Madras High Court
Ravi vs Jothi
Author: P.T.Asha
Bench: P.T.Asha
S.A.No.35 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON: 23.08.2022
PRONOUNCED ON: 05.09.2022
CORAM
THE HON'BLE Ms.JUSTICE P.T.ASHA
S.A.No.35 of 2020
and
C.M.P.No.818 of 2020
Ravi ... Appellant/Appellant/Defendant
Vs.
Jothi
... Respondent/Respondent/Plaintiff
PRAYER : This Second Appeal is filed under Section 100 of the C.P.C,
against the judgement and decree dated 02.07.2018 made in A.S.No.29
of 2016 on the file of the Court of Additional District Judge (Fast Track
Court), Villupuram, confirming the Judgement and Decree dated
02.03.2016 made in O.S.No.158 of 2008 on the file of the Court of
Principal Subordinate Judge, Villupuram.
For Appellant : Mr.T.M.Naveen
For Respondent : Mr.N.Suresh
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S.A.No.35 of 2020
JUDGMENT
The unsuccessful defendant before the Courts below in a suit on a promissory note is the appellant before this Court.
2. The facts in brief which are necessary to appreciate the case on hand is herein below narrated and the parties to the lis are arrayed in the same rank as before the Trial Court.
3. The plaintiff had filed the Suit O.S.No.158 of 2008 on the file of the Principal Sub Court, Villupuram seeking recovery of a sum of Rs.3,88,000/-. It is the case of the plaintiff that on 02.06.2006, the plaintiff has extended a loan of Rs.3,00,000/- in cash to the defendant which was repayable with interest at the rate of 1 rupee per 100 on demand. The defendant had executed a promissory note on the said date. 2/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020
4. It is the case of the plaintiff that though the defendant had undertaken to repay the said sum with interest on demand, he had however observed this assurance in the breach and despite several requests no amounts were forthcoming from the defendant. This constrained the plaintiff to issue a legal notice dated 02.07.2008 calling upon the defendant to repay the money borrowed with interest. Though the said notice was received by the defendant, however he has not come forward to clear the outstanding and therefore, the defendant was constrained to file the suit in question.
5. The defendant had filed a written statement inter alia denying the borrowal and it is his case that the plaintiff’s husband Azhagappan was carrying on a finance business and the defendant had borrowed money from the said Azhagappan for which a Varathamana Agreement dated 18.08.2005 was executed by the defendant. The defendant’s property was offered as security for the same. At that time, the plaintiff’s husband had obtained signatures in blank printed promissory note which has been used to create the suit promissory note. The defendant had 3/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 stated that the plaintiff was a total stranger to him and that he did not know her.
6. He would further contend that the Varathamana Agreement was prepared in a stamp paper which was purchased by Azhagappan and one Mr. R.Radhakrishnan the document writer had typed out the same. One Madhi of Panpakkam Village had signed the agreement as a witness. Though the agreement which is marked under protest as Ex.B.1 would show that a sum of Rs.80,000/- was given, however, it is the case of the defendant that on the said day only a sum of Rs.25,000/- was given and thereafter on several occasions put together the balance amount of Rs.74,000/- was paid.
7. It is the further case of the defendant that towards the above borrowal he had repaid a sum of Rs.60,000/- by 27.12.2007 and he was orally informed by the said Azhagappan that only a sum of Rs.20,000/- was due. The defendant would submit that it is the blank printed 4/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 promissory note signed by him which has been used to create the suit promissory note.
8. The learned Principal District Judge, Villupuram had framed the following issues which when translated from the vernacular would read as follows:-
1) Whether the defendant, as claimed by the plaintiff, is bound to repay the sum of Rs.3,88,000/-
towards promissory note executed by the defendant being the sum of Rs.3,00,000/- borrowed on 12.06.2006 together with interest at 12% p.a.?
2) Whether the claim of the defendant that the promissory note is a fabricated one is true?
3) What other reliefs the plaintiff would be entitled to?
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9. The plaintiff had examined herself as P.W.1 and marked Ex.A.1 to Ex.A.3. On the side of the defendant, the defendant had examined himself as D.W.1, one Mathiazhagan as D.W.2 and Azhagappan as D.W.3. He had marked 3 documents Ex.B.1 to Ex.B.3 all of which were marked under protest.
10. The learned Sub Judge had held that the defendant was liable to repay the sum of Rs.3,88,000/- since the defendant had not taken out a plea in his written statement that the defendant had handed over a blank/ unsigned promissory note to the plaintiff’s husband. On the contrary, the defence taken was that the promissory note has been created by forgery. The Trial Court has also taken note of the fact that the defendant has admitted his signature in the promissory note.
11. The learned Judge has also taken into consideration the fact that in the written statement, the defendant had taken a stand that the 6/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 promissory note had been fraudulently created, thereafter, during the cross-examination, the defence taken is that the signature has been obtained in a blank promissory note. The learned Sub Judge had further held that in the light of the above findings the 2 nd issue, namely, whether the document has been created fraudulently has to necessarily be answered against the defendant. Ultimately, the suit was decreed as prayed for.
12. Challenging the said judgement and decree the defendant had filed A.S.No.29 of 2016 on the file of the Additional District Judge (Fast Track Court) Villupuram. The learned Additional District Judge also held that the defendant has not been able to prove his contention that the blank promissory note executed in favour of the plaintiff’s husband Azhagappan has been utilised to create the suit promissory note. Ultimately the appeal was dismissed, aggrieved by the same the defendant has filed the above Second Appeal.
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13. When the matter had came up for admission this Court had directed notice to the respondent. The plaintiff/respondent had entered appearance through counsel and both parties have extensively argued the case.
14. After hearing the arguments of both the counsels, I am of the view that the appeal gives rise to the following Substantial Questions of law :-
"1. Whether the Courts below are correct in law in decreeing the suit only on the ground that the defendant has signed the promissory note totally overlooking the defence that the signatures had been obtained in blank promissory note and that the plaintiff did not have the wherewithal to pay a huge sum of Rs.3,00,000/- in cash?
2. Whether the Courts below are correct in law in decreeing the suit when the plaintiff has not been able to prove the passing of consideration?
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3. Whether this Court sitting in Second Appeal can re-appreciate the evidence on the ground that the findings of the Courts below on the basis of the document is perverse?"
The both counsels have also addressed their argument on the above questions of law.
15. Mr.T.M.Naveen, learned counsel appearing on behalf of the appellant/defendant would submit that the defendant, even in the opening paragraph of his written statement, had stated that the signature of the defendant obtained in a blank printed promissory note has been used to create the suit promissory note fraudulently. The same contentions has been reiterated by the plaintiff in paragraph no.7 where he has also stated that no consideration has been received by him. The defendant has stated that the plaintiff and her husband Azhagappan have colluded together and created the suit promissory note and filed the suit. He would further submit that the defendant had also questioned the capacity of the plaintiff 9/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 to extend the huge sum of Rs.3,00,000/-. Though the defendant has denied the fact that the signature in a blank promissory note has been used to create the suit promissory note, the plaintiff has not taken steps to examine the two attesting witnesses who had witnessed the signing of the document by the parties. On the contrary, the plaintiff as P.W.1 would state that she was not examined the attesting witnesses because they would depose against her.
16. The learned counsel would further submit that the plaintiff has not been able to prove her capacity to extend a huge sum of Rs.3,00,000/- . As P.W.1 in her cross examination, the plaintiff would submit that the sum of Rs.3,00,000/- had been in her possession which she had saved periodically and also she had the amount given by her mother and brothers. On the contrary, the husband who would depose as D.W.3 in his cross examination would state that the source of income of the plaintiff was the money that she had received from her mother’s house and the income she earned by doing tailoring business. 10/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020
17. Further in her chief examination though she would submit that the passing of consideration and the signing of the alleged promissory note had taken place in the presence of the two witnesses, however in the cross-examination she would submit that only her husband was present when the money exchanged hands. However, her husband has not signed the promissory note as a witness. He would further contend that the lower Appellate Court has decreed the suit on the basis of presumption. The learned counsel would submit that the plaintiff did not have the source for extending a loan of a huge sum of Rs.3,00,000/-. In support of his argument that a mere signing of the document would not close the avenue to the person disputing the signatures to let in other evidence to prove the same, the learned counsel would rely on the judgment reported in (2011) 4 SCC 726 - Tatipamula Naga Raju Vs. Pattem Padmavathi. In support of his argument that the non-issuance of a reply is not fatal to the case of the defendant, he would also rely on the judgement reported in 2011 (2) MWN (Cr.) DCC 67 - D.Karthikeyan Vs. M.Selvaraj. 11/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020
18. Per contra, Mr. N.Suresh learned counsel appearing on behalf of the plaintiff/respondent would submit that the defendant has taken contradictory stands in his defence at one juncture the defendant would deny the signature whereas at the other end he would submit that he has signed in a blank form. He would further submit that despite receipt of the pre-suit notice the defendant has not cared to respond to the same which would naturally lead to the presumption that the promissory note has been executed by the defendant. He would also submit that the plaintiff in her oral evidence has very clearly and categorically stated that she has received the money from her parents. Therefore, he would submit that once the signature is admitted and the defendant has not been able to prove the contrary the Courts below have rightly decreed the suit and no exception can be taken to the same. Further, this Court sitting in Second Appeal cannot re-appreciate the evidence which has already been considered.
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19. Heard the learned counsels on either sides.
20. The case of the plaintiff is that on 02.06.2006 she has extended a loan of Rs.3,00,000/- in cash to the defendant for his urgent family needs as well as business needs. On the very same day the defendant has executed a suit promissory note Ex.A.1. The defendant had executed the promissory note in the presence of two witnesses who had not only witnessed the signing of the document Ex.A.1 but also the handing over of consideration. On the contrary, it is the case of the defendant that he did not know the plaintiff as he had not met her earlier and that his dealings were only with her husband who has been examined as D.W.3 who would lend money to persons as he was a money lender. The defendant would contend that on 18.08.2005 he had executed a Varathamana Agreement in which he had acknowledged receipt of the sum of Rs.80,000/- as loan and on the date of the signing of the document only a sum of Rs.25,000/- was given and thereafter periodically a sum of Rs.74,000/- was paid to the defendant.
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21. The defendant’s case is that on the date of the execution of the Varathamana Agreement his signature in blank printed promissory notes had been obtained by the plaintiff’s husband which was subsequently used to create the forged suit promissory note. The defendant has also taken a plea that the plaintiff did not have the wherewithal and no consideration has passed under the agreement. In order to show that the defendant was un-acquainted with the plaintiff, the defendant has cross- examined the plaintiff in this regard and the plaintiff has admitted that she did not have any prior acquaintance with the defendant and it was only her husband who knew the defendant. Therefore, the contention of the defendant that he did not know the plaintiff so as to borrow money from her stands proved. Further the plaintiff has stated that the amounts had been given only on the instruction of her husband which statement does not find place in the plaint. On the contrary, a reading of the plaint would indicate that the defendant had directly approached the plaintiff for hand loan which she had given. She has stated as follows in her cross examination:-
14/25
https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 gzk; bfhLf;Fk; Kd;g[ vd; tPl;Lf;fhuUf;Fjhd; gpujpthjpia bjhpa[k;/ vdf;F bjhpahJ/ ehd; FLk;gk; ,Uf;Fk; tpyhrk; tpf;fputhz;o bkapd;nuhl;oy; kho tPl;oy; FoapUe;njhk;/ tPl;L bek;gh; epidtpy;iy/ bjhifia ehd; bkhj;jkhfj;jhd; gpujpthjpaplk; bfhLj;njd;/ vdf;F gpujpthjpia vd; fzth; K:ykhfj;jhd; gHf;fk;/ bjhifia ehd; jhd; gpujpthjpaplk; bfhLj;njd;/ vd; fzth; brhy;ypj;jhd; ehd; bjhifia gpujpthjpf;F bfhLj;njd;/
22. The defendant has taken a plea that the plaintiff did not have the source of income for giving a huge sum of Rs.3,00,000/-. In her cross examination the plaintiff would state that the sum of Rs.3,00,000/- was available with her from out of the amount that she has saved periodically and from out of the amount given to her by her mother and her brothers. She has admitted that she is a homemaker and that her family did not have any property. However, D.W.3 the husband of the plaintiff would state that the source of income of the plaintiff was the money that she had received from her mother’s house and from out of the income she earned by doing a tailoring business. Therefore, there appears to be a 15/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 contradiction with reference to the source of income. The plaintiff has not been able to show proof about the source from which she was able to extend a loan of a sum of Rs.3,00,000/- that too by way of cash.
23. The Courts below were simply swayed by the fact that the defendant having admitted the signature in the suit promissory note, therefore, the onus on the plaintiff stands discharged. The Courts below have failed to appreciate that the defendant has been able to establish that plaintiff did not have the wherewithal to extend a huge sum of Rs.3,00,000/- as loan as she was not able to give a convincing explanation for her source of income. The different versions quoted by the plaintiff and her husband regarding her source of income gives rise to a doubt as to whether the plaintiff has given the sum of Rs.3,00,000/- to the defendant. Therefore, the onus for show proof regarding the passing of consideration shifts to the plaintiff. The plaintiff in her chief examination would submit that the two witnesses of the Ex.A.1 promissory note were present when the document was executed and when the sum of Rs.3,00,000/- was handed over to the defendant. However, in her cross 16/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 examination she would admit that there was no one present when the money was paid to the defendant and it was only her husband who was present at that time.
24. Therefore, the plaintiff has not been able to prove the passing of consideration particularly when the same has been vehemently denied by the defendant on the ground that the plaintiff did not have the source of income to pay such a huge amount. Therefore, it is seen that the plaintiff has not been able to show the proof that the money had been paid to the defendant.
25. Further, the husband of the plaintiff who has stated to be present throughout the transaction has not signed the promissory note as a witness. That apart, the defendant has in clear terms stated that she will not examined the attesting witnesses as the witnesses would depose against her. This statement clearly shows that the plaintiff has not come to Court with clean hands. The Hon’ble Supreme Court in the judgement 17/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 reported in (2019) 5 SCC 418 - Basalingappa Vs. Mudibasappa has discussed the expression presumption in favour of the holder as set out in Section 139 of the Negotiable Instrument Act.
"139.. Presumption in favour of holder - 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 debut or other liability"
26. The learned Judges after considering the various judgments where the expression proved-disproved has been dealt with ultimately held as follows:-
20. A Three-Judge Bench of this Court in Rangappa Vs. Sri Mohan, (2010) 11 SCC 441 had occasion to elaborately consider provisions of Sections 138 and 139. In the above case, trial court had acquitted the accused in a case relating to dishonour of cheque under Section 138. The 18/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 High Court had reversed the judgment of the trial court convicting the accused. In the above case, the accused had admitted signatures on the cheque. This Court held that where the fact of signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence. In Paragraph No.13, following has been laid down (SSCP.446):-"
“13. The High Court in its order noted that in the course of the trial proceedings, the accused had admitted that the signature on the impugned cheque (No. 0886322 dated 8-2-2001) was indeed his own. Once this fact has been acknowledged, Section 139of the Act mandates a presumption that the cheque pertained to a legally enforceable debt or liability. This presumption is of a rebuttal nature and the onus is then on the accused to raise a probable 19/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 defence. With regard to the present facts, the High Court found that the defence raised by the accused was not probable.” "21. After referring to various other judgments of this Court, this Court in that case held that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability, which, of course, is in the nature of a rebuttable presumption. In paragraph No.26, following was laid down(Rangappa ase, SCC p.453) :-"
“26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan 20/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 Bhat, (2008) 4 SCC 54 may not be correct.
However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested.
However, there can be no doubt that there is an
initial presumption which favours the
complainant.”
27. Therefore, this Court is constrained to draw the presumption that there is no legally enforceable debt, therefore Substantial Questions of law Nos.1 and 2 are answered against the plaintiff.
28. As regards the 3rd substantial question of law, Section 103 of 21/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 the CPC enables the High Court to consider evidence when the same has been wrongly considered by the Court below. From the discussion in the foregoing paragraphs it is clear that the judgement and decree of the Courts below suffers from perversity as it has not considered the evidence as per the material available before it particularly in the light of the defense taken. The Hon'ble Supreme Court in the Judgement reported in 2018 (18) SCC 303- Ramathal Vs. Maruthathal and Others had observed as follows:
" However, it is not an absolute rule that the High Court cannot interfere in a second appeal on a question of fact. Section 103 CPC enables the High Court to consider the evidence when th same has been arises as referred to in Section 100. When appreciation of evidence suffers from material irregularities and when there is perversity in the findings of the court which are not based on any material, the court is empowered to interfere on a question of fact as well." 22/25
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29. In the instant case it is evident from a reading of the judgement of the Courts below that they have been carried away by the fact that the defendant has admitted his signature and has therefore shut its eyes to the defense raised and the admission of the plaintiff as P.W.1 which have been narrated supra. The 3rd substantial question of law is answered in favour of the defendant.
30. The Second Appeal is allowed and the judgement and decree of the Courts below set aside. No costs. consequently, the connected Miscellaneous Petition is closed.
05.09.2022 Index : Yes / No speaking Order : Yes / No shr 23/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 To
1.The Additional District Judge (Fast Track Court), Villupuram.
2. The Principal Subordinate Judge, Villupuram.
3.The Section Officer, V.R.Section, High Court, Madras -104.
24/25 https://www.mhc.tn.gov.in/judis S.A.No.35 of 2020 P.T.ASHA, J., shr Pre-delivery Judgment in S.A.No.35 of 2020 and C.M.P.No.818 of 2020 05.09.2022 25/25 https://www.mhc.tn.gov.in/judis