15/02/2024
Promissory Note
So far as the question of admissibility is concerned, the first objection was that since two witnesses attested the promissory note and one of them was not produced in Court, in terms of Article 79 of the Qanun-e-Shahadat, 1984, it had to be excluded from evidence. This statement is not correct. It may be noted that as per Section 4 of the Negotiable Instruments Act, 1881, a promissory note is required to contain four essential ingredients:
(i) an unconditional undertaking to pay,
(ii) the sum should be the sum of money and certain,
(iii) the payment should be to or to the order of a person who is certain, or to the bearer, of the instrument, and
(iv) the maker should sign it.
If an instrument fulfils these four conditions, it will be called a promissory note, and the requirement of attestation of a document provided under Article 17(2)(a) of the Qanun-eShahdat,1984, does not apply to a promissory note.1 That apart, two more things also need to be clarified here. First, if an instrument, notwithstanding the provisions of Section 4 of the Negotiable Instruments Act,1881, is attested by witnesses, the nature and character thereof shall not be affected. It shall remain a promissory note and shall not be converted into a bond within the meaning of section 2(5)(b) of the Stamp Act, 1899. Secondly, if a promissory note is not witnessed, it does not appear that any third person saw it signed, in which case, the best evidence is the handwriting of the parties. But if it is witnessed, then it appears, on the face of the promissory note, that there is better evidence behind it; and the best evidence that the nature of the case admits of, the law requires.
This section 36 of Negotiable Instruments Act, 1881, is categorical in its terms that when a document has once been admitted in evidence, such admission cannot be called into question at any stage of the suit or in proceedings, on the ground that the instrument has not been duly stamped. The only exception the section recognizes is the class of cases contemplated by Section 61, which is not material to the present moot. Section 36 does not admit other exceptions. It is now well settled that where a question as to the admissibility of a document is raised on the ground that it has not been stamped or has not been properly stamped, it has to be decided there and then when the document is tendered in evidence. Once the Court, rightly or wrongly, admits the document in evidence and allows the parties to use it in examination and crossexamination, so far as the parties are concerned, the matter is closed. It is, therefore, essential that parties to litigation, where such a controversy is raised, must be cautious, and the party challenging the admissibility of the document must be alert to see that the document is not admitted in evidence by the Court. The Court is also required to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case. On the contrary, the record in this case discloses that, notwithstanding the defendant’s objection, the promissory note was marked as Ex.P.1 under the signature of the Court. It is not, therefore, one of those cases where a document had been inadvertently admitted. So, once the promissory note had been marked as an exhibit and the trial had proceeded along the footing that the promissory note was made an exhibit, and had been used by the parties in the examination and cross-examination of their witnesses, then Section 36 of the Stamp Act, 1899, will come into operation. Inasmuch as the promissory note had been admitted in evidence, as aforesaid, it was not open to the Trial Court to exclude it from consideration while writing the final judgment, nor to the appellate Court. It is clarified that the admission of the document in terms of Section 36 of the Stamp Act, 1899, cannot be reviewed or revised by the same Court or a Court of superior jurisdiction.4So, we hold that the approach was incorrect, and the Courts below had erred in law in refusing to admit the promissory note in evidence.
It is clear from the above discussion that in the present circumstances of the case, the promissory note was admissible and could not be excluded from evidence. But was this enough for the plaintiff's claim to succeed? In our opinion, this was not sufficient, and he had yet to discharge another burden, and that was to prove that the promissory note was valid. This was because the defendant had pleaded non est factum to the promissory note. He had stated in his written statement that he had neither borrowed any money from the plaintiff nor executed any promissory note to repay the alleged amount. Explaining this, the defendant said that he was an illiterate person, the plaintiff was in the business of lending pesticides at double cost, and he thumbed several blank papers while procuring the pesticides from him, and it could be that the plaintiff had used these documents to make a promissory note. This statement indicates that the matter to be resolved here is not one where one person knowingly signs and delivers to another paper stamped in accordance with the law, either wholly blank or having written thereon an incomplete negotiable instrument, in order that it may be made or completed into a negotiable instrument. Therefore, the principle governing such cases, explained in different case law,5 would be inapplicable here.
Be it noted here, no doubt, special rules of evidence are provided for under the Negotiable Instrument Act, 1881. Its section 118 says that until the contrary is proved, inter alia the presumption that every negotiable instrument was made for consideration shall be drawn. Such a presumption is only a prima facie, and may be displaced by raising a probable defence.
C.A.317-L/2011
Mehr Noor Muhammad v. Nazir Ahmed
Mr. Justice Shahid Waheed
24-11-2023
2023 MLD 1182
Suit for recovery of money on the basis of promissory note --- Ex parte . decree , setting aside of Appellant / defendant sought setting aside of ex parte judgment and decree passed by Trial Court against him --- Trial Court set aside the application on the ground that appellant / defendant after joining proceedings absented himself and suit was decreed on the basis of un - rebutted evidence produced by respondent / plaintiff --- Validity --- Appellant / defendant while admitting ex*****on of promissory note and receipt , took a stance that promissory note was executed as a surety that he would not divorce sister of respondent / plaintiff --- Appellant / defendant himself slipped away / absented from trial and his right to produce evidence was closed by Trial Court --- Nothing was available on record to rebut stance of respondent / plaintiff.
PLD 2024 SUPREME COURT 45
C.A.317-L/2011
Mehr Noor Muhammad v. Nazir Ahmed
So far as the question of admissibility is concerned, the first objection was that since two witnesses attested the promissory note and one of them was not produced in Court, in terms of Article 79 of the Qanun-e-Shahadat, 1984, it had to be excluded from evidence. This statement is not correct. It may be noted that as per Section 4 of the Negotiable Instruments Act, 1881, a promissory note is required to contain four essential ingredients:
(i) an unconditional undertaking to pay,
(ii) the sum should be the sum of money and certain,
(iii) the payment should be to or to the order of a person who is certain, or to the bearer, of the instrument, and
(iv) the maker should sign it.
If an instrument fulfils these four conditions, it will be called a promissory note, and the requirement of attestation of a document provided under Article 17(2)(a) of the Qanun-eShahdat,1984, does not apply to a promissory note.1 That apart, two more things also need to be clarified here. First, if an instrument, notwithstanding the provisions of Section 4 of the Negotiable Instruments Act,1881, is attested by witnesses, the nature and character thereof shall not be affected. It shall remain a promissory note and shall not be converted into a bond within the meaning of section 2(5)(b) of the Stamp Act, 1899. Secondly, if a promissory note is not witnessed, it does not appear that any third person saw it signed, in which case, the best evidence is the handwriting of the parties. But if it is witnessed, then it appears, on the face of the promissory note, that there is better evidence behind it; and the best evidence that the nature of the case admits of, the law requires.
This section 36 of Negotiable Instruments Act, 1881, is categorical in its terms that when a document has once been admitted in evidence, such admission cannot be called into question at any stage of the suit or in proceedings, on the ground that the instrument has not been duly stamped. The only exception the section recognizes is the class of cases contemplated by Section 61, which is not material to the present moot. Section 36 does not admit other exceptions. It is now well settled that where a question as to the admissibility of a document is raised on the ground that it has not been stamped or has not been properly stamped, it has to be decided there and then when the document is tendered in evidence. Once the Court, rightly or wrongly, admits the document in evidence and allows the parties to use it in examination and crossexamination, so far as the parties are concerned, the matter is closed. It is, therefore, essential that parties to litigation, where such a controversy is raised, must be cautious, and the party challenging the admissibility of the document must be alert to see that the document is not admitted in evidence by the Court. The Court is also required to judicially determine the matter as soon as the document is tendered in evidence and before it is marked as an exhibit in the case. On the contrary, the record in this case discloses that, notwithstanding the defendant’s objection, the promissory note was marked as Ex.P.1 under the signature of the Court. It is not, therefore, one of those cases where a document had been inadvertently admitted. So, once the promissory note had been marked as an exhibit and the trial had proceeded along the footing that the promissory note was made an exhibit, and had been used by the parties in the examination and cross-examination of their witnesses, then Section 36 of the Stamp Act, 1899, will come into operation. Inasmuch as the promissory note had been admitted in evidence, as aforesaid, it was not open to the Trial Court to exclude it from consideration while writing the final judgment, nor to the appellate Court. It is clarified that the admission of the document in terms of Section 36 of the Stamp Act, 1899, cannot be reviewed or revised by the same Court or a Court of superior jurisdiction.4So, we hold that the approach was incorrect, and the Courts below had erred in law in refusing to admit the promissory note in evidence.
It is clear from the above discussion that in the present circumstances of the case, the promissory note was admissible and could not be excluded from evidence. But was this enough for the plaintiff's claim to succeed? In our opinion, this was not sufficient, and he had yet to discharge another burden, and that was to prove that the promissory note was valid. This was because the defendant had pleaded non est factum to the promissory note. He had stated in his written statement that he had neither borrowed any money from the plaintiff nor executed any promissory note to repay the alleged amount. Explaining this, the defendant said that he was an illiterate person, the plaintiff was in the business of lending pesticides at double cost, and he thumbed several blank papers while procuring the pesticides from him, and it could be that the plaintiff had used these documents to make a promissory note. This statement indicates that the matter to be resolved here is not one where one person knowingly signs and delivers to another paper stamped in accordance with the law, either wholly blank or having written thereon an incomplete negotiable instrument, in order that it may be made or completed into a negotiable instrument. Therefore, the principle governing such cases, explained in different case law,5 would be inapplicable here.
Be it noted here, no doubt, special rules of evidence are provided for under the Negotiable Instrument Act, 1881. Its section 118 says that until the contrary is proved, inter alia the presumption that every negotiable instrument was made for consideration shall be drawn. Such a presumption is only a prima facie, and may be displaced by raising a probable defence.
