2022 (2) TMI 723 - HC - Indian Laws

Dishonor of Cheque - has the plaintiff succeeded in establishing the execution of Ext. A1 cheque and if so, has the defendant rebutted the presumption under s. 118 of the Negotiable Instruments Act, 1881(the Act) by setting up a probable defense? - HELD THAT - It is true that no complaint alleging the commission of the offence under s. 138 of the Act has been filed by the plaintiff. The learned Senior Counsel was pointedly asked as to why such a course of action had not been adopted, to which it was submitted that since the plaintiff is working abroad, it was not practical or possible for him to appear on all posting dates before the Magistrate Court concerned. That of course is not a satisfactory answer. But at the same time, it has to be noted that the plaintiff herein has paid a sum of ₹ 20 odd lakhs, certainly a hefty sum, as court fees before the trial court and this Court. Therefore, had there been no case at all as contended by the defendant, it is improbable for the plaintiff to have paid such a big sum and proceed with the litigation. In the case on hand, the court below has found that in spite of the existence of better evidence or best evidence in the possession of the plaintiff, he has failed to produce the same before the court. In reply to the applications filed by the plaintiff for production of additional documents, the learned counsel for the defendant drew our attention to the testimony of PW1 wherein he deposed that he is not in possession of any other document(s) to evidence the plaint transaction - According to the court below, there is only a general pleading in the plaint that payments were made to the defendant in several installments through cash as well as through Bank account. Ext. A17 was also produced only at the fag end of the trial. The plaintiff had also not referred to this payment when he was examined as PW1. In the absence of specific pleadings in the plaint regarding this payment and also the omission on the part of PW1 to refer to the same in his testimony, persuaded the court below not to rely on Ext. A17 on the ground that mere entries in the books of account are not sufficient to charge a person with liability, relying on Section 34 of the Evidence Act. However, it needs to be noticed that an amount of ₹ 35 Lakhs appear to have been paid to the defendant. This has to be viewed in the background of the contention taken up by the defendant denying the entire transaction. The case put-forward by the defendant that Exts. B1, B2 and A1 were actually given as security for the business transaction that took place between the parties in Dubai, is also not probable because even according to the defendant, the business transaction relating to the supply of building materials/hardware took place in Dubai. Therefore, for a transaction that took place in Dubai, it is improbable for the parties or the defendant to give Exts. B1, B2 and A1 cheques, which are admittedly cheques issued by the Banks in Kerala. It is further true that the plaintiff cannot succeed due to the inconsistent stand of the defendant or based on the loopholes or the weakness in the case put-forward by the defendant - even though there are some laches on the part of the plaintiff in properly conducting the case and omission or laches on his part in producing all the documentary evidence in his possession to prove his case when the matter had been posted for his evidence, in the facts and circumstances of the case, the interest of justice requires an opportunity to be given to the plaintiff to establish his case. The matter is remanded to the trial court for a fresh disposal. The plaintiff is given the liberty to adduce further evidence to substantiate his case - appeal allowed by way of remand.

Summary

Issues Involved:
1. Whether the defendant issued cheque dated 5/5/2010 to the plaintiff towards the discharge of any debt or liability?
2. Whether the cheque was issued as security in the circumstances narrated in the written statement?
3. Whether the plaintiff is entitled to recover the plaint amount from the defendant?

Issue-wise Detailed Analysis:

1. Issuance of Cheque Towards Discharge of Debt or Liability:
The plaintiff alleged that the defendant issued cheques as repayment for the investment made in a joint venture project. The plaintiff claimed to have paid ?2,85,00,400 in installments, which the defendant agreed to repay by issuing cheques. However, these cheques were dishonoured due to insufficient funds. The defendant denied receiving any amount and contended that the cheques were issued as security for business transactions. The court below found that the plaintiff failed to satisfactorily prove the transaction, leading to the dismissal of the suit.

2. Cheque Issued as Security:
The defendant argued that the cheques were issued as security for the supply of goods in the ordinary course of business, and not for repayment of any debt. The defendant claimed that the cheques were returned upon successful completion of orders, and fresh cheques were issued for new orders. The court below found inconsistencies in the plaintiff's witnesses' testimonies and noted that the plaintiff failed to produce the best evidence available, thus supporting the defendant's claim that the cheques were security.

3. Plaintiff's Entitlement to Recover the Amount:
The court below dismissed the suit on the grounds that the plaintiff's claim was improbable and not satisfactorily proved. The plaintiff argued that the court did not properly appreciate the evidence and sought a remand for additional evidence. The appellate court noted the inconsistencies and lack of specific pleadings regarding certain payments. However, it acknowledged the existence of some transactions between the parties and found that the plaintiff should be given an opportunity to produce additional evidence to substantiate his case.

Remand for Fresh Disposal:
The appellate court decided to remand the case for fresh disposal, allowing the plaintiff to adduce further evidence. The court emphasized that the plaintiff must produce all necessary documentary evidence to prove his claim. The defendant is also given the liberty to rebut the plaintiff's evidence. The court highlighted the need for a thorough and judicious approach to ensure complete justice between the parties.

Conclusion:
The appeal was allowed, and the impugned judgment and decree were set aside. The matter was remanded to the trial court for fresh disposal, with both parties given the opportunity to adduce additional evidence. The trial court was directed to expedite the proceedings, considering the age of the suit.