Ramanathan Chettiar v. 1. Subbaraya Gounder2. Kuppusamy Gounder

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 03.04.2007CORAM:THE HONOURABLE MR. JUSTICE P.JYOTHIMANISecond Appeal No.776 of 1995Ramanathan Chettiar .. Appellant/Plaintiff -Vs-1. Subbaraya Gounder2. Kuppusamy Gounder.. Respondents/DefendantsAPPEAL under Section 100 of the Code of Civil Procedure againstthe judgment and decree of the Sub-Court, Tiruvannamalai inA.S.No.71 of 1993 and dated 28.02.1994 in reversing the judgmentand decree of the Principal District Munsif Court,Tiruvannamalai in O.S.No.379 of 1987 and dated 29.04.1993.For Appellant:Mr. V.RaghavachariFor Respondents:Ms. Emily Venkatesan, forM/s. T.R.Rajaraman.- - -J U D G M E N TThe plaintiff in the Trial Court is the appellant in theabove second appeal. The plaintiff filed a suit against thedefendants for recovery of the amount under a suit promissorynote stated to have been executed by the defendants on20.06.1981, marked as Ex.A-1, having received a sum ofRs.4,000/-. On 01.06.1984, an amount of Rs.5/- was paid towardsthe promissory note and an endorsement was also made at thepromissory note and according to the plaintiff, the promissorynote as well as the endorsement were written by the secondrespondent. Thereafter, since the amount was not paid, a legalnotice was issued on 03.06.1987, marked as Ex.A-3, which wasreceived by the defendants on 05.06.1987 and 06.06.1987respectively, marked as Exs.A-4 and A-5. The defendants havealso given a reply on 10.06.1987, marked as Ex.A-6. While thedefendants have admitted the signature in Ex.A-1, theircontention is that, on that date no consideration was passed andit was in respect of the earlier dues by renewing the earlierpromissory note, Ex.A-1 was signed on 20.06.1981 and according https://hcservices.ecourts.gov.in/hcservices/ to the defendants, it was only Rs.1,500/- which was borrowedearlier. Therefore, it is only the consideration which isquestioned. The defendants have also denied the endorsementmade at the back of the promissory note and the suit is barredby limitation.2. The second defendant has also filed a written statementstating that there has been a Panchayat in respect of thepayment, on the basis of which on 27.11.1988, the plaintiff hasreceived a sum of Rs.42,000/-, including the amount due underthe suit promissory note. It is the case of the seconddefendant that since the said amount was not paid, the plaintiffhas filed some other suits in O.S.Nos.103 of 1987 and 416 of1987 and on receipt of the said amount of Rs.42,000/-, theplaintiff has agreed to withdraw the said suits and it was basedon that belief, the amount was given. Therefore, it is the caseof the second defendant that even-though the plaintiff has notkept up his promise, the amount due in respect of the presentsuit has been paid. The Trial Court, on an appreciation ofevidence, has decreed the suit in favour of the plaintiff asagainst which the defendants have filed the appeal. The FirstAppellate Court however, reversed the judgment and decree of theTrial Court by allowing the first appeal. It was against thesaid judgment and decree of the First Appellate Court, theplaintiff has filed the above second appeal.3. While admitting the above second appeal, this Court hasframed the following substantial questions of law:-"1. Whether the lower appellate court is rightin non-appreciation of the consistent evidenceof D.W.3 and its decision in holding that theendorsement in Ex.A-2 as not proved?2. Whether the lower appellate court is right inconcluding that the suit promissory note iscovered under Ex.B-2 in the absence of concreteproof?3. Whether the lower appellate court is right inplacing the burden on the appellants when it isthe defendant who approached the Court with acase that the suit promissory note is settledunder Ex.B-2?"4. A reference to the judgment of the First Appellate Courtshows that while the defendants have admitted execution of suitpromissory note, but set-up the defence that the considerationfor the said promissory note has not passed on the said date andit was in respect of the previous amount of Rs.1,500/- andtherefore having correctly found that in such circumstances, the https://hcservices.ecourts.gov.in/hcservices/ onus is upon the defendants to prove their plea and alsoarriving at a conclusion that the defendants have not provedthat the suit promissory note was executed only for theconsideration of Rs.1,500/-, has however dismissed the suit onthe basis that Ex.A-2 endorsement dated 15.06.1984 on the suitpromissory note has not been proved and therefore the suit isbarred by limitation. The judgments of the Courts belowespecially by the Trial Court in this regard is clear namelythat the witnesses examined on behalf of the defendants namelyD.W.3 has admitted that the endorsement found in Ex.A-2 is thatof the defendants, in fact, the Trial Court also has analysedthat when Ex.A-2 endorsement was made in 15.06.1984, it was thecase of the defendants themselves that in the Panchayat, therewas a compromise arrived at for the settlement of entire claims,relating to some other suits also the suit amount and that wasunder Ex.B-2-Muchalika dated 27.01.1988 and therefore by paymentof the total amount of Rs.42,000/-, the present suit promissorynote amount has also been discharged and in the saidcircumstances, the Trial Court has correctly come to theconclusion that if really the endorsement under Ex.A-2 was notput by the defendants in 1984, in which event the suitpromissory note becomes time barred, there was no necessity forthe defendants to accept the payment under Ex.B-2, an amountwhich includes the amount of suit promissory note. It is on thebasis of the said circumstance and also by relying upon Section69 of the Indian Evidence Act, the Trial Court has come to theconclusion that the endorsement made under Ex.A-2 is that of thedefendants and therefore, the suit is not barred by limitation.5. It is common knowledge that in a suit under promissorynote which is covered under the Negotiable Instruments Act, itis not only the signature in the main instrument, but also theother endorsements are presumed to be valid, unless contrary isproved as per Section 118 of the Negotiable Instruments Act.Therefore, it is clear that if it was the case of the defendantsthat when admittedly Ex.A-1 was executed by them and they onlydeny the endorsement under Ex.A-2, the onus was on them to provethat what was contained in Ex.A-2 was not that of thedefendants.6. In such circumstances, the finding of the Learned FirstAppellate Judge that the plaintiff has not taken steps for thepurpose of referring the signature under Ex.A-2 to a handwritingexpert is not sustainable. This is relevant because on the nextissue in respect of the discharge of the liability of thedefendants under the suit promissory note, the First AppellateCourt has placed reliance on Ex.B-2-Muchalika, stated to havebeen entered based on a Panchayat and concluded on 27.01.1988and on that basis has come to the conclusion that the liability https://hcservices.ecourts.gov.in/hcservices/ of the defendants under Ex.A-1 has been discharged and as far asthe other two suits are concerned, they were admittedly notagainst the defendants in the suit and in such circumstancesagain holding that witnesses under Ex.A-2 endorsement have notbeen examined by the plaintiff and therefore decided the caseagainst the plaintiff is not in accordance with law.7. Therefore it is clear that the decision of the FirstAppellate Court in not appreciating the independent witness,D.W.3, and the liability of the suit promissory note having beendischarged as per Ex.B-2 but imposing the responsibility on theplaintiff to prove the endorsement under Ex.A-2 are allunsustainable and against the provisions of NegotiableInstruments Act, especially in the circumstance that there wasno proof to show that Ex.B-2-Muchalika includes the liability ofthe suit promissory note.8. It is also relevant to point out that when the suititself was laid not only based on Ex.A-1, but also theendorsement under Ex.A-2 and stating that in view of theendorsement, the suit is well within the period of limitation,the defendants in the written statement have only chosen toquestion the quantum of the amount of promissory note. 9. In the result, the above second appeal stands allowedwith proportionate costs and the judgment and decree of theFirst Appellate Court in A.S.No.71 of 1993, dated 28.02.1994,on the file of the Sub-Court, Tiruvannamalai, is set-aside. Sd/Asst.Registrar/true copy/Sub Asst.RegistrarsrkTo1. The Subordinate Judge, Tiruvannamalai 2. The Principal District Munsif, Tiruvannamalai3.The Record Keeper, VR Section, High Court, Madras.+1cc to Mr.V.Raghavachari, Advocate Sr 21326+1cc to Mr.T.R.Rajaraman, Advocate Sr 21658JRG (CO)km/4.6.S.A.No.776 of 1995