C. Vasudevan v. K. J. Johny

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE K. BABU ``` ``` THURSDAY, THE 3[RD] DAY OF FEBRUARY 2022 / 14TH MAGHA, 1943 RSA NO. 625 OF 2009 ``` ``` AGAINST THE DECREE AND JUDGMENT DATED 30.01.2009 IN AS 123/2004 OF DISTRICT COURT, PALAKKAD AGAINST THE DECREE AND JUDGMENT DATED 17.03.2004 IN OS 89/2003 OF PRINCIPAL MUNSIFF COURT, PALAKKAD ``` ## **`APPELLANT/RESPONDENT/DEFENDANT:`** ``` C.VASUDEVAN, S/O GOVINDAN NAIR, AGED 60 YEARS, IRRIGATION QUARTERS N.P.10A,, MALAMPUZHA.P.O., PALAKKAD DIST. ``` ``` BY ADV SRI.RAJESH SIVARAMANKUTTY ``` ## **`RESPONDENT/APPELLANT/PLAINTIFF:`** ``` K.J.JOHNY, S/O K.R. JOSEPH AGED 62 YEARS, KOLLATH HOUSE, DHONI, PALAKKAD DIST ``` ``` BY ADV SRI.VINOD KUMAR.C ``` ``` THIS REGULAR SECOND APPEAL HAVING BEEN HEARD ON 03.02.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` RSA NO.625 of 2009 ``` ``` 2 ``` ## **K.BABU, J.** ------------------------------------------- ## R.S.A. No.625 of 2009 --------------------------------------------- Dated this the 3[rd] day of February, 2022 ## **JUDGMENT** The defendant in O.S.No.89/2003 on the file of the Munsiff’s Court, Palakkad, is the appellant in this Regular Second Appeal. The plaintiff instituted the suit for realization of money on the strength of a promissory note dated 10.02.2002. The plaintiff pleaded that the defendant had borrowed a sum of Rs.30,000/- from him by executing a promissory note agreeing to repay the amount with interest on demand. However, even after repeated requests, the defendant failed to repay the amount due to the plaintiff. 2. The defendant resisted the claim. According to the defendant, he had entrusted certain signed blank papers to one Mr.Bimal Roy for obtaining a loan from the Indian Bank. The defendant pleaded that he had not received any money as pleaded and that the blank signed papers handed over to Sri.Bimal Roy had been misused for the institution of the suit. 3. During the trial, PW1 was examined and Exts. A1 ``` RSA NO.625 of 2009 ``` ``` 3 ``` to A3 were marked on the side of the plaintiff. Defendant himself was examined as DW1 and Exts.B1 and B2 were marked on his side. 4. The Trial Court dismissed the suit. 5. The plaintiff challenged the decree of the Trial Court in appeal before the District Court, Palakkad, in A.S.No.123/2004. The First Appellate Court set aside the decree of the Trial Court and decreed the suit. 6. Being aggrieved by the decree and judgment of the First Appellate Court, the defendant is before this Court in the Regular Second Appeal under Section 100 of the CPC. 7. On 20.08.2009, this Court admitted the appeal and formulated the following substantial questions of law: (i) Has not the Lower Appellant Court gone wrong in holding that the evidence of PW1 is sufficient to prove due execution of Ext.A1 promissory note.? (ii) Has not the Lower Appellate Court committed illegality in appreciation of evidence of the parties vis-a-via the contentions raised by them? (iii) Has not the Lower Appellate Court gone wrong in setting aside the wellreasoned judgment of the trial court? 8. Heard Sri.Rajesh Sivaramankutty, the learned ``` RSA NO.625 of 2009 ``` ``` 4 ``` counsel appearing for the appellant/defendant and Sri.C.Vinod Kumar, the learned counsel appearing for the respondent/plaintiff. 9. The case of the plaintiff is that the defendant borrowed a sum of Rs.30,000/- from him and executed Ext.A1, promissory note, in his favour. 10. The challenge of the defendant is that he has not executed the promissory note as pleaded. According to the defendant, he had entrusted certain signed blank papers to Sri.Bimal Roy, for obtaining a loan from a bank and one of such papers was misused for the institution of the suit. The plaintiff gave evidence as PW1. He deposed in tune with the pleadings in the plaint. According to the plaintiff, the defendant executed Ext.A1, a promissory note, at the time of receipt of the money. 11. A reading of the written statement would show that the defendant had no dispute regarding the signature in Ext.A1. In the written statement, the defendant admitted that Mr.Bimal Roy had taken a loan from the Indian Bank and he was asked to sign certain blank papers in the capacity as a guarantor for the loan transaction. According to the ``` RSA NO.625 of 2009 ``` ``` 5 ``` defendant, those signed blank papers had been misused by Mr.Bimal Roy to file the suit through his father-in-law, the plaintiff. The necessary inference is that the defendant has specifically admitted his signature in Ext.A1. However, he denied the execution of the promissory note. The learned counsel for the appellant/defendant contended that the burden is on the plaintiff to prove that the defendant had executed the promissory note. The admission of signature in Ext.A1 by the defendant would go a long way for proving the execution of Ext.A1. 12. In **Kalamani Tex v. P. Balasubramanian [2021 (2) CTC 357 : 2021(219) AIC 184]** , the Apex Court, while dealing with the drawing of statutory presumptions under Sections 118 and 139 of NI Act, held thus: “14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these ‘reverse onus’ clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystalized by this Court in Rohitbhai Jivanlal Patel v. State of Gujaratmanu/sc/0393/2019 : (2019) 18 SCC 10, p 18 in the following words: “In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of ``` RSA NO.625 of 2009 ``` ``` 6 ``` funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant- accused…..”” 13. The legal position settled by the Apex Court is that once signature on the negotiable instrument is established then the reverse onus clauses become operative, and in such a situation, the obligation shifts upon the appellant/ defendant to discharge presumption imposed upon him. 14. In the case on hand, the finding of the First Appellate Court that the plaintiff proved the execution of Ext.A1 by the defendant requires no interference. 15. The statutory presumptions are rebuttable. In **Rangappa v. Mohan [AIR 2010 SC 1898]** , the Apex Court held that the reverse onus clauses impose an evidentiary burden, not a persuasive burden. In **Rangappa v. Mohan (supra)** and in **M.S.Narayana Menon Alias Mani v. State of Kerala and another [(2006) 6 SCC 39],** the Apex Court held ``` RSA NO.625 of 2009 ``` ``` 7 ``` that in order to rebut the presumption under Sections 118 and 139 of the NI Act, the standard of proof required is that of preponderance of probabilities and not mere possibility. 16. The next question is whether the appellant/defendant could rebut the mandatory presumption drawn in favour of the plaintiff. The case of the appellant/defendant is that while standing as a surety for renewing a loan as requested by the loanee, Mr.Bimal Roy, he had handed over certain signed blank papers to be furnished to the bank, and later those signed blank papers were misutilised at the instance of him with the aid of the plaintiff, who is his father-in-law. 17. The First Appellate Court found that the explanation offered by the defendant was not probable. The First Appellate Court took note of the fact that for loan transactions taken from financial banking institutions, certain printed forms are available and those documents are to be executed by the loanee and the surety, and it cannot be believed that in such a transaction signed blank papers could have been entrusted to the borrower by a surety. The First Appellate Court also took note of the fact that Mr.Bimal Roy was not examined by the defendant to prove the plea raised ``` RSA NO.625 of 2009 ``` ``` 8 ``` by him. 18. PW1, the plaintiff has given oral evidence in tune with the pleadings in the plaint regarding the passing of consideration and execution of the promissory note. The First Appellate Court also took note of the fact that the financial capability of the plaintiff to pay the amounts stated to have been given by the plaintiff remains undisputed. The evidence of PW1 is that he was familiar with the defendant for 12 years prior to the execution of the promissory note. This evidence would further indicate that his son-in-law Mr.Bimal Roy, was not on good terms with his daughter, as there was pending marital litigation between Mr.Bimal Roy and his wife, the daughter of the plaintiff. On reappreciating the entire evidence and the probability of the case, the First Appellate Court found that the plea raised by the plaintiff appeared to be genuine and probable. The First Appellate Court held that the defendant failed to rebut the statutory presumption drawn in favour of the plaintiff in tune with the standard of proof required. This Court is of the view that the First Appellate Court has drawn the necessary interferences and presumptions that would apply on the facts and circumstances of this case. The substantial questions of law ``` RSA NO.625 of 2009 ``` ``` 9 ``` are answered accordingly against the appellant. The Regular Second Appeal stands dismissed. The parties are directed to bear their respective costs. Pending interlocutory applications, if any, stand closed. ``` Sd/- K.BABU JUDGE ``` VPK