THE HONOURABLE SRI JUSTICE A.GOPAL REDDY S.A.No.855 of 2009 Date of Judgment: 25-09-2009 Between: Kaada Nageswara Rao ..Appellant and Soorisetty kanaka Durga ..Respondent The Court made the following Judgment: THE HONOURABLE SRI JUSTICE A.GOPAL REDDY S.A.No.855 of 2009 Oral Judgment: The defendant in the suit filed this Second Appeal assailing the correctness of the judgment and decree dated 22-07-2009 passed by the IV Additional District Judge, East Godavari at Kakinada allowing A.S.No.202 of 2006 filed by the plaintiff against the judgment and decree in O.S.No.185 of 2004 dated 19-09-2006 on the file of Senior Civil Judge, Pithapuram. For the sake of convenience the parties are referred to as arrayed in the court below. The plaintiff instituted the above suit for recovery of an amount of Rs.1,06,540/- basing on promissory note pleading that the defendant borrowed an amount of Rs.90,000/- on 16-10-2003 agreeing to repay the said amount with interest at 24% per annum and executed a promissory note. The suit pronote was scribed by O.Mallikarjuna Rao—D.W.4 and attested by Gollapalli Satyanarayana and O.Subba Rao—P.Ws.2 and 3. In spite of several demands defendant failed to pay the amount; therefore, he got issued a notice—Ex.A2, which was acknowledged by the defendant but failed to repay the same. Hence, the above suit for recovery of the amount. The defendant filed a written statement, contesting the suit, denying borrowing but contended that he joined as a member of chit run by the husband of the plaintiff—Surisetti Gandhi and the value of the chit is Rs.1,25,000/- payable in 25 monthly instalments at the rate of Rs.5,000/- per month. He paid the amounts regularly and later he participated in the auction and became successful bidder for an amount of Rs.74,500/- agreeing to forego a sum of Rs.50,500/-. At the time of receiving prize amount, the plaintiff’s husband obtained several signatures on empty papers, printed empty pronotes affixed with revenue stamps and informed that it is their usual practice. Due to necessity the defendant kept quiet. The husband of the plaintiff issued a small notebook to the defendant and whenever any amount is paid in instalments he used to note down in the book and put his initials. Later the defendant paid the entire amount and the plaintiff’s husband torn away the said book and one pronote and one white paper containing his signatures. When the defendant requested the husband of the plaintiff to tear the remaining papers, he informed that they were misplaced and soon after they are traced he will destroy. Believing the said version the defendant kept quiet but on receiving the legal notice he approached the husband of the plaintiff and asked about the same, then he informed that by mistake it was issued and he will not proceed against him. As such he did not give any reply to the notice. The suit pronote was materially altered and it was not supported by consideration and he never borrowed any amount from the plaintiff. There is no cause of action for the plaintiff to file the suit. On the above pleadings the following two issues were settled for trial. 1. Whether the suit pronote dated 16-10-2003 is true, valid and supported by consideration? 2. To what relief? To prove the pronote, the plaintiff herself was examined as P.W.1 besides examining the attestors of the promissory note as P.Ws.2 and 3 and got marked Exs.A1 to A4. Ex.A4 is the affidavit of D.W.4, who scribed Ex.A1—pronote, given to the plaintiff. On behalf of the defendant, he himself was examined as D.W.1 and three more witnesses were examined as D.Ws.2 to 4 but no documents were marked. The learned trial court on considering the above evidence concluded that the plaintiff is not the money lender and she does not do any business; she did not file any documents to show that she was having Rs.90,000/- as on the date of filing of the suit. Plaintiff herself admitted that she does not own any property, which yields income and her husband does not own any immovable property. When such is the case, saving of Rs.90,000/- by the plaintiff from out of paltry amount of Rs.50/- paid by her husband per a day after defraying family expenses is doubtful. The evidence of P.Ws.1 to 3 shows that the plaintiff has no capacity to pay the amount. The evidence of D.W.1 to 3 probablises the contention of the defendant that at the time of receiving prize amount, Gandhi, who is the husband of the plaintiff, obtained the signatures on empty papers and printed pronotes and later pressed one such document into service and got filed the suit through his wife. Disbelieving the evidence of D.W.4 as untrustworthy, in view of giving affidavit in favour of the plaintiff, the trial court dismissed the suit. Against which the plaintiff carried the matter in appeal. The lower appellate court framed the following points for consideration: 1. Whether the suit pronote—Ex.A1 is true, valid and supported by consideration? 2. Whether the judgment and decree of the trial court under the appeal suffers with infirmities and needs interference? 3. To what relief? The lower appellate court after re-appraising the entire evidence concluded that the defendant is not a stranger to the plaintiff, as both of them are in profession of selling the clothes by moving on cycle into the villages. The defendant admitted in his chief examination that he got acquainted with the plaintiff’s husband. The plaintiff nowhere in her cross-examination stated that the amount of Rs.90,000/- is the saving made by her from out of the amount given by her husband towards house hold expenses. Though the record does not disclose owning of any property by the plaintiff or her husband, it is not uncommon in those parts business people lending amounts in the name of their better half. Hence, the findings of the trial court that the plaintiff has no capacity to lend huge amount of Rs.90,000/- to the defendant is erroneous. The evidence of attestors of pronote—P.Ws.2 and 3 also discloses that they have got acquaintance with the plaintiff, her husband and the defendant and they used to purchase clothes from the husband of the plaintiff. Nothing is elicited in the cross- examination to discredit their evidence. The defendant made a vain attempt by examination the scribe of Ex.A1—pronote as D.W.4, who earlier filed an affidavit at the time of institution of suit, categorically stated that the defendant borrowed a sum of Rs.90,000/- in his presence and trying to alienate his property to 3rd parties in order to defeat the claim of the creditors. In the cross-examination he admitted about his giving affidavit to the plaintiff. Therefore, the lower appellate court has not made his evidence trustworthy. The case of the defendant is that the husband of the plaintiff runs private chits and he joined as a chit member. The defendant keeping quiet in spite of notice —Ex.A2 given by the husband of the plaintiff also shows that the defendant has developed a story subsequently. When the defendant admitted Ex.A1—pronote bears his signature and he has no acquaintance with the attesters of Ex.A1, there is no necessity for P.Ws.2 and 3, who attested Ex.A1—pronote, to speak false against the defendant. D.W.2 in the cross-examination stated that in his presence the defendant (D.W.1) signed on the blank pronote in connection with the chit fund transaction, but D.W.1 has not stated in his evidence that D.W.2 was present while he was signing on blank pronote. It shows that D.W.2 is made to speak in favour of defendant. The plaintiff by examining P.Ws.2 and 3 let in possible evidence to prove Ex.A1— pronote and discharged initial burden. Then the burden shifts on the defendant about his participation in the chit. Since the defendant failed to establish the same, plaintiff succeeded in the suit and accordingly decreed the suit. Learned counsel for the appellant/defendant strenuously contends that it is for the plaintiff to establish that she had capacity to lend the amount to the defendant; when she failed to establish the same it is not for the defendant to prove that she had no capacity. He further contended that appellate court reversing the finding of the trial court without reading the entire evidence and without taking into account the documents necessary for giving a finding on the issue is erroneous as held by the Supreme Court MEHRUNNISA v. VISHAM KUMARI[1]. Merely because the defendant failed to reply the suit notice would not constitute an admission on his part. For the said proposition he placed reliance on the judgment of this Court in MANEPALLI UDAYA BHASKARA RAO v. KANUBOYINA DHARMARAJU[2]. I do not see any merit in the submission made by the learned counsel for the appellant for the reason, once the plaintiff admitted the signature on the pronote and pleaded that the said pronote was executed in connection with the chit transaction, the burden lies on the defendant to establish the same. When the defendant failed to discharge the burden about his joining private chit run by the husband of the plaintiff, presumption under Section 138 of the Negotiable Instruments Act comes into operation. Apart from the evidence of plaintiff, the evidence of P.Ws.2 and 3, who are attestors of the pronote, also establish that the defendant executed pronote for the consideration mentioned therein. In view of the same, I do not see any question of law, much less substantial question of law that arises for consideration in this Second Appeal and it is accordingly dismissed at the admission stage. ______________ A.GOPAL REDDY,J 25-09-2009 Murthy [1] (1998) 2 SCC 295 [2] 2004(4) ALT 600 (DB)