TaxTMI 
TaxTMI 
2024 (10) TMI 498
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....tion of the said Govindaraj and upon request by the defendant, the plaintiff's father advanced a sum of Rs.5,00,000/- to the defendant during October 2013. As a security for repayment of the said sum of Rs.5,00,000/- with interest at 24% per annum, the defendant had executed a simple mortgage in favour of the father of the plaintiff on 18.10.2013 and the same was registered as Document No.4107 of 2013 in the office of the Sub Registrar, Anna Nagar. The original title deeds relating to the property that was mortgaged, were also deposited with the plaintiff's father. Though the defendant had agreed to repay the monies borrowed within three years, he did not repay as assured and he was buying time on some pretext or the other. While so, in or about October 2015, the defendant informed the plaintiff that he requires a sum of Rs.20,00,000/- over a period of two years for development of his business. Despite reluctance, the plaintiff and his father were lured by the defendant to advance monies to him on the pretext that the original sum of Rs.5,00,000/- advanced on the strength of the mortgage in the year 2013 will also be repaid along with interest only if he is able to pl....
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.... him to proceed under Section 69. 4. The defendant resisted the suit contending that he had no necessity to borrow any money since he has been a Cab driver and he meets out the family expenses from the income derived from the said job. It is the defendant's brother Govindaraj who was carrying on construction business and was a good friend of the plaintiff and his father, had colluded with the plaintiff to mulct an enormous liability on the defendant. The defendant admitted the borrowing of Rs.5,00,000/- under the mortgage. He would claim that the plaintiff extracted several documents from him including blank promissory notes and other stamp papers. The claim that the documents in respect of the Kancheepuram property were handed over by the defendant was stoutly denied. It was also claimed that the suit promissory note is not supported by consideration. The defendant also relied on the fact that he had issued the notice even prior to the filing of the suit on 21.10.2020 denying execution of the promissory note. The defendant also claimed that the entire transaction is a make believe affair stage-managed by the plaintiff and the defendant's brother Govindaraj to grab his pro....
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....our attention to various answers in the cross examination of PW1, the learned counsel would submit that the presumption raised under Section 118 of the Negotiable Instruments Act, 1881, stood rebutted. 9. The first contention of the learned counsel on the evidence is that the plaintiff who was aged only 23 years at the time of lending, did not have the wherewithal to lend such huge amount of Rs.20,00,000/-. Drawing our attention to the claim of the plaintiff that the amount was paid on different dates between October 2015 and December 2017 would by itself show that the claim of the plaintiff is artificial. He would also draw our attention to the evidence that the plaintiff had admitted that he is an income-tax assessee, but he has chosen to add that he does not remember as to when he became an assessee. This, according to the learned counsel, is only to explain the failure to produce the income tax returns to demonstrate the borrowing. The learned counsel would also point out that a money lender like the plaintiff who charges exorbitant interest of 24%, would never lend money for over a period of two years without any security whatsoever. The learned counsel would also draw our at....
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....s. Amin Chand Payrelal reported in (1999) 3 SCC 35, wherein, the Hon'ble Supreme Court has held that the rebuttal of the presumption under Section 118 can be done by direct evidence or by preponderance of probabilities showing existence of consideration was improbable, doubtful or illegal. He would also invite our attention to the judgment of a Division Bench of this Court to which one of us (R.SUBRAMANIAN, J.) was a party in T.Mohan Kumar vs. R.Asok Kumar reported in 2024 (1) MWN (Civil) 734, where, it was held that if the plaintiff fails to prove that he was in possession of funds on the date of the alleged advance, the presumption under Section 118 stood rebutted. 12. Contending contra, Mr.C.P.Sivamohan, learned counsel appearing for the respondent would submit that once the execution of the promissory note is admitted, then, it is for the defendant to show absence of consideration. In the absence of any other evidence except his interested testimony, the defendant had failed to discharge the initial burden in order to shift the onus on the plaintiff to prove consideration. The learned counsel would contend that the discrepancies that have been pointed out by the learned co....
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.... of proof by showing the non- existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as existence of negative evidence is neither possible nor contemplated and even if led is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption the defendant has to bring on record such facts and circumstances, upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist. We find ourselves in the close proximity of the view expressed by the Full Benches of the Rajasthan High Court and Andhra Pradesh High Court in this regard.'' 15. In T.Mohan Kumar's case referred to supra, this....