Paneer Selvam v. Siby Thomas

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE K. BABU** **FRIDAY, THE 19[TH] DAY OF NOVEMBER 2021 / 28TH KARTHIKA, 1943 RSA NO. 972 OF 2009** **AGAINST THE JUDGMENT AND DECREE DATED 29.07.2008 IN AS 37/2005 OF SUB COURT,KATTAPPANA AGAINST THE JUDGMENT AND DECREE DATED 21.12.2004 IN OS 164/2002 OF MUNSIFF COURT, PEERUMEDU** ## **APPELLANT/RESPONDENT/PLAINTIFF:** PANEER SELVAM, S/O CHINNAMUTHU, AGED 36 YEARS, RESIDING AT C.K.NILAYAM, LANDRUM KARA, LAKSHMICOVIL P.O., PEERMADE VILLAGE, PEERMADE TALUK, IDUKKI DISTRICT. BY ADVS. SRI.T.A.UNNIKRISHNAN SRI.P.P.BIJU ## **RESPONDENT/APPELLANT/DEFENDANT:** SIBY THOMAS, S/O KURUVILA THOMAS, CHAVARAPUZHA HOUSE, MLAMALA KARA, PEERMADE VILLAGE, PEERMADE TALUK BY ADV SRI.A.C.DEVASIA SRI.RIJO LALY JOSE **THIS REGULAR SECOND APPEAL HAVING BEEN HEARD ON 19.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **RSA NO.972 OF 2009** **2** ## **K.BABU, J.** ------------------------------------------- ## R.S.A. No.972 of 2009 --------------------------------------------- Dated this the 19[th] day of November, 2021 urgent ## **JUDGMENT** The plaintiff is the appellant in this Regular Second Appeal. 2. The plaintiff instituted a suit for realising money on the strength of a promissory note dated 16.11.2000. He pleaded that the defendant had borrowed a sum of Rs.70,000/- from the plaintiff 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. 3. The defendant resisted the claim. Defendant admitted that he had affixed signature in promissory note (Ext.A1). However, he contended that he had not executed the promissory note as pleaded by the plaintiff. According to the defendant, on 10.11.2001, he had borrowed a sum of Rs.10,000/- from the plaintiff for business purposes and at **RSA NO.972 OF 2009** **3** the time of borrowing the money, he had handed over a signed blank stamp paper to the plaintiff, which was later converted as a promissory note by the plaintiff. 4. On the side of the plaintiff, PW 1 was examined and Ext.A1 was marked. DWs 1 and 2 were examined on the side of the defendant. 5. The Trial Court decreed the suit allowing the plaintiff to recover the plaint amount with interest at the rate of 18% per annum from the date of suit. 6. The defendant challenged the decree of the Trial Court in appeal before the First Appellate Court in A.S.No.37/2005. The First Appellate Court set aside the decree of the Trial Court holding that the plaintiff failed to establish the execution of Ext.A1 promissory note. 7. Being aggrieved by the judgment and decree of the First Appellate Court, the plaintiff is before this Court in this Second Appeal under Section 100 of the Code of Civil Procedure. 8. On 17.11.2009, this Court admitted the appeal and formulated the following substantial question of law:- **RSA NO.972 OF 2009** **4** “Whether in the light of the admission of signature in Ext.A1 and the evidence let in by the parties, was the First Appellate Court justified in holding that the due execution of Ext.A1 is not proved and reversing the judgment and decree of the Trial Court.” 9. Heard Sri.T.A.Unnikrishnan, the learned counsel for the appellant/plaintiff and Sri. Mathew Devasia, the learned counsel for the respondent/defendant. 10. The short question that falls for consideration is whether the First Appellate Court was right in holding that the reverse onus clauses as provided under Sections 118 and 139 of the Negotiable Instruments Act, 1881, have not come into operation even when the defendant admitted his signature in Ext.A1 promissory note. 11. The defendant admitted his signature in Ext.A1 promissory note. He contends that, while borrowing a sum of Rs.10,000/- from the plaintiff, he had handed over a blank signed stamp paper to the plaintiff, which was subsequently converted as a promissory note for the purpose of instituting the original suit. 12. In **Rangappa v. Mohan [AIR 2010 SC 1898],** the Apex Court held that when the signature on a cheque is **RSA NO.972 OF 2009** **5** admitted, the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act come into play. 13. In **Bir Singh V. Mukesh Kumar [(2019) 4 SCC 197],** the Apex Court held that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. 14. 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 **RSA NO.972 OF 2009** **6** 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 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…..”” 15. 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 respondent/ defendant to discharge presumption imposed upon him. 16. The statutory presumptions are rebuttable in nature. In **Ragappa v. Mohan (supra)** , the Apex Court held that the reverse onus clauses impose an evidentiary burden and not a persuasive burden. In **Ragappa v. Mohan (supra)** and in **M.S.Narayana Menon Alias Mani v. State of Kerala and** **RSA NO.972 OF 2009** **7** **another [(2006) 6 SCC 39],** the Apex Court held that inorder 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. 17. As the First Appellate Court set aside the judgment and decree of the Trial Court on the ground that the plaintiff failed to prove the execution of Ext.A1, the question whether the defendant established a probable defence meeting the standard of preponderance of probability was not considered. 18. The First Appellate Court, being the final fact appreciating Court, has to record a finding as to whether the defendant established a probable defence meeting the standard of preponderance of probability. In the absence of such a finding, this Court is of the view that there had not been an effectual adjudication of the lis in the First Appellate Court. 19. Therefore, the matter is liable to be remitted to the First Appellate Court for fresh consideration. Resultantly, the judgment and decree of the First Appellate Court are to **RSA NO.972 OF 2009** **8** be set aside. 20. This Court is of the view that the remand was caused not by the fault of the appellant/plaintiff and hence, the appellant is entitled to refund of the Court fee remitted. In the result:- - (i) The Regular Second Appeal is allowed by way of remand. - (ii) The judgment and decree dated 29.07.2008 in A.S.No.37 of 2005 on the file of the Subordinate Judge's Court, Kattappana, are set aside. - (iii) The matter is remanded to the Subordinate - Judge's Court, Kattappana, for fresh consideration in accordance with law. - (v) The Court fee remitted by the appellant is ordered to be refunded to him as provided in Section 67 of the Kerala Court Fees and Suit Valuation Act, 1959. - (iv) The parties shall appear before the - Subordinate Judge's Court, Kattappana, on **RSA NO.972 OF 2009** **9** ## 17.12.2021. - (v) The Court below shall dispose of the appeal expeditiously, at any rate, within three months from the date scheduled for the appearance of the parties. - (vi) The parties are directed to bear their respective costs. **Sd/K.BABU JUDGE** VPK