Court : Madras High Court
Brief : It is well settled that the plaintiff cannot pick holes in the defendant’s case to establish his case.
Citation : Equivalent citations: 2005 (1) CTC 409, (2005) 1 MLJ 14
Bench: S S Hussain
Ayyakannu Gounder vs Virudhambal Ammal on 29/11/2004
JUDGMENT
S. Sardar Zackria Hussain, J.
1. The defendant in O.S.Nos. 117 of 1988 and 130 of 1988 on the file of the District Munsif Court, Thirukoilur, who was unsuccessful before the first Appellate Court, has filed both these appeals.
2. The parties are described as per their rankings in the suits.
3. The respondent/plaintiff filed both the suits to recover the amount due on the suit promissory notes.
4. As per plaint in O.S. No. 117 of 1988, it is the case of the plaintiff that the defendant on borrowing a sum of Rs. 8,500/− from Rammohan Mudaliar’s wife Mallika Ammal of Madavilakam village, Thirukoilur Taluk, who is the
daughter−in−law of the plaintiff, executed a promissory note in that suit on 9.2.1985 agreeing to repay the same with interest at 12% per annum. The said Mallika Ammal assigned the suit promissory note in favour of the plaintiff on 7.1.1988 after receiving the principal and interest due on the said promissory note. Despite several demands and in spite of the lawyer notice dated 21.1.1988,
which was received by the defendant, the amount due was not paid. Since the defendant is an agriculturist, the suit O.S. No. 117 of 1988 was filed claiming the amount due with future interest at 9% per annum.
5. The suit O.S. No. 117 of 1988 was resisted by the defendant in the written statement denying the execution of the promissory note in that suit on 9.2.1985 for Rs. 8,500/− in favour of Mallika Ammal after receiving the amount and that it was assigned to the plaintiff after receiving the amount due towards principal and interest. It is further stated that when the defendant demanded Rs. 10,000/− on 17.4.1973, plaintiff’s husband Amirthalinga Mudaliar agreed to lend which is repayable with interest at 36% per annum and with a view to pay interest properly, by adding a sum of Rs. 10,000/−, the defendant is to execute
mortgage deed for Rs. 20,000/− in favour of his brother−in−law Panchatchara Mudaliar and also execute promissory note for Rs. 20,000/− in favour his wife,
the plaintiff. Accordingly by executing the mortgage deed and promissory note, the defendant borrowed the sum of Rs. 10,000/− from the plaintiff’s husband. On 16.2.1985 when the amount was calculated, the defendant had to pay Rs. 5,000/− towards principal and interest for which amount by adding a sum of Rs. 4,000/−, the defendant executed a promissory note for Rs. 9,000/− on 16.2.1985, in which
the defendant signed on two revenue stamps and also signed below the revenue stamps. On 16.4.1986 the plaintiff caused a notice to the defendant demanding amount due on the promissory note dated 16.2.1985 executed by the defendant; and for the amount due on the promissory note executed in favour of the Mallika Ammal for Rs. 8,500/− on 9.2.1985; and for the amount due on the promissory note
executed on the same date in favour of Jayarani Ammal, which were suitably replied. The plaintiff filed a suit in O.S. No. 567 of 1986 to recover the amount due on the basis of the promissory note dated 16.2.1985 which was contested by the defendant by filing written statement and in view of such enmity, the plaintiff and her husband along with family members joining together sent notices dated 21.1.1988 and 25.1.1988 stating that the plaintiff got
assignment of the promissory notes executed in favour of Mallika Ammal and Jayarani Ammal, which were also replied. The plaintiff’s husband is in Government service and also doing money lending business and so he obtained the
promissory notes in favour of his two daughters−in−law fraudulently and thereafter created the assignment in favour of his wife, the plaintiff. The defendant did not execute the promissory note either to Mallika Ammal or to
Jayarani Ammal and also no amount was received either from Mallika Ammal or from Jayarani Ammal.
6. In the suit O.S. No. 117 of 1988, the plaintiff examined herself as P.W.1 and her younger brother one Panchatcharam as P.W.2, who is an attestor in the promissory note in that suit and also another attestor as P.W.3 and marked Exs.A−1 to A−6. The defendant examined himself as D.W.1 and marked Ex.B−1 certified copy of promissory note dated 15.2.1985 and endorsement which were marked as Exs.A−1 and A−2 in O.S. No. 130 of 1988 and which promissory note was executed in favour of the plaintiff’s another daughter−in−law Jayarani Ammal for Rs. 8,500/− and Ex.B−2, certified copy of promissory note dated 16.2.1985, which was marked as Ex.A−1 in O.S. No. 567 of 1986 and which promissory note was
executed in favour of the plaintiff by the defendant for Rs. 9,000/−.
7. The trial Court, after framing necessary issues and considering oral and documentary evidence let in on either side, accepting the case of the defendant that the promissory note in the suit O.S. No. 117 of 1988 is not supported by consideration and that it was only executed in the manner as stated by the defendant and accordingly non−suited the plaintiff by dismissing the suit O.S.
No. 117 of 1988.
8. As per plaint in O.S. No. 130 of 1988, it is the case of the plaintiff in that suit that the defendant on borrowing a sum of Rs. 8,500/− from Ramachandra Mudaliar’s wife Jayarani Ammal of Madavilakam village, Thirukoilur Taluk, who is another daughter−in−law of the plaintiff, executed a promissory note in that suit on 15.2.1985 agreeing to repay the same with interest at 12% per annum. The said Jayarani Ammal assigned the suit promissory note in favour of the plaintiff on 19.1.1988 after receiving the principal and interest due on the said promissory note. Despite several demands and in spite of the lawyer notice dated 25.1.1988, which was received by the defendant, the amount due was not paid. Since the defendant is an agriculturist, the suit O.S. No. 130 of 1988 was filed claiming the amount due with future interest at 9% per annum.
9. The suit O.S. No. 130 of 1988 was resisted by the defendant by filing written statement and raising similar case as set out in the written statement in O.S. No. 117 of 1988 and denying the execution of promissory note in favour
of the plaintiff’s daughter−in−law Jayarani Ammal after receiving consideration of Rs. 8,500/− and disputing the assignment in favour of the plaintiff by her daughter−in−law Jayarani Ammal.10. In the suit O.S. No. 130 of 1988, the plaintiff examined herself as P.W.1
and her younger brother one Panchatcharam as P.W.2, who is an attestor in the promissory note in that suit and also another attestor as P.W.3 and marked Exs.A−1 to A−7. The defendant examined himself as D.W.1 and marked Ex.B−1
certified copy of promissory note dated 9.2.1985 and endorsement which were marked as Exs.A−1 and A−2 in O.S. No. 117 of 1988 and which promissory note was executed in favour of the plaintiff’s daughter−in−law Mallika Ammal for Rs.8,500/− and Ex.B−2, certified copy of promissory note dated 16.2.1985, which was marked as Ex.A−1 in O.S. No. 567 of 1986 and which promissory note was executed
in favour of the plaintiff by the defendant for Rs. 9,000/−.
11. The trial Court after framing necessary issues and considering oral and documentary evidence let in on either side, accepting the case of the defendant that the promissory note in the suit O.S. No. 130 of 1988 is not supported by consideration and that it was only executed in the manner as stated by the defendant and accordingly non−suited the plaintiff by dismissing the suit O.S.
No. 130 of 1988.
12. The dismissal of the suit in O.S. No. 117 of 1988 was challenged in A.S. No. 109 of 1991 and the dismissal of the suit in O.S. No. 130 of 1988 was challenged in A.S. No. 110 of 1991 before the Sub Court, Villupuram. The learned
Indian Kanoon − http://indiankanoon.org/doc/1681014/
Subordinate Judge, Villupuram allowed both the first appeals and decreed both the suits by reversing the judgments and decrees of the trial Court in the said
suits, which made the defendant in both the suits to prefer these Second Appeals.
13. At the time of admission, the following substantial question of law was framed for consideration in S.A. No. 231 of 1994:−
(1) Whether the Court below was right in holding that the plaintiff was entitled to a decree for recovery of the amounts due on the promissory note without applying its mind as to whether the plaintiff was a holder in due
course?
14. Now in addition to the above substantial question of law the following additional substantial question of law is also framed for consideration in S.A. No. 231 of 1994:−
Whether the learned Subordinate Judge was right in holding that the presumption under Section 118 of the Negotiable Instruments Act would apply when the defendant has denied the execution of the promissory note itself?
15. At the time of admission, the following substantial question of law was framed for consideration in S.A. No. 266 of 1994:−
(1) Whether the learned Subordinate Judge was right in holding that the presumption under Section 118 of the Negotiable Instruments Act would apply when the defendant has denied the execution of the promissory note itself? (2)
Whether the lower appellate Court was right in holding that the plaintiff was entitled to a decree for recovery of the amounts due on the promissory note without applying its mind as to whether the plaintiff was a holder in due
course?
16. Both the Second Appeals arose out of the separate judgments in two suits. Inasmuch as both the suits have been filed against the same defendant in both the suits, both the Second Appeals are disposed of by way of this common judgment.
17. The learned counsel for the appellant/defendant in both the Second Appeals reiterating the stand taken in the written statement and evidence let in by the defendant, vehemently contended that the decrees granted in both the
suits by the first Appellate Court in setting aside the dismissal of both the suits by the trial Court without considering the denial of execution of promissory notes are not proper. Since the defendant denied the execution of the
suit promissory notes, no such presumption would lie under Section 118 of the Negotiable Instruments Act and as such, the finding recorded by the first Appellate Court is not proper. The learned counsel also submitted that the
plaintiff in both the suits is not a holder−in−due course. The learned counsel also pointed out that the first Appellate Court has not given reasonings, in setting aside the judgments of the trial Court, as to how the trial Court went wrong in dismissing both the suits. It is further submitted by the learned counsel for the appellant/defendant that the first Appellate Court has not dealt with all issues and the evidence let in by both parties in reaching the finding in favour of the plaintiff. In support of such contentions the learned counsel relied on the following decisions:−
(1) Madhukar and Ors. v. Sangram and Ors. in which the Apex Court in paragraph 6 ruled thus:−
"First appeal is a valuable right and the parties have a right to be heard both on questions of law and on facts and the judgment in the first appeal must address itself to all the issues of law and fact and decide it by giving reasons
in support of the findings."
(2) Parvathy, B. v. Ramakrishna Mission etc., 4 others reported in 2001−3 Law Weekly 182, in which this Court has held in paragraph 9 thus:−
"It is not in dispute in this case that the lower Appellate Court has nowhere dealt with as to the correctness of the findings of the trial Court. The lower Appellate Court has given independent reasonings for arriving at the conclusion. In view of the decision of the Apex Court in Santhosh Hazari v. Purushottam Tiwari, 2001(1) Supreme 642, while reversing the judgment and decree of the trial Court, the lower Appellate Court ought to have given reasonings as
to how the trial Court is wrong. But, the lower Appellate Court has not given any such finding in its judgment."
(3) Chinnasamy v. Perumal reported in 2000 M.L.J. 682, in which this Court held thus:−
"It is for the plaintiff to establish his case by cogent and acceptable evidence and he cannot pick holes in the case of the defendant and ask the Court to accept his case."
18. The learned counsel for the respondent/plaintiff argued that inasmuch as the defendant admitted the execution of the promissory notes in both the suits and the plaintiff examined P.W.2 Panchatcharam, his younger brother who attested promissory notes in both the suits and since the execution of promissory notes in favour of Mallika Ammal, who is the daughter−in−law of the plaintiff and also
the assignment in favour of the plaintiff, which have been proved by examining the attestor P.W.3, the first appellate Court has rightly came to conclusion that the defendant is to pay the amount claimed in both the suits and as such,
the finding of the first Appellate Court need not be disturbed.
19. The plaintiff Virudhambal in both the suits, is the mother−in−law of Mallika Ammal and Jayarani Ammal. It is the case of the plaintiff that the defendant after receiving a sum of Rs. 8,500/− on 9.2.1985 executed the
promissory note Ex.A−1 in O.S. No. 117 of 1988 in favour of Mallika Ammal and that he also executed the promissory note Ex.A−1 subject matter of the suit O.S.No. 130 of 1988 after receiving the sum of Rs. 8,500/− on 15.2.1985 in favour of
his another daughter−in−law Jayarani Ammal. It also appears that the defendant executed a promissory note for Rs. 9,000/− on 16.2.1985 in favour of the plaintiff Virudhambal Ammal, which is the subject matter of the suit in O.S. No.
567 of 1986. Therefore, it is clear that within a short span of one week all the three promissory notes, according to the plaintiff, came to be executed for the amounts promised in the said promissory notes.
20. The promissory note executed in favour of Mallika Ammal and the promissory note executed in favour of Jayarani Ammal have been assigned in favour of the plaintiff on 7.1.1988 and 19.1.1988 respectively. Mallika Ammal as
well as Jayarani Ammal caused lawyer notices on the same day, viz., on 16.4.1986 to the defendant demanding the amounts due and payable for the promissory notes
executed by the defendant in their favour, which were replied on 9.8.1986 by the defendant denying the execution of the said promissory notes after receiving consideration as stated in the promissory notes in favour of both of them and narrating under what circumstances both the promissory notes came to be executed, which stand has been reiterated in the written statement filed in both the suits and in the evidence adduced by the defendant as D.W.1.
21. To prove the promissory notes subject matter of both the suits relating to the Second Appeals, the plaintiff examined Panchatcharam as P.W.2, one of the attestor of Ex.A−1 and Marimuthu as P.W.3, the attestor for the endorsement Ex.A−2 made on the promissory notes. It is admitted by P.W.2 in his evidence that the defendant executed a mortgage deed in his favour for Rs. 10,000/−.
22. A clear case is set out in the reply notice Ex.A−4 that the plaintiff’s husband advancing a sum of Rs. 10,000/− obtained a mortgage deed in favour of his brother−in−law P.W.2 and during that time he also obtained a promissory note in favour of his wife, the plaintiff for Rs. 10,000/−, which is the subject matter of the suit O.S. No. 567 of 1986 and at the time of discharge of the said
mortgage as demanded by the plaintiff’s husband, the promissory note for Rs. 8,500/− dated 9.2.1985, which is the subject matter of the suit in O.S. No. 117
of 1988, in favour of the plaintiff’s daughter−in−law Mallika Ammal and also another promissory note for Rs. 8,500/− on 15.2.1985 in favour of the plaintiff’s another daughter−in−law Jayarani Ammal, which is the subject matter
of the suit in O.S. No. 130 of 1988 were obtained from the defendant.
23. The very fact that all the promissory notes came to be executed within a short span of one week, viz., one promissory note in favour of mother−in−law and two promissory notes in favour of daughters−in−law throws a doubt with regard to the passing of consideration for the said promissory notes and it appears there is truth in the case of the defendant that without receiving any amount, he
executed the promissory notes on the basis of which both the suits have been filed.
24. The plaintiff has also not proved the assignment in his favour. Though as per the endorsement on the promissory notes in both the suits, both the promissory notes have been assigned in favour of the plaintiff, and both of which have been marked as Ex.A−2 in both the suits and in which it is written that after receiving the entire amount due towards principal and interest both the assignments were made in favour of the plaintiff, the plaintiff as P.W.1 in
her evidence has stated that she paid only the principal amount for both the promissory note in obtaining assignment. Both the assignors have also not been
examined despite the fact the defendant clearly denied in the reply notice about the execution as well as the receipt of the consideration. Though the lawyer notices in both the suits by the assignors were sent as early as 16.4.1986 and
which have been replied on 9.8.1986, the assignments in both the suits, according to the plaintiff, were obtained only on 7.1.1988 and 19.1.1988. The first Appellate Court failed to consider all these aspects and has not given
reasonings in setting aside the judgments of the trial Court and as to how the trial Court committed wrong in dismissing both the suits as held by this Court in 2001−3 Law Weekly(cited supra), instead, the first Appellate Court recorded finding that the defendant failed to establish that both the suit promissory notes were not executed after receiving consideration by the defendant by
examining his son Ananthan, one of the attestors to Ex.A−1 and also recorded finding that the suit promissory notes in both the suits were executed by the defendant after receiving the consideration.
25. It is well settled that the plaintiff cannot pick holes in the defendant’s case to establish his case. The definite case has been taken by the defendant right from the beginning and by sending reply on 9.8.1986 to the
lawyer notice caused by the assignors in both the suits on 16.4.1986 that under what circumstances the promissory notes came to be executed without receiving consideration by the defendant and as such, the defendant has clearly rebutted the presumption under Section 118 of the Negotiable Instruments Act as held by this Court in 2000 M.L.J. 682 (cited supra).
26. Therefore, the plaintiff in both the suits who has not come to Court with clean hands is to be non−suited in both the suits. Accordingly, the judgments of the first Appellate Court in both the suits relating to these appeals have to be set aside, in that the first Appellate Court committed error in recording erroneous finding and as such, committed gross irregularity, impropriety and illegality.
27. In the light of the discussions made above, both the Second Appeals are allowed. No costs. The judgments and decrees made in A.S.Nos. 110 of 1991 and 109 of 1991 on the file of Sub Court, Villupuram, are set aside and both the
suits in O.S.Nos. 117 of 1988 and 130 of 1988 on the file of the District Munsif Court, Thirukoilur are dismissed restoring the judgments and decrees of the
trial Court.
