Andhra Pradesh High Court - Amravati
A. Saraswathamm vs Y. Venkata Narayana Reddy on 24 January, 2020
Author: M.Satyanarayana Murthy
Bench: M.Satyanarayana Murthy
THE HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY
CIVIL REVISION PETITION NO.2411 OF 2019
ORDER:
This revision is filed under Article 227 of the Constitution of India questioning the order dated 01.08.2019 passed in I.A.No.428 of 2019 in O.S.No.191 of 2017 by the Principal Junior Civil Judge, Punganur, whereby the petition filed by the petitioner Under Order VII Rule 11 of Civil Procedure Code (for short "C.P.C.") and Section 151 of C.P.C. to reject the plaint, was dismissed.
The petitioner herein is the defendant and the respondent is the plaintiff.
The respondent-plaintiff filed the suit for recovery of amount based on transaction between the plaintiff and the daughter of petitioner-defendant by name A.Jyothi on 20.02.2017 for Rs.2,00,000/-, the suit is being contested. The petitioner-defendant's main contention is that the transaction between the daughter of the defendant and plaintiff is a special contract and after the death of A.Jyothi, the daughter of the petitioner-defendant on 14.03.2017, the transaction (contract) was ceased to exist. Therefore, the petitioner-defendant being the legal heir along with others cannot be proceeded for recovery of the amount. It is also specifically contended that there is absolutely no cause of action against the petitioner- defendant to file the suit based on forged and fabricated cheque said to have been issued by A.Jhothi during her lifetime drawn on Ing Vysya Bank, Punganur branch. Therefore, the plaint is liable to be rejected under Order VII Rule 11 of I.P.C.
Respondent - plaintiff filed counter denying all material allegations inter alia contending that the suit is filed on the basis of the cheque issued by A.Jyothi, daughter of the petitioner - defendant MSM,J crp_2411_2019 2 and it is binding on the legal heirs of A.Jyothi when it was not honoured by the payee bank and the transaction is still continue to exist even after the death of A.Jyothi, and that the petition is not maintainable and requested to dismiss the petition.
Upon hearing argument of both the counsel, the trial Court dismissed the petition.
Aggrieved by the order of the trial Court, the revision is filed on various grounds. The main ground urged before this Court is that the cheque was defined under Section 6 of the Negotiable Instruments Act (for short "N.I.Act") and when the person, who issued cheque or in whose favour the cheque was issued, is no more, the transaction is ceased to exist and the suit is barred by law and requested to set aside the order passed by the trial Court and reject the plaint.
Learned counsel for the petitioner - defendant, during hearing, placed reliance on the judgment of the Delhi High Court in "Sh.Vijay Singh vs. Smt Manali Malik (I.A.No.6459 of 2008 in CS (OS) No.930 of 2007 dated 05.05.2009).
Learned counsel for the respondent - plaintiff supported the order passed by the trial Court and placed reliance on the judgment of High Court of Andhra Pradesh at Hyderabad in "Bommareddi Mothirddi v. Bhimavarapu Pothireddi1", another judgment of High Court of Karnataka in "Girija v. K.Vinay2"and another judgment of Madras High Court in "Karupiah Palukki (died) and others v. Periasami3" and requested to dismiss the revision.
Considering rival contentions, perusing the material available on record, the point that arises for consideration is: 1
AIR 1963 AP 343 2 2005 (1) ALD (Crl.) (NOC) 3 (Karn.) 3 AIR 1968 Madras 260 MSM,J crp_2411_2019 3 Whether the Plaint in O.S.No.191 of 2017 on the file of the Principal Junior Civil Judge, Punganur is liable to be rejected on the ground that the suit is barred by law by exercising power under Order VII Rule 11 of C.P.C.? P O I N T:
Admittedly, the suit is filed based on the cheque issued by A.Jyothi, who died subsequent to issue of Cheque on 14.03.2017 and that the said suit is filed after the death of A.Jyothi. The transaction is a special contract governed by the provisions of the Negotiable Instruments Act. A "cheque" is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. Issuance of cheque by the drawer in favour of drawee creates a contract between the drawer and drawee as defined under Section 7 of the N.I.Act. Now, the question is whether on account of either drawer or drawee, the contract is ceased to subsist. But this issue is covered by the Judgment of Delhi High Court in Sh.Vijay Singh vs. Smt Manali Malik (I.A.No.6459 of 2008 in CS (OS) No.930 of 2007 dated 05.05.2009). In the said Judgment, the Delhi High Court noted the principles laid down in earlier judgment of House of Lords in "London Joint Stock Bank Limited Vs. Mac. Millan Arthur (1918 LR (HL) 777)"
and "Re Swinburne; Sutton Vs. Featherley (1926 (134) Law Times
121))" and "Hewitt Vs. Kaye L. Reports 6 E.Q. 198", concluded that The relation between banker and customer is that of debtor and creditor, with a super added obligation on the part of the banker to honour the customers' cheques if the amount is in credit. A cheque drawn by a customer is in point of law a mandate to the banker to pay the amount according to the tenor of the cheque. The said mandate, on demise of customer, ceases to be a mandate. On the MSM,J crp_2411_2019 4 moment of demise of customer, the bank, in terms of its contract, is holding the money not to the order of the deceased customer, but to the order of his nominees or legal representatives. The bank cannot thus act on the order of the deceased customer. The cheque, which has been held to be merely an order, thus, on demise of drawer, ceases to be a cheque.
When A.Jyothi died, dishonour of cheque by payee bank i.e. Ing Vysya Bank do not give raise to any cause of action to the plaintiff to file suit. The High Court of Andhra Pradesh at Hyderabad in "Bommareddi Mothirddi v. Bhimavarapu Pothireddi" (referred supra) took a different view and held that the 'holder' of a promissory note, bill of exchange or cheque means any person entitled in his own name to the possession thereof and to receive or recover the amount due thereon from the parties thereto. Thus, it is plain that the endorsee of a promissory note who is the holder of the document, could maintain the action in his own name for the purpose of recovering the amount due thereon. The Court also noted Section 50 of the N.I.Act, which deals with entrustment of negotiable instrument by delivery etc. But it is not necessary to decide the present issue. However, the Court further observed that payment to the holder of the instrument, which includes an endorsee for collection, gives a discharge to the maker of the promissory note. That being the legal position, the learned Single Judge is of the view that the right based on the endorsement survives notwithstanding the death of the endorser and the endorsee could continue the suit. The endorsement having been made for a specific purpose, namely, collection of the amount, it will be valid till that purpose is served.
But the facts of the present case are different. In the present facts, it is not a case of transfer of negotiable instrument by MSM,J crp_2411_2019 5 entrustment or by delivery. Therefore, the principle laid down in Bommareddi Mothirddi v. Bhimavarapu Pothireddi" (referred supra) cannot be applied to the present facts of the case.
In "Karupiah Palukki (died) and others v. Periasami"
(referred supra), the Madras High Court also dealt with transfer of negotiable instrument by delivery and even if the original drawer is no more, the right to collect the amount survives.
Learned counsel for the respondent also placed reliance on the judgment of High Court of Karnataka in "Girija v. K.Vinay" (referred supra) while deciding the issue regarding filing of complaint for the offence punishable under Section 138 of the N.I.Act held that no proceedings can be initiated for an offence under Section 138 of the N.I.Act on the legal heirs of the deceased in the event of death of the drawer of the cheque, however, this would not come in the way of complainant taking recourse and seek redressal under the Civil law.
Learned Counsel for the respondent - plaintiff made a serious attempt to convince the Court about the maintainability of the suit even after the death of the drawer relying on the judgment referred above. But it is difficult to accept the contention since the principle laid down in the above judgment is totally on different stand.
In the present facts, the cheque was allegedly issued by A.Jyothi and it was presented after the death of A.Jyothi with the payee bank i.e. Ing Vysya Bank and notice was also issued on 01.05.2017 as A.Jyothi died on 14.03.2017 itself. Therefore, the question of payment of amount to the drawee by order of the drawer does not arise. Hence, the principle laid down by the Delhi High Court in "Sh.Vijay Singh vs. Smt Manali Malik (I.A.No.6459 of 2008 in CS (OS) No.930 of 2007 dated 05.05.2009) is applicable to the present facts of the case on this aspect. Though the principle laid MSM,J crp_2411_2019 6 down by the Delhi High Court is not a binding precedent, still it has got persuasive value.
Even a bare look at the definition of cheque, amount is payable only on demand. Therefore, the question of demand by the customer of the bank for payment does not arise consequent upon the death of drawer of the cheque, since, the relationship between the bank and customer ceased to subsist and the bank is not under the obligation to pay the amount covered by the cheque. But the judgment of the Delhi High Court did not deal with the situation regarding contractual liability of drawee and drawer, but dealt with the obligation of banker and drawer of cheque. Therefore, it is difficult to apply the principle laid down in the judgment of Delhi High Court in "Sh.Vijay Singh vs. Smt Manali Malik (I.A.No.6459 of 2008 in CS (OS) No.930 of 2007 dated 05.05.2009) to the present facts of the case.
The plaint can be rejected on the ground that the plaint is barred by any law, which includes the law declared by the Courts. But the judgment relied on by the learned counsel for the petitioner - defendant is pertaining to contractual obligation between the banker and drawer of the cheque, but not relating to contractual obligation between the drawer and drawee or their legal heirs consequent upon the death of drawer or drawee. Hence, based on the principle laid down in the judgment of Delhi High Court in "Sh.Vijay Singh vs. Smt Manali Malik (I.A.No.6459 of 2008 in CS (OS) No.930 of 2007 dated 05.05.2009), the same is though not binding precedent, it is difficult to reject the plaint at the threshold. Therefore, I am unable to accept the contention of the learned counsel for the petitioner - defendant that the claim of the plaintiff is barred by law applying the principle laid down by the Delhi High Court. Hence, the contention of MSM,J crp_2411_2019 7 the petitioner - defendant is rejected, leaving it open to raise such contention during argument.
In view of foregoing discussion, I find no reason or merit in the contention of the learned counsel for the petitioner - defendant to reject the plaint at the threshold by exercising power under Order VII Rule 11 of C.P.C., having found I find no legal infirmity in the order under challenge before this Court. Consequently, the revision is liable to be dismissed.
In the result, the civil revision petition is dismissed. No costs. The miscellaneous petitions pending, if any, shall also stand closed.
_________________________________________ JUSTICE M. SATYANARAYANA MURTHY 24.01.2020 Ksp