2022 (4) TMI 873 - HC - Indian Laws

Court dismisses suit over altered promissory notes, shifts burden of proof to plaintiff. Statutory presumption challenged.

Chakravarthy Versus Pachamuthu

The lower appellate court dismissed the plaintiff's suit for the recovery of a loan amount based on promissory notes due to material alteration in the ... Suit for recovery of money - legal presumption under Sec.118 of the Negotiable Instruments Act, not considered - burden of proof of payment of money - suit for recovery of money disbelieving the payment of consideration without an material evidence or documents - HELD THAT:- It is true that the execution of the pronote is admitted. However in the written statement the defendant specifically denied the passing of consideration as it was recited in the document. As a matter of fact the written statement specifically refers to the figure being shown in the suit promissory notes as ₹ 60, 000/- However in the written statement a specific plea is raised by the defendant that the suit is not maintainable as there is material alteration of the suit promissory note. It is true that the statutory or legal presumption under Sec.118 of the Negotiable Instruments Act is important. However the plaintiff in a case of this nature cannot simply rely upon the statutory presumption when there is material alteration. In the present case, the defendant has come forward how the plaintiff used to get the signature in the promissory notes at the time of borrowing money and about previous transaction between the plaintiff and defendant. The lower Appellate Court has accepted the case of defendant and disbelieved the version of plaintiff with regard to consideration. Having regard to the finding of the Appellate Court which is the final Court of fact, this Court finds no substantial questions of law so as to interfere with the findings of the lower Appellate court. Appeal dismissed. Issues:Recovery of loan amount based on promissory notes, Material alteration in promissory notes, Legal presumption under Sec.118 of the Negotiable Instruments Act, Burden of proof on payment of money, Dismissal of suit for recovery of money, Consideration under promissory notes, Admissibility of evidence, Statutory presumption in case of material alteration, Appeal against lower appellate court's decision.Issue 1: Recovery of loan amount based on promissory notesThe plaintiff filed a suit for the recovery of a loan amount with interest based on two promissory notes executed by the defendant. The trial court held that the plaintiff proved the execution of the promissory notes and was entitled to the decree. However, the lower appellate court set aside this decision, stating that the plaintiff had materially altered the promissory notes by correcting the figures, leading to the dismissal of the suit.Issue 2: Material alteration in promissory notesThe defendant contended that the plaintiff altered the promissory notes by changing the amount from &8377; 60,000 to &8377; 1,20,000. The lower appellate court found evidence of alteration in the figures, even though the amount in words remained consistent. This alteration was deemed material, leading to the dismissal of the suit by the plaintiff.Issue 3: Legal presumption under Sec.118 of the Negotiable Instruments ActWhile the execution of the promissory notes was admitted, the defendant denied the passing of consideration as stated in the document. The lower appellate court found that the alteration in the promissory notes was material, affecting the maintainability of the suit. The plaintiff's reliance on the statutory presumption under Sec.118 of the Act was challenged due to the material alteration.Issue 4: Burden of proof on payment of moneyThe plaintiff argued that since the defendant admitted the execution of the promissory notes, the burden of proof regarding the payment of money should not shift to the plaintiff. However, the lower appellate court considered the material alteration and shifted the burden of proof, leading to the dismissal of the suit.Issue 5: Dismissal of suit for recovery of moneyThe lower appellate court dismissed the suit based on the material alteration in the promissory notes, ruling in favor of the defendant. The court found discrepancies in the plaintiff's case regarding consideration and previous transactions, leading to the rejection of the suit for recovery of money.Issue 6: Consideration under promissory notesThe defendant raised specific objections regarding the consideration mentioned in the promissory notes, alleging material alteration. The lower appellate court found merit in the defendant's arguments, leading to the dismissal of the suit by the plaintiff.Issue 7: Statutory presumption in case of material alterationThe plaintiff's reliance on the statutory presumption under Sec.118 of the Negotiable Instruments Act was challenged due to the material alteration in the promissory notes. The lower appellate court's decision to dismiss the suit was based on the finding of material alteration, which affected the plaintiff's claim.Issue 8: Appeal against lower appellate court's decisionThe plaintiff appealed against the lower appellate court's decision, arguing that the trial court's findings in favor of the plaintiff were not adequately considered. However, the court found no substantial questions of law to interfere with the lower appellate court's decision, leading to the dismissal of the second appeal and confirming the lower court's judgment.This detailed analysis covers the various legal issues involved in the judgment, including the recovery of loan amount, material alteration in promissory notes, legal presumptions, burden of proof, and the dismissal of the suit for recovery of money. Each issue is examined in-depth based on the court's findings and the arguments presented by the parties involved.