Madras High Court
M.Kokila vs A.Dhanalakshmi on 30 January, 2014
Author: S.Vimala
Bench: S.Vimala
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 30.01.2014 CORAM THE HONOURABLE MRS.JUSTICE S.VIMALA Second Appeal(MD)No.86 of 2011 and M.P(MD)No.2 of 2011 M.Kokila ... Appellant/Respondent/Plaintiff Vs. A.Dhanalakshmi ... Respondent/Appellant/Defendant Prayer Second Appeal filed under Section 100 of the Civil Procedure Code against the judgment and decree dated 18.08.2010 passed in A.S.No.19 of 2008 on the file of the District Judge, Karur, reversing the judgement and decree of the trial court dated 11.01.2008 made in O.S.No.85 of 2006 on the file of the Subordinate Judge, Karur. !For Appellant ... Mr.M.Saravanan for Mr.N.C.Ashok Kumar ^For Respondent ... Mr.D.Nallathambi :JUDGMENT
(i)When the plaintiff is expected to raise pleadings only with reference to Facta Probanda and not with reference to Facta Probantia, whether the first appellate court is justified in reversing the judgment of the trial court, on the ground that the plaintiff is guilty of omission to plead Facta Probantia?
(ii)Whether the presumption available under Section 118 of the Negotiable Instruments Act, with regard to passing of consideration would be applicable only when the execution of promissory note is admitted and not when the execution is disputed and proved later?
(iii)Whether the plaintiff is entitled to claim interest as per the contractual rate mentioned in the promissory note which would be against the provisions of Tamil Nadu Money Lenders Act, 1957?
These three questions of law were framed/reframed/restructured, at the time of hearing from the questions not framed/framed at the time of admission.
2. The plaintiff Kokila filed a suit based upon the Promissory Note dated 02.01.2005 said to have been executed by the defendant for a sum of Rs.1,50,000/-.
3. The defendant disputed the claim on the ground that;
a)Promissory Note is a rank forgery.
b)Plaintiff has no wherewithal to lend such a huge amount.
c)Defendant had no necessity to buy such huge amount.
4. Before the trial court, plaintiff was examined as PW1 and the attesting witness to the Pro Note has been examined as PW2. Ex.A1-Promissory Note was the only document produced and the DW1 was the only witness examined.
5. The trial court decreed the suit for a sum of Rs.1,83,750/- with costs and subsequent interest at 6% per annum on the original sum of Rs.1,50,000/-. The trial court gave a finding that the execution of promissory note has been proved through the evidence of PW2, the attesting witness. The trial court raised presumption available under Section 118 of Negotiable Instruments Act and held that the suit promissory note is supported by consideration.
6. Challenging the findings, the defendant preferred appeal before the District Court in A.S.No.19 of 2008. The first appellate court allowed the appeal and set aside the decree passed in O.S.No.85 of 2006 and thereby the suit came to be dismissed. The findings of the first appellate court is challenged as perverse before this court.
7. The first appellate court did not believe the promissory note mainly on the ground that the plaint is silent about the presence of attesting witness, PW2 and the scribe Balasubrmaniam at the time of execution of promissory note. Whether this finding is justified, is the issue to be considered. In order to appreciate the observation made by the first appellate court, it is necessary to look into the rules relating to pleadings.
7.1. The fundamental rules of pleadings are:-
1)Every pleading must state facts and not law.
2)It must state all the material facts and material facts only.
3)It must state only the facts on which the party pleading relies and not the evidence by which they are to be proved.
4)It must state such facts concisely, but with precision and certainty.
The materials on which, a party relies are Facta Probanda (the facts to be proved) and they should be stated in the pleadings.
The facts by means of which they are to be proved are Facta Probantia and they are not to be stated.
7.2. The drafting of pleadings is an art which demands high degree of professional skill, knowledge, expertise and experience. It is stated to be, not a child's play. The function of pleadings is primarily for the benefit of the parties and for the assistance of court. It is the duty of the court to peruse the pleadings atleast at the time of framing of issues and to strike out matters which are unnecessary, scandalous, frivolous or vexatious or which may tend to prejudice, embarrass or delay the fair trial of the suit or which is otherwise an abuse of process of court (Order 6 Rule 16).
7.3. Parties are expected to state only essential facts so that the other party may not be taken by surprise. Pleadings are expected to be concise and precise.
7.4. Pleadings in mofussil are not strictly construed as pleadings in high court(AIR 1964 SC 538 Badat And Co. vs East India Trading Co.). It has been repeatedly held that pleadings in the mofussil court are loosely drafted and that liberal construction should be always given to such pleadings.
7.5. From the rules of pleadings, it is evident that, it is enough if the plaintiff pleads that the defendant has executed a promissory note dated so and so and the plaintiff is not expected to state who is an attesting witness/who is the scribe etc. In other words, he is not expected to state, through what evidence he will prove his case. Therefore, the finding of the first appellate court that there is omission in the pleadings regarding the attesting witness and scribe and that it is fatal, cannot be sustained.
7.6. Similarly, the place and time of execution of the promissory note need not be mentioned in the plaint itself. In fact, in the plaint, the place of execution has been mentioned as Karur in the paragraph relating to cause of action. Similarly, non issuance of pre-suit notice has been commented upon but with a cautious remark that it is not a condition precedent.
8. Yet another finding of the first appellate court is that the plaintiff has not proved her capacity to pay money under the promissory note. It is specifically pointed out that the evidence of PW1 is silent about the occupation of the plaintiff and the source of income. Whether this finding is justified when the presumption under Section 118 of the Negotiable Instruments Act operates in favour of the plaintiff, after the execution is proved by the plaintiff.
(a)Passing of consideration under the pro note has been spoken to by PWs 1 and 2. The plaintiff has stated during cross examination that she was doing catering work and cloth work (tying of knot for the blanket) and thereby she had professional income.
(b)Non production of Bank Account and Income-tax return has been commented upon, but it is not the case of the plaintiff that she is an income-tax assessee. If the plaintiff was not having any account in the bank, then, it is not possible to produce bank account. It would be relevant to point out that the plaintiff belongs to a village called Narasimmapuram at Karur Taluk. The court can take judicial notice of the fact that for the women in villages, grocery pots are their bank. This method of saving which involved some risks, as the family and relatives may demand access to savings, some alternative to popular saving methods are resorted to and the village women have started using banking services. Preference is now being given for the Bureaus and almairah.
(c)It is also stated that her husband was employed as an Accountant.
(d)When there is an initial presumption in favour of the plaintiff and when there is specific evidence by the plaintiff herself regarding the capacity to pay, it is for the defendant to adduce rebuttal evidence. Excepting the evidence of defendant herself, there is no other evidence and there is not even an attempt to adduce rebuttal evidence.
8.1. Moreover, the necessity to borrow money for the defendant has been substantiated through the admission made by DW1 herself. The defendant has admitted that her husband suffered loss in the business and thereafter he filed an insolvency application with an averment that his indebtedness was to the extent of Rs.35,00,000/-. Therefore, there had been a necessity to borrow money. This circumstance would strongly probablise the case of the plaintiff that the defendant borrowed money.
8.2. The first appellate court (in paragraph 12) has put the onus on the plaintiff to prove the passing of consideration which is unfortunate, especially when the first appellate court was aware of the presumption under Section 118 of the Negotiable Instruments Act. The finding that the presumption under Section 118 of the Negotiable Instruments Act is applicable only in respect of passing of some consideration and does not justify any presumption as to the quantum of consideration is not correct. This distinction is not contemplated under Section 118 of the Negotiable Instruments Act.
8.3. The finding that passing of exact consideration has to be proved by the plaintiff, is a perverse finding, when the plaintiff has proved the execution of promissory note.
8.4. This presumption under Section 118 of the Negotiable Instruments Act, is applicable and it can be drawn not only when the execution is admitted, but also when the execution is proved. If there is an admission by the defendant regarding execution, then the plaintiff is relieved of the botheration to prove the same. But, it is not mandatory that, to invoke the presumption, there should be an admission of execution. What is required is proof of execution. The proof may come either by admission of the defendant or through the plaintiff adducing evidence. Once the plaintiff proves the execution of the promissory note, then the burden to prove that there was no consideration is on the defendant as per the decision reported in AIR 1991 Kerala Page 39 (Marimuthu Gounder vs. Radha Krishnan).
9. When the plaintiff has adduced evidence regarding execution, the first appellate court without commenting upon the acceptability of evidence, has given a finding that unless the initial burden of execution is proved, the plaintiff is not entitled to the presumption available under Section 118. This finding is unjustified.
9.1. The court was not willing to believe the evidence of PW2, attesting witness on two grounds;
1)PW2 has not spoken anything about the corrections made in the promissory note.
2)PW2 has stated that he is not in cordial terms with the plaintiff and therefore, he would not have spoken favourably (in favour of the plaintiff) unless he is a set up witness by the plaintiff herself. Both the findings are perverse, as the finding No.1 is against the evidence and the finding No.2 is not the outcome of consideration of entire evidence.
9.2. In the cross examination, PW2 has spoken about the corrections made in the promissory note and also about the portions pertaining to which, corrections were made.
9.3. With regard to relationship between PW2 and the plaintiff, the version is that initially there was good relationship with the plaintiff and as he accompanied Dhanalakshmi (defendant) at the time of getting loan and subsequently, as the defendant did not discharge the loan, the relationship with the plaintiff became strained. This evidence would strengthen the case of the plaintiff that the amount ought to have been given in the presence of PW2. The court should have placed more reliance on the evidence of PW2, when the conduct alleged appears to be quite natural.
9.4. Under Section 114 of the Evidence Act, the court may presume the existence of any facts which it thinks likely to have happened regard being had to the common course of natural event, human conduct and public and private business, in their relation to the fact of particular case. If the evidence of PW2 is analysed in the above background, it would be clear that the evidence of PW2 is highly acceptable. As he accompanied the borrower at the time when the loan was obtained and subsequently, when the loan was not repaid (as agreed) naturally, the plaintiff would have entertained ill-feeling towards that witness. The evidence of PW2 that there was strained relationship after the failure to pay the amount reflects the common/natural course of human conduct and therefore, it should have been appreciated in a proper perspective.
10. Therefore, when the plaintiff has proved the execution of promissory note and the passing of consideration is presumed under Section 118 of the Negotiable Instruments Act, there is no justification for the dismissal of the suit.
11. The next issue to be considered is with reference to rate of interest.
The learned counsel for the defendant pleaded for lesser rate of interest, relying upon the provisions of Tamilnadu Prohibition of Charging Exorbitant Interest Act 2003. As per the provisions of the said Act, no person shall charge exorbitant interest on any loan advanced by him.
11.1. Under Section2(5) 'Kanthu Vatti' means an interest which will work out to interest rate more than that fixed by the Government under Section 7 of the Money Lenders Act. Under Section 2(6) 'loan' means an advance of money for daily vatti, hourly vatti, kanthu vatti, meter vatti or thandal. Under Section 7 of the Money Lenders Act, Government is empowered to fix the interest and charges allowed to money lenders.
11.2. Government of Tamil Nadu has issued notification, fixing the rate of interest at 9% per annum (with simple interest in respect of secured loan and @ 12% per annum in respect of unsecured loan). This notification has been published in Gazettee on 06.07.1979.
11.3. Therefore, the plaintiff can claim interest only @ 12% per annum from the date of pro note to till the filing of the suit. Thereafter, the plaintiff is entitled to interest on the principal amount at 6% per annum from the date of plaint to till the date of decree and from date of decree to till the date of realisation.
11.4. Learned counsel for the appellant has given a memo of calculation. According to the calculation, the interest payable from the date of pronote to date of plaint is Rs.23,050/- (@12%). The defendant is liable to pay a sum of Rs.1,73,050/- as on 13.04.2006 and thereafter with interest @ 6% on Rs.1,50,000/- till the date of payment.
12. The first appellate court has neither appreciated the evidence in proper perspective nor interpreted the provision under Section 118 of the Negotiable Instruments Act in a proper way. The first appellate court has reversed the judgment of the trial court without any legal basis. Therefore, the finding of the first appellate court is set aside and the judgment and decree of the trial court is restored.
13. In the result, the second appeal is allowed. Consequently, M.P(MD)2 of 2011 is closed. No costs.
NB2 To
1) District Judge, Karur.
2)Subordinate Judge, Karur.