The presumption of consideration under the Negotiable Instruments Act applies to issued cheques, placing the burden on the defendant to prove otherwise.

JUDGMENT :

1. Challenge has been made against dismissal of the suit filed by the plaintiff for recovery of money, in the present appeal.

2. The parties are arrayed as per their own ranking before the trial Court.

3. The plaintiff filed the suit for recovery of a sum of Rs.12,88,125/- with subsequent interest at the rate of 15% per annum on the principal sum of Rs.9,00,000/- from the date of filing of the suit till its realization and to pay the cost of the suit. The case of the plaintiff is that she was selling clothes and organizing chits and also used to lend money for interest to trusted people. The defendant is her neighbor. She has also participated in a chit organized by the plaintiff. At the initial stage, the defendant was honest and prompt in her transaction with the defendant. The defendant purchased the property in which she was residing in the year 2003. Thereafter, further construction has also been made by the defendant. The defendant raised loan from the bank and also from third parties for putting up construction. The defendant agreed to sell two cents of land at Vembakkam at the rate of Rs.3,50,000/- per cent. As the defendant is the most trusted lady at that time, the plaintiff did not get any receipt for the amount. Similarly, the defendant has also raised a loan of Rs.2 lakhs from Panchatcharam Mudaliar of Ponneri and requested the plaintiff to stand as a surety. The plaintiff also executed a promissory note and the plaintiff had to settle the amount to the said Panchatchara Mudaliar as she stood as a surety to the defendant. To settle the said amount, the defendant has issued a cheque bearing No.877177 dated 26.07.2010 for a sum of Rs.9,00,000/-. When the said cheque was presented for encashment, the same was dishonoured on ground of 'insufficient funds'. Since, the plaintiff got oral information about dishonor of cheque, the plaintiff had lodged a complaint before the police station stating that the defendant has to pay a sum of Rs.6,25,000/- However, as the amount has not been paid, the present suit has been filed.

4. According to the defendant, she is a headmistress in a Government High School. The plaintiff is her neighbor. The plaintiff is running an unregistered chit and lending money to third parties. The defendant also joined the chit for Rs.1,00,000/- and monthly subscription payable is 2000/- for 50 months. The defendant became a successful bidder from the fourth month and signed some documents. This has happened in the year 2005 and 2006. Similarly, the defendant was also subscriber of various other chits and the plaintiff kept other documents as a security for the same. The plaintiff introduced instalments scheme for buying gold ornaments for which the defendant introduced many of her co-employees. The co-employees after getting the gold suspected the gold and returned the same to the defendant. The defendant has paid the monthly instalments regularly. Whereas, the plaintiff has claimed a sum of Rs.3,33,000/- to close the account. The defendant has also lodged a complaint with the Inspector of police, Ponneri and during enquiry, the defendant was forced to give a letter of undertaking to sell her house. Hence, disputed the suit claim.

5. On the basis of the above pleadings, the following issues have been framed for consideration in the suit :

1. Whether the plaintiff is entitled to claim Rs.12,88,125/- with subsequent interest from the defendant as claimed in the suit?

2. Is it correct that no consideration has been given by the plaintiff to the defendants over the suit document?

3. Whether the suit is bared by limitation?

4. To what other relief?

6. On the side of the plaintiff, plaintiff examined herself as P.W.1 and Ex.A.1 to Ex.A.8 marked. On the side of the defendant, defendant examined herself as D.W.1 and Ex.B.1 to B.4 have been marked. However, the trial Court has dismissed the suit mainly on the ground that Ex.A.2 to A.5 have been obtained in the police station and factum of running chit by the