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Judgment
Anand Byrareddy, J.—The parties are referred to by their rank before the trial court for the sake of convenience.
This is a defendant''s appeal.
The Respondent No. 1 in this case was the plaintiff before the trial court.
It was the plaintiffs case that defendant had borrowed Rs. 5,00,000/- from him and is said to have executed a promissory note on 15.1.2003, agreeing to repay the loan with interest at the rate of 6% per annum.
The appellant defaulted. Inspite of several requests by respondent No. 1, the appellant had failed to repay the amount. Respondent No. 1 issued a legal notice to the appellant on 28.10.2004 demanding repayment.
The appellant replied to the notice, but had not repaid the amount. Hence, the suit for recovery.
The defendant contested the suit. He denied the plaint averments. In his defence, the appellant had contended that he had a chit business with the plaintiff about five years prior to the suit and that the same was closed a year prior to the suit. The defendant had further contended that he had issued a blank promissory note to the plaintiff. Inspite of several requests by the defendant to return the promissory note, the same was not returned by him. The plaintiff denied borrowing Rs. 5,00,000/- from the plaintiff and denied any debt.
On the above pleadings, the court below had framed the following points for consideration:
Whether the plaintiff proved that the defendants had received Rs. 5,00,000/- from the plaintiff and executed a promissory note and consideration receipt on 15.1.2003?
Whether the first defendant proved that he had no necessity for borrowing the alleged loan of Rs. 5,00,000/- from the plaintiff?
Whether the first defendant proved that he had a chit business with the plaintiff about five years back and the first defendant had drawn the chit and the same was closed about four years back and the plaintiff wrongfully obtained blank cheques as contended in para 8 of the written statement?
Whether the plaintiff was entitled to the relief sought?
The court below had answered the issues 1 and 4 in the affirmative and issues 2 and 3 in the negative and decreed the suit. It is that which is under challenge in this appeal.
The learned counsel for the defendant contends that the plaintiff had failed to establish that the amount was advanced as a loan. He further contends that there was no proof of payment. And that the plaintiff had failed to establish that there was a legally recoverable debt. In support of his argument, the learned counsel for the defendant relies on a decision of the apex court in Krishna Janardhan Bhat Vs. Dattatraya G. Hegde,
However, the Supreme Court in a later judgment, in Rangappa Vs. Sri Mohan, has overruled the above judgment and held thus:
The presumption mandated by Section 139 includes a presumption that there exists a legally enforceable debt or liability. This is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, herein, there can be no doubt that there is an initial presumption which favours the respondent complainant.
Section 118(a) of the Negotiable Instruments Act, 1881, raises the presumption, that until the contrary is proved, the promissory note was made for consideration.
Further, the Supreme Court in K.P.O. Moideenkutty Hajee Vs. Pappu Manjooran and Another, has held thus:
When the suit is based on promissory note and the promissory note is proved to have been executed, Section 118(a) of the Negotiable Instruments Act, 1881, raises the presumption, that until the contrary is proved, the promissory note was made for consideration. If the plaintiff pleads that the promissory note is supported by a consideration as recited in the negotiable instrument and the evidence adduced in support thereof, the burden is on the defendant to disprove that the promissory note is not supported by consideration.
The Supreme Court in Bharat Barrel and Drum Manufacturing Company Vs. Amin Chand Payrelal, has held thus:
Once the execution of the promissory note is admitted, the presumption u/s 118(a) of the Negotiable Instruments Act, 1881, would arise that it is supported by consideration. Such a presumption is rebuttable. The defendant can prove non existence of consideration, by raising of probable defence. In case the defendant fails to discharge the initial onus of proof by showing non existence of consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising u/s 118(a) of Negotiable Instruments Act, 1881, in his favour.
In the present case on hand, the plaintiff had successfully proved that the appellant had borrowed Rs. 5,00,000/- from him and executed a promissory note dated 15.01.2003.
The defendant''s contention that he had a chit business with the plaintiff does not hold good for want of evidence. Other than his self serving statement, there is nothing to prove that there existed a chit business between the defendant and the plaintiff. The defendant had also failed to prove that the promissory note was not issued for consideration.
In view of the above, this appeal is dismissed.