2017 (12) TMI 288 - HC - Indian Laws

Suit for recovery along with interest - dishonour of cheques - Held that - Trial court in our opinion is justified in dismissing the leave to defend application because in the statement recorded by the appellant/defendant in the Section 138 of Negotiable Instruments Act proceedings, the appellant/defendant on 15.2.2013 in response to a court question stated that cheques in question bear the signatures of the appellant/defendant and that the appellant/defendant did not know how the cheques came to the possession of the complainant (i.e plaintiff in the subject suit), whereas a different stand was taken in the leave to defend application filed by the appellant/defendant that the subject cheques were given to Sh. Brij Bhushan and not to the respondent/plaintiff and that Sh. Brij Bhushan appeared to have illegally given the subject cheques to the respondent/plaintiff. The cheques are the cheques of the appellant/defendant. The cheques do bear the signatures of the appellant/defendant. The appellant/defendant pleaded that the cheques were given in blank to Sh. Brij Bhushan but this defence has been rightly found by the trial court to be a complete moonshine and this Court has given an additional reason that if there was a compromise between Sh. Brij Bhushan and the appellant/defendant, then, there was no reason why at the time of compromise, the appellant/defendant would not have taken the cheques from Sh. Brij Bhushan way back in January, 2011. The leave defend application was thus rightly dismissed by the impugned judgment.

Summary

Issues:
1. Exemption and condonation of delay applications.
2. Impugning the judgment of the Trial Court regarding the leave to defend application.
3. Dispute over the issuance and misuse of post-dated cheques.
4. Justification of Trial Court's decision to dismiss the leave to defend application.

Analysis:

1. The judgment addresses the exemption and condonation of delay applications, allowing exemption subject to exceptions and condoning a delay of 262 days in filing the appeal for reasons stated in the application.

2. The appeal under Section 96 of the Code of Civil Procedure challenges the Trial Court's judgment dismissing the leave to defend application. The respondent filed a suit for recovery of a specific amount along with interest, alleging the appellant purchased metal scrap but issued dishonored cheques. The appellant contended that the cheques were given to a third party, not the respondent, and were misused.

3. The facts reveal a dispute over the cheques' ownership and issuance. The appellant claimed the cheques were given as security to a third party, who allegedly misused them by passing them to the respondent. The Trial Court found discrepancies in the appellant's statements, leading to the dismissal of the leave to defend application.

4. The Trial Court's decision to dismiss the leave to defend application was justified based on various factors. The appellant's conflicting statements, failure to take legal action against the third party for misusing the cheques, and the lack of evidence to support the appellant's defense led to the dismissal. The Court concluded that the cheques belonged to the appellant, bearing their signatures, and the defense of giving blank cheques to a third party was unfounded.

In conclusion, the High Court upheld the Trial Court's decision, finding no merit in the appeal and dismissing it. The judgment provides a detailed analysis of the dispute over the cheques, the appellant's defense, and the Trial Court's reasoning for dismissing the leave to defend application.