The authenticity of a negotiable instrument and the availability of funds are crucial in determining liability under the Negotiable Instruments Act.

This appeal suit has been filed by the Defendants in OS.No.302 of 2004 on the file of the Additional District and Sessions Judge (FTC I), Trichy, challenging the judgment and decree dated 30.3.2007.

2. The above suit had been filed for recovery of a sum of Rs.9,01,250/- with interest at the rate of 12% p.a. from the date of the plaint till the date of realisation.

3. In the plaint, the Plaintiff, who is the Respondent herein, had stated that the Defendants are husband and wife. They were known to the Plaintiff. They had borrowed money on various occasions, amounting to Rs.4 lakhs for discharge of their existing loan. They had also availed loan from Srirangam Cooperative Urban Bank Limited where the 2nd Defendant was one of the Directors. They could not repay the loan. The Bank therefore threatened to take action. In such a situation, the Defendants approached the Plaintiff. The Plaintiff discharged the loan to the Bank to a sum of Rs.2.26 lakhs and received the original title deeds, including the mortgage deed dated 9.5.1949, sale deed dated 9.9.1968, Will dated 16.5.1985, executed by Ramanujam Iyengar, father of the 1st Defendant, house tax receipt dated 2.9.1996, encumbrance certificate, planning permission issued by Srirangam Municipality in respect of the property, bearing Door No.160, East Chithirai Street, Srirangam. The Defendants did not repay the loan amounts advanced by the Plaintiff. The Defendants agreed to pay a sum of Rs.8,75,000/- on 6.43.2004 which included the interest for the money due. They executed a document on 30.5.2001 and issued a post dated cheque bearing no.09230 for Rs.8,75,000/- dated 6.3.2004. This cheque was presented by the Plaintiff in Canara Bank, Srirangam on 10.3.2004. This was returned due to insufficient funds. Consequently, a legal notice dated 7.3.2004 was issued under Section 138 of the Negotiable Instruments Act. The Defendants did not repay the loan. It had been stated that since the Defendants were trying to alienate the property, the Plaintiff issued a paper publication in Dinamalar Newspaper dated 23.9.2003. the Plaintiff therefore filed the suit for recovery of Rs.9,01,250/- with subsequent interest.

4. In the written statement filed by the 2nd Defendant and adopted by the 1st Defendant, it had been stated that the borrowal of amounts from the Plaintiff are false and specifically denied. It had been stated that the 1st Defendant borrowed loan from the Bank. It had been denied that the Plaintiff discharged the loan to a sum of Rs.2.26 lakhs. It had been further denied that the Plaintiff and the Defendants were friends and that the Plaintiff had advanced amounts on various dates to the Defendants. It had been denied that a document was executed on 30.5.2001 and it had been further denied that cheque no.09230 for Rs.8,75,000/- dated 6.3.2004 had been issued. It had been stated that the account, in which the cheque was issued, was already closed in 1995. It had been stated that the Defendants requested the Plaintiff to arrange for a loan of Rs.50,000/- during May 2001. At that time, the Plaintiff got the signatures of the Defendants in an empty stamp paper on 30.5.2001 as security so that he could arrange the amount from third party financiers. The Defendants repaid the amount in June 2001 after getting GPF loan from the employer of the 1st Defendant. The Plaintiff did not return the signed blank documents.

5. It had been further stated in the written statement that the 1st Defendant was employed in Tamil Nadu Electricity Board and consequently, necessity to borrow money was denied. It had been stated that the signature in the cheque is a forged signature. It had been further stated that the document dated 30.5.2001 is a concocted document It had been further stated that the documents received from the Bank were kept by the Defendants in their house. The 1st Defendant retired on 30.6.2003. They wanted to built apartments in their property at door no.160, East Chithirai Street, Sr