JUDGMENT
Nagendra Prasad Singh, J.
1. The plaintiff is the appellant. The suit in question had been filed on behalf of the plaintiff for realisation of a sum of Rupees 2431/- being the principal alone with interest. The claim was based on a hand-note executed by the father of the defendants, Nand Kishore Kanth, in favour of the plaintiff for the amount which had been advanced by the plaintiff in past.
2. According to the plaintiff, the executant had taken a sum of Rs. 1801/- for meeting certain necessities and when he was unable to return the said amount, he executed the handnote in question on 17-8-1961 and agreed to pay interest at the rate of one per cent per month. The executant however died on 7-8-1963 leaving behind the defendants as his heirs.
3. Defendants 1 to 3 contested the suit, and inter alia, denied that their father took a sum of Rs. 1801/- or any amount at any time from the plaintiff. They also denied that any such handnote was executed by their father in favour of the plaintiff. According to them, the document in question is a forged and fabricated one and without any consideration. One of the pleas which was taken on their behalf is that defendant No. 4, who was the daughter of the executant, died during the pendency of the suit and as her legal heirs were not substituted, the suit had partially abated with respect to the share of the deceased defendant No. 4.
4. Learned Munsiff came to the conclusion on the materials on record that handnote had been executed by Nand Kishore Kanth aforesaid. However, he
was of the opinion that the plaintiff had never paid any sum to the executant at any point of time. On that finding, he negatived the claim of the plaintiff. The plaintiff filed an appeal against the judgment aforesaid, which was heard by the learned Subordinate Judge, who recorded the following findings:–
“I hold that the handnote (Ext. 3) was not based on taking of loan by the father of the defendants Nos. 1 to 3 but was in lieu of amicable settlement held between the parties in respect of the loan of Monghyr District. I agree with the findings given by the lower court that the handnote (Ext. 3) was without consideration and it was in respect of some previous transactions which has not been proved by the plaintiff. The plaintiff has also concealed this aspect of the matter.”
On that finding the judgment and decree of the trial court were affirmed in appeal as well.
4-A. On behalf of the appellant, it was urged before a learned Judge of this Court that on the finding recorded by the court of appeal below the suit of the plaintiff should have been decreed inasmuch as it is not necessary for a plaintiff to prove in a suit based on handnote that money had been advanced at the time of the execution of the handnote; once the handnote is found to be executed by the person concerned in lieu of consideration, the court has to decree the suit in favour of the plaintiff. The learned Judge has referred the aforesaid question for consideration by a Division Bench.
5. Whenever a suit is based on hand-note, the plaintiff has to first prove due execution thereof. But then, before a decree in favour of the plaintiff is granted, the court has to be satisfied that the execution of the handnote was for consideration. While judging this aspect of the matter, Section 118 (a) of the Negotiable Instruments Act is relevant, which runs as follows:
“Until the contrary is proved, the following presumption shall be made : that every negotiable instrument was made or drawn for consideration…..”
In view of this provision it has to be presumed that every negotiable instrument was executed for consideration, the result whereof will be that whenever a claim is made on any negotiable instrument the onus of proving want of consideration is on the defendant. So far as this aspect of the matter is concerned, it could not have been seriously disputed
nor it has been disputed. What was, perhaps, urged on behalf of the defendants in the court below was that as soon as it is shown that consideration mentioned in the negotiable instrument or alleged in the plaint is not established, the presumption under Section 118 of the Negotiable Instruments Act is rebutted. If this stand of the defendants is accepted, then in view of the finding recorded by the courts below that the plaintiff has failed to prove the advance of Rs. 1801/- on 17-8-1961, to the executant the suit has been rightly dismissed. But, Section 118 only says “for consideration”, it does not say “consideration as stated in the negotiable instrument”. The words “for consideration” are quite general and they have to be applied in their full literal sense.
6. In the case of Tarmahomed Haji Abdul Rahman v. Tyeb Ebrahim (AIR 1949 Bom 257) Chagla, C. J., speaking on behalf of the Bench, observed :
“Looking to the plain language of the section, it is impossible to accept that contention, because the presumption that is raised under Section 118 is not in respect of the consideration mentioned in the negotiable instrument; the presumption is in favour of there being a consideration for the negotiable instrument, any consideration which is a valid consideration in law.”
It was pointed out in the aforesaid case that if a particular consideration is mentioned in the negotiable instrument and that consideration is found to be false and some other consideration is set up, that will be a factor which the Court would take into consideration in deciding whether the defendant has discharged the burden cast upon him by Section 118. However he hastened to add.
“But it is a very different thing to say that merely because the consideration mentioned in the negotiable instrument turns out to be false, therefore the statutory presumption is rebutted and the burden is thrown upon the plaintiff to prove the consideration.”
In the case of Ramani Mohan Bhattacharjee v. Surjya Kumar Dhar (AIR 1943 Cal 22) a Bench of that Court took a similar view where it was pointed out that even if defendant succeeds in demolishing the case of the plaintiff made at the hearing that there was a loan a few days before the pronote, but if on evidence adduced in the case it is established that there was payment by the plaintiff to the executant at any earlier stage, then there
was no justification for dismissing the claim of the plaintiff, because then the handnote was executed for consideration. A Bench of this Court also in the case of Brahmdeo Singh v. Hari Singh (AIR 1936 Pat 498) observed :–
“The suit, as I have said, is based upon a hand-note, and under Section 118, Negotiable Instruments Act, there is a presumption that it was given for consideration. In this case while the hand-note mentions one kind of consideration the finding of the learned District Judge is that there was a consideration of a different nature, namely the previous dues. I do not think that the suit was liable to be dismissed for this reason.”
In the case of Awadhbihari Singh v. Sheo Shankar Pandey (AIR 1955 Pat 451) again a Bench of this Court reiterated the same view. Reference in this connection may be made to a Full Bench decision of Rajasthan High Court in the case of Heerachand v. Jeevraj (AIR 1959 Rai 1) (FB).
7. Learned Counsel appearing for the
appellant submitted that even if the defendants have succeeded in showing that Rs. 1801/- had not been paid by the plaintiff before execution of the handnote, still the suit ought to have been decreed on the finding recorded by the court of appeal below that it had been executed “in lieu of amicable settlement between the parties in respect of an earlier loan.” In my view, there is substance in this contention and it has to be accepted, because in that case it shall not be a case of execution of a handnote without consideration on the finding of the court of appeal below, it was executed for a consideration, although different from one alleged on behalf of the plaintiff at the trial. In my opinion, on the finding recorded by the court of appeal below the suit of the plaintiff should have been decreed so far as the contesting defendants are concerned.
8. Learned Counsel appearing for the appellant also tried to urge that the suit had not abated against the heirs of defendant No. 4, who died during the pendency of the suit. But, after some argument, he had to concede that defendant No. 4 being one of the heirs of the executant of the handnote, there shall be a partial abatement so far as her share is concerned.
9. In the result, the appeal is allowed and the suit is decreed in part against the defendants (excepting defendant No. 4). It
will be deemed to have abated so far as the share of defendant No. 4, one of the daughters of the executant is concerned. In the circumstances of the case, however, there will be no order as to costs.
M.P. Varma, J.
I agree.