1 OS .25/2009 dt. 13-11-2015
IN THE COURT OF THE PRINCIPAL SENIOR CIVIL JUDGE, NELLORE
Dated this the Thirteenth(13th) day of November, 2015.
Present:- Smt K.SUNITHA,
Principal Senior Civil Judge,
Nellore
Original Suit No. 25/2009
Nagareddy Neeraja … Plaintiff //Vs.//
1.Koduru Venkatarami Reddy(Died)
2.Koduru Annamma
3.Koduru Sreenivasulu Reddy.
4.Koduru Suguna
5.Koduru Aasritha.
6.Koduru Sai Teja.
(D-5 and D-6 are being minors, represented by their mother and natural guardian Koduru Suguna D-4 herein).
(D-2 to D-6 are added as per orders in I.A.No.567/2010 dt.8-12-2010)
... Defendants.
This suit coming on 12-10-2015 before me for final hearing in the presence of Sri O.Abbai Reddy and Sri M.Sambasiva Rao, Advocate for the Plaintiff and D-1 being died pendentelite and Sri T.Srihari and
Sri SVMKV Prasad Rao, Advocate for the defendants 2 to 6 , upon hearing both sides and having stood over for consideration till this day, this court delivered the following:-
JUDGMENT
1.This is a suit filed for recovery of Rs.5,15,700/- with costs and subsequent interest allegedly due under a promissory note.
2.(I)It is the case of the plaintiff that the defendant borrowed Rs.3,00,000/- from her on 30-12-2005 for his necessities and 2 OS .25/2009 dt. 13-11-2015 executed a promissory note , agreeing to repay the amount with interest at 24% p.a either to the plaintiff or to her order on demand.
(ii)It is stated that inspite of repeated demands made by the plaintiff, the defendant failed to discharge the debt and legal notice dated 21-11-2008 got issued to him was not yet returned. The defendant is not an agriculturist and he is not entitled to the benefits of Act IV of 1938 , Act
VII of 1977 and Act 45 of 1987. Hence the suit.
3.(I)The defendant filed his written statement, denying the material allegations of the plaint in specific , contending that he used to borrow money from his relative by name Duvvuru Ramalinga Reddy @
Rami Reddy of Kothapalem village of T.P.Gudur mandal by executing promissory notes and the signatures of the defendant were also used to be obtained on blank promissory notes.
(ii)It is further contended that the defendant discharged the entire debt due to the said Ramalinga Reddy by selling away the properties of his wife and also got return of the discharged promissory notes along with some blank promissory notes.
(iii)It is stated that after demise of said Ramalinga Reddy, the defendant obtained undated letter from his sons Satish Reddy and Murali
Krishna Reddy stating that no debts due by the defendant as the defendant also dischargd the debt by paying Rs.2,50,000/- to them after the death of their father.
(iv)It is pleaded by the defendant that the sons of late Ramalinga
Reddy fabricated the promissory note dated 30-12-2005 in the name of their sister , none other the plaintiff by forging the signature of the defendant. The defendant also got issued Reply notice to the legal notice 3 OS .25/2009 dt. 13-11-2015 requiring to send the Photostat copy of the promissory note. The defendant is an Agriculturist and entitled to the benefits of Act IV of 1938.
The suit is liable to be dismissed.
4.On the strength of aforementioned pleadings, the following issues have been settled for trial by my predecessor:-
1.Whether the suit promissory note is forged and fabricated document?
2.Whether the plaintiff is entitled for suit amount with interest and costs as prayed for?
3.To what relief?
5.The defendant died during the pendency of the suit and his legal representatives i.e., defendants 2 to 6 were brought on record and adopted the written statement of deceased 1st defendant.
6. In trial, the plaintiff examined Pws.1 to 3 and marked
Exs.A-1 to A-4. The 3rd defendant is examined as Dw.1 and Exs.B-1 to
B-7 were marked.
7.Heard the counsels for both sides.
8.The counsel for plaintiff filed written arguments submitting that as the defendant had taken plea that the suit promissory note is forged document , the onus lies upon the plaintiff to prove the execution of Ex.A-1 and passing of consideration. It is submitted that the plaintiff examined
Pws.1 to 3 and marked Exs.A-1 to A-3 in support of her case and also gave explanation for not sending Xerox copy of promissory note as required under Ex.A-4 Reply notice and discharged the burden of proving execution of Ex.A-1 promissory note.
9.It is further submitted that the defendants failed to discharge the burden on them by sending Ex.A-1 promissory note to handwriting Expert 4 OS .25/2009 dt. 13-11-2015 for examination and further more, the 3rd defendant examined as Dw.1 categorically admitted that Exs.B-1 to B-7 are no way connected to the suit transaction and they also derived house property from the deceased 1st defendant, as such, they are liable to pay the suit amount.
10.The counsel for defendants also filed written arguments contending that the suit promissory note is not true and genuine as it is elicited from the evidence of plaintiff that she has not paid the consideration amount which clearly shows that Ex.A-1 is benami transaction and hit by the provisions of the said Act. It is further argued that it is elicited from the cross-examination of plaintiff i.e., Pw.1 that they have no capacity to lend huge amount of Rs.3,00,000/- and the evidence adduced by Pws.1 to 3 is contrary to the plaint averments as to the presence of 3rd defendant at the time of Ex.A-1 transaction.
11.It is also submitted that the plaintiff failed to send the Xerox copy of the promissory note as required by the defendants under Ex.A-4 reply notice and her contention that she received reply after filing of the suit is false as Ex.A-4 reply notice was sent on 11-12-2008 was received by the plaintiff on 13-12-2008 , but the suit was filed on 27-12-2008 and numbered on 17-1-2009.
12.It is also elicited from the evidence on record that the defendant and his family are depending on the agricultural income , as such, the defendants are entitled to benefit of Act IV of 1938.
13.It is argued that the plaintiff failed to prove the execution of
Ex.A-1 and passing of consideration , as such, the burden is on the plaintiff to prove that the signature on Ex.A-1 belongs to the defendant having not denied the signatures on Exs.B-1 to B-6 and the suit is liable to be 5 OS .25/2009 dt. 13-11-2015 dismissed.
14.In support of the above said contentions, the counsel for the defendants relied on a decision in P.Venkatamma and another //vs.//
Dontham Sulochana reported in 2005(6) ALT 789, wherein it is held that
“the burden lies on the plaintiff to prove the promissory note in all
respects . Evaluation of possibilities for defendant to borrow or his
necessities does not arise. Presumption as to consideration
U/Sec.118 can be drawn only when promissory note is proved or
admitted.
15.The counsel also relied on the decision in G.Vasu //vs.// Syed
Yaseen Sifuddin Quadri reported in 1987(1) ALT 1 , wherein, it is held
that “in a suit on promissory note , defendant adduced rebuttal
evidence that no consideration passed under a promissory note
executed by him, burden of proof lies on the plaintiff”.
16.ISSUE NOS. 1 AND 2 :-
In a suit on promissory note, the initial burden is on the plaintiff to prove the execution of the document . As and when execution of promissory note is proved, the presumption U/Sec.118 (a) of Negotiable
Instruments Act arises that the instrument is drawn for consideration.
Then, the defendant has to rebut the said presumption either by adducing direct evidence or by eliciting circumstances from the evidence adduced by plaintiff so as to the non-existence of consideration.
17.It is held in P.Venkatamma and another //vs.// Dontham
Sulochana reported in 2005(6) ALT 789 that “Sec.118 presumption as to consideration . Plea of the defendants being that suit promissory notes are 6 OS .25/2009 dt. 13-11-2015 not supported by consideration . Defendants must prove that non- existence of consideration is so probable that a reasonable man would subscribe to that view. Proof need not be restricted to evidence of defendants. Information elicited by them in the cross-examination of plaintiff's witnesses can also taken into account.
18.In G.Vasu //vs.// Syed Yaseen Sifuddian Quadri reported in 1987(1) ALT 1 it is held as follows:
“ Once the defendant shows either by direct
evidence or circumstantial evidence or by use of other
presumptions of law or fact that the promissory note is
not supported by consideration in the manner stated in
the promissory note or in the manner stated in the suit
notice or in the pleading the evidential burden shifts
to the plaintiff and the legal burden of the plaintiff is
revived, i.e., to prove that the promissory note is
supported by consideration and at that stage, the
presumption of law covered by S.118 “disappears” and
no longer subsists. This is because the presumption
under Sec.118 raised by the statute initially in favour
of the plaintiff steps, as it were into the witness box
and acts as a substitute for the plaintiff’s evidence.
Once such rebuttal evidence is given by the defendant
to the satisfaction of the Court, the Court acting on a
preponderance of probabilities and not requiring an
absolute proof of a negative i.e., absence of all
conceivable forms of consideration, the effect of the
presumption shifting the initial evidential burden to the
defendant “disappears”.
19.In case, the defendant pleads forgery, it is sufficient for the plaintiff to adduce evidence to the effect that the defendant subscribed his signature on the promissory note . It is not necessary to prove that the defendant knew the contents therein.
20.In the present case on hand, since the defendant pleaded forgery, the plaintiff has to adduce evidence to prove the execution. In discharge of the said onus, the plaintiff is examined as Pw.1 and filed her 7 OS .25/2009 dt. 13-11-2015 chief-affidavit . She reiterated the plaint averments stating that the defendant borrowed Rs.3,00,000/- from her for his necessities and executed a promissory note on 30-12-2005, agreeing to repay the amount with interest at 24% p.a., . It is further stated that the defendant failed to discharge the debt even after legal notice dated 21-11-2008 got issued by her.
21.In support of her oral testimony, she also marked Ex.A-1 promissory note dated30-12-2005 for Rs.3,00,000/- and also Ex.A-2 office copy of legal notice dated 21-11-2008 and Ex.A-3 postal receipt dated 21-11-2008 and Ex.A-4 reply notice got issued by the defendant.
22.She also examined Pw.2, scribe and Pw.3 1st attestor to
Ex.A-1 promissory note. They also corroborated the execution of Ex.A-1 promissory note by the defendant in the chief-affidavit filed by them stating that the deceased 1st defendant borrowed Rs.3,00,000/- from the plaintiff on 30-12-2005 in her house at Vedayapalem and executed Ex.A-1 promissory note in their presence besides the presence of 3rd defendant.
23.It is categorically deposed by Pw.3 that Pw.2 scribed Ex.A-1 promissory note in their presence and deceased 1st defendant signed on the promissory note after receiving the consideration amount from the plaintiff and himself signed as 1st attestor and one Enugu Mallikarjuna
Reddy signed as 2nd attestor.
24.The evidence adduced by Pws.1 to 3 coupled with
Exs.A-1 to A-3 is sufficient to hold that Ex.A-1 promissory note was executed by the defendant and Statutory presumption U/Sec.118 of
Negotiable Instruments Act arises as to the execution of Ex.A-1 promissory note followed by consideration .
8 OS .25/2009 dt. 13-11-2015
25. Now, it is for the defendants to rebut the said presumption and in the said course, the 3rd defendant is examined as Dw.1 and filed his chief-affidavit , repeating the averments of written statement of deceased 1st defendant adopted by them as to the plea of forgery and fabrication of
Ex.A-1 promissory note by the brothers of the plaintiff namely Satish
Reddy and Murali Krishna Reddy with the help of blank promissory notes in their custody having returned discharged promissory notes and some of the blank promissory notes executed by the deceased 1st defendant.
26.He also marked Ex.B1 promissory note dated 30-4-1992 for
Rs.10,000/- executed by deceased Ist defendant in favour of the father of plaintiff. Ex.B2 promissory note dated 20-10-1992 for Rs.10,000/- executed by deceased Ist defendant in favour of the father of plaintiff.
Ex.B3 promissory note dated 14-10-1991 for Rs.5,000/- executed by deceased Ist defendant in favour of the father of plaintiff. Ex.B4 promissory note dated 30-4-1991 for Rs.10,000/- executed by deceased
Ist defendant in favour of the father of plaintiff. Ex.B5 blank promissory note containing the signature of deceased Ist defendant with torn
Revenue stamp, Ex.B6 blank promissory note containing the signature of deceased Ist defendant with torn Revenue stamp and Ex.B7 Undated letter issued by D.Muralikrishna Reddy, brother of plaintiff to me for the clearance of the debts of deceased Ist defendant.
27.Having pleaded forgery, except his sole testimony , the defendants did not choose to refer Ex.A-1 promissory note to hand-writing expert for examination in comparison with the admitted signatures of the 1st defendant. However, the defendants are at liberty to elicit information from 9 OS .25/2009 dt. 13-11-2015 the cross-examination of the plaintiff’s witnesses in the absence of direct evidence adduced by them as per the proposition of law laid down in
P.Venkatamma //vs.// Dontham Sulochana reported in 2005(6) ALT 789.
28.While so, in cross-examination, the plaintiff i.e., Pw.1 deposes that she is a house wife and her husband was an agriculturist and he died in the year 2007. It is elicited from her evidence that the consideration amount of Rs.3,00,000/- under Ex.A-1 promissory note was lent by her husband to the plaintiff. As regards Ex.A-1 transaction, she deposed that the said transaction was took place in their house at Vedayapalem and there is no mention of place of execution in Ex.A-1 promissory note, plaint and chief-affidavit.
29.According to her, the money lent under Ex.A-1 promissory note was sale proceeds of their landed property. In her cross-examination, she denied the suggestion that they have no lending capacity to lend an amount of Rs.3 ,00,000/- to the deceased 1st defendant, so also, she denied the involvement of her brothers in Ex.A-1 transaction. On the other hand, she categorically deposes that the 3rd defendant himself brought the deceased 1st defendant who was able to walk with the help of a stick to their house at the time of Ex.A-1 transaction. She would state that her husband handed over the suit promissory note and revenue stamp to her on that date.
30.Her further evidence discloses that Pw.2 namely Janardhan , scribe was called by her husband , so also Pw.3 and one Mallikarjuna
Reddy came to their house on that day to meet her husband. She denied the knowledge about the promissory note transaction in between her father and deceased 1st defendant. She also denied the suggestion that she did 10 OS .25/2009 dt. 13-11-2015 not lend any amount to the deceased 1st defendant and suit promissory note is fabricated by forging the signature of the deceased 1st defendant on account of disputes with her brothers .
31.Pw.2 scribe namely Janardhan Reddy also corroborates with
Pw.1 in his cross-examination and categorically deposes that at the request of husband of plaintiff as well as deceased 1st defendant, he scribed Ex.A-1 promissory note. It is categorically deposed by him that the plaintiff brought the money from the inside of the house and handed over the same to her husband who in turn handed over the same to the deceased 1st defendant. He was consistent in respect of execution of Ex.A-1 by the deceased 1st defendant after receiving consideration amount of
Rs.3,00,000/- from the plaintiff in the presence of himself and other attestors.
32.Pw.3, 1st attestor to Ex.A-1 promissory note consistently deposed about the presence of defendant at the time of Ex.A-1 transaction and passing of consideration amount. He also corroborates the version of the plaintiff deposes that he along with his friend Mallikarjuna Reddy went to the house of the plaintiff casually to meet her husband. His evidence also discloses that the consideration amount of Rs.3,00,000/- paid to the defendant was in denomination of 500 rupee notes.
33.It is evident from the cross-examination of Pws.1 to 3 that they are consistent in their version in respect of execution of Ex.A-1 promissory note and the defendants could not elicit any probabilities to discredit their testimony.
34.The contention of the defendants that the plaintiff is a name lender of her husband is not tenable as it is not at all the plea taken by the 11 OS .25/2009 dt. 13-11-2015 deceased 1st defendant.
35.The self-serving testimony of 3rd defendant examined as Dw.1 also establish that Exs.B-1 to B-4 discharged promissory notes and
Exs.B-5 and B-6 blank promissory notes containing the signatures of the deceased 1st defendant with torn revenue stamps and Ex.B-7 undated letter issued by the brother of the plaintiff by name D.Murali Krishna Reddy are no way related to Ex.A-1 transaction. He also admits that Exs.B-1 to B-7 were not filed along with the written statement of his deceased father . He also admits that Exs.B-1 to B-4 are not in the name of the plaintiff and
Exs.B-5 and B6 blank promissory notes does not relate to suit transaction , so also Ex.B-7 has no reference of suit debt transaction.
36.In view of the evidence adduced by the 3rd defendant , Exs.B-1 to B7 marked by him are no way helpful to establish the plea taken by them. It is also his contention that the plaintiff did not send the Photostat copy of Ex.A-1 promissory note after receiving Ex.A-4 reply notice . But the said contention is not tenable in the absence of any evidence adduced by the defendants to show that Ex.A-1 is forged and fabricated .
37.It is also explicit from the evidence adduced on record that the defendants could not elicit any probabilities to show that their father got any disputes with the brothers of the plaintiff so as to fabricate Ex.A-1 promissory note by forging his signature having executed Ex.B-7 undated letter for clearance of debts. As such, in the absence of any cogent evidence adduced on record, the plea taken by the defendants cannot be accepted and leads to Adverse inference that to evade the payment of suit debt, a false plea was set up.
38.However, in all probabilities , it has been clinchingly established 12 OS .25/2009 dt. 13-11-2015 by the plaintiff that Ex.A-1 was executed by the deceased 1st defendant having received consideration of Rs.3,00,000/- from her and the defendants are liable to discharge the said debt from and out of the estate derived from the deceased 1st defendant.
39.It is also the plea taken by the defendants that the deceased 1st defendant is an agriculturist , as such, the interest claimed by the plaintiff is excessive. The agreed rate of interest claimed by the plaintiff is at 24% p.a., The plaintiff also admitted in her cross-examination that the deceased 1st defendant and his family is depending on the agricultural income which discloses that the deceased 1st defendant is an agriculturist . As such, the defendants are entitled to the benefits of Act IV of 1938 and rate of interest claimed at 24% p.a., is liable to be scaled down in the light of the proposition of law laid down in Yogendranath Rah (died0 //vs.// State
Bank of India, 1987(1) LT 316 (DB) on Section 3(3) of the Usurious
Lands (Madras Amendment) Act, 1936, wherein it is held that :
“A reading of the said provision shows that the
language of the Section is mandatory. It places an
obligation upon the Court to re-open the transaction,
where it has reasons to believe that the interest
charged is excessive, or the transaction between the
parties is substantially unfair. This obligation is there,
whether the defendant appears and raises the plea
based upon Section 3, or remains exparte. There may
be a case where the defendant appears but still may
not raise the plea under Section 3. In all such cases,
the Court is under an obligation to apply the said
provision. Though couched as a command to the
Court, it confers right upon the debtors. This right
accrues to the defendant on the date of suit at any rate
on the date of hearing of the suit”.
40.Since the deceased 1st defendant is an agriculturist as per the amended Madras Act (No.4 of 1938) , rate of interest provided thereunder 13 OS .25/2009 dt. 13-11-2015 is 12.5% p.a. simple. As such, claiming interest over 12.5% p.a. against agriculturist shall be excessive and usurious and accordingly , the plaintiff is not entitled to claim interest at 24% p.a., and same is liable to be scaled down from 24% p.a, to 12.5% p.a.,
Accordingly, Issue Nos.1 and 2 are decided in favour of the
plaintiff and against the defendant.
41.ISSUE NO.3:
In the result, suit is decreed against the estate of deceased 1st defendant namely Koduru Venkatarami Reddy, lying in the hands of D-2 to
D-6 , being his legal representatives for principal sum of Rs..3,00,000/- with costs and interest thereon at 12.5% p.a., from the date of execution of
Ex.A-1 promissory note dated 30-12-2005 till the date of filing of the suit and subsequent interest at 6% p.a.,on principal sum of Rs.3,00,000/- from the date of decree till realisation ;
Typed to my dictation by the Personal Assistant, corrected and
pronounced by me in the Open Court, this the 13th day of November,
2015.
Sd/- K.SUNITHA
PRINCIPAL SENIOR CIVIL JUDGE,
NELLORE.
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For Plaintiff:-
PW.1: Nagareddy Neeraja
Pw.2: Nellore Janardhan
Pw.3: Kakuturu Venu Reddy
For Defendant:
DW.1: Koduru Sreenivasulu Reddy.
14 OS .25/2009 dt. 13-11-2015
DOCUMENTS MARKED
For Plaintiff:-
Ex.A-1: Promissory note dated 30-12-2005 for a sum of Rs.3,00,000/- executed by the deceased 1st defendant in favour of the plaintiff .
Ex.A2: Office copy of legal notice dated 21-11-2008 got issued by the plaintiff to the defendant
Ex.A-3: Postal receipt dt.21-11-2008.
Ex.A-4: Reply notice dt. 11-12-2008 got issued by the defendant's counsel to the plaintiff's counsel.
For Defendants:
Ex.B-1: Promissory note dated 30-4-1992 for Rs.10,000/- executed by deceased Ist defendant in favour of the father of plaintiff.
Ex.B-2: Promissory note dated 20-10-1992 for Rs.10,000/- executed by deceased Ist defendant in favour of the father of plaintiff.
Ex.B-3: Promissory note dated 14-10-1991 for Rs.5,000/- executed by deceased Ist defendant in favour of the father of plaintiff.
Ex.B-4: Promissory note dated 30-4-1991 for Rs.10,000/- executed by deceased Ist defendant in favour of the father of plaintiff.
Ex.B-5: Blank promissory note containing the signature of deceased Ist defendant with torn Revenue stamp
Ex.B-6: Blank promissory note containing the signature of deceased Ist defendant with torn Revenue stamp
Ex.B-7: Undated letter issued by D.Muralikrishna Reddy, brother of plaintiff to me for the clearance of the debts of deceased Ist defendant.
Sd/- K.SUNITHA
Principal Senior Civil Judge,
Nellore.