Civil Procedure Code, 1908 – Section 100 – Second Appeal – Concurrent findings in promissory note suit – Scope of interference.
Suit for recovery of Rs.2,45,300/- (Rs.1,50,000/- principal + interest) based on promissory note dated 05-05-2010. Trial Court decreed the suit; First Appellate Court confirmed on re-appreciation of evidence. In second appeal, defendant sought to reopen factual findings by reiterating his defence of “blank signed promissory note” misused by a third party. High Court held that both courts below had properly appreciated oral and documentary evidence; no perversity, misreading, or non-consideration of material evidence was shown. Reiterating that concurrent findings of fact, howsoever erroneous, cannot be disturbed in second appeal absent a substantial question of law, the Court declined to interfere. Second appeal dismissed at admission stage.-
Promissory note – Suit on pronote – Execution admitted – Defence of blank signed instrument and misuse by third party – Burden of proof and evidentiary consequences.
Plaintiff’s case: defendant borrowed Rs.1,50,000/- on 05-05-2010 for family and business needs, agreed to pay interest at 24% p.a., and executed Ex.A1 promissory note; after default, legal notice was issued and replied with false allegations. Defendant’s defence: in 2006 he borrowed Rs.19,000/- from one R. Chengalraya Naidu; at that time he signed an unfilled printed promissory note which that person later misused, in collusion with plaintiff, to fabricate Ex.A1. In cross-examination, defendant (D.W.1) categorically admitted his signature on Ex.A1 and further admitted that he is in the habit of signing blank promissory notes as and when necessity arises. No documentary material was produced to support the alleged earlier loan of Rs.19,000/- or the subsequent supply of jaggery/repayment. Defendant’s own admission of signature on the suit pronote, without credible rebuttal material, was held sufficient to accept Ex.A1 as a true and valid instrument. The burden to establish misuse of a blank signed instrument was held to lie squarely on the defendant; he failed to discharge it. -
Evidence – Conduct of defendant – Practising advocate – Failure to pursue appropriate remedies – Adverse inference.
Defendant is a practising advocate of the Chittoor Bar. He deposed that he lodged a complaint with the police against R. Chengalraya Naidu alleging misuse of the blank promissory note, but the police did not act on the ground that it was a civil dispute. High Court concurred with the courts below that, as a law-knowing person, he had efficacious alternative remedies (e.g., private complaint under Sections 190 and 200 CrPC, or independent civil proceedings) but did not take any meaningful legal action. His inaction, coupled with absence of any contemporaneous record about the alleged Rs.19,000/- transaction or about loss/misuse of the instrument, seriously undermined his version. On the other hand, the evidence of P.Ws.1 and 2, supported by Exs.A1 to A3, was found consistent and reliable. On this basis, both courts concurrently held that the defence story of “fabrication at the instance of son-in-law / Chengalraya Naidu” was an afterthought. -
Promissory note – Proof of consideration – Appreciation of evidence in pronote suits.
Plaintiff examined herself (P.W.1) and the scribe of Ex.A1 (P.W.2). P.W.2 proved that he scribed the suit promissory note on 05-05-2010 and that defendant executed it for Rs.1,50,000/-. Defendant examined himself and one more witness but produced no documentary support for his plea. Both Trial Court and First Appellate Court, on appreciation of this evidence, held that execution and consideration were duly proved and that Ex.A1 was not fabricated. High Court noted that the courts below neither ignored any material evidence nor relied on inadmissible evidence; their concurrent findings on genuineness, consideration and liability under Ex.A1 stood on firm evidentiary footing and could not be revisited in second appeal. -
Civil Procedure Code, 1908 – Section 96 and Section 100 – First appellate court as final court of fact – High Court’s limited jurisdiction.
First appellate Court, in A.S.No.40 of 2022, undertook a full re-appraisal of pleadings, oral and documentary evidence, and recorded clear reasons for affirming the Trial Court. High Court reiterated the settled position that the first appellate Court is the final court of fact, and that in second appeal the High Court cannot re-investigate the grounds on which factual findings were arrived at, save where such findings are vitiated by perversity, non-consideration of crucial evidence, or application of wrong legal principles. Relying on Kapil Kumar v. Raj Kumar (2022) 10 SCC 281 and Ramasalamma v. Potturi Venkata Srinivasa Raju (2011 SCC OnLine AP 748), the Court held that no such infirmity was shown here; mere attempt to secure a different factual inference does not constitute a substantial question of law. -
Interest – Reduction from 24% p.a. to 12% and 6% p.a. – No interference in second appeal.
Trial Court decreed the suit for Rs.2,45,300/- with subsequent interest at 12% p.a. on the principal sum of Rs.1,50,000/- from the date of suit to date of decree and 6% p.a. thereafter till realization, thus moderating the contractual rate of 24% p.a. First appellate Court confirmed. High Court, while dismissing the second appeal, left this modification undisturbed, finding no perversity or legal error in the exercise of discretion on interest.
ANALYTICAL NOTE (FACTS, BURDEN OF PROOF, AND SECTION 100 CPC)
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Factual structure and defence theory
The suit is a straightforward promissory note action: plaintiff alleges a cash loan of Rs.1,50,000/- on 05-05-2010 with interest at 24% p.a., evidenced by Ex.A1 pronote. The defendant’s resistance is not a simple denial of execution, but a more nuanced story: that in 2006 he had given a blank signed promissory note to one jaggery trader, R. Chengalraya Naidu, for a small loan of Rs.19,000/-, that he later repaid this by jaggery supplies and part cash, and that this third party, in collusion with plaintiff, misused that blank note to manufacture Ex.A1.
This kind of defence is very common in pronote litigation: admission of signature but denial of any transaction with the plaintiff, and an allegation of blank signed instrument being misappropriated by a money-lender. The question then becomes: once signature is admitted, what is the evidentiary burden on the defendant, and how far will appellate courts go in re-examining the factual appreciation?
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Admission of signature and consequence for burden of proof
The judgment rightly isolates one crucial factual admission: in cross-examination, D.W.1 (the defendant) “categorically admitted his signature on Ex.A1 promissory note” and further admitted that he is “in the habit of putting his signatures in empty promissory notes as and when necessity arises.”
In a pronote suit, once execution (i.e., handwriting/signature) is admitted or proved, you effectively cross the primary threshold for the plaintiff. From there:
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The evidentiary burden shifts to the defendant to make his special defence (blank signed note, no consideration, different transaction, etc.) believable;
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Courts will look for contemporaneous documents, complaints, or any corroboration of the “blank note misused” theory.
Here, the defendant is not a lay farmer; he is a practising advocate. The Court stresses that:
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he admits signing blank promissory notes;
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he claims to have complained to police, but there is no further action;
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he took no private complaint or civil action against the alleged wrongdoer;
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he produced no document proving the original Rs.19,000/- transaction, the alleged jaggery supplies, or any attempt to recover the blank instrument.
Against this, plaintiff leads P.W.1 and P.W.2 (scribe), and produces Exs.A1–A3. On this comparative matrix, the Courts below were entitled to treat the “blank promissory note misused” story as a weak and uncorroborated explanation, insufficient to dislodge the plaintiff’s prima facie case once signature and execution are admitted.
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Evidentiary appreciation: why both courts are treated as having acted “properly”
The High Court expressly notes:
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Both Courts have relied on the consistent testimony of P.Ws.1 and 2 and Exs.A1–A3 to hold that the loan was taken on 05-05-2010;
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The Trial Court decreed, but moderated the interest;
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The First Appellate Court re-appreciated “the entire material evidence on record” and concurred.
Crucially, the High Court finds that:
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no material evidence favourable to the defendant was ignored;
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no inadmissible evidence was relied on;
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the approach to Ex.A1 and to the defence story was rational and consistent.
That is precisely the standard they apply, following Kapil Kumar and Ramasalamma: unless you can say “the lower courts either ignored key admissible material or relied on something they ought not to have relied on” there is simply no entry point under Section 100 CPC.
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Section 100 CPC filter: what did not amount to a substantial question of law
The defendant tried to convert the factual dispute around Ex.A1 into a second-appeal question. The High Court refuses to take the bait:
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It reminds that concurrent findings on execution of a promissory note are not to be revisited merely because another view is possible.
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It restates that even an “erroneous” finding of fact by the first appellate court, by itself, does not open the door to Section 100.
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It emphasises that a substantial question of law must be something more than “the lower courts should have believed my story rather than the plaintiff’s.”
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