Mr. G.K. Ilanthiraiyan, J. S.A. No. 1338 of 2000. D/d. 11.2.2020.Execution of pronote – Availability of requisite consideration – Execution being admitted u/s 138 of NI Act, presumption can be drawn regarding requisite consideration being passed.
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K. Ramasamy Gounder v. M/s. Kavuveri Finance, (Madras) : Law Finder Doc Id # 1718265
MADRAS HIGH COURT
Before:- Mr. G.K. Ilanthiraiyan, J.
S.A. No. 1338 of 2000. D/d. 11.2.2020.
K. Ramasamy Gounder and other – Appellants
Versus
M/s. Kavuveri Finance rep. by its Power of Attorney holders P.Ramasamy & M.R. Subramaniam having business at No.1, Kanakkar Street, Salem and other – Respondents
For the Appellants :- Mr.S.Sounthar, Advocate.
For the Respondents No. 1 :- Mr.S.Saravana Kumar for Mr.M.Sudhakar, Advocates.
For the Respondent No. 2 :- Dismissed vide Court Order dated 15.12.2019.
IMPORTANT
Execution of pronote – Availability of requisite consideration – Execution being admitted u/s 138 of NI Act, presumption can be drawn regarding requisite consideration being passed.
Negotiable Instruments Act, 1881, Section 138 Execution of pronote – Availability of requisite consideration – Execution appears to be admitted u/s 138 – Hence, presumption drawn regarding consideration being passed – Contention regarding signing in the blank pronote, held not material, because of S. 138, the holder of the blank pronote held to be an author to fill the content – Resultantly, considering entire materials on the record, recovery suit based on the pronote held to be rightly decreed by the Court below and, thus, second appeal challenging such decree dismisses.
[Paras 10 to 13]
JUDGMENT
Mr. G.K. Ilanthiraiyan, J. – This second appeal is directed as against the judgment and decree dated 24.08.1998 made in A.S.No.119 of 1997 on the file of the District Court, Salem, confirming the judgment and decree dated 08.07.1997 made in O.S.No.799 of 1989 on the file of the Principal Sub Court, Salem.
2. For the sake of convenience, the parties are referred to as per their ranking in the trial Court.
3. The case of the plaintiff in brief is as follows :-
3.1. The suit is filed for recovery of money. The defendants borrowed a sum of Rs.20,000/- from the plaintiff by executing a registered agreement in favour of the plaintiff and also deposited their title deeds on 15.12.1986. But the registration was held on 17.12.1986 since, on that day viz., 15.12.1986, time was over and 16th was Tuesday being inauspicious day, the defendants did not want to borrow and execute the pronote. The defendants also executed pronote for a sum of Rs.20,000/- promising to repay the same with interest at the rate of 1.75% pre month. In respect of repeated demand, the defendants did not pay the same and postponed the payment. Therefore, the plaintiff caused notice and filed the suit.
4. Resisting the same, the defendants 1&2 filed written statement by denying that entire averments and the allegations averred in the plaint are false and frivolous. The pronote and the agreement are not connected with each other. The defendants 1&2 never borrowed any amount by way of demand draft or cheque either on 15.12.1986 or 17.12.1986. The suit pronote also not supported by any consideration. The third defendant approached the plaintiff for financial purpose and the plaintiff insisted for additional security. Since the third defendant is the family friend of the defendants 1&2, they came to the plaintiff office and signed the blank pronote and also executed memorandum of title and handed over it as security. Therefore, the defendants 1&2 did not receive any amount from the plaintiff. In fact, the plaintiff also filed suit in O.S.No.801 of 1989 and the property belonged to the third defendant brought for sale. Therefore, prayed for dismissal of the suit.
5. The third defendant filed separate written statement stating that the defendants 1&2 are the father and son and they are the main borrowers. They borrowed a sum of Rs.20,000/- from the plaintiff and third defendant stood as security. The mortgaged property belonged to the third defendant and the plaintiff at the first instance can proceed against the defendants 1&2 and on their property. Therefore, the third defendant is no way liable for any payment as claimed by the plaintiff and prayed for dismissal of the suit.
6. On the side of the plaintiff, he examined P.W.1 and were marked Ex.A.1 to Ex.A.19. On the side of the defendants, they examined D.W.1 and did not mark any document. On perusal of the material produced on record and considering both the oral and documentary evidence adduced by the respective parties and also the submissions made, the trial Court dismissed the suit filed by the plaintiff. Aggrieved by the same, the plaintiff preferred an appeal suit in A.S.No. 119 of 1997 and the first appellate Court allowed the appeal in part and decreed the suit in favour of the plaintiff. Aggrieved by the same, the defendants 1&2 preferred this present second appeal.
7. At the time of admission of this second appeal on 25.09.2000, the following substantial questions of law were formulated for consideration:-
“Whether the decree of the appellate Court, reversing the judgment of the trial Court, holding that Ex.A.3 promissory note is supported by consideration is sustainable on legal evidence?”
8. The learned counsel appearing for the appellants and first respondent are present and they reiterate the avernments made in the plaint and the written statement.
9. Heard Mr.S.Sounthar, learned counsel appearing for the appellant/defendants 1&2 and Mr.S.Saravana kumar, learned counsel appearing for the first respondent/plaintiff.
10. The suit filed for recovery of money on the pronote executed by the defendants 1&2. The defendants 1&2 borrowed a sum of Rs.20,000/- on 15.12.1986 and executed deed of deposit of title deed, which was marked as Ex.A.2 dated 15.12.1986. They also executed pro note for the sum of Rs.20,000/-, which was marked as Ex.A.3. Though the cheque issued by the plaintiff to the first defendant was returned and thereafter received a demand draft (DD) for the sum of Rs.20,000/- and the same was en-cashed by the defendants 1&2. Therefore, the recital in the deed of deposit of title deed is confirmed the borrowal of money by the defendants 1&2 from the plaintiff. The signature of the defendants in the pronote were not denied. On the date of execution of deposit of title deed i.e., on 15.12.1986, no amount was received by the defendants 1&2, since on that day time was over for registration, as such no amount was paid. Thereafter, 16.12.1986 was being Tuesday, the defendants did not want to receive the money due to inauspicious day. Therefore, the money was received on 17.12.1986 and executed the deposit of title deed. Though they stated that they signed in the blank pronote, under section 138 of Negotiable Instruments Act, the holder of the blank pronote is an author to fill the content.
11. Further in Ex.A.3 pronote, it is categorically mentioned that the demand draft drawn from the Central co-operative bank, Salem and the defendants also did not deny the receipt of the demand draft. Therefore, if the execution is admitted under section 138 of Negotiable Instruments Act, it is presumed that the consideration is passed and as such the first appellate Court rightly decreed the suit in favour of the plaintiff.
12. In view of the above discussion, this Court does not find any valid reason to interfere with the reasonings and findings rendered by the first appellate Court for upholding the case of the defendants. As such, this Court is of the considered opinion that no substantial question of law involved in this appeal. Be that as it may, all the substantial questions of law formulated by this Court are answered in favour of the plaintiff and as against the defendants.
13. In fine, the second appeal stands dismissed by confirming the judgment and decree passed by the first appellate Court. There is no order as to costs.
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