APHC010151052019 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3367] WEDNESDAY,THE TWENTY FOURTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE V SRINIVAS FIRST APPEAL NO: 586/2019 Between: KALPAM.SUJATHA, W/O K. PENCHALA RAJASKHAR BABU, HINDU, AGED 48 YEARS, PROPERTY HOLDER, R/O D.NO. 24-02-1172, 2ND STREET, RAVINDRA NAGAR, KONDAYAPALEM GATE CENTRE, NELLORE ...APPELLANT AND KARANAM LAKSHMI, W/o.Ravindra, Hindu, aged 54 years, House wife residing at D.No.24-7-472, 1st street Ravindra Nagar Kondayapalem Gate Centre, Nellore ...RESPONDENT IA NO: 1 OF 2019 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to condone the delay of 93 days in representing the appeal ASSR No.10901 /2019, before the Hon'ble Court and pass IA NO: 2 OF 2019 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased may be pleased to accept the deficit court fee in ASSR No. 10901 / 2019, on the file of this Hon'ble court and pass IA NO: 3 OF 2019 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay all further proceedings in OS No. 98 /2014, on the file of Principal District Judge, Nellore, pending disposal of the Appeal and to pass 2 IA NO: 1 OF 2022 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to vacate the interim stay granted I.A.No.3/2019 in AS.No.586/2019 dated 17-10-2019 and pass IA NO: 1 OF 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the Decree and Judgment, dated 16.11.2018 in O.S. No. 98/2014 on the file of the Hon’ble Court of Principal District Judge Nellore, Pending disposal of A.S. No. 586/2019 and pass Counsel for the Appellant: MD SALEEM Counsel for the Respondent: C SUBODH The Court made the following: JUDGMENT: This regular appeal under Section 96 Code of Civil Procedure (hereinafter referred to as ‘CPC’) is directed against the decree and judgment in O.S.No.98 of 2014 dated 16.11.2018 on the file of the Court of learned Principal District Judge at Nellore. 3 2. The defendant, before the Trial Court, is the appellant herein. The respondent herein is the plaintiff. 3. The respondent instituted a suit against appellants for recovery of an amount of Rs.14,22,665/- based on the promissory note as well registered mortgage deed dated 08.06.2012. 4. Before adverting to the material and evidence on record and nature of findings in the judgment of the trial Court, it is necessary to scan through the case pleaded by the parties in their respective pleadings. 5. For the sake of convenience, the parties hereinafter referred to as they arrayed before the trial Court. 6. The case of the plaintiff in brief in the plaint was as follows: i) . On 08.06.2012, the defendant borrowed a sum of ₹10,00,000 from the plaintiff to meet her family necessities. To acknowledge the debt, the defendant executed a demand promissory note (Ex.A.1), undertaking to repay 4 the said amount with interest at 24% per annum, payable to the plaintiff or her order on demand. On the even day, the defendant also executed a registered mortgage deed (Ex.A.2, Document No.1698 of 2012), thereby creating an equitable mortgage over the property described in the plaint schedule. In support of the mortgage, the defendant deposited her title deeds with the plaintiff, which include: Ex.A.3 to Ex.A.5 (Document No.2522 of 2009 dated 26.08.2009, Sale deed in Document No.2524 of 2009, and Document No.4339 of 2011) ii) Furthermore, the defendant’s husband made a handwritten endorsement on page 4 of the promissory note, confirming the execution of the registered mortgage deed. iii) Despite repeated demands by the plaintiff, the defendant failed to repay any portion of the 5 loan and continued to delay repayment under various pretexts. Moreover, the defendant is attempting to alienate the mortgaged property, evidently with the intention of defeating the plaintiff’s rightful claim. Therefore, the plaintiff has instituted this suit seeking appropriate relief. 7. The defendant denying the allegations in the plaint and contending in the written statement as follows: i). The plaintiff’s husband (P.W.3) has been operating private chit funds since 2005. The defendant’s husband, D.W.2, became a member in five different chit groups from 2009, each involving varying amounts. In each of these chits, D.W.2 emerged as the successful bidder during the auctions. As part of the chit transactions, P.W.3 collected blank promissory notes from D.W.2 as security. P.W.3 would record the amounts paid by D.W.2 along with endorsements 6 and signatures in the pocketbook maintained by D.W.2. ii). The promissory notes dated 20.06.2009, 25.08.2009, and 30.08.2010 were issued without any consideration. Out of the six blank promissory notes handed over by D.W.2 to P.W.3, three remain unused. iii). P.W.3 used to harass D.W.2 by demanding the chit amounts. On 07.06.2012, a mediation was held by D.W.3-M.Nagabhushanamma and the total due amount under the chit transaction was arrived at Rs.11,15,400/-. D.W.2 expressed his inability to pay the said amount. On that, on 08.06.2012, P.W.3 got registered the said mortgage deed in the name of the plaintiff by the defendant for Rs.10,00,000/-, which is devoid of any consideration. Apart from that, the defendant also delivered the blank promissory note and a blank cheque signed by her. 7 iv). P.W.3 began harassing D.W.2 by repeatedly demanding repayment of the chit amounts. On 07.06.2012, a mediation was held by D.W.3 – M. Nagabhushanamma, during which the total outstanding amount under the chit transactions was calculated to be ₹11,15,400. D.W.2 expressed his inability to pay the said amount. Consequently, on 08.06.2012, P.W.3 arranged for the execution of a registered mortgage deed in the name of the plaintiff by the defendant for ₹10,00,000, which was without any actual consideration. Additionally, the defendant was compelled to deliver a blank promissory note and a blank signed cheque. v). Based on the advice of elders, it was agreed that once P.W.3 returned the six promissory notes signed by D.W.2, the defendant would provide a signed blank stamp paper and a promissory note. On 25.06.2012, P.W.3 informed 8 D.W.2 that the promissory notes were available and requested delivery of the blank documents. Accordingly, D.W.2 handed over the signed blank promissory notes, blank stamp paper, and three sale deeds. However, the promissory notes returned by P.W.3 were not the original ones and were fabricated. The mortgage deed dated 08.06.2012, the ₹100 denomination general stamp paper, and the blank promissory notes signed by the defendant were all executed without any consideration. Moreover, the plaintiff lacked the financial capacity to lend the alleged amount. Therefore, the suit is liable to be dismissed with costs. 8. On these pleadings, the trial Court settled the following issues for trial: “1.Whether registered mortgage deed dated 08.06.2012 executed by defendant for Rs.10,00,000/- is not supported by consideration? 9 2.Whether promissory note dated 08.06.2012 is true, valid, and executed by defendants? 3.Whether defendant created charge on suit property by executing registered mortgage deed dated 08.06.2012 by borrowing Rs.10,00,000/-? 4.Whether plaintiff is entitled for recovery of suit amount? and 5.To what relief?” 9. At the trial, on behalf of the plaintiff, P.Ws.1 to 3 were examined while relying on Exs.A.1 to A.5 in support of her contentions. On behalf of the defendant, D.Ws.1 to 4 were examined and marked Exs.B.1 to B.6 and X.1. 10. Basing on the material and evidence, the Trial Court came to conclusion that the suit promissory note and mortgage deed dated 08.06.2012 are fully supported by consideration and that the defendant registered the said mortgage deed by creating charge over the suit schedule property, thereby, the plaintiff is entitled for recovery of suit amount, and thus, decreed the suit. 10 11. It is against this decree and judgment, the appellant/defendant preferred this appeal. 12. Heard Sri V.V.Raghavaiah, learned counsel representing Sri Md.Saleem, learned counsel for the appellant/defendant and Sri C.Subodh, learned counsel for the respondent/plaintiff. 13. Sri V.V.Raghavaiah, learned counsel representing Sri Md.Saleem, learned counsel for the appellant/defendant submits that the Ex.A.2 mortgage deed is not supported by any consideration; that the plaintiff utterly failed to prove Ex.A.2 mortgage deed; that the plaintiff failed to discharge her initial burden; that the Trial Court failed to appreciate the testimony of D.Ws.1 and 2 in proper perspective; that the findings of the trial Court are bad in law and thereby prays to consider the present appeal. 14. Per contra, Sri C.Subodh, learned counsel for the respondent/plaintiff strenuously contends that the factum of execution of Exs.A.1 and A.2 by the defendant in favour of plaintiff was not denied; that testimony of P.Ws.2 and 3 11 categorically proved the execution of Exs.A.1 and A.2 by the defendant; that the plaintiff as well produced title deed under Exs.A.3 to A.5, which were handed over by the defendant to the plaintiff, to establish her case before the Trial Court; that the defendant executed Exs.A.1 and A.2 under due consideration; that the trial Court on considering the facts and circumstances, material on record rightly decreed the suit; that there are no valid grounds to interfere with the judgment of the Trial Court and that the appeal is liable to be dismissed. 15. Against this backdrop, the following points now require consideration and determination: 1. Whether the mortgage deed under Ex.A.2 was passed for consideration? 2. Whether the plaintiff has successfully established her entitlement to the suit amount as claimed in the plaint? and 3. To what relief? 16. POINT NOs.1 & 2 : Before deciding these points, it is relevant to mention the observations made by the Hon’ble Supreme Court in a 12 recent judgment in Rama KT.Barman v. MD.Mahim Ali1, which are as follows: “It is well-settled principle of law that the Court cannot create any new case at the appellate stage for either of the parties, and the appellate court is supposed to decide the issues involved in the suit based on the pleadings of the parties.” 17. Admittedly the defendant did not deny her signature on Exs.A.1 and A.2 promissory note and registered mortgage deed, dated 08.06.2012. But it is the foremost contention of the defendant that no consideration was passed under Ex.A.2 registered mortgage deed. 18. There is a rebuttal presumption in law that a registered document is validly executed. The burden to rebut this presumption lies with the party challenging the document. Same is drawn from Apex Court ruling in “Prem Singh & Ors vs Birbal & Ors”2. 1 2024 INSC 644 2 2006 (5) SCC 353 13 19. Before that, it is also the well settled legal proposition that initial burden of proof of document must be discharged by the plaintiff. Then the onus of proof of the document or otherwise shifted to the defendant. For which, this Court fortified by a judgment in B.Mallamma v. V.T.V.Rangachary3. 22. In this connection, it is also relevant to mention a judgment of this Court in A.Ramireddy v. A.Rajareddy4, in which it was held that: “The fundamental principle that when the suit transaction is denied, the burden necessarily be shifted to the plaintiff to prove the genuineness of the said document………” 23. As back in the year 1987, the Division Bench of this Court in G.Vasu v. Sayed Yaseen Sifuddin Quadri5, held that: “Even with reference to Section 101 to 103 of Evidence Act and Section 118 of Negotiable 3 1997 (3) APLJ 39/ 1997 (6) ALT 36 4 1997 (1) APLJ 65 5 AIR 1987 AP (139) 14 Instruments Act, the burden of proof undisputedly lies on the plaintiff. It has to be seen that the plaintiff has to fully discharge his burden. The settled law is that when the plaintiff proved due execution of the promissory note by the defendant in his favour, the statutory presumption contemplates under Section 118(a) of Negotiable Instruments Act, that is to say every negotiable instrument was made or drawn for consideration arrived in favour of the plaintiff.” 24. In this connection, keep in mind another judgment of Apex Court in Bharat Barrel And Drum Manufacturing Company v. Amin Chand Payrelal6, in which the Hon’ble Supreme Court held that: “Once execution of the promissory note is admitted, the presumption under Section 118(a) of Negotiable Instruments Act would arise that it is supported by consideration. Such a presumption is rebuttable. The defendant can prove non-existence of consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that existence of consideration was improbable or doubtful or the same was illegal, the onus would shift 6 AIR 1999 SC 1008 15 to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case where the defendant fails to discharge the initial onus of proof by showing the non- existence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) of Negotiable Instruments Act in his favour. The Court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as existence of negative evidence is neither possible nor contemplated and even if led is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the 16 presumption, the defendant has to bring on record such facts and circumstances, upon consideration of which the Court may either believe that the consideration did not exist or its none existence was probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist.” [ 25. In the backdrop of the above legal propositions as stated supra, undoubtedly the initial burden to prove the execution of Exs.A.1 and A.2 under consideration is lies on the plaintiff. To prove the same, the plaintiff examined herself as P.W.1 and, during her chief examination, reiterated the averments made in the plaint. In support of her case, the plaintiff also examined P.W.2 and P.W.3, who are attesting witnesses to Ex.A.1 (promissory note) and Ex.A.2 (mortgage deed), respectively. Their examination was essential to comply with the statutory requirements under Section 68 of the Indian Evidence Act, 1872, which mandates the production of at least one attesting witness to prove the execution of a document required by law to be attested. 17 26. The execution of the mortgage deed was further substantiated by the registration process, which included the defendant’s photograph, signature, and thumb impression. Notably, the defendant has not denied her signatures on Ex.A.1 and Ex.A.2. However, her defence is that these documents were executed in connection with a chit fund transaction. 27. It is also an admitted fact that the sale deeds marked as Exs.A.3 to A.5, which pertain to the plaint schedule property, are currently in the custody of the plaintiff. During cross-examination, P.W.3 clearly testified that the plaintiff received monthly rental income of ₹12,000 to ₹13,000, and that her father had given her ₹5,00,000 upon his retirement. The plaintiff allegedly lent ₹10,00,000 to the defendant from her personal savings and the amount received from her father. 28. No material evidence was brought on record during the cross-examination of P.W.1 and P.W.3 to discredit the plaintiff’s financial capacity or to cast doubt on the credibility 18 of her testimony. Therefore, the plaintiff’s ability to lend the said amount stands unshaken and credible. 29. P.W.3 categorically testified during cross examination that the plaintiff used to get Rs.12,000/- to Rs.13,000/- per month as rentals and the father of the plaintiff at the time of his retirement gave Rs.5,00,000/- to her and she lend Rs.10,00,000/- to the defendant out of her savings and amount given by her father. Nothing incriminating was placed on record during cross examination of P.Ws.1 and 3 to disbelieve the creditworthiness of the plaintiff’s evidence nor the capacity of the plaintiff to lend such amount to the defendant. 30. It is further noteworthy that D.W.2, the husband of the defendant, has admitted his signature on Exs.A.1 and A.2 as one of the attesting witnesses. He also did not deny that he was the scribe of Ex.A.1 (promissory note). Moreover, D.W.2 categorically admitted that the endorsement on the reverse side of Ex.A.1 is in his own handwriting, and the signature on that endorsement is also that of him. 19 31. D.W.2, as testified, is a law graduate, which adds weight to the credibility and awareness of his actions. Given his educational background and the nature of his admissions, it is highly improbable to accept the contention of the defendant and D.W.2 that Exs.A.1 and A.2 were executed in connection with a chit fund transaction without any consideration. 32. Furthermore, it is important to note that, Ex.A.2, the registered mortgage deed, was executed by the defendant in favour of the plaintiff and was registered before the Sub- Registrar at 11:00 a.m. on the same day. According to the testimony of P.Ws.1 and 2, Ex.A.1 (promissory note) was executed earlier that morning, between 08:00 a.m. and 09:00 a.m. 33. As previously stated, D.W.2 has admitted that the endorsement on the reverse side of Ex.A.1 was written in his own handwriting and bears his signature, acknowledging the existence of the registered mortgage deed. This admission is further supported by the testimony of P.W.2. These facts 20 clearly establish that Exs.A.1 and A.2 were part of a single transaction, and the consideration involved was a single amount of ₹10,00,000. 34. In view of the above discussion, the plaintiff well established before the Trial Court by the testimony of P.Ws.1 to 3 coupled with Exs.A.1 to A.5 that the defendant borrowed an amount of Rs.10,00,000/- from her on execution of Exs.A.1 and A.2. 35. Now it has to be seen whether the defendant rebutted the presumption by adducing any substantial piece of evidence. For which the defendant herself entered into the witness box as D.W.1 and in support of her evidence got exhibited Exs.B.1 to B.6 and X.1. 36. Now, it is the turn of the defendant to prove his defense as there was no consideration under Exs.A.1 and A.2 and her evidence must be proved with all preponderance of probabilities that there was no consideration passed as contended by her. Except denying the case of the plaintiff as well supporting his version in written statement nothing 21 culled out from the testimony of D.W.1 to make believe that the defendant did not receive any consideration under Exs.A.1 and A.2. 37. When P.W.3-husband of the plaintiff denied his signatures on Exs.B.1 to B.4, which are pertaining to the chit transaction, they were referred to handwriting expert. D.W.4, who is handwriting expert, gave opinion under Ex.X.1 in favour of the defendant. But, admittedly, the same is not helpful to the case of the defendant to disprove the execution of Exs.A.1 and A.2 by the defendant with the active presence of D.W.2 husband of the defendant as one of the attestor of Exs.A.1 and A.2 and scribe regarding the endorsement made on the reverse of Ex.A.1 about the execution of Ex.A.2. 38. Furthermore, the defendant failed to explain the actual circumstances to hand over the original title deeds under Exs.A.3 to A.5 in respect of the plaint schedule property to the plaintiff. She relied upon improbable defence, without support of any substantial material, which is not sustainable under law. 22 39. More so, the testimony of D.W.3, who is husband of the defendant, is of no use to the case of the defendant to disprove the execution of Exs.A.1 and A.2 under due consideration. 40. On the other hand, plaintiff is able to establish that the Exs.A.1 and A.2 were passed by consideration. Moreover, none of the grounds urged by the appellant/defendant to say that her defense is acceptable rather than the case of the plaintiff. Thereby, the plaintiff is entitled for the suit claim. These points are answered accordingly. 41. POINT No.3: In view of the findings on point Nos.1 and 2, this Court does not find any valid grounds to interfere with the well- articulated judgment passed by the trial Court, as such this Court is unable to found any merits in the appeal and the same is liable to be dismissed. 42. In the result, the appeal is dismissed by confirming the decree and judgment passed in O.S.No.98 of 2014 dated 23 16.11.2018 on the file of the Court of Learned Principal District Judge at Nellore. There shall be no order as to costs. Interim orders granted earlier, if any, stand vacated. Miscellaneous petitions pending, if any, stand closed. ____________________ JUSTICE V.SRINIVAS Date: 24.09.2025 Krs 24 386 THE HON’BLE SRI JUSTICE V.SRINIVAS APPEAL SUIT No.586 of 2019 ( JUDGMENT ) DATE: 24.09.2025 Krs