JAGANNADHA RAO, J.

(1) THIS reference to a Full Bench has been made on the ground that there is a conflict between Division Bench judgments, viz. M. Janaka Lakshmi v. Madhava Rao, AIR 1973 Andh Pra 103 rendered by Chinnappa Reddi, J. (as he then was) and A. D. V. Reddy, J. on the one hand and Maddam Lingaiah v. Hasan CCCA Nos. 95 and 96 of 1969 dt. 22-9-1972 rendered by M. Krishna Rao J. and M. Ramchandra Raju J. and Ponna Satyavathi v. Pamu Surya Rao L. P. A. 158 of 1977 dt. 26-12-1978 rendered by Kuppuswami J. (as he then was) and P. A. Choudary J. on the other hand. The point arises in the context of the presumption under S. 118 of the Negotiable Instruments Act, 1881. In Janaka Lakshmis case (AIR 1973 Andh Pra 103) (supra) the Court disbelieved the defendants plea as to the circumstances under which the promissory note was executed without consideration and the Court also disbelieved the plaintiffs story; but, even so, the Court held that even if the versions of both sides were not true, still the presumption under S. 118 would operate and the suit was liable to be decreed. For that reason, the Court relied upon a judgment of the Bombay High Court in Tar Mahamed v. Tyed Embrahim, AIR 1949 Bom 257 [LQ/BomHC/1948/136] . On the other hand in Maddam Lingaiahs case (supra) another Division Bench of this Court expressly dissented from the Bombay judgment and stated that they were doing so in view of the ruling of the Supreme Court in Kundanlal v. Custodian Evacuee Property, AIR 1961 SC 1316 [LQ/SC/1961/125] and also referred to two earlier decisions of the Madras High Court in Narasamma v. Veeraju, AIR 1935 Mad 769 [LQ/MadHC/1934/347] and Narayana Rao v. Venkatappayya, AIR 1937 Mad 182. In the Second unreported judgment in Ponna Satyavathis case (supra) though the Bombay case was referred to it was not expressly dissented from. That is how the matter has come to the Full Bench. We have to decide which of the conflicting views is to be followed.

(2) IN the present case, the plaintiff pleaded that the defendant borrowed a sum of Rs. 10,000 under one promissory note dt. 1-8-1972 (Ex. A-1) and another sum of Rs. 5,000. 00 (Ex. A-3) on the same day under another promissory note. The plaintiff claimed likewise in the suit notice, Ex. A-5, dt. 10-10-1973 claiming the above sums and another sum of Rs. 1,500. 00 said to have been borrowed earlier. The defence was that no amounts were borrowed as stated above but that the plaintiff was a pauper and had no means to lend the amounts. It was further contended that the plaintiff and defendant were close friends having joint business, that the defendant was the financial investor and plaintiff was paid monthly remuneration, that the plaintiffs parents did not approve of the job and therefore the plaintiff represented to his parents that his monies were invested with the defendant and that therefore the plaintiff obtained these promissory notes from the defendant. These notes were not supported by any consideration. The same story was stated in the reply notice. Ex. A-6 dt. 14-11-1973. The defendant produced his witnesses in the first instance. After D. W. 1 (defendants) cross-examination was over, the plaintiff recalled him and suggested a case of the suit pronotes being renewals of earlier notes, which was denied. Thereafter the plaintiff admitted in his evidence as P. W. 3 that Exs. A-1 and A-3 were not supported by cash consideration but were renewals for Exs. A-9 dt. 1-1-1970 (Rs. 10,000) and Ex. A-7 dt. 26-3-1969 (for Rs. 5000. 00). The trial Court rejected the plaintiffs case of cash consideration for Exs. A-1 and A-3 and also rejected the defendants plea and Ex. A-1 and A-3 were nominally executed. But, it accepted the plaintiffs evidence that Exs. A-9 and A-7 notes were renewals of Exs. A-1 and A-3 respectively (sic). In this appeal, we have come to the conclusion that the plaintiff having admitted that no cash was paid under Exs. A-1 and A-3 and the case regarding renewals not having been set up by the plaintiff either in the suit notice. Ex. A-5 dt. 10-10-1973 or in the plaint or presented in the initial cross-examination of the defendant, the evidence that Exs. A-1 and A-3 were renewals of Exs. A-9 and A-7 is to be rejected. We agree with the view of the trial Court that the defendants case as to the circumstances under which Exs. A-1 and A-3 were executed, was equally not true. Thus the respective pleas of the plaintiff and defendant are rejected. But the counsel for defendant-respondent Sri V. R. Mohan Rao contended relying upon Janaka Lakshmis case, (AIR 1973 Andh Pra 103) (supra) and other cases that the suit is still liable to be decreed (sic) on the basis that the presumption under S. 118 still operates. Sri. E. V. Bhagiratha Rao contended that the view taken in Janaka Lakshmis case is not correct and commended to us the view taken in Maddam Lingaiahs case, (supra). That is how the question above referred to has arisen.

(3) NOW, S. 118 of the Negotiable Instruments Act in so far as it is material for this discussion states that "until the contrary is proved" a presumption shall be made that every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, endorsed, negotiated or transferred for consideration.

(4) IN Janaka Lakshmis case, (AIr 1973 Andh Pra 103) (supra) the learned Judges came to the conclusion that the appellants case of her signatures being taken on blank papers was not true but, at the same time, it was established that the appellant was not in need of money and the plaintiffs case of cash consideration for the pronotes was not true. But the learned Judges Chinnappa Reddi, J. (as he then was) and A. D. V. Reddy, J. held following the Bombay ruling in Tar Mohammeds case, (AIR 1949 Bom 257 [LQ/BomHC/1948/136] ) (supra) decided by Chagla, C. J. and Bhagwati, J. that until it was proved that there was no consideration the presumption under s. 118 operated and that unless that was done, it could not be said that the contrary was proved by the defendant. As the presumption under the section is in favour of there being consideration for the promissory note and not that it was supported by any particular type of consideration, they held that the presumption prevailed-notwithstanding the rejection of the defendants story and of the plaintiffs story as well and the suit was liable to be decreed. It was observed that the burden of proving that there was still, no consideration continued to be on the shoulders of the defendant. They followed the Bombay, Allahabad and Calcutta rulings. They also referred to two decisions of the Madras High Court wherein judgment was delivered by Varadachariar, J. and observed that those judgments were not inconsistent with the view taken by them. They then distinguished certain other cases including the judgment of the Supreme Court in Kundanlals case. (AIR 1961 SC 1316 [LQ/SC/1961/125] ) (supra).

(5) WE may state that the view, first taken by the Bombay High Court in Tar Mohammeds case, (AIR 1949 Bom 257 [LQ/BomHC/1948/136] ) as above stated was characterised by Wanchoo, C. J. as an extreme view in the Full Bench decision in Heerachand v. Jeevraj, AIR 1959 Raj 1 [LQ/RajHC/1958/91] . There are other rulings too which have taken a view contrary to the Bombay view and we shall refer to them a little later.

(6) WE shall first refer to the practical difficulties emanating from the Bombay view and then consider the question from the stand-point of the relevant provisions of the Evidence Act in Ss. 3, 4 and 101 to 104, of the Evidence Act. We shall then examine the matter in the light of S. 114 of the Evidence Act, and the judgment of the Supreme Court and of other High Courts.

(7) AT the outset, we may point out that the Bombay view which was followed in Janaka Lakshmis case, (AIR 1973 Andh Pra 103) creates formidable practical difficulties at the trial. In a suit on a promissory note by a plaintiff pleading, say, cash consideration if the execution is admitted, the defendant-executants has to submit his evidence in the first instance. He states that the theory of cash consideration is not true and sets out his own version as to the circumstances under which the promissory note came to be executed without any consideration. Now, if he has further to prove that the promissory note is not at all supported by any consideration whatsoever, what is the nature of the evidence he has to lead Is he expected to imagine for himself all the conceivable types of consideration and then say that all such possibilities are ruled out What exactly is the defendant to say in his chief examination for the purpose of proving that the promissory note is wholly without consideration On these aspects, the Bombay ruling as well as Janaka Lakshmis case do not throw any light.

(8) HAVING regard to the practical difficulties we shall now consider the question from the standpoint of Ss. 3, 4 and 101 to 104 of the Evidence Act. This involves a discussion of what we mean by the words burden of proof, presumption of law, proved, disproved or until the contrary is proved.

(9) NOW, there are two senses in which the words burden of proof is used. One is the burden of proof arising as a matter of pleading and the other is the one which deals with the question as to who has first to prove a particular fact. The former is called the legal burden and it never shifts, the latter is called the evidential burden and it shifts from one side to the other. See Kundanlal v. Custodian Evacuee Property, (AIR 1961 SC 1316 [LQ/SC/1961/125] ) (supra). The legal burden is the burden of proof which remains constant throughout a trial. It is the burden of establishing the facts and contentions which will support a partys case. If, at the conclusion of the trial he has failed to establish these to the appropriate standard, he will lose. The incidence of the burden is usually clear from the pleadings and usually, it is incumbent on the plaintiff to prove what he contends. On the other hand, the evidential burden may shift from one party to another as the trial progresses according to the balance of evidence given at any particular stage; the burden rests upon the party who would fail if no evidence at all, or no further evidence, as the case may be is adduced by either side (see Halsburys Laws of England, 4th Edition para 13). While the former, the legal burden arising on the pleadings is mentioned in S. 101 of the Evidence Act, the latter, the evidential burden, is referred to in Section 102 thereof. Section 103 amplifies S. 101 regarding proof as to a particular fact while S. 104 deals with the person who has to give evidence.

(10) PRESUMPTIONS are of two kinds, presumptions of fact and of law. Presumptions of fact are inferences logically drawn from one fact as to the existence of other facts. Presumptions of fact are rebut table by evidence to the contrary. Presumptions of law may be either irrebuttable, so that no evidence to the contrary may be given or rebuttable. A rebuttable presumption of law is a legal rule to be applied by the Court in the absence of conflicting evidence. (Halsbury, 4th Edition paras 111, 112). We are here concerned with rebuttable presumptions for it is not in dispute that S. 118 of the Negotiable Instruments Act deals with one such.

(11) AMONG rebuttable presumptions there are again two kinds. Section 4 of the Evidence Act defines the words may presume and shall presume as follows : (a) may presume : Whenever it is provided by this Act that the Court may presume a fact, if may either regard such facts as proved, unless and until it is disproved or may call for proof of it. (b) shall presume : whenever it is directed by this Act that the Court shall presume a fact, it shall regard such fact as proved, unless and until it is disproved.

(12) IN the former case, the Court has an option to raise the presumption or not but in latter case, the Court must necessarily raise the presumption. If in the case where the Court has an option, it chooses to raise the presumption, the distinction between the two categories of presumption ceases and the fact is presumed, unless and until it is disproved. The provisions of S. 118 of the Negotiable Instruments Act direct that the Court shall presume until the contrary is proved.

(13) IF the fact to be presumed is therefore presumed until the contrary is proved or until disproved, what is the meaning of these words is the next question. In fact, this is the crux of the entire problem. If under S. 118 the Court is bound to presume consideration until the contrary is proved, does it mean, as held in Janaka Lakshmis case, (AIR 1973 Andh Pra 103) (supra) and the Bombay case that the defendant must prove with hundred per cent certainty that no consideration at all existed Or is it permissible to establish the fact by a preponderance of probabilities

(14) THAT question requires us to move from S. 4 of the Evidence Act and S. 118 of the Negotiable Instruments Act towards S. 3 of the Evidence Act, which defines the important words proved, disproved and not proved.

(15) NOW, S. 3 of the Evidence Act defines the words proved as follows : "a fact is said to be proved when, after considering the matters before it, the Court believes it to exist, or considers its existences so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.

(16) THE said section also defines the word disproved as follows :"a fact is said to be disproved when, after considering the matters before it, the Court either believes that it does not exist, or considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist". The words Not proved are defined as follows :"a fact is said not to be proved when it is neither proved nor disproved. It will be seen that the words proved and disproved are closely connected with the theory of preponderance of probabilities. "

(17) APPLYING the above definition of the words proved in S. 3 to S. 118, it will read as follows : "a presumption shall be made that every negotiable instrument was made or drawn for consideration until the Court after considering the matters before it, either believes that consideration does not exist or considers the non-existence of consideration so probable, that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that consideration does not exist.

(18) THE defendant therefore has two options. He can either show that consideration does not exist or that under the particular circumstances of the case, the non-existence of consideration is so probable that a prudent man ought to suppose that no consideration existed. It is, in our opinion, certainly harsh to give him only the first of these options and not the second. In our opinion, this Court in Janaka Lakshmis case, (AIR 1973 Andh Pra 103) and the Bombay, Allahabad and Calcutta High Courts in the ruling referred to in that case, allowed the defendant only the first of the options and not the second. They do not agree that apart from the hundred per cent certainty prescribed by the first option the defendant has an option to prove the non-existence of consideration by a preponderance of probabilities by referring to the particular circumstances of the case. The preponderance of probability in favour of the defendants case may be even fifty one to forty nine (sic) and arising out of the entire circumstances of the case, the plaintiffs version in the promissory note, the case in the suit notice, his case at the trial, as also the plea of the defendant in the reply notice, written statement or at the trial as to the circumstances under which the pronote was executed without consideration. All of them can raise a preponderance of probabilities justifying a finding that there was no consideration.

(19) WANCHOO, C. J. in Heerachand v. Jeevraj, (AIR 1959 Raj 1 [LQ/RajHC/1958/91] ) (FB) (supra) after referring to the definition of the words proved and disproved observed (at page 4 para 19). "applying this definition to the principle behind the presumption in S. 118 (a) the principle comes to this. The Court shall presume a negotiable instrument to be for consideration unless and until after considering the matters before it, either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. " (Italics supplied) Wanchoo, C. J. pointed out that if the preponderance of probabilities was to be assessed, the entire circumstances of the particular case had to be considered and the evidence of the plaintiff and of the defendant could not be considered in separate watertight compartments. It is not permissible to merely reject the plaintiffs case on one side and then separately reject the defendants case, and again come back to S. 118 (a). Thus for the purpose of the words unless the contrary is proved, it is permissible to look into the preponderance of probabilities and the entire circumstances of the particular case.

(20) A similar approach was made by the Madras High Court in Narasamma v. Veerraju, (AIR 1935 Mad 769 [LQ/MadHC/1934/347] ) (at page 773). Speaking for the Bench, Varadachariar, J. quoted the following words with approval from Byles on Bills as follows :"consideration is presumed until the contrary appears or at least appears probable. "and observed again :"the expression until the contrary is proved in S. 118, Negotiable Instruments Act, must also be read in an expanded sense, having regard to the definitions of the word disproved and of the expression shall presume in Ss. 3 and 4 of Evidence Act. "in a case from Malaysia wherein the words in the Evidence Ordinance are identical with the relevant words in the Evidence Act, the Privy Council had recently occasion to consider the words proved, disproved and not proved in Public Prosecutor v. Yuvaraj, (1970) AC 913 in relation to the presumption arising under the prevention of Corruption Act, 1961, Lord Diplock rejected the contention of Sir Dingle Foot, Counsel for the State that in the context of the words unless the contrary is proved. The prudent man must ask himself if he is absolutely sure of the innocence of the accused but not rely on the balance of probabilities i. e. certainty of proof was necessary and not even 51 per cent probability in favour of the accused was sufficient. After referring to the meaning of the words disproved in the Evidence Ordinance (which is identical, word for word, with the meaning given to it in the Evidence Act) and to the words unless the contrary is proved in S. 14 of the Prevention of Corruption Act, Lord Diplock observed :"the requirement of the section is satisfied if and only if, after considering the matters before it the Court either believes that it (i. e. the corrupt motive) does not exist or considers its non-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist. The definition in the Evidence Ordinance does not attempt to spell out explicitly the degree of probability for which a prudent man ought to look before he acts on the supposition that a fact does not exist. . . . . The Evidence Ordinance applies to Civil and Criminal proceedings alike. . . . . The degree of probability. . . . depends upon the nature of the proceedings and what will be the consequence in those proceedings of a finding that a fact is proved or disproved. If that consequence will be the determination of a civil suit in favour of one party, a balance of probabilities is all that is necessary. . . . . This has been the rule at common law since at least the sixteenth century. "and went on to hold that even under the Prevention of Corruption Act the accused could discharge his burden by a preponderance of probabilities. Our Supreme Court has also taken the same view in State v. Sanjay Gandhi, AIR 1978 SC 961 [LQ/SC/1978/162] at p. 966, Col. 2, Chandrachud, C. J. observed :"but though the guilt of the accused in cases which involve the assessment of these facts has to be established beyond reasonable doubt these various facts are not required to be proved by the same standard. Indeed, proof of facts by preponderance of probabilities as in a civil case is not foreign to criminal jurisprudence because, in cases where a statute raises a presumption of guilt, for example, the Prevention of Corruption Act, the accused is entitled to rebut that presumption by proving his defence by a balance of probabilities. "

(21) FOLLOWING the reasoning given by Wanchoo, C. J. and Varadachariar, J. and Lord Diplock in the above cases as to the meaning of the words until the contrary is proved used in S. 118 of the Negotiable Instruments Act we hold, on a consideration of Ss. 3, 4, 101 to 104 of the Evidence Act that the Court, while dealing with the question as to whether the contrary, namely the absence of consideration, has been proved by the defendant shall have to consider not only whether, it believes that consideration does not exist, but also whether it considers the non-existence of consideration so probable that a reasonable man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. That is the conclusion which we come to on a consideration of the relevant statutory provisions.

(22) WE shall next approach the question from another angle, namely, with reference to the binding decisions of the Supreme Court and other rulings wherein the principles relating to the rebuttal of the presumption under S. 118 of the Negotiable Instruments Act have been laid down.

(23) THE Supreme Court in Kundanlals case, (AIR 1961 SC 1316 [LQ/SC/1961/125] ) (supra), explained the methods by which the defendant could rebut the presumption raised by S. 118 of the Negotiable Instruments Act, Subba Rao, J. (as he then was) observed :"the evidence required to shift the burden need not necessarily be direct evidence i. e. oral or documentary evidence or admissions made by the opposite party; it may comprise circumstantial evidence or presumption of law or fact". After referring to the provisions of S. 101 of the Evidence Act and to S. 118 of the Negotiable Instruments Act, the learned Judge stated that the legal burden initially rested on the plaintiff but where the execution of the promissory note is admitted, the evidential burden is initially shifted to the defendant and then,"the defendant may adduce direct evidence to prove that the promissory note was not supported by consideration and, if he adduces acceptable evidence, the burden again shifts to the plaintiff, and so on. The defendant may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling the burden may likewise shift to the plaintiff. He may also rely upon presumptions of fact, for instance those mentioned in S. 114 and other sections of the Evidence Act. . . . The burden of proof may shift by presumptions of law or fact. "on the facts of that case, when the creditor failed to produce his account books, the Supreme Court raised a presumption under S. 114 (g) that the evidence, if produced, would have shown the non-existence of consideration. Their Lordships held that the presumption under S. 118 of the Negotiable Instruments Act was rebutted by the presumption under S. 114 of the Evidence Act and approved the observations of Varadachariar, J. in the Division Bench case of the Madras High court in Narayana Rao v. Venkatapayya, (AIR 1973 Mad 182).

(24) IN our view, the above decision of the Supreme Court is clear authority for the proposition that once the defendant shows either by direct evidence or circumstantial evidence or by use of other presumptions of law or fact that the promissory note is not supported by consideration, in the manner stated in the promissory note or in the manner stated in the suit notice or in the pleading, the evidential burden shifts to the plaintiff and the legal burden of the plaintiff is revived, i. e. to prove that the promissory note is supported by consideration and at that stage, the presumption of law covered by S. 118 disappears and no longer subsists. This is because the presumption under S. 118 raised by the statute initially in favour of the plaintiff steps, as it were, into the witness box and acts as a substitute for the plaintiffs evidence. Once such rebuttal evidence is given by the defendant to the satisfaction of the Court, the Court acting on a preponderance of probabilities and not requiring an absolute proof of negative i. e. absence of all conceivable forms of consideration, the effect of the presumption shifting the initial evidential burden to the defendant disappears.

(25) M. H. Beg, J. (as he then was) in Rishikesh Singh v. State, AIR 1970 All 51 [LQ/AllHC/1968/307 ;] ">1970 All 51 [LQ/AllHC/1968/307 ;] [LQ/AllHC/1968/307 ;] at 83 (FB) quoted the statement of law from Wigmore on evidence (Vol. IX, para 249) to the following effect : The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judges requirement of some evidence), the presumption disappears as a rule of law and the case is in the Jurys hands free from any rule.

(26) WE may quote a more important passage from Wigmore from the same paragraph referred to above by M. H. Beg, J. (as he then was) and that reads :"it is therefore a fallacy to attribute (as do some Judges) an artificial force to a presumption, increasing for the Jury, the weight of facts, even when the opponent has come forward with some evidence to the contrary. "and Wigmore explains with reference to an example that if death of a person not heard of for over seven years is in issue and the opponent produces some evidence to the satisfaction of the Court that the person had proclaimed earlier his intention to be away till a prosecution case for a crime was to become time barred, this satisfies the opponents duty of producing evidence and removes the rule of law.

(27) A similar statement of law, that on such rebuttal evidence being given, the evidential burden created by the statute disappears and the plaintiffs legal burden on the pleadings revives, is contained in Cross on Evidence (3rd Edition page 105) and reads as follows :". . . . . . IF such evidence is adduce, the legal burden comes into play and will be decisive of the existence or otherwise of the presumed fact. "

(28) A similar statement of law that at that stage the presumption of law disappears is also contained in Corpus Juris Secundum (Vol. XXXI, para 117, page 731) as follows : "where such evidence is introduced, the presumption is functus officio and drops out of sight"; and again in para 119 as follows :". . . . When the function of a presumption of law sustaining the burden of evidence is ended by the introduction of rebutting testimony, as stated in para 117 the presumption of law "disappears" leaving in evidence the basic fact. "

(29) THERE is indeed a beautiful metaphor in the regard in the judgment of Cochran, J. in Stumpf v. Mantgomery, (1924) 101 OKL 256 Pac 85 of the American Court (quoted in Wigmore para 2491, page 291) as follows : "presumptions. . . . may be looked on as the bats of law, flitting in the twilight, but disappearing in the sunshine of facts. "

(30) FROM the aforesaid authorities, we hold that once the defendant adduces evidence to the satisfaction of the Court that on a preponderance of probabilities there is no consideration in the manner pleaded in the plaint or suit notice or the plaintiffs evidence, the burden shifts to the plaintiff and the presumption disappears and does not haunt the defendant any longer.

(31) HAVING referred to the method and manner in which the presumption under S. 118 is to be rebutted and as to how, it thereafter disappears we shall also make reference to three principles which are relevant in the context. The first one is connected with the practical difficulties that beset the defendant for proving a negative, namely that no other conceivable consideration exists. We had occasion to refer to this aspect earlier. Negative evidence is always in some sort circumstantial or indirect, and the difficulty of proving a negative lies in discovering a fact or series of facts inconsistent with the fact which we seek to disprove (Gulson, Philosophy of Proof, 2nd Edition, p. 153 quoted in Cross on Evidence, 3rd Edn. , page 78 Fn). In such situations, a lesser amount of proof than is usually required may avail. In fact, such evidence as renders the existence of the negative probable may shift the burden on to the other party (Jones, quoted in A Sarkar on Evidence, 12th Edition, p. 870). The second principle which is relevant in the context is the one stated in S. 106 of the Evidence Act. That section states that when any fact is especially within the knowledge of any person, the burden of proving that fact is upon him. It is very generally stated that, where the party who does not have the evidential burden, such as the plaintiff in this case, possesses positive and complete knowledge concerning the existence of fact which the party having the evidential burden, such as the defendant in this case, is called upon the negative or has peculiar knowledge or control of evidence as to such matters, the burden rests on him to produce the evidence, the negative averment being taken as true unless disproved by the party having such knowledge or control. The difficulty of proving a negative only relieves the party having the evidential burden from the necessity of creating a positive conviction entirely by his own evidence so that, when he produces such evidence as it is in his power to produce, its probative effect is enhanced by the silence of the opponent (Corpus Juris, Vol. 31, para 113). The third principle that has to be borne in mind is the one that when both parties have led evidence, the onus of proof loses all importance and becomes purely academic. Referring to this principle, the Supreme Court stated in Narayan v. Gopal, AIR 1960 SC 100 [LQ/SC/1959/168] as follows :"the burden of proof is of importance only where by reason of not discharging the burden which was put upon it, a party must eventually fail, Where, however, parties have joined issue and have led evidence and the conflicting evidence can be weighed to determine which way the issue can be decided, the abstract question of burden of proof becomes academic. "we have referred to these three principles as they are important and have to be borne in mind by the Court while deciding whether the initial evidential burden under S. 118 of the Negotiable Instruments Act has been discharged by the defendant and the presumption disappeared and whether the burden has shifted and later whether the plaintiff had discharged the legal burden after the same was restored.

(32) FOR the aforesaid reasons, we are of the view that where, in a suit on a promissory note, the case of the defendant as to the circumstances under which the promissory note was executed is not accepted, it is open to the defendant to prove that the case set up by the plaintiff on the basis of the recitals in the promissory note, or the case set up in suit notice or in the plaint is not true and rebut the presumption under S. 118 by showing a preponderance of probabilities in his favour and against the plaintiff. He need not lead evidence on all conceivable modes of consideration for establishing that the promissory note is not supported by any consideration whatsoever. The words until the contrary is proved in S. 118 do not mean that the defendant must necessarily show that the document is not supported by any form of consideration but the defendant has the option to ask the Court to consider the non-existence of consideration so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that consideration did not exist. Though the evidential burden is initially placed on the defendant by virtue of S. 118 it can be rebutted by the defendant by showing a preponderance of probabilities that such consideration as stated in the pronote, or in the suit notice or in the plaint does not exist and once the presumption is so rebutted, the said presumption disappears. For the purpose of rebutting the initial evidential burden, the defendant can rely on direct evidence or circumstantial evidence or on presumptions of law or fact. Once such convincing rebuttal evidence is adduced and accepted by the Court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the plaintiff who has also the legal burden. Thereafter, the presumption under S. 118 does not again come to the plaintiffs rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance.

(33) BEFORE leaving the discussion on these aspects we would like to make it clear that merely because the plaintiff comes forward with a case different from the one mentioned in the promissory note it will not be correct to say that the presumption under S. 118 does not apply at all. In our view the presumption applies once the execution of the promissory note is accepted by the defendant but the circumstance that the plaintiffs case is at variance with the one contained in the promissory note or the notice can be relied upon by the defendant for the purpose of rebutting the presumption and shifting the evidential burden to the plaintiff who has also the legal burden. To the above extent, we agree with the view of the Bombay High Court in Tarmahomeds case, (AIR 1949 Bom 257 [LQ/BomHC/1948/136] ) (supra). Our dissent is only to the extent of the principle laid down in that case that even when the case of the plaintiff and that of the defendant is disbelieved still the suit is to be decreed on the basis of the presumption under S. 118 of the Negotiable Instruments Act.

(34) WE, therefore, respectfully follow the decision of the Supreme Court in Kundanlals case, (AIR 1961 SC 1316 [LQ/SC/1961/125] ) (supra) and dissent from the judgment of the Bombay High Court in Tarmahomed v. Syed Ebrahim in so far as it held that even after the plaintiffs version and the defendants version are disbelieved, still the presumption under S. 118 operates. We also dissent from the judgments of the Kerala High Court in Alex Mathew v. Philip Philip, AIR 1973 Ker 210 [LQ/KerHC/1973/110] , as also from the judgment of the Allahabad High Court in Lal Girwarlal v. Daul Dayal, AIR 1935 All 509 [LQ/AllHC/1935/51] ; of the Nagpur High Court in Prem Raj v. Nathumal, AIR 1936 Nag 130; of the Calcutta High Court in Ramani Mohan v. Surjya Kumar Dhan, AIR 1943 Cal 22 [LQ/CalHC/1941/178] ; of the Patna High Court in Barham Deo Singh v. Kari Singh, AIR 1936 Pat 498 [LQ/PatHC/1936/38] and of the views of Abdur Rahim, J. in Venkataraghavalu Chetty v. Sabapathy Chetti, (1911) 21 Mad LJ 1013 of the Madras High Court. We accordingly overrule the decision of our High Court in M. Janaka Lakshmi v. Madhava Rao, (AIR 1973 Andh Pra 103).

(35) ON the contrary, we follow the views of Varadachariar J. in the decisions of the Madras High Court in Narasamma v. Veerraju, (AIR 1935 Mad 769 [LQ/MadHC/1934/347] ) and Lakshmanaswamy v. Narasimha Rao, AIR 1937 Mad 223 [LQ/MadHC/1936/186] , of the views of Wanchoo, C. J. (as he then was) in Heerachand v. Jeevraj case, (AIR 1959 Raj 1 [LQ/RajHC/1958/91] ) (FB), Rajasthan High Court and of Teckchand, J. of the Punjab High Court in Chandanlal v. Amin Chand, AIR 1960 Punj 500 and of the Lahore High Court in Sundar Lal Singh v. Klushi Singh, AIR 1927 Lah 864 rendered by Teckchand, J. of the Allahabad High Court in Md. Shafi v. Md. Moazzam Ali, AIR 1923 All 214 [LQ/AllHC/1922/41] of Pandey and A. P. Sen, JJ. of the Madhya Pradesh High Court in Indermal v. Ram Prasad, AIR 1970 Madh Pra 40 and of Honnaiah and E. S. Venkataramiah, JJ. of the Mysore High Court in Sharada Bai v. Syed Abdul Hai, (1971) 2 Mys LJ 407; We approve of the views expressed by our High Court in Maddam Lingaiah v. Hasan.

(36) APPLYING the above principles to the facts of the case, it will be seen that initially the evidential burden lay on the defendant. In this case, the plaintiff admitted that no cash was lent as recited in the promissory note. The plaintiff recalled the defendant and suggested a new case that the promissory notes were executed in renewal of earlier notes. At all these stages, the presumption has to be applied under S. 118 but the defendant can rely on these facts and also on the circumstances that the plea of renewal of earlier promissory notes by virtue of the suit notes is contrary to the recitals in the suit pronotes, and that the same is not set out in the suit notice or in the plaint nor was it suggested to the defendant before he was recalled. We are of the view that by relying on these pieces of direct and circumstantial evidence the defendant has successfully discharged the evidential burden initially lying on him by a preponderance of probabilities. From then on, the presumption under S. 118 disappears and becomes functus officio and the evidential burden shifts to the plaintiff who has also the legal burden arising out of the pleading to prove consideration. On a consideration of the entire evidence we are of the view that the plaintiff has not discharged the legal burden. He cannot at that stage once again rely on the presumption under S. 118 of the Negotiable Instruments Act. The flitting of the bat of presumption in the twilight is over and it has disappeared in the sunshine of actual facts.

(37) WE accordingly, allow the appeal and dismiss the suit but in the circumstances without costs.

(38) APPEAL allowed.