An unrelated criminal complaint does not establish discharge of promissory-note liability.

The plaintiff sued to recover ₹80,000 with interest under a promissory note dated 30 June 1995.

The defendant denied borrowing that amount but admitted borrowing ₹10,000, signing an unfilled promissory note, and alleged that he had repaid the principal, leaving only interest unpaid.

He relied on statements in related criminal proceedings concerning a dispute between the parties.

The trial court decreed the suit, finding the promissory note and consideration proved and the alleged repayment unproved.

The first appellate court reversed, relying on the criminal proceedings.

The plaintiff appealed under Section 100 CPC.

1. Whether a reference to repayment in criminal proceedings, without identifying the suit transaction, discharged the defendant’s liability under the suit promissory note

2. Whether the first appellate court could reverse the decree by relying on the criminal proceedings rather than assessing the evidence relating to the promissory note in the civil suit

Under Section 118 of the Negotiable Instruments Act, execution of a promissory note attracts a presumption of consideration, which the defendant may rebut with evidence.

A party asserting repayment must establish that defence.

A criminal judgment is not, merely by virtue of its findings, binding in a civil proceeding; the civil court must decide the suit on the evidence before it.

Sections 40–43 of the Evidence Act govern when prior judgments may be relevant, and such judgments are not generally conclusive except as provided by law.

The Court relied on M.S. Sheriff v. State of Madras, Syed Askari Hadi Ali Augustine Imam v. State (Delhi Administration) and Vishnu Dutt Sharma v. Daya Sapra on the distinct assessment of civil and criminal proceedings.

The defendant admitted signing an unfilled promissory note, while the plaintiff’s evidence was accepted as proving execution and consideration.

The defendant’s account of the ₹10,000 loan and repayment was vague and unsupported by sufficient evidence; he did not establish that the suit note related to that separate transaction or that its principal had been repaid.

The criminal proceedings concerned a quarrel over money but did not identify the suit promissory note or establish that the alleged statement about principal and interest related to it.

The first appellate court therefore erred in treating those proceedings as sufficient to probabilise the defence and in failing to decide the civil claim on its own evidence.

The second appeal was allowed; the first appellate court’s decree was set aside and the trial court’s decree restored.

No order as to costs.