HON’BLE SRI JUSTICE K.C. BHANU APPEAL SUIT No.73 of 2006 Date: 21.02.2011 Between: Cherukuri Sreeramamurthy Raju … Appellant and Penumatcha Balarama Raju … Respondent THE HON’BLE SRI JUSTICE K.C. BHANU APPEAL SUIT No.73 of 2006 JUDGMENT : This Appeal Suit is directed against the judgment and decree, dated 29.10.1998, in O.S.No.144 of 1987 passed by the I Additional Senior Civil Judge, Visakhapatnam, decreeing the suit for recovery of money basing on the promissory note, dated 10.5.1984. 2. The appellant is the defendant, and the respondent is the plaintiff, in the suit O.S.No.144 of 1987. For the sake of convenience, the parties are referred to, as they are arrayed in the suit before the trial Court. 3. The averments of plaint, in brief, are that the defendant is a contractor in South Eastern Railway, Waltair. For the purpose of business, he borrowed a sum of Rs.20,000/- on 10.5.1984 and executed a promissory note agreeing to repay the same with interest at 24% per annum and inspite of the demand he failed to pay the amount and hence the plaintiff filed suit for recovery of money. 4. The defendant filed written statement stating that he never borrowed any amount under the suit promissory note and never executed the same and it is a forged document, that one Sivanarayana Raju (P.S.N. Raju) is related to the defendant, who was carrying out contract works and later settled in Visakhapatnam since 1983, that the plaintiff is the junior paternal uncle’s son of the said P.S.N. Raju, that the defendant informed the said P.S.N. Raju that he was in need of some amount in connection with the contract work of Kalyanamandapam of S.E. Railway, that the said P.S.N. Raju and the defendant came to an understanding to form into a partnership and both agreed to subscribe equal share, and in pursuance of the same the said P.S.N. Raju sent a total sum of Rs.1,89,000/- on different dates, that the execution of the partnership deed was postponed at the instance of P.S.N. Raju and though the defendant agreed to return the amount advanced, on 1.7.1985 the said P.S.N. Raju coerced and obtained 24 blank promissory notes from the defendant stating that he would recover the total amount with interest in order to get over the tax liabilities, that the defendant unable to resist signed the blank promissory notes by putting different dates, that contrary to the understanding, the said P.S.N. Raju used 5 blank promissory notes out of 24 blank promissory notes in O.S.No.31 of 1986, O.S.No.32 of 1986, O.S.No.137 of 1986, O.S.No.158 of 1986 and O.S.No.191 of 1986 by filling the blanks in them with the figures and in favour of persons of his choice, that he again used the 6th blank promissory note in the name of the plaintiff in the suit and got filed the same, that there is no privity of contract between the plaintiff or any of the plaintiffs in the said suits and the defendant; that subsequently at the intervention of the elders he repaid the amount of Rs.1,50,000/- to P.S.N. Raju and the said P.S.N. Raju after receipt of the amount agreed that he would return the promissory notes signed by the defendant, that when the defendant requested P.S.N. Raju for return of the promissory notes after the delivery of the demand draft dated 7.5.1986, he did not return the same stating that the blank promissory notes were kept at his native village, that subsequently P.S.N. Raju played fraud on the defendant and used another 3 blank promissory notes in his possession and got filed O.S.Nos.137, 158 and 191 of 1986 on the file of the Sub Court, Visakhapatnam, in the name of his mother-in-law, friends and relations and got attached the amount lying with the Railways, that the said P.S.N. Raju also got filed another suit O.S.No.144 of 1987 in the name of his cousin, that the whole debt of P.S.N. Raju was totally discharged and that the plaintiff is not a holder in due course, that the claim of interest at 24% per annum is unfair and illegal, that P.S.N. Raju affixed revenue stamps of the year 1985 on the suit promissory note and got it ante dated by the defendant for his benefits, that as the suit promissory note is a rank forgery and hence sought for dismissal of the suit with compensatory costs under Section 35-A of C.P.C. 5. Basing on the above pleadings, trial Court framed the following issues for trial: 1. Whether the suit promissory note dated 10.5.1984 is true and valid? 2. Whether it is supported by consideration? 3. Whether the suit is not maintainable? 4. Whether the interest claimed is unfair, unconstitutional, excessive, usurious and illegal? 5. Whether the plaintiff is not entitled to any interest? 6. Whether the defendant is entitled to compensatory costs under Section 35-A of C.P.C.? 7. To what relief? 6. To substantiate his case, the plaintiff was examined as P.W.1 and got marked Ex.A-1 promissory note dated 10.5.1984. On behalf of the defendant, D.W.1 was examined and got marked Exs.B-1 to B-21, besides marking Ex.C-1. 7. The trial Court, accepting the evidence of P.W.1 and the recitals of Ex.A-1, came to the conclusion that the suit promissory note was executed by the defendant after receiving the consideration and decreed the suit as prayed for. Challenging the same, the present appeal suit is filed. 8. Learned counsel for the appellant/defendant contended that in pursuance of the settlement between the defendant and P.S.N. Raju, the latter obtained blank promissory notes about 24 in number and they were misused by the said P.S.N. Raju and one such promissory note was given to the plaintiff and that in pursuance of the settlement, the defendant paid Rs.1,50,000/- by way of demand drafts to said P.S.N. Raju, that after payment of the amount, the blank promissory notes have not been returned to the defendant and that the revenue stamp affixed on the suit promissory note has been released subsequent to the alleged date of execution of the said promissory note and, therefore, there is a possibility for fabrication of the promissory note and that three similar suits filed by different plaintiffs against the defendant have been dismissed on the ground of fabrication of promissory notes therein and, therefore, he prays to set aside the impugned judgment. 9. The respondent/plaintiff refused to receive the summons. 10. Now, the points that arise for consideration are— 1. Whether the suit promissory note is true and correct and is supported by consideration? 2. Whether the plea of the appellant/defendant can be accepted? 11. There cannot be any dispute that in a suit filed based on a promissory note, the initial burden is on the plaintiff to establish that the defendant borrowed the amount mentioned in the promissory note and to that effect executed the promissory note. Once the initial burden stands discharged, the burden shifts on to the defendant to establish that the suit promissory note was not supported by any consideration. The evidence of P.W.1 would clearly go to show that the defendant borrowed an amount of Rs.20,000/- on 10.5.1984 for the purpose of doing business and executed the promissory note, which is marked as Ex.A-1. The defendant did not deny or dispute in the written statement about the signature on the suit promissory note. Once the signature on a negotiable instrument has been admitted and the contents thereof have not been disputed, the presumption under Section 118-A of the Negotiable Instruments Act, 1881 can be drawn and, if it is drawn, the presumption is that the promissory note is supported by consideration. Of course, the said presumption is a rebuttable presumption, where the defendant can plead and establish that the suit promissory note was not supported by consideration. 12. The case of the defendant is that in pursuance of the business transaction with one P.S.N. Raju, he settled the dispute with him and in pursuance of the said settlement, P.S.N. Raju obtained more than 24 blank promissory notes from the defendant and thereafter the defendant paid Rs.1,50,000/- to the said P.S.N. Raju in pursuance of the settlement, but the said P.S.N. Raju after receiving the amount did not return the blank promissory notes to the defendant and one such promissory note must have been used by the plaintiff. To defence that there was a settlement between P.S.N. Raju and the defendant and in pursuance of the said settlement he paid Rs.1,50,000/- and prior to the payment of that amount, P.S.N. Raju obtained blank promissory notes about 24 in number, has not been established beyond preponderance of probability. The oral testimony o DW.1 does not inspire confidence. The important document, namely the letter dated 23.2.1986 executed by P.S.N. Raju stating that promissory notes were kept at his native place, would not have been misplaced by DW.1. The statement of DW.1 on this aspect cannot be accepted. He would have insisted for return of promissory notes at the time of payment of Rs.1,50,000/- to P.S.N. Raju, because by that time they were not on cordial terms. Further, prior to settlement an altercation took place between DW.1 and P.S.N. Raju. Except the oral testimony of DW.1, there is no other evidence to show that the suit promissory note under Ex.A-1 was got fabricated at the instance of P.S.N. Raju. No doubt, the true copies of certain documents show about the payment of certain amounts by the defendant to P.S.N. Raju. But they are not relevant for the purpose of deciding the issue in the suit. If really there was a settlement between P.S.N. Raju and the defendant and in pursuance of the said settlement the defendant paid certain amounts to P.S.N. Raju, certainly he would have examined the elders, who settled the dispute between them. According to defendant, P.S.V. Suryanarayana Raju and N.Suryanarayana Raju were present. Not even one mediator, who was present at the time of settlement or at the time of the defendant handing over the blank promissory notes, is examined. The suppression or non-examination of the material witness would lead to draw an adverse inference under Section 114 (g) of the Indian Evidence Act, 1872. 13. Under Section 114(g) of the Indian Evidence Act, 1872, the Court may presume that the evidence which could be and is not produced, would, if produced, be unfavourable to the person who withholds it. The illustration refers to the presumption raised from willful withholding of evidence. Suppression or withholding of useful evidence naturally leads to the inference that the evidence, if produced, would go against the party who withholds it. 14. To substantiate the plea of the defendant, if the material witness is not examined, the presumption is that he was withheld to suppress the evidence. Therefore, the evidence adduced by the defendant cannot be said to be reliable in view of the fact that the best available evidence has not been produced and as such the burden placed on the defendant has not been discharged. 15. The other contention that suit the promissory note was ante dated and by the date of execution of the said promissory note, the revenue stamp found on Ex.A-1 had not been released, cannot be accepted in view of the report of the General Manager, Central Security Force, Nasik, under Ex.X-1, which clearly shows that prior to the date of execution of the suit promissory note, the authorities concerned released such revenue stamps. Simply because some other suits allegedly got filed by P.S.N. Raju through different persons have been dismissed cannot be a ground to dismiss the present suit, because the evidence therein is clear that the revenue stamps affixed on the respective suit promissory notes therein were released in the market by the competent authority subsequent to the date of execution of the promissory notes therein, which clearly suggests that there was fabrication of records. But, in this case, there is no evidence with regard to such fabrication of records. Therefore, from the evidence on record, the trial Court has rightly decreed the suit and absolutely there are no reasons to interfere with the impugned judgment of the trial Court and hence the appeal suit is liable to be dismissed. 16. Accordingly, the appeal suit is dismissed. No order as to costs. ________________________ JUSTICE K.C. BHANU 21.02.2011. Msr THE HON’BLE SRI JUSTICE K.C. BHANU APPEAL SUIT No.73 of 2006 21.02.2011 (Msr)