Presumption of consideration for a proved promissory note limits recovery against inherited estate, with no pre-decree interest absent contract.

Execution of a promissory note, once proved by genuine signature and expert support, attracts the statutory presumption of consideration under Section 118 of the Negotiable Instruments Act, and the defendant must rebut that presumption with credible evidence; here, the presumption was not displaced. A recovery claim could also be enforced against estate inherited by legal heirs, limited to the assets received from the deceased, where exhaustion of that estate was not proved. The suit was within limitation, but an alleged acknowledgment by the first defendant was not established. Recovery was confined to the amount independently proved due, and pre-decree interest was refused in the absence of a contractual stipulation, though subsequent interest was allowed.

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Issues: (i) Whether the defendants are jointly or severally liable to pay the suit amount from and out of the estate of late Sheela Venugopal inherited by them; (ii) Whether the suit promissory note dated 26.09.2016 is true and valid and supported by consideration; (iii) Whether the suit is barred by limitation; (iv) Whether the first defendant has acknowledged the liability as claimed by the plaintiff; (v) Whether the plaintiff is entitled to a decree for the suit claim and interest.

Issue (i): Whether the defendants are jointly or severally liable to pay the suit amount from and out of the estate of late Sheela Venugopal inherited by them.

Analysis: The deceased executant had left behind estate which was inherited by the defendants. The defendants' plea that the inherited share had been exhausted by other liabilities was not substantiated by convincing oral or documentary evidence. A claim for recovery could therefore be maintained against the estate inherited by the legal heirs.

Conclusion: The issue was answered in favour of the plaintiff, and the defendants were held liable to the extent of the inherited estate.

Issue (ii): Whether the suit promissory note dated 26.09.2016 is true and valid and supported by consideration.

Analysis: The signature on the promissory note was found to be genuine on expert examination. Once execution was proved, the statutory presumption under Section 118 of the Negotiable Instruments Act, 1881 arose in favour of consideration. The defendants failed to rebut that presumption by establishing absence of consideration or patent defect in the document. The blanks in the instrument and the absence of an express interest clause did not dislodge its validity.

Conclusion: The promissory note was held to be true, valid, and supported by consideration.

Issue (iii): Whether the suit is barred by limitation.

Analysis: The suit was instituted within three years from the date of the promissory note. The pleaded and proved dates brought the claim within the statutory period applicable to a money suit based on a promissory note.

Conclusion: The suit was held to be within limitation.

Issue (iv): Whether the first defendant has acknowledged the liability as claimed by the plaintiff.

Analysis: The disputed undertaking attributed to the first defendant was not proved against him. The handwriting expert's opinion did not support the plaintiff on this aspect, and the document could not be relied upon as an acknowledgment by the first defendant.

Conclusion: The issue was answered against the plaintiff.

Issue (v): Whether the plaintiff is entitled to a decree for the suit claim and interest.

Analysis: Although the promissory note was for a larger sum, the plaintiff's own notice and evidence showed the subsisting liability to be Rs. 2,18,50,000/-. The court limited recovery to that amount. As the promissory note contained no stipulation for interest, pre-decree interest was refused. The plaintiff was granted subsequent interest at 6% per annum from the date of decree till realization. The recovery was confined to the assets inherited from the deceased borrower.

Conclusion: The plaintiff was entitled to a decree only for Rs. 2,18,50,000/- with subsequent interest at 6% per annum from the date of decree.

Final Conclusion: The suit was partly decreed, with recovery limited to the proved outstanding amount against the estate inherited by the defendants, and the remaining claim, including the claimed contractual interest, was rejected.

Ratio Decidendi: Once execution of a promissory note is proved, the statutory presumption of consideration operates in favour of the holder, and the burden shifts to the defendant to rebut it; in the absence of rebuttal, recovery may be confined to the amount otherwise proved due, with no pre-decree interest absent a contractual term.

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