IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD PRESENT : THE HON’BLE SRI JUSTICE N.R.L.NAGESWARA RAO APPEAL SUIT NO.640 OF 2001 Date:08.03.2011 Between:- K.S.Thamizuddin .. Appellant. A N D B.Sivaprakash .. Respondent. The Court made the following: JUDGMENT: The appeal arises out of a judgment passed in O.S.No.47 of 1999 on the file of the Senior Civil Judge, Madanapalle. The suit was filed for recovery of Rs.2,00,000/- with interest at the rate of 24% per annum. The defendant in the said suit is the appellant herein. 2. The case of the plaintiff is that on 08.07.1997 the defendant borrowed a sum of Rs.2,00,000/- from the plaintiff for business and other legal necessities agreeing to repay the same with interest at 24 per cent per annum and the said consideration was paid by way of cheque bearing No.672956 and therefore the defendant received the consideration and executed the promissory note. In spite of repeated demands, the defendant has not paid the amount and a legal notice was also issued and the defendant did not give any reply. Hence the suit was filed for recovery of the amount. 3. Defendant filed a written statement contending that he did not receive the consideration but signed on promissory note dated 08.07.1997. It is further contended that the defendant and plaintiff are friends and there had been money dealings between them. The plaintiff used to give hand loans to the defendant and the defendant used to repay them in time. After repayment of all the debts, the plaintiff got this promissory note signed by the defendant as a renewal promissory note, under which no consideration was passed. They story of cheque issued to the defendant as consideration is utterly false and the defendant has not received any amount under the alleged cheque and it is a bogus transaction. Hence the suit is bad for want of consideration and the suit is liable to be dismissed. 4. On the basis of the above pleadings, the following issues were framed by the trial Court for trial: 1. Whether the suit promissory note is not supported by consideration? 2. To what relief? 5. On behalf of the plaintiff, P.W.1 was examined and marked Exs.A-1 to A-3. On behalf of the defendant, D.W.1 was examined and marked Ex.B-1. 6. After considering the evidence on record, the learned Senior Civil Judge, Madanapalle, decreed the suit of the plaintiff. 7. Aggrieved by the said judgment, the present appeal is filed by the defendant. 8. The points that arise for consideration are: 1. Whether the suit promissory note is not supported by consideration? 2. Whether the defendant is not liable to pay the suit amount? 3. Whether the judgment and decree passed by the learned Senior Civil Judge, Madanapalle, is legal and sustainable? P O I N T S: 9. The learned counsel for the appellant strongly contends that the lower Court has wrongly drawn the presumption under Section 118 of Negotiable Instruments Act in favour of the plaintiff when the evidence adduced by the plaintiff and his admissions are not supporting his case. It is also his case that the presumption under Section 118 of the Negotiable Instruments Act cannot be relied upon after the parties have adduced the evidence and the defendant can as well rely upon the inconsistencies in the case of the plaintiff and can show that the suit promissory note is not supported by consideration. According to him, the suit promissory note was executed on 08.07.1997 after discharge of all the previous debts, but the promissory note Ex.A.1 was signed by the defendant. On the other hand, it is the case of the plaintiff that the suit promissory note Ex.A.1 was supported by consideration and he issued a cheque, which was encashed by the defendant. 10. The defendant has admitted the execution of promissory note and also the financial dealings. According to him, prior to the execution of the suit promissory note there were some debts and all of them have been cleared, but the promissory note was taken as a renewal of those debts. One has to fairly understand as to what was the necessity for the defendant to have executed the promissory note after the entire debts have been cleared by the defendant. There is no dispute about the fact that the consideration mentioned in the promissory note need not be the same consideration, which was recited therein and it can be consideration, which is in present, future or the past. The liability to pay the past debts or even time barred debts can also be a valid consideration under the promissory note. Therefore, in order to substantiate the claim of the defendant, the defendant has to plead and prove as to what are the debts borrowed by him prior to the date of Ex.A.1 and what are the accounts settled by then and as to what amount was found due and for which amount, the cheque was given and for which amount the promissory note was executed. Touching on this aspect, there is neither plea on the side of the defendant nor any evidence in respect of his claim. Therefore, the execution of the promissory note for some consideration cannot be disputed. 11. So far as the passing of the consideration under Ex.A.1 is concerned, it is the contention of the learned counsel for the appellant that the plaintiff has admitted in his evidence that the cheque issued by him to the defendant, was presented before the bank and voucher was also signed by him. It was also further sought to be contended that in the evidence, the plaintiff has admitted that on the same day he has presented the cheque said to have been given by the defendant and the same was also taken by the plaintiff. So far as the reference to Ex.B.1 is concerned, the defendant has not pleaded in the written statement as to under what circumstances the cheque was issued by the defendant and the encashment of the above cheque by the plaintiff for the earlier debts. If the facts are taken into consideration, there can be no suspicion by the mere fact that the plaintiff himself has presented the cheque and taken the money and it may be to pay the same to the defendant on the same date. Therefore, merely because the plaintiff has gone to the bank and has presented the cheque and received the money under the cheque, does not create any suspicion about the nature of the transaction since the defendant has not made out a case as to under what circumstances Ex.B.1 entry has come into existence. Further more, the facts clearly shows that by the date of execution of promissory note Ex.A.1, the defendant was indebted to the plaintiff and it was a liability; creditor and debtor relationship between them and the calculations said to have been made. Even if Ex.A.1 and Ex.B.1 transactions are to be taken into consideration, they are touching on the creditor and debtor relationship between the plaintiff and defendant, still, the reasons pleaded by the defendant for execution of promissory note Ex.A.1 on 08.07.1997 after having discharged all the liabilities, do not appear to be probable and true. Therefore, in the above circumstances, it cannot be said that the defendant by evidence or by making out any inconsistencies in the evidence of plaintiff has rebutted the presumption under Section 118 of Negotiable Instruments Act. The plea of the defendant is not supported by any evidence. Therefore, in view of the above circumstances, the judgment and decree passed by the learned Senior Civil Judge, Madanapalle, does not call for any interference. Therefore, I find no merit in the appeal and the same is liable to be dismissed. Accordingly, the points are answered. 13. In the result, the appeal is dismissed. Parties are directed to bear their own costs. ______________________________ N.R.L.NAGESWARA RAO, J. 08th March, 2011 KSP