Statutory presumption on blank promissory notes upheld where signatures were admitted but non-execution was not proved.

Admission of signatures on blank promissory notes, without proof that they were only signed blanks, was treated as execution for purposes of the statutory presumption under Section 118 of the Negotiable Instruments Act; the defendants failed to rebut that presumption. Section 20, which permits completion of a stamped but incomplete instrument by the holder, could not aid the defence because the factual foundation of blank delivery with authority to complete was not proved. On the facts, the plaintiffs as payees were entitled to enforce the promissory notes, and the lower appellate court's reversal was set aside while the trial court decrees were restored.

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Issues: (i) whether the defendants' admission of signatures on blank promissory notes amounted to execution so as to attract the presumption under Section 118 of the Negotiable Instruments Act; (ii) whether the plaintiffs could rely on Section 20 of the Negotiable Instruments Act to complete the blank promissory notes and sue on them.

Issue (i): Whether the defendants' admission of signatures on blank promissory notes amounted to execution so as to attract the presumption under Section 118 of the Negotiable Instruments Act.

Analysis: The defendants asserted only that they had signed blank promissory notes and that no consideration passed. The burden first lay on them to establish that the instruments were merely signed blanks and not executed promissory notes. On the evidence, that burden was not discharged. The Court also treated signing an instrument as execution in the context of the Indian Stamp Act and held that, even on the defendants' version, the instruments could not escape the statutory presumption once the signatures were admitted and the plea of non-execution was not proved.

Conclusion: The presumption under Section 118 of the Negotiable Instruments Act applied in favour of the plaintiffs, and the defendants failed to rebut it.

Issue (ii): Whether the plaintiffs could rely on Section 20 of the Negotiable Instruments Act to complete the blank promissory notes and sue on them.

Analysis: Section 20 confers prima facie authority on the holder of a stamped but incomplete negotiable instrument to complete it, but that question becomes material only when it is proved that the defendant in fact delivered a blank instrument with authority to complete it. As the defendants failed to prove that factual foundation, the plea that the plaintiffs were not entitled to invoke Section 20 could not succeed. The Court also held that the plaintiffs sued as payees and, on the facts proved, were entitled to enforce the instruments.

Conclusion: Section 20 did not assist the defendants, and the plaintiffs were entitled to enforce the promissory notes.

Final Conclusion: The reversal by the lower appellate court was set aside, the trial court decrees were restored, and the second appeals succeeded on the strength of the statutory presumption and the failure of the defendants to prove their defence.

Ratio Decidendi: Where execution is denied only by a bare plea that signed blank promissory notes were delivered without proof of that assertion, the presumption of consideration under Section 118 of the Negotiable Instruments Act remains available to the holder, and Section 20 cannot defeat enforcement absent proof of the alleged blank delivery.

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