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Issues Involved:
1. Whether the cheque issued was supported by consideration. 2. Whether the plaintiff can establish that the actual sale consideration was Rs. 15,000 against the stated Rs. 4,500 in the sale deed. 3. Applicability of Section 92 of the Evidence Act. 4. Impact of the Stamp Act and Contract Act on the enforceability of the transaction. 5. Legal implications of issuing a cheque as a form of payment. Detailed Analysis: Issue 1: Whether the cheque issued was supported by consideration. The plaintiff filed a suit for recovery of Rs. 5,000 due under a dishonoured cheque issued by the second defendant as the managing partner of the first defendant firm. The trial court concluded that the cheque was given for the sale of the plaintiff's properties to T. K. Mani and was fully supported by consideration. However, the lower appellate court held that the cheque was issued as security for the due performance of terms between the second defendant and T. K. Mani, and not as part of the sale consideration. Issue 2: Whether the plaintiff can establish that the actual sale consideration was Rs. 15,000 against the stated Rs. 4,500 in the sale deed. The plaintiff and witness T. K. Mani testified that the real consideration for the sale was Rs. 15,000, with Rs. 10,000 paid in cash and Rs. 5,000 via cheque. The lower appellate court rejected this evidence, citing the sale deed's recital of Rs. 4,500. The court referenced Motilal Singh v. Mt. Fulia, which held that no oral evidence could contradict the sale deed's recitals. However, the higher court found that the evidence of the plaintiff and T. K. Mani was credible and supported by circumstances, thereby establishing the real consideration as Rs. 15,000. Issue 3: Applicability of Section 92 of the Evidence Act. The lower appellate court relied on Section 92 of the Evidence Act, which prohibits oral evidence to contradict, vary, add to, or subtract from the terms of a written contract. However, the higher court clarified that this section applies only between parties to the document or their representatives. In disputes involving third parties, Section 92 does not bar oral evidence. The court cited the Supreme Court's view in Hira Devi v. Official Assignee, Bombay, which allowed third parties to provide extrinsic evidence to contradict the document's terms. Issue 4: Impact of the Stamp Act and Contract Act on the enforceability of the transaction. The respondents argued that allowing the plaintiff to prove a different consideration would defeat the Stamp Act's provisions, particularly Sections 27 and 64, which require full and true consideration to be stated in the instrument. The court noted that even if the parties understated the value to pay lesser stamp duty, the instrument would not become void or inadmissible. The court also referenced Section 23 of the Contract Act, which deals with lawful consideration. It concluded that the sale deed was valid despite the understated consideration, and Section 23 did not preclude the plaintiff from proving the real consideration. Issue 5: Legal implications of issuing a cheque as a form of payment. The court emphasized that issuing a cheque is equivalent to payment in cash, citing cases like Mohideen Bi v. Khatoon Bi and Kirloskar Bros. Ltd. v. Commissioner of Income Tax, Bombay. It held that a cheque, unless dishonoured, operates as payment. The lower appellate court's view that the cheque was not supported by consideration was thus unsustainable. The court found no evidence to support the second defendant's claim that the cheque was issued as security, reinforcing that it was indeed part of the sale consideration. Conclusion: The second appeal was allowed, and the decree and judgment of the lower appellate court were set aside, restoring the trial court's decision in favor of the plaintiff. The court held that the cheque was supported by consideration and that the plaintiff could establish the real sale consideration as Rs. 15,000. There was no order as to costs, and no leave was granted.
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