Sunday 5 February 2017

When defendant is entitled to get unconditional leave to defend in summary suit based on promissory note?

 After service of writ of summons, the defendant No. 1 filed appearance and on receipt of the summons for Judgment has filed an affidavit in reply dated 13th June, 2003. In paragraph No. 2 of the affidavit in reply, the defendant No. 1 who is the son of the deceased has specifically stated that the deceased Fateh Bahadur Shrivastava had never signed the promissory notes on which the plaintiff is relying her claim. In the affidavit, the defendant has further denied that deceased Fateh Bahadur Shrivastava took the loan as alleged by the plaintiff. In view of the denial of the signature on the promissory notes, the plaintiff Would be required to prove that the execution of promissory notes was by late Fateh Bahadur Shrivastava. The learned counsel for the plaintiff contends that under Section 118 of the Negotiable Instruments Act, there ts a presumption of consideration and therefore, the burden of proof that the deceased had not taken the loan was on the defendant No. 1 Which he had got discharged and therefore, no leave to defendant should be granted. Under Section 118, there is no presumption about the execution of a Negotiable Instrument by a person. The execution must be proved in accordance with law. Only after the execution of Negotiable Instrument is proved, then the presumption of consideration would arise. In the present case, there is not only denial of the receipt of consideration but even the denial of the execution of the promissory notes. Therefore, the contention of the learned counsel for the plaintiff cannot be accepted. As the plaintiff would be required to prove the signatures on the promissory notes, triable issue arise. The defendant No. 1 would therefore, have to be granted unconditional leave to defend the suit.
Bombay High Court
Smt. Sheel Arora vs Sanjay Fetah Bahadur Srivastava on 19 November, 2003
Equivalent citations: AIR 2004 Bom 99

Bench: D Karnik


1. Heard the learned counsel for the plaintiff and defendant No. 1.
2. According to the plaintiff, she advanced a loan of Rs. 3,50,000/- to one Fateh Bahadur Shrivastava who executed three demand promissory notes for Rs. 1,60,000/-, Rs. 1,40,000/- and Rs. 50,000/- on 3rd June, 1998 and 4th June, 1998 respectively. Fateh Bahadur died prior to the institution of the present suit. The plaintiff has therefore, filed this suit joining Sanjay Fateh Bahadur Shrivastava, son of the deceased as defendant No. 1. The defendant No. 2. as stated in the title of the plaint is "unknown legal heirs and representatives of Fateh Bahadur Shrivastava."
3. After service of writ of summons, the defendant No. 1 filed appearance and on receipt of the summons for Judgment has filed an affidavit in reply dated 13th June, 2003. In paragraph No. 2 of the affidavit in reply, the defendant No. 1 who is the son of the deceased has specifically stated that the deceased Fateh Bahadur Shrivastava had never signed the promissory notes on which the plaintiff is relying her claim. In the affidavit, the defendant has further denied that deceased Fateh Bahadur Shrivastava took the loan as alleged by the plaintiff. In view of the denial of the signature on the promissory notes, the plaintiff Would be required to prove that the execution of promissory notes was by late Fateh Bahadur Shrivastava. The learned counsel for the plaintiff contends that under Section 118 of the Negotiable Instruments Act, there ts a presumption of consideration and therefore, the burden of proof that the deceased had not taken the loan was on the defendant No. 1 Which he had got discharged and therefore, no leave to defendant should be granted. Under Section 118, there is no presumption about the execution of a Negotiable Instrument by a person. The execution must be proved in accordance with law. Only after the execution of Negotiable Instrument is proved, then the presumption of consideration would arise. In the present case, there is not only denial of the receipt of consideration but even the denial of the execution of the promissory notes. Therefore, the contention of the learned counsel for the plaintiff cannot be accepted. As the plaintiff would be required to prove the signatures on the promissory notes, triable issue arise. The defendant No. 1 would therefore, have to be granted unconditional leave to defend the suit.
4. As regards the unknown legal heirs and representatives of Fateh Bahadur Shrivastava, named as such, in the plaint, the learned counsel seeks leave to take out a fresh summons for judgment. Without going into the issue as to whether such leave can be granted at the hearing of the Summons for Judgment, in the facts and circumstances such leave has to be refused. The person against whom the suit is instituted is required to be joined as party to the suit. The learned counsel for the plaintiff stated that despite the efforts, the plaintiff was unable to know even names of other heirs of the deceased Fateh Bahadur Shrivastava, leave apart their addresses. Despite notices given to him, the defendant No. 1 is not willing to disclose the names of the other heirs and therefore, the plaintiff was helpless and had joined "Unknown legal heirs of Fateh Bahadur Shrivastava" as defendant No. 2 and she may be permitted to add their names as and when the names of heirs are discovered. The learned counsel for the plaintiff relies upon a judgment of this Court rendered in V.B. Kapadia v. Nirmala, D/o Atmaram Laxman Chowdhary, (Civil Revision Application No. 5423/61 decided on 22nd January 1962 by Patel, J.). In that case, there are some observations which do support the contention that a suit can be instituted under certain circumstances in the name of "Unknown heirs of deceased." In the very judgment, the learned single Judge has observed as follows:
"Though, therefore, I agree with Mr. Justice Naik as held by him in Civil Revision Application No. 491/59 (decided on 19/21st July, 1960) that heirs should and ought to be named in view of the peculiar circumstances of the case. I am not prepared to hold that the decree was in nullity."
The proposition laid down by Naik, J. in Civil Revision Application No. 491/59 that heirs should and ought to be named in the plaint was accepted as a correct proposition and I respectfully agree with the said proposition.
5. The peculiar circumstances which existed in V.B. Kapadia's case (Civil Revision Application No. 543/61), do not exist in the present case. In paragraph No. 3 of the plaint, the plaintiff has stated that the deceased Fateh Bahadur Shrivastava was her family friend indicating therein that the two families knew each other. If so, there is no reason why the plaintiff was unable to give the names of his heirs. In my opinion, therefore, the suit against defendant No. 2 i.e. "Unknown heirs of Fateh Bahadur" is not maintainable. As the suit is not maintainable, leave carved by the plaintiff for taking out fresh Summons for Judgment against defendant No. 2 cannot be granted.
6. Accordingly, defendant No. 1 is granted unconditional leave to defend the suit. The suit is transferred to the list of commercial causes. The defendant No. 1 to file written statement within a period of eight weeks.

7. Certified copy be expedited.
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