Statutory presumption for admitted promissory note remains intact absent credible rebuttal evidence of blank instrument misuse.

Once execution of a promissory note is admitted, the statutory presumption of consideration under Section 118 of the Negotiable Instruments Act applies in favour of the holder. The defendant's plea that the note was signed on a blank instrument for security in a chit transaction was not supported by independent oral or documentary evidence, and minor inconsistencies in the plaintiff's witnesses did not dislodge the presumption. The party denying liability must rebut the presumption on a balance of probabilities, and that burden was not discharged here. The first appellate court was therefore wrong to reverse the decree on that basis, and the suit stood decreed.

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Issues: Whether the defendant rebutted the presumption arising from the admitted execution of the promissory note.

Analysis: The defendant admitted his signature on the promissory note and set up the defence that it had been signed on a blank instrument for security in connection with a chit transaction. In such a case, the presumption under Section 118 of the Negotiable Instruments Act, 1881 operated in favour of the holder of the instrument. The contradictions in the plaintiff's witnesses were treated as minor and not going to the root of the matter, especially because the transaction was old and the evidence was recorded after a long lapse of time. The defendant adduced no independent oral or documentary evidence to substantiate the plea that the promissory note was blank or misused, and therefore failed to discharge the burden of rebutting the presumption on a balance of probabilities.

Conclusion: The presumption was not rebutted and the first appellate court erred in reversing the decree on that basis. The suit was rightly decreed and the appeal succeeded in favour of the appellant.

Ratio Decidendi: Once execution of a negotiable instrument is admitted, the statutory presumption of consideration applies, and the party disputing liability must rebut it by credible evidence on a balance of probabilities.

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