Andhra Pradesh High Court - Amravati
M. Sudhakar vs Noorabasha Nagoor Saheb, on 6 October, 2023
THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO
APPEAL SUIT NO.27 OF 2016
JUDGMENT:
1. The Appeal, under Section 96 of the Code of the Civil Procedure, is filed by the appellant/defendant challenging the decree and Judgment, dated 06.03.2015 in O.S.No.20 of 2009 passed by the learned Senior Civil Judge, Parchur (for short, 'trial court'). The respondent is the plaintiff, who filed the suit in O.S.No.20 of 2009 seeking recovery of Rs.6,80,000/- with subsequent interest and costs from the defendant based on the promissory note.
2. The parties will hereinafter be referred to as arrayed before the trial Court.
3. The factual matrix, necessary and germane for adjudicating the contentious issues between the parties inter se, may be delineated as follows:
The defendant borrowed Rs.5,00,000/- from the plaintiff on 15.01.2006 for business purposes and executed a promissory note in favour of the plaintiff, agreeing to repay the same with subsequent interest @ 24% p.a. On repeated demands, the defendant issued a cheque, which was dishonoured, for which the plaintiff filed a criminal case under section 138 of the Negotiable Instruments Act, 1881 (for short, 'N.I. Act'). As the defendant failed to repay the debt due, the plaintiff initiated the 2 TMR, J A.S.No.27 of 2016 present suit to recover the debt owing under the promissory note.
4. In the written statement, the defendant refuted the plaint averments and contended that he borrowed only Rs.1,00,000/- from the plaintiff on 15.01.2006 at Anantapur town and District; the said amount was borrowed through the plaintiff's son; the plaintiff is a money lender and used to lend money at a higher rate of interest; due to urgent need of money, the defendant forced to agree to the plaintiff's terms and executed a promissory note for Rs.5,00,000/-; at the time of execution of the promissory note, the plaintiff and his son and the defendant alone were present at Anantapur town; there was no presence of attestor viz., Brahma Reddy at the time of execution; the said Brahma Reddy's signature was obtained before filing of the suit and as such, there is a material alteration; the plaintiff's son worked for some time as clerk in the defendant's office; due to bad character, the defendant removed him; the plaintiff has no capacity to lend such a huge amount; the plaintiff is a poor man; as the promissory note was executed at Anantapur, the trial Court has no jurisdiction to trial the case.
5. Based on the above pleadings, the trial Court framed the following issues:
(1) Whether the suit promissory note is true, valid and binding on the defendant?
(2) Whether the suit promissory note was supported by full consideration?
(3) Whether this Court has got jurisdiction to entertain the suit? (4) To what relief?3
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6. During the trial, on behalf of the plaintiff, P.Ws.1 and 2 were examined and marked Exs.A1. On behalf of the defendant, D.W.1 was examined, and the Ex.B.1 document was marked.
7. After the trial completion and hearing the arguments of both sides, the trial Court decreed the suit with costs for Rs.6,80,000/- with subsequent interest at 12% p.a., from the date of suit till the date of decree and after that at 6% p.a., from the date of decree, till the date of realization on the principal amount of Rs.5,00,000/-.
8. Sri V.V.N.Narasimham, learned counsel representing the appellant/ defendant, put forth an argument that the burden of proof lies with the plaintiff and the plaintiff cannot rely on the latches of the defendant; the trial Court ought to have dismissed the plaintiff's claim as the plaintiff failed to provide sufficient evidence to support his claim; according to the defendant, the transaction took place in Anantapur and the plaintiff's presence there is undisputed; in the absence of any contradictory evidence, the trial Court erroneously concluded that it had jurisdiction to entertain the suit.
9. Per contra, Sri Madhava Rao Nalluri, learned counsel representing the respondent/plaintiff, contends that the trial Court correctly appreciated the case facts and reached a correct conclusion. The reasons given by the trial Court do not require any interference. 4
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10. Having regard to the pleadings in the suit and the findings recorded by the Trial Court, the following points would arise for determination:
1) Whether the defendant established that he received only Rs.1,00,000/ on execution of the suit promissory note-?
2) Whether the Court at Parchur have jurisdiction to try the suit?
3) Whether the Judgment passed by the trial Court needs any interference?
POINT NO.1:
11. The plaintiff himself is examined as PW.1 and also examined Poluri Bramha Reddy, the attestor, as PW.2. PWs.1 and 2 affirmed that the defendant borrowed Rs.5,00,000/- from the plaintiff and executed Ex.A.1 promissory note, which outlined the agreed upon terms and conditions. Notably, the defendant himself was the scribe of the Ex.A.1 promissory note. In his testimony, the defendant as DW.1, he did not contest the fact that he had signed Ex.A.1 promissory note for Rs.5,00,000/-. In fact, he admitted the contents in Ex.A.1 are true and correct. However, the defendant asserted that he had borrowed only Rs.1,00,000/- from the plaintiff's son on 15.01.2006 in Anantapur town. Consequently, he contends that Ex.A.1 promissory note was not supported by entire consideration amount. The defendant did not provide any reasonable explanation for why he had executed a promissory note for Rs.5,00,000/- instead of the alleged Rs.1,00,000/-. Furthermore, he did not assert that he had initially signed a blank promissory note that 5 TMR, J A.S.No.27 of 2016 the plaintiff later filled in for higher amount. Consequently, the burden lay with the defendant to prove that he had indeed received only Rs.1,00,000/- under the Ex.A.1 promissory note. Apart from, DW.1's self-serving testimony, the defendant failed to provide any substantial or credible evidence to support his assertion.
12. In Bonalaraju Vs. S.Sarupula Srinivas1, the composite High Court of Andhra Pradesh held that:
"once execution is proved, the presumption under Section 118 of N.I. Act that it is supported by consideration automatically applies, and the contention that the plaintiff is not only to establish the execution but also establish passing on the consideration is rejected".
13. In Abbisetti Krishnamoorthy V. Singasani Raghuramaiah (died) per L.R.s2, the composite High Court of Andhra Pradesh held that:
"Section 118 of the N.I Act shows that the presumption attached to passage of consideration (as is the subject matter of this Appeal), just like other presumptions, is clearly rebuttable, and it is for the defendant to satisfy the Court that in a given case, the presumption cannot be drawn".
14. In light of the settled legal position and present facts of the case, the burden lies on the defendant to prove the non-existence of consideration by bringing on record such facts and circumstances, which would lead the Court to believe the non-existence of the consideration. Suppose the defendant discharges the onus of proof showing that the existence of consideration was improbable or doubtful and the execution 1 2006 (2) ALD 202 2 2011 (5) ALT 143 6 TMR, J A.S.No.27 of 2016 of the promissory note, the onus would be shifted to the plaintiff. Then, he will be obliged to prove the existence of the consideration.
15. The defendant failed to show any reason or circumstance to disbelieve the evidence of P.Ws.1 and 2 regarding the execution of the promissory note; it is to be borne in mind that the evidence of P.Ws.1 and 2 is consistent regarding the execution of the promissory note by the defendant on receipt of the consideration amount. Though P.W.s 1 and 2 were subjected to lengthy cross-examination, nothing was elicited to discredit their evidence. The plaintiff and his witness have no reason to fabricate a suit promissory note. P.W.2 has no reason to depose falsehood against the defendant's interest, and he would gain nothing by supporting the plaintiff's case unless there is a truth in it. It is not the defendant's case that he has enmity with him to depose falsehood against his case. However, even the rebuttal could be given by direct evidence or by proving the preponderance of probabilities on record. In the present case, the defendant has not rebutted the presumption, even by the majority of probabilities.
16. Accordingly, the point is answered in favour of the plaintiff by holding that the defendant failed to prove that he received only Rs.1,00,000/- from the plaintiff under the Ex.A.1 promissory note. POINT NO.2:
17. The defendant contends that Ex.A.1 promissory note was executed at Anantapur. Whereas, his residence is in Visakhapatnam and 7 TMR, J A.S.No.27 of 2016 the plaintiff resides in Parchur and so, the Court at Parchur has no jurisdiction to entertain the suit. It is pertinent to note that DW.1 admitted in his cross-examination that Ex.A.1's contents are true and correct. Furthermore, Ex.A.1 contained a specific provision stating that the defendant agreed to pay the outstanding amount along with interest upon the plaintiff's demand and that this payment would occur in Nuthalapadu village. This explicit clause within the promissory note established a clear jurisdiction for the case. The trial Court rightly noted that despite the defendant's claim that Ex.A.1 was executed in Anantapur, the promissory note itself specified Nuthalapadu village as the location for payment the amount due. Therefore, the Court in Parchur had proper jurisdiction to adjudicate the matter.
18. The appellant's counsel argues that the suit should be filed within the jurisdiction where the defendant resides or where the suit transaction occurred, implying that Parchur Court lacks jurisdiction. Conversely, the respondent's counsel contends that due to the clear recital in Ex.A.1 and the defendant's admission of its accuracy, establishing an agreement between the parties, the Parchur Court holds jurisdiction. At this stage, it is relevant to refer to the case of S.S.V.Prasad V. Y.Suresh Kumar and another 3, wherein the Composite High Court of Andhra Pradesh held that:
28. Another important aspect which needs to be taken note of is that the N.I. Act itself provides for the presentation of negotiable 3 A.I.R. 2005 A.P. 37 8 TMR, J A.S.No.27 of 2016 instruments for payment. It is beneficial to extract Sections 68, 69, and 70, which deal with these aspects:
"Section 68. Presentment for payment of instrument payable of specified place and not elsewhere.-- A promissory note, bill of exchange or cheque made, drawn or accepted payable at a specified place and not elsewhere must, to charge any party thereto, be presented for payment at that place.
Section 69: Instrument payable at a specified place.-- A promissory note or bill of exchange made, drawn or accepted payable at a specified place must, in order to charge the maker or drawer thereof, be presented for payment at that place.
Section 70: Presentment where no exclusive place specified.-- A promissory note or bill of exchange, not made payable as mentioned in Sections 68 and 69, must be presented for payment at the place of business (if any) or at the usual residence of the maker, drawee, or acceptor thereof, as the case may be."
X
30. X In the context of the N.I. Act, a cause of action can be said to have accrued to a person when he presents a negotiable instrument in accordance with Sections 68 to 70 of the N.I. Act and the maker of it refuse to honour it. The place where the negotiable instrument is actually presented or is required to be presented under the said provisions becomes significant from the point of view of Section 20(c) C.P.C.
31. Further, the N.I. Act is a self-contained and exhaustive code in relation to the making, transfer, presentation and enforcement of negotiable instruments. When the N.I. Act in clear terms provides for the presentation of the negotiable instruments at a particular place; such a mandate cannot be watered down through a process of treating the indorsement or transfer of a Negotiable Instruments Act as part of the cause of action. Xx
32. X Even assuming that there is conflict, it has to be noted that the N.I. Act is specially enacted to define and amend the law relating to promissory notes, bills of exchange and cheques, whereas the Code of Civil Procedure is a general enactment dealing with procedural aspects. The settled principle of law is that the special law shall always prevail over the general. Further, procedural law cannot be permitted to shatter the scheme framed under the substantive law governing the matter. 9
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35. Therefore, it is held that the holder, in due course, of a negotiable instrument can present a suit to recover the amount covered by it only in a Court within whose territorial jurisdiction the defendants therein reside or carry on business or in a Court within whose territorial jurisdiction, the place at which such negotiable instrument, can be presented, under Sections 68 to 70 of the N.I. Act is situated.
19. By relying on the decision cited supra ,as both parties stipulated a condition to pay the suit amount at Nuthalapadu village, this Court views that the Court at Parchur has jurisdiction to try the suit. Accordingly, the point is answered.
POINT NO.3:
20. After careful consideration, I am of the view that the trial Court has correctly appreciated the evidence. There is no reason for this Court to arrive at a different conclusion than the one arrived at by the trial Court. I am of the opinion that the findings arrived at by the trial Court are correct, and no justifiable reasons have been shown by the appellant/defendant for arriving at different conclusions. I agree with the conclusion reached by the trial Court.
21. Given the preceding discussion, the view taken by the trial court does not call for any interference, and this Appeal fails and is hereby dismissed. The impugned Decree and Judgment passed by the trial court is upheld. Accordingly, the points are answered. 10
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22. As a result, the Appeal is hereby dismissed without costs by confirming the Decree and Judgment in O.S.No.20 of 2009, dated 06.03.2015, passed by the learned Senior Civil Judge, Parchur.
Miscellaneous petitions pending, if any, in this Appeal, shall stand closed.
_________________________________ JUSTICE T. MALLIKARJUNA RAO Date: 06.10.2023 SAK 11 TMR, J A.S.No.27 of 2016 THE HON'BLE SRI JUSTICE T.MALLIKARJUNA RAO APPEAL SUIT NO. 27 OF 2016 Date: 06.10.2023 SAK