- In the recent case, R Barathbaran (died) and others v. R. Nallathambi, the Hon'ble Madras HC has observed that it is not mandatory to have both signature as well as a thumbprint under the Negotiable Instrument Act, 1881 to determine the validity of a pro note.
- The Court noted that it was not right to raise suspicion with regard to the execution merely on the ground that the thump impression of the defendant was not obtained when the defendant had not denied the execution.
- The plaintiff in the present case filed a suit against the respondent for recovery of money of Rs. 1,00,000/- each borrowed by him and executed promissory notes in the favour of the plaintiff for consideration.
- After the pre-suit notice was issued, the plaintiff filed the suit for recovery of the suit claimed of Rs. 4,59,000/- along with subsequent interest.
- The defendant admitted the execution of the suit promissory notes. A plea was raised by the defendant that promissory notes that had been executed towards security for the loan and the loan due was settled by way of execution of a sale deed in the name of the plaintiff’s wife.
- The trial Court took oral and documentary evidence and note of the admission as to the execution and considered the statutory presumption under section 118 of the NIA and the authority of the holder in due course to fill up the promissory note u/s 20 of the Act and favored the plaintiff in the judgment.
- Aggrieved by the decree, the defendant filed an appeal before the Lower Appellant Court. The Court neither considered the admission made in the pleads and evidence nor took note of the statutory presumptions in the favour of the plaintiff but erroneously allowed the appeal that the thump impression of the defendant was not obtained and that signature in each promissory note is different on comparison by naked eyes and hence reversed the judgment by the Trial Court.
- The appeal made before the High Court by the appellant held that there was no dispute with respect to the execution of the documents, there was no reason for the court to compare these documents with the naked eye as if, the defendant had denied the execution.
- The Hon’ble HC declared that the First Appellate Court had committed an error in giving findings in the execution. Once the signature found in the suit documents had been admitted, there was no need or necessity for the plaintiff to give an explanation for not obtaining the thump impression in the suit promissory note. There is no such law to get the thump impression in the promissory note, particularly, when the execution and issuance of pro notes were not in dispute.
- The Court also stated that as there was a statutory presumption in the favour of the plaintiff, the defendant had to rebut it by proof and not by a bare explanation. Unless the explanation is supported by proof, the presumption created by the provision cannot be said to be rebutted. The presumption under Section 118 of the Negotiable Instruments Act was one of law, and thereunder, the Court below shall presume that the promissory notes were made for consideration. Once the statutory presumption was raised, the onus of proving the absence of consideration was on the executant.
- The Madras HC set aside the judgment of the lower appellant court and allowed the petition made by the appellant.
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