IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE A.K.BASHEER & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN MONDAY, THE 3RD AUGUST 2009 / 12TH SRAVANA 1931 AS.No. 529 of 1995 -------------------------------- OS.598/1988 of PRL.SUB COURT,TRIVANDRUM .................... APPELLANT/DEFENDANT IN O.S. ------------------------------------------------------ P.RAJALEKSHMI AMMA, D/O PONNAMMA WORKING AS SENIOR SUPERINTENDENT MEDICAL COLLEGE, THIRUVANANTHAPURAM RESIDING AT KUZHIVILAKATHU VEEDU CHITTATTINKARA DESOM THIRUVANANTHAPURAM BY ADV. SRI.L.GOPALAKRISHNAN POTI,DINESH RAO.A RESPONDENT/PLAINTIFF IN O.S.: ------------------------------------------------------- K.KARUNAKARAN PILLAI S/O K.KESAVAN PILLAI RESIDING AT VILAYIL VEEDU PALLIKKAL KILIMANOOR THIRUVANANTHAPURAM ADV. SRI.N.BALAKRISHNA PILLAI THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 03/08/2009, THE COURT ON 03/08/2009 DELIVERED THE FOLLOWING: A.K.BASHEER & P.S.GOPINATHAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - A.S.No.529 OF 1995 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 3rd day of August, 2009 JUDGMENT Basheer, J: Appellant is the defendant in a suit for realisation of money allegedly due on a promissory note. Though the defendant contended that the alleged promissory note was obtained from her as a collateral security for due performance of an agreement for sale of an immovable property, the court below repelled the above contention and granted a decree in favour of the respondent/plaintiff. 2. The averments in brief in the plaint were that the defendant, who was “known” to the plaintiff, had availed of a loan of Rs.75,000/- from her, agreeing to repay the same with interest at the then prevailing bank rate of 12% per annum after executing Ext.A1 promissory note on October 3, 1985. But despite repeated demands, the defendant did not repay the amount. Though the plaintiff issued a lawyer notice demanding return of the money, the plaintiff did not oblige and she sent a reply denying the whole transaction. Hence the suit. 3. In the written statement, it was contented by the appellant/defendant that on October 3, 1985 she and the plaintiff had entered into an agreement for sale of her immovable property having an extent of 27.25 cents at the rate of Rs.5,000/- per cent. Defendant received A.S.No.529 OF 1995 :: 2 :: a sum of Rs.75,000/- towards the sale consideration on that day. On the same day, she executed a power of attorney in favour of the wife of the plaintiff enabling the latter to execute the assignment deed in favour of the plaintiff. On the same day, Ext.A1 promissory note was also obtained from the defendant at the instance of the plaintiff, his brother Viswambharan Pillai and also one Muraleedharan as a collateral security for the due performance of the agreement for sale. The defendant contended that Ext.A1 was not supported by any consideration and it happened to be executed in the circumstance mentioned above. She further pointed out that she had no necessity to borrow a further sum of Rs.75,000/- from the plaintiff on the same day when she had already received Rs.75,000/- as advance pursuant to Ext.P1 agreement for sale. 4. The court below framed the following issues: 1. Is the suit maintainable? 2. Has the defendant happened to execute the promissory note only as a collateral security for an agreement for sale as contended? 3. Has the defendant happened to execute the promissory note in the circumstances stated in the written statement? 4. Whether the promissory note is supported by consideration? 5. Whether the plaintiff is entitled to recover any amount from the defendant on the strength of the promissory note? 6. Reliefs and costs. A.S.No.529 OF 1995 :: 3 :: 5. The plaintiff got himself examined as PW1 and Exts.A1 to A4 were marked on his side. Defendant was examined as DW1 and Exts.B1 to B3 were marked on her side. 6. The court below after considering issue Nos.2 to 5 held that the evidence adduced by the defendant was not sufficient to rebut the presumption of passing of consideration as provided under Section 118(a) of the Negotiable Instruments Act. In short, the court below held that Ext.A1 promissory note was supported by consideration and therefore the defendant was liable to repay the amount of Rs.1,02,000/- with 12% interest per annum on the principal amount of Rs.75,000/- from the date of suit and thereafter with interest at the rate of 6% from the date of decree till realisation. 7. It may be noticed that the case of the plaintiff as revealed from the plaint proceeded as though the transaction between him and the defendant was not connected with any other transaction. According to the plaintiff, it was purely an affair between a lender and a borrower. The allegation in the plaint was that the defendant was known to him, and when a request was made for a loan of Rs.75,000/-, he readily agreed to advance the same. But in the course of his examination before the court, he admitted that on October 3, 1985 the day on which Ext.A1 promissory note was allegedly executed by the defendant, he and the plaintiff had entered into Ext.B1 A.S.No.529 OF 1995 :: 4 :: agreement for sale. He further admitted that under the said agreement, he had agreed to purchase 27.25 cents belonging to the defendant at the rate of Rs.5,000/- per cent. The plaintiff had to further concede that on the same day the defendant had executed Ext.B2, power of attorney in favour of his wife authorising the latter to execute the sale deed in respect of the property covered under Ext.B1. Though initially the plaintiff pretended ignorance about any other transaction on the day when Ext.A1 promissory note was allegedly executed, later and when he was confronted with Exts.B1 and B2, he had no other option but to admit the other transaction. According to the plaintiff, he had paid Rs.75,000/- to the defendant as loan in addition to the advance paid to her as part consideration of the property agreed to be purchased by him under Ext.B1. But he could not remember as to what was the amount drawn by him from the Bank on that day. He stated that he remembered to have paid the money to the defendant. He also could not say as to whether he had any ready cash with him on that day. 8. In this context, it may be noticed that Ext.B3 assignment deed will show that the wife of the plaintiff had executed the deed as authorised by the defendant in favour of Viswambharan Pillai, the brother of the plaintiff on September 22, 1986. According to the plaintiff, he had no idea about Ext.B3 at any point of time. But curiously, he further stated that he had not A.S.No.529 OF 1995 :: 5 :: taken any steps to recover the sum of Rs.75,000/- paid by him to the defendant as advance when he entered into Ext.B1 agreement with the defendant. It is further significant to note that in Ext.A1 as well as in Ext.B1 Sri.Viswambharan Pillai mentioned above (brother of the plaintiff) was one of the two witnesses, the other witness being one Muraleedharan. But the plaintiff did not bother to examine atleast Mr.Muraleedharan, especially on the face of the specific contention raised by the defendant that Ext.A1 was not supported by any consideration. 9. There is yet another aspect of the matter. If the case of the plaintiff that he had advanced a sum of Rs.75,000/- in addition to the payment of Rs.75,000 made by him on execution of Ext.B1 agreement is to be believed, he had advanced Rs.1,50,000/- to the defendant on October 3, 1985. Going by the value of the property indicated in Ext.B1 agreement, the total sale consideration would come to Rs.1,36,250 only. But according to the plaintiff and if his case is to be believed, he had parted with Rs.1,50,000/- on October 3, 1985 itself. If that be the case, there is absolutely no possibility or probability that he would not have insisted for execution of the sale deed in his favour rather than asking the defendant to execute a power of attorney. All these circumstances will definitely indicate that the case of the plaintiff is not true or believable. A.S.No.529 OF 1995 :: 6 :: 10. We have carefully perused the entire evidence available on record. The court below, in our view, has committed serious illegality in granting a decree in favour of the plaintiff as prayed for. The case of the defendant that Ext.A1 happened to be executed at the instance of the plaintiffs and his brother as a collateral security for due performance of the agreement for sale appears to be more probable and therefore we have no hesitation to hold that Ext.A1 was not supported by any consideration. In that view of the matter, the decree granted in favour of the respondent/plaintiff cannot be sustained. 11. The decree and judgment passed by the court below are set aside. The suit is dismissed. Appellant/defendant shall be entitled to recover cost from the plaintiff both in the trial court and this court. Appeal is allowed in the above terms. (A.K.BASHEER, JUDGE) (P.S.GOPINATHAN, JUDGE) jes A.S.No.529 OF 1995 :: 7 :: A.K.BASHEER & P.S.GOPINATHAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - A.S.No.529 OF 1995 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - JUDGMENT Dated, 3rd August, 2009