Statutory presumption of consideration and completion of blank promissory notes where execution is admitted

Where execution and issuance of promissory notes are admitted, the statutory presumption of consideration under the Negotiable Instruments Act applies and the burden shifts to the defendant to rebut it by proof. A holder of a signed blank promissory note is authorised to complete the instrument, and absence of a thumb impression is not by itself fatal when execution is admitted. Visual comparison of signatures cannot displace admitted execution, and collateral evidence cannot replace the required rebuttal of the statutory presumption. The ratio supports the plaintiff's claim on consideration and validity of completion of the notes.

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Issues: (i) Whether the statutory presumption of consideration under the Negotiable Instruments Act operated in favour of the plaintiff when execution and issuance of the promissory notes were admitted. (ii) Whether the holder was entitled to fill up the blanks in the promissory notes and whether the first appellate court was justified in discarding the suit for want of thumb impression and by a visual comparison of signatures.

Issue (i): Whether the statutory presumption of consideration under the Negotiable Instruments Act operated in favour of the plaintiff when execution and issuance of the promissory notes were admitted.

Analysis: The execution and issuance of the promissory notes were not in dispute and were expressly admitted by the defendant. In such circumstances, the court was required to apply the statutory presumption that the instruments were supported by consideration. The burden then shifted to the defendant to rebut that presumption by proof. The first appellate court failed to apply the rule of presumption and wrongly placed the burden on the plaintiff.

Conclusion: The presumption under the Negotiable Instruments Act applied in favour of the plaintiff, and the finding of the first appellate court on this aspect was unsustainable.

Issue (ii): Whether the holder was entitled to fill up the blanks in the promissory notes and whether the first appellate court was justified in discarding the suit for want of thumb impression and by a visual comparison of signatures.

Analysis: A person signing a blank promissory note authorises the holder to complete the instrument, and there is no legal requirement that a promissory note must bear a thumb impression when the signature and execution are admitted. The first appellate court erred in treating absence of thumb impression as fatal and in comparing signatures by naked eye despite the defendant's admission of execution. The court also wrongly treated collateral evidence as sufficient to displace the plaintiff's claim.

Conclusion: The plaintiff was entitled to fill up the promissory notes, and the first appellate court was not justified in rejecting the suit on the basis of absence of thumb impression or visual comparison of signatures.

Final Conclusion: The second appeal succeeded, the appellate reversal was set aside, and the trial court decree was restored with the attachment before judgment order.

Ratio Decidendi: Where execution of a negotiable instrument is admitted, the statutory presumption of consideration operates and can be displaced only by proof, while the holder of a signed blank instrument may complete it in accordance with the authority implied by the signature.

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