Dismissed

Sheik Musthafa v. Thanka

Kerala HC3 Jun 2024RSA/595/2005

Case brief

AI extract

What is this about?

Second Appeal against dismissal of a suit for recovery based on a promissory note. The Court held that mere signature admission does not prove execution. Witness failures and suspicious document details negated the presumption under Section 118. Suit dismissed.

What did the court decide?

The Second Appeal (RSA No. 595 of 2005) was dismissed with no order as to costs.

Sheik Musthafa Vs Thanka — Contract and Commercial Disputes | Kerala HC (2024)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE C.PRATHEEP KUMAR

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MONDAY, THE 3^RD DAY OF JUNE 2024 / 13TH JYAISHTA, 1946 RSA NO. 595 OF 2005

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AGAINST THE JUDGMENT AND DECREE DATED 18.11.2004 IN AS NO.155 OF 2002 OF I ADDITIONAL DISTRICT COURT,PALAKKAD ARISING OUT OF THE JUDGMENT DATED 27.02.2002 IN OS NO.344 OF 1996 OF MUNSIFF COURT, CHITTUR

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APPELLANT/RESPONDENT/PLAINTIFF:

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SHEIK MUSTHAFA S/O.UDUMAN ROWTHR, MANCHIRA, MUTHALAMADA VILLAGE, CHITTUR TALUK, PALAKKAD DISTRICT.

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BY ADVS. SRI.V.V.ASOKAN SMT.S.AMINA

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RESPONDENTS/APPELLANTS/DEFENDANTS:

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1 THANKA W/O KESAVAN, NELLIPARAMBIL CHAMBRAKULAM AMSOM, KOTTAYI, ALATHUR TALUK, PALAKKAD DISTRICT.

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2 MOHANDAS S/O. KESAVAN NELLIPARAMBIL CHAMBRAKULAM AMSOM, KOTTAYI, ALATHUR TALUK, PALAKKAD DISTRICT.

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BY ADVS. SRI.T.C.SURESH MENON

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THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 28.05.2024, THE COURT ON 03.06.2024, DELIVERED THE FOLLOWING:

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J U D G M E N T

Dated this the 3^rd day of June, 2024

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This Second Appeal has been preferred by the respondent in AS No.155/2002 on the file of District Court, Palakkad, who is the plaintiff in OS. No.344/1996 on the file of Munsiff Court, Chittur, against the judgment and decree allowing the appeal and dismissing the suit. For the purpose of convenience, the parties are hereafter referred to as per their rank before the trial court.

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According to the plaintiff, the defendants 1 and 2, who are mother and son, borrowed a sum of Rs.40,000/- from him on 10.8.1993, after executing a joint promissory note promising to repay the amount with interest. In spite of demand, the defendants failed to repay the amount and hence the suit.

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The defendants denied having any money transaction with

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the plaintiff. According to them, they have borrowed an amount of R.20,000/- from one Mohammed, S/o.Vellakutty in 1993, after getting their signature on some blank paper with revenue stamp affixed thereon. They had repaid a sum of Rs.10,000/- and only a

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balance amount of Rs.10,000/- is due to Muhammed. The plaint promissory note is a forged one.

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After evaluating the available evidence, the trial court decreed the suit. However, the First Appellate Court reversed the findings of the trial court and dismissed the suit. Aggrieved by the above judgment and decree of the First Appellate Court, the plaintiff preferred this Second Appeal.

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At the time of admission, the following substantial questions of law were framed:

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A) Is not the lower appellate court in error in upsetting the well considered judgment of the trial court? Is not the exercise of the appellate jurisdiction by the lower appellate court in the instant case excessive and irregular, especially when absolutely nothing has been stated how the judgment of the trial court is erroneous and unsustainable?

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B) Is it not the defendants' burden to adduce rebuttal evidence when the plaintiff has proved the execution of the promissory note in discharge of their preliminary burden? In the absence of such rebuttal evidence is the lower appellate court justified in non suiting the plaintiff in a suit based on promissory note?”

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Both sides were heard in detail about the above substantial

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questions of law. The case of the plaintiff is that the defendants 1 and 2 borrowed a sum of Rs.40,000/- from them after executing a joint promissory note, promising to repay the amount on demand. The defendants totally denied the claim of the plaintiff. According to them, they had borrowed an amount of Rs.20,000/- from one Mohammed and out of which Rs.10,000/- was repaid. At the time of the loan, they have signed on some blank papers with revenue stamp affixed thereon, which might have been misused by the plaintiff for fabricating a promissory note, for filing this suit.

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Relying upon the decision of the Hon'ble Supreme Court in Hiten P. Dalal v. Bratindranath Banerjee [2001 KHC 1310], learned counsel for the plaintiff would argue that once the plaintiff proves execution of promissory note the presumptions under section 118 and 139 of the Negotiable Instruments Act comes into play and thereafter it is the burden of the defendants to rebut those presumptions. Since in this case, I have found that the plaintiff has not succeeded in proving due execution of Exhibit B1 promissory note and as such those presumptions are not available in favour of

RSA.595/2005

the plaintiff.

The learned counsel for the defendants would argue that mere admission of signature does not amount to admission of execution of promissory note and even in such circumstances, it is the burden of the plaintiff to prove the due execution of promissory note. In support of the above argument, he has relied upon the decisions in Seithammarakkath Mammad v. Koyommatath Mammad [1957 KHC 65] and Velayudhan v. Velayudhan [2001 KHC 113] .

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In the decision in Velayudhan (supra), a Division Bench of this court in paragraph 9 held that:

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To sign means to affix the signature. But when it comes to the signing of a written instrument, it implies more than the act of affixing a signature. It implies more than the clerical act of writing the name. The intention of the person signing is important. The person should have affixed the signature to the instrument in token of an intention to be bound by its conditions. It has been said that for a signing consists of both the act of writing a person's name and the intention in doing this to execute, authenticate or to sign as a witness. The execution of a deed or other instrument includes the performance of all acts which may be necessary to render it complete as a deed or an instrument importing the intended obligation of every act

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required to give the instrument validity, or to carry it into effect or to give it the forms required to render it valid. Thus, the signature is an acknowledgement that the person signing has agreed to the terms of the document. This can be achieved only if a person signs after the document is prepared and the terms are known to the person signing. In that view of the matter, mere putting of signature cannot be said to be execution of the document.

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In the decision in Seithammarakkath Mammad (supra)

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a Single Bench of this court in paragraph 6 held that:

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“6. …... ….. It appears to me, however, that the

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onus, in a case of this type, rests on the plaintiff to prove both the fact of execution and the advance of consideration. For, the admission by the defendant, as to his having affixed his thumb impression as well as signature in a blank paper without stamp cannot amount to an admission as to the execution of the promissory note. …. ….”

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Therefore, the law is well settled that, mere admission of signature does not amount to admission of execution. The defendants could deny execution even while admitting the signature. In such circumstances, the burden of the plaintiff is not over in proving it's due execution. In other words, in this case, in spite of the fact that the defendants admitted their signatures in Ext.A1, still, the

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plaintiff has to prove it's due execution.

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In this case, one of the circumstances relied upon by the First Appellate Court to disbelieve the case of the plaintiff is that at the time of evidence, the plaintiff deposed that he could not even identify the second defendant. The plaintiff as PW1 deposed that he had last seen the 1^st defendant in the year 1993, ie, at the time of the alleged transaction. The suit was filed in the year 1996 and the plaintiff was examined on 20.2.2022. From the evidence of PW1, it appears that he had not seen the 2^nd defendant for more than eight years prior to the date of his examination before the court. It is quite unbelievable that the creditor could not even identify the debtor, who allegedly borrowed a sum of Rs.40,000/- from him, which is a huge amount during 1993. The above crucial circumstance substantiates the contention of the defendants that there was no money transaction with the plaintiff and that the actual transaction was with one Mohammed, to a considerable extent.

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Similarly, during cross examination, PW1 could not give

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any other details of the first defendant also. He does not know the details of the family members of the 1^st defendant. He also has no

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idea about the details of her assets. He had also stated that after the alleged transaction, he had never went to the residence of the 1^st defendant. Those circumstances have relevance in the present case, in view of the defence contention that they have no transaction with the plaintiff and that the actual transaction was with one Muhammed. Therefore, the above evidence of PW1 casts serious doubt about the veracity of the case put forward by him.

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According to the plaintiff, Exhibit A1 promissory note was written in the handwriting of PW2, who is his friend. According to PW1, at the time of money transaction, when the 2^nd defendant was called upon to write the promissory note, he declined saying that his handwriting is bad. It was in the above context, he sought the help of PW2 to prepare Exhibit A1 promissory note. However, at the time of evidence, PW2 had given a totally different version with regard to the circumstance under which he happened to write Exhibit B1.

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According to PW2, about one week before the date of transaction, the plaintiff requested him to write the promissory note. The plaintiff has also informed him about his intention to advance a

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loan to the defendants. The above evidence of PW2 that the plaintiff requested him to write a promissory note about one week before the date of the transaction is contradictory to the evidence of PW1 that the assistance of PW2 was obtained as 2^nd defendant's handwriting was not good. The above circumstance, also substantiates and probabilises the defence version, as held by the First Appellate Court,

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Another circumstance relied up on by the learned First Appellate Court was that on a perusal of Exhibit A1 promissory note, it is revealed that there was willful attempt to expand the body of promissory note up to the place where the signatures of defendants 1 and 2 were seen affixed. The space between the lines was increased from line No.10 onwards. It was in the light of the above circumstances, the First Appellate Court specifically found that the body of the promissory note was written only after affixing the stamp and signature therein.

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Another circumstance relied upon by learned First Appellate Court is that Exhibit B1 letter, issued by Mohammed to the defendants. Ext.B1 substantiates the contention of the defendants

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that they had money transaction with Muhammed. In Exhibit B1 letter dated 15.7.1995, it is specifically stated that balance amount of Rs.10,000/- and interest is due from the second defendant and that promissory note signed by the defendants 1 and 2 along with a cheque leaf is there in his possession. The letter further threatens the defendants that unless the balance amount is paid within ten days, legal proceedings will be initiated. The fact that the plaintiff had issued demand notice only after a period of two years and 11 months, after the money transaction was also relied upon by the First Appellate Court as another circumstances probabilising the defence case.

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It was argued by learned counsel for the plaintiff that no evidence was adduced by the defendants to substantiate the defence case to rebut the presumption under Section 118 of the Negotiable Instruments Act. As observed by the First Appellate Court, the presumption under Section 118 of the NI Act will come into play only when the plaintiff proves due execution of the promissory note. Moreover, it is also settled law that in order to rebut the presumption under Section 118 of the Negotiable Instruments Act, defendants can

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rely upon circumstances brought out during the course of

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examination of the plaintiffs' witnesses.

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In the instant case, the circumstances relied upon by the learned First Appellate Court that plaintiff could not even identify the second defendant, that he had not demanded the amount covered by the promissory note for a period of 2 years and 11 months and never personally demanded the amount from the defendants till demand notice was sent, etc. are sufficient enough to cast serious doubt about the genuineness of the plaint claim. The circumstances under which PW2 appeared in the picture to write Exhibit B1 promissory note is also very suspicious. The existence of money transaction between the defendants and Mohammed as revealed from Exhibit B1 also probabilises the defence version. In the light of the above crucial circumstances, the learned First Appellate Court was justified in holding that the plaintiff has not succeeded in proving due execution of Exhibit B1 promissory note. Therefore, the presumption under Section 118 of the Negotiable Instruments Act is not available in favour of the plaintiff, necessitating any rebuttal evidence from the side of the defence.

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In the above circumstances, the First Appellate Court was

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perfectly justified in interfering with the trial court judgment and dismissing the suit. Therefore, the substantial questions of law formulated are found against the plaintiff. I do not find any irregularity or illegality in the impugned judgment of the First Appellate Court and as such this Second Appeal is liable to be dismissed.

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In the result, this RSA is dismissed. Considering the facts, I

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order no costs.

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Sd/C. PRATHEEP KUMAR, JUDGE

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sou.

Sheik Musthafa v. Thanka

Case brief

What is this about?

What did the court decide?

Sheik Musthafa v. Thanka

Case brief

What is this about?

What did the court decide?

What the court decided

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