APHC010132562009 IN THE HIGH COURT OF ANDHRA PRADESH Monday, the fourth day of May two thousand and twenty six The Honourable Ms. Justice B. S. Bhanumathi Between: Vudumula Siva Reddy and Manam Subhash Chandra Bose Counsel for the appellant: 1. Karri Murali Krishna Counsel for the respondent: 1. Sravan Kumar Mannava The Court made the following: IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) Monday, the fourth day of May two thousand and twenty six Present The Honourable Ms. Justice B. S. Bhanumathi Appeal Suit No. 70 of 2009 Vudumula Siva Reddy Manam Subhash Chandra Bose ...Respondent Counsel for the appellant: Karri Murali Krishna Counsel for the respondent: Sravan Kumar Mannava The Court made the following: IN THE HIGH COURT OF ANDHRA PRADESH [3311] Monday, the fourth day of May two thousand and twenty six The Honourable Ms. Justice B. S. Bhanumathi ...Appellant ...Respondent 2 BSB, J A.S.No.70 of 2009 JUDGMENT: This appeal is filed under Section 96 C.P.C. against the decree and judgment, dated 18.08.2008, in O.S.No.789 of 2006 on the file of the Court of IV Additional Senior Civil Judge, Guntur. The appellant is the defendant and the respondent is the plaintiff in the suit. 2. The plaintiff filed the suit for recovery of an amount of Rs.4,76,656/- being the principal amount of Rs.2,50,000/- with interest thereon at the rate of 24% per annum from 05.12.2003 to 04.12.2004 and with subsequent interest at the same rate on Rs.3,10,000/- from 05.12.2004 to 04.12.2005 and further interest at the same rate on Rs.3,84,400/- from 05.12.2005 to 03.12.2006. 3. The case of the plaintiff is that the defendant borrowed the principal amount of Rs.2,50,000/- from the plaintiff for business purpose of the defendant at Guntur on 05.12.2003 under promissory note executed on the even date agreeing to repay the amount with interest at 24% per annum with yearly rests, but failed to pay the amount in spite of repeated demands. The plaintiff sought a decree for Rs.4,76,656/- with subsequent interest at the contractual rate from the date of the suit till the date of realization and costs. 4. The suit was resisted by the defendant by filing written statement denying the whole transaction and further stating that his son, Vudumula Srinivasa Reddy previously had done business in Chillies on commission basis transacting with the plaintiff who was running a cold storage under the name and style ‘Sri Lakshmi Vidya Cold Storage’ at Nallapadu Road, Guntur and the defendant executed empty promissory notes on the assurance by his son that the empty promissory notes would be kept with the plaintiff to secure the loans as his son had no 3 BSB, J A.S.No.70 of 2009 land. It is further pleaded that on receipt of summons in the suit, the defendant questioned his son and the defendant was informed about the discharge of the loan, but the pronote was retained by the plaintiff on the pretext of misplacing the same. 5. The plaintiff himself was examined as P.W.1 and got examined another witness as P.W.2. Ex. A1, promissory note, dated 05.12.2003, was marked. On behalf of the defendant, D.Ws.1 and 2 were examined and Exs. B1 and B2 were marked. Ex.B1 is the discharged pronote, dated 05.12.2003 and Ex. B2 is the discharged pronote, dated 05.12.2003. 6. After hearing both the parties, the trial Court decreed the suit holding that the presumption, under Section 118 of the Negotiable Instruments Act, 1881 (for short, ‘N.I. Act’), of the suit promissory note being supported by consideration is drawn on admission of the execution of the promissory note, but the defendant failed to discharge the burden that it was not supported by consideration. The trial Court took note of Section 20 of the N.I. Act which enables a holder of a negotiable instrument to fill up the instrument if duly stamped and signed by an executant. The trial Court held the view that the plaintiff is entitled to recover the suit amount and decreed the suit for an amount of Rs.4,76,656/- payable with simple rate of interest at the rate of 12% per annum from the date of the suit till the date of the decree and thereafter at the rate of 6% per annum from the date of the decree till the date of realization on the principal amount of Rs.2,50,000/-. 7. Aggrieved by the decree and the judgment, this appeal was filed. 4 BSB, J A.S.No.70 of 2009 8. The learned counsel for the appellant / defendant contended that the plaintiff obtained several promissory notes merely signed by the defendant and not attested by any person and as soon as the money under the pronote was discharged, such promotes were returned to the defendant and therefore, Exs. B1 and B2 were filed in support of such defence; that the plaintiff had admitted about Exs. B1 and B2 in the cross-examination, yet, the trial Court had failed to appreciate the evidence lead by the defendant to show that the suit promissory note was also not supported by consideration; that P.W.2 who scribed Ex. P1 is Clerk of P.W.1 and was hand in glove with the plaintiff and created Ex. P1; and that the plaintiff failed to place on record any evidence of his books of accounts or income tax return to show that the amount of consideration was passed and moreover, in the suit promissory note, the signature of the defendant’s son was obtained as attestor which would show that the case pleaded in defence. Regarding passing of the amount of consideration, he further submitted that P.W.2 stated in his evidence he was unaware of passing of consideration. Though it was not taken in the pleadings, it was argued that the figure No. ‘2’ in date on the pronote Ex.A1 is different from the same figure in the rest of the promissory note. He further argued that the rate of interest @ 24% per annum with annual compounding is very high and no prudent person would accept it. This point was not specifically raised before the trial Court. No issue was framed and no finding was given. Finally, he submitted that the trial Court wrongly placed burden on the defendant and therefore, the judgment and the decree are liable to be reversed. 9. On the other hand, the learned counsel for the respondent / plaintiff submitted that filing of Exs. B1 and B2 which are in the name of the wife and son of the plaintiff would show that the defendant used to 5 BSB, J A.S.No.70 of 2009 borrow money and repaid and therefore, there is nothing to disbelieve the suit promissory note, which is also one such transaction. He further submitted that whatever deficiencies pointed out in the suit promissory note are also found in Ex. B1 and Ex.B2, yet, the defendant admittedly discharged the liability under them, but failed to discharge the liability under the suit promissory note and therefore, such arguments cannot be accepted. He further submitted that the trial Court has rightly drawn presumption under Section 118 of the N.I. Act in view of the admission, but the defendant failed to discharge the burden to rebut the presumption and therefore, the trial Court rightly decreed the suit. 10. Sections 20 and 118 of the N.I. Act are excerpted hereunder: “20. Inchoate stamped instruments.—Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments 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.” 6 BSB, J A.S.No.70 of 2009 “118. Presumptions as to negotiable instruments.— 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, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; (b) as to date – that every negotiable instrument bearing a date was made or drawn on such date; (c) as to time of acceptance – that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity; (d) as to time of transfer – that every transfer of a negotiable instrument was made before its maturity; (e) as to order of indorsements – that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; (f) as to stamp – that a lost promissory note, bill of exchange or cheque was duly stamped; (g) that holder is a holder in due course – that the holder of a negotiable instrument is a holder in due course Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful 7 BSB, J A.S.No.70 of 2009 consideration, the burden of proving that the holder is a holder in due course lies upon him.” 11. In view of the above legal propositions and the defence taken in the written statement, the trial Court has rightly drawn the presumption in favour of the plaintiff that the suit promissory note was supported by consideration and placed burden on the defendant to rebut the presumption. In this regard, except Exs. B1 and B2, there is no other evidence. In fact, these documents would support the case of the plaintiff. These documents would not help the defendant to show that the suit promissory note was not supported by consideration. The evidence of D.W.2 who is son of the defendant would not help the defendant as it is self-serving evidence. At the most, his evidence would further strengthen the contention that there were previous similar transactions between the parties. There is no other independent evidence to establish that the suit promissory note was not supported by consideration. Under these circumstances, there is no illegality in the impugned judgment. Hence, this Court does not see any reason to interfere with the judgment and the decree impugned in this appeal. 12. In the result, the appeal is dismissed. There shall be no order as to costs. Pending miscellaneous petitions, if any, shall stand closed. ___________________ B. S. BHANUMATHI, J Dt.04.05.2026 RAR