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Ram Raja Ram Vs. Dhruba Charan Jena - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtOrissa High Court
Decided On
Case NumberSecond Appeal No. 59 of 1978
Judge
Reported inAIR1982Ori264; 53(1982)CLT537
ActsEvidence Act, 1872 - Sections 102; Negotiable Instruments Act, 1881 - Sections 118
AppellantRam Raja Ram
RespondentDhruba Charan Jena
Appellant AdvocateB.B. Mohanty, Adv.
Respondent AdvocateS.C. Sahu, Adv.
DispositionAppeal allowed
Excerpt:
.....led by both the parties, came to hold that the defendant had failed to establish that the suit promissory note was forcibly obtained from him under threat and coercion. on appeal, the learned additional district judge reversed the decree of the trial court on the findings that (1) the plaintiff had failed to prove that the defendant had actually misappropriated a sum of rs. both the courts below concurrently found that the defendant failed to establish the plea that the suit promissory note was obtained from him under threat and coercion. 4,500/-.accordingly, it held that the plaintiff failed to prove his case against the defendant, 6. section 118 of the negotiable instruments act is imperative and the court is bound to draw the initial presumption that the negotiable instrument..........also disbelieved the defence plea that the endorsement of payments on the back of the promissory note was obtained under threat and coercion. accordingly, a decree for rs. 3,119.35 paise was passed in favour of the plaintiff.on appeal, the learned additional district judge reversed the decree of the trial court on the findings that (1) the plaintiff had failed to prove that the defendant had actually misappropriated a sum of rs. 4,500/- and (2) the promissory note was executed by the defendant due to some undue influencethough it may not be 'due to threat at the point of gun, as alleged.5. it is urged in this appeal that the lower appellate court erred in law in not drawing the statutory presumption under section 118 of the negotiable instruments act, as indicated earlier, the.....
Judgment:

P.K. Mohanti, J.

1. This second appeal is by the plaintiff against a decree of reversal arising out of a suit for recovery of a sum of Rs. 3,119.35 on the basis of a promissory note dated 4-10-1966,

2. The plaintiff's case is that he is the sole proprietor of the firm 'Bhagwan Ram Ramrajaram' and he carries on business in steel furnilure, asbestos etc. The defendant was serving as a salesman under him and was in charge of cash and stock. The plaintiff while checking the accounts of the firm detected shortage of cash to the tune of Rs. 4,500/-and the defendant admitted to have misappropriated the same and voluntarily executed the suit promissory note in hisown hand on 4-10-1966 agreeing to repay the same on demand with interest at the rate of 12 p. c. p. a. During the period from 5-6-1968 to 5-4-1969 the defendant paid a sum of Rs. 550/- by instalments and endorsed the total amount of payment on the back of the promissory note on 5-4-1969. He also adjusted a sum of Rs. 830.65 out of his pay from 5-5-1969 to 29-10-1970, leaving a balance of Rs, 3,119.35.

3. The defendant admitted execution of the promissory note but contended that it was forcibly obtained from him under threat and coercion. He denied having acknowledged his liability under the promissory note. His contention was that he was only in charge of accounts and under the instructions of the plaintiff he was maintaining account books in duplicate -- one for the purpose of avoiding payment of sales-tax and income-tax and the other indicating true account of sale and purchase. Once the sales-tax authorities seized the duplicate accounts and the plaintiff suspected the defendant to have given information to the Sales-tax Department. On 4-10-1966, the defendant was called to the plaintiff's house and he denied having given any information to the Sales-tax authorities, but he was forced to execute the suit promissory note under threat and coercion. It was also contended that even after execution of the promissory note the defendant was forced to serve under the plaintiff and the endorsement of payment on the back of the promissory note was forcibly obtained from him under threat and coercion although no payment in fact was made.

4. The trial court, on a consideration of the evidence, led by both the parties, came to hold that the defendant had failed to establish that the suit promissory note was forcibly obtained from him under threat and coercion. It also disbelieved the defence plea that the endorsement of payments on the back of the promissory note was obtained under threat and coercion. Accordingly, a decree for Rs. 3,119.35 paise was passed in favour of the plaintiff.

On appeal, the learned Additional District Judge reversed the decree of the trial court on the findings that (1) the plaintiff had failed to prove that the Defendant had actually misappropriated a sum of Rs. 4,500/- and (2) the promissory note was executed by the defendant due to some undue influencethough it may not be 'due to threat at the point of gun, as alleged.

5. It is urged in this appeal that the lower appellate court erred in law in not drawing the statutory presumption under Section 118 of the Negotiable Instruments Act, As indicated earlier, the defendant admitted execution of the promissory note but contended that it was obtained from him under threat and coercion. Both the courts below concurrently found that the defendant failed to establish the plea that the suit promissory note was obtained from him under threat and coercion. The lower appellate court stressed the fact that the plaintiff did not examine the Gumasta who made entries in the account books -- Exts. 3 to 5 -- in order to show that the defendant had actually misappropriated a sum of Rs. 4,500/-. Accordingly, it held that the plaintiff failed to prove his case against the defendant,

6. Section 118 of the Negotiable Instruments Act is imperative and the Court is bound to draw the initial presumption that the negotiable instrument was made for consideration when its execution is proved. It throws the burden of proof of want of consideration on the defendant. Similarly Section 102 of the Evidence Act throws the burden of proving want of consideration on the defendant, for if no evidence was produced by either side and the execution of the document being admitted, the plaintiff's claim would be decreed. When the court below decided that the defendant had failed to prove that the promissory note was obtained from him under threat and coercion, it was unnecessary to consider whether the plaintiff had proved passing of consideration or not. The execution of the hand-note having been admitted, it was not necessary for the plaintiff to prove passing of consideration. The presumption under Section 118 of the Negotiable Instruments Act, continued in all its rigour until the contrary was proved. The mere fact that the plaintiff did not adduce sufficient evidence to prove passing of consideration did not in any way relieve the defendant from the burden of establishing the contrary of the presumption arising under Section 118 of the Negotiable Instruments Act. The plaintiff produced his account books maintained in the regular course of business and also proved the relevant entry dated 4-10-1966 writ-ten by the defendant himself admitting misappropriation of Rs. 4,500/- vide Ext. 2. The defendant examined as DW 1 admitted to have written Ext. 2 in his own hand. He also admitted that the accounting made at the particular page of the account book containing Ext, 2 is correct. The burden of proving want of consideration was on the defendant and he failed to discharge that onus. The plaintiff was, therefore, entitled to a decree.

7. In the result, the appeal is allowed with costs, the decree of the lower appellate court being set aside and that of the trial court being restored.


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