TMI Blog2008 (5) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... in appreciating the evidence of the appellant to come to the conclusion that since such evidence was inconsistent with the pronote being Ex.A-21, the appellant could not be given the benefit of the presumption. Appeal is allowed and the judgments of the courts below are, therefore, modified to the extent that the suit of the appellant must stand decreed in its entirety. - C.A. 5597 OF 2001 - - - Dated:- 16-5-2008 - TARUN CHATTERJEE AND HARJIT SINGH BEDI, JJ. JUDGMENT 1. This appeal is directed against the final judgment and order dated 30th of July, 1999 passed by a Division Bench of the High Court of Judicature of Andhra Pradesh at Hyderabad in AS No. 721/92 whereby the High Court had affirmed the judgment and decree dated 5th of August, 1991 in OS No. 33/87 of the 1st Court of the Additional Subordinate Judge, Kakinada, E.G. District, Andhra Pradesh decreeing the suit filed by the appellant in part for a sum of Rs. 2,33,125/- with interest @ 18% from the date of the suit till realization. 2. The facts leading to the filing of this appeal as emerging from the case made out by the appellant in the plaint are as under. The appellant is the son-in-law of respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts due under the pronotes of Rs. 4,72,000/- and Rs. 2,15,000/- with interest and costs. The respondent No. 2 contested the suit by filing written statement on his own behalf and also on behalf of the respondent No. 1 firm denying any execution of the pronotes in favour of the appellant and further stating that the pronotes were forged by the appellant with the assistance of his brother-in-law and the Clerk. It was further alleged that the appellant bore a grudge against the respondents and was involved in many criminal cases and since he was not looking after his wife and children properly, the respondents had opened an account in the name of Narayanmurthy and were sending monies regularly in that account for the maintenance of the appellants family and therefore, it was alleged that no money was ever borrowed from the said Pynda Ramakumar, whom the respondent no.2 did not know, through the appellant for the respondent No. 1 firm. It was also alleged by the respondent no. 2 that the respondent no. 1 firm was not carrying on any business and in fact, all its branches were closed and the respondent Nos. 2 to 4 were partitioned in the year 1980. 4. The respondent nos. 3 and 4 al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .A-20). As regards recovery of the amount due under the other pronote Ex.A-21, the trial court held that the appellant was not entitled to recover the same because the said pronote was not supported by consideration and accordingly, the rest of the claim of the appellant was dismissed with proportionate costs. Feeling aggrieved by the said judgment of the trial court, both the appellant and the respondents filed two appeals before the High Court of Andhra Pradesh at Hyderabad being A.S. NO. 721/87 and 1872/92 respectively. By the impugned judgment of the High Court dated 30th of July, 1999, both these appeals were dismissed. The appellant has filed this special leave petition before us against the aforesaid judgment of the High court passed in A.S. No. 721/87. 7. We have heard the learned counsel for the parties and examined the judgment of the High Court as well as the trial Court and other materials on record including the oral and documentary evidence. The only question that needs to be decided in this appeal is whether in the absence of any rebuttal by the respondents to the fact that the promissory note was for consideration as required, which gave rise to the presumption u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court was passed after considering the evidence in extenso to hold that the pronote Ex. A-21 was not supported by any consideration. The learned counsel for the respondents further submitted that the presumption under Section 118 is rebuttable and that the respondents had all along denied the execution of the pronotes. 10. Having heard the learned counsel for the parties, we are of the view that this appeal deserves to be allowed for the reasons set out hereinafter. 11. Section 118 of the Negotiable Instruments Act deals with presumptions as to negotiable instruments. One of such presumptions appearing in Section 118(a), with which we would be concerned in this appeal is reproduced as under:- that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration. 12. Under Section 118(a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove 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 13.From the above decision of this court, it is pellucid that 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 would be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. It is also discernible from the above decision that if 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. 14.Keeping the aforesaid in mind, let us now see if the respondents in this case had discharged the initial burden, which lay on them to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the execution of the pronotes had become final. Also, we are of the view that the respondents had not discharged the initial burden of proving the non-existence of consideration either by direct evidence or by preponderance of probabilities. The mere denial, if there be any, by the respondents that no consideration had passed would not have been sufficient and something probable had to be brought on record to prove the non-existence of consideration. In this view of the matter, we are, therefore, of the view that once the execution of the pronote has been proved, the appellant would be entitled to the benefit of the presumption under Section 118(a) of the Negotiable Instruments Act because the respondents had failed to discharge the initial burden and therefore, the High Court was in error in appreciating the evidence of the appellant to come to the conclusion that since such evidence was inconsistent with the pronote being Ex.A-21, the appellant could not be given the benefit of the presumption. 16. For the foregoing reasons, the appeal is allowed and the judgments of the courts below are, therefore, modified to the extent that the suit of the appellant must stand decree ..... X X X X Extracts X X X X X X X X Extracts X X X X
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