Madras High Court
Pushpadhas vs M.Ayyappan Pillai on 26 April, 2007
Author: M.Jaichandren
Bench: M.Jaichandren
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 26/04/2007 CORAM THE HONOURABLE MR.JUSTICE M.JAICHANDREN S.A.No.1528 of 1993 Pushpadhas .... Appellant Vs. M.Ayyappan Pillai .... Respondents The Second Appeal has been preferred against the Judgment and Decree of the learned Sub-ordinate Judge, Kuzhithurai, in A.S.No.10 of 1993, dated 29.04.1993, pursuant to the Judgment and Decree in O.S.No.197 of 1992, dated 24.12.1992, on the file of the Principal District Munsif, Kuzhithurai.
!For appellant : Mr.Sree Kumaran Nair ^For respondent : Mr.S.Jayakumar
The Second Appeal has been preferred against the Judgment and Decree of the learned Sub-ordinate Judge, Kuzhithurai, in A.S.No.10 of 1993, dated 29.04.1993, pursuant to the Judgment and Decree in O.S.No.197 of 1992, dated 24.12.1992, on the file of the Principal District Munsif, Kuzhithurai.
2. Heard the learned counsels appearing for the appellant as well as for the respondent.
3. The brief facts of the case, as stated by the appellant, are as follows:-
The appellant herein was the plaintiff in the suit O.S.No.197 of 1992. The plaintiff had filed the suit O.S.No.197 of 1992, on the file of the Principal District Munsif, Kuzhithurai, for realisation of Rs.9,348/-, which included the principal amount of Rs.8,200/- and the interest thereon, at 12% per annum. The plaintiff had stated in the said suit that he had known the defendant for more than two years. On 10.01.1991, the defendant had come to the plaintiff's house requesting for a loan of Rs.8,200/- promising to pay back the amount within one month thereafter, along with the interest. Inspite of several requests, the defendant had not repaid the amount borrowed by him from the plaintiff. In the month of March, 1991, the defendant had handed over a cheque to the plaintiff stating that the said cheque could be presented in the bank, on or before 30.04.1991. The said cheque with No.NSE/K.No.718831, drawn on Kuzhithurai Branch of the Canara Bank was presented to the bank, on 30.04.1991, by the plaintiff. On 08.05.1991, the cheque was returned by the bank due to insufficiency of funds in the account of the defendant. The plaintiff, after making several requests to the defendant to pay the amount borrowed, had issued a legal notice, on 22.05.1991, through his counsel. The defendant had issued a reply notice, on 21.06.1991, denying the claims made by the plaintiff.
Therefore, the plaintiff had filed the suit for realisation of the amount said to be due to him.
4. The defendant had filed a written statement denying the averments made in the plaint stating that he had never borrowed the amount of Rs.8,200/- from the plaintiff. The defendant had stated that he had not known the plaintiff and there was no necessity for him to borrow the amount from the plaintiff. The defendant had further stated that he had not given any cheque to the plaintiff as alleged. The defendant had stated that he had, in fact, lost the cheque of the Canara Bank, Kuzhithurai Branch, bearing No.718831 containing his signature and his savings bank account No.11724, on 25.4.1991. Immediately thereafter, the defendant had informed about the loss of the cheque to the Manager of the bank and he had given a complaint to the Police Station, on 26.04.1991. The defendant had claimed that the plaintiff had acted fraudulently and dishonestly by presenting the cheque to the bank with a view to gain unlawfully. It was further stated by the plaintiff that he was not aware of the complaint given by the defendant to the Manager of the bank and the Police Station with regard to the loss of the cheque.
5. In the replication filed by the plaintiff, it has been stated that the plaintiff and the defendant were known to each other for more than five years. Both the plaintiff and the defendant were subscribers in Prabha Chit Fund at Marayappuram. One R.Prabhakaran Nair was the chief foreman in the said Chit fund. While so, the defendant along with the said Prabhakaran Nair had approached the plaintiff and demanded the amount, on 10.01.1991. The plaintiff had paid the amount to the defendant seeing his urgent necessity. The contention of the defendant that he has not seen the plaintiff at all is false and frivolous. The transaction is valid and genuine and the defendant cannot dispute the same in the suit.
6. In the additional written statement filed by the defendant, it has been stated that the defendant had no acquaintance with the plaintiff from any chit fund. The allegation that along with Prabhakaran Nair, the defendant had approached the plaintiff is totally false. The defendant never saw the plaintiff and the defendant had never received any money from the plaintiff. The cheque was not filled up by the defendant.
7. Considering the rival contentions of the parties concerned, the trial Court had framed the following issues for consideration, which are as follows:-
"1.Whether the plaintiff is entitled to realise Rs.9.348/- from the defendant and his assets?
2.Whether the plaint transaction is true and valid?
3.Is the suit not maintainable?
4.Are the contentions of the defendant valid and competent?
5.Whether the contentions of the defendant barred by estoppel?
6.To what reliefs is the plaintiff entitled to?"
8. The plaintiff had examined himself as P.W.1 and the said Prabhakaran Nair was examined as P.W. 2 in support of the case of the plaintiff. While, the defendant had let in evidence as D.W.1, Exhibits A1 to A7 were marked in favour of the plaintiff and Exhibits B1 to B6 were marked in favour of the defendant.
9. Based on the submissions made on behalf of the plaintiff as well as the defendant and on analysing both the oral and documentary evidence, the trial Court had decreed the suit in favour of the plaintiff. The trial Court had found that the statements made by the defendant are false and the defendant, having borrowed the amount as alleged by the plaintiff, was liable to repay the same. The cheque, dated 30.04.1991, given by the defendant to the plaintiff, marked as Exhibit A1, was found to contain the signature of the defendant and the same was not denied. It was also found that the cheque had been returned by the bank for insufficiency of funds. According to the trial Court, the claims made by the defendant with regard to the loss of the cheque was false. The defendant had claimed that he was carrying a signed cheque in his pocket which he had lost at the time when he had gone to the shop to buy snuff. Further, the defendant had also claimed that he had made written complaints to the concerned bank and to the Police Station with regard to the loss of the cheque. However, the trial Court had disbelieved the statements of the defendant.
10.The statement of the defendant that he did not know the plaintiff was not believed by the trial Court, since it was only the defendant who could have given the details about the plaintiff to his counsel, while filing the written statement. This was also confirmed during the cross-examination of the defendant. Further, the trial Court had found that the defendant had only Rs.200/- in his savings bank account, which was deposited at the time of opening of the said account. There was no money, which was either deposited or taken out from the account thereafter. While so, it could not be true to state that the defendant was carrying a signed cheque in his pocket and had lost it at the time of buying snuff from the petty shop. The trial Court had come to the conclusion that the defendant had given a false information to the Manager of the bank and a false complaint to the Police Station stating that he had lost the cheque only with the fraudulent intention of defending himself against criminal prosecution for dishonour of the cheque which he had given to the plaintiff while borrowing the loan amount. Even though, it had been stated by the defendant that he had lost an unfilled signed cheque on 25.04.1991, it was only on 26.04.1991, that he had informed the Manager of the bank and the Police Station about the lost cheque.
11. It was also found by the trial Court that one Prabhakaran Nair was known both to the plaintiff as well as the defendant. In such circumstances, it was not unusual for Prabhakaran Nair to have accompanied the defendant to the house of the plaintiff while borrowing the loan amount. Further, it could not be said that Prabhakaran Nair was an interested witness. Therefore, the trial Court had disbelieved the statement of the defendant that he did not know the plaintiff and that the cheque which was presented by the plaintiff to the bank had been lost by the defendant, on 25.04.1991.
12 . Further, it is the finding of the trial Court that it is only due to the apprehension in the mind of the defendant about the criminal proceedings that could have been initiated against him for the dishonour of the cheque that he had made the false claims with regard to the lost cheque. In such circumstances, the trial Court had found the issues framed in favour the plaintiff and had decreed the suit. Since the suit was decreed in favour of the plaintiff, the defendant had filed an appeal in A.S.No.10 of 1993, before the Sub-Court, Kuzhithurai, challenging the Judgment and Decree made in O.S.No.197 of 1992, by the District Munsif, Kuzhithurai.
13.The Lower Appellate Court had framed an issue as to whether the appeal was to be allowed or not. While analysing the rival contentions of the parties concerned the Lower Appellate Court had come to the conclusion that the trial Court was wrong in decreeing the suit. Therefore, the Lower Appellate Court had reversed the findings of the trial Court by allowing the appeal in favour of the appellant, who is the respondent in the present Second Appeal, by holding that the Lower Appellate Court had stated that the the plaintiff had claimed that the defendant had come to his house and had asked for a loan of Rs.10,000/- and since the plaintiff did not have the said amount he had given only an amount of Rs.8,200/- as loan to the defendant. The defandant had not stated anything about P.W. 2, namely, Prabhakaran Nair, accompanying the defendant at the time of his lending the amount to the defendant. It was only after the defendant had denied his borrowing of the amount from the plaintiff by way of his written statement, the plaintiff had filed a reply in which he had stated about the visit of Prabhakaran Nair to his house along with the defendant. Though the plaintiff had stated that both himself and the defendant were members of the chit fund conducted by Prabhakaran Nair, he had stated in the plaint that he had known the defendant for two years and in his reply he had stated that he had known the defendant for five years. However, the defendant had denied that the plaintiff was as a member of the chit fund and he had further stated that he did not know the plaintiff.
14. In such circumstances, it is unlikely that the plaintiff could have given a sum of Rs.8,200/-, on 10.01.1991, and the defendant had asked the plaintiff for a loan without any written document. The plaintiff had further stated that it was on a oral request made by the defendant he had given a sum of Rs.8,200/- as loan. Later, in his reply, the plaintiff had stated that the loan amount was given to the defendant, since Prabhakaran Nair had accompanied the defendant, while the defendant had come to the plaintiff's house. Even though the said loan amount had been borrowed by the defendant, on 10.01.1991, stating that he would return the amount with interest within one month from the said date, no reasons have been shown by the plaintiff for not taking any steps to recover the loan amount till 05.03.1991. It has been found by the First Appellate Court that the plaintiff had not even issued a notice to the defendant to return the alleged loan amount said to have been borrowed by the defendant. Further, there is no proper explanation from the side of the plaintiff as to why the defendant had given him a cheque, dated 30.04.1991. The defendant is said to have agreed to pay the interest on the borrowed amount.
15. It was further found by the trial Court that the plaintiff had only approached the defendant asking him to repay the borrowed amount, even after the cheque had been dishonoured by the bank due to insufficiency of funds. There is no explanation from the plaintiff as to why he did not initiate the necessary action against the defendant to recover the loan amount. Even though the plaintiff had stated that he had issued a legal notice on 22.05.1991, he had not taken any action against the defendant till the defendant had issued a reply notice on 21.06.1991. However, it has been seen that the plaintiff has filed the suit to recover the amount of Rs.9,348/- including the interest on the loan amount. Further, it had been noted that the plaintiff had conducted his sister's wedding in the year 1990 at a cost of Rupees one and half lakhs. However, the plaintiff had admitted that he had spent only Rs.51,000/- at that time. Therefore, he had borrowed the remaining amount from other persons as loan.
16. Therefore, in such circumstances, it was not probable for the plaintiff to have lent the amount of Rs.8,200/- based on the oral request of the defendant. It has also been found that the plaintiff had not stated the fact in the plaint that it was only because he knew Prabhakaran Nair who had come along with the defendant, the plaintiff had given the loan amount of Rs.8,200/- to the defendant without any written documents. However, the said fact, as claimed by the plaintiff, has not been stated in the plaint. It has also not been stated by the plaintiff as to why he had taken the cheque only for the sum of Rs.8,200/- even though the borrowed amount was said to have been returned by the defendant by way of the cheque, dated 30.04.1991, without any further interest on the said sum. Even though the plaintiff had not stated in the plaint, filed at the time of the filing of the suit, that the defendant had come to his house, on 05.03.1991, to give the cheque he had been stated so in his evidence. Therefore, such a statement by the plaintiff was not acceptable.
17.On a perusal of the cheque said to have been given by the defendant and marked as Exhibit A 1 on behalf of the plaintiff, the Appellate Court had found that the signature of the defendant on the cheque and the other words entered in the cheque were of different inks. Further, the plaintiff had not explained as to how the cheque was filled up in english when the defendant did not know to read or write in english.
18.The Lower Appellate Court had also found that the plaintiff had failed to prove that the cheque, dated 30.04.1991, had been filled up and given to him by the defendant, especially, in view of the statements made by the defendant that he had lost a signed and unfilled cheque. It has also been seen that it was only after the defendant had informed the Manager of the bank and made a complaint before the concerned Police Station regarding the loss of the cheque, the plaintiff had presented the cheque in the bank on 30.04.1991. Based on the above reasoning, the Lower Appellate Court had concluded that the trial Court was wrong in decreeing the suit in favour of the plaintiff. Therefore, the substantial questions of law that arose for consideration in the present Second Appeal are as follows:-
"a) Whether there is a statutory presumption under Section 118(A) of the Negotiable Instrument made or drawn for consideration, whether the Appellate Court was right in placing the burden on the plaintiff to prove that Exhibit A-1 cheque was supported by consideration?
b) Whether the Lower Appellate Court was right in reversing the well considered judgment of the trial Judge who had the privilege of personally seeing the witnesses in the box and assessing the evidence on the basis of the personal observation of the witnesses?; and
c) whether the Lower Appellate Court was right in reversing the Judgment of the trial Court without setting aside the finding of the trial Court on P.W.1 and P.W.2 were honest and dependable and the other finding that D.W.1 and dishonest and undependable?"
19.The learned counsel appearing on behalf of the appellant had relied on the decision of the Supreme Court made in Santosh Hazari Vs. Purushottam Tiwari (deceased) by LRs., reported in (2001) 3 SCC 179, wherein, the Supreme Court had held that under Section 96 of the Civil Procedue Code, 1908, the Appellate Court ought not to interfere with the findings of the trial judge on a question of fact unless the latter has overlooked some peculiar feature connected with evidence of a witness or such evidence on balance is sufficiently improbable so as to invite displacement by appellate Court. The learned counsel appearing on behalf of the appellant has also relied on Goaplast (P) Ltd Vs. Chico Ursula D'Souza and another, reported in (2003) 3 SCC 232, wherein the Supreme Court has held as follows:-
"Chapter XVII containing Sections 138 to 142 was introduced in the Act by Act 66 of 1988 with the object of inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business transactions. The said provisions were intended to discourage people from not honouring their commitments by way of payment through cheques. The court should lean in favour of an interpretation which serves the object of the statute. A post-dated cheque will lose its credibility and acceptability if its payment can be stopped routinely. The purpose of a post-dated cheque is to provide some accommodation to the drawer of the cheque. Therefore, it is all the more necessary that the drawer of the cheque should not be allowed to abuse the accommodation given to him by a creditor by way of acceptance of a post-dated cheque.
In view of Section 139, it has to be presumed that a cheque is issued in discharge of any debt or other liability. The presumption can be rebutted by adducing evidence and the burden of proof is on the person who wants to rebut the presumption. This presumption coupled with the object of Chapter XVII of the Act leads to the conclusion that by countermanding payment of post-dated cheque, a party should not be allowed to get away from the penal provision of Section 138 of the Act. A contrary view would render Section 138 a dead letter and will provide a handle to persons trying to avoid payment under legal obligations undertaken by them through their own acts which in other words can be said to taking advantage of one's own wrong."
20.On an analysis of the rival contentions and based on the documents available before this Court, it could be found that the trial Court had rightly decreed the suit. The First Appellate Court had reversed the findings of the trial Court wrongly presuming that the claims made by the defendant was sustainable. It is a clear position of law that there is a presumption in favour of the holder of the cheque.
21. On a perusal of the relevant Sections of the Negotiable Instruments Act,1881, including Sections 118 (A) and Section 139, it is clear that there is a presumption in favour of the holder of the cheque. Therefore, it could be taken to be sufficient proof once the plaintiff had shown that the cheque was issued in his name signed by the defendant. It is not the case of the defendant that the said cheque, marked as Exhibit A-1, had not been signed by him. Even though the First Appellate Court had found that there were some discrepancies in the inks used to fill up the cheque, that by itself cannot controvert the claim of the plaintiff that the cheque had been issued by the defendant to discharge his liability which was a sum of Rs.8,200/-, said to have been borrowed by him as loan from the plaintiff. Further, from the evidence available before this Court, it is seen that the defendant is said to have been visited the house of the plaintiff, along with Prabhakaran Nair, at the time of borrowing the amount of Rs.8,200/- from the plaintiff. It is also the case of the plaintiff that he had known the defendant as a member of the chit fund run by Prabhakaran Nair and that he had lent the money to the defendant since the defendant was accompanied by Prabhakaran Nair while the money was borrowed. There is sufficient evidence on record to substantiate the claims made by the plaintiff, even though certain statements have not been included in the plaint.
22. On the other hand, the defendant had claimed that he had lost a signed unfilled cheque which he had carried in his pocket at the time of his visit to a petty shop for buying snuff. Such a claim cannot be accepted, since it is not usual for a person to carry a signed unfilled cheque in his pocket. There is no other evidence let in on behalf of the defendant to prove such a claim. Further, it has also been seen from the Exhibits marked before the trial Court that it was only a sum of Rs.200/- which was available in the savings bank account of the defendant in the Kuzhithurai Branch of the Canara Bank on which the cheque was drawn. Even though, it is seen that the defendant had informed the Manager of the bank and lodged a complaint in the Police Station regarding the loss of the cheque that by itself would not be sufficient to prove the claims made by the defendant even if the cheque is said to have been lost on 25.04.1991. The defendant had lodged a compliant only on 26.04.1991. There is no explanation from the defendant as to why the loss of the cheque was not immediately intimated.
23. Further, Prabhakaran Nair who was examined as a prosecution witness (P.W. 2) had clearly stated about the defendant borrowing the amount from the plaintiff, on 10.01.1991. The Lower Appellate Court had found that the amount filled in the cheque, dated 30.04.1991, was only for a sum of Rs.8,200/- which was the principal amount and that the interest due on the said amount for two months had not been added cannot be a good reason to disbelieve the claim of the plaintiff that the cheque had been given to him by the defendant to discharge the liability of the loan amount. Therefore, even though certain statements have not been made by the plaintiff in his plaint at the time of the filing of the suit he has clearly stated the facts relating to the event of the defendant borrowing the amount from him in his reply statement. In such circumstances, this Court is of the considered view that the Lower Appellate Court was wrong in setting aside the considered judgment and decree of the trial Court.
24. For the aforesaid reasons, the Second Appeal stands allowed. Hence, the Judgment and Decree of the Sub-Court, Kuzhithurai, made in A.S.No.10 of 1993, dated 29.04.1993, is set aside and the judgment and decree passed by the Principal District Munsif, Kuzhithurai, dated 24.12.1992, in O.S.No.197 of 1992, is restored. No costs.