A suit for recovery of money based on a negotiable instrument may be maintained despite the cheque being stale for criminal prosecution, provided the underlying transaction is proven; however, the presumption of consideration is rebutted if the court finds the transaction itself inherently improbable.

JUDGMENT :

MOHAMMED NIAS C.P., J.

1. The defendant in a suit for the realisation of money is the appellant. 

2. O.S.No.362 of 2011 was filed by the respondent/plaintiff alleging that he had advanced an amount of Rs. 2,00,000/- to the appellant/defendant for business purposes on 07.10.2010, which the appellant agreed to repay within 5 months, besides issuing a cheque dated 25.02.2011 for Rs. 2,00,000/-, drawn on the Syndicate Bank, Alappuzha Branch. The cheque, on presentation, was dishonoured on 12.03.2011 for insufficient funds. A lawyer's notice was issued, to which the appellant replied, disputing the transaction and the liability, which led to the filing of the suit.

3. The appellant, apart from denying the plaint allegation of receipt of any amount from the respondent, specifically pleaded that he had not executed the cheque in question on 25.02.2011 as alleged and that the same was one among the cheque leaves handed over by him to his brother Rafeek as part of the financial dealings between them. The appellant's brother, Rafeek, who also had monetary transactions with the plaintiff, handed over those cheques to the plaintiff/respondent, misusing which the claim was founded.

4. The respondent had also instituted four criminal cases against the appellant based on those cheques under Section 138 of the Negotiable Instruments Act (for short the 'N.I. Act'), alleging dishonour, all of which were settled out of court between the appellant and respondent on 04.03.2010, on making payment. The appellant was made to believe that he had only four cheques with him. The plaintiff had retained the cheque in question, which he presented on 12.03.2011, leading to dishonour of the same.

5. The trial court considered the evidence of PW1 and PW2 and Exts.A1 to A4 and Exts.C1 and C2 were marked on the side of the respondent. The appellant was examined as DW1, and the handwriting experts who examined the cheque as DW2 and DW3, respectively and also marked Exts.B1 to B17 on the side of the appellant.

6. Earlier, the trial court had decreed the suit, which was challenged by the appellant by filing RFA No.752 of 2016 before this court, wherein this court found that the handwriting expert, who examined the disputed cheque, was not qualified and therefore his report cannot be accepted in evidence and accordingly remanded the matter. Thereafter, the trial court again decreed the suit.

7. The trial court, after remand, found that the evidence of PW1 and PW2 shows that Ext.A1 cheque was executed and that the defendant had borrowed an amount of Rs. 2,00,000/-. The trial court also relied on the presumption under Section 118 of the N.I. Act to hold that the cheque is supported by valid consideration. The fact that the disputes were settled on 04.03.2010, and the improbability of a further borrowing by the defendant, was not accepted by the trial court. Thus holding that the defendant failed to rebut the presumption under Section 118 of the N.I. Act, granted a decree for Rs. 2,00,000/- with interest at the rate of 9% per annum from the date of borrowal, ie, 07.10.2010, till the date of the decree and thereafter at the rate of 6% per annum till realisation.

8. The learned Senior Counsel for the appellant, Sri. Raghuraj N. instructed by Adv. Vivek Menon, argues that the court below had gone wrong on facts as well as in law while passing the impugned judgment. It is his submission that Ext.A1 cheque was illegally retained by the respondent/plaintiff and misused to unjustly enrich himself, and that the trial court did not take note of the crucial fact that four criminal cases, in which the subject matter cheques bearing numbers 535697, 535698, 535699 and 535700, were issued on 20.02.2009, 25.02.2009, 21.03.2009 and 20.03.2009 respectively and therefore Ext.A1 cheque, which bears an earlier serial number, but allegedly issued two years later. That apart, the criminal cases, instituted based on the above cheques, were settled on 04.03.2010 by paying Rs.4,00,000/- as