(Prayer: Appeal Suit filed under Section 96 read with Order XLI of Civil Procedure Code to set aside the judgment and decree, dated 01.06.2016 made in O.S.No.24 of 2008 on the file of the Principal District Court, Dharmapuri by allowing this Appeal)
A. The Appeal Suit:
1.This Appeal Suit is filed against the judgment and decree, dated 01.06.2016 in O.S.No.24 of 2008 passed by the learned Principal District Judge, Dharmapuri, in and by which, the suit filed by the plaintiff for recovery of a sum of Rs.11,74,250/- with further interest at the rate of 9% per annum on the principal sum of Rs.10,00,000/- from the date of plaint was decreed by the Trial Court.
B. The Plaint:
2. The case of the plaintiff is that the defendants borrowed a sum of Rs.5,00,000/- from the plaintiff on 25.11.2005 for the purpose of constructing house and for agricultural expenses and executed the suit 'A' promissory on the same day at Echanampatti village, Palacode taluk promising to repay the same together with interest at the rate of Rs.1.50 ps per hundred per month on demand either to the plaintiff or to his order. Again the defendants had borrowed another sum of Rs.5,00,000/- on 15.03.2006 for the purpose of marriage of the daughter of the defendants 1 and 2 and sister of the third defendant and business expenses and executed the suit 'B' promissory note at Echanampatti village, Palacode taluk again promising to repay the same with interest at the rate of Rs.1.50 ps per hundred per month on demand either to the plaintiff or to his order. However, thereafter, the defendants omitted and neglected to pay the interest or the principal amount and therefore, the plaintiff issued a legal notice on 29.10.2007. There was no positive response from the defendants and hence the suit.
C. The Written Statement:
3. The suit was resisted by the written statement filed by the first defendant and adopted by the defendants 2 and 3. The defendants denied that neither any amount was borrowed nor the suit pronotes were executed. The defendants could not reply to the legal notice because after receipt of the legal notice, they misplaced the same. The case of the defendants is that the plaintiff was working as a Commercial Tax Officer and he had purchased about 30 acres of land in that area and the said land was entrusted to the defendants on lease for cultivation. At the time of entering into lease, the defendants' signatures were obtained in the stamp papers and blank pronotes for security purpose. However, after the lease was over and when the defendants surrendered the agricultural lands to the plaintiff, while the plaintiff returned the lease deed, he represented that the blank pronotes and stamp papers were misplaced and promised that he will hand those over to the defendants as and when he traces out. Later on, only because the defendants did not agree to sell their lands also to the plaintiff, he is now misusing those blank promissory note forms and stamp papers and has filed the suit.
D. The Issues:
4. On the strength of the said pleadings, the Trial Court framed the following issues:
1. Whether the defendants have borrowed a sum of Rs.5,00,000/- from the plaintiff on 25.11.2005 and executed suit 'A' pronote?
2. Whether the defendants have borrowed a sum of Rs.5,00,000/- from the plaintiff on 15.3.2006 and executed suit 'B' pronote?
3. Whether the plaintiff has obtained signatures of the defendants in stamp papers and in some blank pronotes for the security purposes?
4. Whether the suit pronotes are false documents and the signatures of the defendants were forged?
5. Whether the plaintiff is entitled to the suit claim as prayed for?
6. To what reliefs if any?
E. The Evidence:
5. On the said issues, the parties let in evidence. The plaintiff examined himself as P.W.1 and one Sigamani, the brother of the plaintiff and attesting witness of suit 'A' and 'B' pronotes was examined as P.W.2. On behalf of the plaintiff, Exs.A-1 to A-4 were marked. On behalf of the defendants, the first defendant was examined as D.W.1. One Sivalingam and Kamaraj, who are the witnesses for the panchayats, which is said to have been held regarding leasing of the land of the plaintiff to the defendants, were examined as D.Ws.2 and 3. One Vedi, who is the attesting witness to the suit 'A' and 'B' pronotes, was examined as D.W.4. One Sekar, who is the document writer and who denied writing the suit pronotes, was examined as D.W.5.
F. The Findings of the Trial Court:
6. The Trial Court, thereafter, proceeded to consider the case of the parties and by the judgment, dated 01.06.2016, found that the plaintiff examined himself and also produced the suit pronotes under Exs.A-1 and A- 2. Therefore, the plaintiff discharged his initial burden. The case of the defendants that the blank pronotes were misused was considered in the light of the evidence of D.W.3, who has admitted that as mentioned in the written statement, no lease deed was written at the time of lease. Similarly, the attesting witness of Exs.A-1 and A-2 was examined on behalf of the defendants as D.W.4, but, however, the said witnesses has categorically deposed that on both the occasions, a sum of Rs.5,00,000/- each was borrowed. Therefore, the defendants' case was not believed and once the signatures in the pronotes are admitted, the Trial Court held that the suit claim has been proved and decreed the suit. As far as the subsequent interest, from the date of decree the Trial Court awarded interest at the rate of 6% per annum. Aggrieved by the same, the defendants have filed this Appeal Suit.
G. The Submissions:
7. Heard R.Prabakar, learned Counsel appearing on behalf of the appellants and Mr.C.Prabakaran, learned Counsel appearing on behalf of the respondent.
8. Mr.R.Prabakar, the learned Counsel appearing on behalf of the appellants, would submit that the plaintiff, in this case, is a Commercial Tax Officer. Being a Government Servant, he is supposed to have maintained accounts. He has not filed any income tax account or proof for the fact that he was having the sum of Rs.5,00,000/- each on the dates of lending. Therefore, there is no proof for the consideration. The learned Counsel would further submit that when admittedly no interest is paid on the first borrowal, advancing of another Rs.5,00,000/- by way of second loan is abnormal and hence doubtful. It can be seen that both pronotes are filled by the same ink. As a matter of fact, the applications, filed for comparison of ink, were dismissed and were confirmed in C.R.P.No.1409 of 2014. The mode of payment of both the loans are neither proved and there is also contradiction in the evidence of P.Ws.1 and 2.
9. As far as P.W.1 is concerned, he had stated that only first defendant alone has signed the pronotes. It is the case of the plaintiff that the pronotes were supposed to have been written by one velan. However, P.W.2 states that both the promissory notes were written by some person by name Sekar. The said Sekar was examined as D.W.5 who denied the writing in the promissory notes. Therefore, by letting in evidence and by due crossexamination of the plaintiff, the defendants have rebutted the presumption under Section 118 of the Negotiable Instruments Act, 1881 and once the presumption is rebutted, in the absence of proof of consideration or production of any I.T returns by the plaintiff, the Trial Court ought to have held that the plaintiff has not proved the advancing of loan and ought to have dismissed the suit.
10. The learned Counsel relied upon a judgment of the Hon'ble Supreme Court of India in G.Pankajakshi Amma and Ors. Vs. Mathai Mathew (D) Thr. Lrs. and Anr(2004) 12 SCC 83, more specifically relying upon paragraph No.10 to contend that if the unaccounted money is paid by way of cash, no Court can come to the aid of the party and the loss must be allowed to lie where it falls. The learned Counsel relied upon a judgment of this Court in B.S.Rao Vs. K.V.S.Prasad CDJ 2018 MHC 4423, more specifically relying upon paragraph Nos.8(c), 9 and 13 to contend that in the absence of production of incometax returns, the suit cannot be decreed. The learned Counsel relied upon a judgment of this Court in Ramkumar Vs. ChelladuraiCDJ 2021 MHC 3397, more specifically relying upon paragraph No.27 to contend that when the answer in the crossexamination points out towards unaccounted money, then, it cannot be held to be legally recoverable debt. The learned Counsel relied upon a judgment of this Court in S.Suresh Vs. K.Selvi in Crl.A.No.105 of 2019, more specifically relying upon paragraph Nos.6 and 7, whereby, this Court has followed a judgment of the Hon'ble Supreme Court of India in G.Pankajakshi Amma and Ors. Vs. Mathai Mathew (D) Thr. Lrs. and Anr. (cited supra) that the loss has to be allowed to lie where it is. The learned Counsel relied upon a judgment of this Court in C.Balu @ Chinnasamy and Ors. Vs. N.Saravanan and Anr. in Crl.A.Nos.5, 6, 7 of 2021, more specifically on paragraph No.20 to contend that when the plaintiff has not proved his capacity or that he has source to pay such an amount, mere admission of signature by itself will not entitle the plaintiff.
11. Per contra, Mr.C.Prabakaran, learned Counsel appearing on behalf of the respondent, would contend that in this case, the defendants have borrowed the amounts for the purpose of constructing house, agricultural purposes, for their business purposes and for the marriage of the daughter. The borrowal is duly evidenced by Exs.A-1 and A-2 suit pronotes. The attesting witness of the suit pronotes was examined as P.W.2 and the other witness was also examined as D.W.4 and both the witnesses have categorically deposed that the defendants had actually received the amounts and executed the pronotes. Moreover, the presumption under Section 118 of the Negotiable Instruments Act, 1881 also favours the plaintiff that valid consideration has been passed on once the execution of promissory notes is admitted. He would submit that the defence is unbelievable on the face of it as nobody will require any security if they had to entrust their land for cultivation. No evidence whatsoever has been let in by the defendants by way of any independent witness to prove the said fact. Therefore, he would submit that it is a clear case of borrowal and omission to repay and therefore, the Trial Court has rightly decreed the suit.
12. In support of his contention, the learned Counsel would rely upon a judgment of the Delhi High Court in Shri. Shyam Sunder Vs. Sohan Singh @ Shoban Singh2018 SCC OnLine Del 7455, more-fully relying upon paragraph Nos.9 and 10 to contend that mere violation of Income-Tax Act, 1961 in advancing loan as cash and non-filing of returns are all matters to be gone into by the tax authorities and once the signatures in the suit promissory notes are not denied, then the plaintiff is entitled for this claim. The learned Counsel relied upon by a judgment of the Karnataka High Court in Mr.Mohammed Iqbal Vs. Mr.Mohammed ZahoorILR 2007 KAR 3614, more-fully relying upon paragraph Nos.12 and 13 for the same proposition that violation of Income-Tax Act, 1961, per se, would not render the transaction void and the debt was legally recoverable. The learned Counsel relied upon a judgment of this Court in A.R.Mohammed Jalaludeen and Anr. Vs. V.Dhakshinamoorthy(2014) 8 Mad LJ 413, more specifically on paragraph No.26 to press home the point that the Exs.A-1 and A-2 suit pronotes are clothed with the presumption under Section 118 of the Negotiable Instruments Act, 1881. For the same proposition, the learned Counsel also relied upon a Division Bench judgment of this Court in P.Ravi Vs. R.Anbalaga(2018) 2 Mad LJ 6, more specifically on paragraph Nos.16 and 17 of the said judgment. The learned Counsel also relied upon a judgment of this Court in K.Sivalingam Vs. S.T.Murugan (S.A.(MD).No.180 of 2021), more specifically relying upon the paragraph No.9, while considering the fact of non-production of income-tax returns vis--vis the presumption under Section 118 of the Negotiable Instruments Act, 1881, this Court held that once the presumption is there, it is for the defendant to dislodge the said presumption and the promissory note was not supported by consideration. For all the above reasons, the learned Counsel would pray that the Appeal Suit be dismissed.
H. Points for consideration:
13. Upon consideration of the rival submissions made on either side and perused the material records of the case, the following questions arise for consideration in this Appeal:-
(i) Whether the plaintiff has proved the lending of Rs.5,00,000/- each to the defendants under Exs.A-1 and A-2 pronotes?
(ii) To what reliefs, the parties are entitled?
I. Question No.1:
14. Even though the defendants completely denied the borrowal as claimed in the plaint, they had not categorically denied their signatures in the Exs.A-1 and A-2 pronotes. Once the signatures in the pronotes is admitted, the presumption under Section 118 of the Negotiable Instruments Act, 1881 comes to play that the suit pronotes are supported by valid consideration. It is for the defendants to rebut the presumption by letting in evidence to the level of preponderance of probability, so as to again shift onus back to the plaintiff to prove the actual passing of consideration. Firstly, in this case, the defence of the defendants is that at the time of the defendants being made as cultivating tenants, blank stamp papers and pronotes are taken as security, by itself points out to an abnormal transaction and therefore, it is for the defendants to have strictly proved the same. It is in this context, when D.W.3 was cross-examined, the contention in the written statement, that there was a written lease deed, was denied and therefore, the defendants' case becomes doubtful. The learned Counsel further pointed out the contradictions in the evidence of P.Ws.1 and 2 regarding the name of the person who has written the promissory notes. In this case, it is the case of the plaintiff that D.W.5, Sekar, who had been examined by the defendants, is not concerned Sekar and therefore, the evidence of D.W.5 does not in any manner come to the help of the defendants. There is a contradiction between the name of the person who has written the promissory note whether he is velan and Sekar, but, however, the said contradiction is not a material one and it is only the attesting witness's testimony which becomes relevant. D.W.4 has clearly and categorically deposed that the plaintiff has advanced the said amount. Therefore, the said circumstance also does not in any manner help the defendants in rebutting the presumption.
15. The learned Counsel for the appellants strongly contended that the money seems to be an unaccounted money. The plaintiff, being a Commercial Tax Officer, could not have advanced the money, unless it gets reflected in the income-tax accounts. In this regard, detailed crossexamination was made and no income-tax returns were produced before the Trial Court. Therefore, by placing reliance on the judgment of the Hon'ble Supreme Court of India in G.Pankajakshi Amma and Ors. Vs. Mathai Mathew (D) Thr. Lrs. and Anr. (cited supra) and other judgments, the learned Counsel strongly contended that the suit be dismissed.
16. It is true that when considering certain circumstances for determining the legal enforceable liability under Section 138 of the Negotiable Instruments Act, 1881, when huge amount was said to be borrowed by way of cash and only cheque alone was issued, in these circumstances, when the entire money seems to be unaccounted and illegal, the Court held that it cannot come to the aid of the person and held that the loss should be allowed to lie where it falls. However, in this case, borrowal is Rs.5,00,000/- on two occasions. Therefore, it cannot be said to he a huge amount beyond the capacity of the plaintiff. Not accounting the said amount in the income-tax returns is for the tax authorities to take further action in this regard, the same by itself would not render the entire transaction void. In Pankajakshi Amma, cited supra, when the plaintiff moneylender had to maintain books of accounts as per Kerala Money Lenders Act and when no such books of accounts were produced and it was admittedly unaccounted transaction, the Hon'ble Supreme Court held that the loss must be allowed to be where it is. It is also true to contend that this court also while determining the criminal liability for the offense under Section 138 of the Negotiable Instruments Act had held so, when huge amounts are said to be lent on cash and in the absence of any other proof. As such, the said judgments are not applicable for the instant suit based on promissory note, especially, when the pronotes having been duly proved and the attesting witnesses have also deposed. It is for the Income Tax Authorities to take appropriate action if the plaintiff had not account for the loan.
17. This apart, considering the nature of purpose mentioned in the plaint that on the first occasion, the loan was
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obtained for the purpose of constructing house and agricultural expenses and the second borrowal was for the marriage expenses of the daughter, the contention of the appellants, that the second loan would not have been advanced when no interest is paid on the first amount, is also without any substance and it is quite natural for the parties to borrow for the second time and that by itself also would not in any manner rebut the presumption. For all the above reasons, I hold that the defendants were not successful in rebutting the presumption in favour of the plaintiff under Section 118 of the Negotiable Instruments Act, 1881 and once the plaintiff is clothed with the legal presumption, the further proof of positive evidence was not necessary and therefore, the Trial Court has rightly decreed the suit. J. Answers to the issues: 18. In view of my above findings, I find that the findings of the Trial Court in respect of issue Nos.1 and 2 that the defendants have borrowed the amounts and executed the suit 'A' and 'B' pronotes as correct. I answer the issue No.3 that the defendants' case that the plaintiff has obtained signatures in blank pronotes for security purpose has not been proved. The suit pronotes are not false documents and therefore, the issue No.4 is answered accordingly. The plaintiff is entitled for suit claim, but, however, the interest shall be at the rate of 6% per annum from the date of decree till the date of realisation and accordingly, the issue No.6 is answered. In view thereof, the decree and judgment of the Trial Court does not call for any interference and due relief has been granted to the plaintiff. K. The Result: 19. In the result, this Appeal Suit in A.S.No.551 of 2016 is dismissed. However, in the facts and circumstances of the case, there shall be no order as to costs. Consequently, connected miscellaneous petition is closed.