Section 118 N.I. Act Presumption Rebutted — 2026 CLC 30.
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| 2026 clc 30 |
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Must read judgment
2026 CLC 30
[Lahore (Multan Bench)]
Before Anwaar Hussain, J
SHAUKAT ALI --Appellant
Versus
ABDUL GHAFFAR ---Respondent
R.F.A. No. 245 of 2017, heard on 24th January, 2024.
(a) Negotiable Instruments Act (XXVI of 1881)--
S. 118-Qanun-e-Shahdat (10 of 1984), Art. 129--Civil Procedure Code (V of 1908), O. XXXVII-Execution of negotiable instrument---Presumption attached ched to to negotiable neg instrument-Scope-Shifting of burden of proof back on the plaintiff on rebuttal-Scope-1 -Scope-Lending of money as a natural human conduct /relation in a society--Suit was decreed in favour of plaintiff-Validity-In a suit for recovery on the basis of a negotiable instrument, there are certain presumptions attached to the same in terms of S. 118 of Negotiable Instruments Act, 1881 ('the Act 1881'), as to the passing of consideration, date, time, etc-Such presumptions have been created by law, however, the same are rebuttable and it is for the defendant to raise a defence to rebut the statutory presumptions-The defendant in the suit. by setting up a probable defence, can refute the said legal presumption as regards the date and time of execution as also the consideration; the same can be established by evidence or circumstances of the case, which can be culled out from the mouth of the plaintiff and his witnesses or even from such other attending circumstances through which the Court can be shown that the passing of consideration is improbable, doubtful or illegal, or that the circumstances are such that a reasonable prudent man would disbelieve lawful issuance/execution of the instrument-Pertinently, the lending of money is part of human relation and of natural human conduct in a society, therefore, the same needs to be seen and viewed through the prism of natural human conduct--Statutory presumptions like the one attached to the negotiable instrument are based upon upon the natural and/or established human conduct---Given the diversification and inherent variability of human conduct, such presumptions have have been been made r rebu rehuttable-High e-High/Appellate Court has to keep in sight the fact that there is an inextricable interplay of presumptions and burden of proof as existence of presumption shifts the burden of proof on the other side-The presumptions under S. 118 of the Act, 1881 merely shift the burden on the defendant to prove that the issuance of negotiable instrument was consequence of any fraud-In addition to the documentary or oral evidence, the defendant in a suit under O. XXXVII, C.P.C., can always rely on existence of certain fact(s) based upon the existence of some other fact to set up probable defence that concomitantly shift the burden of proof---Under Art. 129 of the Qanun-e-Shahdat Order, 1984 (the Order 1984), the Courts are empowered to entertain the presumption of of certain facts to have happened in the common course of natural events and human conduct-Said provisions unambiguously read that the Court while deciding a case can look into the facts relating to the human conduct--Thus, the statutory presumption under 5. 118 of the Act, 1881 can be dislodged by the Court itself to shift the burden back on the plaintiff to prove consideration and/or genuineness of negotiable instrument by presuming the existence of certain facts in consonance with the common course of natural events and human conduct-In the present case ase, admittedly, it was not a case not a case involving business relation inter se the appellant and respondent, r ey lent to the appellant (defendant) by the respondent (plaintiff)---Unlike the cases involving business relationship between the parties, the cases involving negotiable instruments based upon lending money call for greater circumspection on the part of the Courts-For instance, where the relations inter se the parties are cordial and long-lasting and/or are those of involving trust in the normal and natural course of human conduct, such presumption as carried by negotiable instruments, under S. 118 of the Act 1881. would call upon the defendant to rebut such presumption with plausible evidence to shift the burden back on the plaintiff-However, cases where the parties are alien to each other and/or have strained relation to such an extent that they were involved in criminal litigation involving commission of heinous offence under 5.302, P.P.C., a such presumption would subside by denial of the defendant because this was contrary to common course of natural events and human conduct that a person would lend money to someone whose close relative had allegedly murdered son of the lender--Respondent could not deny the factum of registration of the criminal case by him (respondent) against son-in-law of the appellant for alleged murder, however, took the plea that a compromise between the parties had taken place and the relations became cordial between the parties, therefore, the respondent agreed to lend money to further strengthen relations between the parties-Said contention of the respondent belied logic that when the respondent alleged that son-in-law of the appellant had murdered his (respondent's) son that he would lend such a huge money to the appellant even if matter had been compromised-Thus, the appellant had been able to successfully rebut the presumption of correctness attached to the pronote as a result of which the burden of proof shifted back to the respondent to prove that the pronote was executed lawfully and this crucial aspect of the case had been ignored by the Trial Court-High Court set aside the impugned judgment and decree passed by the Trial Court and the suit of the respondent was dismissed---Appeal was allowed accordingly.
(b) Negotiable Instruments Act (XXVI of 1881)-
S. 118-Qanun-e-Shahdat (10 of 1984), Art. 129-Civil Procedure Code (V of 1908), O. XXXVII-Execution of negotiable instrument-Presumption attached to negotiable instrument-Scope-Lending of money--Financial position of the plaintiff--Suit was decreed in favour of plaintiff---Held: In a suit for recovery on the basis of a negotiable instrument, there are certain presumptions attached to the same in terms of 5 of 5. 118 of Negotiable Instrument Act, 1881 (the Act, 1881'), as to the passing of consideration, date, time, etc-Such presumptions have been created by law, however, the same are rebuttable and it is for the defendant to raise a defence to rebut the statutory presumptions-In the present case, admittedly, the respondent/plaintiff was driver by profession from where he could earn hardly to live comfortably let alone that he had savings to lend to others-Thus, it was difficult to believe that he had an amount of Rs.1,000,000/- to lend to the appellant-Financial position of the plaintiff was a relevant factor in such like matters-Therefore, lending of such an amount by the respondent to the appellant having the kind of job as held by the respondent seemed improbable that he would have lent such an amount- unt---High Court set aside the impugned judgment and decree passed by the Trial Court and the suit of the respondent dismissed-Appeal was allowed accordingly.
Salar Abdur Rauf v. Mst. Barkat Bibi 1973 SCMR 332 ref.
(c) Qanun-e-Shahdat (10 of 1984)--
-Art. 79-Negotiable Instruments Act (XXVI of 1881), S. 118-Civil Procedure Code (V of 1908), O. XXXVII-Execution of negotiable instrument---Marginal witnesses of negotiable instrument, non-production of-Scope and effect-Question as to whether the two marginal witnesses are mandated to appear and prove the execution of the negotiable instrument (pronote) and what is the effect of non-production of n of the marginal witnesses?-Held: Provision of the Art. 79 of the Qanun-e-Shahdat, 1984, comes into play only if a particular document is required by law to be attested-In the present case, the document-in-question was pronote which was not required by any law to be attested by two witnesses-Therefore, when a document was not required by any law to be attested, the failure to produce marginal witness was not fatal and detrimental to the case in such a situation where the defendant of a case under O. XXXVII, C.P.C., fails to put up a probable defence-However, said rule was not applicable in the present case, since appellant /defendant showed probable defence and the burden to prove had shifted back to the respondent on account of denial by him to have executed any pronote and/or the receipt, therefore, the respondent was obligated to prove the prove the issuance and execution of the pronote by producing both attesting witnesses of the pronote-The respondent could have moved the Court to summon the said witness through process of Court and could have cross-examined him so as to prove his stance, however, no such effort was made-In such circumstances, an inference could be drawn that had said witness appeared before the Court, he would have deposed against the respondent and non-production of second attesting witness of the pronote was certainly fatal-Scanning of the evidentiary resume of the case revealed that animosity between the parties was admitted-Similarly, a plaintiff's witness also admitted that signatures of the appellant on the backside of pronote and the receipt the receipt were different-Another plaintiff's witness, who was a deed writer, deposed that the pronote was not recorded in his record and he was unable to produce any such record, and also admitted that amount mentioned in the pronote was not given to the appellant by the respondent in his presence---Such shortcomings were fatal for the respondent and had also escaped notice of the Trial Court-Absence of the second attesting witness of the pronote cum receipt and also the shortcomings in the oral and documentary evidence of the respondent propelled High Court to conclude that the presumption of correctness attached to the pronote was successfully rebutted by the appellant by putting forth probable defence and it was obligatory on the on the part the part of the respondent to prove the issuance and lawful execution of the pronote which the appellant failed to do-High Court set aside the impugned judgment and decree passed by the Trial Court and the suit of the respondent was dismissed-Appeal was allowed accordingly.
Muhammad Imran Shahzad Bhatti for Appellant. Ch. Iftikhar Ahmed Warraich for Respondent.