The presumption of a cheque being issued for a legally enforceable debt under Section 118 of the N.I. Act cannot be rebutted without sufficient evidence from the defendant.

J U D G M E N T

This appeal arises out of the judgment and decree in A.S No.147/2008 of the files of the Additional District Court, Thalassery, by which a decree for recovery of money granted in favour of the appellant in O.S No.96/2005 on the files of Sub Court, Payyannur, was reversed.

2. Brief facts necessary for the disposal of the appeal are as follows:-

2.1 The plaintiff sued the defendant for recovery of money on the strength of a cheque No.490429 drawn in his name. The plaintiff contended that, for establishing a super market the defendant was in short of money and therefore the plaintiff had advanced an amount of Rs.1,50,000/- and as a security for the same, a cheque was given. When the cheque was sent for collection, the same was returned with an endorsement ‘in sufficient fund’. The defendant resisted the suit and contended that there is no privity of contract between the plaintiff and the defendant and that the defendant had financial transaction with the son in law of the plaintiff, namely Pavithran and that three cheques and some signed blank stamp papers were entrusted to the said Pavithran and later the liability was discharged and the daughter of the plaintiff had issued discharge receipts. On behalf of the plaintiff, Exts.A1 to A5 documents were produced and PW1 was examined. On behalf of the defendant, Exts.B1 to B4 documents were produced and DW1 and DW2 were examined.

2.2 The trial court on appreciation of oral and documentary evidence came to the conclusion that a presumption is attached to Ext.A1 cheque and that the presumption is not rebutted satisfactorily by the defendant. The plea of discharge based on Exts.B1, B2 and B4 were negated on the ground that the plaintiff had denied the execution of Exts.B1, B2 and B4 by his daughter. Thus finding that the signatures as well as the writings in Ext.A1 cheque is of similar nature, the suit was decreed. Aggrieved, the defendant filed A.S No.147/2008. The First Appellate Court on re-appreciation of evidence came to the conclusion that the handwriting in the cheque and also the writings in the cheque are not similar and further went on to hold that going by Exts.B1 and B2, the defendant had satisfactorily rebutted the presumption under Section 118 of the Negotiable Instruments Act, 1881 (for short ‘N.I. Act’). Accordingly, reversed the judgment of the trial court by dismissing the suit and hence the present case.

3. On 27.10.2017, while admitting the appeal this Court framed the following substantial questions of law:-

(1) Has not the lower appellate court gone wrong in dismissing the suit, in the absence of sufficient evidence from the part of the defendant to rebut the presumption available to the plaintiff under Section 118 (a) of the N.I. Act.

(2) Has not the lower appellate court gone wrong in placing reliance on Exts.B1 and B2, when the same were not properly proved?

4. Heard Shri.Mrinal Chand, the learned counsel appearing for the appellant and Shri.O.V.Maniprasad, the learned counsel appearing for the respondent.

5. Shri.Mrinal Chand, the learned counsel for the appellant pointed out that inasmuch as the signatory of Exts.B1,B2 and B4 was not examined by the defendant and further that the son in law of the plaintiff with whom the defendant had a financial transaction having not been examined, the plea of discharge under Exts.B1, B2 and B4 stood unproved, the said aspects have been correctly appreciated by the trial court. At any rate, it is contended that the presumption available to a negotiable instrument drawn in terms of Section 118 of the N.I. Act, 1881, has not been satisfactorily rebutted, the judgment