Delhi District Court
Sh.Mukesh Garg vs Sh. Ravi Kumar Sharma on 24 December, 2022
IN THE COURT OF SH. SYED ZISHAN ALI WARSI:
ADDITIONAL DISTRICT JUDGE-05: WEST DISTRICT:
TIS HAZARI COURTS: DELHI
Civ DJ No. 611337/16
CNR No. DLWT01-001187-2013
In the matter of :
Sh.Mukesh Garg,
S/o Sh. Phool Chand,
R/o H. No. 16, Road No. 8,
East Punjabi Bagh,
New Delhi-110016
.......... Plaintiff
Vs.
Sh. Ravi Kumar Sharma,
S/o Sh. Vijay Kumar Sharma,
R/o H-11, Karam Pura,
New Delhi-110015.
.......... Defendant
SUIT FOR RECOVERY OF RS.15,00,000/- (RUPEES FIFTEEN
LAKHS) ALONGWITH PENDENTE LITE AND FUTURE
INTEREST ONLY
Date of institution : 22.10.2013
Judgment Reserved on: 22.12.2022
Date of Decision : 24.12.2022
JUDGEMENT
1. Initially, plaintiff namely Mukesh Garg filed the present suit under Order 37 CPC against the defendant Ravi Kumar Sharma for recovery of Rs.15,00,000/- along with pendente lite and future interest. Vide order Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 1 of 24 dated 03.02.2016, an application under order 37 Rule 3 (5) CPC for grant of unconditional leave to defend the suit filed on behalf of the defendant is allowed and defendant was directed to file WS.
2. The brief facts of the present case in nutshell are as follows:-
"That the defendant approached the plaintiff for a friendly loan of Rs. 15,00,000/- as he was in dire need of money. It is stated that initially the plaintiff was reluctant to give the money but on the repeated assurances of the defendant that he would duly return the money in one year. It is stated that plaintiff had given the alleged friendly loan of Rs. 15,00,000/- to the defendant in cash in the month of April, 2012 for the period of three months @ 12% per annum, believing on assurance of the defendant that he will returned the amount. In lieu of that defendant issued a cheque no.000131 dated 07.04.2012 for a sum of Rs. 15,00,000/-. It is stated that on presentation of the cheque, the same was got dishonoured with the remarks of "Payment stopped by the drawer". It is stated that the defendant requested the plaintiff for more three weeks time for the repayment of the said loan amount. It is stated that the cheque was received back on 30.04.2012 vide bank memo dated 27.04.2012 of Union Bank of India, Naraina Branch. That the plaintiff tried to Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 2 of 24 approach the defendant but to no avail. It is stated that in order to maintain good social relationship and to seek recovery of the amount, the plaintiff time and again made requests to the defendant to return the friendly loan amount. It is stated that the defendant made promise on several occasions to make payment but to no avail. It is stated that in the aforesaid manner the defendant have cheated and dishonestly induced the plaintiff to provide him a friendly loan concealing the fact that he did not have intention to return the amount and stop the payment in his bank. It is stated that the defendant have failed to pay the amount to the plaintiff despite the receipt of the notice, the plaintiff filed a criminal complaint against the defendant under section 138 N.I Act. It is stated that inspite of the receipt of the demand notice dated 28.05.2012, the defendant had not paid the amount to the plaintiff till day. It is stated that the suit of the plaintiff is within the period of limitation. The plaintiff has prayed for the following reliefs:
a) A decree of Rs.15,00,000/- (Rupees fifteen lacs only), in favour of the plaintiff and against the defendant alongwith pendente lite and future interest @ 24% per annum, till its realisation;
b) Any other or further order(s) may be passed in Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 3 of 24 favour of the plaintiff and against the defendant.
3. Written statement was filed on behalf of defendant wherein defendant has taken the preliminary submissions that plaintiff has not come to the Court with clean hands and has suppressed the material facts, the suit of the plaintiff is without cause of action, the present suit is abuse of the process of law and the same is liable to be dismissed. It is stated that the cheque in question was given by the defendant to the plaintiff only as a security amount and the amount claimed by the plaintiff in his suit had already been repaid by the defendant for which the plaintiff was under obligation to return the cheque bearing No. 000131 dated 07.04.2012 of Rs. 15,00,000/- drawn on Kotak Mahindra Bank, Punjabi Bagh Branch, New Delhi to the defendant. It is stated that the defendant has already paid all his dues towards the plaintiff against the purchase of the saria and the plaintiff was bound to return the aforesaid cheque to the defendant which was retained with the plaintiff only as a security amount and after receiving the payment from the defendant, the plaintiff had no right to retain the aforesaid cheque with him any more. It is further stated that the plaintiff was never known to the defendant prior to August, 2009 and before that the plaintiff had no link with the defendant in any manner. It is stated that only in the month of August, 2009, Mr. Arun Kumar Gupta, previous business partner of the defendant when the defendant had been doing his business in constructions of building along with Mr. Arun Kumar Gupta as the plaintiff was dealing in selling saria (iron rods) and the plaintiff in the business of construction of the buildings. It is stated that the defendant Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 4 of 24 then started purchasing saria from the plaintiff for the business of constructions, for that the defendant used to handover the unnamed cheques to the plaintiff as security purpose and the plaintiff used to return the cheques, given by the defendant to him, to the defendant after the payment was made by the defendant to the plaintiff. It is further stated that cheque in question was also handed over by the defendant to the plaintiff only as a security amount which was not issued in the name of the plaintiff nor any date was put in the said cheque by the defendant at any point of time and the amount allegedly claimed by the plaintiff in the suit had already been paid by the defendant in cash and when the defendant asked the plaintiff to return the cheque, the plaintiff did not return the same to the defendant on the pretext that he had got the cheque mixed up in some documents and would return the same to the defendant immediately after finding the same. It is further stated that there had been no friendly relation of the defendant with the plaintiff at any point of time then the question of alleged demand of loan by the defendant from the plaintiff does not arise at all. It is further stated that defendant had already written a letter to his banker which is Kotak Mahindra Bank Ltd. Punjabi Bagh Branch, New Delhi-110029 on 13.04.2012 stating that "... this cheque was presented by them in clearing without any knowledge. I request to dishonour the cheque and will ensure that I will give the request to the bank for the stop payment of all such cheques given to this party. It is further stated that the defendant had moved an application for stop payment in the aforesaid cheques to his banker on 24.04.2012 because there was no liability of the defendant to pay any amount to the plaintiff as alleged by him in present suit. On merits the Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 5 of 24 contents of the plaint were denied in the written statement.
4. Plaintiff filed replication to written statement of defendant wherein contents of plaint were reiterated and version of defendant was denied.
5. After completion of pleadings, following issues were settled on 27.07.2016:-
(i) Whether the cheque in dispute was issued by the defendant as security?OPD
(ii) Whether the defendant has already paid the amount as claimed by plaintiff?OPD
(iii) Whether the plaintiff is entitled for recovery of the suit amount?OPP
(iv) Whether the plaintiff is entitled for pendentelite and future interest, if yest, at what rate and for which period?OPP
(v) Relief.
6. In Plaintiff's evidence, plaintiff Sh. Mukesh Garg examined himself as PW-1. He tendered his evidence by way of affidavit as Ex.PW1/A in which he reiterated the contents of plaint which are not repeated here for the sake of brevity. PW-1 relied upon following documents:-
S.No Exhibits Nature of documents
1. Ex PW1/1 Certified copy of complaint u/s 138 N.I (colly) Act PW-1 was cross-examined at length by ld. Counsel for the Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 6 of 24 defendant.
7. After examining himself, plaintiff closed his evidence vide order dated 04.07.2017 and the matter was fixed for defendant's evidence.
8. In defendant's evidence, two witnesses have been examined.
9. Defendant examined himself as DW-1. He tendered his evidence by way of affidavit as Ex.DW1/A in which he reiterated the contents of the written statement. DW-1 relied upon following documents:-
S.No Exhibits Nature of documents
1. Ex. DW-1/1 Application for stop payment of
cheque dated 13.04.2012
2. Ex. DW-1/2 Letter of stop payment of the cheque
in question dated 24.04.2012
10. Sh. Inderpal Singh, DM, Kotak Mahindra Bank, Punjabi Bagh, Delhi is a summoned witness is examined as DW-2. He has brought the summoned record i.e. image of the cheque bearing No. 000131 dated 07.04.2012 and status of stop payment of the aforesaid cheque duly certified by the Branch Operational Manager, Kotak Mahindra Bank, Punjabi Bagh, Delhi, the same is exhibited as Ex. DW-2/1 and Ex. DW-2/2 respectively.
11. After examining said witnesses, defendant's evidence was closed vide order dated 23.11.2022 and thereafter the matter was fixed for final Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 7 of 24 arguments.
12. Final arguments were addressed on behalf of both the parties and after hearing final arguments, matter was fixed for judgment.
ARGUMENTS
13. Ld. counsel for the plaintiff submits that the defendant approached the plaintiff for a friendly loan of Rs. 15,00,000/- and defendant assured that plaintiff that he would duly return the money. Ld. counsel for the plaintiff submits that plaintiff has given a friendly loan to the defendant at interest rate of 12% per annum for the period of three months and in lieu of said loan, defendant issued a cheque no. 000131 dated 07.04.2012 for a sum of Rs. 15,00,000/-. Ld. counsel for plaintiff further submits that on presentation, the said cheque got dishonoured with the remarks of "Payment stopped by the drawer" and when the same was informed to the defendant, the defendant requested the plaintiff for more three weeks time for the repayment of the said loan amount and again on presentation, the cheque was received back on 30.04.2012 vide bank memo dated 27.04.2012 of Union Bank of India, Naraina Branch and despite various requests of the amount the said loan amount was not paid by the defendant. The plaintiff has duly sent a legal notice to the defendant for repayment of loan amount but the defendant even after service of the notice has failed to pay the loan amount. In the end, it is prayed that present suit may be decreed in favour of the plaintiff.
On the other hand, Ld. counsel for defendant submits that there had been no friendly relation of the defendant with the plaintiff at any Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 8 of 24 point of time then the question of alleged demand of loan by the defendant from the plaintiff does not arise at all. He further submits that the cheque in question was given by the defendant to the plaintiff only as a security amount and the amount claimed by the plaintiff in his suit had already been paid by the defendant. He further submits that in August, 2009, Mr. Arun Kumar Gupta, previous business partner of the defendant has introduced plaintiff to the defendant and on asking of him, he started purchasing saria from the plaintiff for the business of constructions, for that the defendant used to handover the unnamed cheques to the plaintiff as security purpose and the plaintiff used to return the cheques, given by the defendant to him, to the defendant after the payment was made by the defendant to the plaintiff and the amount allegedly claimed by the plaintiff in the suit had already been paid by the defendant in cash and when the defendant asked the plaintiff to return the cheque, the plaintiff did not return the same to the defendant on the pretext that he had got the cheque mixed up in some documents and would return the same to the defendant immediately after finding the same. He further submits that defendant himself wrote a letter dated 13.04.2012 and 24.04.2012 to his bank to stop the payment of cheque in question. It is also submitted that the plaintiff has not came to this court with clean hands as no information was given to the defendant before presentation of cheque and the stands with regard to rate of interest reflects that it is a concocted story as in the plaint, the interest claimed is @12% while in the cross-examination plaintiff states it to be @18% per annum. No document of ITR is filed by the plaintiff to support his claim. Lastly, it is prayed that suit of the plaintiff may be dismissed with Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 9 of 24 exemplary cost.
14. It is relevant here, before appreciation of evidence and deciding the issues, the position of law as settled is that the onus of proof in civil trial is the obligation on the plaintiff that the plaintiff would adduce evidence that proves his claims on preponderance of probability against the defendant. As per the principles of Indian law, until and unless an exception is created by law, the burden of proof lies on the person making any claim or asserting any fact. A person who asserts a particular fact is required to affirmatively establish it. The Supreme Court in R.V.E. Venkatachala Gounder V Arulmigu Viswesaraswami & V.P. Temple & another, VI (2003) SLT 307 observed that whether a civil or a criminal case, the anvil for testing of 'proved', 'disproved' and 'not proved', as defined in Section 3 of the Indian Evidence Act, 1872 is one and the same. A fact is said to be 'proved' when, if considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of a particular case, to act upon the supposition that it exists. It was observed in A. Raghavamma & another V Chenchamma & another, AIR 1964 SC 136, there is an essential distinction between burden of proof and onus of proof: burden of proof lies upon a person who has to prove the fact and which never shifts. Onus of proof shifts. Such a shifting of onus is a continuous process in the evaluation of evidence. It was observed in Rangammal V Kuppuswami and others, Civil Appeal No 562 of 2003 observed that burden of proof lies on the person who first asserts the fact and not on the one who denies that fact to be true. The responsibility of Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 10 of 24 the defendant to prove a fact to be true would start only when the authenticity of the fact is proved by the plaintiff. In Anil Rishi V Gurbaksh Singh, (2006) 5 SCC 558 it has been held that the burden of proving the facts rests on the party who substantially asserts the affirmative issues.
APPRECIATION OF EVIDENCE AND ISSUE-WISE
FINDINGS ARE AS UNDER:
Issue No. 1
(i) Whether the cheque in dispute was issued by the defendant as security?OPD
15. The onus to prove this issue is upon the defendant
16. In his defence, defendant examined himself as DW1 and he reiterated/supported the contents of his written statement. It is stated by the defendant that the cheque in question was given by the defendant to the plaintiff as a security amount. It is also stated that the plaintiff had been running the business of selling iron goods including saria (iron rods) and the defendant had came into touch /contact of the plaintiff through one Sh. Arun Kumar Gupta as the defendant has to purchase saria (iron rods) for his building sites and the defendant for his business of construction used to purchase saria (iron rods) from the plaintiff and used to handover the un-named cheques to the plaintiff as security purpose and the plaintiff used to return the cheques after the payment made by the defendant and alleged cheque was also handed over by the defendant to the plaintiff only for security purpose and the defendant is Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 11 of 24 not liable for its payment as no outstanding amount was due upon him.
17. On careful examination of testimony of DW1 i.e. defendant, it is admitted by the defendant that he has not placed on record any document showing that he used to purchase iron rods from the plaintiff. It is also admitted that the defendant has not mentioned anywhere on the cheque or separately on document that the cheque in question was given as security. It is also admitted by the defendant that he has not issued any written notice to the plaintiff for return of the cheque in question. The defendant has relied on document Ex DW1/1 i.e. Application for stop payment of cheque dated 13.04.2012 and Ex DW1/2 i.e. Letter of stop payment of the cheque in question dated 24.04.2012. On careful perusal of both these documents, there is no mention of the issuance of alleged cheque as security while, on the other hand, there is a confirmation with regard to issuance of cheque. The defendant has stated that he got introduced to the plaintiff through Sh. Arun Kumar Gupta who was his business partner, however, the defendant has not produced any evidence or Sh. Arun Kumar Gupta in the deposition box to support his cause. Per contra, the plaintiff has stated in the cross-examination that the said cheque was not given as security but was given in exchange of cash. The plaintiff has denied that the said cheque was given as security, on the other hand, the plaintiff has stated that the said cheque was given in exchange of cash by the defendant. Thus, the defence of the defendant with regard to the cheque being given as security in the light of aforesaid discussion does not seems to be sustainable and the defendant has failed to discharge the onus to prove issue no.1 on the basis of preponderance Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 12 of 24 of probabilities, accordingly, issue no.1 is decided in negative i.e. against the defendant.
Issue No. 2(ii) Whether the defendant has already paid the amount as claimed by plaintiff?OPD
18. The onus to prove this issue is upon the defendant.
19. In his defence, defendant examined himself as DW1 and he reiterated/supported the contents of his written statement. It is stated by the defendant that the amount allegedly claimed by the plaintiff had already paid by the defendant as the defendant has already paid all his dues towards the plaintiff against the purchase of saria (iron rods) and after receiving the payment, the plaintiff had no right to retain the aforesaid cheque with him. The defendant has further relied on letter Ex DW1/1, the same was written to Kotak Mahindra Bank whereby the defendant has informed the concerned bank to stop payment and the reason mentioned is he does not have any outstanding payment towards payee. However, in his cross-examination, he has admitted that he has not placed on record any document showing that he used to purchase iron rods from the plaintiff. He has also admitted that he has not took any acknowledgement or receipt from the plaintiff regarding the payment of Rs.15 lacs. It also came in his cross-examination that he has not mentioned about the month and year of repayment and he does not remember the exact date. Except oral statement of the defendant/DW1, there is no supporting evidence either oral or documentary produced on Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 13 of 24 behalf of defendant to show that the defendant has returned the alleged amount to the plaintiff. While, on the other hand, the plaintiff has specifically denied any dealings with the defendant regarding sale and purchase of saria (iron rods) and the testimony of plaintiff of advancing Rs.15 lacs as friendly loan remains unrebutted in cross-examination. The defendant has also failed to brought in evidence Sh. Arun Kumar Gupta who was claimed to be his business partner.
20. In the light of aforesaid discussion, the defendant is failed to discharge the onus to prove issue no.2 on the basis of preponderance of probabilities, accordingly, issue no.2 is decided in negative i.e. against the defendant.
Issue No. 3(iii) Whether the plaintiff is entitled for recovery of the suit amount? OPP
21. The onus to prove this issue is upon the plaintiff.
22. It is necessary to examine whether the plaintiff has advanced the alleged loan to the defendant and the cheque was given by the defendant to the plaintiff for the repayment of loan amount.
23. As per plaint, the plaintiff has given a friendly loan of Rs.15,00,000/ to the defendant. In order to discharge the onus, plaintiff relied on the testimony of himself as PW1, plaintiff has also placed on record Ex. PW1/1 (colly) i.e. certified copy of complaint against the Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 14 of 24 defendant under Section 138 NI Act, certified copy of cheque, bank return memo, legal notice and its postal receipt to fortify his testimony by documentary evidence.
24. It is submitted on behalf of plaintiff that the plaintiff has given friendly loan to the defendant and on perusal of testimony of plaintiff/PW1, it is stated that plaintiff and defendant are social friends and since the year 2011 both are sharing the very cordial relations, due to that plaintiff had given friendly loan of Rs.15 lacs to the defendant as the defendant was in dire need of money. The defendant acknowledged the liability and issued the alleged cheque of Rs.15 lacs. However, the same is dishonoured and the plaintiff has sent a legal notice and after service of which, the defendant has failed to repay the amount and the defendant is liable to refund the loan amount to the plaintiff. The same remained unrebutted in the crossexamination of the plaintiff. While on the other hand, defendant i.e. DW1 has stated that the plaintiff was known to the defendant from August, 2009 through Sh. Arun Kumar Gupta, previous business partner of the defendant. The defendant has also admitted the issuance of the cheque but for security purpose. It is also stated by the defendant that there were no friendly relations between the plaintiff and the defendant except for business terms and he had not took any loan from the plaintiff. As the fact of issuance of cheque is admitted by the defendant, the certified copy of the cheque, cheque return memo, notice dated 28.05.2012 and its postal receipt are part of Ex PW1/1 (colly) and same is perused and in order to appreciate the same, the relevant Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 15 of 24 provisions of law as well as interpretation to them given by Hon'ble Supreme Court and High Court has to be considered.
25. The Section 118 of Negotiable Instruments Act, 1881 reads as under : "CHAPTER XIII SPECIAL RULES OF EVIDENCE 118 Presumptions as to negotiable instruments. -- Until the contrary is proved, the following presumptions shall be made:--
(a) of consideration --that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;
(b) as to date --that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance --that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer --that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of endorsements --that the endorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamps --that a lost promissory note, bill of exchange or cheque was duly stamped;
(g) that holder is a holder in due course --that the holder of a negotiable instrument is a holder in due course:
Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him."
26. The provision of law under Section 114 of the Indian Evidence Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 16 of 24 Act reads as under : "114 Court may presume existence of certain facts. --The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case.
Illustrations. The Court may presume--
"..............
(c) That a bill of exchange, accepted or endorsed, was accepted or endorsed for good consideration ................"
27. Further, the hon'ble Supreme Court in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [(1999) 3 SCC 35] has observed that: "12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the nonexistence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the nonexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the plaintiff would invariably be held entitled to the benefit of Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 17 of 24 presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt."
28. In Khem Singh v. Dinesh Bhatia, 2017 SCC OnLine Del 9047, wherein it is observed by Hon'ble Delhi High Court as under : "I would like to add that once a cheque is dishonored, a liability arises as a cheque has to be presumed to have been given for consideration. Also, in terms of Section 114 of the Indian Evidence Act, 1872 illustration (i) if a document creating an obligation is in the hands of the obligor, the obligation stands discharged and meaning thereby the opposite is also equally true that if the instrument, i.e banking instrument in this case, is not in the hands of the appellant/defendant, it means that the banking instrument was with the respondent/plaintiff for discharge of the liability of the appellant/defendant. I would also like to add another reason for disbelieving the case of the appellant/defendant because this story is not believable that he gave the cheque to Sh. Rakesh Kumar who had promised to get loans for the appellant/defendant and his family from financial institutions as why would a cheque be required for taking loans from a financial institution."
29. In Balinder Yadav v. Ram Saran Singh, 2018 SCC OnLine Del 12363, wherein it is observed by Hon'ble Delhi High Court as under : "29. As regards the issue No. 'D' sought to be formulated by the appellant which reads to the effect:
D. Whether issuing of cheque is amount (sic) (amounts) to presumption that cheque is issued for repayment of loan?
30. The presumption of law on issuance of a cheque in favour of the holder of the cheque, unless the contrary is proved that the holder of the cheque received the cheque of the nature referred to in Section 138 for the discharge in whole or in part of any debt or other liability, exists in law in terms of Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 18 of 24 Section 139 of the Negotiable Instruments Act, 1881 as rightly held by the learned Trial Court and upheld by the First Appellate Court, and thus the formulation of the question of law to submit as to whether the issuance of a cheque amounts to a presumption that the cheque was issued for repayment of a loan as sought by the appellant does not arise in relation to repayment of any debt or other liability falling with the ambit of Section 139 of the Negotiable Instruments Act, 1881 itself. Thus the said question of law 'D' sought to be formulated as a substantial question of law also thus does not arise in the instant case."
30. In Mallavarapu Kasivisweswara Rao v. Thadikonda Ramulu Firm, (2008) 7 SCC 655, where in it is observed by Hon'ble Supreme Court as under : "17. Under Section 118(a) of the Negotiable Instruments Act, the court is obliged to presume, until the contrary is proved, that the promissory note was made for consideration. It is also a settled position that the initial burden in this regard lies on the defendant to prove the nonexistence of consideration by bringing on record such facts and circumstances which would lead the court to believe the non existence of the consideration either by direct evidence or by preponderance of probabilities showing that the existence of consideration was improbable, doubtful or illegal. In this connection, reference may be made to a decision of this Court in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [(1999) 3 SCC 35] . In para 12 of the said decision, this Court observed as under : (SCC pp. 5051) "12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the nonexistence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 19 of 24 same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the nonexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its nonexistence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist."
From the above decision of this Court, it is pellucid that if the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who would be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. It is also discernible from the above decision that if the defendant fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour.""
Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 20 of 24
31. The position of law with regard to Section 118 of Negotiable Instruments Act, 1881 and Section 114 of Indian Evidence Act, 1872 has been explained by the Hon'ble Supreme Court in M.S. Narayana Menon v. State of Kerala, (2006) 6 SCC 39 : (2006) 3 SCC (Cri) 30 :
2006 SCC OnLine SC 660 as under :
30. Applying the said definitions of "proved" or "disproved"
to the principle behind Section 118(a) of the Act, the court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the nonexistence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.
31. A Division Bench of this Court in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal [(1999) 3 SCC 35] albeit in a civil case laid down the law in the following terms: (SCC pp. 5051, para 12) "12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the nonexistence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the nonexistence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. In such an event, the Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 21 of 24 plaintiff is entitled under law to rely upon all the evidence led in the case including that of the plaintiff as well. In case, where the defendant fails to discharge the initial onus of proof by showing the nonexistence of the consideration, the plaintiff would invariably be held entitled to the benefit of presumption arising under Section 118(a) in his favour. The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt." This Court, therefore, clearly opined that it is not necessary for the defendant to disprove the existence of consideration by way of direct evidence.
32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies.
33. Presumption drawn under a statute has only an evidentiary value. Presumptions are raised in terms of the Evidence Act. Presumption drawn in respect of one fact may be an evidence even for the purpose of drawing presumption under another."
32. Now, reverting back to case in hand, the issuance of alleged cheque is admitted by the defendant. It will lead to raising a prima facie presumption in favour of the plaintiff that the cheque was drawn for consideration and it was for the defendant to rebut the presumption as raised against him under Section 118 of the Negotiable Instrument Act, 1881.
33. The only defence of the defendant is the cheque was issued for the purpose of security and the amount was repaid by him to the plaintiff. However, the defence of the defendant is already discussed at length Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 22 of 24 during discussion and findings on issue no.1 & 2 in paras no.15 to 20 of this judgment and same are not repeated here for the sake of brevity. As the defendant has failed to prove the non existence of consideration by raising a probable defence, the defendant has failed to discharge the initial onus of proof that the existence of consideration was improbable or doubtful or the same was illegal. No circumstances were brought on record by the defendant to show that the cheques were misused. Thus, by virtue of Section 118 of Negotiable Instrument Act, 1881, a presumption is drawn that the cheque was made for consideration of Rs.15 lacs and in absence of any evidence on record by the defendant and in the light of unrebutted testimony of plaintiff, the plaintiff has discharged the onus of proof and issue no.3, on the basis of preponderance of probabilities is decided in affirmative i.e. in favour of plaintiff and against the defendant.
Issue No. 4(iv) Whether the plaintiff is entitled for pendentelite and future interest, if yes, at what rate and for which period?OPP
34. As the issue of interest is concerned, the onus to prove this issue is upon the plaintiff. No evidence has been led by plaintiff regarding the amount of interest. Considering the fact that the loan was friendly not commercial thus, plaintiff is entitled for normal rate of interest i.e. interest @6 % per annum from the date of filing of the suit till the date of its realization.
Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 23 of 24
35. Thus, issue no.4 is decided accordingly.
Issue No. 5(v) Relief.
36. The object of the judicial process is to find the truth from the pleadings, documents and the evidence led before the Court. In Maria Margarida Sequeria Fernandes V Erasmo Jack de Sequeria, (2012) 5 SCC 370, it was observed that the truth should be guiding star in the entire judicial process. Truth alone has to be the foundation of justice. In view of above discussion and findings on issues no. (iii) & (iv) the suit of the plaintiff stands decreed and a decree for a principal amount of Rs.15,00,000/- with pendentelite and future interest @ 6% per annum from the date of filing of the suit till the date of its realization is passed in favour of the plaintiff and against the defendant.
37. Cost of the suit is also awarded in favour of the plaintiff.
38. Decree sheet be prepared accordingly subject to payment of deficient court fees.
39. File be consigned to the record room after due compliance.
Digitally signed by SYED SYED ZISHAN ZISHAN ALI WARSI Announced in the open Court ALI WARSI Date: 2022.12.24 16:21:39 +0530 [SYED ZISHAN ALI WARSI] Dated : 24.12.2022 ADJ-05, WEST DISTRICT TIS HAZARI COURT, DELHI Civ DJ 611337/16 Mukesh Garg Vs. Ravi Kumar Sharma Page No. 24 of 24