TaxTMI 
TaxTMI 
2023 (12) TMI 1358
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....rial Court. 3. According to the plaintiff, the defendant borrowed a sum of Rs. 23 lakhs from him on 04.11.2012 and issued a post-dated cheque dated 05.12.2012. The cheque that was presented for payment by the plaintiff was dishonoured on 27.12.2012. The plaintiff issued a notice on 04.01.2013 seeking repayment, and the defendant, having received the notice, did not send any reply. The defendant agreed to pay interest @ 12% per annum from the date of borrowal and the plaintiff restricted the claim to 9% per annum from the date of the suit. On the basis of dishonour of the cheque, a criminal case in S.T.C. No. 459 of 2013 was also launched by the plaintiff before the Judicial Magistrate Court No. III, Erode, which was dismissed and on appeal....
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....he dishonour note issued by the bank. Ex.A.6 to A.11 are the documents which were alleged to have been handed over by the defendant to the plaintiff at the time of borrowal. Ex.A.12 is the certified copy of the sale deed, the consideration received on execution of which was used to advance the loan to the defendant by the plaintiff. 7. The Trial Court invoked the presumption under Section 118 of the Negotiable Instruments Act, 1881, and granted a decree, as prayed for, finding that the defendant had not chosen to reply to the legal notice issued by the plaintiff and it was not a normal human conduct for a person to have kept quiet and contend that the documents were snatched from him by force. The said judgment of the Trial Court is assail....
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....aw covered by Section 118, ibid., would disappear. 11. If we were to examine the evidence of P.W.1 in the light of what has been laid down by the Hon'ble Supreme Court in the aforesaid judgment, we find that the evidence of P.W.1, by itself, would demolish the presumption created by operation of law, viz., Section 118, ibid. 12. P.W.1, in his cross-examination, has deposed that he has not produced his bank accounts, income tax returns or any other document to show that he had a sum of Rs. 23 lakhs on the date on which he is said to have lent money to the defendant. He would admit that he is not an Income Tax assessee. He has not explained the source of a whopping sum of Rs. 23 lakhs. He has also deposed that he had a sum of Rs. 5 lakh....
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....d into. He would contend that though the defendant alleges that the documents were snatched from him, he had not chosen to lodge a police complaint. The conduct of the defendant in not sending a reply to the legal notice issued by the plaintiff, is also sought to be taken advantage of by the learned counsel for the plaintiff, to buttress his submission that the presumption that is raised under Section 118, ibid., cannot be said to have been rebutted by the defendant. Stressing upon the need for positive evidence to prove the negative, the learned counsel would submit that in the absence of any evidence regarding failure of consideration, the Court will have to go by the presumption and the Trial Court was justified in drawing such a presump....
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....If we were to look at the evidence on hand in the light of the principles laid down by the Supreme Court in the judgment alluded to above, we find that Mr. Ramanlaal is justified in his contention that the evidence of P.W.1 itself would completely demolish the presumption created under Section 118, ibid. As already pointed out, the plaintiff has admitted that he has not produced any document to show the lending; he has not produced any document to show that he was in possession of a sum of Rs. 23 lakhs on 04.11.2012, the date of alleged lending; he has not produced any document to show that he was carrying on some business fetching him income on the relevant date; he has admitted that he had no bank account; he has also admitted that he is ....