Judgment:
S.T. Kharche, J.
1. By invoking the jurisdiction of this Court under Section 100 of the Civil Procedure Code, this appeal is directed against the judgment dated 1.2.1990 of the learned Additional District Judge in Regular Civil Appeal No. 35 of 1983, whereby the appeal came to be allowed and the judgment and decree granted by the Trial Court directing the defendants to pay the amount of Rs. 9,563/- with interest at the rate of 10% per annum from the date of suit till realisation, has been set aside and the suit of the plaintiff for recovery of the said amount has been dismissed.
2. Briefs facts are required to be stated as under:
The plaintiff has filed suit for recovery of Rs. 9,563/- on the contentions that defendant No. 1 is a partnership firm of which defendant No. 2 is a partner. The partnership firm is carrying on the business in cloth at Raipur. On 14.1.1974 the defendant No. 2 on behalf of the firm obtained the loan of Rs. 7,000/- for the cloth business from the plaintiff by executing a Hundi for the amount in the latter's favour. The defendant No. 2 signed the Hundi on receiving the said amount and when the said amount was demanded on the due date, i.e. 14.4.1974 for the remaining unpaid amount, the notice dated 2.9.1976 was served and the defendants were called upon to repay the amount with interest, but did not pay the same, and therefore the plaintiff filed the suit for recovery of the said amount.
3. The defendant contested the claim by filing written statement. It is contended that they did not enter into any transaction with the plaintiff nor have received the loan amount of Rs. 7,000/-. It has been specifically pleaded that the defendants used to collect funds through Roshanlal and in Order to facilitate the collection of funds, the blank duly signed Hundis were being handed over to the broker and it is the broker Roshanlal who used to collect the funds for them. It is contended that any blank signed Hundi might have been made over by the broker Roshanlal to the plaintiff and the same Hundi is a forged document and the suit is liable to be dismissed.
4. On the aforesaid pleading, the Trial Court framed as many as six issues. The parties adduced evidence and relied on documentary as well as oral evidence. The Trial Court on consideration of the oral as well as documentary evidence recorded the finding that the defendants had borrowed the loan amount of Rs. 7,000/- by execution of a Hundi (Ex. 22} on receiving the consideration and that the plaintiff is entitled to a decree for the amount Rs. 7,000/- with interest at the rate of 12% per annum. The Trial Court negatived the contention of the defendant that the Hundi was a fabricated document and also recorded the finding that presumption under Section 118 of Negotiable Instruments Act, 1881 (for short the Act) would be available to plaintiff. Consistent with these findings the Trial Court decreed the suit as mentioned above. Being aggrieved by the judgment and decree passed by the Trial Court, the defendants carried appeal to the District Court. The learned Additional District Judge on hearing the learned Counsel for the parties and on re-appreciation of the evidence was of the view that the Hundi (Ex. 22) was a forged document; that the plaintiff has to stand on his own legs and cannot take the advantage of the weakness in the defence; and that there was no privity of contract between the parties. Consistent with these findings, the appellate Court allowed the appeal and set aside the judgment and decree passed by the Trial Court and instead dismissed the suit. This judgment of the appellate Court is under challenge in this appeal.
5. Mr. H. D. Dubey, learned Counsel appearing for the plaintiff, contended that the execution of the Hundi was duly proved and the defendant No. 2 has admitted his signature on the Hundi and, therefore, presumption under Section 118 of the Act would be available to the plaintiff to show that there is presumption that the Hundi has been executed for consideration. He contended that this presumption of law has not been rebutted by the defendants and the appellate Court was totally wrong in applying the principle that the plaintiff has to stand on his legs and cannot take the advantage of the weakness in the defence. hP contended that Hundi (Ex. 22) is not a forged document and the appellate Court was perfectly justified in granting decree for recovery of the said amount with interest. He contended that the defendants borrowed the loan amount of Rs. 7,000/- and had executed the Hundi on receiving the loan amount and agreed to repay the said amount by 14th April, 1974. He contended that the defendants though served with the notice did not give any reply to the notice. He contended that there was privity of contract between the parties because Roshanlal was acting as a broker and used to collect funds for the defendants and that Roshanlal is the nephew of one Ranchhodas and the latter is the owner of Bharat Saree Stores, situated at Itwari, Nagpur, and the plaintiff was in service and an' employee of Bharat Saree Stores, and under thee circumstances the defendant No. 2 borrowed the loan amount of Rs. 7,000/- from the plaintiff and on receiving the same he executed the Hundi. He, therefore, contended that the impugned judgment of the appellate Court is not sustainable-in-law and the appeal may kindly be allowed.
6. None appears for the defendants, though duly served.
7. This Court has given thoughtful consideration to the contentions canvassed by the learned Counsel for the plaintiff. It is not in dispute that Roshanlal was working as a broker and used to collect funds for the defendants. It is also not in dispute that Roshanlal is the nephew of Ranchhodas and the latter is the owner of Bharat Saree Stores, whereas the plaintiff was an employee in the same Bharat Saree Stores. It is also not in dispute that the Hundi bears the signature of defendant No. 2. Some of the contents of the said Hundi are typed written some portion is handwritten and those contents are incorporated on a stamp paper of Rs. 2.50. It is necessary to reproduce those contents of the Hindi which are as under:
' 2 Rs. 50 np.Rs. 7,000/-only Due date 14.4.1974.(90) Nagpur date 14.1.1974.Ninety days from today without days of grace we Banthia Trading Co. promise to pay to Shri. Mukundrai Mathuradas Madnani of Nagpur a sum of Rs. 7,000/- (Rupees seven thousand only) received in cash from him today. For Banthia Trading Co., Received rupees seven thousand only.J.C. JainPartner'
8. The contents mentioned in the bottom in the words 'Rupees seven thousand only' are hand written. The ink used is the same for writing these contents and also for drawing the signature by defendant No. 2. Defendant No. 2 who is a partner of Banthia Trading Co., has signed this Hundi by putting his signature in English. When the signature on the Hundi has been admitted in the cross-examination by defendant No. 2, it would reveal that presumption of law would be available to the plaintiff.
9. It is necessary to reproduce Sub-section (a) of Section 118 of the Negotiable Instruments Act, 1881. It contemplates as under;
'Presumption as to negotiable instruments of the consideration--
Until the contrary is proved, the following presumptions shall be made--
(a) of consideration--that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;'
Bare reading of the aforesaid provision, of law would reveal that once the execution of negotiable instrument is admitted, the passing of consideration can be presumed, but the course of presumption is rebuttable. The mere fact that the plaintiff did not adduce sufficient evidence to prove passing of consideration did not in any way relieve the defendants from the burden of establishing the contrary of the presumption arising under Section 118 of the Act. In the present case, the execution of Hundi has been admitted by defendant No. 2 by putting signature and, therefore, it would follow that the presumption of law can be drawn that the Hundi was executed for consideration. The defendants did not adduce any evidence to discharge the burden of establishing the contrary to the presumption arising under the aforesaid provision of law and, therefore, the appellate Court committed an error in shifting the burned of proof on the plaintiff to show that there was a privity of contract between the parties.
10. It is pertinent to note that the Hundi (Ex. 22) was executed on 14.1.1974 and the defendants had promised to pay the sum of Rs. 7,000/- on or before 14th April, 1974. The amount was outstanding against the defendants though demanded several times and, therefore, the defendants were ultimately served with the notice (Ex. 23) dated 2.9.1976 which was sent by R.P.A.D. and the postal acknowledgement has also been placed on record. The defendant No. 2 admits in his cross-examination that he had received the said notice but he did not give any reply to the said notice. It is necessary to reproduce the relevant contents of the said notice which are as under:
'My client had advanced you a friendly loan of Rs. 7,000/- on interest at 12% p.a. on 14.1.1974 at Nagpur for your business purpose against a Hundi dated 14.1.1974. The amount became due on 14.4.1974. My client several times demanded the money with interest but you failed to pay the same. The total amount due against you for principal and interest till today is Rs. 8,995/-. By this notice I call upon you to pay the said amount within four days from receipt hereof failing which my client shall be constrained to file Civil Suit against you for recovering the said amount with interest and cost.
Please note.'
11. In spite of service of the aforesaid notice on the defendants they did not give any reply to the same for the reasons best known to them and instead they have taken a stand in the written statement that the Hundi is a forged document. In these circumstances, the conduct of the defendants would clearly reveal that whatever defence was raised in the written statement is nothing but an afterthought only to suit their purpose to avoid the payment. The appellate Court has wrongly applied the principle that the plaintiff has to stand on his own legs and cannot take the advantage of weakness in the defence. The onus was on the defendants to prove by the cogent evidence to show that they did not receive the consideration of Rs. 7,000/- and in absence of evidence in rebuttal the presumption is available to the plaintiff under Section 118 of the Act and it would lead to an irresistible conclusion that the amount of Rs. 7,000/- was paid to the defendant No. 2.
12. In such circumstances, it is not possible to accept the defence put forth by the defendants that they used to keep blank Hundis duly signed by them with Roshanlal and the latter used to collect funds for them and the present Hundi (Ex. 22) might have been one of the documents which was kept with Roshanlal duly signed. If there would have been some truth in the defence, the defendants would not have failed to produce their account books to show as to what were the entries recorded by them in their account books regarding receipt of the funds borrowed by them through Roshanlal. .
13. Even the broker Roshanlal did not maintain the accounts and in absence of that evidence, it is quite clear that the defence sought to be raised was only for the purpose to avoid the payment. Therefore, this Court is of the considered opinion that the approach of the appellate Court to the matter was totally wrong, ignoring the presumption of law, and instead placing the burden on the plaintiff to prove the absence of the consideration. It is, therefore, clear that the impugned judgment of the appellate Court has resulted into miscarriage of justice. The Trial Court was perfectly justified in granting the decree for recovery of Rs. 9,563/- and in such circumstances the impugned judgment cannot be sustained in law. Therefore, the appeal is allowed with costs. The impugned judgment of the appellate Court is set aside and that of the trial Court is restored.