2022 (6) TMI 853 - HC - Indian Laws

Court rules in favor of Plaintiff in promissory note case, awarding Rs.1,71,20,256 with interest and costs.

Mrs. V.V. Ramani Versus Mr. P. Rajaraman

The court decreed in favor of the Plaintiff in a case involving the recovery of money based on a promissory note executed by the Defendant. The ... Dishonor of Cheque - rebuttal of presumption - existence of consideration for the Suit Promissory Note or not - Recovery of amount alongwith the interest - HELD THAT:- The Suit Promissory Note indicates that the consideration is a sum of Rs.1,45,12,735/-. Since it is a promissory note, it qualifies as a negotiable instrument in terms of the NI Act. As contended by the Plaintiff, if execution is proved, the Plaintiff is entitled to the presumption under Section 118 of the NI Act. Consequently, the first question is whether the Plaintiff has proved execution of the Suit Promissory Note. By referring to the reply statement filed in O.S.No.36 of 2016, the Defendant contended that the execution of the promissory note was denied by the Defendant. On examining Section 73, it is evident that it specifies one of the methods of proving a document. In order to invoke Section 73, admitted signatures of the person concerned should be available. In this case, the Defendant admits the signatures on Ex.P8, Ex.P9 and Ex.P12. On account of the availability of documents bearing the admitted signature of the Defendant, it is possible to compare such admitted signatures with the disputed signature. Upon undertaking such comparison, the disputed signature on Ex.P13 tallies with the admitted signatures on visual examination with the naked eye. The Defendant denies the signature largely on the basis that the name of the signatory/Defendant is not written in capital letters beneath the disputed signature on Ex.P13. Merely because the name of the executant has not been written beneath the signature, the genuineness of the signature cannot be questioned. Thus, it cannot be concluded that the existence of consideration for the Suit Promissory Note is improbable. In effect, the Defendant has failed to disprove the existence of consideration in the manner required by reading Section 3 of the Evidence Act and Section 118 of the NI Act along with the interpretations thereof by the Hon'ble Supreme Court. Once it is concluded that the existence of consideration is not improbable, it should be concluded that the Defendant has failed to effectively rebut the presumption. For such reason, the Plaintiff is entitled to succeed. Interest - HELD THAT:- The Plaintiff has claimed a sum of Rs.1,71,20,256/- by calculating interest on Rs.1,45,12,735/- at 6% per annum from the date of the Suit Promissory Note until the date of the plaint. Interest has been claimed at 6% per annum although the Suit Promissory Note specifies that interest would be payable at 24% per annum. As indicated earlier, the Plaintiff is entitled to this sum. Although the Plaintiff has claimed interest at 24% per annum on Rs.1,71,20,256/- from the date of plaint until the date of realization, by taking into account the prevailing interest rates, the Plaintiff is entitled to interest at 9% per annum from the date of plaint until the date of realization. The suit is decreed by directing the Defendant to pay the Plaintiff a sum of Rs.1,71,20,256/- with interest thereon at 9% per annum from the date of plaint till the date of realization - Application allowed. Issues Involved:1. Entitlement of the Plaintiff to recover money based on the promissory note executed by the Defendant dated 30.11.2015.2. Additional reliefs the Plaintiff is entitled to.Detailed Analysis:1. Entitlement of the Plaintiff to Recover Money Based on the Promissory Note Executed by the Defendant Dated 30.11.2015:The Plaintiff sought to recover Rs.1,71,20,256/- based on a promissory note executed by the Defendant on 30.11.2015, acknowledging a debt of Rs.1,45,12,735/- and promising to repay it with interest at 24% per annum. The Plaintiff relied on Section 118 of the Negotiable Instruments Act, 1881 (NI Act), which presumes that every negotiable instrument was made for consideration and on the date it bears unless rebutted by the Defendant.The Plaintiff presented antecedent documents to support the claim, including:- A registered mortgage (Ex.P1) dated 28.01.1997.- Acknowledgment of receipt of Rs.4,65,000/- (Ex.P3) dated 09.02.2002.- A sale agreement (Ex.P2) dated 03.08.2001.- Promissory notes dated 19.09.2002, 20.10.2002, and 20.12.2002.- A letter dated 30.11.2015 (Ex.P12) confirming the deposit of title documents.The Defendant denied executing Ex.P13 and claimed the signature was not his, pointing out discrepancies such as the absence of his name in capital letters beneath the signature on Ex.P13, which was his usual practice. The Defendant referred to previous repayments and earlier suits to argue that the promissory note was fabricated to avoid the bar of limitation.The Defendant cited judgments, including Bharat Barrel and Drum Mfg. Co. v. Amin Chand Pyarelal, to argue that the presumption under Section 118 of the NI Act can be rebutted by showing the improbability of consideration. The Plaintiff countered by requesting the court to compare the disputed signature with admitted signatures under Section 73 of the Indian Evidence Act, 1872.Upon examining the documents and comparing the signatures, the court found that the disputed signature on Ex.P13 matched the admitted signatures. The court concluded that the Defendant failed to disprove the existence of consideration, thus the statutory presumption under Section 118 of the NI Act stood unrebutted.2. Additional Reliefs the Plaintiff is Entitled To:The Plaintiff claimed a sum of Rs.1,71,20,256/- by calculating interest at 6% per annum from the date of the promissory note until the filing of the suit, despite the promissory note specifying 24% per annum. The court awarded this sum and additionally granted interest at 9% per annum from the date of the plaint until realization, considering prevailing interest rates.The Plaintiff was also awarded costs amounting to Rs.3,00,000/-, which included court fees, lawyer's fees, and other expenses, based on the 'loser pays' principle.Conclusion:The suit was decreed in favor of the Plaintiff. The Defendant was directed to pay Rs.1,71,20,256/- with interest at 9% per annum from the date of the plaint until realization and Rs.3,00,000/- as costs, including court fees, lawyer's fees, and other expenses.