G.K. Misra, J.
1. Plaintiffs suit is for recovery of Rs. 600/- on the basis of a promissory note (Ext. 1) for Rs. 443/- paid in cash to and executed by the defendant on 4-10-1958. Defendant admitted execution but denied passing of consideration. His case was that there was a Civil Suit between the plaintiff and one Raghunath Das regarding succession to the Mahantship of the Muth Sri Raghunath Mohaparayu at Dharakote. Defendant was in cultivation of some lands in village Sunapalli belonging to the Math. During the pendency of that suit, plaintiff thereatened the defendant with eviction and he was forced to execute a Muchalika (Ex. A) dated 4-10-1958 on payment of a Salami of Rs. 500/-. The suit promissory note was executed at the same time by way of security for payment of the Rajbhag paddy. Mahant Raghunath Das succeeded in the aforesaid suit and the defendant had to pay the Rajbhag paddy to him and not to the plaintiff. The suit is based on the promissory note executed without consideration.
2. The trial Court decreed the suit. The lower appellate Court dismissed the suit holding that though the oral evidence on either side was unreliable and unsatisfactory, the presumption of passing of consideration under Section 118 of the Negotiable Instruments Act was rebutted by the circumstantial evidence establishing that no consideration passed. Against the decree of the lower appellate Court dismissing the suit, the Civil Revision has been filed.
3. Mr. Rath raised the following contentions:
(i) In the absence of a finding that the plaintiff was in possession of the account book, an adverse inference cannot be drawn under Section 114 of the Evidence Act for non-production of the same:
(ii) Adverse inference should not have been drawn against the plaintiff's case under Section 114, Illustration (g) of the Evidence Act for non-production of the Account Book without the defendant giving notice for production of the same under Order 11 or without summoning the document under Order 16 of the Code of Civil Procedure; and
(iii) Oral evidence of both the parties having been rejected as unreliable and unsatisfactory, and the circumstantial evidence not being compelling, the presumption under Section 118 of the Negotiable Instruments Act stands unrebutted.
These contentions require careful examination.
4. The learned lower appellate Court found:
'Thus the oral evidence on either side is unreliable and unsatisfactory.'
It also recorded a funding to the effect:
'The non-production of the account book is also a circumstance militating against the plaintiff's claim to have lent the amount under Ex. 1 to the defendant.'
Plaintiff is admittedly a registered moneylender. under Section 7 of the Orissa Money-Lenders Act, every registered money-lender shall, in respect of every transaction made by him after the commencement of this Act relating to any loan advanced by him regularly, record and maintain an account of the loans advanced to each of the debtors. Under Rule 11 of the Rules framed under the Orissa Moneylenders Act, every plaint in a suit by a moneylender must contain a particular showing a copy of the account referred to in Section 7(a) of the Orissa Money Lenders Act. It has been held in Anirudha Behera v. Dhanu Behera, ILR 1961 Cut 430 that if a copy of the account has not been referred to in the plaint under Rule 11, opportunity must be given to the plaintiff to amend the plaint and furnish necessary particulars. In case he fails to rectify the defect after the matter is brought to his notice, the suit is liable to be dismissed. In this case, no objection was taken in the written statement that the suit is not maintainable for non-compliance of Rule 11. The dismissal of the suit for non-compliance of Rule 11 is not pressed before this Court by Mr. Misra as no opportunity was given to the plaintiff for rectification of the defect.
There is no finding or material on record to show that the plaintiff maintained a money-lending account. Law is well settled that no adverse inference is to be drawn against a party under Section 114 Illus (g) of Evidence Act unless in fact the party is in possession of a document and fails to produce it. See Devidass v. Shrishailappa, AIR 1961 SC 1277. Mr. Rath accordingly contended that in the absence of a finding that the plaintiff was in possession of money lending accounts, no adverse inference can be drawn for non-production of the same. This contention is not available to him in face of the statutory provision in Section 7 (a) of the Orissa Money Lenders Act and Rule 11 framed thereunder. It is open to the court even now to call upon the plaintiff to produce the account book prescribed under Section 7 (a). If the plaintiff gives a reply that he did not maintain any account book, the suit is liable to be dismissed on that ground even though objection as to non-compliance of Rule 11 had not been taken up earlier. The reason is elementary. In such a case, even if the suit be remanded for affording adequate opportunity to the plaintiff for furnishing particulars as required under Rule 11, plaintiff would fail to do so as on his own case he had maintained no accounts. The only legitimate defence available to the plaintiff in face of the statutory prescription is that the suit is not to be dismissed for non-compliance of Rule 11. Plaintiff cannot, however, be permitted to take up a defence that he did not maintain any account book as required under Section 7 (a) and he simultaneously allowed to make a prayer for non-dismissal of the suit for non-compliance of Rule 11. The position is thus clear that though ordinarily Mr. Rath's contention is unassailable, such contention is not available to a registered money-lender in view of the statutory provisions in the Orissa Money-Lenders Act and Rules. The adverse inference to be drawn under Section 114, Illus (g) is wholly different in its scope and ambit from the dismissal of the suit for non-compliance of Rule 11. No statement has been made before this Court on affidavit that the plaintiff did not maintain any accounts. In the context of the legislative enactment and in the absence of an assertion that account had not been maintained, the legitimate inference is that the plaintiff maintained the account and did not produce the same. If any adverse inference is to be drawn for non-production of the accounts, there would be no difficulty arising out of absence of a finding to the effect in the facts and circumstances of this case.
5. Mr. Rath's second contention that adverse inference is not be drawn against the plaintiff for non-production of the account book in the absence of the defendant calling upon the former to produce the same--is based on the following dictum in Mt. B. Kunwar v. Ranjit Singh, AIR 1915 PC 96:--
'The High Court judges 'attach great significance' to the non-production of the books showing the accounts of the general estate, and appear to draw an inference therefrom adverse to the plaintiff's claim ; any such inference is, in their Lordships' opinion, unwarranted. These books do not necessarily form any part of the plaintiff's case; it is of course, possible that some entries might have appeared therein relating to the bungalow. But it is open to a litigant to a refrain from producing any document that he considers irrelevant ; if the other litigant is dissatisfied, it is for him to apply for an affidavit of documents, and he can obtain inspection and production of all that appear to him in such affidavit to be relevant and proper. If he fails to do so, neither he nor the court at his suggestion is entitled to draw any inference as to the contents of any such document. There is no ground for any inference such as is made in the High Court that the books if produced, would have shown rent credited to Jagmag or set off against some claim against her. They related to a different property, and the possibility of entries relating to the bungalow therein is very remote, but even if it had been greater, the court was not entitled to draw any such inference. It is for the litigant who desires to rely on the contents of the documents to put them in evidence in the usual and proper way; if he fails to do so no inference in his favour can be drawn as to contents thereof. '
This decision fully supports Mr. Rath's contention. According to him, plaintiff considered the production of the account book irrelevant, and if the defendant was dissatisfied, it was for him to call for the document. This decision has been relied upon by different High Courts see Premraj v. Nathumal, ILR 1936 Nag 142 : (AIR 1936 Nag 130); Chandra Narayan Deo v. Ramchandra Sarawgi, AIR 1946 Pat 66; Bihar Agents Ltd. v. Union of India, AIR 1960 Pat 111 and Bans Narayan v. Chandrani, AIR 1944 All 130. It is, however, to be noticed that in none of these decisions, any reference has been made to AIR 1917 PC 6, Murugesam Pillai v. Gnana Sambandha, or the subsequent Privy Council and Supreme Court decisions to be referred to hereinafter.
6. In AIR 1917 PC 6 their Lordships pronounced a contrary view in the following manner :
'A practice has grown up in Indian procedure of those in possession of important documents or information lying by, trusting to the abstract doctrine of the onus of proof, and failing accordingly to furnish to the Courts the best material for its decision. With regard to third parties, this may be right enough. They have no responsibility for the conduct of the suit ; but with regard to the parties to the suit it is, in their Lordships' opinion, an inversion of sound practice for those desiring to rely upon a certain state of facts to withhold from the court the written evidence in their possession which would throw light upon the proposition. The present is a good instance of this bad practice X X X X X X The best assistance to a court of justice would have been a scrutiny of these documents (ledgers and day books), and their Lordships feel free to conclude that if they had been by their entries confirmatory of the defendants' view, the defendants would have brought them into Court. '
This decision has been consistently followed in all of the subsequent Privy Council decisions in Rameshwar Singh v. Bajit Lal, AIR 1929 PC 95 and Mahabir Singh v. Ramana Dhwaj Prasad Singh, AIR 1933 PC 87 and in Supreme Court decisions in Hiralal v. Badkulal, AIR 1953 SC 225 and Kundan Lal Rallaram v. Custodian, Evacuee Property Bombay, AIR 1961 SC 1316.
7. An effort has been made in some decisions to reconcile the two conflicting thoughts. In view of the decisions of the Supreme Court accepting AIR 1917 PC 6 as laying down the correct law, the view given in AIR 1915 PC 96 cannot be accepted. The conflict of view was attempted to be reconciled in Ridhikaran Ramadhin v. French Motorcar Co., Ltd, AIR 1955 Orissa 60 and Devji Shivij v. Mohanlal, AIR 1960 Pat 223. The reasons given in the Patna decision may be quoted :--
'It is true that prima facie in a way there appears to be some conflict between this passage and what has been stated in the foregoing decisions. But in my opinion, this part of the observation made in the judgment has to be read in the context and if that is so read, there is no inconsistency left between them. In that case the entry in the general accounts could not be any way decisive on the question of farzi as raised there, it could at best be only relevant or a link in the chain of evidence, but in no case decisive on the point in issue.
It was for that reason that it was observed therein that if in the opinion of the party who was in possession of the document, the book of account was irrelevant, it was not necessary or incumbent on his part to produce the same and, therefore, the non-production of it could not lead to any adverse inference against him. In other words, in that case the entry in the book of account was not the best evidence either to support or rebut the claim in issue between the parties.'
AIR 1955 Orissa 60 also tried to reconcile by saying that the documents which were not produced in AIR 1915 PC 96 were irrelevant to that case. The distinction pointed out in aforesaid Patna and Orissa decisions cannot be supported in the dictum of the Privy Council in AIR 1915 PC 96. Their Lordships clearly stated that the possibility of entries relating to the bungalow was very remote, but even if it had been greater the Court was not entitled to draw any adverse inference as the litigant who desired to rely on the contents of the documents did not take steps to put them in evidence in the usual and proper way. Their Lordships, in that case, clearly pronounced that even if the document was relevant and had considerable probative value, the opponent could not ask the Court to draw adverse inference unless he resorted to the requisite steps for bringing the document into record.
The correct approach has been taken in Angurchand Bhomraj v. Deochand, AIR 1960 Andh Pra 101 that both the views were irreconcilable and the earlier view of the Privy Council in AIR 1915 PC 96 stands overruled by the later view of the Privy Council and of the Supreme Court. With great respect to the learned Judges, I am inclined to accept his view as correct.
On the aforesaid position of law, adverse inference is to be drawn against the plaintiff for non-production of the account book which is not only to be statutorily maintained but a copy of which is to be referred to in the plaint itself under Rule 11. Adverse inference would arise in this way ; according to the plaintiff, Rs. 443 was paid in cash, while, according to the defendant, no cash was at all paid and the suit promissory note was given by way of collateral security. If money had been paid in cash, the amount must have been entered in the account book maintained by a registered money-lender. The production of the account book, if accepted to be genuine, would be confirmatory of the plaintiff's case. On the other hand, the absence of corresponding entry in the account book would be destructive of the plaintiff's case and confirmatory of the defendant's version. The account book thus constitutes one of the best evidence in the case. under Section 114 of the Evidence Act, the Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and, private business, in their relation to facts of the particular case. Illustration (g) thereon says that the Court may presume that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it. Plaintiff being a registered moneylender, and the statement being that this is the first time of loan advanced after his registration, the account book would be the best evidence to show whether cash was paid or not. It is open to a court of fact to draw an adverse inference under Section 114, Illus. (g) that the account book, if produced, would not show an entry regarding advancement of cash under the suit promissory note, though the onus of proof regarding non-passing of consideration is on the defendant. I would, therefore, reject the contention that the lower appellate Court exercised its jurisdiction illegally or with material irregularity in drawing adverse inference against the plaintiff for non-production of the account book.
8. The last contention is that the presumption under Section 118 of the N.I. Act has not been rebutted. Under this section, until the contrary is proved, a presumption shall be made that every negotiable instrument was made for consideration. In AIR 1961 SC 1316, the scope of the presumption and the different methods available to a person, against whom such a presumption is drawn, to rebut the same, have been fully analysed.
On the admission of the execution of Ext. 1, the burden of rebutting the presumption shifts to the defendant. The defendant might adduce direct evidence to prove that the suit promissory note was not supported by consideration. If the evidence is acceptable, the burden again shifts to the plaintiff. Defendant might also rely upon circumstantial evidence, and if this is compelling, the burden may shift to the plaintiff. Defendant also may rely upon presumptions of fads as those mentioned in Section 114 of the Evidence Act. The presumption under Section 114, Illus. (g) of the Evidence Act, if raised by the Court, can in certain circumstances rebut the presumption of law under Section 118 of the N. I. Act. The burden of proof may be shifted by presumption of law or of fact which may be rebutted not only by direct or circumstantial evidence but also by presumption of law and fact. In view of the authoritative pronouncement of the Supreme Court, it is unnecessary to further pursue the matter.
9. The question for consideration is whether in this case the presumption under Section 118 of the N. I. Act has been rebutted so as to shift the onus to the plaintiff to establish that consideration did pass. The learned lower appellate Court rejected the oral evidence and relied upon the following circumstances in support of its finding that the presumption was rebutted. Those circumstances may be quoted in its own words :
(i) A man who could arrange Rs. 500 independently of any loan borrowed from plaintiff could not have been in immediate need of money on the very day. Rather had the defendant been in actual need of money he would not have brought with him from home to pay the Salami for Ex. A and he could have adjusted the suit loan towards the consideration of Ex. A.
(ii) He (means plaintiff) was required in the pauper petition to show all his personal assets to entitle him to sue in forma pauperis. But he did not choose to do so. That indicates that he had no personal properties at the time of the pauper petition and the suit loan was definitely not an asset in his hands then.
(iii) Ex. 1 was executed on the verandah of the office of the Sub-Registrar on the very day when Ex. A was executed and similar documents were also executed on that day and at the same time by defendant's brother Raghu Jena who was also cultivating the said land. I think both the brothers could not have got the necessity to borrow money from plaintiff on the same date and at the same place. X X X X X X So the execution of Ex. 1 and Ex. A at the same time and at the same place highly probabilises the case of the defendant that Ex. 1 was executed as a measure of security.
(iv) Rather the approximate odd amount (Rs. 443) put in the pronote goes to indicate that the document was obtained for the sake of security.
(v) The non-production of this account book is also a circumstance militating against the plaintiff's claim to have lent the amount under Ex. 1 to the defendant.
The cumulative effect of the circumstances narrated above cannot be said to be not compelling as to justify the conclusion of the learned Subordinate Judge that the presumption under Section 118, N. I. Act was rebutted, so far to shift the onus to the plaintiff.
10. In Wall Mahomed v. Mahomed Baksh AIR 1930 PC 91 their Lordships observed that the proper legal effect of a proved fact was essentially a question of law. But the question whether a fact has been proved, when evidence for and against had been properly admitted, is necessarily a pure question of fact. The question whether statutory presumption is rebutted by the rest of the evidence is always, a question of fact. Entries duly made under Section 44 of the Punjab Land Revenue Act (No. 17) of 1887 are to be presumed to be correct as to the facts they record until the contrary is proved. In the case before their Lordships, after considering the evidence, both oral and documentary, and giving effect to the statutory presumption, the High Court held that the onus on the appellants in whose favour the entries had been made had not been rebutted. In that context, their Lordships held that whether a statutory presumption was rebutted by the rest of the evidence was always a question of fact. The aforesaid principle applies with full force to the facts of the present case. As has already been said, the presumption under Section 118, N. I. Act can be rebutted by circumstantial evidence and by presumptions of facts drawn under Section 114 (Illus. (g) of the Evidence Act. Once the final Court of fact had come to a conclusion on the basis of circumstantial evidence that the statutory presumption had been rebutted, the question becomes one of fact. Such a finding cannot be disturbed in second appeal and much less in Civil revision.
The last contention must accordingly fail.
11. In the result, the Civil revision is dismissed, but in the circumstances, parties to bear their own costs throughout.