2004 (8) TMI 771 - HC - Indian Laws

Summary

Issues:
1. Dispute over recovery of the price of goods sold and interest.
2. Allegations of non-payment and dishonored cheques.
3. Claims of coercion and misrepresentation in issuing cheques.
4. Interpretation of legal provisions regarding consideration for cheques.

Analysis:

1. The second appeal was filed by the plaintiff against the judgment and order passed by the II Additional District Judge, Buldana. The plaintiff sought recovery of the price of goods sold and interest from the defendants. The plaintiff alleged that the defendants purchased jaggery but failed to pay the full amount, leading to the issuance of postdated cheques that were later dishonored.

2. The defendants resisted the suit by claiming that the transaction was related to a money lending business and not a sale of goods. They argued that the cheques were issued under coercion and misrepresentation. The trial Judge found in favor of the plaintiff, stating that the sale of goods was proven, and the cheques were issued for the price of jaggery.

3. The first appellate Court overturned the trial Court's decision, ruling that there was no evidence of the sale of jaggery worth the claimed amount. The defendants argued that the cheques were issued as security for a loan transaction. However, the plaintiff maintained that the cheques were for the goods sold. The Court analyzed the legal implications of consideration for the cheques issued.

4. The High Court examined the legal provisions under the Negotiable Instruments Act regarding the presumption of consideration for negotiable instruments. The Court emphasized that the burden of proof lies on the defendant to show the absence of consideration for the cheques issued. The Court referred to previous judgments to support the presumption of consideration unless rebutted by the defendants with a preponderance of probabilities.

5. Ultimately, the High Court allowed the appeal filed by the plaintiff, setting aside the first appellate Court's judgment. The Court reinstated the trial Court's decision, emphasizing that the defendants failed to rebut the presumption of consideration for the cheques issued. The defendants were ordered to pay the costs to the appellant and bear their own expenses.