TaxTMI 
TaxTMI 
2018 (5) TMI 839
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....est at 12% p.a., on the original amount of Rs. 65,000/-. The defendant filed a written statement stating that the plaintiff is the sister of one Bolla Veera Venkata Rama Mohana Rao of Mondepulanka village, the plaintiff in O.S.No.37 of 1992 is the younger brother of the said B.V.V.R. Mohana Rao and the plaintiff in O.S.No.28 of 1992 is the mother of said B.V.V.R. Mohana Rao. All the pronotes were executed on the same date, but the date on the pronote in O.S.No.37 of 1992 was put as 26.10.1989. The plaint allegations are denied. The execution, passing of consideration under the promissory note and the validity of the same are specifically denied by the defendant. It was also stated that the suit promissory note was not true, valid and it is not supported by consideration. The defendant denied the knowledge of the plaintiff and also stated that there are no transactions between him and the plaintiff, but admitted that one B.V.V.R. Mohana Rao has got some transactions with the defendant. The said B.V.V.R. Mohana Rao was stated to be an unscrupulous money lender. It was also stated that the defendant and the said B.V.V.R. Mohana Rao stored the paddy by purchasing with a view to sell t....
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....ed to the benefit of Act 45 of 1987 and also Act 1 of 1990 and other enactments. The suit debt even if it is true was abated. On the basis of the above pleadings, the following issues were framed by the trial court: 1. Whether the suit promissory note is true, valid and supported by consideration? 2. Whether the suit promissory note came into existence under the circumstances mentioned in the written statement/ 3. Whether the defendant is a small farmer and whether he is entitled to the benefits of Act 45 of 1987 and Act 1 of 1990. 4. To what relief? On behalf of the plaintiff, PWs.1 and 2 were examined and Exs.A1 to A4 were marked. On behalf of the defendant, the defendant himself was examined as DW.1 besides examining three more witnesses as DWs.2 to 4 and Exs.B1 to B19 were marked. The trial Court noticed that the defendant as DW.1 admitted the execution of Ex.A1 promissory note and held that in view of the said admission, Section 118 of the Negotiable Instruments Act comes into operation and presumption could be drawn in favour of the promisee that the promissory note was supported by consideration. In view of the same, the oral evidence of DWs.2 to 4 to the effect t....
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....is elder sister and he has been looking after her affairs. He spoke about the defendant borrowing an amount of Rs. 65,000/- from the plaintiff and scribing the promissory note in favour of the plaintiff on 01.09.1989. He denied doing any business with the defendant jointly. The other averments made in the written statement were also denied by him. He further stated that DW.2 is a tailor by profession and close friend of DW.1. In the cross- examination he stated that himself, his mother and his brother are residing in the same house at Mondepulanka village and the plaintiff was not having any properties at Mondepulanka village. He further stated that except the amount lent under the promissory note, he did not lend any amount. He denied the other transactions alleged by the defendant in his cross-examination. On behalf of the plaintiff, PW.2 was also examined and he is one of the attestors of the pronote. He stated that he attested Ex.A1 pronote along with elder son of the defendant who attested Ex.A1. The defendant as DW.1 spoke on the lines of his written statement. In the chief-examination he admitted that the said Rama Mohana Rao obtained a pronote for Rs. 65,000/-, which incl....
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.... refused and the plaintiff was still prepared to offer the said amount to the first defendant. The second defendant admitted the case of the plaintiff, whereas the first defendant contested the suit and stated that the document was not a mortgage by conditional sale but an out and out sale and since the amount of consideration was not tendered within the time stipulated, the plaintiff could not claim re-conveyance of the property in question. The trial Court decreed the suit and was confirmed in appeal, but was reversed by the High Court in the Second Appeal. In the said case, the Honble Supreme Court noticed that the first defendant did not enter the witness box, did not state the facts pleaded in the written statement on oath in the trial Court and avoided the witness box so that he may not be cross-examined and that would itself be enough to reject the claim that the transaction of sale between the plaintiff and the second defendant was a bogus transaction. In that connection the Honble Supreme Court observed as follows: 16. Where a party to the suit does not appear into the witness box and states his own case on oath and does not offer himself to be cross examined by the ot....
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....y PW.1 on behalf of the plaintiff and the case of the plaintiff to the extent of execution of the document was admitted by the defendant, though he denied the consideration and attestation. The suit promissory note is not a compulsorily attestable document and there is no dispute with regard to execution of Ex.A1 promissory note. In such circumstances, as rightly pointed out by the learned counsel for the respondent/plaintiff, Section 118(a) of the Negotiable Instruments Act comes into operation and the decision in Vidhyadhars case (supra) is not applicable to the facts of the present case. The facts in Bijoy Kumar Karnanis case (supra) are identical to the facts of the present case. The case of the plaintiff was that the defendant executed two promissory notes for a sum of Rs. 5,000/- and Rs. 12,000/- respectively. He also executed two receipts on the dates of the promissory notes. In spite of giving notice, the defendant failed to pay the amount and accordingly the suit was filed. In the suit, the defendant admitted the execution of the promissory notes and the receipts of the monies under the said promissory notes. He also admitted the execution of two separate receipts/voucher....
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....se of the plaintiff. In cross-examination it was suggested that paragraphs 1 and 2 of the plaint are verified by the plaintiff as true to his knowledge and it was suggested that the plaintiff should have come and deposed. But in view of the evidence given by the plaintiff's witness I do not think that the plaintiff himself was a material witness to prove the place of execution. The accountant Kundu is also not a material witness in this suit. The argument made by Dr. Das, if accepted, would mean that the plaintiff should have been called to disprove the defendant's case. In my view, there is no question of invoking presumption of Section 114, illustration (g) of the Indian Evidence Act and the principles laid down in the said Privy Council decision, cannot apply in this case. In Bharat Barrel and Drum Manufacture Company Limiteds case (supra) also the defendant admitted the execution of the promissory note. The Honble Supreme Court, interpreting the scope of Section 118 of the Negotiable Instruments Act and the presumptions arising under it held as follows: 11. Section 118 of the Act deals with the presumptions as to negotiable instruments. One of such presumptions is, t....
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....nt for the purpose of rebutting the presumption of shifting the evidential burden to the plaintiff. After referring to the catena of authorities on the point, the Full Bench held:-- "Having referred to the method and manner in which the presumption under Section 118 is to be rebutted and as to how, it thereafter disappears we shall also make reference to three principles which are relevant in the context. The first one is connected with the practical difficulties that beset the defendant for proving a negative, namely that no other conceivable consideration exists. We had occasion to refer to this aspect earlier. Negative evidence is always in some sort circumstantial or indirect, and the difficulty or proving a negative lies in discovering a fact or series of facts inconsistent with the fact which we seek to disprove (Gulson, Philosophy of Proof, 2nd Edition, p. 153 quoted in Cross on Evidence, 3rd Edition, page 78 Fn). In such situations, a lesser amount of proof than is usually required may avail. In fact, such evidence as renders the existence of the negative probable may shift the burden on to the other party (Jones, quoted in A Sarkar on Evidence, 12th Edition, p. 870). Th....
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....t the case set up by the plaintiff on the basis of the recitals in the promissory note, or the case set up in suit notice or in the plaint is not true and rebut the presumption under Section 118 by showing a preponderance of probabilities in his favour and against the plaintiff. He need not lead evidence on all conceivable modes of consideration for establishing that the promissory note is not supported by any consideration whatsoever. The words until the contrary is proved in Section 118 do not mean that the defendant must necessarily show that the document is not supported by any form of consideration but the defendant has the option to ask the court to consider the non-existence of consideration so probable that a prudent man ought, under the circumstances of the case, to fact upon the supposition that consideration did not exist. Though the evidential burden is initially placed on the defendant by virtue of Section 118 it can be rebutted by the defendant by showing a preponderance of probabilities that such consideration as stated in the pronote, or in the suit notice or in the plaint does not exist and once the presumption is so rebutted, the said presumption disappears. For t....