In a civil suit for recovery based on a dishonored cheque, once the execution of the cheque is admitted by the defendant, the burden of proof shifts to the defendant to explain the circumstances of its issuance and rebut the presumption of liability.

O R D E R

1. Regular Second Appeal under Section 100 of the CPC has been filed on behalf of the Appellant, to challenge the Judgment dated 23.12.2024 of the learned District Judge, which upheld the Judgment and Decree dated 26.08.2023 of learned Civil Judge decreeing the Suit for Recovery of Rs.2,20,000/- along with interest.

2. It was submitted in the Plaint that the Plaintiff and Defendant/Appellant had good relationship. In the end of October, 2016 on the request of Defendant, Plaintiff could arrange Rs.1,80,000/- which he paid to the Defendant on an undertaking by him that he would return the money in four monthly instalments. Thereafter, the Appellant again approached him in the month of November, 2016 to pay another sum of Rs.40,000/- and he undertook to repay the entire amount of Rs.2,20,000/- by the end of March, 2017. However, the Defendant failed to pay the loan amount. He then issued a Cheque bearing No.137946 dated 17.03.2017 of Rs.2,20,000/- drawn on Central Bank of India, New Delhi, which on presentation in Corporation Bank, Sushant Lok, Gurgaon on 18.03.2017 was returned unpaid for “funds insufficient”. On the assurance of the Appellant, the Plaintiff again presented the Cheque on 02.06.2017, but it was again dishonoured vide Return Memo dated 03.06.2017 with the remarks “funds insufficient”. The Plaintiff sought the money, but the Defendant failed to pay.

3. Consequently, the Suit for Recovery of Rs.2,20,000/- along with pendente lite and future interest @ 12% per annum was filed.

4. The Appellant in his Written Statement took the preliminary objection that he had given a sum of Rs.50,000/- to the Plaintiff and the Suit has been filed only to dissuade the Appellant from claiming his Rs.50,000/-. It was denied that he had ever taken a loan of Rs.2,20,000/- and further asserted that no Legal Notice for recovery had ever been served upon him.

5. The Defendant explained that he had friendly relationship with the Respondent through Latif Sukhdev Alam and the Plaintiff induced the Appellant to invest the money for purchase of land of which they would have been the beneficiary. Consequently, because of the friendly relationship, Defendant had given Rs.50,000/- to the Plaintiff on an assurance that the money would be returned after two months. Appellant met the Plaintiff and sought the return of his money, but he avoided on one pretext or the other. Again, in March, 2019 Defendant demanded the money, but the Plaintiff refused to return.

6. On merits, it has been denied that he had taken a loan of Rs.2,20,000/- as claimed by the Plaintiff. He further explained that on persistent requests of the Plaintiff, the Defendant on 17.03.2017 issued Cheque No.137946 for Rs.2,20,000/- drawn on Central Bank of India, South Extension Branch, New Delhi towards the repayment of the entire loan amount. It is denied that the Cheque on presentation was dishonoured with the remarks “funds insufficient”. It was denied that the Cheque had been issued for any legally enforceable liability. It was thus, submitted that the Suit be dismissed.

7. The Plaintiff in the Replication reiterated his claim.

8. The Plaintiff examined himself as PW1 and deposed about the contents of the Suit and reiterated that he had given a loan of Rs.2,20,000/- for which a cheque dated 17.03.2017 was issued by the Defendant, which on presentation got dishonoured.

9. PW2 Uttam Sanapoti was a witness to the loan of Rs.2,20,000/- being given by the Plaintiff to the Defendant in his presence in two instalments of Rs.1,80,000/- and Rs.40,000/-. He also was a witness to the cheque given by the De