T. Mallikarjuna Rao, J
1. The Appeal, under Section 96 of the Code of the Civil Proceedure, 1908 (for short, 'C.P.C.'), is filed by the Appellant/1st Defendant, challlenging the decree and Judgment dated 20.10.2009 in O.S.No.184 of 2003 passsed by the learned IV Additional Seni or Civil Judge (Fast Track Court), Visakhapatnam (for short, 'the trial Court'). 1st Respondent is the Plaintiff, who filedd the suit in O.S.No.184 of 2003 seeking recovery of Rs.4,46,519/- with interesst and costs from the Defendants basedd on the promissory note. The case agaainst the 2nd Respondent / 2nd Defendant was dismissed for default on 08.06.20005.
2. Referring to the parties as arrayed in the suit is expedient to mitigate potential confusion and better comprehend the case.
3. The factual matrix, necessary and germane for adjudicating the contentious issues between the parties inter se, may be delineated as follows:
On 14.02.2001, the Defendants borrowed Rs. 3,00,000/- from the Plaintiff to cover their family expenses and settle various debts. They executed a promissory note on the even date, agreeing to repay the principal amount along with interest @ 24% per annum. Despite numerous demands for repayment by the Plaintiff, the Defendants have consistently failed to meet their repayment obligations.
4. The 1st Defendant filed a written statement that refutes the claims presented in the plaint. She asserts that she never borrowed any money from the Plaintiff and did not execute the promissory note. The husband of the 1st Defendant, K. Venugopal Rao, borrowed Rs. 50,000/- in March 2001 from Sitharamanjaneya Financiers for his business. The partners of the financing firm, Nagireddy and Surireddy, obtained three blank promissory notes from her husband, with the Defendants 1 and 2 acting as guarantors for this loan.
The 1st Defendant further claims that her husband repaid nearly Rs.40,000/-; however, the finance company has not returned the blank promissory notes they retain. She alleges that the finance company, taking advantage of these blank notes, fabricated the current promissory note with the assistance of others and initiated the suit through the Plaintiff, a partner in the finance company. On 01.07.2002, Surireddy issued a legal notice to the Defendants demanding repayment of Rs.90,000/-, to which they responded through their counsel, denying the contents of the notice. Following ongoing harassment from Surireddy, on 16.02.2003, Venugopal Rao sent a telegram outlining the situation. Subsequently, on 03.03.2003, the 1st Defendant and her husband issued a registered notice, a copy of which was forwarded to the Commissioner of Police. On 31.03.2003, they sent another notice to Surireddy demanding the return of the blank promissory notes, which he failed to do. The 1st Defendant contends that the present suit has been filed with ulterior motives and objectives.
5. Based on the above pleadings, the trial Court framed the following issues:
(1) Whether the suit promissory note is true, valid and binding on the Defendants?
(2) To what relief?
6. During the trial, on behalf of Plaintiff, P.W.s 1 to 3 were examined and marked Ex.A.1. On behalf of Defendants, D.Ws.1 to 3 was examined and marked Exs.B.1 to B.9 documents.
7. After completing the trial and hearing the arguments of both sides, the trial Court decreed the suit with costs for Rs.4,46,519/- against the 1st Defendant only, together with subsequent interest at 12% per annum from the date of suit till the date of decree and after that interest at 6% per annum from the date of decree till realization on the principal sum adjudged, i.e. Rs.3,00,000/-. The suit claim against 2nd Defendant was already dismissed for default.
8. I have heard learned counsel appearing on behalf of the respective parties at length and have gone through the Judgment and findings recorded by the learned trial Court while decreeing the suit. I have also re-appreciated all the evidence on record, including the deposition of witnesses examined by both sides.
9. Smt. A.V.S. Laxmi, learned counsel for the Appellant /1st Defendant, contends that the trial Court should have assessed the testimonies of the witnesses in a correct prospective and it is highly implausible for the 1st Respondent to lend Rs.3,00,000/- without any collateral security from the Appellant. The trial Court erred in concluding that the suit promissory note was valid against the Defendants, particularly in light of the default order against the 2nd Respondent. Learned counsel further asserts that, although the Appellant is the 2nd Respondent’s mother, the trial court's observation that the 1st Respondent did not dispute her signature is insufficient to establish the execution of the promissory note, even if by the 2nd Respondent. The trial Court also misjudged the evidence, particularly regarding the testimony of P.W.2, the scribe of the promissory note, who indicated that both the Appellant and the 2nd Respondent signed the document only once. Additionally, learned counsel emphasizes that the trial Court should have taken into account Ex.B8, which demonstrates that the Appellant repaid Rs.40,000/- of the total amount borrowed by her husband. She argues that the failure to return the blank promissory notes allowed the finance firm to exploit the situation and pursue a fraudulent claim before this court.
10. Despite several opportunities provided to him, there is no representation on behalf of the 1st Respondent/Plaintiff. Consequently, the arguments on behalf of the 1st Respondent/Plaintiff have been deemed as heard.
11. Concerning the pleadings in the suit, the findings recorded by the Trial Court and in light of the rival contentions and submissions made before this Court, the following points would arise for determination:
(1) Is the trial Court justified in holding that the suit promissory note Ex.A1 is accurate, valid and supported by consideration?
(2) Does the decree and Judgment passed by the Trial Court need any interference?
POINT NOs.1 and 2:
12. The 1st Defendant is the 2nd Defendant’s mother. The suit claim against the 2nd Defendant was dismissed for default. The suit is decreed against the 1st Defendant only. Aggrieved by the said Judgment, the 1st Defendant preferred this Appeal.
13. The Plaintiff testified as P.W.1, and he examined P.W.2, K.Nageswar Reddy, the scribe of the promissory note, along with P.W.3, Ch.V.V.Satya Raju, the 1st attestor. Collectively, P.Ws.1 to 3 asserted that Defendants 1 and 2 borrowed Rs.3,00,000/- from the Plaintiff on 14.02.2001, ostensibly to cover family expenses and settle various debts, and executed a demand promissory note (Ex.A.1) upon receipt of the sum mentioned above in their presence. During cross-examination, P.W.2 admitted to having no clear recollection of the exact timing of the transaction detailed in Ex.A.1, attributing this lapse to the passage of time; however, he stated visiting the Plaintiff's residence around 11 AM or noon. In contrast, P.W.1 maintained that the transaction occurred precisely at 11:00 AM at his home. This apparent inconsistency in the testimonies of P.Ws.2 and 3 was emphasized before both the trial Court and this Court. The trial Court acknowledged these discrepancies, stating that it is unreasonable to expect precise recollections of events from Ex.A.1's execution. This Court concurs, asserting that evidence should be evaluated for its internal consistency and the inherent plausibility of the witnesses' accounts.
14. The learned counsel for the Appellant emphasizes that P.W.1 explicitly testified that he could not identify the photographs of the 1st Defendant; he would be able to recognize the 1st Defendant upon sight. This assertion complicates any conclusion regarding P.W.1’s unfamiliarity with the 1st Defendant. The argument presented by the 1st Defendant might hold some merit, notably if P.W.1 had failed to identify the 1st Defendant when she appeared before the Court.
15. This Court views that normal discrepancies in the evidence are due to normal errors of observation and memory due to lapse of time. It must also be borne in mind that a parrot-like deposition after a long lapse of time smacks of tutoring, and some differences advance the credibility of the witnesses. The witnesses are not expected to remember every tiny detail of the transaction, and it is relevant to note that PWs.1 to 3 had given evidence seven years after the transaction under Ex.A.1. The witnesses cannot be expected to have an exact sense of time. The Court must cull out the nuggets of the truth from the evidence unless there is a reason to believe that the discrepancies or inconsistencies are so glaring as utterly to destroy the confidence in the witnesses.
16. No true witness can escape from making some discrepant details. An untrue witness who is well tutored can successfully make his testimony totally non-discrepant. However, courts should bear in mind that it is only when discrepancies in the evidence of a witness are so incompatible with the credibility of his version that the court is justified in jettisoning his evidence. The trial Court noted that the 1st Defendant did not assert that P.Ws.2 and 3 are henchmen of the Plaintiff or that there exists any animosity between the Defendants and these witnesses; indeed, no such suggestions were posed during their examination. Instead, the 1st Defendant claimed that Plaintiff colluded with P.Ws.2 and 3 to fabricate the promissory note, Ex.A.1. P.W.2 acknowledged in his testimony that he is a friend of the Plaintiff. In light of this evidence, the trial Court concluded that the friendship between P.W.2 and the Plaintiff does not inherently discredit P.W.2's testimony. This Court reasoned that such a relationship, without further substantiated claims of collusion or bias, does not warrant the dismissal of P.W.2's account.
17. A witness is usually considered independent unless he or she springs from sources likely to be tainted. This generally means unless the witness has cause, such as enmity against the other party. Nothing is elicited in the cross-examination of P.Ws.2 and 3 to establish the existence of such enmity or grudge against the Defendants.
18. The 1st Defendant, testifying as DW.1, corroborated all assertions made in her written statement. Her husband, DW.2 (K. Venu Gopal), also provided testimony. Both DWs.1 and 2 affirmed that the signatures appearing on the revenue stamps of Ex.A.1 belong to Defendants 1 and 2. However, they further testified that DW.2 had borrowed Rs.50,000/- from Sree Seetharamanjaneya Financers in March 2001 for business purposes. They indicated that partners Nagi Reddy and Suri Reddy were involved in this financing arrangement, which entailed obtaining three blank promissory notes from DW.2 and Defendants 1 and 2 as collateral. To substantiate their claims, the Defendants submitted correspondence exchanged, ostensibly to support their assertion regarding the nature of the transactions and the context in which the promissory notes were executed.
19. The trial Court meticulously examined the submitted exhibits, noting that Exs.B.1 to B.7 comprise a series of exchanged notices, while Ex.B.8 includes a passbook and Ex.B.9 contains a visiting card. To further substantiate their stand, the 1st Defendant presented DW.3, Sri G. Radha Krishna Murthy, an Advocate, who testified that he issued Ex.B.1 notice at the behest of one Suri Reddy. However, DW.3 admitted to being unaware of whether Ex.B.1 had been resolved. The trial Court pointed out that Sree Seetharamanjaneya Financers is not a party to the proceedings. Notably, no evidence in the record indicates that the 1st Defendant took any legal action against the financers because they had provided blank promissory notes to the Plaintiff. This lack of action casts doubt on the 1st Defendant's assertions regarding the legitimacy of the promissory note in question.
20. After thoroughly evaluating the oral and documentary evidence, the trial Court determined that the evidence presented by the 1st Defendant was inadequate to establish that any financial transaction occurred between DW.2 and Sree Seetharamanjaneya Financers. The documents submitted by the 1st Defendant failed to convincingly demonstrate any connection between the Plaintiff and the alleged financial dealings involving the third parties and the 1st Defendant. Consequently, this Court found it difficult to draw conclusions linking Plaintiff to the purported transactions, undermining the 1st Defendant’s claims.
21. The testimonies of P.Ws.1 to 3 and D.Ws.1 and 2 unequivocally confirm that the promissory note Ex.A.1 signatures belong to Defendants 1 and 2. This consensus among the witnesses substantiates the authenticity of the document in question.
22. In G. Venkata Rama Subbaiah Vs. D. Rasool Naik 2003 (4) ALT 414, the composite High Court of Andhra Pradesh held thus:
"Once the execution of the promissory note is admitted or proved, then it is presumed to be supported by consideration unless contrary is proved. The burden is on the Defendant to rebut the same by adducing convincing evidence. Unless the Defendant rebuts the presumption by adducing convincing rebuttal evidence, the evidential burden would not shift back to the plaintiff who has legal burden only after adducing such convincing rebuttal evidence, it can be held that thereafter the presumption under Section 118 does not come to the rescue of the plaintiff."
23. In Bonalaraju V. S. Sarupula Srinivas 2006(2) ALD 202, the composite High Court of Andhra Pradesh held that:
“once execution is proved the presumption under Section 118 of N.I. Act that it is supported by consideration automatically applies and the contention that the plaintiff is not only to establish the execution but also establish passing on the consideration is rejected”.
24. In Abbisetti Krishnamoorthy V. Singasani Raghuramaiah (died) per L.R.s 2011(5) ALT 143, the composite High Court of Andhra Pradesh held that:
"Section 118 of the N.I Act shows that the presumption attached to passage of consideration (as is the subject matter of this Appeal) just like other presumption also is clearly rebuttable and it is for the Defendant to satisfy the Court that in a given case, the presumption cannot be drawn".
25. In light of well-settled legal principles, the burden lies on 1st Defendant to prove the non-existence of consideration by bringing on record such facts and circumstances, which would lead the Court to believe the non-existence of the consideration. Suppose the 1st Defendant discharges the onus of proof showing that the existence of consideration was improbable or doubtful and that executing the promissory note would shift the onus to Plaintiff. Then, he will be obliged to prove the existence of the consideration.
26. Based on the evidence presented in this case, it is clear that the 1st Defendant has failed to provide satisfactory and reliable evidence or circumstances to discredit the testimonies of P.Ws.1 to 3 regarding the execution of the promissory note (Ex.A.1) by Defendants and the passing of consideration. The consistency in the evidence of P.Ws.1 to 3 regarding the execution of the promissory note by Defendants upon receiving the consideration amount is significant. Despite extensive cross-examination, no evidence has emerged to undermine their testimony. The Plaintiff and his witnesses have no apparent motive to fabricate the promissory note. The evidence of P.Ws.2 and 3 is consistent and free from bias, and they have no apparent reason to provide false testimony against the interests of the Defendants. While the defence could provide a rebuttal, it would need to be backed by direct evidence or a preponderance of probabilities, which has not been demonstrated in this case.
27. The 1st Defendant has not rebutted the presumption in the present case, even by the preponderance of probabilities. This Court is of the view that the evidence of PWs.1 to 3 establishes the execution of Ex.A.1 promissory note.
28. A cumulative reading of the cited precedent of the Honourable Apex Court and the provisions above of the N.I.Act would unambiguously and unequivocally highlight and spotlight the fact that in the event of the Plaintiff capable of ushering in Section 118 of the N.I.Act, the initial burden is on the 1st Defendant to establish at least by a preponderance of probabilities, and there was no passing of consideration under the promissory note; after that, only the burden would get shifted to the Plaintiff to prove that the negotiable instrument was supported by consideration.
29. On studied scrutiny, it is seen that the 1st Defendant has not produced any evidence to discharge the onus on her. The defence taken by the 1st Defendant is not substantiated. The 1st Defendant has failed to prove the contention by leading cogent evidence. The presumption under section 118 of the Negotiable Instruments Act 1881 is a statutory one, and unless it is rebutted, it has to be presumed that consideration has passed.
30. For the reasons stated above, this Court thinks that the Plaintiff is able to establish the execution of the suit promissory note in his favour by Defendants 1 and 2 after receipt of the consideration amount there under.
31. It does not appear that the finding of the fact recorded by the trial Court by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible evidence and it is against the weight of the evidence, or the said finding so outrageously defied logic as to suffer from the vice of irrationality. It cannot be said that the decision of the trial Court arrived based on no evidence or thoroughly unreliable evidence.
32. After careful consideration, the trial Court correctly appreciated the evidence. There is no reason for this Court to arrive at a different conclusion than the one arrived at by the trial Court. The findings arrived at by the trial Court are correct, and the appellant has shown no justifiable reasons for arriving at different conclusions. I agree with the conclusion reached by the trial Court.
33. Accordingly, the Points are answered in favour of the Plaintiff by holding that the Trial Court is justified in holding that Defendants 1 and 2 executed the suit promissory note and received the consideration amount. Given the preceding discussion, the view taken by the trial Court does not call for any interference, and this Appeal fails and is hereby dismissed. The impugned Decree and Judgment passed by the trial Court is upheld.
34. As a result, the Appeal is hereby dismissed without costs by confirming the Decree and Judgment dated 20.10.2009 in O.S.No.184 of 2003, passed by the learned IV Additional Senior Civil Judge (Fast Track Court), Visakhapatnam.
Miscellaneous applications pending, if any, in this Appeal shall stand closed.
