M. Danial Pratap Vs Sri R.Venkat Rao — Cheque Dishonour | Andhra Pradesh HC (2025)

M. Danial Pratap Vs Sri R.Venkat Rao — Cheque Dishonour | Andhra Pradesh HC (2025)

What the court decided

AI extract

Outcome

No relief to the appellants; second appeal dismissed at the stage of admission confirming the judgments and decrees of both the Courts below; no order as to costs in the second appeal.

Issue for consideration

Whether the defendants jointly borrowed Rs.3,50,000/- from the plaintiff on 20-01-2012 and executed the suit promissory note ? +4 more

Court's answer

Execution of Ex.A-1 promissory note by defendants 1 and 2 and passing of consideration stand proved through the evidence of P.W.1 (creditor) and P.W.2 (sole attestor); though subjected to cross-examination, nothing was elicited from them to discredit their testimony.

Ratio / Principle

A second appeal under Section 100 CPC can be admitted only when a substantial question of law arises between the parties; mere appreciation of facts, documentary evidence and contents of documents does not amount to a substantial question of law.

Key takeaways

Where the facts required for a point of law have not been pleaded, a litigant should not be allowed to raise that question as a substantial question of law in second appeal.ratio¶41
Ex.A-1 contains overwriting of one letter only in the name of Danial Pratap; there is absolutely no material alteration in the promissory note, and the appellants had never pleaded material alteration either before the trial Court or before the first appellate Court.ratio¶44
The appellants failed to prove the contention of non-payment of consideration by leading cogent evidence and were not successful in showing improbability of the consideration; the defence taken by the defendants is not substantiated.

Detailed headnote1 paragraphs

Second Appeal (Section 100 CPC) — Dismissed at the stage of admission — A second appeal is maintainable only on a substantial question of law; mere appreciation of facts, documentary evidence and contents of documents does not raise a substantial question of law, nor can a question resting on facts not pleaded be raised in second appeal. Promissory note suit — Recovery of Rs.5,99,660/- on a demand pronote dated 20-01-2012 for Rs.3,50,000/- (interest at 24% per annum as per plaint case) — Execution of Ex.A-1 by defendants 1 and 2 (husband and wife) and passing of consideration proved through the creditor (P.W.1) and the sole attestor (P.W.2); nothing elicited in cross-examination to discredit them; defendants neither sent Ex.A-1 to a handwriting expert nor lodged any police complaint or sent any legal notice alleging forgery; overwriting of a single letter in the executant's name is no material alteration, and material alteration was neither pleaded in the written statement nor urged before the Courts below; dishonour of the 1st defendant's cheque for Rs.3,00,000/- (endorsement 'Funds Insufficient') and the 1st appellant's admission of the pending complaint under Sections 138 and 142 of the Negotiable Instruments Act, 1881 corroborate the debt. Concurrent findings of the trial Court and the first appellate Court affirmed; second appeal dismissed at the stage of admission; no order as to costs.

[3397]

APHC010262502022

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

(Special Original Jurisdiction)

TUESDAY, THE EIGHTH DAY OF APRIL TWO THOUSAND AND TWENTY FIVE

PRESENT

THE HONOURABLE SRI JUSTICE VENUTHURUMALLI GOPALA KRISHNA RAO

SECOND APPEAL NO: 308/2022

Between:

M. Danial Pratap and another

...APPELLANTS

AND

Sri R. Venkat Rao

...RESPONDENT

Counsel for the Appellants:

1.ARRABOLU SAI NAVEEN

Counsel for the Respondent: ---

The Court made the following:

Judgment:

This second appeal is filed aggrieved against the Judgment and decree dated 08-3-2022 in A.S.No.203 of 2017 on the file of the VII Additional District Judge, Visakhapatnam, Visakhapatnam District, confirming the Judgment and decree dated 24-8-2017 in O.S.No.93 of 2015 on the file of the VI Additional Senior Civil Judge, Visakhapatnam.

The appellants herein are the defendants 1 and 2 and the respondent herein is the plaintiff in O.S.No.93 of 2015 on the file of the VI Additional Senior Civil Judge, Visakhapatnam.

The plaintiff initiated action in O.S.No.93 of 2015 on the file of the VI Additional Senior Civil Judge, Visakhapatnam, with a prayer for recovery of a sum of Rs.5,99,660/- being the principal and interest due on a promissory note dated 20-01-2012 for Rs.3,50,000/- executed by the defendants in favour of the plaintiff agreeing to repay the same with interest and for costs.

The learned VI Additional Senior Civil Judge, Visakhapatnam, decreed the suit with costs. Felt aggrieved of the same, the unsuccessful defendants in the above said suit filed the aforesaid appeal before the first appellate Court. The learned VII Additional District Judge, Visakhapatnam, dismissed the first appeal by confirming the judgment and decree passed by the trial Court. Aggrieved thereby, the unsuccessful defendants/ appellants approached this Court by way of second appeal.

For the sake of convenience, both parties in the second appeal will be referred to as they are arrayed in the original suit.

The case of the plaintiff, in brief, as set out in the plaint averments in O.S.No.93 of 2015, is as follows:

(a) It is pleaded that the defendants are husband and wife and both of them jointly borrowed an amount of Rs.3,50,000/- from the plaintiff on 20-01-2012 for the purpose of their family necessities and executed a demand promissory note in favour of the plaintiff agreeing to repay the same with interest at 24% per annum to the plaintiff or his order on demand. In spite of repeated requests made by the plaintiff, the defendants did not choose to repay any amount and postponing the same on some pretext or the other. When the plaintiff demanded the defendants for repayment of the amount due under the above said promissory note, in discharge of partial legally enforceable debt, the 1^st defendant issued a cheque drawn on Co-operative Bank Limited, Main Branch, Visakhapatnam, for a sum of Rs.3,00,000/- in favour of the plaintiff towards part satisfaction of the principal amount.

(b) It is further pleaded that surprisingly, the said cheque was returned with an endorsement “ Funds Insufficient ” on 12-3-2014. The plaintiff filed a complaint under Sections 138 and 142 of the Negotiable Instruments Act, 1881, before the Judicial Magistrate of First Class, Kothavalasa, against the 1^st defendant and the same is pending. Hence, the suit is filed against the defendants for recovery of the promissory note amount along with subsequent interest and costs.

The defendants filed a written statement denying the contents of plaint averments and further contended as follows:

It is contended that there is no cause of action for the suit and they denied the alleged cause of action. The defendants never borrowed any amounts from the plaintiff, much less the alleged amount of Rs.3,50,000/- nor executed any promissory note dated 20-01-2012 in favour of the plaintiff. It is further contended that the 1^st defendant never issued any cheque to the plaintiff, much less the cheque bearing No.314941, dated 16-12-2013. The alleged pronote is a fabricated one and rank forged one. It is further contended that in view of financial disputes in between the plaintiff and the 1^st defendant in respect of real estate transactions, the present suit and the complaint under the provisions of N.I. Act were filed to harass not only the 1^st defendant but also his wife, who is the 2^nd defendant. Therefore, it is prayed to dismiss the suit with costs.

On the basis of the above pleadings, the learned VI Additional Senior Civil Judge, Visakhapatnam, framed the following issues for trial:

(1) Whether the defendants jointly borrowed Rs.3,50,000/- from the plaintiff on 20-01-2012 and executed the suit promissory note ?

(2) Whether the suit promissory note is a forged and fabricated, as pleaded by defendants ? and

(3) To what relief ?

During the course of trial in the trial Court, on behalf of the plaintiff, P.Ws.1 and 2 were examined and Ex.A-1 was marked. On behalf of the defendants, D.W.1 was examined and no documents were marked.

The learned VI Additional Senior Civil Judge, Visakhapatnam, after conclusion of trial, on hearing the arguments of both sides and on consideration of oral and documentary evidence on record, decreed the suit with costs. Felt aggrieved thereby, the unsuccessful defendants filed the appeal suit in A.S.No.203 of 2017 before VII Additional District Judge’s Court, Visakhapatnam, wherein, the following point came up for consideration.

(1) Whether there are any grounds to interfere with the judgment and decree dated 24-8-2017 passed in O.S.No.93 of 2015 by the learned VI Additional Senior Civil Judge ?

The learned VII Additional District Judge, Visakhapatnam, i.e., the first appellate Judge, after hearing the arguments, answered the point, as above, against the defendants/appellants and in favour of the plaintiff/ respondent and dismissed the appeal suit filed by the defendants. Felt aggrieved of the same, the unsuccessful defendants in O.S.No.93 of 2015 filed the present second appeal before this Court.

Heard Sri Arrabolu Sai Naveen, learned counsel for the appellants/ defendants.

The second appeal is filed against the judgment and decree of the first appellate Court. The defendants in the suit proceedings instituted the present second appeal under Section 100 of Civil Procedure Code. The law is that, it is for the appellant to satisfy this Court that the case involves a substantial question of law, then only in the event of existence of substantial question of law, this Court has to admit the second appeal. Therefore, it is for the appellants to show about the existence of substantial question of law.

It has to be kept in mind that the right of appeal is neither a natural nor an inherent right attached to the litigation. It is regulated in accordance with law. A second appeal preferred under Section 100 of CPC could be admitted only when the appellant satisfies this Court that substantial question of law between the parties arise in this case. A proper test for determining whether a question of law raised in the case is substantial would be or whether it directly and substantially affects the rights of the parties and if so, whether it is either an open question in the sense that it is not finally settled by the superior Courts or is not free from difficulty or cause for discussion of alternative views. In the case of Boodireddy Chandraiah v. Arigela Laxmi¹ , the Apex Court held that 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 viz., the first appellate Court. In a case where from a given set of circumstances two inferences of facts are possible, one drawn by the lower appellate Court will not be interfered by the High Court in a second appeal. Adopting any other approach is not permissible. Where, the facts required for a point of law have not been pleaded, a litigant should not be allowed to raise that question as a substantial question of law in second appeal. Mere appreciation of facts, documentary evidence and contents of the documents cannot be held to be raising a substantial question of law.

The contention raised by the appellants before this Court is that the promissory note Ex.A-1 was materially altered and the learned counsel for appellants would draw attention of this Court by relying on a copy of Ex.A-1. It is not the case of appellants either before the trial Court or before the first appellate Court that the suit promissory note is materially altered. The contention of appellants is that the suit promissory note is a forged and fabricated document. As seen from the copy of promissory note, there was overwriting of one letter only in the name of Danial Pratap. It is not the case of appellants that there was another person in the name of Ranial Pratap at the

1(2007) 8 SCC 155

village and the name of Ranial Pratap was altered as Danial Pratap. In fact, absolutely there is no material alteration in the promissory note. Moreover, the recitals in Ex.A-1 go to show that the defendants 1 and 2, who are the husband and wife, jointly executed the promissory note. It is not the case of 1^st defendant that the name of his wife is not Mary Padmaja. The case of plaintiff is that both the husband and wife executed the promissory note.

The learned counsel for appellants would contend that Ex.A-1 promissory note was not proved in accordance with law and the oral and documentary evidence were not properly considered by both the Courts below. Having gone through the judgments of both the Courts below, it is seen that the evidence of each witness i.e. P.W.1 and P.W.2 was examined by both the Courts below and Ex.A-1 was referred to and facts were properly marshalled and weighed and credibility of evidence was testified by both the Courts below. The creditor in his evidence stated about Ex.A-1 debt and also the execution of Ex.A-1 promissory note by the defendants 1 and 2. His evidence was supported by P.W.2, who is a sole attestor to Ex.A-1 promissory note. It is not the case of appellants that they are having enmity with P.W.2 and due to that, he deposed falsehood against them. In fact, Ex.A-1 promissory note was of the year 2012. The suit for recovery of money was filed by the plaintiff in the year 2015 and the trial Court delivered the judgment on 24-8-2017. Either before the trial Court or before the first appellate Court, the defendants did not take any steps to send Ex.A-1 promissory note to a handwriting expert for determination of alleged forgery. Moreover, it was admitted by the 1^st defendant i.e. D.W.1 in his evidence in cross-examination that he did not lodge any police complaint against the plaintiff on the allegation that he had forged his signature nor he sent any legal notice to him on the said cause. To substantiate the case of the plaintiff, the plaintiff pleaded that to discharge the promissory note debt, the 1^st defendant issued a cheque for Rs.3,00,000/- on 16-12-2013 drawn on Co-operative Bank Limited, Main

Branch, Visakhapatnam, but the said cheque was dishonoured with reasons “ Funds Insufficient ” and a case under Section 138 of the Negotiable Instruments Act was also instituted before the Judicial Magistrate of First Class. It is also admitted by the 1^st appellant that a case under Section 138 of the N.I. Act was filed by the plaintiff against him.

The alleged Ex.A-1 is proved by the plaintiff through the evidence of P.Ws.1 and 2. The appellants are unable to show any reason of circumstance to disbelieve the evidence of P.Ws.1 and 2 regarding the execution of suit promissory note by the defendants 1 and 2 and passing of consideration under Ex.A-1. Though P.Ws.1 and 2 were subjected to cross-examination, nothing was elicited from them to discredit their testimony. The appellants failed to prove the contention regarding the non-payment of consideration by leading cogent evidence. The defendants were not successful in showing improbability of the consideration. The defence taken by the defendants is not substantiated.

The learned counsel for appellants placed reliance on a Full Bench judgment of the common High Court of Andhra Pradesh at Hyderabad in the case of G. Vasu v. Syed Yaseen Sifuddin Quadri² , wherein it is held as follows:

“The presumption under Section 118 of the Negotiable Instruments Act, 1881, is rebuttable and can be disproved by the defendant by showing a preponderance of probabilities that the promissory note is not supported by any consideration. The Court interpreted the words “until the contrary is proved” in Section 118 to mean that the defendant need not prove with absolute certainty that no consideration existed, but can rely on the circumstances of the case and establish the non-existence of consideration by a preponderance of probabilities.”

The learned counsel for appellants placed another reliance on a judgment of the Apex Court in the case of Bharat Barrel and Drum

2 1987 AIR (AP) 139

Manufacturing Company v. Amin Chand Payrelal³ wherein it is held as follows:

“Generally speaking, the law relating to negotiable instruments is the law of the commercial world which was enacted to facilitate the activities in trade and commerce making provision of giving sanctity to the instruments of credit which could be deemed to be convertible into money and easily passable from one person to another. In the absence of such instruments, the trade and commerce activities were likely to be adversely affected as it was not practicable for the trading community to carry on with it the bulk of the currency in force. The introduction of negotiable instruments owes its origin to the bartering system prevalent in the primitive society. The negotiable instruments are, in fact, the instruments of credit being convertible on account of the legality of being negotiated and thus easily passable from one hand to another. The source of Indian Law relating to such instruments is admittedly the English Common Law. The main object of the Act is to legalise the system by which instruments contemplated by it could pass from hand to hand by negotiation like any other goods. The purpose of the Act was to present an orderly and authoritative statement of the leading rules of law relating to the negotiable instruments.”

The learned counsel for appellants also placed reliance on an unreported judgment of the Madras High Court in the case of Chakravarthy v. Pachamuthu⁴ , wherein it is held as follows:

“11. … … … the statutory or legal presumption under Sec.118 of the Negotiable Instruments Act is important. However the plaintiff in a case of this nature cannot simply rely upon the statutory presumption when there is material alteration. … … …”

In the case on hand, the plaintiff got examined the sole attestor of the promissory note as P.W.2. As stated supra, the evidence of P.W.2 is consisting and cogent with regard to the execution of Ex.A-1 promissory note and passing of consideration from the plaintiff under Ex.A-1 and it is not at all the case of defendants that they are having enmity with P.W.2 and due to that,

3 1999(2) Supreme 187

4 SA No.698/2017 & CMP No.17973/2017, dt.30-3-2022

he deposed falsehood against them. To disprove the evidence produced by the plaintiff before the trial Court, the defendants did not place any evidence except examining the 1^st defendant as D.W.1. As seen from the averments of written statement, there is no pleading in the written statement that the suit promissory note was materially altered. A bald plea was taken by the defendants in the written statement that the suit promissory note is a forged document. As noticed supra, the plaintiff discharged his burden by examining the sole attestor to Ex.A-1 as P.W.2. To rebut the said evidence, the defendants did not produce any evidence except examining the 1^st defendant as D.W.1 and also did not take any steps to send Ex.A-1 promissory note to a handwriting expert.

For the aforesaid reasons, I am of the considered view that on appreciation of the entire evidence on record, the learned trial Judge rightly decreed the suit and on re-appreciation of the entire evidence on record, the learned first appellate Judge confirmed the judgment and decree passed by the learned trial Judge.

In the result, the second appeal is dismissed at the stage of admission, confirming the judgments and decrees of both the Courts below. Pending applications, if any, shall stand closed. There shall be no order as to costs in the second appeal.

VENUTHURUMALLI GOPALA KRISHNA RAO,J