P L D 1977 Karachi 905 (PLP)

(1) Whether the suit filed fin Runs‑barred 9 (2) Whether the signatures on pronote dated 26‑12‑66 are forged ? (3) Whether the plaintiff is entitled to suit amount? (4) Whether the defendant is an agriculturist within the meaning of the Dekkan Agriculturists Relief Act and thereby entitled to all protections under the law? (5) Whether the rate of interest stipulated by the plaintiff is excessive, oppressive and not warranted by law? (6) What should the decree be?

5. The parties have led evidence in support of their respective cases. On behalf of the plaintiff's their officer ore Syed Ziaul Hassan Ja`ery was examined who has produced promissory note dated 21‑7‑64 (Exh. 5/1), state. ment of account in the loan account with plaintiffs' McLeod Road Branch (Exh. 5/2) promissory note dated 26‑12‑66 (Exh. 5/3) and 3 notices dated 2.t‑1‑68, 25‑3‑67 and 5‑7‑67 (Exh. 5;4). On the defendant's side the defendant himself appeared as his own witness and has produced in cross‑examination documents relating to alleged equitable mortgage of his house properties at Kotri and Hyderabad which is denied by him.

6. Issues Nos. 1, 2 and 3.‑The learned counsel argued these three issues together and therefore, it will be convenient to consider them together. It was contended on behalf of the defendant that the plaintiffs have failed to prove the execution of the pronote dated 26-12‑66 upon which the suit was based and therefore the claim in suit must fail. As against this the conten tion on behalf of the plaintiffs was that the defendant has failed to establish the forgery of the promissory note and in any case the basic transaction between the parties being admitted the plaintiffs are entitled to the decree claimed. The alternate argument on behalf of the defendant was that the plaintiff have failed to prove the consideration. The plaintiffs on the other hand invoked the presumption of law under section 118, Negotiable Instru ments Act which provides that until the contrary is proved it shall be presumed that a negotiable instrument was made or drawn for consideration.

7. Before considering the respective contentions of the parties it is necessary to point out that upon they request of the defendant the disputed promissory note dated 26‑12‑66 was referred to the Handwriting Expert for comparison with the admitted signatures and opinion as to the genuineness of the signatures on the disputed instrument. Before closing his evidence the defendant had summoned the Handwriting Expert but subsequently the defendant closed his side after the evidence of the defendant himself, without examining the Handwriting Expert. When the case came up for final arguments the plaintiffs requested for summoning the Handwriting Expert as their witness but by a separate order dated 1‑4‑77 I dismissed their application.

8. Now the only remaining evidence on the plaintiffs' side is that of their officer Syed Ziaul Hassan Jafery who has merely stated that the defend ant executed the disputed promissory note and has denied the suggestion that the signature on it is forged. "The defendant on the other hand in his evidence A denied that the signatures on this document are his. In this state of affairs it is hardly possible to hold that the execution of the promissory note in question has been established. Mr. Inamul Hague for the plaintiffs, however, con, tended that the failure on the part of the defendant to summon the Hand. writing Expert in evidence gives rise to a presumption under section 114 of the Evidence Act that the evidence of the expert would have been unfavourable to the defendant. On this premise the learned counsel contended that it must be presumed that the impugned promissory note was found to bear the genuine signature of the defendant. Mr. Sabir Rehmani on the other hand invoked the aid of section 73 of the Evidence Act and urged for a comparison of the disputed signatures with tae admitted signature which according to him reveal that the signatures were not genuine. In my opinion it is not necessary to undertake a visual comparison as in any case such examination will not be a reliable mode for decision of the issue in the circumstances of this case. The other circumstances are Oat the plaintiffs have chosen to adduce the evidence of an officer who does not claim that the defendant signed the promissory note in his presence or that he is conversant with his signature It should not have been difficult for the plaintiffs to have produced the officer who obtained the promissory note from the defendant and it is the usual practice of banks to obtain signatures on documents from their constituents in presence of a responsible officer of the Bank. To my mind, therefore, even in absence of the evidence of the forgery it cannot be assumed that the execution of the promissory note is established. The rule of presumption contained in section 114 of the Evidence Act is a permissive provision and the Court has discretion to draw or not to draw a presumption, having regard to the circumstances of a particular case. Besides this section deals with presump tion of fact whereby the existence of say fact which the Court thinks likely to have happened may be presumed.

9. It is therefore, doubtful if the defendant executed the second promissory note dated 26‑12‑

66. But be that as it may, the important ques tion that arises for consideration is whether this promissory note upon which the suit is founded, was drawn for consideration. In this connection Mr. Inamul Haque submitted that this promissory note was executed for the past consideration of the loan initially advanced try the plaintiffs, for which admittedly the first promissory note dated 21‑7‑64 was executed. However, as stated earlier the defendant has denied consideration even for the first promissory note. The next question, therefore, that falls for consideration is whether the pronote dated 21-7‑64 was executed by the defendant for consideration.

10. In the plaint the case set up by the plaintiffs is that in July, 1964 the defendant approached for grant of a loan of Re. 35,W0 and the payment was made to him on 28‑7‑

64. In support of the payment the plaintiffs have produced the Statement of Account which commences ;with the entry dated 28‑7‑64 and in the column relating to the particulars the words mentioned are "To loan allowed" and in the coumn relating to withdrawals the amount of Re. 35,C00 is mentioned. The nature of the account is shown as a loan account. The column relating to cheque number in regard to this entry is blank. Coupled with these circumstances is the fact admitted by the witness of the plaintiffs that the defendant had not issued any cheque for payment of the amount. The other circumstances are that admittedly the defendant had no account with the concerned branch. No other evidence In proof of the payment has been produced. It was denied by the defendant that he had any account with this branch. Even so the plaintiffs did not produce any document like the Account Opening Form which is the usual mode for opening an account with tie bank, to prove that the defendant did open the account in question. It is rather strange arid unusual for a bank to make payment over the counter against a promissory note. The usual mode for making advances by the bank is through the existing account of the constituent or in case of a pew customer, by opening a fresh account in the usual manner. In any case it cannot be expected from a battling organization not to obtain a separate receipt for payment of money even if the extraordinary mode canvassed on behalf of the plaintiffs was actually adopted. The other circumstance that militates against tile contention of the plaintiffs is the admitted fact that the defendant bad a regular account at the plaintiffs' Kotri Branch. The ordinary course of conduct would be expected to advance the loan to the defendant who was already a constituent of the bank, through their Kotri Branch where the defendant was maintaining his account. But for reasons best known to the plaintiffs and in any case not clearly mentioned, the plaintiffs adopted the course pleaded by them. It is also admitted by the witness of the plaintiffs that no application was male by the defendant for the loan. In the circumstances we are left only with the statement of account as the proof for the alleged payment. Section 34 of the Evidence Act clearly,, stipulates that although entries in books of account are relevant but provides that such evidence shall not alone be sufficient to charge any person with liability. It was held in Lakshrni Narayan Jew v Province of East Pakistan (1969 S C M R 898) that mere production of books of account does not prove each item of entry there in and it is necessary where the correctness of such entry is specially challenged to produce corroborating evidence in shape of vouchers or receipts or cash memos. to establish factual correctness of the entry. The rule that corroboration is necessary in support of entries in the certified copy of account under the Bankers Books Evidence At was confirmed by their Lord ships of the Supreme Court in Mohammad Siddiq Mohammad Oomar v. Australasia Bank Ltd (P L D 1966 S C 684). In the light of all these circumstances I am of the confirmed view that the plaintiffs have totally failed to establish the payment of the amount allegedly advanced under the first promissory note.

11. Mr. Inamul Haque the learned counsel for the plaintiffs, however, sought to overcome this position by raising a two‑fold contention. t‑ a first argued that the absence of substantial evidence of consideration is immaterial as section 118 of the Negotiable Instruments Act raises a presumption of consideration. This argument, however, is of no avail to the plaintiffs in the circumstances of the present case. In this connection it is important to refer to the significant fact that the promissory note was executed on 21‑7‑64 whereas according to the plaintiffs' own case the payment was made on 28‑7‑

64. The promissory note states that it was executed for "value received", although admittedly no consideration had passed on that date. In Sallar Abdur Rauf v. Barkat Bibi (1973 S C M R 332) it v as contended similarly that where the execution of the pronote was proved by the evidence the burden of proof lay upon the defendant to prove affirmatively teat the pronote wag without consideration. Their Lordships affirmed the view of the High Court that where the holder of the pronote bad undertaken to show that it was for consideration actually paid at the time of execution of the pronote but failed to produce creditworthy evidence in that behalf, re cannot turn round to invoke the presumption under section

118. Further in Mohammad Hassan Ashraf v. Shakil Ahmad (1973 S C M R 595) it was held that where there was no contemporaneous payment of consideration at the execution of the promissory note and the payment on earlier occasion wav not proved, the inference that the pronote was executed without consideration was justified despite section 118.

12. As expressed by me earlier the circumstances surrounding tile transaction in dispute, to say the least, were rather extraordinary. It is admitted that the defendant had an account at plaintiff's' Kotri Branch where their Manager was one Mr. Bashir. The defendant has contended that the promissory note was obtained from him to cover up the defalcations by the Manager of the Kotri Branch. On an overall consideration of the circum stances pointed out above, the balance of probabilities would indicate that the promissory note was executed without consideration as pleaded. At any rate the above circumstances have in my opinion, the effect of displacing the presumption under section 118 of the Negotiable Instruments Act. The effect would be that the onus would in the ultimate analysis revert to the plaintiffs to establish by substantial evidence the payment of consideration.

13. Mr Inamul Haque next contended that having regard to the plead ing of the defendant, in any case the first promissory note was executed in consideration of the dues outstanding against Mr. Bashir the Manager of the Kotri Branch which would constitute sufficient consideration to support the promissory note. In this connection counsel submitted the proposition that in law the holder of a promissory note is entitled to succeed even if he failed to establish the consideration mentioned in the instrument if it was established that some other consideration passed for the execution of the promissory note. Reliance was placed on some decisions from the Indian Jurisdiction as well as a decision of this Court reported as Mohiuddin Baig v. jamila Bibi (P L J 1973 Kar. 63). In the last‑mentioned case Noorul Arfin, J. (as he then was) reviewed the cases on the point and noticed the conflict of judicial opinion among the various High Courts in the sub‑continent. One view is that if the holder admits in the pleadings or in his evidence, or if it is proved on other evidence before the Court, that the consideration for the negotiable instrument was different from that stated in the instrument itself, then the initial presump tion under section 118 (a) of the Act is rebutted. The other view taken by some of the Courts is that section 118 of the Negotiable Instruments Act raises a statutory presumption in respect of any consideration which is valid consideration in law. and not in respect of particular form of consideration mentioned in the instrument itself. However, the learned Judge without committing himself to correctness of either of these two conflicting views proceeded to examine the question in the light of the evidence on record on the assumption that the accord view mentioned above is valid and observed as under :‑ "However, if the consideration stated in the instrument turns out to be untrue and some other form of consideration is proved at the trial, either by way of admission in the pleadings or in the evidence of the holders of the instrument or through some other evidence, then this inconsistency between the forms of consideration should be viewed in the context of the other evidence which comes before the Court for the purpose of coming to the conclusion whether the defendant has discharged the burden laid upon him with regard to the presumption of consideration under section 118 of the Negotiable Instruments Act." The learned Judge then upon the examination of the evidence came to the conclusion that whereas the instrument shows cash consideration of Rs. 40.600, in the deposition of the plaintiff it was stated that part of the consideration was in the shape of certain household effects and a taxi‑car given by the plaintiff to the executant. The plaintiff had further stated that accounts were rendered by the drawer to the plaintiff before the execution of the instrument and that the instrument was executed in the house of the witness who had however, admitted in the cross‑examination that no money was advanced in his presence. The facts of that case ware much stronger in so far as the holder also produced a receipt for the payment shown in the instrument. But the learned Judge finally reached the conclusion that the statement made in the promissory note arid the receipt that consideration of Rs. 4,0000 had been paid in the form of currency notes was totally incorrect in view of the circumstances appearing in the plaintiff's evidence. In the pre. sent case, even if the rule laid down in the reported case is followed the result would be the same. I have already pointed out the circumstances which tend to show that the payment was not made in cash. This decision also there fore, does not advance the case of the plaintiffs.

14. For the foregoing reasons I would hold that the first promissory note was without consideration and as such no liability arose therefrom against the defendant.

15. Out of the rest of the issues, Issue No. 4 was not pressed and the remaining issues are not necessary to decide in view of my finding on Issue No. 3.

16. In the result this suit fails and is accordingly dismissed with costs. S. A. H. Suit dismissed.