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IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. JAYACHANDRAN, J.
Rasipuram Lorry Owner's Association, Rep. by its President, Namakkal & Another - Appellant
Versus
M. Velayutham - Respondent
A.S. No. 988 of 2009 & M.P. No. 1 of 2009
Decided On : 04-02-2021
Negotiable Instrument Act - Section 138 - The suit is based on a dishonored cheque. The Court analyzed the provisions of the Act to determine the limitation period for the suit and the admissibility of secondary evidence of the lost negotiable instrument. The Court also referred to relevant case law to support its interpretation of the Act.
Fact of the Case:
The plaintiff lent Rs.6,00,000/- to the defendants and received a cheque as repayment. The cheque was dishonored and the plaintiff filed a suit for recovery of the amount. The defendants denied the existence of the debt and challenged the admissibility of the photocopy of the cheque as secondary evidence. The Trial Court decreed the suit in favor of the plaintiff. The defendants appealed against the decision.
Finding of the Court:
The Court held that the suit was not barred by limitation as it was filed within three years from the date of dishonor of the cheque. The Court also held that the plaintiff had satisfied the foundational requirements to adduce secondary evidence of the lost negotiable instrument. The defendants failed to rebut the presumption of existing debt and did not produce any evidence to prove their defense. The Court dismissed the appeal and upheld the Trial Court's decision.
Ratio Decidendi: The limitation for a suit based on a dishonored cheque commences from the date of dishonor. Secondary evidence of a lost negotiable instrument can be admitted if the foundational requirements under Section 65 of the Evidence Act are satisfied. The burden is on the party seeking to rebut the presumption of existing debt to produce evidence to probablize their defense.
Result: The appeal suit is dismissed. The Trial Court's decision is upheld.
JUDGMENT :
Prayer: Appeal Suit is filed under Order 41 Rule 1 r/w Section 96 of C.P.C., as against the judgment and decree dated 16.07.2009 made in O.S.No.97 of 2005 on the file of the Additional District Court/Fast Track Court, Namakkal.
1. This Appeal suit is preferred by the defendants in the suit, assailing the money decree passed against them by the Trial Court.
2. Pleadings in brief:
The plaintiff is a businessman residing at Rasipuram Town. The defendants are President and Secretary of Rasipuram Lorry Owners Association. The plaintiff and defendants are known to each other. The Rasipuram Lorry Owners Association is running a Petrol bunk at Rasipuram. The affairs of the petrol bunk is administered through the defendants. For the urgent financial requirement of the petrol bunk, the defendants borrowed hand loan of Rs.6,00,000/- from the plaintiff on 20.11.2002. When the plaintiff demanded back the loan amount, the defendants issued a cheque bearing No.657002 dated 28.11.2002 for Rs.6,00,000/- of Canara Bank, Rasipuram assuring that, sufficient balance is available in the account. The cheque was presented on 11.12.2002 for collection. The cheque returned on the same day with endorsement “Not arranged for. Exceeds arrangement and Payment stopped by the drawer”. The plaintiff met the defendants and informed them about the bouncing of the cheque. The defendants promised to pay the money soon. Next day, on 12.12.2002, the defendants came to the plaintiff house and asked him to come to the Office of the Lorry Owners Association with the cheque and get the cash. Believing their words, the plaintiff went to the Office of the defendants. At the defendants Office, the defendants and three others forcible took the cheque and the bank intimation slip from him. They told him that the money will be paid only after verification of the accounts and till then, the plaintiff should not trouble them demanding the money. They refused to give back the cheque and the bank slip. The attempt of the plaintiff to get back his money through one A.K.B.Chinnaraj, Treasurer of the Lorry Owners Association and others failed. Hence, on 14.12.2002, the plaintiff gave a Criminal complaint at Rasipuram Police Station against the defendants and requested the police to get back the original cheque and bank intimation slip taken forcible by the defendants from him. The defendants handed over the cheque to the Inspector of Police, Rasipuram. However, the Inspector did not hand over the cheque to the plaintiff on the pretext that, the defendants had given to him two cheques, one blank cheque and another cheque drawn in favour of the plaintiff. He will handover both the cheques and refused to handover the cheque drawn in the name of the plaintiff separately.
3. Narrating these facts, the plaintiff issued notice dated 21.12.2002 to the defendants and demanded to repay the money or to face legal consequence. The defendants gave a reply through their Lawyer vide reply notice dated 30.12.2002 with false allegations. The plaintiff had proceeded against the defendants with the photocopy of the cheque under Section 138 of Negotiable Instrument Act, before the Judicial Magistrate Court at Rasipuram. In the said private complaint, miscellaneous petition filed against the Inspector of Police, Rasipuram, for production of original cheque which was left in his custody. In the said petition, the Inspector of Police, in his counter stated that, he had returned the cheque to the second defendant. Therefore, another Miscellaneous Petition was filed against the second defendant for production of the original cheque. To escape from the liability, the second defendant averred that, he has handed over the cheque to the plaintiff. Therefore, the plaintiff filed Criminal Revision Petition before the High Court. The High Court in Crl.R.C 1161 of 2003 granted leave to proceed wit
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