J U D G M E N T

By way of instant appeal, appellant has assailed judgment and decree dated 17.7.2002, passed by learned Additional District Judge, Sirmaur District at Nahan, H.P. in Civil Suit No. 1-N/1 of 2001/1998, whereby the suit of the appellant has been dismissed.

2. The parties herein shall be referred by the same status, which they held before the learned trial Court i.e.

appellant as plaintiff and the respondent as defendant.

3. Plaintiff filed a suit for recovery of Rs. 3,91,984/- along with interest pendente lite and future before the learned District Judge, Sirmaur at Nahan under Order XXXVII of the Code of Civil Procedure (for short, the Code). According to plaintiff, defendant had borrowed a sum of Rs. 2,30,000/- from him in August, 1995 with a promise to return the said amount till December, 1995. Defendant had issued two post dated cheques dated 10.10.1995 and 5.12.1995 in the sums of Rs. 1,30,000/- and 1,00,000/- respectively, both drawn on State Bank of Patiala, Industrial Branch, Yamunanagar, Haryana. These cheques were issued with assurance that the cheques would be honoured on presentation. However, when the cheques were presented, those were dishonoured and remained unpaid, forcing the plaintiff to file the suit. Plaintiff also claimed interest at the rate of 24% per annum on the premise that the defendant had agreed to pay such sum of interest in case he failed to pay the amount within the agreed period.

Accordingly, a sum of Rs. 1,61,984/- was calculated towards interest and by adding the same to principal amount of Rs.

2,30,000/-, the suit amount was calculated at Rs. 3,91,984/-.

4. Defendant entered appearance on 7.12.1995 and on the same day, notice of summons in Form 4 A in ‘Appendix B’ of the Code was served upon the defendant through his counsel. Accordingly, defendant filed an application under Order XXXVII Rule 3 of the Code, seeking leave to defend on the ground that the cheques, on the basis of which, the suit was filed were not issued in favour of plaintiff. Defendant specifically denied receipt of any amount as loan from the plaintiff. He also asserted that the cheques were without consideration. As per defendant, the cheques were issued as security cheques on the asking of Sh. C. N. Chaudhary, father of plaintiff, who was dealing in steel Products. Since the defendant wanted to have business transactions with Sh. C.N. Chaudhary, therefore, in order to ensure the regular payments, defendant had issued security cheques. The cheques were issued in the name of plaintiff on the asking of Sh. C. N. Chaudhary. Defendant thus denied the allegations in the plaint and existence of any liability towards plaintiff.

5. Plaintiff contested the application of defendant, seeking leave to defend. The learned trial Court allowed the application of defendant and granted him leave to defend the suit in favour of defendant vide order dated 21.2.2000 and framed the following issues:

“1) Whether the suit U/O 37, Rule 2, CPC, by the plaintiff is not maintainable, as alleged. OPD

2) Whether the summons in Form IV-A in Appendix-B of the CPC have not been served upon the defendant in accordance with law, as alleged. OPD.

3) Whether the cheques dt. 5-12-1995 for Rs.

1,00,000/- and dt. 10-10-95 for Rs. 1.30 lac issued by the defendant have been without consideration.

OPD

4) Whether this court has no jurisdiction, as alleged.

OPD.

5) Relief.”

6. Defendant examined himself as his own witness (DW-2). He has also summoned and produced the records of Income Tax Returns of the plaintiff through DW-1. The cheques, on the basis of which, the suit was filed were exhibited as Ext. P-1 and Ext. P-2. Previous statement of plaintiff in proceedings under Section 138 of the Negotiable Instruments Act, 1881, recorded in the Court of Judicial Magistrate, 1st Class was proved as Ext. DX.

7. Plaintiff examined himself as his own witness in rebuttal and closed the evidence.

8. Learned Additional District Judge, Sirmaur at Nahan dismissed the suit of the p