Statutory presumption for promissory notes sustained where the defendant failed to prove a probable rebuttal

Execution of a promissory note, once proved through oral testimony and admitted signatures or thumb impression, attracted the statutory presumption of consideration under the Negotiable Instruments Act. That presumption remained rebuttable, but the defendant had to establish a probable defence on the balance of probabilities. The materials relied on were found insufficient to show misuse of the instrument, collusion, or repayment of the alleged earlier loan. No adverse inference arose from non-production of account books or income-tax returns without a notice to produce. In second appeal, the concurrent findings of fact were not shown to be perverse, so the decrees for the plaintiff were sustained.

---

---

Issues: Whether the plaintiff proved execution of the promissory note and passing of consideration so as to attract the statutory presumption, and whether the defendant had rebutted that presumption by a probable defence in second appeal.

Analysis: The plaintiff adduced oral evidence of execution of the promissory note through himself and attesting witnesses, and the defendant did not dispute the signatures or thumb impression. Once execution was established, the presumption under Section 118(a) of the Negotiable Instruments Act, 1881 arose in favour of consideration. That presumption was rebuttable, but the defendant was required to raise a probable defence on a preponderance of probabilities. The materials relied on by the defendant were found insufficient, as they did not establish misuse of the instrument, collusion between the plaintiff and the alleged third party, or repayment of the alleged earlier loan. The Court also held that there was no basis to draw an adverse inference against the plaintiff for non-production of account books or income-tax returns in the absence of a notice to produce such documents. In the exercise of second appellate jurisdiction under Section 100 of the Code of Civil Procedure, 1908, the concurrent findings of fact were not shown to be perverse or based on no evidence.

Conclusion: The defendant failed to rebut the statutory presumption, and the concurrent decrees in favour of the plaintiff were upheld.

---