The statutory presumptions under the Negotiable Instruments Act set a high threshold for interference in cases involving the presentation of cheques and mortgage disputes.

JUDGMENT

(Prayer in O.A.No.737 of 2021: This Original Application is filed under Order XIV Rule 8 of Original Side Rules r/w. Order 39 Rule 1 and 2 of CPC praying to grant an order of interim injunction restraining the respondents/defendants or their men, agents from presenting schedule cheques belonging to the plaintiffs for encashment, given as security to the Respondents 1-2/Defendants 1-3 in pursuance of mortgage deed dated 16.04.2012 pending disposal of the suit.

A.No.673 of 2022: This application is filed under Section XIV Rule 8 of O.S.Rules read with Order XXXIX Rule 4 of CPC praying to vacate the interim order granted on O.A.No.737 of 2021 in C.S.No.94 of 2021, dated 25.11.2021, subsequently extended on 20.12.2021.)

1. The suit is filed for declaratory relief, redemption of mortgage, a money decree and for permanent injunction. The original application is filed by the plaintiffs in the suit. For the sake of convenience, in this order, the applicants in the original application are referred to as the applicants and the respondents thereto as the respondents. By the original application, the applicants seek to restrain the respondents from presenting specific cheques for payment. By an earlier order dated 25.11.2021, an order of interim injunction was granted for a limited period. Application No.673 of 2021 is filed by the respondents to vacate the order of interim injunction. The parties endeavoured to resolve the dispute through mediation, but the mediation was unsuccessful.

2. In support of the original application, learned senior counsel for the applicants submitted that the first applicant and respondents 1 to 3 entered into a mortgage deed on 16.04.2012. In terms thereof, respondents 1 to 3 advanced a sum of Rs.82 lakhs to the first applicant. In addition, a sum of about Rs.68 lakhs was received from some of the other respondents, thereby aggregating to a sum of Rs.1.5 crore. The applicants asserted that the respondents are money lenders as per the Tamil Nadu Money Lenders Act, 1957 (the Money Lenders Act). Keeping in mind the fact that it is a secured loan, it is contended that simple interest at not more than 9% p.a. may be charged on the transaction as per the Money Lenders Act. By relying upon three certificates issued by a Chartered Accountant, the applicants further asserted that a sum of about Rs.1.91 crore is refundable by the respondents to the first applicant if simple interest is calculated at 9% p.a.

3. As regards the second mortgage deed dated 13.03.2020, learned senior counsel for the applicants stated that no money was received under the second mortgage. By drawing reference to the date of execution of the said second mortgage deed, i.e.13.03.2020, it is pointed out that the cheques in respect of which the original application is filed were all issued between 2012 and 2018. On such basis, it is asserted that these cheques cannot be relied upon as evidence of consideration under the mortgage deed dated 13.03.2020. According to the applicants, as against a sum of Rs.1.5 crore which was received under the first mortgage, a sum of about Rs.3.87 crores was repaid. By relying upon a judgment of this Court, A.Ganesa Nadar v. Jayalakshmi 2009 (6) CTC 181, it is contended that a person engaged in the business of lending money is subject to the provisions of the Money Lenders Act.

4. The applicants further contended that unless the interim order is made absolute, the applicants would be put to irreparable hardship inasmuch as they would be subject to proceedings under the Negotiable Instruments Act, 1881 (the NI Act). An offer is made to open up the bank statements and books of account for scrutiny by an independent chartered accountant so as to arrive at the true and correct amount paid and payable under the transactions with the respondents.

5. These contentions were strongly refuted by the respondents. By drawing reference to the first mortgage deed, learned counsel for the respondents pointed out that the amount