The main legal point established in the judgment is the importance of raising a substantial defense, the evidence required to rebut the presumption arising from the cheque, and the need for proper legal representation.

SANJIV KHANNA, J.

1. Counsel for the appellant prays for and is granted permission to correct typographical error in the memo of parties and initial the same in today’s date. Appellant No.1 by mistake was described as ABI Overseas instead of ABI Overseas Ltd. The appellant No. 1 who is defendant No. 1 in the suit has been described as ABI Overseas Ltd. in the plaint.

2. The present appeal by the defendants, namely, ABI Overseas Ltd. and Vipen Kumar Parwanda, impugns the order dated 24th November, 2016, whereby OA No.58/2014, I.A. Nos. 6574/2014, 10989/2014 and 19203/2014 filed by them have been dismissed. Appellant No. 2 Vipen Kumar Parwanda is the director of appellant No. 1, ABI overseas Ltd.

3. In order to decide the appeal, we had called for the records of CS (OS) No. 1497/2011, titled Ashwani Kumar Vs. M/s ABI Overseas Ltd. & Anr. and have perused the same.

4. The aforesaid suit filed under Order XXXVII of the Code of Civil Procedure, 1908 (Code, for short) is for recovery of Rs.4,57,60,440/- and pendente lite and future interest. The suit is based on the dishonoured cheque for Rs.4,25,00,000/-.

5. The appellants-defendants filed the application for leave to defend, which was allowed vide order dated 30th April, 2013, relevant portions of which are reproduced below:-

“2. The counsel for the plaintiff has at the outset clarified that the claim of the plaintiff is against the defendant no.1 Company and the defendant no.2 is impleaded in his capacity as Chairman-cum-Managing Director of the defendant no.1 Company and the recovery of money is not sought from the defendant no.2.

4. As far as the merits of the case are concerned, it is the case of the plaintiff that he is a shareholder of the defendant no.1 Company; that a Memorandum of Understanding (MoU) dated 04.07.2006 was executed by the defendant no.1 Company, the plaintiff and certain other shareholders of the defendant no.1 Company and under which MoU, (a) the plaintiff and the said other shareholders disassociated from the affairs of the defendant No.1 Company without any liability/obligation in respect of past or future transactions of the defendant No.1 Company; (b) the plaintiff undertook the liability to clear the dues of the defendant No.1 Company to Syndicate Bank in the sum of Rs.2.25 crores and the liability to settle the claims of other two shareholders against the defendant No.1 Company of Rs.20 lakhs—the plaintiff thus took over the liability to the tune of Rs.2.45 crores of the defendant No.1 Company; and, (c) that in consideration of the above, the defendant No.1 Company transferred, stocks/goods worth of Rs.1.08 crores belonging to the defendant No.1 Company and assigned book debts to the tune of Rs.1.37 crores i.e. amounts recoverable by the defendant No.1 Company from others, to the plaintiff. To effect such assignment of book debts, the defendant No.1 Company also executed a Transfer Deed and a General Power of Attorney (GPA) transferring the book debts of the defendant No.1 Company in favor of the plaintiff and empowering the plaintiff to recover such book debts.

5. It is further the case of the plaintiff that in pursuance to the aforesaid, the plaintiff has been repaying the liability of the defendant No.1 Company to the Syndicate Bank and has paid a sum of approximately Rs.1.08 crores till date to the said Bank. The plaintiff however claims that he was unable to recover any amount whatsoever either of the book debts of the defendant No.1 Company assigned to him or from the stocks/goods transferred by the defendant No.1 Company to the plaintiff. The plaintiff claims, to have thus represented to the defendant No.1 Company for being compensated, and a meeting in this regard was held on 31st March, 2009 and in which the defendant No.1 Company agreed to compensate the plaintiff if the plaintiff in the next twelve months also was unable to make any recoveries against the book debts or the stocks/goods, and issued the post dated cheque for Rs.4.25 crores