TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 853
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....am, No.34, Madhavaram Village. The Plaintiff states that the Defendant acknowledged the loan availed of by him in multiple tranches, as set out above, by executing a document (Ex.P3) dated 09.02.2002, whereby he acknowledged the receipt of a sum of Rs.4,65,000/. Subsequently, the Defendant also executed a sale agreement (Ex.P2) dated 03.08.2001 in respect of the mortgaged property and borrowed a further sum of Rs.3,85,000/-. 3. Between 08.02.2002 and 30.10.2003, the Plaintiff states that the Defendant borrowed further sums. In the aggregate, it is stated that a total sum of Rs.29,62,000/- was borrowed as on 30.10.2003. In relation thereto, it is stated that the Defendant executed four promissory notes. The Plaintiff refers to promissory notes dated 19.09.2002, 20.10.2002 and 20.12.2002, respectively, for sums of Rs.32,000/-, Rs.20,000/- and Rs.20,000/-, respectively. Eventually, it is stated that a promissory note dated 30.11.2015 was executed by the Defendant acknowledging receipt of a sum of Rs.1,45,12,735/-, and promising to repay the said sum with interest at 24% per annum from the date of execution of the promissory note. Based on such promissory note, the present suit was fi....
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....edent documents to establish that Ex.P13 is supported by consideration even de hors the statutory presumption. Towards such end, the Plaintiff referred to the letter of undertaking dated 09.12.2002 (Ex.P3) which records the receipt of a sum of Rs.4,15,000/- by the Defendant from the Plaintiff's father. The Plaintiff also referred to the letter confirming the deposit of title documents with the intention of creating an equitable mortgage over the relevant property (Ex.P4) and earlier promissory notes such as the promissory notes dated 19.09.2002 (Ex.P5) and 20.10.2002 (Ex.P7), the letter of undertaking dated 31.10.2002(Ex.P8), the promissory note dated 20.12.2012 (Ex.P9) and the letter dated 30.11.2015 (Ex.P12) to the Plaintiff from the Defendant. With reference to Ex.P12, the Plaintiff stated that the Defendant requested for title documents which had been handed over to the Plaintiff in relation to a loan applied for by the Defendant from Reliance Capital Limited. The promissory note was executed on the same date. This communication records that the property documents pertaining to Plot No.8, Bhavani Nagar, Lakshmipuram, Kolathur, Chennai - 600 099 would be returned after verif....
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.... 10. In support of these contentions, the Defendant referred to and relied upon the following judgments: (i) Bharat Barrel and Drum Mfg.Co. v. Amin Chand Pyarelal 1999(1) CTC 497(Bharat Barrel), wherein, at paragraph 11, the Hon'ble Supreme Court dealt with the presumption under Section 118 of the NI Act and held that the presumption would cease to operate once the defendant showed either by direct or circumstantial evidence or by use of the other presumptions of law or fact that the promissory note was not supported by consideration. (ii) Reverend Mother Marykutty v. Reni C.Kottaram and another (2013) 1 SCC 327, wherein, at paragraph 13, the Hon'ble Supreme Court referred to the judgment in Bharat Barrel and concluded that the presumption under Section 118 of the NI Act had been duly rebutted by the defendant therein. (iii) M.S.Narayana Menon Alias Mani v. State of Kerala and Another (2006) 6 SCC 39, wherein, at paragraphs 27 to 30, the Hon'ble Supreme Court considered the implications of Sections 118 and 139 of the NI Act, including the purport of the expressions 'proved' and 'disproved' as per Section 3 of the Indian Evidence Act, 1872 (the E....
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....erson.'' 13. 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. In any event, the law and the remaining evidence should be considered before drawing a definitive conclusion. 14. Section 118 of the NI Act is as follows: ''118. Presumptions as to negotiable instruments. - Until the contrary is proved, the following presumptio....
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....Bench of the Rajasthan High Court formulated three principles with regard to rebutting the presumption under Section 118. The first principle is that the Court would not demand a very high standard of proof from the Defendant who has to discharge the burden of proving the negative. The second principle is that the Plaintiff should adduce evidence if all the relevant facts are within the plaintiff's knowledge. The third principle is that once both parties have led evidence, the onus of proof loses all importance. Based on these principles, the Full Bench concluded that it is sufficient if the Defendant shows that the preponderance of probabilities is in favour of drawing the conclusion that the negotiable instrument is not supported by consideration. After considering the judgment of the Full Bench and other relevant judgments, the Hon'ble Supreme Court held as under in paragraph 14: ''14.Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by consideration. Such a presumption is rebuttable. The ....
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.... the burden of disproving the existence of consideration 16. For such purpose, it is necessary to turn to the documents antecedent to the Suit Promissory Note. Since the letter of undertaking dated 09.12.2012(Ex.P3) is an admitted document, it is an appropriate exhibit to begin the inquiry with. This document is executed by the Defendant in favour of the Plaintiff's father. It records that the Defendant borrowed an aggregate sum of Rs.4,15,000/- on various dates between 18.01.1997 and 08.02.2002. It also records that the Defendant borrowed a sum of Rs.50,000/- on 28.01.1997 by mortgaging an immovable property. Thus, the document clearly evidences the receipt of the sum of Rs.4,65,000/- by the Defendant. The document also bears endorsements with regard to payments made by the Defendant. Such endorsements indicate repayments between 24.05.2008 and 12.05.2014 of an aggregate sum of Rs.3,65,000/-. On the basis of this document, the only inference that can be drawn is that the sum of Rs.4,65,000/- was not repaid in full even as of 19.06.2015, which is the date specified beneath the endorsements on the document. The letter of undertaking dated 31.10.2002, which is also an admitted d....