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Lakshminarayana Reddyar v. Subhadri Ammal

Madras High Court
Aug 15, 1902
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Structured Summary of the Provided Opinion

Factual and Procedural Background

The plaintiff sued on a negotiable promissory note dated 15th August 1898 for Rs. 5,000 (with interest at 12% per annum), the making of which was admitted by the defendant. The defendant's written statement pleaded not that there was no consideration, but that the consideration was immoral: he alleged the note was given in consideration of an undertaking by the plaintiff to bring her daughter to the defendant's village and place her under his protection as his concubine for life, and that the plaintiff failed to carry out that undertaking. The central issue was formulated as whether the consideration for the promissory note was immoral and whether it was void for failure of consideration as alleged in the written statement.

The defendant opened his case and gave evidence and called witnesses. At the close of the defendant's evidence the plaintiff submitted that the defendant had proved no case; the trial judge declined to stop the case and heard plaintiff's evidence. After hearing the whole of the evidence the trial judge held that the defendant had failed to discharge the onus of proving that the consideration was immoral, and entered a decree in favour of the plaintiff for the amount due on the promissory note. The defendant appealed; the appeal was heard and dismissed with costs.

Legal Issues Presented

  1. Was the consideration for the plaint promissory note immoral (i.e., was it given for future illicit cohabitation with the plaintiff's daughter)?
  2. If the consideration was immoral, was the promissory note void for failure of consideration as alleged in the written statement? (The court treated this as superfluous if immorality were established, because an immoral consideration would itself render the contract void under Section 23 of the Indian Contract Act.)

Arguments of the Parties

Appellant's (Defendant's) Arguments

  • The defendant asserted that he executed the promissory note because the plaintiff promised to bring her daughter to his residence and leave her with him as his concubine; thus the consideration was future illicit cohabitation.
  • In his evidence he denied any prior criminal intimacy with the plaintiff's daughter and said sexual relations commenced only after the note; he stated he later gave the daughter jewels worth about Rs. 4,000.
  • The defendant called three witnesses who purported to have been present at the making of the note and who corroborated his account of the consideration (although this evidence was materially inconsistent with the plea as set out in the written statement).
  • On appeal it was argued that by declining to stop the case at the close of the defendant's evidence the trial judge effectively shifted the burden of proof to the plaintiff; counsel contended this should have required the plaintiff to prove the consideration affirmatively.

Respondent's (Plaintiff's) Arguments

  • The plaintiff and her daughter testified that the defendant had been in a habitual sexual relationship with the daughter for several years before the making of the promissory note and that this relationship continued thereafter.
  • The plaintiff testified that the consideration was a payment in cash of Rs. 2,000 and the value of certain jewels entrusted to the defendant for sale roughly a month before the note; she stated she intended to invest the amount with the defendant.
  • The plaintiff relied on Section 118 of the Negotiable Instruments Act to relieve her of the onus of proving the making of the note (i.e., the statutory presumptions applicable to negotiable instruments), and denied that the consideration was immoral.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Hill v. Spencer, 4 Amb. 641 Referenced (via In re Vallance) for the principle that the mere continuance of cohabitation does not raise any presumption that a bond given during such cohabitation was given for an immoral consideration. The court relied on the principle (as stated in In re Vallance) to hold that mere continuance of cohabitation is insufficient to presume the promissory note was given for future illicit cohabitation.
In re Vallance, L.R. 26 Ch. D. 353 (at p. 357) Direct authority stating "the mere continuance of cohabitation raises no kind of presumption that a bond given during such cohabitation was given for an immoral consideration." The court applied this authority to reject the contention that a promissory note executed during ongoing cohabitation should be presumed to be given for future illicit cohabitation.
Hire Purchase Furnishing Co. v. Rishens, L.R. 20 Q.B.D. 387 Stands for the broad principle that when facts are equally consistent with a transaction being legal or illegal, the law presumes against illegality, and the defendant seeking to set aside a transaction for illegality must prove the illegality. The court invoked this principle to place the burden of proof on the defendant and to require him to persuade the court that the transaction was illegal; because the defendant did not discharge that burden, his plea failed.
Man Kuar v. Jasodha Kuar, I.L.R. 1 A. 478 (High Court of Allahabad) Held (as stated in the opinion) that a promise made without consideration could be valid under Indian law before the Indian Contract Act and that such a promise may be valid and enforceable under Section 25(2) of the Indian Contract Act. The court noted this decision but stated no need to decide the point in the present case; the judge expressed no dissent from the view but did not base the decision on it.
Dhiraj Kuar v. Bikramajit Singh, I.L.R. 3 A. 787 Referenced (like Man Kuar) for the proposition that certain promises made without consideration were treated as valid under the law described and could be enforceable under Section 25(2) of the Indian Contract Act. The court mentioned the case but did not decide the issue; it stated the point was unnecessary to resolve for the disposition of the appeal and expressed no dissent from the view.

Court's Reasoning and Analysis

The court proceeded on these key legal and evidentiary premises and steps (as stated in the opinion):

  • Admission of execution: The making of the promissory note was admitted by the defendant, so the dispute focused on the nature of the consideration.
  • Onus of proof: The onus lay on the defendant to prove that the consideration was immoral (i.e., that the note was given for future illicit cohabitation). The court repeatedly emphasized that burden remained with the defendant.
  • Trial course: The defendant opened his case, testified, and called witnesses. The trial judge declined to stop the case after the defendant's evidence and heard the plaintiff's evidence as well before deciding the issue; the appellate material records an argument that this refusal improperly shifted the burden, which the court rejected as a misunderstanding of the judge's intention.
  • Credibility findings and factual determination: The plaintiff and her daughter both testified that the defendant had been in sexual relations with the daughter for some years before the note and that these relations continued after the note. The trial judge and the appellate judge disbelieved the defendant's denial of prior intimacy and discredited some of the defendant's witnesses who claimed to have been present at the making of the note.
  • Competing versions of consideration: The plaintiff's version was that she paid Rs. 2,000 in cash and entrusted jewels to the defendant about a month before the note; the defendant's version was that the note was given as security/guarantee in respect of the promise to bring the daughter and leave her with him (or to secure his undertaking not to desert her if she were brought). The court noted inconsistencies between the written plea and the oral evidence for the defendant.
  • Presumption against illegality and relevant authorities: Citing In re Vallance (and Hill v. Spencer as referred therein), the court held that the mere continuance of cohabitation does not give rise to a presumption that a bond or promissory note given during that continuance was given for future illicit cohabitation. The court also relied on the principle stated in Hire Purchase Furnishing Co. v. Rishens that where facts are equally consistent with legality or illegality, the law presumes against illegality and the party asserting illegality must prove it.
  • Application to the present facts: Given the evidence of past and continuing relations, and given the defendant's failure to persuade the court that future cohabitation was the consideration, the court concluded the defendant had not discharged the onus of proving an immoral consideration. The court observed that even if the plaintiff had not fully proved her version of cash and jewels, that would not compel a conclusion that the defendant's version (immoral consideration) was thereby proved.
  • Statutory and evidentiary points: The court noted Section 118 of the Negotiable Instruments Act relieved the plaintiff from the onus of proving the instrument in certain respects, and it rejected an argument that terms in the law of evidence ('disproved' and 'not proved') were synonymous for purposes of shifting burdens.

Holding and Implications

Holding: The appeal was dismissed and the decree in favour of the plaintiff for the amount due on the promissory note was affirmed; costs were awarded against the appellant. (The court explicitly held that the defendant had failed to discharge the onus of proving that the consideration for the note was future illicit cohabitation.)

Implications:

  • Direct effect on the parties: The plaintiff's decree for the amount due on the promissory note (dated 15th August 1898 for Rs. 5,000 at 12% per annum) stands; the defendant's defence of immoral consideration failed and the appeal was dismissed with costs.
  • Broader legal implications: The opinion applies and reaffirms existing principles—notably that mere continuance of cohabitation does not create a presumption of future illicit cohabitation as consideration, and that the law presumes against illegality where facts are equally consistent with legality or illegality—but it does not purport to establish a novel rule of law. The court did not base its decision on any new legal principle beyond the authorities it cited, and it expressly treated certain additional authorities (e.g., decisions on promises without consideration under Section 25(2) of the Indian Contract Act) as unnecessary to decide in this appeal.

Note: This summary strictly reflects only the facts, arguments, authorities, reasoning and disposition that are explicitly contained in the provided opinion.

Show all summary ...

1. The plaintiff sued on a promissory note executed in her favor by the defendant. The execution of the note was admitted by the defendant. The defendant's plea was that he executed the note in consideration of an undertaking by the plaintiff that the plaintiff would bring her daughter to the defendant's village in South Arcot, and put her under his protection as his concubine during the rest of her life, and that she (the plaintiff) failed to carry out the undertaking. The issue was

"was the consideration for the plaint promissory note immoral, and is it void for failure of consideration as alleged in the written statement?"
It seems to me that the latter portion of the issue is unnecessary. If the defendant was able to show that the consideration for the note was immoral, the question whether the consideration failed or not would be immaterial.

2. At the trial the execution of the note having been admitted by the defendant, and the onus being on him, he went into the box for the purpose of proving his plea of immoral consideration, and certain witnesses were examined on his behalf. At the close of the defendant's case it was submitted on behalf of the plaintiff that the defendant had proved no case, The learned judge declined to stop the case at that stage and the plaintiff and her witnesses were examined, It was argued on behalf of the appellant that the learned judge by declining to stop the case at the close of the evidence of the defendant and his witnesses, in effect ruled that the burden of proof had become shifted and that it thus became incumbent on the plaintiff to show, by affirmative evidence, that consideration had been given for the note. It is perfectly clear that the learned judge never ruled and never intended to rule that as the result of the evidence adduced on behalf of the defendant the burden of proof had shifted. He allowed the case to go on because he thought it desirable to hear the whole of the evidence before deciding the issue which he had to determine. Having heard the whole of the evidence, he came to the conclusion that the defendant had failed to discharge the burden which lay on him of proving, affirmatively, that the note had been given for an immoral consideration. The Judge no doubt holds that the plaintiff failed to prove her allegation that she had given cash and jewels for the note, I need not stay to consider whether on the evidence I should have come to the same conclusion as the learned judge with reference to the plaintiff's testimony, as it certainly does not follow that because the plaintiff failed to prove her case that the defendant must be taken to have established his, The question to be determined was not--was the consideration of future cohabitation with the plaintiff's daughter, as alleged by the defendant, or hard cash, as alleged by the plaintiff, but had the defendant proved affirmatively that the consideration for the note was future cohabitation with the plaintiff's daughter.

3. No doubt, the defendant denies that there was any criminal intimacy between himself and the plaintiff's daughter before the execution of the note, but to my mind the evidence establishes beyond all doubt (in fact this was not seriously contested by the learned Counsel for the defendant) that there had been immoral relations between the defendant and the woman for some years before the execution of the note, that these relations were subsisting at or about the time of the execution of the note and that they continued after the execution of the note.

4. It was urged that when a note is given during the continuance of cohabitation, there is a presumption that the consideration, in part, if not wholly, is future cohabitation. This is not so. No such presumption arises from the mere fact that a promise is made during the continuance of cohabitation. In referring to the case of Hill v. Spencer 4 Amb. 641 Kay, J, says in In re Vallance 26 Ch. D. 353 at p.357:

"This amounts to a distinct decision that the mere continuance of cohabitation raises no kind of presumption that a bond given during such cohabitation was given for an immoral consideration."
It would no doubt be otherwise if there had been a breaking off of immoral relations and a renewal of them as the outcome of a promise to pay; but there is not a shred of evidence to show anything of this sort took place in the case before us.

5. I think the learned Judge was right in holding that the defendant failed to prove the plea which he set up, and I think this appeal should be dismissed with costs.

Moore, J.

6. I concur.

Bhashyam Aiyangar, J.

7. This is an appeal by the defendant in a suit brought by the payee, against the maker, of a negotiable promissory note, payable on demand, (dated 15th August 1898) for the sum of Rs. 5,000 with interest at 12 per cent, per annum. The making of the note is admitted and the defence to the suit is, not absence of consideration, but that the consideration was immoral, viz., an undertaking by the plaintiff (payee) to bring her daughter to the residence of the defendant (maker) and put her under his protection as his concubine during the rest of her life--and that such consideration failed. The issue framed in the case runs as follows:

"Was the consideration for the plaint promissory note immoral and is it void for failure of consideration as alleged in the written statement."
If the consideration be immoral, it is perfectly immaterial whether or not there was failure of such consideration, for the contract itself is void (Section 23 of the Indian Contract Act) and the latter part of the issue may, therefore, be left out of consideration as being superfluous.

8. The onus being on the defendant he opened the case. In his evidence as his own 1st witness, he deposed as follows as to the consideration for the note: ''The plaintiff promised to bring her daughter to me and let her remain with me. It was for that, I executed the pronote. My note was given as security for bringing her daughter and leaving her with me, for fear, I should desert her daughter" He also examined three more witnesses who profess to have been present at the making of the note and who substantially corroborate the defendant's version as to the consideration for the note. According to this version--which materially differs from and is inconsisient with the plea set up in the written statement--the pro-note was given by the defendant as a guarantee that he would not desert the plaintiff's daughter after she has been brought to live with him as his concubine, and in the 'event of his so deserting her, the plaintiff was to be entitled to sue him upon the note. Notwithstanding this variance and inconsistency between the plea set up and the evidence adduced in support thereof, the case was argued on behalf of the defendant both in the Court below and before us in appeal, on the footing that the consideration for the note was defendant's future co-habitation with the plaintiff's daughter in his own residence at Nellikuppam. Defendant, in his evidence, distinctly denies past cohabitation with the plaintiff's daughter--a married woman who separated in fact from her husband about two years prior to the date of the note. He says that his sexual intercourse with her commenced only some time after the making of the pro-note and that for about 20 months prior to the suit he was now and then visiting her in her residence in Madras, where she was living with her mother, the plaintiff, and that subsequent to the date of the pro note, he has given her in the aggregate, jewels worth about Rs. 4,000.

9. After the defendant closed his case, the plaintiff adduced rebutting, evidence and it is necessary to refer only to the evidence of herself and her daughter. Both of them clearly prove that the defendant was in the habit of having sexual intercourse with the plaintiff's daughter for some years before the making of the pro-note and also thereafter; and they distinctly deny the presence of the defendant's 2nd, 3rd and 4th witnesses at the time and place of the making and delivery of the pro-note. I may say at once that I disbelieve the defendant's evidence that he had no improper intimacy with the plaintiff's daughter before the making of the pro-note and that such intimacy commenced only some time after the making of the note. I have no doubt that, as deposed to by the plaintiff and her daughter, the sexual relations between the latter and defendant commenced a few years before the pro-note and continued thereafter. I may also say that I discredit the evidence of defendant's 2nd, 3rd and 4th witnesses who say they were present when the pro-note was made and delivered.

10. Plaintiff's and her daughter's evidence as to the consideration for the note is the payment in cash, by the plaintiff, of Rs. 2,000 and the value of certain jewels which had been entrusted by the plaintiff to the defendant, for sale, about a month prior to the making of the note. She says that her object was to invest the amount for interest with the defendant in whom she had confidence. The case therefore, practically rests upon the evidence of the defendant on the one hand and the evidence of the plaintiff and her daughter on the other. The onus being undoubtedly on the defendant, it will be impossible to give judgment for the defendant unless his evidence is believed as to the immoral nature of the consideration, and I cannot accede to the contention on behalf of the appellant that the defendant's evidence ought to be accepted if the plaintiff's version as to the consideration is rejected. "Assuming that the plaintiff's has not proved that she advanced the cash and the jewels as deposed to by her in her evidence, it by no means follows that the consideration for the note must be assumed to be immoral as deposed to by the defendant. As regards the plaintiff's version as to the consideration for the note, if the onus were upon her, I should not be prepared to find, upon the evidence of herself and her daughter, that she has proved the consideration for the note. But Section 118 of the Negotiable instruments Act relieves her from such onus and I must say that there is nothing intrinsically improbable in her version of the transaction or in her having had the means to advance to the defendant the money and jewels referred to and I am not satisfied that her version is false. The argument of the learned Counsel for the appellant, on this part of the case proceeded on the assumption that the terms 'disproved' and 'not proved' in the Law of Evidence (See Section 3 of the Indian Evidence Act) are synonymous.

11. There being no plea of absence of consideration, the only question in the case is whether the consideration was immoral. The consideration cannot be held to be immoral unless the defendant's evidence is believed, viz., that future cohabitation was the consideration and object of the pro-note. This is distinctly denied by the plaintiff and I am not prepared to accept the defendant's word for it. As already stated there undoubtedly was past cohabitation which has continued after the making of the note and the defendant himself deposes that subsequent to the pro-note, he gave the plaintiff's daughter jewels to the aggregate value of Rs. 4,000.

12. The pro-note will be illegal as tainted with immorality only if the consideration therefor be future cohabitation or both past and future cohabitation. In in re Vallance L.R.26 Ch. D 353 it was held by Mr. justice Kay that a mere continuance of the cohabitation was not enough to raise the presumption that the bond was given in consideration of future cohabitation, and accordingly the bond--on which the claim in that case was founded was good, I may also refer to the case of the Hire Purchase Furnishing Co v. Rishens L.R. 20 Q. B.D. 387 in the Court of Appeal, in which Bowen L.J., stated the law in the following terms: " There, is a broad principle that where a defendant is attempting to set aside a transaction for illegality and the facts connected with it are equally consistent with the transaction being legal or illegal, it lies on the defendant to prove the illegality. The law presumes against illegality and this presumption holds in all civil and other proceedings for whatever purposes originated.'' An agreement made with a woman upon the consideration of future illicit cohabitation--which under the Penal Code may be criminal--or one made with a third party, as in this case, for procurement of such cohabitation, is illegal and void. But a promise made in consideration of past illicit cohabitation is void for want of consideration under the English Law. There is, however, no illegality in such promise but merely absence of consideration and, therefore, according to English Law, if made in the form of a bond or covenant under seal, there is, prima facie, a valid contract (Leake on Contracts, 3rd Edition, p. 660).

13. No plea of absence of consideration having been raised in this case, it is unnecessary to consider whether, as held by the High Court of Allahabad in Man Kuar v. Jasodha Kuar I.L.R., 1 A. 478 and Dhiraj Kuar v. Bikramajit Singh I.L.R. 3 A. 787 such a promise--though made without consideration--was valid under the Indian Law before the passing of the Indian Contract Act and is also valid and enforceable under Section 25(2) of the Indian Contract Act. It is therefore not necessary to decide whether the view so taken is correct, but I express no dissent from it. The onus is cast by law on the defendant and on the ground that he has not discharged it by proving that the note was given for procurement of future illicit cohabitation with the plaintiff's daughter as alleged by him, the learned Judge was right in passing a decree in favour of the plaintiff for the amount due on the pro-note, whatever suspicion may attach to the transaction as being immoral and unrighteous. The appeal, therefore, fails and should, in my opinion, be dismissed with costs.