TARMAHOMED HAJI ABDUL REHMAN Vs. TYEB EBRAHIM BHARAMCHARI

JUDGEMENT

(1.) THIS is an appeal from a judgment of Mr. Justice Tendolkar by which he passed a decree for Rs. 8,000 in favour of the plaintiff. The plaintiff filed a suit on three hundis, two dated April 4, 1947, payable 90 days after the date of the hundis, and the third hundi dated April 29, 1947, for Rs. 3,000 payable 68 days after the date of the hundi. The defence of the defendant was that these hundis were passed for accommodation. At the trial three issues were raised: (1) Whether the hundis were passed for the accommodation of the plaintiff as alleged in para. 2 of the written statement? (2) What relief is the plaintiff entitled to ? and (3) Whether the defendant is entitled to the return of the said three hundis as alleged in para. 6 of the written statement and counter-claim ?

(2.) THE learned Judge came to the conclusion that the defendant had failed to prove that the hundis in suit were passed for accommodation. It was then argued before him that inasmuch as the plaintiff had put forward as the consideration of the hundis something different from what was mentioned in the hundis themselves, the presumption which arises under Section 118 of the Negotiable Instruments Act, 1881, was rebutted and the burden was upon the plaintiff to prove that there was consideration for these hundis. THE hundis mention the amount as the consideration for value received in cash this day, i. e. cash received on the day on which the hundis were -executed. But at the hearing the defendant admitted that the consideration mentioned in the hundis was not correct and the real consideration was something different from what was mentioned in the hundis. Now, Section 118 of the Negotiable Instruments Act raises a statutory presumption in favour of there being consideration for every negotiable instrument, and the language of the section is that "until the contrary is proved, the following presumptions shall be made: (a) that every negotiable instrument was made or drawn for consideration. . . " Those are the material words with which we are concerned. THErefore, the statutory, presumption continues until it is rebutted, and the only way it can be rebutted is by proving the contrary, viz. that the negotiable instrument was without consideration.

(3.) CERTAIN authorities have been cited at the But and considerable emphasis has been laid by Mr. Purshottam on a decision of the Allahabad High Court reported in Lal Girwar Lal v. Dau Daval. (1935) I. L. R. 57 All. 895 All that that case lays down is that where the Court, after a careful consideration of the entire evidence, records a clear finding one way or the other, then that finding is based not on a mere presumption but on the evidence and has to be accepted. With great respect, that is a proposition of law which is unexceptionable. If Mr. Justice Tendolkar had given a clear finding that there was no consideration for the three hundis, then apart from any question of presumption that finding if accepted would have resulted in the defendant succeeding, because the result of that finding would be that the presumption under Section 118 had been rebutted. Two cases were referred to in this judgment of the Allahabad High Court by Mr. Justice Sulaiman and both those cases have also been referred to at the Bar. One is another decision of the Allahabad High Court, Md. Shafi Khan v. Md. Moazzam Ali [1923] A. I. R. All. 214 That case decided that in case where consideration is denied and the plaintiff goes into the witness-box and the result of his cross-examination is such that he failed to establish the point which he set out to make, viz. that he gave the consideration, and the Court is satisfied that he did not give the consideration, the defendant can avail himself of that. It is to be noted that in that case there was only one issue as to consideration, and on that issue the Court considering the contradictory evidence given by the plaintiff came to the conclusion that there was no consideration, and Mr. Justice Sulaiman in Lai Girwar Lal v. Dau Dayal (1935) I. L. R. 57 All. 895 sounds a note of warning as to how that case should be properly understood, and this is what he says (p. 898): We are not satisfied that it was meant to lie laid down in that case that where the plaintiff merely fails to prove that consideration passed and the. defendant also fails to prove that he did not get consideration, there is no presumption in favour of the plaintiff. That is exactly the case here. The plaintiff has failed to prove that consideration passed and the defendant has also failed to prove that lie did not get consideration. Under those circumstances the presumption in favour of the pfeiriliff continues. The other case is L. Bam Nath v. Lala Ram Chandra Mal. [1935] A. I. R. All. 154 In that case the plaintiff sued on a promissory note and a receipt on which he claimed that Rs. 2,000 cash had been lent to the defendants. The defendants, on the other hand, admitted the execution of the promissory note and the receipt, but they denied that there was a loan of Us. 2,000 cash. The plaintiff failed to prove consideration and the defendant also did not prove the allegations made by him. A divisional bench of the Allahabad High Court consisting of Mr. Justice Niamatullah and Mr. Justice Bennett held that in that state of the record the presumption under Section 118 applied and the suit should be decreed.