment and decree, dated 07.08.1998, passed in O.S.Nos.126 and 128 of 1996, by the learned District Munsif-cum-Judicial Magistrate, Vedasandhur.

9. In support of his submissions, the learned counsel for the appellants relied on the following judgments and submitted that no rebuttal evidence was let in by the respondent to prove that the promissory notes were not supported by consideration. On the other hand, under Section 118(a) of the Negotiable Instruments Act, the presumption is that once the execution of the promissory notes are admitted, then it follows that they are supported by consideration.

(i) AIR 1999 Supreme Court 1008 [Bharat Barrel and Drum Manufacturing Company Vs. Amin Chand Payrelal]

(ii) 1996 (I) CTC 613 [Meenakshisundaram Vs. N.Rengasami]

(iii) 2008 (6) CTC 271 [K.Sivakami Vs. S.Krishnan]

10. Per contra, the learned counsel for the respondent submitted that four promissory notes executed by the respondent in favour of the appellants, who are sons and sons-in-law of Venkatasamy Naicker and another son and son-in-law, were not supported by consideration. The said documents were executed by the respondent, by putting different dates as a security, for due repayment of Rs.22,000/- found to be payable to Venkatasamy Naicker as on 12.10.1995. The said Venkatasamy Naicker is known to the respondent and therefore, believing him, he has executed five promissory notes as a security and handed over the same to Venkatasamy Naicker. No notice was issued before filing of the suits and only when the respondent sold some of his properties, Venkatasamy Naicker with fraudulent intension filed all the five suits on the same day through his sons and sons-in-law and attached the properties of the respondent. The respondent by acceptable evidence has rebutted the presumption as contemplated under Section 118 of the Negotiable Instruments Act. The learned Additional District Judge has properly appreciated the evidence and has come to the correct conclusion that there is no necessity for the respondent to borrow a sum of Rs.1,16,000/- within a short period of nine months for agricultural purpose. No question of law arises for consideration in the second appeal much less substantial question of law and therefore, he prayed for dismissal of the second appeals.

11. I have carefully perused all the materials available on record, the judgment and decree of the Courts below and considered the arguments advanced by the learned counsel appearing for the parties.

12. From the pleadings and oral and documentary evidence, it is an admitted fact that the promissory notes were written by the respondent himself and executed by him. Therefore, it is for the respondent to prove that the four promissory notes executed in favour of the appellants were not supported by consideration and the same were executed only as a security document for the repayment of a sum of Rs.22,000/- payable to Venkatasamy Naicker. To rebut the presumption under Section 118 of the Negotiable Instruments Act, the respondent examined himself as D.W.1 and deposed the defence as stated in the written statement. To substantiate his case, he examined D.W.2. The evidence of D.W.2 does not advance the case of the respondent. D.W.2 deposed that he did not know whether M/s.Renganathan Finance advanced any money to the respondent. His evidence is that for the amount repaid by him, for the amounts borrowed from the M/s.Renganathan Finance, they issued receipt and after repayment of entire loan, the promissory notes executed by him were returned duly cancelled by them. This evidence destroys the case of the respondent, who has stated that he has paid Rs.21,500/- towards interest to the M/s.Renganathan Finance, but did not receive any receipt and after repayment of entire loan amount, the promissory notes executed by him were not returned to him. This contention has no force, as it is proved that M/s.Renganathan Finance is in the habit of issuing receipt for the amounts received and returning the promissory note after entire loan is discharged. Apart from the interested evidence of the respondent as D.W.1, there is no acceptable evidence to prove the case of the respondent that he did not receive money after executing four promissory notes in favour of the appellants and they are only security documents for the amounts received by him from Venkatasamy Naicker.

13. The reasoning of the Additional District Judge, Dindigul, that Rs.1,16,000/- is not required for the respondent for agricultural purpose within a short period of nine months, is only an assumption. The learned Additional District Judge failed to consider the evidence of the respondent as D.W.1 that he himself admitted that he borrowed amounts from more than 50 persons and a sum of Rs.80,000/- is due and payable by the respondent even after filing of the suits. D.W.2 also admitted that the respondent is in the habit of borrowing money and discharging the same. The respondent has admitted that he himself has written the promissory notes and executed the same on the stamp paper. The respondent has failed to rebut the presumption that consideration was paid to him. The reasoning given by the learned Additional District Judge, Dindigul, that the respondent rebutted the presumption with regard to consideration is error in law. From the evidence of D.Ws.1 and 2, it is seen that the respondent failed to rebut the presumption. In the circumstances, the judgments relied on by the learned counsel for the appellants are squarely applicable to the facts of the present cases. The substantial questions of law framed are answered in favour of the appellants.

14. In the result, these second appeals are allowed, setting aside the judgment and decree of the learned Additional District Judge, Dindigul, dated 31.03.2000, made in A.S.Nos.79 and 81 of 1999, and confirming the judgment and decree of the learned District Munsif-cum- Judicial Magistrate, Vedasandhur, dated 07.08.1998, made in O.S.Nos.126 and 128 of 1996. No costs.


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