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High Court Of Himachal Pradesh
R.L.KHURANA
KALYAN SINGH - Appellant
Versus
RANJOT SINGH - Respondent
Regular Second Appeal No. 382 of 1998
Decided On : 03/22/2002
Negotiable Instruments Act - Recovery of Cheque Amount - Section 118, Negotiable Instruments Act, 1881 - Summary of Acts and Sections: Section 118, Negotiable Instruments Act, 1881 - The court discussed the presumption as to consideration for negotiable instruments under Section 118 and emphasized that the burden of proof lies on the defendant to rebut the presumption. The court also highlighted the power of the court to call for specimen handwriting/signatures and draw adverse inferences under Section 114, Evidence Act. The court further emphasized the voidness of an agreement under Section 29, Contract Act, 1872, due to uncertainty of meaning. The court's decision was influenced by the interpretation of Section 118 and the burden of proof on the defendant to rebut the presumption of consideration for negotiable instruments.
Fact of the Case:
The plaintiff sold barberry roots to the defendant, who issued a cheque that was later dishonoured. The plaintiff filed a suit for recovery of the amount, but the defendant denied the purchase and claimed an agreement not to encash the cheque until payment was received from Lucknow.
Finding of the Court:
The trial court decreed the suit in favor of the plaintiff, but the district judge reversed the decision based on a writing executed by the plaintiff. The appellate court's decision was set aside, and the plaintiff was held entitled to the recovery of the cheque amount.
Issues: The issues included the purchase of barberry roots, dishonour of the cheque, liability for interest, maintainability of the suit, cause of action, and non-joinder of necessary parties.
Ratio Decidendi: The court emphasized the presumption of consideration for negotiable instruments under Section 118 and the burden of proof on the defendant to rebut the presumption. It also highlighted the power of the court to call for specimen handwriting/signatures and draw adverse inferences under Section 114, Evidence Act. The court further emphasized the voidness of an agreement under Section 29, Contract Act, 1872, due to uncertainty of meaning.
Final Decision: The appeal was allowed, and the judgment and decree of the district judge were set aside, restoring the decision of the trial court in favor of the plaintiff.
R.L. Khurana, J.—The plaintiff has directed the present appeal against the judgment and decree dated 29.6.1998 of the learned District Judge, Nahan, reversing the judgment and decree dated 7.2.1998 of the learned Sub Judge 1st Class (I), Paonta Sahib, and thereby dismissing the suit of the plaintiff for the recovery of Rs. 50,000 from the defendant.
2. The plaintiff on 25.10.1993 had sold barberry roots to the defendant for a sum of Rs. 37,000. The defendant issued a cheque for the said amount in favour of the plaintiff. Such cheque on presentation to the Bank for encashment was returned as dishonoured for want of sufficient funds in the account of defendant. The plaintiff, accordingly, on 16.8.1995 filed the suit for the recovery of Rs. 50,000 (Rs. 37,000 being the principal amount and Rs. 13,000 as interest on such principal amount at the rate of 18% per annum from 25.10.1993 till 31.7.1995).
3. The defendant while resisting the suit, denied having purchased barberry roots from the plaintiff. It was pleaded that the parties were dealing in the sale and purchase of barberry roots and have been supplying the same in Lucknow (UP). The defendant was possessed of the requisite licence for sale/supply of roots in U.P. whereas the plaintiff was not possesing such a licence. The plaintiff, therefore, had approached the defendant for the sale of his barberry roots in U.P. area. The plaintiff had agreed to receive the payment of cost of such roots as and when the same would be received by the defendant. Issuance of cheque for Rs. 37,000 was admitted by the defendant. It was pleaded that such cheque was issued on the instance of the plaintiff, who had given an undertaking not to encash the cheque till payment was received from Lucknow by the defendant. An agreement in writing to this effect was executed between the parties. It was further pleaded that since the defendant had not received the payment from Lucknow, he was not liable to make the payment to the plaintiff. Objections as to maintainability of the suit, absence of cause of action, the suit being premature and also that the suit is bad for non-joinder of necessary parties.
4. On the pleadings of the parties, following issues were framed by the learned trial Court:—
1. Whether defendant purchased Herbs to the tune of Rs. 37,000 from plaintiff as alleged? OPP
2. Whether the cheque qua the payment of this amount having been issued by defendant in favour of plaintiff was dis-honoured due to insufficiency of funds as alleged? OPP
3. Whether defendant is liable to pay rate of interest at Rs. 18% per annum on the aforesaid amount as alleged? OPP
4. Whether suit of the plaintiff is not maintainable as alleged? OPD
5. Whether plaintiff has no cause of action to file the suit? OPD
6. Whether suit is bad for non-joinder of necessary parties? OPD
7. Whether defendant is liable to pay Rs. 37,000 with interest to the plaintiff as prayed? OPP
8. Relief.
5. The learned trial Court decided issues No. 1 to 3 in favour of the plaintiff and issues No. 4 to 6 against the defendant. Consequently, the suit of the plaintiff for recovery of Rs. 50,000 was decreed with costs in his favour and against the defendant.
6. In appeal preferred by the defendant, the learned District Judge, set aside the judgment and decree of the Court below. The learned District Judge on the basis of the writing Ex. DW1/A came to the conclusion that the plaintiff had no cause of action to recover the amount in suit. Aggrieved by the impugned judgment and decree of the learned District Judge, the plaintiff is before this Court by way of present appeal, which stands admitted on the following substantial questions of law:—
1. Whether learned District Judge has erred in holding that the plaintiff has no cause of action for filing the suit in view of Ex. DW1/ A which has been misconstrued, misinterpreted and misapplied?
2. Whether under Section 118 of the Negotiable Instruments Act, 1881, presumption as to consideration, date etc. of C
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