Madras High Court
Subbarayulu vs Lakshmanan on 6 September, 2011
Author: M.Venugopal
Bench: M.Venugopal
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :06.09.2011 CORAM THE HONOURABLE MR.JUSTICE M.VENUGOPAL A.S.No.161 of 2003 Subbarayulu ... Appellant/Defendant Vs. Lakshmanan ... Respondent/Plaintiff Appeal Suit filed under Section 96 of Code of Civil Procedure, against the Judgment and Decree dated 01.10.2002 made in O.S.No.89 of 1999 on the file of the Additional Subordinate Judge, Virudhachalam. For Appellant : Mr.V.Raghavachari For Respondent : Mr.D.Govinda Reddy JUDGMENT
The Appellant/Defendant had preferred this present Appeal as against the Judgment and Decree dated 01.10.2002 in O.S.No.89 of 1999 passed by the Learned Additional Subordinate Judge, Virudhachalam.
2.The trial Court, on an appreciation of oral and documentary evidence available on record, while passing the Judgment in O.S.No.89 of 1999 on 01.01.2002, had, inter alia, observed that on 15.08.1998 the Appellant/Defendant had received a sum of Rs.3,00,000/- from the Respondent/Plaintiff towards loan and only after filling up the details like amount, date, had given the Ex.A.1-Cheque and further held that as per written statement and exhibited through the evidence of D.W.1 to D.W.3, Ex.A.1-Cheque dated 15.08.1998 was not given to the Respondent/Plaintiff by the Appellant/Defendant. Further, it decreed the suit in directing the Appellant/Defendant to pay the suit sum of Rs.3,13,500/- together with future interest to the Respondent/Plaintiff together with costs.
3.Before the trial Court, in the main Suit, on behalf of the Respondent/Plaintiff, witness P.W.1 (Plaintiff) was examined and Exs.A.1 to A.5 were marked. On the side of the Appellant/Defendant, witnesses D.W.1 to D.W.4 were examined and Exs.B.1 to B.4 were marked. On the side of the Court, Ex.C.1 was marked.
4.Being dissatisfied with the Judgment and Decree dated 01.10.1999 in O.S.No.89 of 1999 passed by the trial Court, the Appellant/Defendant had projected this Appeal before this Court.
5.The Points that arise for determination in this Appeal are:
(1)Whether the Appellant/Defendant received a sum of Rs.3,00,000/- on 15.08.1998 from the Respondent/Plaintiff through Canara Bank Cheque bearing No.458946 and handed over the same to the Respondent/Plaintiff?
2.Whether the cheque dated 15.08.1998 was handed over to the Respondent/Plaintiff by the Appellant/Defendant based on the circumstances mentioned in the Written Statement?
The Contentions,Discussions and Findings on Point Nos.1 and 2:
6.According to the Learned Counsel for the Appellant/Defendant, the trial Court ought to have appreciated that the Respondent/Plaintiff had no wherewithal to pay a sum of Rs.3,00,000/- and the evidence also proved that there was no Debtor-Creditor relationship between the parties.
7.The Learned Counsel for the Appellant/Defendant urges before this Court that the specific case of the Appellant/Defendant is that he had not borrowed any sum and had not issued the cheques in discharge of any loan.
8.It is the further contention of the Learned Counsel for the Appellant/Defendant that one Ravichandran of Pudukuppam of Virudhachalam was not in good terms with the Appellant/Defendant and hence, there was a dispute between them and that the Respondent/Plaintiff intervened in the settlement process and only at that point of time, a blank cheque was obtained. Subsequently, no settlement was arrived at leaving the parties to settle the dispute among themselves, which could be proved by the evidence of D.W.2. Unfortunately, these aspects were not considered by the trial Court, which had resulted in miscarriage of justice.
9.The plea of the Appellant/Defendant is also to the effect that the Respondent/Plaintiff was inimically disposed of with him since he refused to sell his property.
10.According to the Learned Counsel for the Appellant/ Defendant, the trial Court should have seen that the cheque was dishonoured on 12.11.1998 and no notice was issued till 04.02.1999 and in fact, the cheque was presented on 04.02.1999 and only after its dishonour, a notice was issued as per Ex.A.4-Lawyer's Notice dated 08.02.1999.
11.The Learned Counsel for the Appellant/Defendant projects an argument that the case of the Respondent/Plaintiff was that he had obtained the money by selling 6 acres of land and he admitted that he was not aware which land was sold to the Appellant/Defendant and further, he had not taken any documentary proof for advancing the loan and moreover, the very fact that when cheque was issued, except parties to the suit, no other persons were available and also that he was not aware of the particulars as to who filled the cheque, all these would go to establish that loan transaction was a bogus one.
12.The Learned Counsel for the Appellant/Defendant submits that the date of issue of the cheques (not the one indicated in Ex.A.1-Cheque dated 15.08.1998) would by itself establish that it was issued earlier in point of time and the Respondent/Plaintiff had filled the cheques three years after its cheques, as if it was issued during the year 1998.
13.It is the contention of the Learned Counsel for the Appellant/ Defendant that the Appellant/Defendant had resolved the dispute with Ravichandran and obtained the Ex.B.1-Pronote dated 07.10.1993 which would not establish a loan of transaction.
14.Lastly, it is contended on behalf of the Appellant/Defendant that the trial Court had failed to evaluate and consider the evidence of D.W.1 to D.W.4.
15.Conversely, it is the submission of the Learned Counsel for the Respondent/Plaintiff that the trial Court had scrutinised the evidence of P.W.1 (Plaintiff) and the evidence of D.W.1 to D.W.4 and also considered the documentary evidence viz., Exs.A.1 to A.4 and Exs.B.1 to B.5 and Ex.C.1 and came to the right conclusion that the Appellant/Defendant had received a sum of Rs.3,00,000/- on 15.08.1998 from the Respondent/Plaintiff and after filling up the Ex.A.1-Cheque and gave the same to him.
16.The Learned Counsel for the Appellant/Defendant cites the decision of the Hon'ble Supreme Court in M.S.Narayana Menon Alias Mani V. State of Kerala and Another, (2006) 6 Supreme Court Cases 39, at page 40 and 41, it is held as follows:
"In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words 'proved' and 'disproved' have been defined in Section 3 of the Evidence Act. Applying the said definitions of 'proved' or 'disproved' to the principle behind Section 118(a) of the Negotiable Instruments Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. It is not necessary for the defendant to disprove the existence of consideration by way of direct evidence. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which the accused relies. The accused need not disprove the prosecution case in its entirety. Moreover, the onus on an accused is not as heavy as that of the prosecution. It may be compared with that on a defendant in a civil proceeding."
Also, in the aforesaid decision, at page 54 and 55, in paragraphs 45 and 46, it is observed hereunder:
"45.Two adverse inferences in the instant case are liable to be drawn against the Second Respondent:
(i) He deliberately has not produced his books of accounts.
(ii) He had not been maintaining the statutory books of accounts and other registers in terms of the bye-laws of Cochin Stock Exchange.
Moreover, the onus on an accused is not as heavy as that of the prosecution. It may be compared with a defendant in a civil proceeding.
46.In Harbhajan Singh v. State of Punjab and another [AIR 1966 SC 97], this Court while considering the nature and scope of onus of proof which the accused was required to discharge in seeking the protection of Exception 9 to Section 499 of the Indian Penal Code, stated the law as under: (SCR pp.242 H-243 A) "In other words, the onus on an accused person may well be compared to the onus on a party in civil proceedings, and just as in civil proceedings the court trying an issue makes its decision by adopting the test of probabilities, so must a Criminal Court hold that the plea made by the accused is proved if a preponderance of probability is established by the evidence led by him."
17.He also relies on the decision of the Hon'ble Supreme Court in Krishna Janardhan Bhat V. Dattaraya G. Hegde, (2008) 4 Supreme Court Cases 54 at special page 65, in para 44 whereby and whereunder, it is laid down as follows:
"The presumption of innocence is a human right. [See Narender Singh & Anr. v. State of M.P. (2004) 10 SCC 699, Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra and Anr. (2005) 5 SCC 294 and Rajesh Ranjan Yadav @ Pappu Yadav v. CBI through its Director (2007) 1 SCC 70.] Article 6(2) of the European Convention on Human Rights provides : "Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law". Although India is not bound by the aforementioned Convention and as such it may not be necessary like the countries forming European countries to bring common law into land with the Convention, a balancing of the accused's rights and the interest of the society is required to be taken into consideration. In India, however, subject to the statutory interdicts, the said principle forms the basis of criminal jurisprudence. For the aforementioned purpose the nature of the offence, seriousness as also gravity thereof may be taken into consideration. The courts must be on guard to see that merely on the application of presumption as contemplated under Section 139 of the Negotiable Instruments Act, the same may not lead to injustice or mistaken conviction. It is for the aforementioned reasons that we have taken into consideration the decisions operating in the field where the difficulty of proving a negative has been emphasised. It is not suggested that a negative can never be proved but there are cases where such difficulties are faced by the accused e.g. honest and reasonable mistake of fact. In a recent article The Presumption of Innocence and Reverse Burdens : A Balancing Duty published in [2007] C.L.J. (March Part) 142 it has been stated :-
"In determining whether a reverse burden is compatible with the presumption of innocence regard should also be had to the pragmatics of proof. How difficult would it be for the prosecution to prove guilt without the reverse burden? How easily could an innocent defendant discharge the reverse burden? But courts will not allow these pragmatic considerations to override the legitimate rights of the defendant. Pragmatism will have greater sway where the reverse burden would not pose the risk of great injustice - where the offence is not too serious or the reverse burden only concerns a matter incidental to guilt. And greater weight will be given to prosecutorial efficiency in the regulatory environment."
18.He also invites the attention of this Court to the decision in Laxminivas Agarwal V. Andhra Semi Conductors Private Limited and Others, 2006 Cri LJ 2643, wherein, at paragraph 15, it is, among other things, observed as follows:
"15. As seen from the facts concerned in the decision of this Court reported in Shri Taher N. Khambati's case 1995 Cri LJ 560 (supra), the case of the appellant complainant therein is that the respondents accused borrowed a sum of Rs. 1,00,000/- for the purpose of their business, promising to repay the same within a short time, and became liable in a sum of Rs. 1,18,337/- and in respect of the said transaction the respondents issued a cheque drawn on Karur Vysya Bank for the said amount with an understanding to present the said cheque on 15-10 1991 but the same was returned for want of sufficient funds and the first accused is the partnership firm and the second accused was one of the partners of the partnership firm. The case of the accused was that they approached the complainant for loan for which the complainant agreed to advance loan and gave loan of Rs. 96,500/- drawn on Balaji Mahadev Male in favour of the respondents-accused and then the respondents-accused executed a pronote for Rs. 1,00,000/- in favour of the appellant complainant agreeing to repay the same with interest at 20% per annum and that at that time the complainant got an account opened in the name of the respondents in Karur Vysya Bank and the cheque for Rs.96,500/-was adjusted towards that account and it was stipulated that the respondents 1 and 2 should pay interest every month to the appellant complainant and further the appellant complainant also took a blank signed cheque from respondents 1 and 2 as security for payment of interest every month and it was understood that if the respondents fail to pay interest as stipulated, the appellant can present the cheque in the bank for the amount due by that date under the pronote and that the respondents paid the interest of Rs. 1,667/- every month and they stopped payment and by 15-10-1991 a sum of Rs. 18,337/- was due from the respondents towards interest and as the accused failed to pay the interest, the complainant filled up the blanks in the cheque as if it was issued for a sum of Rs. 1,18.337/- being the total amount due under the pronote after giving credit to the payment already made and presented the cheque for encashment before the bank. In other words the case of the accused is that the said cheque was taken as surety from them on the very date of lending the amount and not towards the discharge of the debt already borrowed and therefore Section 138 of the Act has no application. On the question of fact, it is found that the said cheque was taken without putting the date on the same day on which date the amount was lent to the accused as a security for prompt repayment. The trial Court found that it is not valid cheque as enunciated under Section 138 of the Act. In that case this Court confirmed the order of acquittal passed by the learned Magistrate. This Court in paragraph 10 of that judgment observed as follows:
Section 138 of the Act is introduced with a view to avoid the malignant trade practice of indiscriminately issuing cheques without sufficient funds. The amendment is introduced with a view to curb instances of issuing such cheques indiscriminately. So, having regard to the purpose with which this provision is introduced, it is doubtful " whether a case of this nature can be construed as attracting the provisions of Section 138 of the Act. In the instant case, the appellant advanced some money to the respondents and obtained a pronote. It was stipulated that the respondents should pay interest every month. At the same time appellant-creditor took a blank signed cheques from the respondents with the understanding that the complainant could fill the other columns in the cheque and present it if the respondents committed default, in payment of interest. Then the appellant put the date as 15-1-1991, wrote his own name in the space intended for the payee and also mentioned amount as Rs. 1,18,337/- and presented the cheque. He would not have expected that the cheque would be honoured. He was presenting the cheque only with a view to get an endorsement, which would enable him to proceed under Section 138 of the Act. If this sort of practice is allowed, every Creditor would abuse the provisions of Section 138 of the Act by obtaining blank cheques and putting the debtors in the fear of presentation, insist on discharge of the debts at any time. I do not think that would have been the intention of the Legislature while incorporating Section 138 in the Negotiable Instruments Act. Though, the appellant did not state the circumstances under which he obtained the pronote and the cheque in his complaint yet it is clear from the evidence the circumstances under which the complainant obtained a signed blank cheque from the respondent. So, the appellant has obtained this blank signed cheque with a view to make use of it, as a threat to the respondents for realization of the amount. So, it cannot be construed that the respondent had issued the cheque voluntarily for discharge of any debt or legal liability as envisaged under Section 138, I, therefore, find that the facts and circumstances of the case are not attracted by the provisions of Section 138 of the Act and that the learned Magistrate was justified in acquitting the accused."
19.Per contra, the Learned Counsel for the Respondent/Plaintiff cites the decision of the Hon'ble Supreme Court in Hiten P.Dalal V. Bratindranath Banerjee, AIR 2001 Supreme Court 3897 (1) at page 3898, wherein it is observed as follows:
"Section 139 provides that "it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability." The effect of these presumptions is to place the evidential burden on the accused of proving that the cheque was not received by the complainant towards the discharge of any liability. Because both Sections 138 and 139 require that the Court "shall presume" the liability of the drawer of the cheques for the amounts for which the cheques are drawn, as noted in it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. It introduces an exception to the general rule as to the burden of proof in criminal cases and shifts the onus on to the accused. Such a presumption is a presumption of law, as distinguished from a presumption of fact which describes provisions by which the court "may presume" a certain state of affairs. Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact.
The distinction between the two kinds of presumption lay not only in the mandate to the Court, but also in the nature of the evidence required to rebut the two. In the case of discretionary presumption the presumption if drawn may be rebutted by an explanation which 'might reasonably be true and which is consistent with the innocence" of the accused. On the other hand in the case of a mandatory presumption "the burden resting on the accused person in such a case would not be as light as it is where a presumption is raised under Section 114 of the Evidence Act and cannot be held to be discharged merely by reason of the fact that the explanation offered by the accused is reasonable and probable. It must further be shown that the explanation is a true one. The words 'unless the contrary is proved' which occur in this provision make it clear that the presumption has to be rebutted by proof and not by a bare explanation which is merely plausible. A fact is said to be proved when its existence is directly established or when upon the material before it the Court finds its existence to be so probable that a reasonable man would act on the supposition that it exist. Unless therefore, the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted."
20.He draws the attention of this Court to the decision in T.G.Balaguru V. Ramachandran Pillai, (2010) 2 MLJ 861 at page 862 wherein it is held as follows:
"As soon as execution of promissory note is proved, rule of presumption laid down under Section 118 of Negotiable Instruments Act is to be raised that promissory note is supported by consideration. Presumption under Section 118 of Negotiable Instruments Act is one of law and thereunder a Court shall presume inter alia that negotiable instrument or the endorsement was made for consideration. Once statutory presumption is raised, onus of proving absence of consideration is on the executant. When initial burden is discharged by the Plaintiff, the burden shifts to the Defendant to prove that promissory note is not supported by valid consideration. It is for the Defendant to rebut the presumption by establishing that he did not receive consideration by direct evidence or by bringing on record the preponderance of probabilities."
21.Yet another decision of this Court in N.S.Arumugam V. Trishul Traders, Dealers in Ferrous and non-Ferrous Iron Scrap Rubbish, Contractors, Madras and others, (2006) 2 MLJ 41, 42 (DB), is relied on the side of the Respondent/Plaintiff, wherein it is laid down as follows:
"The burden of proof as a question of law rests on the plaintiff, but since the execution is proved, Section 118 of the Negotiable Instruments Act imposes a duty on the court to raise a presumption in his favour that the said instrument was made for consideration and this presumption shifts the burden of proof in the second sense, that is, the burden of establishing a case shifts to the defendants. If we consider the present case in the light of the above said principles, we have to hold that the trial court has wrongly thrown the burden of proof on the plaintiff without drawing the legal presumption in favour of the plaintiff when the defendants have admitted the execution of exhibit Al. Unless and until the defendant either by direct evidence or by circumstantial evidence acceptable to the court proves that the negotiable instrument was not supported by consideration, the burden on the defendants is not shifted. We have to see whether the defendants have adduced acceptable evidence and discharged their burden and shifted the burden to the plaintiff to prove his case.
That the trial court has totally misconstrued the oral and documentary evidence available on record and has not properly considered the scope of the legal presumption available under Section 118 of the Negotiable Instruments Act and we are unable to accept the reasoning of the trial court for dismissing the suit."
22.The Learned Counsel for the Respondent/Plaintiff places reliance on the following decisions:
(a)In I.Arumugam V. Channagiri N. Govindaraj Shetty, AIR 1992 Karnataka 347, it is observed as follows:
"Section 118 of the Act lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder a court shall presume, inter alia, that the negotiable instrument or the endorsement was made or endorsed for consideration. In effect it throws the burden of proof of failure of consideration on the maker of the note or the endorser. In a case where the defendant sets up a special plea, burden is upon him to prove it and if he fails to prove the special plea the case of the plaintiff stands proved. There is no doubt that mere payment by cheque is not a prima facie evidence of advancing loan because the cheque is deemed to have been issued on consideration. It is not an irrebuttable presumption of law. It is permissible in law to show by other evidence that the cheque issued was not to extinguish the existing debt but it was for the money lent. Defendant has failed to prove his special plea that the suit amount was paid through cheques towards the contract work done by him, as he has failed to produce the accounts and a copy of the bill. He has also not produced any evidence as to what action he has taken for recovery of the balance of the amount due from the plaintiff, in as much as he would have taken action, if really he had done the work under the alleged contract and had issued the bill for the work done. He has neither filed a suit for recovery of the balance amount nor he has made a counter-claim. This demonstrates that the defence set up by the defendant is not true as otherwise the defendant would not have allowed his claim for the balance of the amount to be barred by time. The presumption that the three cheques in question were issued for consideration namely, towards the amount payable for the contract work done by him to the plaintiff is rebutted and it was held that the sum under claim was advanced by the plaintiff to the defendant as loan under the cheques in question."
(b)In V.Thangaraj V. Sankaran Financiers, AIR 2007 Madras 284, it is held, in paragraph 4 and 7, as follows:
"4. Simply because defendant was able to narrate the events under which he has borrowed several amounts that will not be conclusive proof that in all times he has given a blank pronote form as a security. Even according to him, all the erstwhile transactions have been discharged and in that event, had he given a blank suit pronote signed by him as only a security, he could have issued a notice and asked for return of the same. This is so because even, according to the defendant, all his erstwhile transactions have been discharged. Such failure on the part of the defendant in not asking for his blank signed pronote form, which, according to him, as delivered as a security for the erstwhile transactions, would go to falsify statement as if he has given Ex.A-4 only as security for other loans. Thus, the defendant has not successfully rebutted the presumption and therefore, it cannot be said that the plaintiff has filled up the consideration in the blank pronote form, which has been delivered to him after signing of defendant. It is also not the case of defendant that instead of Rs. 22,000/-he has received only a lesser sum and therefore, we have to only come to the conclusion that Ex.A-4 pronote was correctly executed.
7. The learned Counsel for the respondent/plaintiff relied on Shyamal Kumar Roy v. Sushil Kumar Agarwal 2006(ii) Scale 159, wherein it was held that the appellant having consented to the document being marked as an exhibit has lost his right to re-open the question. This is the judgment of Honourable Apex Court, which is binding. In this case also, the appellant/defendant had admitted that the suit pronote has been marked as Ex.A-4. He has waived his right to question the same even though such right was originally available to him."
(c)In Chanana Steel Tubes Private Limited V. M/s.Jaitu Steel Tubes Private Limited and another, AIR 2000 Himachal Pradesh 48 at page 49, it is held that 'the Lender is entitled to interest at the rate of 18% per annum on outstanding amount from date of dishonour till realisation of amount.'
(d)In M/s.Wolstenholme International Limited V. Twin Stars Industrial Corporation and others, AIR 2001 Bombay 409, in paragraph 8, it is held thus:
"8. Before dealing with the main controversy which was the subject matter of the submissions at the hearing of the Summons for Judgment, it would be necessary to reject at the outset the defence that the Plaintiff has claimed interest at the rate of 18% per annum, which they are not entitled. The suit is filed on Bills of Exchange and the Plaintiff is clearly entitled to interest at 18% per annum in view of the provisions of Section 80 of the Negotiable instruments Act, 1881. Similarly, there is no substance in the contention that the Bills of Exchange having been negotiated by the Plaintiff in favour of the Bombay Mercantile Bank Ltd., there is no cause of action against the Defendants. The Bills of Exchange contained an endorsement that they were accepted for payment at the Bombay Mercan- tile Bank Ltd. and they were thus, negotiated only for collection. There is, therefore, no substance in the submission of the Defendants. The Bills of Exchange have been duly noted and protested. In fairness, it must be stated that these submissions though urged in the affidavit in reply, were not pressed at the hearing of the Summons for Judgment."
(e)In Bharat Barrel and Drum Manufacturing Company V. Amin Chand Payrelal AIR 1999 Supreme Court 1008 at page 1009, it is observed as follows:
"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 defendant can prove the non-existence of consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would dis-entitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus 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."
23.In the Plaint, the Respondent/Plaintiff had averred that on 15.08.1998 the Appellant/Defendant for family expenses and for house construction received a sum of Rs.3,00,000/- from the Respondent/ Plaintiff and handed over a Cheque bearing No.458946 dated 15.08.1998 of Puvanur Canara Bank by signing the same. For the aforesaid amount of Rs.3,00,000/-, the Appellant/Defendant had agreed to pay the interest of Rs.1/- per month for Rs.100/- and further that the Appellant/Defendant had not paid the agreed interest amount. The Respondent/Plaintiff deposited the aforesaid cheque at Virudhachalam Karur Vysya Bank, but the same was returned by the Bank due to insufficiency of funds. Subsequently, when the Respondent/Plaintiff met the Appellant/Defendant and asked for the same, the Appellant/Defendant requested the Respondent/Plaintiff to redeposit the cheque once again after three months. The Respondent/ Plaintiff on 31.12.1998 deposited the cheque and again the said cheque was returned for insufficiency of funds and therefore, the Appellant/Defendant was liable to pay a sum of Rs.3,00,000/- together with interest at 9% per annum to the Respondent/Plaintiff.
24.The Respondent/Plaintiff on 08.02.1999 issued a lawyer's notice to the Appellant/Defendant requiring him to settle the amount, which was received by the Appellant/Defendant on 11.02.1999. The Respondent/Plaintiff did not receive any reply. Hence, the Respondent/ Plaintiff had filed the suit for recovery of sum of Rs.3,13,500/- together with interest from the Appellant/Defendant.
25.In the Written Statement, the Appellant/Defendant had denied his liability to pay the principle sum of Rs.3,00,000/- together with interest at 9% per annum to the Respondent/Plaintiff. He also denied that he handed over the cheque bearing No.458946 dated 15.08.1998 for Rs.3,00,000/- to the Respondent/Plaintiff by signing the same. Moreover, he had denied that he agreed to pay interest at the rate of one for Rs.100/- per month to the aforesaid sum of Rs.3,00,000/-.
26.The categorical denial of the Appellant/Defendant in Written Statement was that he had not received a sum of Rs.3,00,000/- from the Respondent/Plaintiff either on 15.08.1998 or on different date for the purpose of house construction or towards his family expenses. During the year 1998, the Appellant/Defendant had not constructed his house. He was not in requirement of huge sum of Rs.3,00,000/-. The Respondent/Plaintiff and Appellant/Defendant belonged to Vayalur, they were residing opposite to each other and they were also relatives.
27.The Appellant/Defendant was to pay an outstanding Pronote amount to one Ravichandran of Madura Pudukuppam. The said Ravichandran demanded an interest of 36% for the amount due by the Appellant/Defendant. The Appellant/Defendant had agreed to pay 18% rate of interest. In this regard, the said Ravichandran came to the house of Appellant/Defendant during October, 1995 and created trouble. At that time, the Respondent/Plaintiff intervened and compromised the matter by stating that he would come and hand over the amount and sent Ravichandran to his house.
28.The Respondent/Plaintiff asked the Appellant/Defendant about this for which the Appellant/Defendant replied that he would be proceeding to his village on the next day and the amount could be paid and settled by talking with Ravichandran in a compromise manner, but instead of giving cash the unfilled cheque was signed by the Appellant/Defendant and handed over the Respondent/Plaintiff with a condition that if the amount is determined on the compromise, the said cheque could be filled up and the same could be paid either to the Ravichandran or it could be handed over to the Bank by the Respondent/Plaintiff and after receiving the amount and to pay to the said Ravichandran with a view to settle. But the said Ravichandran refused to receive the amount for 24% interest stated by the Respondent/Plaintiff. However, the cheque remained with the Respondent/Plaintiff. When the Appellant/Defendant demanded the Respondent/Plaintiff about the cheque, the Respondent/Plaintiff informed him that he had forgotten the place where he kept the cheque.
29.The Appellant/Defendant did not show an interest in receiving back the cheque because of his relationship with the Respondent/ Plaintiff and also based on faith upon the Respondent/Plaintiff. Subsequently, the said Ravichandran's Pronote was settled by the Appellant/Defendant by means of money being paid. Moreover, the Respondent/Plaintiff demanded the Appellant/Defendant's to sell his land which was situated near his land. But the Appellant/Defendant refused to sell his land, but he sold it one Abdul Azeez on 12.10.1998 and because of this reason, the Respondent/Plaintiff to his own liking had written the amount and the date in the unfilled cheque dated October 1995 written by the Appellant/Defendant. After 1998 October when the land near that of Respondent/Plaintiff's land was sold, the Appellant/Defendant and Respondent/Plaintiff were not in talking terms. The Respondent/Plaintiff was not entitled to get the relief as per Plaint. The Appellant/Defendant did not receive any consideration as per the suit No.1 document. There was no cause of action for the suit.
30.The evidence of P.W.1 (Respondent/Plaintiff) was to the effect that the Appellant/Defendant on 15.08.1998 received a sum of Rs.3,00,000/- from the Respondent/Plaintiff as loan for the purpose of house construction and for family expenses and that the Appellant/ Defendant on 15.08.1998 gave a cheque to him and in that cheque, the date was written as 15.08.1998 and the amount was mentioned as Rs.3,00,000/- and that the cheque bearing No.458946 was drawn in favour of Canara Bank, Puvanur Branch and Ex.A.1 was the Cheque.
31.It is the further evidence of P.W.1 that on 12.11.1981 in Virudhachalam Karur Vysya Bank, he deposited the cheque for collection and at that time, the cheque returned for insufficiency of funds in the Appellant/Defendant's account and the Ex.A.2-Intimation came from the Bank and in Canara Bank also the Appellant/Defendant had a bank account and in the said Savings Bank Account, the Appellant/Defendant had not kept any money and on 04.02.1999 he presented the cheque and Ex.A.3-Notice came to him to the effect that the Appellant/Defendant had no money in Canara Bank.
32.Further, for the first time when cheque got returned, P.W.1 asked the Appellant/Defendant and at that time, the Appellant/ Defendant informed him that if cheque was presented in the Bank after three months, he would receive his money and therefore, for the second time, he remitted the cheque into the Bank and even then the said Cheque-Ex.A.1 got returned. Ex.A.3 was a Notice received by the Canara Bank and on 08.02.1999 issued a Lawyer's Notice-Ex.A.4 to the Appellant/Defendant and Ex.A.5 was the acknowledgement and for Ex.A.4-Lawyer's Notice, no reply was given by the Appellant/ Defendant and further, he had not paid either the interest or the principle and therefore, he has filed the present suit.
33.P.W.1, in his cross examination, deposed that it was correct to state that he and the Appellant/Defendant had not spoken about the details as to when the said amount of Rs.3,00,000/- was to be returned back, but they spoke about the rate of interest at one percent and at the time of Ex.A.1-Cheque written and handed over by the Appellant/Defendant to him, no other persons were present except themselves.
34.The evidence of P.W.1 was that it was not correct to state that to and in favour of Ravichandran, Pudukuppam, the Appellant/ Defendant executed a Pronote and because of the reason that no amount was paid and no interest was paid, a quarrel arose and that he intervened and pacified the said Ravichandran.
35.In fact, P.W.1 denied the Written Statement averment in paragraph 4 relating to the circumstances under which the cheque was handed over to the Respondent/Plaintiff by the Appellant/Defendant.
36.D.W.1 (Appellant/Defendant), in his evidence, deposed that it was false to state that he received a sum of Rs.3,00,000/- from the Respondent/Plaintiff as loan for his family expenses and for house construction on 15.08.1998 and further it was not correct to state that he agreed to pay interest of Rs.1/- per month for Rs.1,000/-.
37.It is the further evidence of D.W.1 that for repaying the loan, he had not handed over a signed cheque, but Ex.A.1-Cheque was issued by him, but the signature in Ex.A.1-Cheque alone belong to him and the amount and date was not written by him and Ex.A.1-unfilled Cheque was signed and handed over by him and that he had received a sum of Rs.10,000/- during October 1993 from Ravichandran for which he executed a Pronote and 12% interest was agreed upon and the said Ravichandran during the year 1995 came to his house and Ravichandran was the resident of Pudukuppam village and himself and the Respondent/Plaintiff all belong to Vayalur village.
38.The evidence of D.W.1 was to the effect that the Respondent /Plaintiff was his relative and that he pacified Ravichandran and on that day he was proceeding to Chennai and he signed the blank cheque and handed over the same to the Respondent/Plaintiff for the purpose of settling the loan and only under this circumstance, he signed the cheque and gave to the Respondent/Plaintiff and that the Respondent/ Plaintiff had not compromised the loan matter and after two months later he settled the loan amount and Ex.B.1 was the Pronote executed by him in favour of Ravichandran and that he had settled the Ex.B.1 amount and the endorsement was in back side of Ex.B.2.
39.D.W.1 went on to add in his evidence that he gave the Cheque-Ex.A.1 urgently and therefore, he had not written the date and the amount and even in the counterfoil, he had not written the date and the amount and two times he asked for the cheque but the Respondent/Plaintiff informed him that he would search for the same and he sold his land to Abdul Azeez on 12.10.1998 but not sold the same to the Respondent/Plaintiff and therefore, the Respondent/ Plaintiff had an enmity with him and fabricated the cheque for Rs.3,00,000/- and filed the suit which was to be dismissed.
40.D.W.1, in his cross examination, had admitted that in the written statement he had not mentioned on what date the Ex.A.1-Cheque was given by him and further he had not informed the Bank Manager that Bank should not pay the money if Ex.A.1-Cheque was presented.
41.D.W.2, in his evidence, had deposed that the Appellant/ Defendant took a loan for a sum of Rs.10,000/- from him and for the said loan, the rate of interest was agreed at 36% per month for Rs.100/- and the Appellant/Defendant, for the aforesaid loan, had not executed any document but later executed Ex.B.1-Pronote and that the said Ex.B.1-Pronote was executed by the Appellant/Defendant during October 1993, but he does not remember the date.
42.The evidence of D.W.2 was to the effect that since the Appellant/Defendant had not paid any amount towards the loan received by him, he went to the door step of his house and questioned him during the 9th month of the year 1995 and at that time, the Respondent/Plaintiff came that way and the Appellant/Defendant informed him that he would refuse to pay three paise interest but would pay two paise interest and that the Respondent/Plaintiff called him to his house for talks in this regard and further, he went to the house of the Respondent/Plaintiff on the next day at about 4'o clock in the evening and at that time, the Respondent/Plaintiff agreed to pay interest at 2 = paise and he informed that he would give cheque immediately on behalf of the Appellant/Defendant.
43.D.W.2 further deposed that the cross cheque was of Puvanur Canara Bank and for settling the amount mentioned in Ex.B.1-Pronote the cheque was given to the Respondent/Plaintiff, as informed by the Respondent/Plaintiff and the Respondent/Plaintiff showed the cheque to him that it was given by the Appellant/Defendant and in the cheque, no amount was written and he had not agreed for the rate of interest of 2= paise and that he had immediately left his house and two months later he and the Appellant/Defendant had settled the Ex.B.1-Pronote amount.
44.D.W.2, in his cross examination, to a suggestion, had admitted that it was correct to state that in the Pronote for Rs.100/- rate of interest was written as '1' and also that the Pronote was written by Amanulla Khan and that the Pronote remained with him after the same being written.
45.D.W.3, in his evidence, had stated that Ex.B.1-Pronote was executed by the Appellant/Defendant in favour of Ravichandran for a value of Rs.10,000/- and that he saw the amount was paid and that the Pronote was written on 07.10.1993 and Ex.B.2 endorsement details were seen by him and the endorsement date was 25.12.1995.
46.D.W.3, in his cross examination, had stated that for the past 15 years he was working as a Document Writer and that he did not know the settlement amount and that the Plaintiff and Defendant brought the witnesses and the two witnesses had affixed their signatures in the Pronote.
47.D.W.4, in his evidence, had stated that Ex.B.3 was the summons received by the Bank and Ex.B.3-Cheque Book belonged to his Bank and the return cheque number was 458946 and the Appellant/Defendant's Bank Account copy was Ex.C.1 and nine cheques were encashed during the year 1995 and one cheque was returned on 12.10.1998 and for the second time, the said cheque was represented in his Bank on 04.02.1999.
48.In Ex.A.1-Cheque dated 15.08.1998 for Rs.3,00,000/-, the signature of the Appellant/Defendant was seen. As a matter of fact, Ex.A.1-Cheque was issued in favour of the Respondent/Plaintiff. Ex.A.2 was the Slip dated 12.11.1998 of the Canara Bank, Puvanur Branch which indicates that the Cheque bearing No.458946 dated 12.11.1998 was returned unpaid for the reason 'Not arranged for'. Ex.A.3 was the Slip dated 04.02.1999 of the Canara Bank, Puvanur Branch refers to the aforesaid cheque dated 15.08.1998 was returned unpaid on account of 'Funds insufficient'. Ex.A.4 was the Legal Notice dated 08.02.1999 issued by the Respondent/Plaintiff's lawyer addressed to the Appellant/Defendant.
49.In Ex.A.4-Notice, it was mentioned that the Appellant/ Defendant had received a sum of Rs.3,00,000/- on 15.08.1998 towards family expenses and for construction of the house and gave a cheque bearing No.458946 and when the same was presented at Virudhachalam Karur Vysya Bank by the Respondent/Plaintiff on 12.11.1998, the same was returned by the Bank stating that there was no sufficient funds in his account and when the Respondent/Plaintiff demanded the same from the Appellant/Defendant directly, the Appellant/Defendant informed that the cheque could be presented after three months and thereafter, on 04.02.1999 the said cheque was presented through Virudhachalam Karur Vysya Bank and again the said Cheque was returned on 04.02.1999 stating that there was no sufficient fund in his account. Indeed, in Ex.A.4, the Respondent/ Plaintiff through Lawyer Notice had demanded the payment of Rs.3,00,000/- together with interest at 12% per annum within three days from the date of receipt of the notice.
50.A perusal of Ex.B.1-Pronote dated 07.10.1993 shows that the said Pronote was executed by the Appellant/Defendant in favour of one Ravichandar for Rs.10,000/-. The agreed rate of interest was for Rs.100/- per month at Rs.1/-.
51.Ex.B.2 was the endorsement dated 25.12.1995 made by the said Ravichandar for receiving the principle and interest in entirety towards Ex.B.1-Pronote dated 07.10.1993. Ex.B.3 was the counterfoil of the Canara Bank Cheque Book. Ex.B.4 is the certified copy of Sale Deed dated 12.10.1998 executed by Abdul Azeez to and in favour of the Appellant/Defendant.
52.It is to be noted that as per Section 138 of the Negotiable Instruments Act, if any cheque for discharge of any legally enforceable debt or other liability is dishonoured by the Bank for want of funds and the payment is not made by the drawer inspite of a demand legal notice, it shall be a deemed criminal offence. However, if the cheque is given by way of a gift or present and the same is dishonoured by the Bank, then, the maker of the cheque is not liable for prosecution, as per decision Mohan Krishna (B) V. Union of India, 1996 Cri. LJ at page 636 (A.P.) : (1996) 86 Company Cases at page 487 (A.P).
53.One cannot ignore a very vital fact that a 'Pay Order' is a cheque within the ambit of Section 138 of Negotiable Instruments Act and on dishonour of a 'Pay Order', Section 138 proceedings are competent in law. If an individual has initiated a civil suit for recovery of the amount, then, he is not prevented from preferring a complaint as per Section 138 of the Negotiable Instruments Act, 1881 and Section 420 of the Indian Penal Code.
54.At this stage, this Court worth recalls the decision of the Hon'ble Supreme Court in State of Rajesthan V. Kalyan Sundaram Cement Industries Limited, (1996) 86 Company Cases 433 (SC) wherein it is laid down that the pendency of the criminal matters would not be an impediment to proceeding with the civil suits. The enforcement of the liability through a competent Civil Court would not disentitle the affected person from prosecuting the offender for the offence punishable under Section 138 of the Negotiable Instruments Act. In short, a civil suit cannot affect a launching of criminal proceedings.
55.As per Section 20 of the Negotiable Instruments Act, the authority implied by a signature in a blank instrument was wide that the party so signing was bound to a holder in due course even though the holder was authorised to fill for a certain amount. A person in possession of a bill incomplete in any material particular had a prima facie authority to fill the same and as such, he was an agent of the person delivering the blank instrument, as per decision in Shantidas V. Hiralal, 59 IC 657; Ibrahim V. Ramdas AIR 1954 Mad 532.
56.It is relevant for this Court to aptly point out the decision of this Court in Mohamed Ali V. Abdul Sinab (2001) 1 M.L.J. 371 at page 372 wherein it is held that 'Section 20 of the Negotiable Instruments Act is itself authority to the holder of the signed instrument to fill up the blanks and to negotiate the instrument.'
57.Also, this Court points out the decision in N.K.Jinnah and another V. Sunil Finance Agencies represented by Power Agent, Sunil Kumar, (2001)-Vol.45-M.L.J.-(Crl.)-674, at page 675 wherein it is held that 'When there is an issuance of cheque in favour of the payee, it must be presumed that the said cheque was issued for the discharge of liability, which is legally enforceable as per Section 139 of the Negotiable Instruments Act.'
58.Further, this Court cites the decision in Gopi V. Sudarsanan, (2002)-Vol.46-M.L.J.-(Crl.)-882 wherein it is, inter alia, that 'the issuance of cheque to cover a legal liability, though of another person, the dishonour of the same for want of funds and also failure to pay the amount inspite of Ex.P-6 notice stand proved. The Courts below were therefor right in concluding that the petitioner has committed the offence under Sec. 138 of the Negotiable Instruments Act.'
59.It is to be borne in mind that discharge of a burden in terms of Section 139 of the Negotiable Instruments Act is a preponderance of probability.
60.This Court, in the interest of justice, cites the decision in K.P.O.Moideenkutty Hajee V. Pappu Manjooran and another (1996) 8 SCC 586 at page 587, it is held as follows:
"When the suit is based on pronote, and promissory note is proved to have been executed, Section 118(a) raises the presumption, until the contrary is proved, that the promissory note was made for consideration. That initial presumption raised under section 118 (a) becomes unavailable when the plaintiff himself pleads in the plaint different considerations. If he pleads that the promissory note is supported by a consideration as recited in the negotiable instrument and the evidence adduced in support thereof, the burden is on the defendant to disapprove that the promissory note is not supported by consideration or different consideration other than one recited in the promissory note did pass. If that consideration is not valid in law nor enforceable in law, the court would consider whether the suit pronote is supported by valid consideration or legally enforceable consideration. The burden of proof is of academic interest when the evidence was adduced by the parties. The court is required to examine the evidence and consider whether the suit as pleaded in the plaint has been established and the suit requires to be decreed or dismissed."
61.Before the trial Court, the Appellant counsel filed a Memo on 11.06.2002 to the effect that when the evidence of D.W.1 the printed number of cheque, date and details were wrongly typed by the Typist and these mistakes would have to be taken note of by the trial Court at the time of delivering Judgment. The cheque date 16.12.95 instead of the year 95, it was wrongly typed as '98'. Even in the evidence of D.W.1, it was recorded as 25.7.98 instead of the year 95 and also in 16.12.98 the year should be corrected as '95'. Likewise, in the evidence of D.W.4 when the cheque bearing Nos.458945, 458944 came for their bank for collection on 14.8.95 and when it was typed, it was typed as 14.8.98 instead of the year 95. Hence, it was prayed that in the deposition of D.W.4 in first page in 14.8.98, the year '98' should be corrected as '95'. Likewise, the Respondent/Plaintiff side also filed a Memo that in the evidence of P.W.1 (Respondent/Plaintiff), there were typing mistakes to the effect as if the Respondent/Plaintiff in his evidence in chief examination had admitted to pay interest at the rate of 12% per annum for the aforesaid amount of Rs.2,00,000/-. Further, this rate of interest was not accepted by Ravichandran, the cheque signed and given by the Defendant was typed as correct in the evidence was to be corrected, as not correct.
62.Also, in the said Memo filed on the side of the Respondent/ Plaintiff, it was stated that in the evidence of P.W.1 it was wrongly typed as near his land there was the Appellant/Defendant's land and it was correct to state that he asked for the land to be sold to him by the Appellant/Defendant but it should read as that it was not correct to state that he had land near the Defendant's land and he demanded the said land to be sold by the Appellant/Defendant.
63.The Memos of the Appellant/Defendant's Counsel and the Respondent/Plaintiff's Counsel praying to rectify the mistakes that had crept in while typing the depositions of P.W.1 and D.W.1 were accepted by the trial Court.
64.A perusal of Ex.B.3-Canara Bank Cheque Book Counterfoils shows that in counterfoil bearing No.458946, 458949, 458950 no date was mentioned as to when it was issued. The cheque No.458949 was cancelled. Apart from these three aforesaid cheques, the other counterfoils indicate that cheques was utilised, as seen from the details mentioned therein.
65.In Ex.B.4-Sale Deed dated 12.10.1998 executed by one Abdul Azeez in favour of the Appellant/Defendant, there were recitals to the effect that the Appellant/Defendant purchased the schedule properties on 20.05.1991 and that he was in possession of the said Nanja lands. Significantly, the Ex.B.4-Sale Deed does not refer to the person from whom the Appellant/Defendant had purchased the properties. A summon was issued to the Abdul Azeez, but he had refused to give evidence, by appearing before the trial Court, that a plea was put forward that the Respondent/Plaintiff demanded the Appellant/Defendant to sell one of the items of properties mentioned in Ex.B.4-Sale Deed and since the property was sold to Abdul Azeez, the Respondent/Plaintiff became angry and pursuant to the principal and interest due amount to be paid to D.W.2, in the cheque he only affixed his signature and to receive the said cheque from the Respondent/ Plaintiff, subsequently, he forgotten the same and the said cheque was filled up and a suit was filed by the Respondent/Plaintiff was not accepted by this Court since the same was not satisfying the judicial conscience of this Court.
66.Further, in Ex.A.1-Cheque dated 15.08.1998 for Rs.3,00,000/- the Appellant/Defendant had signed in Ball Point Pen. The contents of Ex.A.1 and the amount of Rs.3,00,000/- were written in Ball Point Pen. The trial Court, in para 34 of its Judgment in the suit, had observed that the entire recitals in Ex.A.1-Cheque was written by the Appellant/Defendant in one pen (Ballpoint) and given to the Respondent/Plaintiff. As per Section 73 of the Indian Evidence Act, though a Court of Law is empowered to compare the signature writing or seal with others admitted or proved, the same is an hazardous one. Certainly, a Court of Law can compare the writings in order to appreciate properly the other evidence produced before it as per decision S.Vinaya Chandra, AIR 1967 Supreme Court at page 778.
67.In the instant case on hand, no complaint was lodged by the Appellant/Defendant against the Respondent/Plaintiff before the Police as to the misuse of cheque made by the Respondent/Plaintiff or in regard to the fact that he demanded the Respondent/Plaintiff to return the cheque and inspite of the same, he had not returned the cheque. Therefore, it is quite evident that the Appellant/Defendant had given the Ex.A.1-Cheque dated 15.08.1998 to the Respondent/Plaintiff. Accordingly, this Court holds that the Appellant/Defendant received a sum of Rs.3,00,000/- and handed over the Canara Bank Cheque-Ex.A.1 dated 15.08.1998 to the Respondent/Plaintiff and the Point No.1 is answered in favour of the Respondent/Plaintiff.
68.Since the Respondent/Plaintiff and Appellant/Defendant were relatives and residing in opposite houses, the absence of Pronote, apart from Ex.A.1-Cheque dated 15.08.1998, would not anyway defeat the case of the Respondent/Plaintiff, as opined by this Court.
69.P.W.1, in his evidence, had deposed (in cross examination) that two or three days before 15.08.1998 the Appellant/Defendant asked for a loan from him and he gave a loan of Rs.3,00,000/- to D.W.1 (Appellant/Defendant) by agreeing to sell his land to Mohanakrishnan and in his house, he was keeping a sum of Rs.4,00,000/- being the sale consideration by the said Mohanakrishnan and that till date the sale had not taken place and that he agreed to sell 6 acres of his Punja land at the rate of 70,000/- per acre and the said Mohanakrishnan gave him the amount on Monday and two days later the Appellant/Defendant demanded a loan from him to which he replied that he would pay the amount on Saturday, but though he had the money, not paid the same on Saturday. The aforesaid cogent and coherent evidence of P.W.1 was quite convincing and the same was accepted by this Court, to establish that the Respondent/Plaintiff was in possession of sufficient amount to lend to the Appellant/ Defendant.
70.D.W.1 (in his cross examination) categorically admitted that at Virudhachalam Junction Road, in his wife's name, there was a Hotel Rahmania which was let out for rent.
71.D.W.1, in his evidence, had deposed that he received a loan of Rs.10,000/- during October 1993 for which he executed a Pronote agreeing to repay the principle amount with 12% interest and that Ravichandran came to his house during October, 1995 and demanded the interest at the rate of 36% per annum by raising a dispute with him and that the Respondent/Plaintiff, who being his relative, pacified the said Ravichandran.
72.It is also the further evidence of D.W.1 that since he was proceeding to Chennai and therefore informed the Respondent/Plaintiff to settle the said loan of Ravichandran and after affixing his signature in the blank cheque handed over the same to the Respondent/Plaintiff and left in Chennai and only under these circumstances, he affixed his signature and handed over the cheque.
73.D.W.2 also in his evidence, had deposed that the Appellant/Defendant received a sum of Rs.10,000/- from him as loan for which he agreed to pay interest at the rate of 36% per annum for Rs.100/- per month and Ex.B.1-Pronote during October, 1993.
74.D.W.2, in his evidence, would add that when the Appellant/ Defendant refused to pay three paise interest and agreed only to two paise interest, there arose a dispute between them and at that time, the Respondent/Plaintiff, who came that way, asked him to come his house for talks and accordingly, he went to the house of Respondent/Plaintiff at 4.00 p.m. in the evening and that the Respondent/Plaintiff agreed to pay interest at the rate of 2 = paise and also informed him that he would issue cheque for and on behalf of the Appellant/Defendant and only for settling the B.1-Pronote amount, the Respondent/Plaintiff informed him that the cheque was issued.
75.The evidence of D.W.1 to the effect that he had not received a sum of Rs.3,00,000/- from the Respondent/Plaintiff as loan for his family expenses etc. and only for the purpose of settling the Ravichandran's loan, he signed the cheque in the year 1995 was an unnatural one and hence, not accepted by this Court. Likewise, the interested evidence of D.W.2 that since the Appellant/Defendant had not paid any amount towards the loan received by him, he went to the door step of his house and questioned him during the 9th month of the year etc., was an artificial one and did not inspire the confidence of this Court.
76.In view of the evidence of P.W.1 that he had paid a sum of Rs.3,00,000/- to the Appellant/Defendant from out of the sum of Rs.4,00,000/- he had with him in his house and also taking note of the fact that Ex.B.1-Pronote dated 07.10.1993 executed by Ravichandran in favour of the Appellant/Defendant was settled as per Ex.B.2-Endorsement dated 25.12.1995, this Court comes to an inevitable conclusion that the Ex.A.1-Cheque dated 15.08.1998 was not handed over to the Respondent/Plaintiff in the manner alleged by the Appellant/Defendant in the Written Statement and the Point No.2 is answered against the Appellant/Defendant.
77.In the Plaint, the Respondent/Plaintiff had claimed a sum of Rs.3,13,500/- along with interest from the Appellant/Defendant. Significantly, in para 4 of the Plaint, the Respondent/Plaintiff had claimed 9% interest for the principle amount of Rs.3,00,000/-. Though P.W.1, in his evidence, had deposed that the Appellant/Defendant (D.W.1) had agreed to pay 12% interest for a sum of Rs.3,00,000/-, the decree passed by the trial Court does not specify the quantum of interest awarded by it.
78.Interest cannot be claimed as a matter of right unless the Statute specifically provides it or provided for under the specific terms of contract, as per decision in Union of India V. Konduru Venkata Reddy, AIR 2008 Andra Pradesh 211 at page 215 (D.B.).
79.In C.Narayana Reddy V. State Bank of India (Agricultural Development), Hosur Branch, Hosur and others, (2004) 4 M.L.J. 53 at page 59 (Mad)(D.B.), it is held that 'The Court is competent to reduce the rate of interest, from the contractual rate, pendente lite and post decree interest at a lower rate or even refusing interest.'
80.In (2006) 3 Banker's Law Journal 1212 (Kerala), it is held that 'where no rate of interest is provided in the pronote, the plaintiff can claim pre-suit interest at the rate provided in Section 80 of the Negotiable Instruments Act subject to the discretion of the Court.'
81.In the instant case on hand, the Respondent/Plaintiff proved that the Appellant/Defendant was legally due to pay to him a sum of Rs.3,00,000/- which was not paid to him. A party responsible for withholding the amount was to pay an interest at a rate considered by a Court of Law. Inasmuch as there was no convincing and acceptable proof, on the side of the Respondent/Plaintiff, that the Appellant/ Defendant agreed to pay either the rate of interest at 12% per annum or at 9% per annum for the sum of Rs.3,00,000/-, yet, this Court, on the basis of Equity, Fair Play and even as a matter of prudence, directs the Appellant/Defendant to pay the sum of Rs.3,00,000/- together with proper and reasonable uniform rate of interest at 7.5% per annum from 15.08.1998 till date of realisation together with proportionate costs.
82.In the result, the Appeal is disposed of, by directing the Appellant/Defendant to pay the Respondent/Plaintiff a sum of Rs.3,00,000/- together with interest at the rate of 7.5% per annum from 15.08.1998 till date of realisation together with proportionate costs. Time for payment is three months from the date of receipt of copy of this Judgment. Considering the facts and circumstances of the case, the parties are directed to bear their respective costs.
sgl To The Additional Subordinate Judge, Virudhachalam