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Tarmahomed Haji Abdul Rehman Vs. Tyeb Ebrahim Bharamchari - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 58 of 1948 and Suit No. 2681 of 1947
Judge
Reported inAIR1949Bom257; (1949)51BOMLR219
AppellantTarmahomed Haji Abdul Rehman
RespondentTyeb Ebrahim Bharamchari
DispositionAppeal dismissed
Excerpt:
.....it is entirely unnecessary and irrelevant to consider whether the plaintiff has failed to prove consideration or not. it is not necessary for the plaintiff to prove any consideration. the presumption under section 118 continues in all its rigour.;the presumption under section 118 is not rebutted till it is proved that there is no consideration for the negotiable instrument. the mere fact that the plaintiff fails to prove the particular consideration on which he relies is not sufficient to rebut that presumption and lead the court to the conclusion that the contrary as required by the section has been proved.;lal girairar lal v. dau dayal (1935) i.l.r. 57 all. 895 md. shati khan v. md. moazzam ali [1923] a.i.r. all. 214 and l. bam nath v. lalajtam chandra mal [1935] a.i.r. all...........it was proved that there was no consideration at all for the three hundis. the mere failure to prove consideration on the part of the plaintiff did not establish that the hundis were for accommodation as the defendant alleged, or that the defendant had succeeded in proving that there was no consideration at all for these hundis. mr. purshottam has made a grievance of the fact that the learned judge has considered the evidence in two water-tight compartments; he has considered only the evidence of the defendant in coming to the conclusion that the defendant had failed to discharge the burden. what the learned judge should have done was to have considered the evidence as a whole, and according to mr. purshottam it is not merely from the evidence of the defendant that it can be.....
Judgment:

M.C. Chagla, C.J.

1. This is an appeal from a judgment of Mr. Justice Tendolkar by which he passed a decree for Rs. 8,000 in favour of the plaintiff. The plaintiff filed a suit on three hundis, two dated April 4, 1947, payable 90 days after the date of the hundis, and the third hundi dated April 29, 1947, for Rs. 3,000 payable 68 days after the date of the hundi. The defence of the defendant was that these hundis were passed for accommodation. At the trial three issues were raised:

(1) Whether the hundis were passed for the accommodation of the plaintiff as alleged in para. 2 of the written statement?

(2) What relief is the plaintiff entitled to and

(3) Whether the defendant is entitled to the return of the said three hundis as alleged in para. 6 of the written statement and counter-claim ?

2. The learned Judge came to the conclusion that the defendant had failed to prove that the hundis in suit were passed for accommodation. It was then argued before him that inasmuch as the plaintiff had put forward as the consideration of the hundis something different from what was mentioned in the hundis themselves, the presumption which arises under Section 118 of the Negotiable Instruments Act, 1881, was rebutted and the burden was upon the plaintiff to prove that there was consideration for these hundis. The hundis mention the amount as the consideration for value received in cash this day, i.e. cash received on the day on which the hundis were -executed. But at the hearing the defendant admitted that the consideration mentioned in the hundis was not correct and the real consideration was something different from what was mentioned in the hundis. Now, Section 118 of the Negotiable Instruments Act raises a statutory presumption in favour of there being consideration for every negotiable instrument, and the language of the section is that 'Until the contrary is proved, the following presumptions shall be made: (a) that every negotiable instrument was made or drawn for consideration...' Those are the material words with which we are concerned. Therefore, the statutory, presumption continues until it is rebutted, and the only way it can be rebutted is by proving the contrary, viz. that the negotiable instrument was without consideration.

3. Now, what was urged before Mr. Justice Tendolkar and what has been urged before us is that as soon as it is shown that the consideration mentioned in the negotiable instrument is not the real consideration, the presumption under Section 118 is Tebutted and it is for the plaintiff who is suing on the negotiable instrument to prove what the real consideration was. Looking to the plain language of the section, it is impossible to accept that contention, because the presumption that is raised under Section 118 is not in respect of the consideration mentioned in the negotiable instrument; the presumption, is in favour of there being a, consideration for the negotiable instrument, any consideration which is a valid consideration in law. Mr. Purshottam for the appellant wants us to read the section as if it were worded thus : That every negotiable instrument was made or drawn for consideration mentioned in the negotiable instrument. There is no warrant for importing into the section words which the Legislature did not think fit to incorporate in that section. Two judgments of the Lahore High Court have been relied upon for the purpose of putting this interpretation upon the section. One is Mt. Zohra Jan v. Mt. Bajan Bibi (1915) P.R. No. 48 of 1915 (Civil) and the other is Sundar Singh v. Khushi Ram. A.I.R. [1927] Lah. 864 With very great respect to the Lahore High Court, the learned Judges have not attached sufficient importance to the plain language of the section and have more been carried away with the question of appreciation of evidence and the approach to the evidence led rather than the legal construction of the section in the statute. It is perfectly true that if a particular consideration is mentioned in a negotiable instrument and that consideration is found to be false and some other consideration is set up, that is a factor which the Court would take into consideration in deciding whether the defendant has discharged the burden cast upon him by Section 118. But its is a very different thing to say that merely because the consideration mentioned in the negotiable instrument turns out to be false, therefore the statutory presumption is rebutted and the burden is thrown upon the plaintiff to prove the consideration. Mr. Justice Pal of the Calcutta High Court, although his observations are obiter in Ramani Mohan v. Surjya Kumar Dhar : AIR1943Cal22 has taken a different view as to the true construction of the section from the view taken by the Lahore High Court. In our opinion, therefore, Mr. Justice Tendolkar was right in coming to the conclusion that the mere fact that the consideration mentioned in the three hundis turned out to be wrongly described did not rebut the presumption under Section 118, and the burden still lay on the defendant to satisfy the Court that there was no consideration for the three hundis.

4. The learned Judge on a review of the evidence came to the conclusion that the defendant had failed to prove that the three hundis were for accommodation and he gave his finding on the first issue accordingly. That should have been sufficient to dispose of the suit and a decree would have followed in favour of the plaintiff. But in view of this legal argument advanced, the learned Judge thought it necessary, in the event of a higher Court taking a different view, to approach the case from a different angle. If the legal view was as laid down by the Lahore High Court, then undoubtedly the burden to prove the consideration would have been on the plaintiff inasmuch as the consideration mentioned in the hundis had been found to be false. He, therefore, went on to consider whether the plaintiff had succeeded in proving that there was consideration for the three hundis, and having considered the evidence of the plaintiff and the witnesses examined by him he came to the conclusion that the plaintiff had failed to prove that there was that consideration for the three hundis which he alleged and on which he relied. Now it is argued by Mr. Purshottam that this finding of the learned Judge is tantamount to a finding that there is no consideration for the three hundis and that in any view of the case the defendant has succeeded in rebutting the presumption raised by Section 118 of the Negotiable Instruments Act. As I have already pointed out, this finding of the learned Judge must be viewed and appreciated in its own context. The learned Judge was considering not whether the defendant had discharged the burden, but whether the plaintiff had discharged the burden in the event of its being held that the burden was on the plaintiff, and all that he held was that the plaintiff had failed to discharge the burden of proving consideration. But as I have already pointed out earlier, the statutory presumption continued in favour of the plaintiff and therefore it was for the defendant to establish that there was no consideration. It is one thing to say that the plaintiff has failed to prove a particular consideration for the three hundis; it is an entirely different thing to say that it was proved that there was no consideration at all for the three hundis. The mere failure to prove consideration on the part of the plaintiff did not establish that the hundis were for accommodation as the defendant alleged, or that the defendant had succeeded in proving that there was no consideration at all for these hundis. Mr. Purshottam has made a grievance of the fact that the learned Judge has considered the evidence in two water-tight compartments; He has considered only the evidence of the defendant in coming to the conclusion that the defendant had failed to discharge the burden. What the learned Judge should have done was to have considered the evidence as a whole, and according to Mr. Purshottam it is not merely from the evidence of the defendant that it can be established that there was no consideration, but it is open to the defendant to prove his case even from the mouth of the plaintiff himself. There Mr. Purshottam is quite right. In order to determine whether the contrary is proved or not, as required by Section 118, the whole volume of the evidence led before the Court must be considered. Very often important admissions are elicited by counsel for the defendant by cross-examining the plaintiff and those admissions certainly can be availed of by the defendant. But in considering the whole volume of evidence the Court must always bear in mind the statutory presumption under Section 118 and also the fact that the burden of proof lies upon the defendant and that-burden has got to be discharged by the defendant. How that burden can be discharged or whether it has been discharged is a matter of appreciation of evidence. As a matter of fact, in this case no express issue was raised as to the consideration. The only issue, as I have pointed out, was whether the hundis were passed for accommodation as alleged by the defendant. But the learned Judge points out-and this has been strongly relied upon by Mr. Purshottam-that the plaintiff himself put forward his version of the consideration, and although no issue was in terms raised by the learned Judge, he says in his judgment that it has been tried and answered by him. But even assuming that the learned Judge was right in considering an issue which was not expressly raised and to which the attention of the parties was not directed, even so the only finding on this issue is that the plaintiff has failed to prove the consideration which he set out to prove. That does not get over the earlier finding of the learned Judge that the defendant had failed to prove that the hundis were passed for accommodation. We must look at both these findings in order to try and assess what is the effect of these two findings. In our opinion, it is clear that the learned Judge comes to the conclusion? that the defendant has failed to prove want of consideration as required by Section 118, and then he goes on to say that the plaintiff also has failed to prove the particular consideration which he attempted to prove. Now. it must he borne in mind that as soon as the learnet Judge had decided that the defendant that had failed to prove that the hundis were passed for accommodation, it was entirely unnecessary and irrelevant to consider whether the plaintiff had failed to prove conisederation or not. It was not necessary for the plaintiff to prove any conisedearation. The presumption under Section 118 continued in all its rigour. Assuming that the plaintiff did attempt to prove consideration, the mere fact that he failed to prove such a consideration did not in any way relieve the defendant from his obligation in law to establish the contrary of the presumption raised by Section 118 of the Negotiable Instruments Act. Therefore, we do not read the finding of the learned Judge as meaning that on the record it has been established and proved that there was no consideration for the three hundis.

5. Certain authorities have been cited at the But and considerable emphasis has been laid by Mr. Purshottam on a decision of the Allahabad High Court reported in Lal Girwar Lal v. Dau Daval. I.L.R. (1935) All. 895 All that that case lays down is that where the Court, after a careful consideration of the entire evidence, records a clear finding one way or the other, then that finding is based not on a mere presumption but on the evidence and has to be accepted. With great respect, that is a proposition of law which is unexceptionable. If Mr. Justice Tendolkar had given a clear finding that there was no consideration for the three hundis, then apart from any question of presumption that finding if accepted would have resulted in the defendant succeeding, because the result of that finding would be that the presumption under Section 118 had been rebutted. Two cases were referred to in this judgment of the Allahabad High Court by Mr. Justice Sulaiman and both those cases have also been referred to at the Bar. One is another decision of the Allahabad High Court, Md. Shafi Khan v. Md. Moazzam Ali A.I.R. [1923] All. 214 That case decided that in case where consideration is denied and the plaintiff goes into the witness-box and the result of his cross-examination is such that he failed to establish the point which he set out to make, viz. that he gave the consideration, and the Court is satisfied that he did not give the consideration, the defendant can avail himself of that. It is to be noted that in that case there was only one issue as to consideration, and on that issue the Court considering the contradictory evidence given by the plaintiff came to the conclusion that there was no consideration, and Mr. Justice Sulaiman in Lai Girwar Lal v. Dau Dayal I.L.R. (1935) All. 895 sounds a note of warning as to how that case should be properly understood, and this is what he says (p. 898):

We are not satisfied that it was meant to lie laid down in that case that where the plaintiff merely fails to prove that consideration passed and the. defendant also fails to prove that he did not get consideration, there is no presumption in favour of the plaintiff.

That is exactly the case here. The plaintiff has failed to prove that consideration passed and the defendant has also failed to prove that lie did not get consideration. Under those circumstances the presumption in favour of the pfeiriliff continues. The other case is L. Bam Nath v. Lala Ram Chandra Mal. : AIR1935All154 In that case the plaintiff sued on a promissory note and a receipt on which he claimed that Rs. 2,000 cash had been lent to the defendants. The defendants, on the other hand, admitted the execution of the promissory note and the receipt, but they denied that there was a loan of Us. 2,000 cash. The plaintiff failed to prove consideration and the defendant also did not prove the allegations made by him. A divisional bench of the Allahabad High Court consisting of Mr. Justice Niamatullah and Mr. Justice Bennett held that in that state of the record the presumption under Section 118 applied and the suit should be decreed.

6. These authorities clearly show that the presumption under Section 118 is not rebutted till it is proved that there is no consideration for the negotiable instrument, and the mere fact that the plaintiff fails to prove the particular consideration on which he relies is not sufficient to rebut that presumption and lead the Court to the conclusion that the contrary as required by Section 118 has been proved. In this case it is clear that the defendant failed to prove that the hundis were for accommodation, and the mere fact that the plaintiff also failed to prove the consideration on which he relied is not sufficient to lead one to the conclusion that the presumption under Section 118 has been rebutted.

7. The findings of fact as arrived at by the learned Judge have been accepted by Mr. Purshottam and therefore the result is that the learned Judge was right in coming to the conclusion that he did. The appeal therefore fails and must be dismissed with costs. In taxing the costs of the appeal, costs of including the notes of evidence in the record to be disallowed. As regards the cross-objections, they deal with the order for costs made by the trial Court. In the exercise of his discretion he allowed only two-thirds costs to the plaintiff. We see no reason why we should interfere with the discretion exercised by the learned Judge. Cross-objections therefore must be dismissed with costs.

Bhagwati, J.

8. I agree and have nothing to add.


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