2019 (2) TMI 1941 - HC - Indian Laws

Dishonor of Cheque - Suit for realization of money - rebuttal of presumption - It is the definite case of the plaintiffs that Ext. A1 cheque was issued by the defendant to Ramachandran in discharge of a liability - HELD THAT - It has come out in evidence that the proceedings under Section 138 of the N.I. Act was initiated against the defendant at the instance of the plaintiffs as C.C. No. 1500 of 1996 before the Judicial First Class Magistrate Court, Koyilandy. At the time of examining the defendant (accused in that case) under Section 313 of Cr.P.C., he has practically admitted that the statement given by the Bank Manager that signature seen on Ext. A1 is that of the defendant's own signature. This admission in a judicial proceedings by the defendant is a relevant piece of evidence. The defendant has not tried to explain away the admission in a manner known to law. Therefore, appreciation of evidence by the court below cannot be said to be proper in this case. The court below had wrongly dismissed the suit - Appeal allowed.

Summary

Issues:
Realization of money advanced via a cheque, denial of cheque execution, limitation period for claiming money based on a cheque, appreciation of evidence regarding cheque execution, relevance of evidence from Section 138 of the Negotiable Instruments Act proceedings.

Analysis:

1. The appeal was filed by the plaintiffs seeking to recover money advanced through a cheque issued by the defendant's predecessor-in-interest. The plaintiffs alleged that the cheque was dishonored due to insufficient funds in the defendant's account, leading them to send a lawyer's notice and eventually file a suit for the amount covered by the cheque with interest and costs.

2. The defendant denied executing the cheque, claiming that it was taken without his knowledge or consent by the deceased predecessor-in-interest. The court framed necessary issues based on the pleadings, with evidence presented by both parties through witnesses and documents.

3. The appellant's counsel argued that the lower court erred in dismissing the suit, contending that the court misjudged the evidence by concluding that the defendant did not sign the cheque. Reference was made to legal provisions such as Section 118 of the Negotiable Instruments Act and Section 2(c) of the Limitation Act to support the presumption of consideration in negotiable instruments like cheques.

4. Additionally, the appellant's counsel challenged the lower court's finding on the suit's filing date, asserting that it was incorrectly determined to be beyond the limitation period. The argument was supported by the date of the cheque issuance and the three-year limitation period for claiming money based on a cheque, ultimately leading to the appeal's success.

5. The court highlighted discrepancies in the lower court's appreciation of evidence, emphasizing that despite the defendant's denial, circumstances and statements from judicial proceedings indicated his involvement in the cheque's execution. The defendant's failure to explain contradictory statements further strengthened the case for the plaintiffs.

6. Notably, evidence from a previous Section 138 proceeding under the Negotiable Instruments Act played a crucial role in establishing the defendant's admission regarding the signature on the cheque. This admission, coupled with the overall circumstances, led the court to reverse the lower court's decision and decree in favor of the plaintiffs, granting the claimed amount with interest and costs.