Case Note & Summary
The appellant-plaintiff filed a suit for recovery of Rs.29,250/- with interest at 24% per annum, claiming that the defendant had executed a promissory note in her favor. The trial court dismissed the suit, holding that the plaintiff failed to prove the consideration for the promissory note. On appeal, the High Court of Karnataka examined the evidence, including the promissory note (Ex.P1) and the testimony of the plaintiff's husband (PW1). The court noted that the defendant admitted his signature on the promissory note but denied the transaction. The High Court held that under Section 118 of the Negotiable Instruments Act, 1881, there is a presumption that a promissory note is made for consideration. Once the execution is admitted, the burden shifts to the defendant to rebut that presumption. The defendant did not lead any evidence to show that the note was without consideration. Therefore, the trial court's finding was perverse and the appeal was allowed. The suit was decreed for the principal amount of Rs.29,250/- with interest at 6% per annum from the date of suit till realization.
Headnote
A) Negotiable Instruments Act - Promissory Note - Presumption of Consideration - Section 118 of Negotiable Instruments Act, 1881 - The plaintiff sued for recovery of Rs.29,250/- based on a promissory note executed by the defendant. The trial court dismissed the suit holding that the plaintiff failed to prove consideration. On appeal, the High Court held that once execution of the promissory note is admitted or proved, the presumption under Section 118 arises that it was made for consideration. The defendant failed to rebut this presumption. The appeal was allowed and suit decreed. (Paras 5-10) B) Evidence Act - Burden of Proof - Rebuttal of Presumption - Section 118 of Negotiable Instruments Act, 1881 - The defendant merely denied the transaction but did not lead any evidence to show that the promissory note was without consideration. The court held that the burden shifted to the defendant to prove absence of consideration, which he failed to discharge. (Paras 7-9)
Issue of Consideration
Whether the plaintiff proved the execution of the promissory note and discharge of the debt, and whether the defendant rebutted the presumption under Section 118 of the Negotiable Instruments Act, 1881.
Final Decision
Appeal allowed. The judgment and decree of the trial court dated 13.12.2006 in O.S.No.4198/1993 are set aside. The suit is decreed for Rs.29,250/- with interest at 6% per annum from the date of suit till realization. No order as to costs.
Law Points
- Burden of proof
- Promissory note
- Negotiable Instruments Act
- 1881
- Section 118
- Presumption of consideration
- Recovery of money
- Civil Procedure Code
- 1908
- Section 96
