The authenticity of documents and signatures is crucial in cases involving recovery of loans and dishonored cheques.

S. L. BHAYANA, J.

( 1 ) THIS is an appeal arising out of the order of the learned additional District and Sessions Judge, Delhi dated 29. 10. 2005 wherein the learned Trial Court has dismissed the application of the appellant for leave to defend the suit and has decreed the suit of the respondent/plaintiff. The brief facts of the case are that the plaintiff/respondent filed a suit for recovery of Rs. 3,88,000/- under the provisions of Section 37 of the Code of Civil Procedure. The plaintiff has alleged that the appellant/defendant had taken a friendly loan from the plaintiff in the sum of Rs. 3,00,000/- on 13. 8. 2002. The plaintiff had given a sum of Rs. 3,00,000/- in cash and the defendant executed and signed the receipt for the same. The defendant also gave an undertaking that he will return the said loan within a period of ten months w. e. f. 13. 8. 2002. The appellant/defendant also issued two post-dated cheques bearing Nos. 138230 and 144075 for Rs. 1,50,000/- each. Both the cheques were dated 13. 6. 2003. These cheques were drawn on State Bank of Hyderabad, Vikas Marg, Delhi in favour of the plaintiff. On 13. 6. 2003, the plaintiff presented these cheques with the bank for encashment but the said cheques were returned back unpaid with the remarks 'account Closed'. The plaintiff sent a legal notice under Section 138 of the Negotiable Instruments Act dated 19. 7. 2003 demanding the aforesaid amount from the appellant/defendant but despite service of the said legal notice, defendant did not make any payment to the plaintiff. The plaintiff thereupon filed a criminal complaint under Section 138 of the Negotiable instruments Act against the defendant which is pending in Karkardooma Courts. The plaintiff again served the legal notice dated 6. 10. 2004 on the defendant calling upon the defendant to make payment of Rs. 3,70,000/- which included Rs. 3,00,000/- as principle amount and Rs. 70,000/- as interest. The legal notice was duly served upon the defendant but the defendant did not make any payment to the plaintiff. Thereafter, the plaintiff filed a suit for recovery of Rs. 3,88,000/- against the defendant along with interest @ 18% per annum.

( 2 ) THE defendant was served with summons of the suit filed under Order 37 of the Code of Civil Procedure. The defendant put in his appearance before the court. The defendant also filed an application for leave to defend the suit. The application for leave to defend the suit filed by the defendant has been dismissed by the learned Trial Court and the suit of the plaintiff has been decreed.

( 3 ) WE have heard arguments advanced by learned Counsel for both the parties and have perused the record carefully. The Counsel for the appellant has stated that the blank signed cheques in question were lost from the custody of the appellant. Thereafter, he lodged the complaint with the police. He also gave information to the bank about the cheques having been lost. He has further stated that the cheques appeared to have been stolen by the respondent/plaintiff and have been used for filing the present suit for recovery against the appellant. He has further stated that the cheques in question on the basis of which the suit has been filed by the respondent/plaintiff are without any consideration. Learned Trial Court has not applied its mind and wrongly dismissed the application of the appellant for leave to defend the suit. The Counsel for the appellant has prayed that the impugned oider may be set aside and the appellant be granted permission for leave to defend the suit. On the other hand, learned Counsel for the respondent/plaintiff has submitted that the appellant and the respondent/plaintiff are known to each other for a long time. He has further stated that the appellant took a friendly loan of Rs. 3,00,000/- in cash from the respondent/plaintiff and he executed and signed receipt for having received the sum of Rs. 3,00,000/- in cash. The appellant also wrote an undertaking that the said lo