Delhi District Court
Sh. C.L. Gupta (Chiranji Lal Gupta) vs Sh. Sumesh Gupta (Deceased) on 3 March, 2012
IN THE COURT OF MS. NEHA PALIWAL, CIVIL JUDGE-06
CENTRAL DISTRICT, TIS HAZARI COURTS, DELHI
CONSOLIDATED SUIT NOS. 533/10/98 & 538/10/98
Unique Case ID no. : 02401C0291462002 & 02401C0506842003
In the matters of :
Sh. C.L. Gupta (Chiranji Lal Gupta),
s/o Late Sh. P.L. Gupta,
4/3, Yusuf Sarai, New Delhi. ...Plaintiff
versus
Sh. Sumesh Gupta (deceased),
Proprietor of M/s Satish and Co.
r/o P-6, Green Park Extension,
New Delhi-110016.
now represented
through his legal representatives:
1.Sh. Mohit Gupta - Son.
2. Smt. Sapna (Puja) - Daughter.
3. Smt. Komal - Daughter.
4. Smt. Veena - Widow All r/o A-280, Shivalik Appartment, Near Malviya Nagar, New Delhi. ...Defendant AND Sh. C.L. Gupta, s/o Sh. (Late) Pyare Lal, r/o 4/3, Yusuf Sarai, New Delhi-110016. ...Plaintiff versus Sh. Sumesh Gupta (deceased) now represented through his legal representatives:
1. Sh. Mohit Gupta - Son.
2. Smt. Sapna (Puja) - Daughter.
CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 1 of 25
3. Smt. Komal - Daughter.
4. Smt. Veena - Widow All r/o A-280, Shivalik Appartment, Near Malviya Nagar, New Delhi. ...Defendants.
Date of institution of CS no. 533/10/98 : 24.04.1998 & 21.02.1998.
& CS no. 538/10/98 Date of receipt of CS no. 533/10/98 : 01.11.2010. & CS no. 538/10/98 in this Court Date of reserving Consolidated Judgment : 01.03.2012. Date of pronouncement : 03.03.2012. JUDGMENT IN CONSOLIDATED SUITS:-
1. Vide this consolidated judgment this Court will dispose off the two civil suits filed by the Plaintiff against the Defendant. These two suits were consolidated vide order of this Court dated 01.03.2012 for the purpose of pronouncement of a consolidated judgment as parties to the suit are the same and there are mixed questions of facts involved in both the matters which could be more expeditiously determined by a consolidated judgment.
2. Civil suit no. 533/10/98 was filed by the Plaintiff against the Defendant in his capacity as proprietor of M/s Satish and Company and CS no. 538/10/98 was filed by the Plaintiff against the Defendant and against the proprietorship concern separately, therefore, basically the parties were the same in both the suits as the proprietorship concern and the Defendant were impleaded in the capacity of two Defendants in the initial suit and they were impleaded as single Defendant in the later suit. Both the suits were initially filed under the provisions of order 37 CPC, however, in CS no. 538/10/98 the leave to defend application of the Defendant CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 2 of 25 was allowed unconditionally and the Defendant was granted leave to defend the suit vide order of the Court dated 01.06.2001 whereas in the CS no. 533/10/98 on the basis of the submissions of the counsel for the Plaintiff that the matter was inadvertently filed under the provisions of order 37 CPC and the same is not a suit u/o 37 CPC, the matter was treated as an ordinary suit vide order dated 03.05.1999. Both the suits are for recovery of Rs. 1,80,000/- each.
3. Briefly the case of the Plaintiff in CS no. 533/10/98 is that the Defendant has approached the Plaintiff for a loan of Rs. 1,50,000/- and has promised to pay interest thereupon @ 21% p.a. and he for the purpose of repayment of the loan had issued a cheque for Rs. 1,50,000/- dated 10.02.1997 bearing no. 211488 however, when the said cheque was deposited by the Plaintiff with his bank it was dishonored by the banker of the Defendant vide cheque return memo dated 16.07.1997 with the remarks 'Insufficient funds'. It is averred by the Plaintiff that thereafter a legal notice of demand u/s 138 of the Negotiable Instrument Act was served upon the Defendant by the Plaintiff and a criminal complaint u/s 138 of the Negotiable Instrument Act was also filed against the Defendant by the Plaintiff. It is the case of the Plaintiff that the Defendant is liable to pay interest @ 21% p.a. from the date of the cheque, that is, 10.02.1997 till 10.04.1998 total amounting to Rs. 36,750/-, however, the Plaintiff is claiming Rs. 30,000/- as interest only and is waiving the rest of the claim and therefore the Defendant is liable to pay Rs. 1,50,000/- as the principle amount and Rs. 30,000/- as interest thereupon and therefore is liable to pay a total sum of Rs. 1,80,000/- to the Plaintiff. It is further the case of the Plaintiff that Defendant has taken another CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 3 of 25 loan from the Plaintiff and has issued a separate cheque for the same for which a separate suit is pending u/o 37 CPC. It is the case of the Plaintiff that as despite various requests and service of the notices sent vide UPC and registered cover dated 21.07.1997 the Defendant has failed to pay the amount the present suit has been filed by the Plaintiff. Thus, the Plaintiff has prayed that a decree of recovery of Rs. 1,80,000/- be passed in favour of the Plaintiff and against the Defendant.
4. Briefly the case of the Plaintiff in CS no. 538/10/98 is that Defendant no. 1 as proprietor of Defendant no. 2 has taken a loan of Rs. 1,50,000/- from the Plaintiff and has promised to pay interest @ 2.5% p.m. and had issued a cheque bearing no. 211489 dated 22.05.1997 in favour of the Plaintiff, however, when the said cheque was presented for encashment by the Plaintiff it was returned dishonored by the bankers of the Defendant with the cheque return memo dated 23.08.1997 containing the remarks 'Account closed'. It is the case of the Plaintiff that thereafter a legal demand notice dated 19.11.1997 was sent by the Plaintiff to the Defendant, however, the same was of no affect. It is further the case of the Plaintiff that at the time of taking of the said loan Defendant no. 1 has also executed a promissory note as well as a receipt both dated 02.06.1994 in favour of the Plaintiff. Thus, it is the case of the Plaintiff that Defendant has acknowledged his liability for payment of the amount of the loan by issuing the cheque and the issuance of the cheque amounts to an acknowledgment in writing. It is the case of the Plaintiff that the Defendant is liable to pay interest @ 2.5% p.m. which is the prevailing market rate of interest and is also the agreed CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 4 of 25 rate of interest between the parties and therefore the Plaintiff is claiming the same from the date of issuance of the cheque that is w.e.f 22.05.1997 to 21.01.1998 which amounts to Rs. 30,000/-. It is the case of the Plaintiff that Defendant no.1 has issued the said cheque as proprietor of Defendant no. 2 and therefore both the Defendants are jointly and severally liable to make the payment of the said amount. Thus, it is prayed by the Plaintiff that a decree for recovery of Rs. 1,80,000/- be passed in favour of the Plaintiff and against the Defendants jointly and severally along with interest @2.5% p.m.
5. Written Statement was filed on behalf of the Defendant in both the matters wherein the Defendant has denied the contentions of the Plaintiff categorically and had taken the defence that on 02.06.1994 the Plaintiff approached the Defendant, Sh. Sumesh Gupta, for giving a loan of Rs. 3,00,000/- to one Sh. Bhandari who was known to the Plaintiff. It is the case of the Defendant that he expressed his inability to give the loan of Rs. 3,00,000/- at that moment and stated that he was only in a position to give a sum of Rs. 1,50,000/- on which the Plaintiff stated that he did not want to give the loan to Sh. Bhandari in his own name and only wanted that the amount may be given as loan by the Defendant so that the Plaintiff can get the amount recovered from Sh. Bhandari in the name of the Defendant. The Plaintiff stated that he wanted to oblige Sh. Bhandari as he was his close friend and wanted to help him and therefore he stated that he will give a sum of Rs. 1,50,000/- to the Defendant and the Defendant may issue 2 cheques in the name of Sh. Bhandari for the sum of Rs. 1,50,000/- each and as and when Sh. Bhandari would refund the amount of Rs. 3,00,000/-, the CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 5 of 25 Defendant may refund the amount of Rs. 1,50,000/- to the Plaintiff. It is the case of the Defendant that he agreed to the said proposal and executed a promissory note which was blank for the sum of Rs. 1,50,000/- and issued two cheques bearing no. 211488 and 211489 for Rs. 1,50,000/- each but the said cheques were blank and no date and name of the person to whom the same were issued were mentioned and only the amount was filled when the Defendant signed the said cheques. Thereafter, the Plaintiff paid a sum of Rs. 1,50,000/- to the Defendant and it was agreed between the parties that cheques issued on 02.06.1994 which were blank would be presented by Sh. Bhandari and at that moment the Defendant would get the cheques cleared from his banker. It is the case of the Defendant that as the said cheques were not presented to his banker for several months therefore he asked the Plaintiff as to why the same were not presented, to which the Plaintiff answered that Sh. Bhandari was not in need of money and had made the arrangement of money from somewhere else and therefore the cheques were not presented and thereafter the Plaintiff asked the Defendant for refund of Rs. 1,50,000/-. However, the Defendant expressed his inability to pay the sum of Rs. 1,50,000/- in lumpsum and asked the Plaintiff to return the blank cheques given to the Plaintiff for Sh. Bhandari and further asked the Plaintiff that he would refund the amount in installments and thereafter he started making the payment in installments to the Plaintiff. It is averred by the Defendant that the installments were used to be received by the Plaintiff himself or by his son. It is the case of the Defendant that the cheques were got filled by the Plaintiff dishonestly in his own name though the same were given for Sh.
CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 6 of 25
Bhandari. It is the case of the Defendant that despite the fact that he has asked the Plaintiff to return the cheques to him on the ground that the Plaintiff has got the promissory note and receipt for a sum of Rs. 1,50,000/- the Plaintiff stated that these cheques were misplaced and lost by him and in turn asked the Defendant to immediately get the payment of these cheques stopped so that somebody may not use the said cheques and on his representation the Defendant vide its letter dated 22.12.1995 informed the bank to stop the payment of the cheques bearing no. 211488 and 211489 and thereafter he felt secured and therefore later on also got the account closed. It is the case of the Defendant that he cleared the amount of Rs. 1,50,000/- in installments and on 19.08.1996 only Rs. 3,920/- was the balance amount. It is his case that some times the Plaintiff used to issue receipts and sometimes his son and some times no receipt was issued and after 19.08.1996 when the balance of Rs. 3,920/- was confirmed by the son of the Plaintiff the Defendant made the payment of Rs. 3,920/- in the month of September 1996 and cleared the liability of Rs. 1,50,000/-. It is averred by the Defendant that thereafter he asked the Plaintiff to return the promissory note and the receipt, however, the Plaintiff stated that he would destroy the promissory note and the receipt and it is the case of the Defendant that as the relations between the Plaintiff and the Defendants were very cordial he did not insisted for the return of the promissory note and the receipt and felt assured that the Plaintiff would destroy the same. It is averred by him that therefore he was astonished to receive the summons from the Court and only at that moment came to know that the Plaintiff was in possession of CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 7 of 25 both the cheques which were issued for Mr. Bhadari on 02.06.1994 and with the ulterior motive had lied to the Defendant that the cheques were misplaced and had filled the cheques and had presented the cheques to his bankers in a account which was closed much prior to the date when the cheques were presented and thus it is averred by the Defendant that the cheques were filled by the Plaintiff later on with ulterior motives. It is averred by the Defendant that even on the recorded slips attached to the cheque book it finds mention that the cheques were issued for Sh. Bhandari on 02.06.1994 and thereafter several cheques have been issued from the said account on 05.06.1994 and 12.06.1994. Thus, it is the case of the Defendant that he is not liable to pay any amount to the Plaintiff and had never received any loan from the Plaintiff except Rs. 1,50,000/- against the promissory note and the receipt, which amount has already been repaid by him and therefore no amount is payable by the Defendant to the Plaintiff and further no interest was ever agreed to be paid by the Defendant to the Plaintiff. The cheques were never issued for consideration and the Plaintiff is taking benefit of his own wrong. Thus, it is prayed by the Defendant that the suits of the Plaintiff be dismissed.
6. Replication was filed by the Plaintiff in both the matters, to the written statement of the Defendant wherein the Plaintiff has denied the contentions of the Defendant categorically as stated in the written statement and has reaffirmed his case as stated in the plaint and it is his case that Sh. Bhandari was known both to the Plaintiff and the Defendant, however, the Defendant has executed the promissory note and receipt in favour of the Plaintiff on 02.06.1994 and the CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 8 of 25 Plaintiff has given a loan for a sum of Rs. 3,00,000/- to the Defendant on 02.06.1994 and the Defendant had executed two promissory notes and receipts in favour of the Plaintiff for a sum of Rs. 1,50,000/- each. It is the case of the Plaintiff that the averment of the Defendant to pay the amount in installments is totally false and the Defendant has not paid the loan of Rs. 1,50,000/- in both the suits to the Plaintiff so far. It is the case of the Plaintiff that the Defendant was also a member of chits which was being carried out by the Plaintiff as director in the name and style of C.Lal Chit Fund Private Ltd., Yousuf Sarai and the Defendant has taken two chits of Rs. 3,00,000/- each having installments of Rs. 10,000/- per month and the Defendant prized both these chits and has paid the amount of those chits against receipts. It is further the case of the Plaintiff that his son was also organizing a Committee of shop keepers and the Defendant also took the committee of Rs. 5,00,000/- from the son of the Plaintiff and had paid the same in installments. It is the case of the Plaintiff that Defendant has never paid the loan of Rs. 1,50,000/- each in both the suits despite several requests and has always stated that he will pay the amount of promissory notes only after clearing the chit amount and the committee amount. It is the case of the Plaintiff that the Defendant after clearing the aforesaid amount had issued the cheques in question in favour of the Plaintiff after great persuasion which were later on dishonored on presentation and therefore the present suits have been filed. Thus, it is averred by the Plaintiff that the cheuqes of the suit were issued in his favour towards the payment of the loan amount due from the Defendant. Thus, it is prayed by the Plaintiff that his suit be decreed.
CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 9 of 25
7. In the present matter as the Defendant died during the pendency of the litigation the application of the Plaintiff for impleadment of his legal representatives u/o 22 rule 4 read with section 151 CPC was allowed vide orders of the Court dated 19.04.2001 in Civil Suit no. 538/10/98 and order dated 30.04.2001 in civil suit no. 533/10/98.
8. Issues were framed in civil suit no. 533/10/98 vide order of the Court dated 06.10.1999 and they are as under:-
1. Whether the cheque was issued by the Defendant in the sum of Rs. 1.5 Lakhs without consideration? OPD.
2. To what amount, if any, the Plaintiff is entitled? OPP.
3. Whether the Plaintiff is entitled to claim interest? OPP.
4. Relief.
9. Issues were framed in civil suit bearing no. 538/10/98 vide order of the Court dated 07.11.2001 and they are as under:-
1. Whether cheque no. 211489 dated 22.05.1997 for Rs. 1,50,000/- was issued by the Defendant, blank, without any date and name, towards the loan to be given by the Plaintiff to one Sh. Bhandari? If so, its effect? OPD.
2. Whether the Plaintiff is entitled to the amount of Rs. 1,80,000/- with costs and interest @2.5% p.m. as prayed against the Defendant? OPP.
3. Relief.
10. Plaintiff in support of his case has examined in both the suits himself as PW-1 and Defendant in support of his case has examined in both cases as DW-1 CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 10 of 25 Sh. Mohit Gupta, who is the son of the Defendant.
11. PW-1 in his examination in chief in CS no. 533/10/98 has relied upon and exhibited the following documents:-
1. Ex. PW1/1 - Cheque of Rs. 1,50,000/- bearing no. 211488 dated 10.02.1997.
2. Ex. PW1/2 - Cheque return memo dated 16.07.1997 with the remarks 'Insufficient funds'.
12. DW-1 in that suit has in his affidavit relied upon and exhibited the following documents:-
1. Ex. DW1/1 - Counter foil of the cheque book wherein entries dated 02.06.1994 are relied upon.
2. Ex. DW1/2 to Ex. DW1/7 - Receipts.
3. Ex. DW1/8 - Letter dated 22.12.1995 written to Manager, Punjab National Bank by Defendant as proprietor of Satish & Co.
13. Plaintiff as PW-1 in CS no. 538/10/98 has in his affidavit relied upon and exhibited the following documents:-
1. Ex. PW1/1 - Promissory note dated 02.06.1994.
2. Ex. PW1/2 - Receipt dated 02.06.1994.
3. Ex.PW1/3 - Cheque of Rs. 1,50,000/- dated 22.05.1997 bearing no. 211489.
4. Ex. PW1/4 - Cheque return memo with the remarks 'Account closed' along with debit advice dated 26.08.1997.
5. Ex. PW1/5 - Legal notice dated 19.11.1997.
CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 11 of 25
6. Ex. PW1/6 and Ex. PW1/7 - Registry receipts.
7. Ex. PW1/8 - UPC receipts.
8. Ex. PW1/9 - Certified copy of the cheque bearing no. 211488 filed in CS no. 533/10/98.
9. Ex. PW1/10 - Certified copy of cheque return memo dated 16.07.1997 filed in CS no. 533/10/98.
14. PW-1 in his cross examination was confronted with photocopies of receipts mark A to F which are the same receipts which are exhibited as DW-1/2 to DW1/7 in the another connected suit.
15. DW-1 in his affidavit has exhibited and relied upon the certified copy of the documents and had exhibited them as DW1/1 to DW1/8 and these are the same documents which were exhibited by him in original in CS no. 533/10/98.
16. In both these matters the Plaintiffs has also filed the certified copies of the proceedings of the matter filed under section 138 of the Negotiable Instrument Act by the Plaintiff against the Defendant and which was abated on the ground of the death of the Defendant.
17. In civil suit no. 533/10/98 an application u/o 13 rule 2 was also filed by the Plaintiff for filing the original promissory note dated 02.06.1994 along with receipt wherein it was averred by the Plaintiff that the promissory note along with receipt was not filed earlier as it was misplaced and now the same has been filed. The said application was allowed vide order of the Court dated 13.09.2005 and the documents were allowed to be taken on record.
18. Another application u/o 13 rule 2 was also moved by the Plaintiff in CS no.
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538/10/98 for placing on record the certified copies of the documents on record which was allowed vide order dated 12.02.2002.
19. In the present case the applications for consolidation were also moved by the Plaintiff on 21.08.2004 and on 23.11.2005 it was stated by both the counsels that they have no objection if both the suits are decided by a consolidated judgment, however, the application for consolidation was never disposed off. The application for consolidation was allowed on 01.03.2012 after the no objection of the counsel for the Defendant herein.
20. An application u/s 151 CPC was moved in CS no. 538/10/98 by the Defendant as per which the certified copies of the documents exhibited in that matter were placed due to inadvertence by the staff in another file. The application was allowed and the Ahlmad was directed to place the same in CS no. 538/10/98.
21. Issue wise findings in the present matters are as under:-
Issue no. 1 of CS no. 533/10/98 : - Whether the cheque was issued by the Defendant in the sum of Rs. 1.5 Lakhs without consideration? OPD. Issue no. 1 of CS no. 538/10/98 : - Whether cheque no. 211489 dated
22.05.1997 for Rs. 1,50,000/- was issued by the Defendant, blank, without any date and name, towards the loan to be given by the Plaintiff to one Sh. Bhandari? If so, its effect? OPD.
22. The onus to prove both these issues was on the Defendant.
23. Defendant in CS no.533/10/98 is Sh. Sumesh Gupta as proprietor and in CS no. 538/10/98 is also Sh. Sumesh Gupta and the proprietorship firm and CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 13 of 25 therefore in fact the Defendant is virtually the same in both the suits. The onus to prove both the above issues was on the Defendant and as the Defendant has taken the same defence in both the suits the present issues are dealt together.
24. Section 118 of The Negotiable Instruments Act, 1881 reads as under:-
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, indorsed, 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 indorsements - that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon;
(f) as to stamp - 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 CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 14 of 25 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."
25. Section 139 of the Act reads as under:-
Presumption in favour of holder - "It shall be presumed, unless the contrary is proved, that the holder of a 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."
26. Both these cases are based upon cheques bearing no. 211488 dated 10.02.1997 and 211489 dated 22.05.1997 for Rs. 1,50,000/- each respectively executed by proprietor Satish & Co. who is the Defendant in both the cases. In view of the provisions of Section 118 of the Negotiable Instruments Act there is a presumption that these cheques were drawn for consideration and were drawn on the date mentioned and that the holder of the cheque is a holder of the same in due course. Section 139 of the Act draws a presumption that the holder of the cheque received the same in discharge of any debt or liability. As these sections are containing words "shall presume" the Court will regard these facts as proved unless and until the same are disproved and therefore the onus shifts upon the Defendant to prove that these cheques were not given by him to the Plaintiff for the discharge of a debt or a liability and that these cheques were not drawn on the date mentioned and were not transferred for consideration and that the Plaintiff was not the holder of the same in due course. The Defendant has CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 15 of 25 admitted that he was the executor of these cheques and that these cheques were dishonoured, however, it is his case that these cheques were not given to the Plaintiff for discharge of any liability but were given to the Plaintiff for giving the same to one Sh. Bhandari and the Plaintiff has only given a sum of Rs. 1,50,000/- to the Defendant for which promissory note and receipt exhibited as Ex. PW1/1 and Ex. PW1/2 were executed by the Defendant. It is the defence of the Defendant that he had given these cheques to the Plaintiff so that the Plaintiff can give the same to Sh. Bhandari and that when he asked the Plaintiff to return these cheques, the Plaintiff stated that these cheques were misplaced and lost and therefore the Defendant got the payment of these cheques stopped and thereafter got his account closed.
27. The Defendant in the present case has not been able to substantiate his defence on the ground that Ex. DW-1/1 which as per the Defendant is the counter foil of his cheque book from where the cheques were issued has not been proved by the Defendant and is a unilateral document which could have been prepared by the Defendant to subserve his interest. The Defendant has failed to prove the same as he has failed to examine / prove the bank record vis- a-vis the transactions prior to and later to 02.06.1994 that is with respect to Cheques bearing no. 211485, 211486, 211487 or 211491, 211492 or 211493 which were within the power of the Defendant to examine and prove before the Court and thus the Defendant has withheld the best evidence from the Court. The Defendant could have shown the credibility of the document Ex. DW1/1 by examining the bank record and by showing the commercial transactions entered CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 16 of 25 by him vis-a-vis the cheques given prior to and later than the cheques in question which the Defendant has failed to do in the present matter.
28. The Defendant is further relying upon Ex. DW1/8 which is the letter dated 22.12.1995 written to the Manager, Punjab National Bank for stopping the payment of cheque bearing no. 211488. Firstly, this letter is mentioning only about cheque bearing no. 211488 and not about the other cheque, though the photocopy of the letter of the same date regarding other cheque has also been placed on record by the Defendant in civil suit no. 538/10/98, however, even if one considers that the letters vis-a-vis both the cheques were given by the Defendant to the Manager, Punjab National Bank, however, these are containing the noting that no date of the cheque meant for stop payment is furnished and the bank has asked for furnishing the date. The Defendant has failed to show on record any further steps taken by the Defendant vis-a-vis the stopping of the cheques or that he has intimated to the bank that the cheques were issued by him without any date. This letter by itself does not prove the case of the Defendant or discharge his onus.
29. Moreover, if one sees the certified copies of the proceedings in the criminal complaint filed by the Plaintiff against the Defendant which were abated due to the death of the Defendant, in that at the stage of framing of the notice and at the stage when the Defendant was questioned regarding his plea of guilt the Defendant has stated that he has handed over the blank cheque in the year 1994 to one Sh. Bhandari and some how the Plaintiff had procured the blank cheque from Sh. Bhandari and the Defendant has never given the cheque to the CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 17 of 25 Plaintiff. He has further stated that he also does not know how the same was in the name of the Plaintiff/Complainant. Thus, a completely different stand has been taken by the Defendant on 04.03.1999 before the Court of Ld. Metropolitan Magistrate when the Defendant has answered to the question whether he has any defence to make in the criminal trial u/s 138 of the Negotiable Instruments Act. Thus, the submissions of the Defendant in the criminal trial are going against the defence raised by the Defendant in the present cases that he has handed over the cheques having no name and date to the Plaintiff and thereafter the Plaintiff has entered the date and the name upon them fradulently as he has issued the same for giving them to Sh. Bhandari. Thus, a completely different stand has been taken by the Defendant in the written statement and in the defence raised in the criminal trial regarding the fact as to whom were the cheques handed over by the Defendant.
30. Further more as per the written statement it is the case of the Defendant that it was the proposal of the Plaintiff that cheques were to be given in the name of Sh. Bhandari then a question arose as to why were the cheques left blank by the Defendant. The Defendant was vigilant enough to write the amount on the cheques and therefore one fails to understand that if he has to give the same to Sh. Bhandari what prevented him from writing the name of Sh. Bhandari while handing over the cheques to the Plaintiff.
31. Further more the Defendant has also failed to examine Sh. Bhandari as a witness in the present matter.
32. It is further the case of the Defendant that he has paid the amount of Rs.
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1,50,000/- to the Plaintiff by way of installments and for proving the same the Defendant is relying upon Ex. DW1/2 to DW1/7. It is the case of the Defendant as per the deposition of DW-1 that Ex. DW1/2 is in the handwriting of the son of the Plaintiff and the Plaintiff has signed the same whereas Ex. DW-1/3 to DW1/7 are in the handwriting of the Plaintiff and he has identified the signatures of the Plaintiff as the same were signed in his presence. However, in his cross examination it is deposed by DW-1 that he cannot say as to whether the signatures on the receipt Ex. DW1/2 to Ex. DW1/7 are of the Plaintiff or not. Contrary to that it is the case of the Plaintiff that these installments were paid by the Defendant to the son of the Plaintiff in respect of the committee of the shop keepers run by the son of the Plaintiff and the Defendant has paid the amount of the committee to his son in installments. When the Plaintiff was confronted with Ex. DW1/2 to DW1/7 as mark A to F he has deposed that the same were signed by his son and were issued by his son. Thus, the witness of the Defendant has in his cross examination failed to identify the signatures of the Plaintiff on the said receipts whereas it has remained a consistent stand of the Plaintiff that the signatures on these receipts are of his son and these installments were towards the payment made for the committee run by his son. Though the deposition of the Plaintiff regarding the committee is also hearsay and cannot be relied upon, his deposition regarding the signatures of his son over the receipts cannot be said to be coming under the category of hearsay evidence. It is further the case of the Defendant that on 19.08.1996 after he has made the payment, only balance amount of Rs. 3,920/- was left which he paid to the Plaintiff in the month CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 19 of 25 of September and thereafter he cleared the amount of Rs. 1,50,000/-, however, the exhibits of the Defendant goes against the case of the Defendant as even after 19.08.1996 there is a receipt dated January, 1997 and November, 1996 Ex. DW1/4 and DW1/7 whose existence is not answered in the defence of the Defendant. It has remained the consistent case of the Plaintiff that he was also running the business of Chit funds, however, it has remained a consistent stand in his deposition that the payment of chit funds were always made by way of cheques and the said fact has also remained undisputed. Further more Ex. DW1/3 is stating that the installment paid in August 1996 is 16th installment of September, 1995, but as per the own case of the Defendant the transaction took place on 02.06.1994 and when for several months the cheques were not presented and thereafter he asked about their whereabouts the Plaintiff also asked about the refund of Rs. 1,50,000/- which he started to give in installments. The words as stated in the defence "not presented to the banker for several months" are of considerable importance here as if the financial transaction took place in June, 1994 and several months have elapsed, how come the installment of September, 1995 paid on August, 1996 be a 16th installment.
33. Thus, the documents relied upon by the Defendant Ex. DW1/1 and Ex. DW1/8 are unilateral documents which are not substantiating the defence of the Defendant as the same are not proved by way of showing prior and subsequent transactions. Further there is a discrepancy and basic fallasy in the version of the Defendant given before the criminal Court and before this Court. Moreover, the receipts relied upon by the Defendant are denied by the Plaintiff to be under his CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 20 of 25 signatures and even DW-1 cannot depose in his cross examination categorically as to whether they are bearing the signatures of the Plaintiff or not. Though the case of the Defendant is that the entire loan was paid in September, 1996 still there are receipts of January, 1997 and November, 1996 as well. In view of the above said findings and discussion the Defendant has failed to discharge the onus of rebutting the presumption which was againt him. In view of the provisions of The Negotiable Instruments Act the onus has shifted upon the Defendant which the Defendant has failed to discharge. Further more though the promissory note in civil suit no. 533/10/98 was never proved by the Plaintiff however, the same was placed on record after the application u/o 13 rule 2 of the Plaintiff was allowed and it appears as a corroborative piece of evidence in favour of the Plaintiff as the documents placed on record that is promissory note and receipt though not proved are also bearing the same stamp and signature of the Defendant. The writing over the same is also the same and the documents are also bearing the same date as Ex. PW1/1 and PW1/2. Thus, though the cheques have different inks used for the purpose of writing the date and the name yet the Defendant has not been able to discharge the onus put on him.
34. Further more in the present case in hand it is the case of the Defendant that he has got his account closed, however, cheque bearing no. 211488 was dishonoured on 16.07.1997 for the reasons 'Insufficient funds' and thereafter the another cheque bearing no. 211489 was dishonored in August 1997 for the reasons 'Account closed'. Thus, the account was closed after the presentation of the first cheque and not prior to that in the year 1995 or 1996 and neither was CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 21 of 25 the payment of these cheques stopped by the Defendant otherwise the cheque return memo would have mentioned stopped payment as reasons for the dishonor.
35. In view of the above said findings and observations the Defendant has failed to prove that the cheques were given to the Plaintiff without consideration. The Defendant has further failed to prove that the cheques were given to the Plaintiff for giving the same to one Sh. Bhandari and has further failed to discharge the onus that the cheques were given blank without bearing any date and name.
36. In view of the above said findings and observations these issues are decided in favour of the Plaintiff and against the Defendant. Issue no. 2 and 3 of CS no. 533/10/98 & Issue no. 2 of CS no. 538/10/98 Issue no. 2 of CS no. 533/10/98 : To what amount, if any, the Plaintiff is entitled? OPP.
Issue no. 3 of CS no. 533/10/98 : Whether the Plaintiff is entitled to claim interest? OPP.
Issue no.2 of CS no. 538/10/98 : Whether the Plaintiff is entitled to the amount of Rs. 1,80,000/- with costs and interest @2.5% p.m. as prayed against the Defendant? OPP.
37. The onus to prove these issues was on the Plaintiff.
38. In view of the findings in issue no. 1 above and in view of the presumption of the Negotiable Instrument Act vis-a-vis promissory note and cheque, the Plaintiff is entitled for the recovery of the suit amount. In the present case the CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 22 of 25 loan transaction is dated 02.06.1994 as per the promissory note and receipt Ex. PW1/1 and PW1/2 and the cheques are dated 22.05.1997 and 10.02.1997 and thus there is an acknowledgment in writing by the Defendant within the period of 3 years from the date of loan transaction. It was never the case of the Plaintiff that the cheques were given by the Defendant to the Plaintiff on the very date of the loan transaction. It is deposed by the Plaintiff in his deposition that the cheques were given after the Defendant has paid the amount of the chit funds and the committee and therefore the dating of the cheques of the year 1997 is not causing any discredit to the case of the Plaintiff. Ex. DW1/1 has remained unproved by the Defendant along with Ex. DW1/5 and therefore as there is a acknowledgment within the limitation period, the claim of the Plaintiff is within the period of limitation and thus the Plaintiff is entitled for the recovery of the suit amounts.
39. The Plaintiff is claiming interest @21% p.a. in CS no. 533/10/98 and interest @ 2.5% p.m. in CS no. 538/10/98. For claiming interest @2.5% p.m. the Plaintiff is relying upon Ex. PW1/1 and Ex. PW1/2 which are promissory notice and receipts and is further relying upon section 79 of the Negotiable Instruments Act.
40. Section 79 of The Negotiable Instruments Act, 1881, reads as under:-
Interest when rate specified - "When interest at a specified rate is expressly made payable on a promissory note or bill of exchange, interest shall be calculated at the rate specified, on the amount of the principal money due thereon, from the date of the instrument, until tender or realization of such CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 23 of 25 amount, or until such date after the institution of a suit to recover such amount as the Court directs".
41. However, the provisions of Section 79 are not absolute and it can be subject to the other statutory provisions enacted for the particular purpose and Section 7 and 8 of the Money Lenders Act has an overriding effect upon Section 79 of The Negotiable Instruments Act.
42. Section 80 of The Negotiable Instrument Act, 1881, reads as under:-
Interest when no rate specified - "When no rate of interest is specified in the instrument, interest on the amount due thereon shall, [notwithstanding any agreement relating to interest between any parties to the instrument], be calculated at the rate of [eighteen per centum] per annum, from the date at which the same ought to have been paid by the party charged, until tender or realization of the amount due thereon, or until such date after the institution of a suit to recover such amount as the Court directs."
43. Section 80 provides the rate of interest @18% p.a. The Plaintiff is claiming interest @21% p.a. in one matter and @ 2.5% p.m. in other matter. Though there is a statutory provision in hand that interest can be awarded @18% p.a. However, keeping in view the prevailing banking rates given on fixed deposits this Court is of the considered opinion that interest @18% p.a. is also at a higher side and therefore the Plaintiff is given interest @ 9% p.a. from the date of filing of the suit till the recovery of the decreetal amount in consonance with the prevailing banking rates given on the fixed deposits.
44. Thus, this issue is decided accordingly.
CS no. 533/10/98 and 538/10/98 C.L. Gupta v. Sumesh Gupta Page no. 24 of 25 Relief:-
45. In view of the findings in the above issues the suits of the Plaintiff are decreed and a decree for recovery of Rs. 1,80,000/- is passed in favour of the Plaintiff and against the Defendant along with interest @9% p.a. from the date of filing of the suit till the realization of the decreetal amount in CS no. 533/10/98 and a decree for recovery of Rs. 1,80,000/- is passed in favour of the Plaintiff and against the Defendant along with interest @9% p.a. from the date of filing of the suit till the realization of the decreetal amount in CS no. 538/10/98.
46. Costs of the suit are also awarded to the Plaintiff.
47. Consolidated decree be prepared accordingly.
48. Files be consigned to record room.
49. A signed copy of this judgment be placed in both the civil suits.
Announced in open Court on the 3rd day of March, 2012.
(Neha Paliwal) Civil Judge-6 Delhi/03.03.2012.
Certified that this judgment contains 25 (twenty five) pages and each page bears my signature.
(Neha Paliwal) Civil Judge-6 Delhi/03.03.2012.
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