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Thirumalai Iyengar Vs. Subba Raja - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberAppeal No. 18 of 1957
Judge
Reported inAIR1962Mad219
ActsNegotiable Instruments Act - Sections 118; Evidence Act - Sections 114
AppellantThirumalai Iyengar
RespondentSubba Raja
Cases ReferredIn Nandakumar Das v. Emdad Ali
Excerpt:
.....passed - parties to instrument bound by recital till contrary proved. - - 2 referring to the suit promissory note in an un-equivocal manner as strong pieces of evidence against the plea of the defendant of the note being a forgery and the note being devoid of consideration. how far these circumstances will enable the plaintiff to obtain a decree against the defendant will have to be considered in the light of the other evidence in the case with due regard to the probabilities as well. the defendant failed to executed the othi as promised by his and the indebtedness of the defendant for the amount of rs. (16) learned counsel for the respondent submitted that the defendant admittedly maintained accounts and he having failed to produce the same in court, an adverse inference against..........also was impleaded as a party to the suit. he denied that either himself or his wife executed the suit promissory note which he characterised as a forged document. he however admitted that on 13-11-1950 the date of the suit promissory note, he executed a promissory note in favour of ramaswami raja for a sum of rs. 500 and that promissory note was discharged by his executing an othi document in favour of the plaintiff and his brother chinnaswami raja where in the promissory note amount was adjusted and given credit to. the learned subordinate judge of ramanathapuram at mathurai overruled the plea of the defendant and granted a decree in favour of the plaintiff as prayed for. this appeal has therefore been preferred by the aggrieved defendant.(2) the two simple points that arise for.....
Judgment:

(1) The defendant in O. S. No. 77 of 1955 on the file of the court of the Subordinate Judge of Ramanathapuram at Mathurai has filed this appeal challenging the correctness of the decree against him for recovery of the sum of Rs. 6125-10-9 with interest thereon at 51/2 per cent per annum from 16-8-1955, the date of suit, till payment. The plaintiff, the respondent in this appeal claimed to be the assignee of a promissory note alleged to have been executed by the defendant and his wife, Kothaiammal in favour of one Ramaswami Raja, the younger brother of the plaintiff, for a consideration of a sum of Rs. 5500. Kothaimmal was dead and the defendant also was impleaded as a party to the suit. He denied that either himself or his wife executed the suit promissory note which he characterised as a forged document. He however admitted that on 13-11-1950 the date of the suit promissory note, he executed a promissory note in favour of Ramaswami Raja for a sum of Rs. 500 and that promissory note was discharged by his executing an othi document in favour of the plaintiff and his brother Chinnaswami Raja where in the promissory note amount was adjusted and given credit to. The learned Subordinate Judge of Ramanathapuram at Mathurai overruled the plea of the defendant and granted a decree in favour of the plaintiff as prayed for. This appeal has therefore been preferred by the aggrieved defendant.

(2) The two simple points that arise for consideration in this appeal are: (1) whether the suit promissory note was not executed by the defendant and his wife, the late Kothaiammal and is therefore a forged document, (2) whether the suit promissory note, if true and genuine, is not supported by consideration to the extent of Rs. 5500 stated to have been borrowed by the executants of the note from Ramaswami Raja, the payee on the date of its execution.

(3) Ramaswamit Raja, the payee of the note, Subba Raja, the assignee of the note (the plaintiff), Chinnaswami Raja and Sankara Raja are four brothers. They were not strangers to the defendant. The defendant is an agriculturist owning a considerable extent of immoveable properties and his wife, Kothaiammal also had agricultural properties. The defendant and his wife leased out their properties to the plaintiff as evidenced by registered lease deeds, Ex. B. 4 dated 27-7-1944, Ex. A. 5 dated 10-8-1950 and Ex. A. 7 dated 2-7-1951. It appears that the defendant had executed othi deeds in favour of Nacharammal, the mother of the plaintiff and Ramaswami Raja. It is obvious from the evidence on record that there has been monetary dealings and lease transactions between the defendant and the plaintiff's family.

(4) Ex. A. 1 dated 13-11-1950 is the suit promissory note. It recites a cash consideration of Rs. 5500 and it provided for payment of interest at 6 per cent per annum. It is purported to be signed by the defendant and it purports to bear the mark of Kothaiammal and her thumb impression. The scribe of the promissory note is one Krishnamaraja who has not been examined as a witness in this case. The three attestors to the note have been examined as P. Ws. 1 to 3. The defendant denied his alleged signature in Ex. A 1 and also denied that the thumb impression in Ex. A. 1 is that of his wife. His definite case was that on 13-11-1950 he borrowed a sum of Rs. 500 from Ramaswami Raja for expenses for the medical treatment of his wife who was ill and executed a promissory note at his residence.

(5) On 14-8-1952 the defendant executed two othi deeds, one in favour of the plaintiff and his brother Chinnaswami Raja for a sum of Rs. 5000 (Ex. A. 2) and the other in favour of the plaintiff and his brother Sankara Raja for another sum of Rs. 5000 (Ex. B. 10).

The consideration under Ex. B. 10 is made up of (1) Rs.2800 due by the defendant to Nacharammal, the mother of the plaintiff,under four othi documents for Rs. 700, Rs 800, Rs. 500 and Rs 800 of the years 1936,1938,1941and 1945 and (ii) the sum of Rs 1100 due by the defendant to Ramaswami Raja under a mortgage bond dated 16-2-1950, and (iii) the sum of Rs.1100 due by the defendant to Sankara Raja one of the mortgagees under Ex.B.10 in respect of a mortgage in his favour of the year 1950. Under Ex. B. 10 the defendant did not receive any cash consideration but merely discharged his previous indebtedness to Nacharammal and the two Mortgagees therein. The consideration for Ex. A. 2, the othi deed in favour of the plaintiff and Chinnaswami Raja as recited in the document consists of (i) the sum of Rs. 3200 due by the defendant to Nacharammal, the mother, under an othi document of the year 1946; (ii) the sum of Rs. 600 described as principal and interest on the amount due by the defendant under the promissory note date 13-11-1950 for Rs. 5500 in favour of Ramaswami Raja and (iii) Rs. 1200 cash paid on the date of the execution of the document. According to the plaintiff item No. 2 of the consideration of recital set out in Ex. A. 2 referred categorically to the suit promissory note. Ex. A 1 and this sum of Rs. 600 was given credit to in favour of the defendant in respect of his liability under the suit promissory note and an endorsement of payment was also made on Ex. A. 1 bearing the date 16-8-1952.

The endorsement is Ex. A. 11 in the case, and this is signed by both the plaintiff and his brother Chinnaswami Raja, the Mortgagee under Ex. A. 21 Ex. A 4 is a receipt admittedly executed by the defendant in favour of the plaintiff in respect of lease amounts paid by the plaintiff to the defendant arising out of the transaction of lease between them. That document shows that S. No. 705/1 in the village of Rajapalayam was leased out on 10-8-1950 by the defendant to the plaintiff. The lease was for a period of five years. Ex. A. 4 (a) which is really a part of the document Ex. A. 4 bearing the date 9-8-1955 recites that out of a sum of Rs. 240 arrears of rent payable by the plaintiff to the defendant under the lease an amount of Rs. 200 was adjusted towards the suit promissory note and the balance of Rs. 40 was paid in cash.

The following is a material extract from Ex. A. 4 (a): 'Whereas you have obtained an assignment of the promissory note executed by me and my wife for Rs. 5000 on 13-11-1950 in favour of one M. V. Ramaswami Naidu, excluding the amount paid towards the interest due in respect of the aforesaid promissory note the balance of interest and principal is due by me to you. In the matter of your having credited through this towards the interest due in respect of the aforesaid promissory note the balance of interest and principal is due by me to you. In the matter of your having credited through this towards the interest due in respect of the aforesaid promissory note the amount paid to me is Rs. 200. The amount paid by you this day an received by me in cash is Rs. 40.' It may now be mentioned that the suit promissory note Ex. A. 1 is purported to have been assigned by the payee Ramaswami Raja in favour of the plaintiff on 9-9-1952 by an endorsement on the promissory note, which is Ex. A. 10.

(6) Apart from the oral evidence in the case adduced on the side of the plaintiff to prove the genuineness of Ex. A. 1 and the fact of the alleged lending of Rs. 5500 to the defendant and his wife, the plaintiff relies very strongly upon the recital in Ex. A. 4 (a) and in Ex. A. 2 referring to the suit promissory note in an un-equivocal manner as strong pieces of evidence against the plea of the defendant of the note being a forgery and the note being devoid of consideration. How far these circumstances will enable the plaintiff to obtain a decree against the defendant will have to be considered in the light of the other evidence in the case with due regard to the probabilities as well.

(7) I shall now refer briefly to the direct evidence of the execution of the suit promissory note and the passing of consideration thereunder which consists mainly of the evidence of the three attestors, P. Ws 1 to 3 and the interested testimony of the plaintiff's assignor, the payee of the note, P.W. 8.

* * * * * *

(The learned Judge here discussed the oral evidence and proceeded:)

(8) Though I have discussed the evidence relating to the passing of consideration of the suit promissory note and have expressed my opinion that there could not have been a lending of a sum of Rs. 5500 by Ramaswami Raja on 13-11-1950 the question that has to be first answered is whether the suit promissory not is a forgery or a genuine one. It seems to me that the defendant's case that the promissory note for Rs. 500 on 13-11-1950 and that has been discharged. On the question of genuineness, apart from the assertion of the plaintiff and his witnesses that the suit note was executed by the defendant and his wife and the denial of the defendant that it does not contain his signature or the mark of his wife, there is the denial of the defendant that it does not contain his signature or the mark of his wife, there is the evidence of two handwriting experts one on each side, the witness on the side of the plaintiff swearing to the genuineness of the document and the witness on the side of the defendant swearing that it is a rank forgery. (The learned Judge here discussed the evidence of the experts as regards the signature and thumb impression and held that they were of little assistance and considered the probabilities of the case and concluded:)

(9-10) * * * I am of the opinion that the defendant and his wife Kothaiammal executed the suit promissory note, Ex. A. 1, dated 13-11-1950, but received only a consideration of Rs. 500.

(His Lordship then discussed the other documentary evidence in regard to the defendant's case and found:)

(11-15) * * * As a net result of the analysis of the evidence, it seems to me, that the defendant borrowed a sum of Rs. 500 on 13-11-1950, but executed a promissory note for Rs. 5500 in favour of Ramaswami Raja as he assured that he would lend further moneys if an othi is executed over his properties. The defendant failed to executed the othi as promised by his and the indebtedness of the defendant for the amount of Rs. 500 was adjusted by the othi document executed by him in favour of the plaintiff.

(16) Learned counsel for the respondent submitted that the defendant admittedly maintained accounts and he having failed to produce the same in court, an adverse inference against the truth of his contention should be drawn by the court. The evidence of D.W. 2 relating to accounts is as follow: 'I maintain accounts for my dealing for every year. The accounts will show my borrowings and the paddy I got and my other realisations............ From 1912 onwards I have been maintaining accounts. I have been maintaining my account till today. I have mentioned the pronote in my accounts. From my accounts I say it is 21 months. I have entered the receipt of Rs. 240 in my accounts. I am writing accounts till today.' It is however admitted that the plaintiff did not call upon the defendant to produce the accounts into Court. The defendant did not produce them perhaps in the view that the entries therein will only be self-serving statements without any evidentiary value. Unless a party is called upon to produce into court any documentary evidence in his custody and possession and he fails to produce such evidence deliberately without any adequate or justifying reason the court should not draw an adverse inference from the mere non-production of such evidence.

See Mt. Bilas Kunwar v. Destraj Ranjit Singh, 42 Ind Ap 202: AIR 1915 PC 96 where Sir George Farwell observed,

'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 its of course possible that some entries, might have appeared therein relating to the bungalow. But it is open to a litigant to refrain from producing any documents 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 appears to him in such affidavit to be relevant and proper. It he fails so to do, neither he nor the court at his suggestion is entitled to draw any inference as to the contents of any such documents.... It is for the litigant who desires to rely on the contents of 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 the contents thereof.' Further the presumption of adverse inference if any, cannot displace the contrary inference supported by adequate evidence. D. Ramachandrudu v. D. Janakiramanna, AIR 1920 PC 84.

(17) Ex. A. 1 is a negotiable instrument and due regard must be had to the presumption of consideration as indicated in S 118 of the Negotiable Instruments Act. Section 118 is as follows:

'Until the contrary is proved the following presumption shall be made--(a) that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred was accepted, negotiated or transferred for consideration.......'

Reference can also be made to S. 114 of the Indian Evidence Act, which is in these terms:

'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 the facts of the particular case.'

Illustration (c) is in these terms:

'That a bill of exchange, accepted or endorsed, was accepted or endorsed for good consideration.' There is marked contrast between S. 118 of the Negotiable Instruments Act and S. 114 of the Indian Evidence Act. The statutory presumption under S. 118 of the Negotiable Instruments Act is mandatory while the presumption under Section 114 of the Evidence Act is permissive depending upon the exercise of the discretion of the Court. Bills of exchange, promissory notes and cheques are categories of transactions in the commercial world and the Law Merchant raises a presumption of consideration in favour of these instruments partly because it is necessary and important to preserve their negotiability intact and partly because the existence of a valid consideration may reasonably be inferred from the solemnity of the instruments themselves and the deliberate mode in which they are executed. (See Teylor on Evidence Sec. 148). This presumption is however only a rebuttable presumption as Byles in his Bills of Exchange states.

'Consideration is presumed until the contrary appears or at least appears probable.'

The presumption of consideration is only to this extent, namely, that the negotiable instrument is supported by some consideration adequate or inadequate and is not a nudem pactum.

(18) There is no presumption regarding the quantum of consideration and the amount of value mentioned in a negotiable instrument should not be presumed to have been given or taken under the instrument. A recital in a negotiable instrument as to the passing of consideration is not doubt prima facie evidence of such consideration having passed and the parties to the instrument are bound by the recital till the contrary is proved.

(19) In Narasamma v. Veerraju : AIR1935Mad769 , Varadachariar J. Dealing with the presumption under S. 118 of the Negotiable Instruments Act observed thus at page 773:

'Neither the earlier case law nor the language of the section justifies any presumption being made as to the quantum of consideration. The English Act merely states that any consideration sufficient to support a simple contract may constitute valuable consideration for a bill or a note........................ Any presumption as to quantum of consideration, as distinguished from the mere existence of consideration, has accordingly to be drawn, not be virtue of S. 118 of the Negotiable Instruments Act or even under S. 114 of the Evidence Act, but only from the recitals, if any, that the instruments may contain. As to such recitals, it has long been established that being prima facie evidence against the parties to the instrument they may operate to shift on to the party pleading the contrary, the burden of rebutting the inference raised by them: See Zamindar S.G.R.V. Bomayya Naik v. Virappa Chetti, 2 Mad HC 174. But the weight due to recitals may vary according to circumstances and in particular circumstances, the burden of rebutting them may become very light, especially when the court is not satisfied that the transaction was honest and bona fide.'

(20) This decision was followed by the Andhra Pradesh High Court in Narayanarao v. Ramachandrarao, : AIR1959AP370 . At Page 373 Krishna Rao J observed thus:

'The court is bound to start with the presumption that a promissory note, the genuineness of which is admitted or proved was made for consideration. But it is a rebuttable presumption and the recitals in the instrument are any prima facie evidence against the parties thereto, the weight to be attached to them varying with the circumstances.

The recitals may operate to shift on to the party pleading the contrary, the burden of rebutting the inference raised by them. But the question of burden is of subordinate importance after both the parties have adduced all their evidence unless evidence is evenly balanced and conflicting. Even in suits on negotiable instruments, the debtor can press into service facts and circumstances disclosed by the plaintiff's evidence.'

That there is no presumption in respect of the quantum of the consideration has also been held by the Andhra Pradesh High Court in another decision, Raghava Reddi v. Sundaram Reddi, 1958 2 AWR 570.

(21) In Halsbury's Laws of England Volume 3, third Edn. The rule regarding presumption stated thus at page 175:

'It has been already stated that bills of exchange and promissory notes, unlike other forms of simple contract, are presumed to stand upon the basis of a valuable consideration................. The effect of the presumption therefore, is that shifts the burden of proof from the shoulders of the plaintiffs who relies upon the instrument those of the defendant who impugns it.'

The initial presumption of the subsistence of consideration in respect of a negotiable instruments which is not necessarily a presumption of the which is not necessarily a presumption of the passing of consideration in respect of the amount or value mentioned in the instruments is only a starting advantage in favour of the plaintiff in an action on the instrument and a corresponding handicap against the defendant sued. The course of trial, however, may bring in various factors and circumstances, the cumulative effect of which may be sufficient to destroy the presumption and to place the plaintiff in a position where he cannot succeed without establishing affirmatively by cogent and positive evidence that the document sued upon is supported by consideration, and that he to entitled to recover the amount sued for. In order to counteract the prima facie rebuttable presumption in favour of the plaintiff regarding the consideration the defendant can rely upon the circumstances and probabilities of the case and can, of course, make capital out of the absurdity in the evidence on the side of the plaintiff himself.

(22) I have no hesitation to conclude that, giving the plaintiff the fullest benefit of the statutory presumption of consideration in regard to Ex. A. 1, the evidence on record and the over whelming probabilities and circumstances of the case disentitle the plaintiff to get any relief on foot of the promissory note Ex. A. J.

(23) I am not unaware of the fact that my finding, namely, that though the suit promissory note is genuine it is supported by consideration only to the extent of Rs. 500 is not the case of either party. The parties took up extreme positions, the plaintiff pleading that he had advanced cash of Rs. 5500 to the defendant and the defendant denying the very execution of the suit promissory note. The duty of the court is to give effect to the inference to be drawn from the evidence on record. The court is not prevented from recording a finding which may not be consistent with the pleadings of either party in a suit. In Nandakumar Das v. Emdad Ali : AIR1927Cal49 a Division Bench of the Calcutta High Court observed thus at page 50.

'The learned Judge is perfectly entitled as a Judge of fact to give due weight to the evidence adduced by the parties to draw his own inference which may be inconsistent with the case of either party for it is the duty of the judge to shift the truth and not to be pinned to the evidence if a party to the case in order not to defeat the ends of justice.'

(24) I respectfully agree with this observation. The contentions of the parties largely depend upon the exigencies of the respective case put forward by them and hey do not hesitate to discount in their favour. The pleadings constituted the frame-work of the action and they cannot be disregarded or varied from by the parties themselves. But the finding of the court on the issue arising in the case is one that emerges from the evidence on record and it may so happen that the finding may not be in strict accord with the case of either party. There is no law which can prevent the court from recording such a finding without being fettered or oppressed by the pleadings in the case. Indeed it is the duty of the court to record only such findings which follow on a proper appreciation of and a legitimate inference from the evidence on record.

(25) On my finding it follows that the plaintiff has to be non-suited. The appeal is allowed; the judgment and decree of the learned Subordinate Judge in O. S. No. 77 of 1955 are set aside and the suit is hereby dismissed. Having regard to the conduct of the parties who have put forward false contentions. I direct that each party should bear their respective costs both here and in the court below.

(26) Appeal allowed.


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