The Pronote for Five Lakhs and the Expert Application at Final Arguments

The issues should be framed so that each disputed proposition of fact and law carries its own burden. (1) Whether the pronote and receipt dated 10 January 2022 were executed by the defendant for consideration of Rs 5,00,000, as alleged - that is, whether the plaintiff advanced the amount. (2) Whether the defendant proves that he signed blank stamped papers in 2019 as security for a loan of Rs 1,00,000, and that the figure and words were subsequently filled in without his authority. (3) Whether the defendant proves payment of Rs 40,000 in March 2023 towards the debt. (4) Whether the pronote is insufficiently stamped and, if so, whether it is admissible, and with what consequence. (5) Whether the defendant proves interpolation of the figure '5' in the pronote. (6) To what relief, if any, is the plaintiff entitled, and to what amount.

Two further points should be recorded in the order framing issues. First, execution of the signatures being admitted, no issue need be framed on execution as such; the dispute is confined to the amount and to the circumstances of signing. Second, the burden of proving payment and of proving interpolation lies on the defendant, because these are matters within his special knowledge; they are not the plaintiff's burden merely because the plaintiff is the one claiming. Framing the issues in this form prevents the common error of treating every pleading of the defendant as requiring proof by the plaintiff.

Because the signatures are admitted, the plaintiff has established execution and need not prove it further. Section 118(a) of the Negotiable Instruments Act then raises a presumption that the promissory note was made for consideration, and Section 118(b) presumes the date. The plaintiff is therefore not required to lead positive evidence of passing of consideration in the first instance, although he has in fact produced his passbook showing a withdrawal of Rs 5,00,000 three days earlier, which supports his version.

The presumption is rebuttable, and the defendant must displace it. Kumar Exports v. Sharma Carpets holds that the standard is preponderance of probabilities, not proof beyond reasonable doubt; the defendant may rely on the circumstances of the case, the absence of the plaintiff's account books, the failure to examine the scribe or attesting witness, and the improbability of advancing so large a sum. A bare statement that he signed blank papers is not enough; he must show how the papers came to be filled in and why he signed them. If the defendant's version that only Rs 1,00,000 was advanced is accepted, the question arises whether Section 20 of the Negotiable Instruments Act protects the plaintiff. It does not, on these facts: Section 20 protects a holder in due course who takes an inchoate instrument, and the plaintiff as payee is not a holder in due course unless he negotiates the instrument. The court should therefore decide on evidence, not on the presumption alone, and must give reasons for holding the presumption rebutted or unrebutted.

On the FSL application, the court must balance the right to lead evidence against the duty to prevent abuse. The defendant admitted his signatures at the earliest stage and never sought expert examination during the years the suit was pending; the application comes only on the date of final arguments, when the plaintiff has closed his evidence. That delay must be explained. At the same time, expert evidence on interpolation goes to the root of the matter. The proper course is to call for an affidavit explaining the delay and the specific basis for believing the figure was added; if a prima facie foundation is shown (for example, a visible difference in ink or a different pen), the court may allow the examination on payment of costs and on condition that the plaintiff is permitted to lead rebuttal expert evidence. If no foundation is shown, the application should be dismissed with costs, and the court may compare the writings itself where the law permits.

On under-stamping, Section 35 of the Indian Stamp Act makes an insufficiently stamped instrument inadmissible, and the proviso, which allows admission on payment of deficit duty and penalty, excludes bills of exchange and promissory notes. The objection is therefore serious. But it must be decided on evidence of the actual stamp duty payable, not on the defendant's assertion, and it must be raised before the document is admitted, because once admitted, Section 36 bars reopening the question in the same suit. The court should decide both matters by a reasoned order before delivering judgment.