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J&K High Court Rules Non-Presentation of Cheque Does Not Bar Ordinary Recovery Suit
Sets Aside Trial Court's Order, Directs Conversion of to Ordinary Money Suit
The has held that the failure to present a cheque does not extinguish the underlying debt, ruling that a plaint disclosing a loan transaction and subsequent refusal to repay constitutes a for a regular money recovery suit. The bench of Justice Shahzad Azeem set aside a trial court order that had rejected a plaint under in a under .
The Underlying Debt Lives On
The case arose from a friendly loan of ₹5 lakh extended by appellant Sheikh Ghulam Hassan to respondent Mohammad Amin Dar for the performance of Hajj by his father. In partial discharge, the respondent issued a cheque for ₹4 lakh in , promising to pay the remaining ₹1 lakh in cash. The appellant, trusting assurances from the respondent mediated by respectable persons, agreed not to present the cheque. When the cheque expired, the respondent allegedly refused to repay the amount.
The appellant filed a suit under for recovery of ₹4 lakh. The respondent sought , raising including a pending counterclaim of ₹24.76 lakh and allegations of forged signatures. Before the leave application could be considered, the respondent objected to the suit's maintainability on the ground that the stale, unrepresented cheque disclosed no .
A Drastic Remedy Not Appropriate
The Trial Court accepted that objection, holding that under , a suit based on a cheque is maintainable only if the cheque was presented and dishonoured. It rejected the plaint under Order VII Rule 11 CPC, citing precedents including and .
While the High Court affirmed the legal principle that summary suits under Order XXXVII require
, it critically examined the Trial Court's application of Order VII Rule 11.
"Rejection of suit under Order 7 Rule 11 of CPC in such circumstances is a drastic course and should be resorted only when no
whatsoever is disclosed,"
the court observed.
Balancing Summary and Ordinary Procedures
The High Court noted that the plaint, read as a whole, disclosed three key averments: advancement of a ₹5 lakh loan, issuance of a ₹4 lakh cheque as acknowledgment of debt, and subsequent refusal to repay. These elements, the court held, constitute a complete for a regular money recovery suit.
"Even if the finding of the Trial Court that the suit is not maintainable under Order XXXVII is accepted, the appropriate course was to convert the suit into an
rather than to reject the plaint outright,"
the judgment stated.
The court emphasized that conversion preserves the suit and enables , whereas rejection forces the plaintiff to institute a fresh suit subject to limitation. Given that the respondent had already appeared and raised serious , the Trial Court ought to have ordered the suit to proceed as an ordinary suit.
The Final Verdict
Justice Shahzad Azeem set aside the dated , restored the suit to its original number, and directed that it be tried as an . The respondent was granted four weeks to file a written statement, and both parties were ordered to appear before the Trial Court on .
The ruling underscores the principle that technical procedural errors should not extinguish substantive claims, and that courts must ensure that no party is left remediless when a civil wrong is alleged.
