No Recovery Can Be Granted On An Incomplete Promissory Note Lacking The Name Of The Promisee: Madras High Court

“Though the plaintiff is entitled to fill the particulars as per Section 20 of the Negotiable Instruments Act, 1881, he failed to fill the promisee's name... It is not a complete document” - In a meticulously reasoned judgment, the Madras High Court dismissed the appeal of a money lender who sought recovery of over ₹5.69 lakhs based on four promissory notes, holding the suit was barred by limitation and one of the core documents was inchoate and unenforceable under law.

Justice R. Sakthivel, confirming the decree of the XVIII Additional City Civil Court, Chennai, in O.S. No. 5989 of 1997, ruled that the plaintiff had failed to prove valid acknowledgment of debt within the statutory period and that a blank promissory note without the name of the promisee cannot be enforced under Section 20 of the Negotiable Instruments Act, 1881.

“Acknowledgment Must Be Clear, Unambiguous And Within Limitation: Suspicious Last Payment Does Not Extend Time”

“It is not believable that the defendants paid Rs.4,080/- on July 18, 1992... Ex-A.10 is clearly a fabricated document”

The appellant, Mr. Suresh Bafna, proprietor of M/s Madras Mercantile Agency, claimed that the respondents (defendants) had borrowed ₹2,04,000 through four promissory notes executed between January and June 1988. The suit, filed on 17 July 1995, relied heavily on an alleged last interest payment of ₹4,080 on 18 July 1992 to bring the claim within limitation.

The Court, however, found the timing of the payment highly questionable, noting that the parties had been embroiled in criminal litigation around the same time over alleged fraudulent registration of property and forgery of documents.

Justice Sakthivel held:

“The defendants have filed a criminal complaint... against the plaintiff and Ashok Sharma... there was strong previous enmity... While so, it is unbelievable that the defendants paid a sum of Rs.4,080/- to the plaintiff and acknowledged the debt.”

The Court concluded that Exhibit A-10, which was said to evidence the last payment, lacked credibility, and there was no connection between the payment and the suit debt. Therefore, no valid acknowledgment under Section 18 of the Limitation Act, 1963 could be inferred.

“Incomplete Negotiable Instrument Without Promisee’s Name Is Legally Void”

“Plaintiff ought to have filled the promisee's name before filing suit… No decree can be granted on the basis of an incomplete document”

A central issue in the suit revolved around Exhibit A-5, one of the four promissory notes, which was signed and stamped but left blank in the column meant for the name of the promisee.

The plaintiff argued that under Section 20 of the Negotiable Instruments Act, the holder of a signed but incomplete instrument has authority to complete it. However, the Court rejected this argument, observing that the plaintiff failed to exercise this right before filing the suit.

The judgment clarified:

“Though the plaintiff is entitled to fill the particulars as per Section 20... he failed to fill the promisee's name... Hence, it is not a complete document.”

Thus, Ex-A.5 was declared unenforceable, further weakening the plaintiff’s case.

“Section 118 NI Act Presumption Not Sufficient To Overcome Limitation Bar”

“While the presumption applies to Ex-A.2 to Ex-A.4, the relief cannot be granted when the suit is barred by time”

Though the Court acknowledged that the presumption under Section 118 of the Negotiable Instruments Act would apply to the signed and stamped promissory notes, namely Ex-A.2 to A.4, the plaintiff’s claim still failed due to the overriding bar of limitation.

“The defendants have failed to rebut the presumption... However, the plaintiff failed to prove that the suit is filed within limitation.”

This distinction underscored the primacy of procedural limitations over substantive presumptions in civil recovery suits.

“Suit Defeated By Procedural Defects In Plaint Verification”

“There is a cloud whether M/s Madras Mercantile Agency is a Proprietorship Firm or Partnership Firm”

Apart from substantive failures, the Court also noted a procedural inconsistency in the pleadings. The plaintiff described himself in the plaint short title as “Proprietor” of Madras Mercantile Agency, but in the verification and long title, referred to himself as “Partner / Manager”.

This unexplained inconsistency, held the Court, created ambiguity in the business structure, leading to a procedural defect in the plaint under the Code of Civil Procedure.

“The plaintiff did not remove the cloud... Hence, the plaint is not duly verified.”

The Court observed that even after remand from the High Court and an opportunity to cure procedural lapses, the plaintiff failed to clarify or amend the inconsistent verification, further validating the Trial Court’s dismissal.

Trial History and Litigation Background

The suit was initially decreed in 2004 by the Trial Court. However, the High Court in A.S. No. 276 of 2005 set aside the decree and remanded the matter for fresh trial with liberty to file additional evidence. Following a second round of trial, the XVIII Additional City Civil Court, Chennai, dismissed the suit on 04.09.2013, prompting the present appeal.

The Court noted that even after remand, the plaintiff failed to produce key documents like ledger books, original daybooks, and proper accounts to support his version. Further, the claim that records were sealed by the Income Tax Department in 2003 could not explain the failure to produce them at the time of filing suit in 1995.

“The reason assigned by the plaintiff is not believable.”

Appeal Dismissed, Defendants Entitled To Refund Of Deposits

The High Court upheld the Trial Court’s judgment in full, reiterating that a suit filed beyond limitation and based on defective documents cannot succeed, regardless of past admissions or partial payments.

“This Court finds no reason to interfere with the findings of the Trial Court. Hence, the Appeal Suit must fail.”

Accordingly, the Appeal Suit was dismissed, and the judgment and decree of the Trial Court dated 04.09.2013 were affirmed. The Court recorded that the defendants had deposited ₹5,89,135 during earlier proceedings and directed that they were entitled to recover the deposit with accrued interest, if not already withdrawn. No order as to costs was made, considering the protracted litigation.

Date of Decision: 03 November 2025