Rani Vs Arokiyammal (Madras High Court)
The Madras High Court dismissed the second appeal filed by the plaintiff and confirmed the concurrent findings of the Trial Court and the First Appellate Court that the promissory note was not supported by consideration. The suit had been filed for recovery of Rs.40,000 allegedly borrowed by the defendant under a promissory note dated 26.12.1995. While the defendant admitted execution of the promissory note, he denied that any consideration had passed and contended that the promissory note had been executed only as security during a village settlement relating to a dispute involving his son and the plaintiff’s son.
According to the defendant, the dispute arose after an incident involving family members in Bombay, leading to a village panchayat in which it was agreed that Rs.10,000 would be paid towards medical expenses and a further Rs.20,000 would be payable in the event of permanent disability. He claimed that, following village custom, a promissory note for Rs.40,000 was executed as security and that, simultaneously, a Muchalika (Ex.B.1) recording the settlement was also executed.
The Trial Court dismissed the suit after finding that no consideration had passed under the promissory note, and the First Appellate Court affirmed that finding. The plaintiff challenged the concurrent judgments by contending that once execution of the promissory note was admitted, the burden shifted entirely to the defendant under Section 118 of the Negotiable Instruments Act to prove absence of consideration.
