Dismissed

Paliki Govindababu, v. Nurikurthi Veera Venkata Satyanarayana

Andhra Pradesh HC13 Oct 2022SA/453/2022

Case brief

AI extract

What is this about?

The High Court dismissed the second appeal filed by a defendant. The defendant admitted executing a promissory note but claimed lack of consideration. The Court held the defendant failed to rebut the presumption of consideration under Section 118 of the Negotiable Instruments Act with cogent evidence, noting that denial of consideration alone is not a defense. The appeal was dismissed without cost

What did the court decide?

Second appeal dismissed without costs; pending miscellaneous applications closed.

Paliki Govindababu, Vs Nurikurthi… — Contract and Commercial Disputes | Andhra Pradesh HC (2022)

¶1

THE HON’BLE SRI JUSTICE SUBBA REDDY SATTI SECOND APPEAL No.453 of 2022

¶2

JUDGMENT:

¶3

Defendant filed the above second appeal aggrieved by the judgment and decree dated 18.02.2022 in A.S.No.195 of 2019 on the file of VIII Additional District & Sessions Judgecum-Special Court for Trial of Offences against Women, East Godavari District, Rajamahendravaram, confirming the judgment and decree dated 14.10.2019 in O.S.No.147 of 2017 on the file of Senior Civil Judge, Ramachandrapuram.

¶4

For the sake of convenience and brevity, parties to this judgment are referred to as per their array in suit.

¶5

Plaintiff filed the suit O.S.No.147 of 2017 on the file of Senior Civil Judge, Ramachandrapuram for recovery of an amount Rs.6,27,750/-, principal being Rs.5,00,000/-.

¶6

In the plaint, it was contended interalia that defendant

¶7

borrowed an amount of Rs.5,00,000/- from the plaintiff on 03.01.2016 for the purpose of his family expenses and to discharge sundry debts and executed promissory note agreeing to repay the same with interest @18% per annum.

¶8

¶9

In spite of repeated oral demands, defendant failed to repay the amount. Defendant started proclaiming to alienate his agricultural land. Hence suit was filed for recovery of amount.

¶10

Defendant filed written statement and contended interalia that he did not borrow any amount from the plaintiff and he has no necessity to borrow money from the plaintiff; that suit promissory note is not supported by consideration; that plaintiff has no capacity to lend the amount; that brother of defendant filed two suits O.S.Nos.143 of 2017 and 144 of 2017; that first attestor and second attestor in the suit promissory note are relatives of defendants therein; that defendant subscribed a chit with Kukkala Suryanarayana and at the time of auction, said Suryanarayana obtained two empty promissory notes from the defendant and the plaintiff is close relative of the said person; that in view of disputes, plaintiff obtained blank promissory note from Suryanarayana and fabricated the same and filed the suit and thus, prayed the Court to dismiss the suit.

¶11

Basing on the above pleadings, the trial Court framed the following issues:

¶12

¶13

(1) Whether the suit promissory note is true, valid and binding on the defendant?

¶14

(2) To what relief?

¶15

During the trial, plaintiff examined himself as P.W.1

¶16

and got examined the attestor and scribe of promissory note as P.Ws.2 and 3. Exs.A-1 to A-3 were marked. On behalf of defendant, he examined himself as D.W.1 and no documents were marked.

¶17

Trial Court on consideration of both oral and documentary evidence and also legal aspects, decreed the suit with costs vide judgment and decree dated 14.10.2019. Aggrieved by the same, defendant filed appeal A.S.No.195 of 2019 on the file of VIII Additional District & Sessions Judgecum-Special Court for Trial of Offences against Women, East Godavari District, Rajamahendravaram. Lower appellate Court being the final fact finding Court, framed necessary points for consideration as contemplated under Order 41 Rule 31 of CPC and on consideration of both oral and documentary evidence, dismissed the appeal vide judgment and decree dated 18.02.2022. Assailing the same, the present second appeal is filed.

¶18

¶19

Heard Sri K.Ramakoteswara Rao, learned counsel for the appellant/defendant.

¶20

Learned counsel for appellant would submit that no consideration was passed under the suit promissory note Ex A-1. He would submit that the Courts below failed to consider the evidence of P.Ws.1 to 3 in a proper perspective. He would also submit that the Courts below ought to have sent Ex.A-1 promissory note to the expert for comparison.

¶21

Basing on the pleadings, the following substantial questions of law arise for consideration:

¶22

(1) Whether Ex.A-1 promissory note is supported by consideration?

¶23

(2) Whether the defendant rebutted the presumption

¶24

under Section 118 of the Negotiable Instruments

¶25

Act, 1881 having admitted execution of Ex.A-1?

¶26

Suit was filed by the plaintiff for recovery of amount on the strength of Ex.A-1 promissory note. Plaintiff, apart from examining himself as P.W.1, got examined P.Ws.2 and 3, attestor and scribe of Ex.A-1. The evidence of P.Ws.1 to 3 is

¶27

¶28

consistent regarding execution of Ex.A-1 promissory note and passing of consideration.

¶29

Defendant admitted execution of Ex.A-1, however pleaded that no consideration was passed under Ex.A-1. He further pleaded that he scribed promissory note in connection with a chit transaction with one Kukkala Suryanarayana and due to disputes, plaintiff obtained the said promissory note and fabricated the same.

¶30

The relevant portion in cross examination of D.W.1 is extracted below:

¶31

“I have verified the documents filed by the plaintiff to show his properties.

¶32

It is true that the plaintiff filed certificate showing that he is working as mill driver in Chaitanya Rice Mill, Pasalapudi and as per the said certificate, the plaintiff is getting an income of Rs.18,000/- per month.

¶33

The plaintiff also filed certificate issued by the M.R.O. I do not know whether there are disputes between my brother and the plaintiff. There are no cases in between plaintiff and my brother.

¶34

I have not issued any notice nor filed any case against Suryanarayana by demanding him to return the blank promissory note.

¶35

¶36

The signature and thumb impression on Ex.A-1 belong to me. The averments of Ex.A-1 show that I borrowed an amount of Rs.5,00,000/from the plaintiff on 03.01.2016.”

¶37

The above evidence of D.W.1 coupled with averments in

¶38

written statement would manifest that defendant admitted execution of Ex.A-1 and passing of consideration.

¶39

Plaintiff having filed suit for recovery of money on the strength of promissory note, as stated supra , discharged legal burden regarding execution of Ex.A-1 and passing of consideration to the defendant. In view of the admission made by the defendant regarding execution, defendant had to rebut the presumption available to the plaintiff under Sec 118 of N.I.Act. Apart from since the plaintiff proved passing of consideration under Ex A-1, the onus shifts to defendant, to disprove that no consideration was passed under Ex A-1. However, except the self-serving statement of defendant, he did not place any cogent evidence to prove that Ex.A-1 promissory note is not supported by consideration.

¶40

¶41

17. In Bharat Barrel and Drum Manufacturing Company

¶42

Vs. Amin Chand Payrelal¹ , the Hon’ble Apex Court was held thus:

¶43

“Once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by consideration. Such a presumption is rebuttable. The defendant can prove the non- existence of consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the non-existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as existence of negative evidence is neither possible nor contemplated and even if led is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption the defendant has to bring on record such facts and circumstances, upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so

¶44

1 (1999) 3 SCC 35

¶45

¶46

probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist.”

¶47

18. In G.Venkata Rama Subbaiah Vs. D.Rasool Naik² , the

¶48

composite High Court of Andhra Pradesh held thus:

¶49

“Once the execution of the promissory note is admitted or proved, then it is presumed to be supported by consideration unless contrary is proved. The burden is on the defendant to rebut the same by adducing convincing evidence. Unless the defendant rebuts the presumption by adducing convincing rebuttal evidence, the evidential burden would not shift back to the plaintiff who has legal burden only after adducing such convincing rebuttal evidence, it can be held that thereafter the presumption under Section 118 does not come to the rescue of the plaintiff.”

¶50

Though Ex.A-1 is not compulsorily attestable document in view of defense taken by defendant, plaintiff also examined attestor and scribe of Ex.A-1. P.Ws.1 to 3 in one voice stated about execution of Ex A-1 and passing of consideration under Ex.A-1. In view of specific defense, plaintiff also marked Exs.A-2 and A-3 show that he got capacity to lend the amount. However, as observed supra , defendant failed to prove his contention regarding non passing of consideration under Ex.A-1 by leading cogent evidence.

¶51

2 2003 (4) ALT 414

¶52

¶53

Defendant in this second appeal for the first time, filed application to send Ex.A-1 promissory note for expert opinion. But the appellant-defendant ought to have taken steps to send Ex.A-1 for expert, however, no steps were taken by the defendant. In fact, defendant admitted his signature on Ex A-1.

¶54

21. Regarding scope of Section 100 CPC, the Hon’ble Apex Court in Hero Vinoth Vs. Seshammal³ , held that:

¶55

“ 19 . It is not within the domain of the High Court to investigate the grounds on which the findings were arrived at, by the last court of fact, being the first appellate court. It is true that the lower appellate court should not ordinarily reject witnesses accepted by the trial court in respect of credibility but even where it has rejected the witnesses accepted by the trial court, the same is no ground for interference in second appeal when it is found that the appellate court has given satisfactory reasons for doing so. In a case where from a given set of circumstances two inferences of fact are possible, one drawn by the lower appellate court will not be interfered by the High Court in second appeal. Adopting any other approach is not permissible. The High Court will, however, interfere where it is found that the conclusions drawn by the lower appellate court were erroneous being contrary to the mandatory provisions of law applicable or its settled position on the basis of pronouncements made by the Apex Court, or was based upon inadmissible evidence or arrived at by ignoring material evidence.

¶56

24 . The principles relating to Section 100 CPC, relevant for this case, may be summerized thus:-

3 AIR 2009 SC 1481

(i) …

(ii) The High Court should be satisfied that the case involves a substantial question of law, and not a mere question of law. A question of law having a material bearing on the decision of the case (that is, a question, answer to which affects the rights of parties to the suit) will be a substantial question of law, if it is not covered by any specific provisions of law or settled legal principle emerging from binding precedents, and, involves a debatable legal issue. A substantial question of law will also arise in a contrary situation, where the legal position is clear, either on account of express provisions of law or binding precedents, but the court below has decided the matter, either ignoring or acting contrary to such legal principle. In the second type of cases, the substantial question of law arises not because the law is still debatable, but because the decision rendered on a material question, violates the settled position of law.”

¶61

22. The Hon’ble Apex Court in Randhir Kaur Vs. Prithvi

¶62

Pal Singh and Ors.⁴ , held thus:

¶63

“16. A perusal of the aforesaid judgments would show that the jurisdiction in second appeal is not to interfere with the findings of fact on the ground that findings are erroneous, however, gross or inexcusable the error may seem to be. The findings of fact will also include the findings on the basis of documentary evidence. The jurisdiction to interfere in the second appeal is only where there is an error in law or procedure and not merely an error on a question of fact.”

¶64

The findings of the facts recorded by the Courts below

¶65

are based on appreciation of both oral and documentary

¶66

4 (2019) 17 SCC 71

¶67

¶68

evidence. Unless, the appellant demonstrates that substantial question of law involved in the second appeal, interference of this Court with the judgments rendered by the Courts below in exercise of jurisdiction under Section 100 of CPC is not warranted. In this case on hand, as observed supra, no questions of law much less substantial questions of law arose in the appeal. Hence, the second appeal is liable to be dismissed, however, without costs.

¶69

Accordingly, the second appeal is dismissed at

¶70

admission stage. No order as to costs.

¶71

As a sequel, all the pending miscellaneous applications shall stand closed.

¶72

_________________________ SUBBA REDDY SATTI, J

¶73

13^th October, 2022

¶74

PVD

Paliki Govindababu, v. Nurikurthi Veera Venkata Satyanarayana

Case brief

What is this about?

What did the court decide?

Paliki Govindababu, v. Nurikurthi Veera Venkata Satyanarayana

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Kothakota Saddam Hussain, Vs The State of Ap

A. Punnaiah Vs Union of India

Madiki Rajeswara Dayal Vs Nidadavolu Sai Ram

A.Virupaksha Reddy (died) Vs Kesava Reddy

V Srinivasa Rao, Vs The State of Andhra Pradesh

M/s. Epr Constructions Vs The State of Andhra Pradesh