Inam Ullah Khan, J.
1. By virtue of this appeal, legality and validity of the judgement dated 30.5.2024, passed by the learned Addl. District Judge-II, D.I.Khan has been called in question, whereby, the suit filed by the respondent under Order XXXVII Code of Civil Procedure, 1908 (Code) was decreed to the extent of Rs. 44,00,000/-.
2. The facts, as enumerated in the appeal are that the respondent claims to have lent Rs.
44,00,000/- to the appellant in September 2020. This loan was purportedly given in the presence of witnesses. A pro-note, dated 14.10.2020, was allegedly executed to formalize the loan transaction.
After the loan was given, the respondent demanded the return of the loan amount from the appellant. As a result of the appellant's refusal to repay, the respondent filed the suit for recovery of Rs. 45,00,000/- under Order XXXVII CPC, which provides for summary procedure in cases involving negotiable instruments, including promissory notes.
3. Upon being duly summoned, the appellant appeared before the Court and submitted an application for leave to defend the suit, which was allowed. Subsequently, a written statement was filed. After the framing of issues, both parties were afforded full opportunity to produce evidence of their choice. The respondent-plaintiff examined five (05) witnesses and thereafter closed his evidence. Conversely, the appellant failed to produce any evidence despite the opportunity provided. Consequently, his right to lead evidence was struck off under Order XVII Rule 3 of the Code of Civil Procedure (CPC) by order dated 27.02.2023. The appellant challenged the said order before this Court through C.M. No. 31-D/2023 but was unsuccessful in obtaining the desired relief.
Thereafter, arguments were heard from both parties and the learned trial Court, vide judgment and decree dated 31.05.2024, decreed the suit in favour of the respondent to the extent of Rs.
4,400,000/-. Feeling aggrieved, the appellant preferred instant appeal and challenged the validity of the impugned judgment and decree passed by the learned trial court.
4. I have heard the contentions of the learned counsel for the parties and have perused the record with their able assistance.
5. Perusal of the record reveals that on 04.09.2021, the respondent instituted a suit for recovery of Rs. 4,400,000/-, along with costs of the suit, counsel's fee, and other ancillary reliefs under Order XXXVII Rule 2 of the Code of Civil Procedure, 1908, before the learned Additional District Judge-II, Dera Ismail Khan. In the plaint, it was, inter alia, pleaded that in the year 2020, the appellant approached the respondent seeking a loan amounting to Rs. 4,400,000/-, which was advanced accordingly. In this regard, a promissory note dated 14.10.2020 was allegedly executed by the appellant acknowledging the receipt and undertaking to repay the said amount. In evidence session, Muhammad Farooq Baloch (PW-2), the scribe of the said promissory note, appeared and testified regarding the execution of the document and the transaction between the parties, providing detailed particulars concerning its contents. Furthermore, the marginal witnesses, namely Muhammad Shoaib (PW-4) and Khasore Khan (PW-5), also entered the witness box and confirmed that the promissory note was duly scribed by the petition writer in their presence and that the document bore their respective signatures/thumb impressions.
6. Conversely, the appellant refuted the claim and denied any liability, asserting that the impugned promissory note was fabricated by the respondent in connivance with the marginal witnesses. The appellant also took the plea that in fact, an exchange deed was executed between the respondent and one Ghazanfar Ullah, a mutual acquaintance of the parties, and that the appellant had merely signed the said deed as a witness at the behest of Ghazanfar Ullah. According to the appellant, the promissory note and receipt were a result of fraud perpetrated in collusion between the respondent and Ghazanfar Ullah.
7. The initial burden of establishing that the impugned promissory note was executed in lieu of consideration--specifically a loan of Rs. 4,400,000/--and that the agreement deed dated 14.10.2020 was duly effected, squarely rested upon the respondent. The respondent produced evidence that corroborates the averments made in the plaint. Learned counsel for the appellant, however, laid considerable emphasis on the mode of payment, particularly highlighting the respondent's admission during cross-examination that the loan amount was paid in installments. Nonetheless, such mode of disbursement does not materially impair the respondent's version of events, especially when sufficient documentary and oral evidence is available on record to substantiate his claim. Moreover, in the written statement, the appellant has admitted to having affixed his signature on the arbitration/agreement deed as a marginal witness, which further lends credence to the respondent's case. So, the mere denial that the appellant had not signed the pronote would not be sufficient and he seems to have taken the plea just to get rid of the payment outstanding against him. The burden heavily lies upon the appellant, as in case of negotiable instrument, it is the defendant who is duty-bound to prove contrary, because the presumption is attached to the negotiable instrument, but even then the respondent has successfully proved, and there is nothing in rebuttal on behalf of the appellant. The story cooked up by the appellant has not been supported with any cogent evidence. For the facility of reference, section 118 of the Negotiable Instruments Act, 1881 is reproduced as under: "118. Presumptions as to negotiable instruments Until the contrary is proved, the following presumption 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, endorsed, negotiated or transferred, was accepted, endorsed, 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 endorsements-that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamps-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 contained 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 consideration, the burden of proving that the holder is a holder in due course lies upon him".
From the plain reading of section 118 of the Act, it evinces that there is an initial presumption that a negotiable instrument/prontoe is made, drawn, accepted or endorsed for consideration. Although the presumption is rebuttable, the onus is on the person denying consideration to allege and prove the same. Therefore, under section 118 or the Act, where the execution of the negotiable instrument was admitted, the burden of proof of non-payment of consideration would lie on the executant, which is lacking in this case. The appellant failed to rebut the statutory presumption raised under section 118 of the Act in that he did not lead evidence in disproof of the assertions made in the plaint, and proved by the respondent by adducing confidence inspiring evidence.
8. Additionally, there is no cavil with the legal proposition that suit under Order XXXVII, Rule 2, C.P.C. can be filed in respect of negotiable instruments which includes promissory notes. The promissory note is defined under section 4 of the Act, 1881, which reads as follows:- "Promissory note." A "promissory note" is an instrument in writing (not being a bank-note or a currency note) containing an unconditional undertaking, signed by the maker, to pay [on demand or at a fixed or determinable future time] a certain sum of money only to, or to the order of, a certain person, or the bearer of the instrument".
The plain reading of the above definition shows that a document shall be regarded as promissory note, if it fulfills the following requirements:-
(i) An unconditional undertaking to pay,
(ii) The sum should be a sum of money and should be certain,
(iii) The payment should be to or to the order of a person who is certain, or to the bearer, of the instrument,
(iv) And the maker should sign it.
If all aforementioned four conditions are present, the document becomes a promissory note under section 4 of the Act. In the instant case, the respondent has undoubtedly fulfills the essential pre- requisites of promissory note under section 4 of the Act ibid. The Honourable Supreme Court of Pakistan in case titled "Haji Karim and another v. Zikar AbdulIah" (1973 SCMR 100) has observed that the initial presumption that a negotiable instrument is made, drawn, accepted or endorsed for consideration, although is rebuttable presumption, yet the onus is on the person denying consideration to prove the same.
9. Having said that burden to rebut presumption lies upon the party denying the consideration, the questions arise that how this presumption can be rebutted? The Honourable Supreme Court of Pakistan in case titled "Rab, Nawaz Khan v. Javed Khan Swati" (2021 CLD 1261) answered the question as to how the presumption is rebutted, in the following words: "Although the presumption stated above, that every negotiable instruments is made/drawn for consideration, is rebuttable, it is trite law that the burden to rebut this presumption lies upon the party arguing that the negotiable instrument has not been made/drawn for consideration.
Reference is made to the case of Haji Karim v. Zikar Abdullah (1973 SCMR 100 at page 101).
However, this raises the question: how can this presumption be rebutted? The answer has been provided by the Indian Supreme Court in the case of Bharat Barrel and Drum Manufacturing Company v. Amin Chand Payrelal ([1999] 1 SCR 704).
"13. ...The defendant can prove the nonexistence of consideration by raising a probable defence...
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 relics... 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 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 non- existence was so probable that a prudent man would. under the circumstances of the case shall act upon the plea that it did not exist."
10. The learned counsel of the appellant has also taken support of few minor discrepancies and contradictions in evidence of witnesses produced by the respondent-side, which is not sufficient, in the present case, to rebut the presumption. The appellant has completely failed to raise any probable defense or to show by producing any convincing evidence that the promissory note lacks consideration, hence he has remained unsuccessful to rebut the presumption arising under section 118(a) of N.I.A, 1881.
11. No case requiring interference, under section 96 of the Code, is made out. Consequently, this appeal is dismissed. No order as to costs.