The Delhi High Court upheld the trial court’s finding that two promissory notes executed in 1994 and 1995 were genuine, rejecting the appellants’ claim of forgery and affirming that mere variations in handwriting or ink do not invalidate a document where signatures are admitted.
Background & Facts
The Dispute
The respondent, Ram Chand, sued Nand Lal and Anr for recovery of two loans of Rs 50,000 each, allegedly advanced on 09.11.1994 and 05.01.1995. The loans were said to be secured by promissory notes dated the same days, witnessed by Appellant No. 2. The appellants contended that the notes were handed over blank to Shri Swaraj Kapoor in a separate transaction and later misused by the respondent.
Key Facts
- 09.11.1994: First loan of Rs 50,000 advanced; promissory note executed (Ex. PW-1/A).
- 05.01.1995: Second loan of Rs 50,000 advanced; promissory note executed (Ex. PW-1/B).
- Both notes were witnessed by Appellant No. 2 (the wife of Appellant No. 1).
- The appellant alleged that the notes were filled in different hand-writings, inks and languages (Hindi for the first, English for the second).
- 16.09.1976: Legal notice issued by the appellants to the respondent outlining the same allegations.
- The respondent did not produce any books of account or diary entries to substantiate the loans.
- The trial court found the notes genuine and rejected the forgery plea on 31.08.2009.
Procedural History
- 31.08.2009: Additional District Judge, Delhi, passed judgment and decree in Suit No. 122/2008 (Ram Chand v. Nand Lal & Anr).
- RFA 458/2009: Regular First Appeal filed under Section 96 CPC, initially challenging several issues but later confined to Issue 2 (validity of the promissory notes).
- 02.07.2026: Appeal reserved.
- 24.08.2026: Judgment pronounced, appeal dismissed and trial court’s findings affirmed.
Parties' Positions
- Appellants (Nand Lal & Anr): Asserted forgery based on handwriting, ink, language differences; claimed the notes were handed to Shri Swaraj Kapoor and later misused; relied on adverse inference from non-response to the 1976 legal notice.
- Respondent (Ram Chand): Maintained that the notes were executed contemporaneously with the loans; admitted signatures; argued that discrepancies did not prove forgery and that the appellants failed to produce the key witness Shri Swaraj Kapoor or Appellant No. 2.
Relief Sought
The appellants sought reversal of the trial court’s finding on Issue 2, declaring the promissory notes forged and fabricated, and consequently setting aside the decree of 31.08.2009.
The Legal Issue
Whether the High Court should set aside the trial court’s finding that the promissory notes dated 09.11.1994 and 05.01.1995 were not forged or fabricated, given the appellant’s allegations of discrepancies and non-production of key witnesses, under the standards applicable to a first appeal under Section 96 of the CPC.
Arguments Presented
For the Appellant
The appellants argued that:
- Variations in handwriting, ink colour and language on the two notes indicated tampering and therefore forgery.
- No contemporaneous documentary evidence (books of account, receipts) was produced to prove the loans.
- The respondent’s silence to the 1976 legal notice warranted an adverse inference under Kalu Ram v. Sita Ram.
- Section 118 of the Negotiable Instruments Act creates a presumption of genuineness that must be rebutted with cogent evidence, which the appellants failed to do.
For the Respondent
The respondent contended that:
- The signatures on both notes were admitted by the appellant; differences in handwriting or ink do not, by themselves, prove forgery.
- The appellant bore the burden of proving forgery and did not produce the material witness Shri Swaraj Kapoor nor Appellant No. 2.
- The trial court correctly applied the statutory presumption under Section 118 NI Act and gave due weight to the admissions.
- An adverse inference from the non-response to the legal notice was not decisive in the absence of substantive proof.
The Court's Analysis
The Court began by reiterating the scope of a first appeal under Section 96 CPC, emphasizing that the appellate court may rehear the entire case but must give deference to trial-court findings unless they are perverse, illegal or unsupported by evidence. It cited Santosh Hazari v. Purushottam Tiwari, Madhukar v. Sangram and Malluru Mallappa v. Kuruvathappa to underline that appellate interference is justified only on a solid ground of misappreciation.
"The defence advanced by the Appellants falls far short of the standard required to rebut the statutory presumption operating in favour of the Respondent."
The Court then examined the evidentiary record. It noted that both promissory notes were admitted as signed by Appellant No. 1 and witnessed by Appellant No. 2. The appellant’s claim that the notes were filled in blank and later misused hinged on the testimony of Shri Swaraj Kapoor, who was never examined, and on the non-examination of Appellant No. 2, the attesting witness. Under Section 114 of the Indian Evidence Act, the Court may draw an adverse inference when a party withholds the best evidence, but such inference is not conclusive. The Court held that the appellant’s failure to produce these witnesses weakened the credibility of the forgery allegation.
Regarding the handwriting, ink and language differences, the Court observed that the two notes were executed on different dates; therefore, expecting uniformity in penmanship or language is unrealistic. It referred to Bir Singh v. Mukesh Kumar, stating that variations in hand-writing or ink do not, per se, render a negotiable instrument forged when the execution is admitted.
The Court further applied Section 118 of the Negotiable Instruments Act, which presumes that a negotiable instrument was made for consideration and duly executed unless the contrary is proved. Since the appellant admitted the signatures, the burden shifted to them to rebut this presumption. The Court found that the appellant offered no cogent evidence of alteration or unauthorised interpolation; mere assertions and the absence of documentary proof of the loans were insufficient.
Finally, the Court addressed the argument that the respondent’s silence to the 1976 legal notice warranted an adverse inference. While acknowledging that non-response can be a relevant circumstance, the Court held that it does not, on its own, overturn the trial court’s appreciation of the evidence, especially when the core issue - authenticity of the signatures - remains undisputed.
In sum, the appellate court concluded that the trial court’s finding was not perverse or unsupported and therefore deserved affirmation.
The Verdict
The appeal is dismissed. The High Court affirms the Additional District Judge’s finding that the promissory notes dated 09.11.1994 and 05.01.1995 were genuine, not forged or fabricated, and upholds the decree of 31.08.2009. No order as to costs was made.
What This Means For Similar Cases
Handwriting Variations Do Not Prove Forgery
- Differences in ink, hand-writing or language across documents executed on different dates are not determinative of forgery.
- Courts will look for concrete evidence of alteration rather than superficial discrepancies.
Burden of Proving Forgery Lies on the Alleging Party
- Once signatures are admitted, the statutory presumption under Section 118 NI Act shifts the evidential burden to the challenger.
- The challenger must produce credible, independent evidence - such as testimony of the person who allegedly possessed the blank instrument.
Non-Production of Key Witnesses Invites, but Does Not Guarantee, Adverse Inference
- Under Section 114 IEA, withholding the best evidence may lead to an adverse inference, yet the inference is not fatal without supporting proof.
- Parties should ensure that material witnesses, especially attesting witnesses, are examined to substantiate claims of forgery or misuse.
