The court upheld the dismissal of the suit for failing to prove a valid loan transaction and that manipulations on the cheque rebutted legal presumptions of liability under the Negotiable Instruments Act.

5(iii) Defendant has though not disputed his signature over the cheque but he has explained the circumstances in which the cheque was handed over to the plaintiff. His defence is that his father in the year 2004 had borrowed an amount of `30,000/- from the plaintiff and in lieu of this loan, a blank cheque, signed by him, was handed over by his father to the plaintiff. Though the loan amount of `30,000/- was cleared by his father, however, the cheque was not returned by the plaintiff despite repeated demands. It is this cheque, which has been misused by the plaintiff in instituting the civil suit by filling-in wrong and manipulative details. In the facts of instant case where there are apparent manipulations on the cheque then due execution of a cheque would not only require proof of handing over of a blank signed cheque but the fact that the cheque was handed towards a legally enforceable liability also has to be proved. Plaintiff has failed to prove any legally enforceable liability of defendant towards him. The complaint instituted by him against the defendant under Section 138 of the Negotiable Instruments Act regarding the same cheque was dismissed by learned Judicial Magistrate Ist Class, Court No. 1, Rohru, District Shimla vide judgment dated 23.8.2011. There is no averment in the appeal about any challenge to the judgment dated 23.8.2011. On the basis of same cheque, present civil suit for recovery of amount has been instituted. There is difference in civil and criminal proceedings based on a cheque. In civil Court, plaintiff is required to prove his claim on the basis of evidence to be adduced in support of his claim for recovery of the amount due. In this regard, it will be apposite to refer following para of (2019) 10 SCC 287, titled Uttam Ram versus Devinder Singh Hudan and another :

“20. The Trial Court and the High Court proceeded as if, the appellant is to prove a debt before civil court wherein, the plaintiff is required to prove his claim on the basis of evidence to be laid in support of his claim for the recovery of the amount due. A dishonour of cheque carries a statutory presumption of consideration. The holder of cheque in due course is required to prove that the cheque was issued by the accused and that when the same presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability.”

In the backdrop of facts of instant case as pleaded and the evidence led by the parties, both the learned Courts below were justified in holding that there were suspicious circumstances regarding the execution of the cheque. Plaintiff has failed to prove his alleged transaction with the defendant. Therefore, liability cannot be fastened on the defendant on mere statement of plaintiff when presumption attached to the cheque under Sections 118 and 139 of the Negotiable Instruments Act has been effectively rebutted by the defendant. Question is answered accordingly.

6. Second Point: Applicability of the H.P.

Registration of Money Lenders Act, 1976.

Learned Senior Counsel for the appellant argued that there was no evidence before the learned Courts below to apply The Himachal Pradesh Registration of Money Lenders Act, 1976 (hereinafter referred to as the ‘Act’) to the facts of the case to hold that the suit was not maintainable.

6(i) In his written statement, the defendant had pleaded that plaintiff was engaged in 42 criminal and civil proceedings against various persons for recovery of money. Lending of money was alleged to be plaintiff’s profession. A preliminary objection was also raised in the written statement that plaintiff was not entitled to file the suit in view of provisions of the Himachal Pradesh Registr