Gurjant Singh Vs Itbarjeet Singh

T h e defendants are the appellant s before this Court challengin g the judgment and d ecree dated 13.02.2024 passed b y the learned First Appellate C ourt whereby the a p peal preferred by the responde n t-plaintiff was allowed and the suit for recovery o f ₹5,77,500/- (₹3,75,000/- as pri n cipal and ₹2,02,500/- as intere s t @ 18% per ann u m upto 18.08.2016) on the b asis of pronote and receipt d ated 19.08.2013, w a s decreed , with a further directi o n that the plaintiff-respondent s hall be entitled to f u ture interest @ 6% per annum o n the decretal amount from the date of filing of th e suit. Earlier, the learned Tri a l Court, vide judgment and d e cree dated 11.03.20 1 9, had dismissed the said suit. 2. In brief, the facts are that the plaintiff-respondent filed a sui t for recovery of ₹ 5 ,77,500/- (₹3,75,000/- as prin c ipal and ₹2,02,500/- as intere s t @ 18% per ann u m upto 18.08.2016) on the b asis of pronote and receipt d ated 19.08.2013 titl e d as “Itbarjeet Singh Vs. Gurj a nt Singh”. The case of the plai n tiff is that the defe n dant-appellant borrowed a su m of ₹3,75,000/- in cash from hi m on

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19.08.2013 an d executed a pronote and recei p t in his favour in the presence of witnesses, wit h an assurance to pay interest @ 18% per annum. The said am o unt was to be retur n ed on demand. However, whe n the plaintiff demanded repay m ent, the defendant f ailed to pay even a single pen n y. The plaintiff issued legal n o tice dated 27.07.2016, but the same was returne d with the report of refusal. E ven thereafter, des p ite repeated demands, the de f endant failed to pay the am o unt. Hence, the suit .

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U p on notice of the suit, the de f endant appeared and filed wr i tten statement thro u gh their counsel denying ex e cution of pronote and receipt or borrowing any amount. It was alleged that the p laintiff and his family members had filed six different false suits for recovery against the defendant and his fa m ily members on t he basis of forged and fab r icated pronotes and receipts, all purportedly ex e cuted on the same date with o nly interchanged witnesses. It was further averre d that in earlier proceedings re g arding surplus land, the plain t iff’s father Satpal S ingh had obtained signatures/t h umb impressions of the defendant and his family members on blank and printed p apers, which were later misus e d to fabricate pron o tes and receipts. Additional objections were also taken that the plaintiff was a minor in 2013, without any i ndependent source of income, and therefore incap a ble of lending such a huge amount. The defendant also pleaded that the suit was n o t maintainable, without cause o f action, barred by mis-joinder and non-joinder of n ecessary parties, and liable to b e dismissed with special costs u n der Section 35-A C PC.

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O n the basis of the pleadings, t he learned trial Court framed the following issues vide order dated 05.01.2018:

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Whether the plaintiff is e n titled for recovery of ₹5,77, 5 00/along with interest as praye d for? OPP

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Whether the suit is not mai n tainable in the present form? O P D

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Whether the plaintiff has n o locus standi and no cause of a c tion to file the present suit? OP D

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Relief.

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In order to prove their case, the p laintiff examined PW-1 Lajpat Rai, deed writer; P W-2 Lakhvir Singh, attestin g witness; PW-3 Itbarjeet Si n gh, plaintiff; PW- 4 Anil Kumar Gupta, Handwrit i ng & Finger Print Expert, be s ides tendering docu m ents Ex.P1 to Ex.P10 includi n g the pronote, receipt, deed wri t er’s register, legal n otice, postal receipts and exper t report. The defendant, on the o ther hand, examine d himself as DW1 along with D W 2 Gurpyas Singh and DW3 A s hok Kumar (Addl. Ahlmad) and produced docu m entary evidence Ex.D1 to Ex.D28 including copi e s of plaints, pronotes, receipts a nd judgments in other civil sui t s to substantiate his defence.

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O n appreciation of the evidence, t he learned trial Court observed that there were mat e rial contradictions between th e witnesses of the plaintiff regar d ing payment of co n sideration; that the plaintiff fail e d to plead the purpose of advancing such a huge a m ount; that the defendant’s pl e a of misuse of signatures obtained during surplus land proceedings appeared cre d ible. Consequently, issue No.1 was decided agains t the plaintiff, whereas issues N o .2 and 3 were not pressed. The suit of the plainti f f was dismissed with costs vide judgment and decree d ated 11.03.2019 pas s ed by the learned trial Court.

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A g grieved thereby, the plaintiff f iled first appeal. The learned F irst Appellate Cou r t, on re-appreciation of the en t ire evidence, held that the plai n tiff had duly prove d execution of the pronote and r e ceipt by examining the deed w r iter,

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attesting witne s s as well as handwriting exper t , and once signatures were proved, presumption u n der Section 118 of the Negotia b le Instruments Act, 1881 (for s hort the Act of 188 1 ) arose in favour of the plaintiff. It was observed that the def e nce raised by the d efendant was contradictory an d unsupported by cogent evid e nce. The appellate C ourt further held that though the plaintiff was a student a t the relevant time, h is deposition regarding having income from agricultural land and sale of crop c o uld not be disbelieved merely because he had not produced b ank statements. It w as further held that once due e xecution was proved, the onus was on the defenda n t to rebut the presumption, whi c h he failed to discharge. 8. A c cordingly, the appeal was allo w ed vide judgment and decree d ated 13.02.2024, th e judgment of the trial Court was set aside, and the suit o f the plaintiff was d ecreed for recovery of ₹5,77, 5 00/- (₹3,75,000/- as principal and ₹2,02,500/- as i nterest @ 18% per annum upto 18.08.2016). The plaintiff was also held entitled t o future interest @ 6% per ann u m on the decretal amount fro m the date of filing o f the suit till realization, besid e s costs. Hence, the present Re g ular Second Appeal by the defendant-appellant.

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L e arned counsel for the app e llant-defendant submits that the impugned jud g ment and decree dated 13.02. 2 024 passed by the learned Di s trict Judge, Sirsa, i s wholly perverse and contrar y to the record, inasmuch as it has wrongly set aside the well-reasoned judgment a nd decree dated 11.03.2019 passed by the learned C ivil Court, whereby the suit of t he plaintiff had been dismissed. 10. It i s urged that the plaintiff institu t ed the present suit on the basis of a pronote and re c eipt dated 19.08.2013 for an a mount of ₹5,77,500/-, but fail e d to prove the exec u tion of the pronote, the passing of consideration, or the source f rom which such a h uge amount was allegedly adv a nced. The plaintiff was a stude n t at

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the relevant ti m e and even his college fees we r e being borne by his father, the r eby demonstrating h is incapacity to advance any s u ch loan. He further submits tha t the plaintiff and hi s family members have filed as m any as six similar suits agains t the appellant and his relatives, all founded upon pr o notes and receipts of the same d ate, with the same amount and attested by witn e sses who are none other than the plaintiff’s ow n relatives. It is argued that such a pattern clearly establishes collusion and fa brication of documents. It is also submitted that during the su r plus land litigation, pertaining to land measuring 3 2 kanals 16 marlas, the father o f the plaintiff, name l y Satpal Singh, had obtained t h e signatures and thumb impressions of the appellan t and his family members on cer t ain blank and printed papers, w h ich were subseque n tly misused, in connivance w ith other relatives, to fabricate the impugned pro n ote and receipts. The learned trial Court had rightly apprec i ated these circumst a nces and dismissed the suit, bu t the learned Lower Appellate C ourt has overlooked such material evidence. It is fu r ther contended that the presum p tion under Section 1 18 of the Negotiable Instrume n ts Act stood effectively rebutte d by the appellant/ d efendant through cogent evid e nce. The plaintiff, having ne i ther disclosed the p urpose of the alleged loan nor established any financial capa c ity, could not prov e the passing of consideration. T h e witnesses examined in support of the pronote ar e stock witnesses, who had alr e ady been disbelieved in connected suits, yet the l e arned 1^st Appellate Court has chosen to rely upon them. O n the strength of th e aforesaid submissions, learne d counsel prays that the impu g ned judgment and d ecree dated 13.02.2024 be set aside and the judgment and d e cree dated 11.03.20 1 9 of the learned Civil Court, d i smissing the suit of the plaintif f , be restored.

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Per contra, learned counsel for the respondent-plaintiff has supporte d the impugned judg m ent and decree dated 13.02.2 0 24, submitting that the pronote and receipt dated 19.08.2013 stood duly proved a n d the statutory presumption u n der Section 118 of the Act of 1881 operates in fa v our of the plaintiff. It is argued that the defence of s ignatures on blank papers is w i thout substance and unsupporte d by evidence, and the mere pendency of simila r suits by family members ca n not discredit the p r esent claim. It is further sub m itted that the trial Court erre d in dismissing th e suit by ignoring material e vidence, which has rightly b een appreciated by the learned Lower Appellate C ourt, and hence no interferen c e is warranted.

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Hav i ng heard learned counsel for th e parties and after going throug h the record, this Co u rt finds merit in the submissions advanced by learned counse l for the appellants- d efendants. 13. In a suit on a promissory note w h ere the case of the defendant a s to the circumstan c es under which the promissory n ote was executed is not accept e d, it is open to the d efendant to prove that the case s et up by the plaintiff on the bas i s of the recitals in t h e promissory note, or the case s et up in suit notice or in the plaint is not true and r e but the presumption under S e ction 118 of the Act of 188 1 by showing a preponderance of probabilities in hi s favour and against the plaintif f . He need not lead e vidence on all conceivable mo d es of consideration for establis h ing that the promi s sory note is not supported by any consideration whatsoever. The words ‘until th e contrary is proved’ in Section 118 of the Act of 1881 do not m ean that the defend a nt must necessarily show that t h e document is not supported by any form of consid e ration but the defendant has th e option to ask the court to con s ider the non-existe n ce of consideration so probable that a prudent man ought, unde r the

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circumstances o f the case, to act upon the su p position that consideration di d not exist. Though t h e evidential burden is initially p laced on the defendant by virt u e of Section 118, it can be rebutted by the defend a nt by showing a preponderan c e of probabilities th a t such consideration as stated i n the pronote, or in the suit noti c e or in the plaint d oes not exist and once the p r esumption is so rebutted, the said presumption ‘d i sappears’. For the purpose of r e butting the initial evidential bu r den, the defendant can rely on direct evidence or circumstantial evidence o r on presumptions o f law or fact. Once such conv i ncing rebuttal evidence is add u ced and accepted by the court, having regard to a l l the circumstances of the case and the prepondera n ce of probabilities, the evident i al burden shifts back to the plai n tiff who has also t h e legal burden. Thereafter, the p resumption under Section 118 d oes not again com e to the plaintiff's rescue. Once b oth parties have adduced evid e nce, the court has t o consider the same and the bur d en of proof loses all its import a nce. In the judgme n t passed by the Hon’ble Supre m e Court in Bharat Barrel & Drum Manufacturing Co. v. Amin Chand Payrelal (1999) 3 SCC 35, the Ho n ’ble Supreme Court has held as under:-

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“12. Upon consideration of vario u s judgments as noted hereina b ove, th e position of law which emer g es is that once execution o f the pr o missory note is admitted, the presumption under Section 118(a) w o uld arise that it is suppor t ed by a consideration. Suc h a pr e sumption is rebuttable. The de f endant can prove the non-exist e nce of a consideration by raising a p r obable defence. If the defenda n t is pr o ved to have discharged the in i tial onus of proof showing tha t the ex i stence of consideration was i m probable or doubtful or the same w a s illegal, the onus would shift t o the plaintiff who will be oblig e d to pr o ve it as a matter of fact an d upon its failure to prove w o uld di s entitle him to the grant of re l ief on the basis of the negotiable

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in s trument. The burden upon t h e defendant of proving the n onex i stence of the consideration ca n be either direct or by bringin g on re c ord the preponderance of p robabilities by reference to the ci r cumstances upon which he relies. In such an event, the plaint if f is en t itled under law to rely upon all the evidence led in the c ase in c luding that of the plaintiff as well. In case, where the defen d ant fa i ls to discharge the initial onus of proof by showing the n onex i stence of the consideration, th e plaintiff would invariably be h eld en t itled to the benefit of presump t ion arising under Section 118( a ) in hi s favour. The court may not insi s t upon the defendant to disprov e the ex i stence of consideration by lea d ing direct evidence as the exist e nce of negative evidence is neither po s sible nor contemplated and ev e n if le d , is to be seen with a doubt. T h e bare denial of the passing o f the co n sideration apparently does not appear to be any def e nce. Something which is probable has to be brought on record for ge t ting th e benefit of shifting the onus of p roving to the plaintiff. To disp r ove th e presumption, the defendant h a s to bring on record such facts and ci r cumstances upon considerati o n of which the court may e i ther be l ieve that the consideration did n ot exist or its non-existence w a s so pr o bable that a prudent man wo u ld, under the circumstances o f the ca s e, shall act upon the plea that i t did not exist.....”

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T h e plaintiff-respondent had ins t ituted the suit on the basis o f a pronote and re c eipt dated 19.08.2013 for a su m of ₹5,77,500/-. Statement of P W -2 Lahvir Singh, one of the attesting witness o f all the alleged six pronotes and receipts that co n sideration was received by the defendant in his presence in fro n t of deed writer wa s belied by the said deed writer- L ajpat Rai, who stepped into wit n ess box as PW-1 to state that no consideration was paid in his presence. T hus, contradictory t e stimonies of aforesaid witnesses made a dent to the presum p tion gained by the p laintiff under the provisions of Section 118 of the Act of 1881 and

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shifted the bur d en on plaintiff, which he faile d to discharge, as he failed to p r ove that he had fin a ncial capacity to advance such a n amount nor proved the passi n g of consideration. A t the relevant time, the plaint i ff was a student whose educational expenses were even borne by his father. F u rthermore, no source of fund s or purpose of the a lleged loan has been disclosed. 15. T h e record further reveals that a s many as six similar suits w ere instituted by the respondent-plaintiff and his f a mily members against the appe l lant and his relativ e s, all founded on pronotes of i d entical date and amount, witnessed only by close r e lations. Such a pattern unmista k ably raises serious doubts abou t the genuineness o f the transactions. Significantl y , the respondent-plaintiff hi m self admitted befor e the learned trial Court throu g h the testimony of PW-3 Itba r jeet Singh i.e. resp o ndent-plaintiff and attesting w i tness PW-2 Lakhvir Singh in t heir cross-examinat i ons that the defendant and his f amily members, who are defen d ants in the other five recovery suits, are financially well-off and owners of agricul t ural land. The susp i cion further increases because t h e respondent-plaintiff has not e ven mentioned the p urpose for which such a large a m ount was allegedly given. 16. T h e learned trial court, appreciating these circumstances, ri g htly dismissed the s uit. The presumption under Se c tion 118(a) of the Act of 1881 was rebutted by the defendant by raising a probabl e defence. The learned 1^st Appellate Court, howeve r , misdirected itself by ignoring these material aspects and reve r sing the well-reasoned judgment passed by the lear n ed trial Court. 17. In view of the aforesaid discussio n , this Court finds that the impu g ned judgment and d ecree dated 13.02.2024 passed by the learned District Judge, Sirsa, is unsustainable in law and is hereby set as i de. Resultantly, the judgment and

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decree dated 1 1 .03.2019 passed by the learned trial Court dismissing the suit o f the plaintiff stands restored.

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A c cordingly, the regular second a p peal is allowed. Decree sheet s hall be prepared ac c ordingly. There shall be no ord e r as to costs. 19. M i scellaneous application(s), if a n y, also stand disposed of

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( AMARINDER SINGH GREWAL ) JUDGE

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August 20, 2025 Pankaj* Whether speaking/reasoned : Yes/No Whether reportable : Yes/No

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Gurjant Singh v. Itbarjeet Singh

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Gurjant Singh v. Itbarjeet Singh

Case brief

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