2024 (10) TMI 555 - HC - Indian Laws

Suit for money due under a dishonoured cheque was decreed by the trial court - correctness of findings of the trial court with regard to the due execution of Ext.A1 cheque and the drawing of presumption under Section 118(a) of the N.I. Act - failure to rebut the presumption under Section 118(a) of the N.I. Act based on the evidence. Do the findings of the trial court with regard to the due execution of Ext.A1 cheque and the drawing of presumption under Section 118(a) of the N.I. Act warrant any interference? - HELD THAT - The plaintiff as PW1, has categorically deposed about the execution and issuance of Ext.A1 cheque by the defendant. He has asserted about the signing of the cheque by the defendant in his presence. There is no other witness, for such execution and issuance - When PW1 is cross examined there is no suggestion that the signature in Ext.A1 is not that of the defendant. No steps were taken by her to have an expert opinion obtained regarding the signature on Ext.A1. We are in agreement with the finding of the trial court that the plaintiff has proved the due execution of the cheque. The execution of the cheque having been proved, the plaintiff is entitled for the benefit of the presumption under Section 118(a) of the N.I. Act that, the instrument is supported by consideration. The burden is on the defendant to rebut the presumption. The trial court was right in holding so. Is the finding of the trial court that the defendant failed to rebut the presumption under Section 118(a) of the N.I. Act based on the evidence in the case? - HELD THAT - Admittedly there were financial dealings between the plaintiff and the husband of the defendant while they were abroad. Ext.B2 is the agreement executed between the plaintiff and the husband of the defendant regarding the same. Ext.B2 and the transaction thereunder is admitted by both parties. According to the defendant, the liability under Ext.B2 was paid off, and the original of Ext.B2 was got returned - The cheque was dishonoured for insufficiency of funds. Though it is claimed that the liability under Ext.B2 agreement was discharged, there is no evidence to prove such discharge - the finding of the trial court that the evidence on record is insufficient to rebut the presumption of consideration under Section 118(a) of the N.I. Act, is justified. On the evidence on record, the conclusions arrived at by the trial court are plausible. There is no sufficient material to upturn the findings of the trial court. The trial court has granted interest only at the rate of 6% per annum from the date of suit which is reasonable and warrants no interference - Appeal dismissed.

Summary

Issues:
1. Whether the findings of the trial court regarding the due execution of the cheque and the presumption under Section 118(a) of the N.I. Act warrant interference?
2. Is the trial court's finding that the defendant failed to rebut the presumption under Section 118(a) of the N.I. Act based on the evidence in the case?

Analysis:

The judgment involves a suit for money due under a dishonored cheque, where the trial court decreed in favor of the plaintiff, and the defendant appealed. The plaintiff alleged that the defendant and her husband required funds for their business, which the plaintiff arranged through his friends. An agreement was made for repayment, and when the defendant failed to pay, the plaintiff covered the liability. The defendant denied issuing the cheque and its signature, claiming ignorance of how it came into the plaintiff's possession. The trial court found in favor of the plaintiff, holding that the defendant failed to rebut the presumption under Section 118(a) of the Negotiable Instruments Act (N.I. Act).

The first issue pertains to the trial court's findings on the due execution of the cheque and the presumption under Section 118(a) of the N.I. Act. The defendant denied issuing the cheque and its signature, but the plaintiff testified to witnessing the defendant signing the cheque. The defendant did not take steps to disprove her signature, and no expert opinion was sought. The court agreed with the trial court that the plaintiff proved the cheque's execution, entitling him to the presumption of consideration under Section 118(a) of the N.I. Act.

Regarding the second issue, the defendant claimed that the liability under a previous agreement was settled, producing the agreement as evidence. However, the plaintiff asserted that the liability was not discharged, leading to the issuance of the disputed cheque. Despite the defendant's denial and lack of evidence of settlement, the trial court found the evidence insufficient to rebut the presumption of consideration under Section 118(a) of the N.I. Act. The appellate court cited the Supreme Court's stance on appellate power to reevaluate evidence and upheld the trial court's findings.

The appellate court found the trial court's conclusions reasonable, emphasizing the need for caution in disturbing factual findings. The trial court's decision to grant interest at 6% per annum from the date of the suit was deemed appropriate. Consequently, the appeal was dismissed, affirming the trial court's decree in favor of the plaintiff.