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Issues: (i) Whether the plaint was liable to be rejected or the suit could be defeated because it did not meet the defence raised in the reply notice; (ii) whether non-compliance with Section 269SS of the Income-tax Act, 1961 could prevent invocation of the presumption under Section 118 of the Negotiable Instruments Act, 1881 and justify non-suiting the plaintiff.
Issue (i): Whether the plaint was liable to be rejected or the suit could be defeated because it did not meet the defence raised in the reply notice.
Analysis: A plaint need only contain the particulars required by the procedural law, namely the cause of action and the material facts constituting the claim. It is not required to answer every defence set out in a pre-suit reply notice. The later written statement also showed that the defendant's stand was not consistently maintained. Mere silence in the plaint on the reply notice defence did not impair the maintainability of the money suit.
Conclusion: The suit could not be rejected on the ground that the plaint did not meet the defence in the reply notice.
Issue (ii): Whether non-compliance with Section 269SS of the Income-tax Act, 1961 could prevent invocation of the presumption under Section 118 of the Negotiable Instruments Act, 1881 and justify non-suiting the plaintiff.
Analysis: The promissory note was admitted in evidence and the signature on it was not denied. Once the statutory presumption as to consideration arose, the burden shifted to the defendant to rebut it. The evidence adduced by the defendant did not displace the presumption, and the testimony of the scribe did not undermine the plaintiff's case. Section 269SS regulates the mode of taking or accepting loans, but breach of that provision does not extinguish a civil creditor's right to recover the debt, nor does it authorise the court to refuse the presumption mandated by Section 118. Non-disclosure in income-tax returns may have tax consequences, but it does not render the underlying debt unrecoverable in civil law.
Conclusion: Non-compliance with Section 269SS did not bar the presumption under Section 118 or justify dismissal of the suit; the finding against the plaintiff was unsustainable.
Final Conclusion: The first appellate court's decree was set aside and the trial court's decree for recovery was restored, with the clarification that no interest would be payable for the period of delay in filing the appeal.
Ratio Decidendi: A breach of the income-tax provision regulating the mode of cash loans does not nullify a civil debt or displace the statutory presumption of consideration attached to a promissory note; the presumption under Section 118 must be applied until it is rebutted by evidence.
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