GORLA RAMI REDDY Vs. N VENUGOPAL REDDY

JUDGEMENT

(1.) .This revision petition is directed against an order of the First Additional Judge, City Civil Court, Hyderabad, given on 25th August, 1965, whereby he re-cast issue No. 1. The facts which are common are that the respondent plaintiff filed a suit for the recovery of some amount on the foot of a promissory note showing cash consideration. The plaintiff has alleged in the plaint that he paid cash on the day when the promissory note was executed. The defence set up by the defendant was that he had executed the promissory note in favour of the promisee with an understanding that he will pay the amount to him. The promisee however did not pay the amount, but unauthorisedly transferred the promissory note in favour of the plaintiff. His contention therefore has been that the promissory note is not supported by any consideration. The plaintiff thereupon filed a rejoinder. In that rejoinder the plaintiff conceded that the promissory note is not supported by any cash consideration as was alleged in the plaint.

(2.) He however pleaded that the suit promissory note was in renewal of an earlier promissory note dated 20th July, 1958. Upon these pleadings the trial Court first framed the following two issues : "1. Whether the suit promissory note is supported by consideration ? 2. Whether any balance was due under the promissory note dated 20th July, 1958 and whether in respect of such balance the suit promissory note was executed ? " The plaintiff filed an application to re-cast issue No. 1 and delete issue No. 2. That application was resisted by the defendant. The trial Court did not delete issue No. 2 but re-cast issue No. I in the following manner : "1. Whether the suit promissory note is not supported by consideration ?" It is this re-casting of issue No. 1 which is now questioned in this Revision Petition. Broadly it is true that when the defendant admits the execution of the promissory note but denies the receipt of consideration, it is for him to prove that the promissory note is without consideration. That conclusion is based on the statutory presumption under section 118 of the Negotiable Instruments Act. Where however the case is that the plaintiff himself suggests other consideration than what is mentioned in the promissory note, he himself rebuts the presumption and in such a case no question of any presumption under section 118 arises in order to determine on whom the burden lies. It is in such cases on the plaintiff to prove that although the promissory note mentions one form of consideration in fact it is supported by another form of consideration which is valid. This view is supported by the following decisions : P. L. M. Palaniappa v. S. Rajagopala, A.I.R. 1928 Mad. 773. Venkatareddi v. Nagireddi, (1951) 1 M.L.J. 569 : A.I.R. 1951 Mad. 861. Fulchand v. Laxminarayan, A.I.R. 1952 Nag. 308.Shrinarain v. Chunnilal, A.I.R. 1957 Raj. 159. Heera Chand v. Jeevraj, I.L.R. 1959 8 Raj. 717. A.I.R. (1950) Raj. 1 (F.B.) : It was however contended by Mr. N. Subba Reddy, the learned Counsel for the respondent that even in such a case the presumption under section 118 of the Negotiable Instruments Act will have to be kept in view and the burden lies on the defendant. In support of this contention he relies upon Raghavareddi v. Sundararani Reddy, (1958) 2 An.W.R. 570. and the decisions relied upon in the said judgment. A reading of that judgment would disclose that in that case the plaintiff had not shown any other consideration than what was mentioned in the promissory note. He was proceeding in accordance with the tenor of the document. That was made clear by his Lordship at page 573. The real question in that case was whether the plaintiff was entitled to a decree when he had suggested one form of consideration to the promissory note and ultimately it is found that there was another form of consideration which is valid in law. His Lordship considering the earlier decisions of identical character said that even in such a case the plaintiff would get a decree because there is a presumption in such a case in regard to the valid consideration, and not consideration of a particular type. It would be thus plain that in all these cases the question was not as to on whom the initial burden lay in view of the facts of a particular case. Nor there was any question as to whether it is for the plaintiff to prove the consideration even when he himself repudiates the consideration shown in the document. After enquiry if it is found that the stand taken by the plaintiff in his rejoinder is correct, then the question which would naturally arise is whether the plaintiff can get a decree in the face of the plaint which had shown cash consideration of the promissory note. At that stage apart from, the evidence in the case if it is necessary, presumption under section 118 of the Negotiable Instruments Act also would be taken into account. That is very much a different thing than to say that a plaintiff who speaks against the tenor of the document need not prove the new form of consideration which he himself professes, but it is for the defendant to prove that the promissory note is not supported by any form of consideration. After all a presumption under section 118 of the said Act is not absolute. It is a rebuttable presumption and when the plaintiff himself rebuts the presumption by speaking in different language than the promissory note itself, it is for him to prove that type of consideration. If that consideration is valid, then whether the suit should be decreed on that consideration or not, would be considered after the trial is closed. This is not the stage to consider that. I do not therefore think that the re-cast issue No.1 was rightly framed by the lower Court. That apart, in the presence of issue No. 2, I do not find any necessity of issue No. 1. A reading of issue No. 2 would make it abundantly clear that the burden was placed by the trial Court on the plaintiff who was called upon to prove that for suit promissory note was executed in renewal of an earlier promissory note the the amount due. When the burden of that fact is placed upon the plaintiff T fail to see where was the necessity to frame issue No. 1 either in the old form or in the new one, which in any case would be inconsistent with issue No.

(3.) It will be difficult in such a case to decide the case appropriately. I do not therefore find any necessity of issue No. 1 either in the old form or in the new form. Issue No. 1 therefore is altogether deleted. This Revision Petition therefore is accordingly allowed. There will be no order as to costs. A.B.K. Revision allowed.