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Judgment
Balakrishna Ayyar, J.—In I.P. No. 82 of 1955 one Kandaswami was adjudicated insolvent. On 2nd September 1954 this Kandaswami
had executed a promissory note for Rs. 200/- in favour of Syed Abdul Shakoor with interest payable thereon at the rate of 3 pies per rupee per
month. After the adjudication of Kandaswami Syed Abdul Shakoor sought to prove his claim based on the promissory note. He also gave
evidence on 10th February 1955 in the course of which he stated that he had paid Rs. 200/- as consideration to the insolvent for the promissory
note. He admitted that he had no accounts and that he had no witnesses to prove the payment. He denied having received any amount in
repayment either of the principal or the interest. Kandaswami the insolvent deposed that he actually received only Rs. 86-8-0 as consideration for
the promissory note Rs. 12-8-0 was deducted for one month''s interest and one rupee for bond charges. He repaid Rs. 12-8-0 per mensem
regularly till July 1955, that is to say, for a period of ten months. In all he has paid Rs. 125/-.
The learned Dy. Official Assignee then passed the following order:
On the evidence placed before me, I consider that the claimant has not spoken the truth and that as stated by the insolvent he has paid Rs. 125/- to
the creditor, who has advanced only Rs. 86-8-0, within the course of about one year. I therefore dismiss the claim, Notify by R/A.
This is an appeal from that order.
On behalf of the creditor it is argued that his claim is supported by a document to which the insolvent had of his own free will affixed his
signature and that the learned Dy. Official Assignee was wrong in preferring the uncorroborated evidence of the insolvent to that of the creditor.
The point was emphasised that Kandaswami had nothing to lose and everything to gain by giving the evidence he actually did. In addition of
course, there is the circumstance that the presumption is that a negotiable instrument is supported by consideration.
Now, the presumption that a negotiable instrument is supported by consideration is one liable to be rebutted, and in the present case, it appears
to me that it has been sufficiently rebutted. Under S. 3 of the Madras Debtors'' Protection Act a creditor is under a duty to maintain accounts in
which he is required to regularly record and maintain in respect of each debt, the date of the loan, the amount of the principal advanced, the rate of
interest and the amount of every (sic) and the dates of repayment. When such a statutory duty is imposed upon him and when moreover for hit
own reference the lender mutt have some account and still he lays he has no accounts, the inference is either that be is not speaking the truth or that
the accounts, if produced, will not support him. The allegation that till he has examined by the Dy. Official Assignee the insolvent did not say that
the amount of the loan was Rs. 86-8-0 is not correct because even in the schedule he has filed this figure Rs. 86-8-0 is mentioned. There is next
the fact that the interest charged exceeds 18 per cent, and by reason of section 6-A of the Madras Debtors Protection Act, the Court is required
to presume that the transaction between the parties was substantially unfair. On behalf of the insolvent it was pointed out that the promissory note
has been torn off from a book of printed forms and that even the inner foil has not been produced. It was suggested that if the inner foil had been
produced it would have contained entries very much to the disadvantage of the petitioning creditor. To this the reply was given that the inner foil
was given to the debtor Kandaswami. That explanation I am not willing to believe. In the bottom half of the promissory note I find printed in big
letters ""how much salary"" and below that is the entry Rs. 205. The suggestion that the petitioning creditor is a professional moneylender and lends
moneys to hard pressed clerks and take advantage of their impecunious has a certain amount of force. In such circumstances it is very seldom
indeed that the debtor is given any document. The Dy. Official Assignee preferred the evidence of Kandaswami to that of the creditor, and in the
circumstances of the case. I am not prepared to say that he was wrong in having done so. This application is dismissed with costs of R. 2.