SINGAR KUNWAR Vs. BASDEO PRASAD

JUDGEMENT

(1.) This is a defendant's appeal arising out of a suit for sale on the basis of a mortgage deed dated 9 September 1913 executed by Kunwar Sheopal Singh, the deceased husband of defendant 1, in favour of Shekher Prasad, the father of the plaintiffs. The mortgage deed was for Rs. 15,000 and carried interest at 0-7-6 per cent per mensem with six-monthly rests. The plaintiffs have given credit for Rs. 150, and have claimed the balance together with interest amounting to nearly Rs. 27,000. The main defence raised on behalf of the defendants was want of consideration, although even the execution of the document was not admitted. The learned Subordinate Judge has found the mortgage deed to have been duly executed, but has held that part of the consideration has not been established, and has accordingly decreed the claim in part. The defendant has appealed and the plaintiffs have filed a cross objection.

(2.) The mortgage deed is printed at p. 55 and the details of consideration are to be found on p. 56. In appeal before us only two of the items are now challenged on behalf of the defendant-appellant. The bulk of the amount is Rs. 3,424-10-3 stated to have been due on four hundis of 1912 in favour of the mortgagee himself, and Rs. 3,490 left in deposit with the mortgagee in order to pay off a hundi in favour of one Panna Lal. The cross-objections relate to the amount due on the promissory note of 1912 which was included in the sum of Rs 3,424-10-3. There can be no doubt that the execution of the document has been fully established, and indeed that plea is not now pressed before us. When the execution was proved there was the acknowledgment of Sheopal Singh admitting the receipt of the entire consideration, as well as the fact that there were hundis and promissory notes executed by him which had been set off, or for the payment of which money had been left in the hands of the mortgagee. There was therefore the initial presumption in favour of the plaintiffs that the full consideration had passed, and the burden was upon the defendants to rebut that presumption. Nevertheless the plaintiffs did lead evidence in the first instance, not only on the question of execution but also of consideration, though the evidence only related to the amount due under the hundi in favour of Panna Lal. On the other hand there was no direct evidence on behalf of the defendants to show that the amount did not actually pass, the reason being that the borrower Sheopal Singh was dead, and there was no one who could categorically deny the receipt of the consideration.

(3.) The learned advocate for the respondents has contended before us that under Section 118, Negotiable Instruments Act, there is a strong presumption in favour of the passing of consideration on the hundis and the promissory note, and that in the absence of any direct and positive evidence to rebut it the plaintiffs claim must be decreed. We are not prepared to go to this length for, in our opinion, the presumption arising under Section 118 or that from the acknowledgment of the mortgagor can be rebutted even by circumstantial evidence. The plaintiffs in the Court below relied mainly on the acknowledgments of Sheopal Singh and his various admissions. There was no direct evidence to prove the payment of consideration on the four hundis or the promissory note, though there was the oral statement of Panna Lal to prove the payment of the amount on his hundi. Similarly there was no positive and direct evidence of the non-receipt of consideration on behalf of the defendants. But both the parties have led evidence and certain circumstances have been duly established, and therefore the main point for consideration is whether the circumstantial evidence is sufficient to rebut the ordinary presumption.