TMI Blog2012 (2) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... ramed the issues. d] During trial, the plaintiff examined himself as P.W.1 along with PW2 and marked Exs.A1 to A12. The defendant examined himself as D.W.1 and marked Exs.B1 to B5. e] Ultimately, the trial court dismissed the suit. f] Being aggrieved by and dissatisfied with the same, the original plaintiff Nachimuthu has preferred this appeal on various grounds. 4. The learned counsel for the appellant/plaintiff placing reliance on the grounds of appeal would advance his arguments, which could tersely and briefly be set out thus: (i) The lower court failed to apply the correct proposition of law in deciding the case. (ii) The respondent/defendant failed to discharge his initial burden of proof and even then, the trial court simply dismissed the suit, ignoring the presumption as contemplated under Sections 20 and 118 of the Negotiable Instruments Act. (iii) Even though the defendant pleaded that there were unauthorised chits conducted by the plaintiff's brother-in-law Marudhachalam; that the defendant's wife was subscribing two such unauthorised chits and in that process he signed blank promissory notes and handed over the same to the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of Rs.3 lakhs to lend the same in favour of the defendant. f] The admitted case of the plaintiff was that he lent amounts to various persons and he also filed suits to recover the same. In the facts and circumstances of this case, the plaintiff could not have lent money in favour of the defendant and others, as his income tax returns as well as the pass book filed by him would show that he could not have possessed several lakhs. g) As such, the defendant's case that the plaintiff is none but a name lender of his brother-in-law, who is a money lender as well as unauthorised chit foreman, stood proved and in such circumstances, there is no necessity to interfere with the trial court;s judgment. (h) The trial court being the court of first instance is the best court to appreciate the evidence and accordingly, it appreciated and arrived at the conclusion and there is no perversity or illegality in it. 6. The points for consideration are as under: 1. Whether the trial court properly appreciated the scope of Sections 20 and 118 of the Negotiable Instruments Act and applied it in the factual circumstances of this case? 2. Whether the concept 'burden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bharat Barrel Drum Manufacturing Company vs. Amin Chand Payrelal] and certain excerpts from it would run thus: 12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. 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 will 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. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fendant dated 15-9-1961. The total price of the goods to be imported under the said import licence and the aforesaid arrangement with the plaintiff was about Rs 55,30,000. The plaintiff through its Director, Shri L.P. Goenka was stated to have represented to the defendant in October 1961 that until and unless the assurance or guarantee that deliveries would be made in time could be given, the letter of credit would not be opened by the plaintiff. Shri Goenka insisted that the defendant should either give a guarantee or provide some security for the due performance by the defendant of its obligation under the said arrangement for supply of goods under the letter of credit. It was further suggested that the defendant should execute a promissory note for the sum of Rs 6,20,000 by way of collateral security for payment to the plaintiff of damages, in any event, which the plaintiff might actually suffer in consequence of non-supply of the goods due to default on the part of the supplier. Eventually, the defendant in order that its reputation in the foreign market and that the foreign suppliers might not be injured, was compelled to agree to execute a promissory note for Rs 6,20,000 by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the issues were required to be decided together which was not done with the result that miscarriage of justice crept into the proceedings depriving the plaintiff of its rights on account of the pendency of this litigation in the courts for a period of about four decades now. The technicalities of law and procedural wrangles deprived the plaintiff of its due entitlement. The justice claimed by the plaintiff was buried under heaps of divergent legal pronouncements on the subject conveyed and communicated in sweetly-coated articulate language and the oratory of the persons which is shown to have been resorted to to present the rival claims. The approach adopted by the majority of the Judges in dealing with the case was contrary to the basic principles governing the law relating to negotiable instruments. Faith of the business community dealing in mercantile and trade cannot be permitted to be shaken by resort to technicalities of law and the procedural wrangles as appears to have been done in the instant case. Even though it is true that the plaintiff's evidence was not believed yet we are of the opinion that the same could not be made the basis for rejecting its claim becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t every negotiable instrument bearing a date was made or drawn on such date; (c) as to time of acceptance that every accepted bill or exchange was accepted within a reasonable time after its date and before its maturity; (d) as to time of transfer that every transfer of a negotiable instrument was made before its maturity; (e) as to order of indorsements that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; (f) as to stamp that a lost promissory note, bill of exchange or cheque was duly stamped; (g) that holder is a holder in due course that the holder of a negotiable instrument is a holder in due course: Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. 12. A cumulative reading of the cited precedent of the Honourable Apex Court and the aforesaid provisions of the Negotiable Instruments Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any estrangement between the plaintiff and his father. The plaintiff would claim that he had the probability opportunity of coming into possession of such agricultural income and that he did possess it. 20. The learned counsel for the defendant, by inviting the attention of this Court to Exs.A5 to A10-the Income Tax Returns would submit that those returns would clearly demonstrate and display that at no point of time the plaintiff had at his disposal a sum of Rs.3,00,000/-, as against which, the learned counsel for the plaintiff would place reliance on Ex.A12-the Bank pass-book of the plaintiff, which would evince and evidence that the plaintiff, on his voluntary retirement as Supervisor in Lakshmi Mills, received a sum of Rs.2,58,000/- and odd and that he withdrew from out of it, a sum of Rs.50,000/- on 5.10.1998 and Rs.2,00,000/- on 9.10.1998, so to say, within a short space of time, before the emergence of Ex.A1-the promissory note dated 20.10.1998. It is also the case of the plaintiff that he is a LIC agent, which fact is found well fortified. 21. The learned counsel for the defendant would submit that there is nothing to indicate that the plaintiff had Rs.3,00,000/- sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 138 of the Negotiable Instruments Act and in such a case, the plaintiff's case is having no legs to stand before this Court and contend in support of the averments in the plaint. 29. Both sides in unison would submit before this Court certain other facts orally. Consequent upon the decision rendered by the criminal Court, criminal appeal was filed before this Court and in that this Court convicted the defendant herein and imposed sentence, as against which, the defendant approached the Honourable Apex Court, which on certain conditions suspended the sentence. As such, de hors Ex.B1, which refers to the criminal proceedings, this Court has to independently decide this matter for which there is no embargo. 30. Trite the proposition of law is that 'witnesses might lie but the circumstances would not do so. It is the specific case of the defendant that his wife subscribed two unauthorised chits run by Marudhachalam-the brother-in-law of the plaintiff and even before bidding those chits by the defendant's wife, the said Marudhachalam insisted upon the defendant to sign in blank promissory notes as well as in cheques by way of security and only in that context, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court which had the opportunity of observing the demeanor of the witnesses, held against the plaintiff, but it has to be seen as to how far the lower Court was justified in dismissing the suit. 37. The trial Court was very much carried away by certain answers given by P.W.1. One such answer was that P.W.1 was not in possession of any evidence to prove his agricultural income. Normally, agriculturists will not have any documentary evidence to prove their agricultural income, except by pointing out their cultivation of land. 38. Here the plaintiff as P.W.1 candidly and categorically, without mincing words admitted the fact that his father was owning nine acres of land and from that he could have got agricultural income. Agricultural income is not taxable, also. 39. The learned counsel for the plaintiff would try to explain and expound that there is nothing that the plaintiff should not keep the agricultural income as savings, without disclosing it in the income tax returns. 40. Once an income is not taxable, I do not think that such income also should be disclosed in the tax returns. Section 10(1) of the Income Tax Act, 1961 would unambiguously and unequivocally mandate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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