NARAYANAN GANGADHARA PANICKER Vs. T.R. HARIDASAN

JUDGEMENT

(1.) The plaintiff filed the suit on the strength of a dishonoured cheque, Exhibit A1, for Rs. 4,000.00 and interest thereon. His case is that when the cheque was presented, it was dishonoured as per Exhibit A-2 memo. The defendant contended that he owed Rs. 1,000 to DW2, Sadasivan, that on June 18, 1975, he and DW2 approached the plaintiff and demanded Rs. 1,250.00 as loan and that the plaintiff gave Rs. 1,000 to DW-2. On getting from the defendant a signed cheque leaf. The trial court granted a decree in favour of the plaintiff for Rs. 1,000.00 and interest at per annum. The plaintiff's appeal was dismissed by the Sub Judge. The Munsiff held that the evidence adduced by both sides is interested and not reliable. The Munsiff found it difficult to accept the testimony of the witnesses examined by both sides and the Sub Judge agreed with the aforesaid finding.

(2.) Learned Counsel for the plaintiff submitted that as the evidence adduced by both sides has been found to be unsatisfactory, the Courts below ought to have drawn the necessary presumption regarding consideration under section 118(a) of the Negotiable Instruments Act, 1881, particularly in view of the fact that the defendant has admitted his signature in the cheque. Learned Counsel for the defendant submitted that as the cheque is not admitted by the defendant, the burden to prove its execution is upon the plaintiff and as both the courts, on appreciation of evidence, held that the evidence on his side is not reliable, no presumption can be drawn.

(3.) The presumption under Sec. 118(a) of the Act arises when there is a negotiable instrument which is admitted to have been executed. If the fact of execution itself is in dispute, the plaintiff has to prove not only the execution but also passing of the consideration. It is the admitted case of the plaintiff that the amount and the date in Exhibit A-1 cheque were written by him. In such a case, it is really necessary for the plaintiff to prove the due execution of the cheque. Only when the above execution has been established, the presumption under section 118(a) could be raised. In M.G. Gangadhara Vs. Rudriah, AIR 1969 Mysore 269, the Court held that it was only after due execution of the negotiable instrument was established that the presumption under section 118 could be raised. As the execution of the cheque was denied by the defendant and as the evidence on the side of the plaintiff was found unsatisfactory, the Court cannot draw a presumption under section 118(a) of the Act. In a case where the defendant has admitted execution of a negotiable instrument, it is entirely upon him to prove lack of consideration and there is no burden on the plaintiff to establish adequate consideration. In such a case, when the evidence adduced by both sides is evenly balanced, the plaintiff can certainly bank upon the presumption under section 118(a) of the Act. But, in a case where execution of the negotiable instrument itself is denied and when evidence adduced on both sides is not evenly balanced, the plaintiff cannot rely on the presumption under section 118(a).