AIR 1999 SUPREME COURT 1008 ::1999 AIR SCW 636 ::1999 (2) ADSC 221 ::(1999) BankJ 526 ::(1999) 3 CivLJ 783 ::1999 (2) CivilCourtC 535 ::1999 (3) SCC 35 ::(1999) 2 RecCivR 615 ::(1999) 1 Scale 521 ::1999 (2) All CJ 1029 ::(1999) 2 BankCLR 334 ::(1999) 2 AllMR 269 (SC) ::1999 (2) Cal LT 10 ::1999 (1) Cal HN 54 ::(1999) 1 BankCas 558 ::1999 (3) Bom CR 1 ::1999 (2) All WC 1266 ::1999 (97) Com Cas 786 ::1999 (3) GujLR 2305 ::(1999) 2 ICC 41 ::1999 (3) MadLW 237 ::1999 (1) LRI 504 ::1999 (2) Supreme 187 ::(1999) 1 JT 576 (SC) ::1999 (3) SRJ 355

Supreme Court Of India

(From : 1996 (2) Cal HN 327)

Hon'ble Judge(s): V. N. Khare, R. P. Sethi , JJ

Negotiable Instruments Act (26 of 1881) , S.118— Promissory note - Presumption as to consideration - Burden of proof - Promissory note alleged to have been executed as a collateral security and not for "value received" as mentioned therein - Failure of defendant to prove non-existence of consideration - Onus cannot be shifted on plaintiff - Claim made by plaintiff has to be allowed even if evidence adduced by plaintiff is found to be unbelievable in rebuttal of defendant's case. (1996) 2 Cal HN 327, Reversed. Once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and @page-SC1009 upon its failure to prove would dis-entitle him to the grant of relief on the basis of the 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 refe....