TaxTMI 
TaxTMI 
2021 (8) TMI 376
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to repay the same on demand with interest. However, the defendant did not pay any amount either towards principal or towards interest. Therefore, the plaintiff caused to issue Ex.A2-Notice dated 25.07.1996. It was received by the defendant. The defendant issued Ex.A4 reply on 26.08.1996 denying the averments set out in the suit notice. Since the demand set out in the suit notice was not complied with, the plaintiff filed the suit in question in July 1997. It was numbered as O.S.No.212 of 1997. It was later renumbered as O.S.No.284 of 2004. 2.The defendant filed his written statement denying the plaint allegations. According to the defendant, he never borrowed any amount from the plaintiff let alone on 20.07.1994. The stand of the defen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act? (b) Whether the lower Appellate Court committed an error in not considering the version of P.W.1 which categorically proves the case of the plaintiff and that the lower Appellate Court failed to consider that the plaintiff has proved his case without any iota of doubt and hence the burden of proof will shift to the defendant and the defendant has the onus to prove his case as per Sections 101 and 102 of the Indian Evidence Act? (c) Whether the lower Appellate Court is right in allowing the appeal when the defendant had categorically admitted his signature in Exhibit A1 Promissory Note, whether the lower Appellate Court is correct in shifting the burden of proving Exhibit A1 promissory note on to the appellant? ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... testimony recorded on the side of the plaintiff. In particular, there were glaring contradictions in the deposition of the plaintiff and the scribe and the attestor. 6.The learned counsel for the respondent in particular placed reliance on the following circumstances:- The plaintiff who examined himself as P.W.1 admitted that he borrowed money from one Dhanam Finance and lent the same to the defendant. He was unable to state on which date, or day, on which, the suit pro-note was executed. He was unable to say in which color-ink, the defendant had put his signature. The attesting witness P.W.3 Muthusamy is a close relative of P.W.1. Though the scribe Narayanasamy claims that he knew the plaintiff for more than 15 years, he does not kn....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y note, it was blank. In other words, in a blank promissory note, his signature was taken. The defendant would explain that the plaintiff was conducting an unregistered chit business and that at the time of disbursing the prize money, the plaintiff was the habit of taking signature in the blank pro-note from the subscribers of the chit group. The defendant had also handed over the suit pro-note only under such circumstances. Since the relationship between the parties came under strain, the plaintiff had chosen to misuse the suit promissory note and filed the suit on that basis. 8.The learned counsel appearing for the appellant drew my attention to the decision of the Madras High Court reported in (2006) 2 MLJ 42 (N.S.Arumugam Vs.Trishul ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d in effect it throws the burden of proof of failure of consideration on the makers of the note or the endorser, as the case may be." 9.In the case on hand also, the signature in the suit pro-note has been admitted. Therefore, the approach laid down in the aforesaid decision will have to be adopted. The trial Court was justified in drawing presumption under Section 118 of the Negotiable Instruments Act in favour of the plaintiff/appellant herein. The question that next arises is whether the presumption had been successfully rebutted by the defendant. The first Appellate Court had referred to a host of discrepancies found in the testimony of the witnesses for the plaintiff to come to the conclusion that the presumption had been rebutted a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e defendant was the son of his elder brother. Later, the plaintiff clarified that the defendant was his cousin's son. But the fact remains that the defendant and the plaintiff are close relatives. Hence, there is no merit in the contention that the witnesses examined on the side of the plaintiff are relatives. In view of the relationship between the parties namely the plaintiff and the defendant, the fact that the attestor is also a relative pales into insignificance. The first Appellate court has unnecessarily given importance to minor contradictions. I therefore answer the first substantial question of law in favour of the appellant. The first appellate Court went wrong in concluding that the defendant rebutted the presumption regardi....