Thekke Veettil Narayanan v. Edacherry Valiya Veettil Narayani Amma

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE P.D.RAJAN** **WEDNESDAY, THE 15TH DAY OF MARCH 2017/24TH PHALGUNA, 1938** **AS.No. 535 of 1998 (C)** **----------------------AGAINST THE JUDGMENT IN OS 97/1991 of SUB COURT, PAYYANNUR DATED 20-02-1998** **APPELLANT(S)/PLAINTIFF:** **--------------------------** - **THEKKE VEETTIL NARAYANAN, S/O. KUNHANGA AMMA,** **MERCHANT, RESIDING AT PAYYANNUR AMSOM DESOM** - **DIED. LEGAL HEIRS IMPLEADED** ****ADDL. APPELLANT (2)A.V. LAKSHMI,W/O. LATE T.V. NARAYANAN, AGED 62 YEARS, PULIKODAN HOUSE, WEAVERS STREET, PAYYANNUR - 670 307.** **“ (3) A.V. PREMAVATHI, D/O. -DOAGED 43 YERS, -DO- -DO“ (4) A.V. JAYARAJAN, S/O. -DO-DO- -DO“ (5) A.V.SASIDHARAN, S/O. DO- AGED 39 YEARS -DO- -DO“ (6)A.V. CHANDRAMATHI, D/O. -DO- AGED 37YEARS “ (7)A.V. PRAKASHAN, S/O. -DO- AGED 35 YEARS “ (8)A.V. ARUN KUMAR S/O. -DO- AGED 34 YEARS “ (9) A.V.PRAVEEN KUMAR, S/O. -DO- AGED 32 YEARS -DO- -DO“ (10) A.V. SALISH KUMAR, D/O. -DOAGED 30 YEARS, -DO- -DO-** **** ( IT IS RECORDED THAT THE SOLE APPELLATNT DIED AND LEGAL HEIRS OF THE DECEASED SOLE APPELLANT ARE IMPLEADED AS ADDL. APPELLANTS 2 TO 10 AS PER ORDER DATED 28.6.99 ON CMP 3095/99.)** **BY ADV. SRI.K.V.SOHAN** **RESPONDENT(S)/DEFENDANT: -----------------------EDACHERRY VALIYA VEETTIL NARAYANI AMMA, W/O. V. KUNHIRAMA PODUVAL, RESIDING AT PAYYANNUR AMSOM, ARADHANA TALKIES, PO PAYYANNUR.** **R, BY ADV. SRI.K.LAKSHMINARAYANAN R, BY ADV. SRI.R.SURENDRAN** **THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 15-03-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: acd** ## **P.D. RAJAN, J.** ------------------------------------------A.S.No.535 of 1998 ---------------------------------------------Dated this the 15[th] day of March, 2017 ## **JUDGMENT** This appeal is preferred by the plaintiff against the judgment in O.S. No.97 of 1991 of Subordinate Judge, Payyannur. The defendant is the respondent in this appeal. The appellant's case was that on 1.9.1988, the respondent borrowed a sum of 30,000/- from him by executing a₹ promissory note, at that time, she agreed to pay the amount immediately on demand. After some time, the appellant demanded the amount, but there was no payment. In the circumstances, he issued a lawyer notice demanding the due amount with cost. After receipt of lawyer notice, she sent a reply notice, in which she denied the transaction. Hence the suit. 2. In the trial Court, the respondent resisted the suit A.S..No.535/1998 2 and contended that there was no financial transaction with the appellant and she never borrowed any amount from him. She denied the signature in the promissory note. But, she admitted that her husband was a close friend of the appellant. Moreover, the appellant had no financial capacity during the year 1988 to lend such huge amount, since he was the accused in S.T.C. No.896/1991 before Judicial First Class Magistrate Court, Payyannur. The respondent's husband had arranged a loan of ₹10,000/- from Narayana Pothuval to the appellant, who was the elder brother of the respondent. When there was a default in payment of that amount, the above criminal case was preferred against the appellant. The respondent contended that for making undue enrichment, the appellant fabricated a promissory note and foisted a false case against her. 3. In the lower court, the plaintiff's evidence consists of oral testimony of PW1 and PW2 and 3 A.S..No.535/1998 documentary evidence of Exts.A1 to A8. The defendant's evidence consists of oral testimony of DW1 and documentary evidence consists of Exts.B1 to B7. The Court exhibits were marked as Ext.C1. After sifting and weighing the evidence on record, the learned trial Judge dismissed the suit with cost of the defendant. After preferring this appeal, the appellant died and his legal representatives were impleaded as additional appellants 2 to 10 by virtue of order in C.M.P. No.3095/1999 dated 28.6.1999. 4. The learned counsel appearing for the appellant contended that the execution of the promissory note was properly proved, but it was not properly considered by the court below. In cross examination DW1 admitted her signature in the promissory note. When signature is admitted by the respondent, a presumption can be drawn u/s.118 of the Negotiable Instruments Act and she relied the decision reported in A.S..No.535/1998 4 _**K.P.O.Moideenkutty Hajee**_ v. _**Pappu Manjooran and another**_ [1996 (8) SCC 586] and _**Paily @ Kunju**_ v. _**Jose**_ [2012 (2) KHC 942]. 5. The learned counsel appearing for the respondent contended that the appellant failed to prove the execution of the promissory note. The signature in Ext.A1 was denied by the respondent and a vague answer given in cross examination is not sufficient to draw an admission of the signature in Ext.A1. On the other hand, it is the responsibility of the appellant to prove the execution of the negotiable instrument and the consideration given as per Ext.A1. Where the execution of the promissory note was denied by the borrower and the lender failed to prove that he had sufficient money, no presumption can be drawn regarding the execution of promissory note and consideration thereunder. 6. This Court in _**Venkiteswara Iyer**_ v. _**Appukutty Muthan**_ [1986 KLT SN 25 (C.No.45)] held as follows: A.S..No.535/1998 5 “In a case where the execution of the promissory note is denied the burden is on the plaintiff to prove its execution and also passing of the consideration. In a case where execution of the note is admitted the burden is on the defendant to prove lack of consideration. So also in a case where denial of the execution of the note has been found to be false necessary presumption regarding consideration can be drawn under S. 118 (a) of the Negotiable Instruments Act. But, even in a case where the execution of the note though denied by the defendant is proved by the plaintiff the defendant can still contend that the note is not supported by consideration. S.118 is imperative and the court is bound to draw the initial presumption that the note is supported by consideration. The burden is always n the defendant to prove lack of consideration when he admits execution of the note or when the denial has been found false. But, if the evidence discloses lack of consideration plaintiff's suit cannot be decreed merely on the basis of the presumption arising from the fact that the execution of the note has been duly proved. In a case where lack of consideration has been brought out from the testimony of the plaintiff or from the totality of evidence court cannot brush aside that evidence on the ground that the note which has been proved to have been duly executed is presumed to be supported by consideration. Where execution of the note has been denied and when it has been found that the denial is false the plaintiff can rely on S.118(a) of the Negotiable Instruments Act and contend that consideration has to be presumed. But in a case where evidence adduced is found highly inconsistent or unreliable such presumption cannot be availed of by the plaintiff to obtain a decree. If the maker of the note satisfies the conscience of the court that at no time the consideration has passed under the negotiable instrument and that he executed it under compelling circumstances plaintiff cannot succeed in his claim merely on the basis of the presumptions. A.S..No.535/1998 6 7. It is true that Section 118 of the Negotiable Instruments Act lays down certain presumption with regard to a negotiable instrument until the contrary is proved. Before this presumption is drawn, it is the primary responsibility of the claimant to prove the execution of the negotiable instrument. There is no presumption with regard to the execution of a negotiable instrument and in case of denial of execution by the opposite party, the execution of the instrument must be proved. Apex Court in _**Kundan Lal Rallaram**_ v. _**Custodian Evacuee Property**_ [AIR 1961 SC 1316] held as follows: “Section 118 lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder a court shall presume, inter alia, that the negotiable instrument or the endorsement was made or endorsed for consideration. In effect it throws the burden of proof of failure of consideration on the maker of the note or the endorser, as the case may be. The phrase 'burden of proof' has two meanings - One, the burden of proof as a matter of law and pleading and the other the burden of establishing a case the former is fixed as a question of law on the basis of the pleadings and is unchanged during the entire trial, whereas the latter is not constant but shifts as soon as a party adduces sufficient evidence A.S..No.535/1998 7 to raise a presumption in his favour. The evidence required to shift the burden need not necessarily be direct evidence, i.e., oral or documentary evidence or admissions made by opposite party; it may comprise circumstantial evidence or presumptions of law or fact. A plaintiff who says that he had sold certain goods to the defendant and that a promisory note was executed as consideration for the goods and that he is in possession of the relevant account books to show that he was in possession of the goods sold and that the sale was effected for a particular consideration should produce the said account books. If such a relevant evidence is withheld by the plaintiff, Section 114, Evidence Act enables the Court to draw a presumption to the effect that, if produced, the said accounts would be unfavourable to the plaintiff. This presumption, if raised by a court, can under certain circumstances rebut the presumption of law raised under Section 118 of the Negotiable Instruments Act.” The appellant was examined as PW1 in the trial Court, but respondent disputed the execution of the promissory note, in the circumstances, the promissory note was forwarded for expert opinion. Ext.C1 is the report received from the handwriting expert, who was examined as PW2. Ext.A1 is the promissory note. Ext.A2 is the copy of lawyer notice. Ext.A3 is the postal receipt and Ext.A4 is the postal acknowledgment card. Ext.A5 is the A.S..No.535/1998 8 reply. Analysing the evidence of PW1 and Exts.A1 to A5, it is clear that the appellant lent 30,000/- to the₹ respondent which was denied by the respondent. She took a contention that the appellant had no financial capacity to lend the money to the respondent during 1998. To prove that financial capacity, PW1 produced Exts.A6 to A8 documents. Even though those documents were produced in the trial Court, initial burden to prove an execution and passing of a consideration has to be proved by the appellant. It is the primary responsibility of the appellant to prove that Ext.A1 promissory note was made or drawn for consideration and it was endorsed as negotiated by the respondent. 8. To prove the execution, handwriting expert was examined as PW2. His evidence shows that he had examined Ext.A1 promissory note and issued Ext.C1 report. He had carefully and thoroughly examined Ext.A1 and compared with the standard documents in all 9 A.S..No.535/1998 aspects of handwriting identification and used scientific aids in the laboratory for detecting forgery. His opinion was that the person, who wrote the blue enclosed standard signatures stamped and marked A1 to A10 and S1 also wrote the red enclosed questioned signature similarly stamped and marked Q1. In this context, he opined that it has not been possible to express any opinion on the authorship of questioned signature marked Q2 in comparing with the standards. When PW2 expressed his inability to make a final opinion after comparing the signature, this Court cannot draw a presumption with regard to the execution of the promissory note. If PW2 made a firm opinion with regard to that point, this Court can rely on his evidence in supporting the execution of Ext.A1. The evidence of handwriting expert is only an opinion evidence. Irrespective of opinion of the handwriting expert, the court can also compare the admitted handwriting and A.S..No.535/1998 10 disputed writing invoking Section 73 of the Evidence Act. In that situation also, the expert opinion of the handwriting expert is necessary. Therefore, in the instant case, the handwriting expert's opinion with regard to execution of Ext.A1 promissory note shows that the signatures appearing do not tally with the disputed signature. DW1 in her evidence denied the transaction with the appellant, but a word used by her in cross examination has been relied on by the learned counsel appearing for the appellant. 9. Only when due execution is prove, presumption under S.118 could be raised. Section 118 lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and a court shall presume that the negotiable instrument was made or endorsed for consideration. Therefore, the burden of proof of passing consideration is on the maker of the note. The word 'burden of proof' has two meanings A.S..No.535/1998 11 - One, as a matter of law and pleading and the other the burden of establishing a case. The former is a question of law on the basis of the pleadings, which is unchanged during the entire trial, on the other hand the latter is not constant but shifts as soon as a party adduces sufficient evidence to raise a presumption in his favour. The evidence required to shift the burden need not be direct evidence, it may by circumstantial evidence or presumptions of law or fact. In this case during cross examination, a word in her answer has been highlighted as an admission of the execution, but she categorically denied the execution. If that be the position, there was no answer with regard to the admission of the execution. Therefore, vague answer cannot be treated as an admission of the execution of the promissory note. Under the common law, a person seeking relief to enforce a promissory note must prove that the promissory note was executed and consideration A.S..No.535/1998 12 was passed to the opposite party. Prima facie no materials before Court to the are brought prove execution. If that be the position, I am of the opinion that there is no merit in this appeal and it is dismissed accordingly. **P.D. RAJAN, JUDGE.** acd