HONOURABLE SRI JUSTICE ASHUTOSH MOHUNTA SECOND APPEAL No. 65 OF 2011 DATED 25TH NOVEMBER, 2011. BETWEEN Sri Pedugu Venkata Suryanarayana …Appellant And Sri Kareti Koteswara Rao ….Respondent. HONOURABLE SRI JUSTICE ASHUTOSH MOHUNTA SECOND APPEAL No. 65 OF 2011 JUDGMENT: The unsuccessful plaintiff in O.S.No. 267 of 2005 preferred the present Second Appeal aggrieved by the judgment and decree dated 7.10.2010 whereunder and whereby the learned Principal District Judge, West Godavari District at Eluru dismissed the appeal in A.S.No. 211 of 2009, confirming the judgment and decree dated 5.9.2008 passed by the learned Additional Senior Civil Judge, Eluru, in the aforesaid suit. The appellant/plaintiff instituted the aforesaid suit for recovery of Rs.1,69,636/- together with costs and subsequent interest thereon basing on four promissory notes dated 16.8.2002 said to have been executed by the respondent/defendant. It was the case of the appellant/plaintiff that the respondent/defendant borrowed a sum of Rs.1,00 000/- from him on 16.8.2002 to meet his family expenses and to pay sale consideration for the land purchased by him from one Meddala Rama Rao and executed four promissory notes each for Rs.25,000/- with a specific understanding to repay the said amount in four installments with interest at 24% per annum. It was his further case that as the respondent/defendant did not repay the said amount, he instituted the aforesaid suit for recovery of the amount. However, it was the case of the respondent/defendant that he borrowed only Rs.25,000/- from the appellant/plaintiff on 16.8.2002 and signed a promissory note and other papers as instructed by the appellant/plaintiff. He specifically denied that he borrowed Rs.1,00,000/- from the appellant/plaintiff on 16.8.2002 and also denied the execution of four promissory notes in his favour. He also denied the refusal of the registered legal notice got issued by the appellant/plaintiff. Basing on the above pleadings, the Court below framed the issues to resolve the dispute in between the parties as to (1) Whether all the four suit pronotes are true, valid and binding? (2) Whether the defendant is a small farmer and is entitled to rights of reduction of interest claimed? and (3) to what relief. Before the trial Court, to prove the claim, on behalf of the appellant/plaintiff, P.Ws.1 and 2 were examined and Exs.A.1 to A6 were got marked. On behalf of the respondent/defendant, DW.1 was examined; however, no documents were marked On due consideration of the evidence on record, the trial Court dismissed the suit through judgment and decree dated 5.9.2009 holding that the appellant/plaintiff failed to prove due execution of the four promissory notes by the respondent/defendant. Appeal in A.S.No.211 of 2009 preferred by the appellant/plaintiff against the judgment and decree dated 5.9.2009 in the aforesaid suit also ended in dismissal through the judgment and decree impugned in the Second Appeal. Heard. Perused the case file scrupulously. The learned Counsel for the appellant, apart from the substantial questions of law sought to be raised in the present appeal, has submitted that when the respondent/defendant admitted the execution of the pronotes, it shall be presumed that the consideration under the suit pronotes are passed until the contrary is proved. She further submitted that when it was the specific case of the respondent/defendant that no consideration was passed under the three suit pronotes, burden is on him to prove the scribe of the said pronotes, but he did not do so and as such it is manifest that consideration was passed under the said pronotes. While it was the case of the appellant/plaintiff that the respondent/defendant borrowed a sum of Rs.1,00,000/- from him and executed four promissory notes each for Rs.25,000/- on 16.8.2002, it was the case of the respondent/defendant that he borrowed only Rs.25,000/- and executed one promissory note for the said amount, but, the appellant/plaintiff obtained his signatures on blank pronotes and other papers. When it is the defence of the respondent/defendant that no consideration was passed under the other three said pronotes, burden shifts on the appellant/plaintiff to prove the contrary. The respondent/defendant who was examined as D.W.1 stated in his chief-examination affidavit that he borrowed Rs.25,000/- only from the appellant/plaintiff on 16.8.2002 and signed on a promissory note and other papers as instructed by the appellant/plaintiff. He denied that he borrowed Rs.1,00,000/- from the appellant/plaintiff and executed four promissory notes in favour of the appellant/plaintiff. However, he admitted in his cross-examination the signatures appending on Exs.A.2 to A.4 suit promissory notes. Except this, nothing was elicited from him in the cross-examination to disbelieve his evidence. During the cross-examination of the appellant/plaintiff, he deposed that except the scribe, no other person was present at the time of execution of the suit promissory notes. However, he did not take steps to examine the scribe of the suit promissory notes. He did not state in his chief affidavit that the consideration under Exs.A.2 to A.4 was paid in the presence of attestor, P.W.2 and the scribe. When a negotiable instrument was made for consideration, the burden initially rests on the plaintiff who has to prove that the promissory note was executed by the defendant. On its proof, the rule of presumption under Section 118(a) of the NI Act helps him to shift the burden on the defendant. The burden of proof as a question of law rests therefore on the plaintiff in the first instance, but as soon as the execution is proved, section 118 of the NI Act imposes a duty on the Court to raise a presumption in his favour that the said instrument was made for consideration. That presumption shifts the burden of proof namely establishing a case that the promissory is not supported by consideration to the defendant. The defendant may adduce direct or circumstantial evidence to prove that the promissory note was not supported by consideration. If he adduces acceptable evidence, the burden again shifts to the plaintiff. If the circumstances relied on by the defendant are so compelling the burden is on the plaintiff to prove the contra. The statutory presumption though is one of the law is also question of fact to be proved in each case. The presumption raised under Section 118 of the NI Act is not in respect of consideration mentioned in negotiable instruments, the presumption is in the favour of there being a consideration for the negotiable instruments. Any consideration which is a valid consideration in law is valid and enforceable. If a particular consideration mentioned in the negotiable instrument is found to be false and some other consideration is set up, that is a factor which the Court would take into consideration in deciding whether the defendant has discharged the burden cast on him by Section 118 of the NI Act. The Court is required to consider the entire evidence laid before it. Very often important admissions elicited by counsel for the defendant in the cross- examination of the plaintiff certainly can be availed of by the defendant. The Court therefore must always bear in mind the statutory presumption under Section 118 (a) of the NI Act and also the fact that the burden of proof lies on the defendant and to see whether the burden has been discharged or not. How burden can be discharged or whether it has been discharged is a matter of appreciation of evidence. The failure of the plaintiff to prove a particular consideration may itself probabilise the defendants version and lead to conclusion that there was no consideration at all; on the other hand , it may not have any consideration. (See G.Ramatulasamma Vs.Kogowaraiaha: 1984 (2) ALT 333). If the evidence in the case on hand is tested with the touchstone of the well settled principle of law laid in the aforesaid case, it is evident that the plaintiff has failed to prove due execution of the promissory notes by the respondent/defendant. Non examination of the scribe is certainly fatal to the case of the appellant/defendant. Nothing relevancy was elicited from the evidence of P.W.2 to prove the case of the plaintiff. He deposed in his evidence that he sold away his land to one Tareti Suryakumari and not to the respondent/defendant. Hence the plea of the respondent/defendant borrowed Rs.1,00,000/- from the appellant/plaintiff on 16.8.2002 for the purpose of paying the sale consideration to P.W.2 stands disproved. It is further to be seen that If at all the respondent/defendant really borrowed Rs.1,00,000/- from the appellant/plaintiff, there is no necessity to execute four promissory notes each for Rs.25,000/-. Even the appellant/plaintiff failed to prove himself that he has the capacity to make lending of Rs.1,00,000/- to the respondent/defendant basing on his bank balance and agriculture proceeds. Therefore, the explanation given by the appellant/plaintiff in the plaint that the respondent/defendant executed four promissory notes with a specific understanding of making repayment in four installments does not appear to be correct, in the given facts and circumstances of the case on hand, more so in view of the specific defence taken by the respondent/defendant that he borrowed only Rs.25,000/- from the appellant/plaintiff and at that time the plaintiff obtained his signatures on a pronote and some other papers. In those circumstances, the fact finding Court rightly considered and held that the appellant/plaintiff failed to prove the execution of the pronotes. The lower appellate Court on re-appreciation of the evidence brought on record rightly concurred with the findings of the trial Court through the judgment and decree under appeal, which do not warrant interference. For the foregoing discussion, I do not see any question of law, much less a substantial question of law that arise for consideration in this Second Appeal so as to interfere with the well reasoned judgments and decrees of the Courts below. The Second Appeal is dismissed accordingly. There shall be no order as to costs. -------------------------------------- JUSTICE ASHUTOSH MOHUNTA Dated 25TH NOVEMBER, 2011. Msnro