Smt. Mariam George vs Smt. S. Jeswina W/O Sri Sathya ...

on 21 November, 2007

Karnataka High Court

Smt. Mariam George vs Smt. S. Jeswina W/O Sri Sathya ... on 21 November, 2007
Equivalent citations: ILR 2008 KAR 672, 2008 (1) KarLJ 383
Author: A Bopanna
Bench: A Bopanna
JUDGMENT A.S. Bopanna, J.
1. The parties would be referred to in the same rank assigned to them before the Court below.
The unsuccessful plaintiff in OS No. 1350/1996 is before this Court in this appeal. The plaintiff was
before the Court below in a suit seeking for a judgment and decree against the defendant for Rs.
92,500/- with current interest at 18% p.a. from the date of the suit till the date of realisation and for
costs. The case of plaintiff as pleaded in the plaint is that the plaintiff knows the defendant for the
last about 20 years. Both of them are working in M/s Bharat Electronics Limited, Bangalore.
According to the plaintiff, during March 1993, the defendant expressed certain serious domestic
financial problems and requested the plaintiff to help her by lending Rs. 60,000/- as temporary
loan. The plaintiff, though did not have sufficient funds with her, borrowed some amount from her
friends and close relatives and made over Rs. 60,000/- to the defendant on 21.3.1993. The
defendant is said to have expressed that the same would he returned along with interest within six
months. Since the plaintiff had borrowed from her friends and relatives, insisted the defendant that
the said amount be repaid along with interest of 1.5% per mensum. The defendant on agreeing to the
same executed an on demand promissory note in favour of the plaintiff. The defendant is said to
have also signed the consideration receipt for having received Rs. 60,000/- on 21.3.1993. The said
amount is said to have been received from the defendant in the presence of Sri K. Ramasuryan who
is the attestor and scribe to the said documents. It is further contended by the plaintiff that the
defendant did not repay the amount after six months and as such on the plaintiff demanding the
said amount, the defendant sought for some more time indicating that her problems were not yet
over. Since the defendant did not make any payment, the plaintiff approached the defendant once
again in October 1994 and requested for repayment. The defendant is said to have sought for time
till April 1995 to clear all the dues by stating that she would apply for provident fund loan and would
be getting loan in April 1995. When the plaintiff again approached the defendant in April 1995, the
defendant is said to have adapted a hostile attitude and at that stage the plaintiff on enquiry came to
know that the defendant had borrowed all types of loan from the office also. Hence the plaintiff got
issued a notice dated 3.11.1995 through the Advocate. Since the amount was not paid, the plaintiff
has filed the suit for recovery of the principal amount of Rs. 60,000/- and the accrued interest at
18% per annum from 21.3.1993 till the date of suit. The notice charges is also claimed.
2. The defendant on being notified of the suit appeared and filed detailed written statement. The
defendant at the outset has denied the entire claim put forth by the plaintiff in the plaint. The
defendant has therefore contended that the plaintiff is to be put to strict proof of the averments
contained in the plaint. Contending so, the defendant has proceeded further to aver that the actual
fact is that the plaintiff is running a chit business on monthly installment basis and in such chit
group the defendant is a member. It is further contended that the chit amount being Rs. 40,000/was to be paid in 40 monthly installments at Rs. 1000/- per month by distributing the discount in
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the bid amount among the Chit members. This chit group was started according to the defendant on
10.4.1991 in which the defendant has two chits and liable to pay Rs. 2,000/- per month subject to
discount in bidding. The said chit is said to have ended on 10.7.1994. The defendant has further
contended that she was the successful bidder on the chit auction conducted on 10.2.1992 and
10.6.1992 by having bit at a discount of Rs. 18,000/- and 16,000/- respectively. Thereafter the
plaintiff had paid the chit amounts of Rs. 22,000/- and 24,000 respectively to the defendant. It is
therefore contended by the defendant that before making payment in respect of two chit amounts,
the plaintiff had obtained signature of the defendant on four blank promissory notes and
consideration receipt on the ground that the same was required for collateral security purpose and
also to ensure that the defendant continues to pay the future chit amounts regularly. The defendant
therefore contends that believing in the plaintiff, the defendant affixed her signatures as stated and
further submits that till the completion of the two chits up to and inclusive of 10.7.1994, the
defendant has paid all the amounts even after the successful bidding. It is further contended by the
defendant that after clearing of the chit payments, the defendant requested the plaintiff to return the
four signed blank on demand promissory notes and consideration receipt executed by the
defendant. But the plaintiff kept on postponing the same on some pretext or the other. The
defendant however did not bother much since the plaintiff was her colleague and had confidence
that the plaintiff would not misuse the same. It is alleged by the defendant that instead of returning
the said four promissory notes and consideration receipt, the plaintiff has now misused the same
with an intention to cheat the defendant and has fraudulently filled up the promissory note by
forging the same. The defendant therefor contends that she is not due any amount to the plaintiff.
3. The Court below considerring the rival contentions putforth in their respective pleading framed as
many as five issues for its consideration which read as hereunder:
i) Whether the plaintiff proves that on 21.3.1993 the defendant borrowed loan of Rs. 60,000/- from
the plaintiff by executing on demand promissory note and consideration receipt ?
ii) Whether the plaintiff proves that the defendant agreed, to pay interest at 1.5% per month on the
loan amount ?
iii) Whether the plaintiff proves that the defendant in liable to pay the suit claim of Rs. 92,500/- ?
iv) Whether the defendant proves that the plaintiff obtained her signature on 4 blank promissory
notes and 4 consideration receipt and created the suit documents by using those signatures ?
v) What decree or order ?
4. The plaintiff in older to discharge the burden cast on her by the said issues deposed as PW.1 and
also examined one Sri Ramasuryan as PW.2 and Sri Jose Danial as PW.3. The documents at Exhs.P1
to P3 were marked. The defendant on the other hand deposed as DW.1 and the documents at Exhs.
D1 to D6 were marked.

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5. The Court below thereafter held issue Nos. 1 to 3 by which the burden had been cast on the
plaintiff in the negative and issue No. 4 by which the burden had been cast on the defendant in the
affirmative. Accordingly the suit filed by the plaintiff against the defendant was dismissed with
costs. The plaintiff therefore claiming to be aggrieved by the judgment and decrree dated 1.4.2000 is
before this Court in this appeal.
6. Sri S.G. Krishnamurthy, learned Counsel appearing for the plaintiff while assailing the judgment
passed by the Court below would contend that the Court below has misdirected itself in coming to its
conclusion to dismiss the suit. The learned Counsel would contend that the documents viz., the
promissory note and the consideration receipt were produced and proved by the plaintiff not only
through the oral evidence of the plaintiff, but the scribe and attestor in the said documents had also
been examined as PW.2. Further the execution the said documents has not been denied by the
defendant and as such the suit based on the promissory note ought to have been decreed. The
learned Counsel would further contend that the only contention put forth by the defendant was that
the consideration had not passed and the suit documents had been executed as collateral security.
Despite such contention, Section 118(a) of the Negotiable Instruments Act, 1881 (hereinafter
referred to as 'the Act' for short) would provide for presumption regarding passing of consideration
and as such the burden was heavy on the defendant to prove that the consideration had not passed.
Such burden had not been discharged by the defendant. In any event, the plaintiff at the first
instance itself has proved the passing of consideration by examining the witnesses and as such not
only by presumption but by proof also, the plaintiff has established her case before the Court below.
The learned Counsel in this regard has also referred to the pleadings, the oral evidence tendered and
the documents marked. The learned Counsel also placed reliance on the decision rendered by this
Court in the case of K. Narayana Reddy v. N.M. Muniyappa ILR 1999 KAR 3200, J. Rajanna Setty v.
Sri Patel Thimmegowda and the decision of the Hon'ble Supreme Court in the case of Bharat Barrel
And Drum Manufacturing Company v. Amin Chand Payrelal .
7. On the contrary Sri R. Gopalakrishna, learned Counsel appearing for the defendant sought to
justify the judgment passed by the Court, below. The learned Counsel would also refer to the
provision contained in Section 118(a) of the Act and rely on the very same decision in the case of
Bharatm Barrel And Drum Manufacturing Company cited supra to contend that even though a
presumption would arise in view of the provision contained in Section 118(a) of the Act, the burden
would shift back on the plaintiff once; the defendant indicates to the Court that in the circumstances
of the case the consideration has not passed. In this regard it is enough for the defendant to bring on
record the circumstances to probabilise that the claim put forth by the plaintiff is not genuine and
consideration had not passed. Stating so, the learned Counsel would contend that in the present
case, the defence taken by the defendant from the first instance while issuing reply to the legal
notice and the marking of exhibits D1 to D6, more particularly, when the plaintiff has admitted that
the hand writing contained in Exhs. D1 to D4 is her hand writing, the defendant has established that
no consideration had passed on execution of the on demand promissory note and the consideration
receipt. A blank promissory note executed by the defendant had been obtained by the plaintiff as
collateral security. The learned Counsel would contend that in view of the same, the burden of proof
having shifted back on the plaintiff, the plaintiff has thereafter foiled miserably in proving that the
consideration has passed. The learned Counsel by referring to the pleading and the oral evidence of
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the plaintiff would contend that even according to the plaintiff, she did not have sufficient funds to
make over to the defendant and as such had borrowed from her friends and relatives. In this regard,
plaintiff had categorically stated that she had only Rs. 30,000/- with her and the balance was
borrowed from her friends and relatives, but, PW.3 who was examined has stated that he has
furnished Rs. 20,000/- and as such the said amount does not make up total amount contained in
the promissory note and consideration receipt. Therefore on the burden shifting back to the
plaintiff, the plaintiff has not proved the case. Hence according to the learned Counsel, the Court
below was justified in dismissing the suit. The learned Counsel also referred to the decision of this
Court in Katte Shivappa v. Kori Eranna .
8. Having considered the rival contentions put forth by the respective learned Counsel and
considering the fact that the emphasis by both the learned Counsel has been on the presumption as
contained in Section 118(a) of the Act and the law laid down by the Hon'ble Supreme Court in the
case of Bharat Barell & Drum Manufacturing Company, the legal position with regard to arising of
the presumption and shifting of burden thereafter would have to be analysed before adverting to the
facts of this case. The provision contained in Section 118(a) would read as hereunder:
118. Presumptions as to negotiable instruments.
Until the contrary is proved, the following presumptions shall be made:
(a) of considerations that every negotiable instrument was made or drawn for consideration, and
that every such instrument when it has been accepted, indorsed, negotiated or transferred, was
accepted, indorsed, negotiated or transferred far consideration.
9. The reading of the provision would indicate that the passing of consideration would have to be
presumed when the instrument has been accepted, indorsed, negotiated and transferred until the
contrary is proved. The Hon'ble Supreme Court in the decision of Bharat Barrel & Drum
Manufacturing Co. cited above had considered several other decisions and had ultimately laid down
as follows:
12. Upon consideration of various judgments as noted hereinabove, the position of law, which
emerges is that once execution of the promissory note is admitted, the presumption under Section
118(a) would arise that it is supported by consideration. Such a presumption is rebuttable. The
defendant can prove the non-existence of consideration, by mising a probable defence. If the
defendant is proved to have discharged the initial onus of proof showing that the existence of
consideration was improbable or doubtful or the same was illegal, the onus would shift to the
plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would
dis-entitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the
defendant of proving the non-existence of the consideration can be either direct or by bringing on
record the preponderance of probabilities by reference to the circumstances upon which he relies. In
such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case
including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus
of proof by showing the non-existence of the consideration, the plaintiff would invariably be held
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entitled to the benefit of presumption arising under Section 118(a) in his favour. The Court may not
insist upon the defendant to disprove the existence of consideration by leading direct evidence as
existence of negative evidence is neither possible nor contemplated and even if led is to be seen with
a doubt. The bare denial of the passing of the consideration apparently does not appear to be any
defence. Something which is probable has to be brought on record for getting the benefit of shifting
the onus of providing to the plaintiff. To disprove the presumption the defendant has to bring on
record such, facts and circumstance, upon consideration of which the Court may either believe that
the consideration did not exist or its non-existence was so probable that a prudent man would,
under the circumstances of the case, shall act upon the plea that it did not exist. We find ourselves in
the close proximity of the view expressed by the Full Benches of the Rajasthan High Court, and
Andhra Pradesh High Court in, this regard.
(emphasis supplied) The Hon'ble Supreme Court while explaining the said provision has held that
the burden upon the defendant of proving the non-existence of the consideration can be either
direct or bringing on record the preponderance of probabilities by reference to circumstances upon
which he relies. It is further held that in case the defendants fails to discharge the onus of proof by
showing non-existence of the consideration, the plaintiff would invariably be held entitled to the
benefit of presumption arising under Section 118(a) in his favour. The Hon'ble Supreme Court while
rendering the said decision has referred to several other decisions among which the decision
rendered by the Hon'ble Supreme Court in the case of Kundan Lal Rallaram v. Custodian, Evacuee
Property, Bombay AIR 1961 SC 1316 in my view requires to be looked into since the manner of
shifting of the burden has been very succinctly explained therein while explaining the provision of
Section 118 of the Act. It would be useful to extract the relevant portion of the observations made by
the Hon'ble Supreme Court in the said decision which is as follows:
The presumption is one of law and thereunder a Court shall presume inter alia, that the negotiable
instrument or the endorsement was made or endorsed for consideration. In effect it throws the
burden of proof of failure of consideration on the maker of the note or the endorser, as the case may
be. The question is, how the burden can be discharged ? The rules of evidence pertaining to burden
of proof are embodied in Chapter VII of the Evidence Act. The phrase "burden of proof" has two
meanings - one the burden of proof as a matter of law and pleading and the other the burden of
establishing a case; the former is fixed as a question of law on the basis of the pleadings and is
unchanged during the entire trial, whereas the latter is not constant but shifts as soon as a party
adduces sufficient evidence to raise a presumption in his favour. The evidence required to shift the
burden need not necessarily be direct evidence, i.e., oral or documentary evidence or admissions
made by opposite party; it may comprise circumstantial evidence or presumptions of law or fact. To
illustrate how this doctrine works in practice, we may take a suit on a promissory note. Under
Section 101 of the evidence Act, "Whoever desires any Court to give judgment as to any legal right or
liability dependent on the existence of facts which he asserts, must prove that those facts exist".
Therefore, the burden initially rests on the plaintiff who has to prove that the promissory note was
executed by the defendant. As noon as the execution of the promissory note is proved, the rule of
presumption laid down is Section 118 of the Negotiable Instruments Act helps him to shift the
burden to the other side. The burden of proof as a question of law rests, therefore, on the plaintiff;
but as soon as the execution is proved, Section 118 of the Negotiable Instruments Act imposes a duty
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on the Court to raise a presumption in his favour that the said instrument was made for
consideration. This presumption shifts the burden of proof in the second sense, that is, the burden
of establishing a case shifts to the defendant. The defendant may adduce direct evidence to prove
that the promissory note was not supported by consideration, and, if he adduced acceptable
evidence, the burden again shifts to the plaintiff and so on. The defendant may also rely upon
circumstantial evidence and if the circumstances so relied upon are compelling, the burden may
likewise shift again to the plaintiff.
(emphasis supplied)
10. The decisions noted supra would indicate that the provision relevant while discharging the
burden of proof both on the plaintiff as well as defendant is as contained in Section 101 of the
Evidence Act. Therefore, whoever desires any Court to give judgment, dependent on the existence of
facts which he asserts, must prove that those facts exists. Hence it does not mean that a probable
defence without sufficient proof would shift the burden back on the plaintiff. Therefore, even if it is
circumstantial evidence it should be of such nature that it should inspire confidence in the Court
about such fact being probable in the facts and circumstances of each case.
11. In the instant case, the plaintiff has contended that the on demand promissory note and the
consideration receipt has been executed in view of the loan borrowed by the defendant. The
execution of the document has been admitted by the defendant, but has contended that though the
documents were executed, they were blank and had been executed as a collateral security in respect
of the chit business which being conducted by the plaintiff. It is further averred that the said
procedure is the normal practice and the plaintiff has obtained similar promissory notes and
consideration receipts from the other members of the chit. Therefore, keeping the said rival
contentions in view, the shifting of the burden and the manner in which it has been discharged
requires to be examined in the present case.
12. Insofar as the initial burden on the plaintiff to take benefit of the presumption, the plaintiff has
examined herself and stated with regard to the manner in which the loan was borrowed by the
defendant. In so far as arranging the funds also, the plaintiff has examined one witness for a portion
of the amount which had been borrowed by the plaintiff to be made over to the defendant Ex. P1 is
the promissory note which is a promise to repay the amount. Since the consideration is disputed by
the defendant, Ex. P2 becomes a relevant document since the execution of the said documents
would not only indicate the promise to pay the amount as indicated in Ex. P1, but the receipt of the
consideration also by the defendant from the plaintiff. The execution of the said documents are
admitted by the defendant. The plaintiff in the plaint as well as in her deposition has stated that one
Sri Ramasuryan had come along with the defendant to her house and the said Ramasuryan has
written the contents of the said documents. In support of the case made out by the plaintiff, the said
Sri Ramsuryan has been examined as PW.2 who states that he had gone to the plaintiff's house on
21.3.1993 and he has also signed the documents at Exhs. P1 and P2. The said witness categorically
states that the defendant has received Rs. 60,000/- and thereafter executed the said documents.
Therefore, in so far as the execution of the document and the passing of the consideration, the said
evidence tendered by the plaintiff and the admission of execution would raise a presumption in
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favour of the plaintiff with regard to the passing of consideration and therefore the burden would
shift on the defendant.
13. Once the burden has shifted on the defendent, the manner of proof required from the defendant
to discharge the said burden as already noticed from the decision rendered by the Hon'ble Supreme
Court would be in the same manner as contemplated under Section 101 of the Evidence Act.
Therefore in view of the contentions of the defendant which has been noted above, the defendant is
required to prove in the facts of this case that the plaintiff was running a chit business; that the
defendant was one of the members of the said chit; that the defendant had succeeded in bidding on
10.2.1992 and 10.6.1992 and had received a sum of Rs. 22,000/- and 24,000/- respectively; that it is
the practice in such chit business to obtain blank on demand promissory note and consideration
receipt; that the plaintiff had obtained similar on demand promissory notes from the other
members of the chit also, who are colleagues of the plaintiff and defendant; the exhibits at D1 to 04
being in the handwriting of the plaintiff is relating to the chit business alone and that the promissory
notes were not returned to the defendant despite request. The proof of existence of these
circumstances would make it probable that the Ex.P1 and P2 were in fact executed as collateral
security and no consideration has passed. The burden would be heavy on the defendant on this
aspect and it is in this context, the detailed examination of the evidence placed by the defendant
requires to be examined to see if these circumstances have been proved. This is so, because the
non-passing of consideration cannot be proved by the defendant by direct evidence since the same is
a negative factor. Hence the evidence reqiuires to be noticed as to whether the contentions would be
probabilised by the defendant. In this regard the defendant has got marked Exhs. D1 to D4 by
confronting the same to the plaintiff in her cross examination. Thereafter the exhibits at D5 and D6
have been marked in the evidence of the defendent. The said documents have been heavily relied
upon by the defendant and therefore the evidentiary value of the same requires to be assessed by
looking into the said document and the contentions put forth by the defendant. The portion of
cross-examination of the plaintiff (PW1) with regard to the same would indicate as follows:
I see accounts slip. It is in my handwriting. The same is marked as Ex. D1. Now, I see three more
sheets. It is in my hand writing. The same is marked as D2 to D4. It is not true to suggest that I have
not lent any amount much less Rs. 60,000/- to the defendant. It is not true to suggest that
defendant was member of the chit that I was running. It is also not true to suggest that the chit was
for Rs. 40,000/-, 40 months, with payment of Rs. 2,000 per month and chit being started on
10.4.1991.
It is with the said cross-examination the Exhs. D1 to D4 have been marked. The portion extracted
above would indicate that except for securing the admission that the said exhibits were in the hand
writing of the plaintiff, there is not even a suggestion to the plaintiff that the said calculation slips
are relating to the chit business and the reason for which the exhibits have been drawn up and with
regard to the contents of the said exhibits to connect it to the chit by suggesting these aspects to the
plaintiff. But all that has been suggested is that the defendant is a member. Further in the cross
examination of the defendant (DW.1) the relevant portion reads as hereunder.

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I cannot say what are the figures written in Ex. D1 to D4. I do not know if it is suggested that there is
calculation of interest in Ex. D1 to D4. It is true that EX. D1 to D4 have no connection with the
amount claimed in the suit.
14. This portion of the cross examination of the defendant read with the earlier cross examination of
PW-1 would indicate that even though the said exhibits D1 to D4 have been confronted to the
plaintiff and except for the admission that it is in her hand writing, neither it has been successfully
linked to chit transaction claimed nor has the defendant been able to explain with regard to the
contents and relevancy of the said exhibits. That apart DW.1 has admitted that D1 to D4 have no
connection with the amount claimed in the suit. Therefore, in my view, once D1 to D4 has not been
properly established by the defendant, Ex. D5 and D6 also cannot assume importance.
15. If the defendant intended that the Court should believe her version that four promissory notes
and the consideration receipts were executed as a collateral security in view of such chit business,
the defendant should have examined at least one other member who was involved in the said chit
transaction like that of the defendant which is said to have been conducted by the plaintiff, more
particularly when the defendant had stated in her evidence that all the members were co-employees
and it was being done in the factory premises. Such witness should have spoken with regard to the
nature of the transaction and that it was the normal practice to obtain such blank on demand
promissory notes and consideration receipts. This is more so because PW.2, who is also an employee
of the BEL and who is attestor to the promissory note, in his cross examination has denied the
suggestion that the plaintiff is conducting chit business which is in addition to the denial by the
plaintiff in her cross-examination. Therefore, without the defendant first establishing the fact that
the plaintiff is involved in the business of conducting chits in the factory premises, the other
contentions cannot assume importance. That apart even though the defendant has contended that
even after taking the bid amount, she has continued to pay the instalments which according to her
was Rs. 1,000/- each in respect of two chits and the said figure is not indicated in fix. D1 to D6.
Keeping in view the number of members in each of the chits the figures indicated in Exhs. D1 to D4
should have been explained.
16. Furthermore, the defendant has contended that the entire amount towards the chit has been
paid by her and therefore she had requested the plaintiff to return the blank promissory notes when
the chit ended in the year 1994. This has been stated by the defendant to advance her contention
that the said document was issued by her as a collateral security to the chit transaction and once the
purpose was over she was entitled to receive back. The defendant in her written, statement has in
fact averred that, though the plaintiff did not return the blank promissory notes and the
consideration receipt, she did not bother much about the same since she was her colleague and had
confidence that the plaintiff would not misuse them. Further in the evidence of the defendant also
she has stated that after the closure of the chit group, she has asked the plaintiff to return the blank
promissory notes to her and the plaintiff had promised to return, but went on postponing. That
apart, an attempt has been made by the defendant to state that the plaintiff had got filed suit in SC
No. 6893/1992 against her colleague Parthasarathy. The said suit as claimed by the defendant is of
the year 1992 and an instance of misuse of document. The defendant is said to have repaid the chit
amounts in the year 1994 and in the cross examination of the defendant she has stated that she and
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the plaintiff were known to each other for the last 25 years and at one time they were friends.
Thereafter it is categorically stated by the defendant that the relationship between them is not good
since the last five years. This statement was made in the cross-examination on 4.11.1999 which
would indicate that in the year 1994 their relationship was already strained. If that be so, the natural
conduct should have been to take necessary steps to get back the collateral documents if really the
same had been executed as collateral documents in respect certain chit transaction, more
particularly, when the defendant claims to be aware of a suit filed in the year 1992 against one of her
colleagues. No such step has been taken by the defendant and the contention urged presently is
taken up for the first time in the reply notice.
17. The evidence noticed above in this regard would indicate that the defendant has neither proved
nor established the probabilities of the circumstances under which the Exhs. P1 and P2 have been
executed as a collateral security as contended by the defendant and as such the presumption which
had arisen in favour of the plaintiff has not been rebutted by the defendant so as to shift the burden
back to the plaintiff. Hence the plaintiff is entitled to the benefit of presumption arising in her
favour. Therefore, the plaintiff should be held entitled to the amount to respect of which the
documents at Exhs. P1 and P2 have been executed.
18. Having concluded that the plaintiff is entitled to a decree to recover the amount claimed as the
money which was given as loan, the next question would be with regard to the rate of interest. In a
normal circumstance, the rate of interest indicated in the promissory note could have been granted
from the date of the instrument to the date of suit in terms of Section 79 of the Act. The discretion
could have been exercised for the pendente lite and post decree period. In an ideal situation, the oral
evidence cannot dislodge the contents of a proved document. The case on hand however admits of
peculiar circumstance inasmuch as the promissory note which is a printed form contains interest at
1.5% per month. However, the plaintiff who is the beneficiary of the interest payable under the said
promissory note in her examination-in-chief as P.W.1 states as hereunder, The defendant executed a
promissory note after receiving the amount. The defendant agreed to pay interest at the rate of 1.5%
per year. Now I any that I do not know whether it was per month or per year.
This portion of her deposition states that the rate of interest agreed is per year. Though, she
attempts to correct herself she does not emphasise that it is per month but appears to be in doubt.
Therefore, the intention would have to he gathered. Admittedly, the loan advanced in the instant
case is not a commercial transaction. On the other hand, the very case put forth by the plaintiff is
that it was a help rendered to the defendant who was her friend since a long time, to over come her
domestic problems. The relationship was such that the plaintiff though did not have that much
money, took the help of her friends and relatives to arrange the money and help her friend. One of
the relatives who is said to have lent a sum of Rs. 20,000/- was examined as P.W.3, but he has not
stated that he has given it on interest. Considering the surrounding circumstance that it was a
domestic loan to tide over immediate necessity and on the deposition of the plaintiff herself it has to
be concluded that the understanding was to pay nominal interest at 1.5% per year but the necessary
alteration was not made in the printed form. Hence, the plaintiff shall be entitled only to the
principal amount and the notice charges quantified in the plaint. In place of the quantified interest,
the plaintiff would be entitled to interest at 1.5% per year. Such entitlement to interest shall be from
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the date of the instrument i.e., 21.3.1993 till the date of realisation.
19. In the result, the following:
ORDER
i) The judgment and decree dated 01.04.2000 passed in O.S.No. 1350/96 is set aside.
ii) Consequently, the suit in O.S.No. 1350/06 shall stand decreed for a sum of Rs. 61,000/- (Rupees
Sixty One thousand only) with interest at 1.5% per annum on Rs. 60,000/- (Rupees Sixty thousand
only) from 21.03.1993 till the date of realisation. The plaintiff is also entitled to proportionate costs
throughout.
iii) The appeal is accordingly allowed in part on the above terms.

Indian Kanoon - http://indiankanoon.org/doc/1338488/

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