P.Palanikumar Vs R.Selvi (Madras High Court)
The Madras High Court considered an appeal filed by the plaintiff after the trial court dismissed his suit for recovery of Rs.31,54,167/-, which was based on a promissory note allegedly executed by the defendant for repayment of a cash loan of Rs.25,00,000/- advanced on 05.06.2015 with interest at 12% per annum. The plaintiff also relied on the defendant’s deposit of the original sale deed as security, the legal notice issued by him, and the defendant’s reply notice.
The trial court dismissed the suit despite the defendant neither filing a written statement nor cross-examining the plaintiff. It framed issues regarding the plaintiff’s financial capacity, the mode of payment of the loan, and the execution of the promissory note, ultimately holding that the plaintiff had failed to establish these aspects. The plaintiff challenged the judgment, contending that undue importance had been attached to his financial capacity despite there being no dispute raised by the defendant and that the trial court ignored admissions contained in the defendant’s reply notice.
The High Court held that the absence of a written statement prevented the defendant from leading evidence but did not prevent cross-examination of the plaintiff. However, the defendant chose not to cross-examine the plaintiff. The Court observed that if the trial judge had doubts regarding the plaintiff’s financial capacity to lend such a large amount, the judge ought to have exercised the powers available under Section 165 of the Indian Evidence Act by questioning the witness and under Order X Rule 2 CPC by examining the parties. Since no such exercise was undertaken, the adverse finding regarding the plaintiff’s financial capacity was held to be based on no evidence and therefore perverse.
