A. Kulasekaran, J.
1. The unsuccessful defendant, who lost the case before the courts below, is the appellant herein. The respondent herein has filed a suit in O.S. No. 179 of 1997 for recovery of Rs.50,000/- based on a pronote dated 22.10.1994 and the same was decreed. The appeal preferred by the appellant herein before the Additional District Judge, Fast Track Court No.2, Kancheepuram in A.S. No. 29 of 2002 was also dismissed, hence, the present second appeal.
2. This second appeal has not been admitted and it stands at the stage of 'notice of motion' and now it is taken up for final disposal. For the sake of convenience, the parties to the proceedings shall be referred according to their rank in this second appeal.
3. The case of the respondent herein is that the appellant borrowed a sum of Rs.50,000/- from him and executed a pronote, Ex.A2 dated 22.10.1994, agreeing to repay the said amount with interest at the rate of 36% per annum. The said amount was paid by way of cash by the respondent. The appellant is a rice mill owner, who borrowed the said loan for his business. Inspite of repeated demands made by the respondent, the appellant did not pay the amount, hence, notice dated 22.05.1997, Ex.A3 was issued. The appellant had received the same which is evident from Ex.A4. Even after receipt of the said notice, the appellant has not paid any amount and hence the suit was filed.
4. The case of the appellant herein is that the respondent was running a chit fund in which appellant had subscribed some chits and availed chit amount in the beginning, before making the payments, the respondent insisted him to execute pronotes towards security for repayment of the balance chit instalments and obtained appellant's signature not only in the suit pronote but also in other three pronotes; that after the discharge of the chit amount, though the appellant requested the respondent to return the pronotes, he did not return them on the ground that the pronotes were in the custody of his partner Sampath and one of the said pronotes was used for filing this vexatious suit.
5. Before the trial court, the respondent examined himself as PW1 and marked Ex.A1 to A4, in which Ex.A2 dated 22.10.1994 is the suit pronote; Ex.A1 is the signature of the appellant found in the said pronote; Ex.A3 is the notice issued by the respondent through his lawyer calling upon the appellant to pay the outstanding amount and Ex.A4 is the acknowledgment. The appellant examined himself as DW1 and marked Ex.B1 dated 27.05.1997 which is the reply notice to Ex.A3. Ex.B2 is the acknowledgment of the respondent.
6. PW1 deposed before the trial court that on 22.10.1994, the appellant herein borrowed a sum of Rs.50,000/- and executed the suit pronote. The appellant in his evidence has stated that the suit pronote and other pronotes were executed as security for repayment of the chit amount payable by him to the respondent who was conducting the chit unauthorisedly and that though the amount payable towards the chit was in fact fully paid, the respondent has not returned the pronotes, including the suit pronote, executed by him.
7. Considering the oral and documentary evidence on both sides, the trial court came to the conclusion that even assuming that the suit pronote was executed as security for repayment of the chit amount and when according to the appellant the entire chit amount was paid as early as in the year 1993, the appellant has not chosen to call upon the respondent to return the said pronotes; that even in Ex.B1, the appellant has not stated that the entire chit amount payable by him to the respondent herein had been discharged in full; that no valid evidence was placed to justify the said averments that the same was executed as security for repayment of chit amount and held that the respondent herein is entitled to the decree sought for by him and decreed the suit.
8. The first appellate Court, after careful consideration of the oral and documentary evidence let in by the parties pointed out that the appellant herein has admitted the signature, Ex.A1, in Ex.A2, pronote. In Ex.B1, reply notice sent by the appellant to the respondent, he had admitted that he was paying the subscriptions towards the chit belatedly and nowhere he had mentioned that he had paid the entire amount payable by him towards the chit transaction. The first appellate Court also further pointed out that the appellant herein had miserably failed to prove that the suit pronote was executed as security for repayment of chit amount and confirmed the decree and judgment of the trial court.
9. Before this Court, the learned counsel on either side reiterated the contentions which were raised by their clients before the courts below. I have perused the material records placed. The respondent herein issued the notice, Ex.A3 calling upon the appellant to pay the amount which is due and payable by him under the suit pronote. The respondent admitted that he was running a chit which was closed prior to execution of Ex.A2. The appellant borrowed Rs.50,000/- for his business and executed the suit pronote on 22.10.1994 but he failed to repay the amount inspite of repeated demands. The appellant is running a rice mill. The appellant in his evidence stated that he did not receive Rs.50,000/- as alleged by the respondent and his signatures were obtained by the respondent in blank pronotes as security for repayment of chit amounts. When he approached the respondent to return the suit pronote, after paying the dues, he informed him that the same were handed over to his partner Sampath. Thereafter, the appellant approached the said Sampath, who in turn informed that he has to pay Rs.15,00,000/- to return the pronotes and unless the said amount is paid he would not return the same. Ex.B1 is the reply notice sent by the appellant wherein it is stated that he paid chit subscriptions belatedly to the respondent. It is evident from Ex.B1 that admittedly the appellant not paid the entire amount towards arrears in respect of chit transaction to the respondent herein, however, he stated in his evidence that he paid the entire amount due towards the chit transaction but the respondent and his friend Sampath refused to return the suit pronote to him. When compared with Ex.B1, it is clear that the appellant would not have approached the respondent for return of pronote since he admittedly not discharged the amount due in respect of chit transaction.
10. It is an admitted fact that the chit was taken by the appellant in the year 1992. If really the entire amount is paid in 1994, the appellant would have taken steps to get back the pronote, admittedly, the appellant has not even issued any notice but chosen to lay the said ground only after Ex.A3.
11. As rightly pointed out by the courts below, the presumption under Section 20 of the Negotiable Instruments Act is in favour of the respondent. The appellant herein has admitted the execution of the suit pronote, Ex.A2. His signature, Ex.A1 is also admitted by him. Section 20 of the Negotiable Instruments Act contemplates that where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instrument then in force in (India) and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount: provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.
12. The executant admitting signature but asserting that he did not sign note in the condition in which it is filled, the burden of proof is on the executant. When we look into the evidence let in by the appellant herein, he has not proved it.
13. Considering the above said facts, the courts below concurrently found that the respondent is entitled to the relief sought for, however, the first appellate Court reduced the rate of interest claimed by the respondent at 18% per annum from 36%.
14. It is argued by the learned counsel appearing for the appellant that the pronote contain 36% interest, the first appellate Court reduced it to 18% from the date of plaint till the date of judgment, which is also usurious and prayed that the same may be reduced.
15. Section 79 of the Negotiable Instruments Act contains a mandate that Court shall allow the interest on the principal amount advanced against a promisory note at the rate specified in that note and this interest shall have to be allowed even after filing of the suit till the money is actually tendered or realised or a date has been fixed at the institution of the suit to recover such amount. The discretion given to the Court under Section 34 of Code of Civil Procedure for allowing interest pendente lite at the rate not exceeding 6% per annum cannot be applied to the debt incurred on the basis of pronote, which is definitely governed by the provisions of the Negotiable Instruments Act.
16. Considering the strange circumstance of the case, this Court is of the opinion that even the percentage of interest reduced by the first appellate Court from 36% to 18% per annum is slightly on the higher side, hence, the interest for the period of pendency of the suit shall be calculated at the rate of 12% per annum.
17. With the above modification only to the extent of rate of interest, the other findings of the courts below are confirmed. The second appeal is partly allowed. No costs. Connected CMP is closed.