- (1.)1. The defendant who had lost before the both courts below, has come forward with the instant second appeal.
(2.)THIS second appeal has arisen in this way:
The respondent/plaintiff instituted a suit for recovery of certain amounts purported to be due under two promissory notes alleged to have been executed by the defendant/appellant. According to the respondent/plaintiff, on 12.2.1987, the defendant/appellant borrowed Rs.6,000 from the respondent/plaintiff for his family expenses and executed a promissory note agreeing to repay the said sum with an interest at 18% p.a., on demand or to the order of the respondent/plaintiff. So also the appellant/respondent borrowed Rs.36,760 on 9.7.1988 from the respondent/plaintiff and executed a promissory note agreeing to repay the said sum with an interest at 24% p.a. to the respondent/plaintiff or his order. Towards the first promissory note, the appellant/defendant paid interest upto 2.2.1990. The appellant/defendant paid Rs.15,000 towards the second promissory note and made an endorsement on the promissory note itself. Despite issuance of notice demanding payment, the appellant/defendant had not made payment which prompted the respondent/plaintiff to institute the suit in O.S.No.88 of 1993 on the file of the Principal Sub Judge, Tiruchirappalli.

The appellant/defendant admitted the claim of the respondent/plaintiff so far as the first promissory note is concerned, but refuted the claim of the second promissory note. According to him, there is want of consideration for the second promissory note. According to the appellant/defendant, the respondent/plaintiff, defendant's wife and certain other twelve persons were partners of the finance concern known as ?Sri Vajravel Finance?, that he recommended the respondent/plaintiff to advance loan to certain persons, that the quantum of loan advanced is Rs.30,760, that the respondent/plaintiff wanted the appellant/defendant to execute a promissory note as a security for prompt payment of the loan disbursed to the three persons, by name Natarajan, Kethamma and Periaswamy, and thus, no consideration was passed on the promissory note.

The trial court has observed as follows:

Both the courts below have concurrently held that the promissory note is supported by consideration and accordingly decreed the suit. Aggrieved by the finding of both the courts below, the defendant has come forward with the instant second appeal.

I am conscious that when there are concurrent findings of fact, this Court may not interfere with such findings of the fact under Sec.100 of Code of Civil Procedure. But it is settled law that if there is misconstruction of a basic document which is the foundation of rights of the parties, then necessarily a question of law arises. In Irudayasamy, A. v. Perumal Naidu Irudayasamy, A. v. Perumal Naidu Irudayasamy, A. v. Perumal Naidu, (1997)1 MLJ. 360: (1997)1 L.W. 474 S.S.Subramani, J. has observed as under:

The High Court under Sec.100, C.P.C. is entitled to take into consideration the question whether the material evidence and relevant circumstances were considered by the lower courts. This Court is also entitled to consider whether the finding of the lower appellate court is based on evidence, and whether that evidence is based on pleadings.

In the instant case, the question of law that arises is whether both the courts have considered the evidence in proper perspective to hold that a debtor and creditor relationship is created between the plaintiff and the defendant and whether the promissory note was executed for a valuable consideration as security for moral obligation. That is why, my learned predecessor has framed the following substantial questions of law:

1. Whether the courts below are right in ignoring the admission of P.W.1 that the pro-note had been executed only for the purposes of ensuring prompt repayment of the loans by persons introduced by the defendant and should it not have held that it cannot constitute a consideration for attracting civil liability. 2. Whether the courts below are right in decreeing the suit in the absence of debtor-creditor relationship. 3. Whether the courts below should not have drawn adverse inference against the plaintiff for non-production of the best evidence namely Book of accounts.

(3.)QUESTION Nos.1 and 2: It is not in dispute that Ex.A-4 promissory note had been executed by the appellant/defendant. In a suit, on a promissory note, the burden initially rests upon the plaintiff/respondent. The burden of proving consideration stands discharged as soon as the execution is proved and the rule of presumption laid down under Sec.118 of the Negotiable Instruments Act steps into helping the plaintiff to shift the burden on the other side. But, it should not be lost sight of that the presumption that is raised under Sec.118 of the Negotiable Instruments Act is not in respect of consideration mentioned in the negotiable instrument. The presumption is, in favour of there being a consideration for the negotiable instrument, the consideration is a valid consideration in the law. There is no presumption as to nature of consideration.
In the instant case, it is admitted that the appellant/defendant had executed the promissory note. But, it should be pointed out that so far as the nature of consideration is concerned, the respondent/plaintiff had been hesitating and meditating. Regarding the first promissory note, the respondent/plaintiff had unambiguously pleaded that the defendant borrowed a sum of Rs.6,000 from the plaintiff, but so far as Ex.A-4, the disputed promissory note is concerned the respondent/plaintiff has not come forward with such clear pleading, but would plead ?the defendant executed a promissory note in favour of the plaintiff on 9.7.1988 for a sum of Rs.36,760 promising to repay the money borrowed on demand. Reference to the promissory not would show as to what is the recited consideration. It recites as under:

It would thus appear that the respondent/defendant is not definite as to the nature of the consideration. In the plea, it is stated that the defendant borrowed the amount, whereas according to the promissory note, when the accounts were settled, if the defendant was found to debit Rs.36,760.

Both the plaintiff and defendant have examined themselves P.W.1 and D.W.1. It is admitted that the defendant's wife was a partner in the Finance Company and the appellant/defendant was not a partner. Therefore, statement of accounts between the partners had nothing to do with the appellant/defendant. It is settled law that in a suit for money due on a negotiable instrument, if the defendant shows that the cash consideration originally pleaded for the negotiable instrument did not pass, he must be taken to have discharged the onus which lay upon him for proving the lack of consideration. This has been reiterated in Krishna & Co. v. Bhagat Ram Girdhari Lal , A.I.R. 1968 P. & H. 552.