In a suit based on a dishonored cheque, the plaintiff must prove the underlying transaction, after which presumptions under the Negotiable Instruments Act apply, and the defendant can rebut these with evidence.

JUDGMENT :

A. Badharudeen, J.

This regular first appeal has been filed under Section 96 read with Order XLI Rule 1 of the Code of Civil Procedure, 1908, challenging the decree and judgment dated 30.10.2009 in O.S. No.7/2006 on the files of the Court of the Subordinate Judge, Payyannur. The appellant herein is the defendant and the respondent herein is the plaintiff.

2. Heard the learned counsel for the appellant and the learned counsel appearing for the respondent. Perused the verdict under challenge and the records of the trial court.

3. Parties in this appeal shall be referred as “plaintiff” and “defendant” with reference to their status before the trial court.

4. According to the plaintiff, the defendant and her husband, Sri.Suresh Babu, approached the plaintiff at his residence in the month of January, 2005 and borrowed an amount of Rs.3,00,000/- in connection with the construction of their house. Further case of the plaintiff is that, the defendant promised to repay the amount within four months and accordingly cheque dated 31.05.2005 drawn on Ex-Service Co-operative Bank, Pazhayangadi was issued in discharge of the said liability. According to the plaintiff, though the cheque was accepted and presented for collection, the same got dishonored for insufficient fund. Though, legal notice of demand was issued to the defendant intimating the dishonor of the cheque, the defendant sent a false reply notice, without repaying the amount.

4. The defendant appeared and filed written statement. The main contentions raised by the defendant which would appear in paragraph Nos. 3 and 5 of the written statement are extracted as under:

“3. It is humbly submitted that, the defendant has not executed any promissory note infavour of the plaintiff as alleged in the plaint. Infact this defendant is in receipt of a copy of plaint from this Hon'ble court in which the plaintiff has alleged that, the above suit is based on a cheque issued by the defendant. This defendant would like to submit that. the plaintiff is a total stranger to the defendant and as such the defendant had no occassion to execute any instrument in his favour. The documents, if any, produced along with the plaint projecting the same as 'cheque' or promissory note must be a concocted document. As such, the plaintiff is not entitled to get any decree on the basis of the said document.

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5. It is submitted that, one M.V.Vijayakumar, being a co-worker and the family friend of the husband of this defendant, used to visit the residence of the defendant, and had developed a close connection and intimacy with the other family members of the defendant. Later stage, there was some disputes between the husband of this defendant and one P.Kunhiraman, who is the uncle of the said Vijayakumar. The abovesaid P. Kunhiraman was the surety of respondent's husband before K.S.F.E, Kannur branch for availing a loan in the name of respondent's husband. Some default was committed by the defendant's husband in payment of the loan amount. Inspite of giving sufficient security for the payment of the loan amount, the above said Kunhiraman started making unwanted demands. Lastly, the defendant's husband transferred the undivided interest in his ancestral property, to Kunhiraman on the condition that the same will be reconveyed to the defendant's husband on satisfaction of the loan amount to K.S.F.E. The defendant's husband repaid the loan amount and after that, demanded for reconveyance of the property. But the above said Kunhiraman refused to hand over the property, as promised. His intention was to put the defendant's husband under pressure and extract some amount. It is also submitted that, the above said Kunhiraman and the plaintiff herein, at the behest of M.V.Vijayakumar and one K.V. Manojkumar, conspired together to make use of the good relationship between the defendant's husband and M.V.Vijayakumar and attempted to compel the defendant's husband to pay some more amount. As such, the above said