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2004 DIGILAW 484 (KER)

Thomas @ Tomy v. K. C. Thomas

2004-10-09

A.K.BASHEER, S.SANKARASUBBAN

body2004
Judgment :- Sankarasubban, J. This appeal is preferred by the defendant in O.S.No.63 of 1999 of the Sub Court, Thodupuzha. Respondent is the plaintiff. The suit was filed for recovery of an amount of Rs.4,50,000/- with interest thereon. The case of the plaintiff is as follows: 2. The plaintiff is an Agriculturist. He is having rubber plantation. He sells the rubber to the defendant, who stores it and sells it at Kochi. The dealing has been going for a long time. The practice is that whenever the quantity of rubber is entrusted to the defendant, a slip will be given by the defendant showing the quantity as well as the price and later on, on producing the slip, the amount will be given. According to the plaintiff, the amount under two slips is due to the plaintiff. Those slips are produced as Exts.A1 and A2 and the value of those slips together comes to Rs.1 lakh and odd and the rubber was sold in 1994. There is another case for the plaintiff that the defendant has borrowed an amount of Rs.68,000/personally in 1994. Even though many times the plaintiff demanded the amount from the defendant, he did not pay the same. Ultimately, at the instance of the mediators, a cheques for Rs.4,50,000/- was issued by the defendant to the plaintiff taking into account the entire amount due to the plaintiff as well as the interest thereon. When the cheques was presented, it was dishonoured. Thus, the suit was filed for recovery of Rs.4,50,000/- with interest thereon. 3. The defendant filed a written statement. In the written statement, the transaction with the plaintiff is denied. He also denied that he took a loan of Rs.68,000/-. It is further stated that there was a practice on the part of the defendant of keeping signed cheques. The building in which the defendant’s shop is housed was trespassed by one Thomas and took away the valuables from it. This included cheques leaves and those cheques would have been made use of by the plaintiff. At the time when the cheque was alleged to be executed, the claim had become barred by limitation and hence, even if the cheques is issued, it cannot be legally enforced. 4. On the basis of the above pleadings, necessary issues were raised by the court below. At the time when the cheque was alleged to be executed, the claim had become barred by limitation and hence, even if the cheques is issued, it cannot be legally enforced. 4. On the basis of the above pleadings, necessary issues were raised by the court below. Exts.A1 to A10 were marked on the side of the plaintiff and Exts.B1 to B6 were marked on the side of the defendant. On the side of the plaintiff, PWs 1 and 2 were examined. PW1 is the plaintiff and DWs 1 and 2 were examined on the side of the defendant to show that the defendant owes money to the plaintiff. DW1 is the defendant himself and DW is one T.K. Lal, who was the Accountant of the defendant. The court below found that the plea set up by the plaintiff is correct. Thus, a decree was passed for Rs.4,50,000/- with interest thereon at 6% per annum. 5. We heard learned senior counsel Sri. S.V.S. Iyer for the appellant and learned counsel Sri. K. Jayakumar for the respondent. 6. Learned counsel for the appellant submitted that there is no evidence to show that the plaintiff had transaction with the defendant. The slips cannot be lawfully accepted as evidence for any transaction. Learned counsel submitted that amounts are due in 1994 and hence, the claim is barred by limitation. On the other hand, learned counsel for the respondent submitted that Section 25(3) of the Contract Act enables the plaintiff to show that if there is promise in writing, that is a good claim and the bar of limitation cannot be applied for the same. 7. We went through the records in the case. So far as the question of transaction is concerned, we find that Exts.A1 and A2 slips were issued. The execution of Ext.A1 is admitted by the defendant. So far as Ext.A2 is concerned, it is signed by DW2. We agree with the lower court in finding that Exts.A1 and A2 are issued by the defendant. So far as the issue of cheques is concerned, the case set up by the defendant is that he signed cheques leaves. There was a trespass in his building by the owner and took away the valuable records including the cheques and those cheques might have been misused by the plaintiff. We don’t find any evidence for this. So far as the issue of cheques is concerned, the case set up by the defendant is that he signed cheques leaves. There was a trespass in his building by the owner and took away the valuable records including the cheques and those cheques might have been misused by the plaintiff. We don’t find any evidence for this. Even though, as already stated by the court below, the records were taken away from the shop room, it did not include the cheques leaves. Hence, that part of evidence cannot be believed. Hence, we have to assume that the cheques were legally issued by the defendant. 8. The next question is whether the issuance of the cheques shows the liability on the part of the defendant. As we have already stated, Exts.A1 and A2 show the liability on the part of the defendant to pay the amount to the plaintiff. The amount stated in the cheques includes not only the value of the rubber, but also an amount of Rs.68,000/-, which is said to be taken as loan from the plaintiff and further includes other amounts including interest. It goes without saying that if the execution of the negotiable instrument is admitted under Section 118 (1) of the Negotiable Instruments Act, there is a presumption of passing of the consideration. There is no presumption regarding the exact amount is shown in the negotiable instrument. 9. I Kundan Lal Rallaram – Custodian, Evacuee Property, Bombay – A.I.R. 1961 Supreme Court 1316, it was held by the Supreme Court thus: “Section 118 lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder a court shall presume, inter alia, that the negotiable instrument or the endorsement was made or endorsed for consideration. In effect it throws the burden of proof of failure of consideration on the maker of the note or the endorser, as the case may be”. It is further stated in that judgment as follows: “A plaintiff who says that he had sold certain goods to the defendant and that a promissory note was executed as consideration for the goods and that he is in possession of the relevant account books to show that he was in possession of the goods sold and that the sale was effected for a particular consideration should produce the said account books. If such a relevant evidence is withheld by the plaintiff, S.114, Evidence Act enables the Court to draw a presumption to the effect that, if produced, the said accounts would be unfavourable to the plaintiff. This presumption, if raised by a court, can under certain circumstances rebut the presumption of law raised under S.118 of the Negotiable Instrument Act”. A Division Bench of this Court in a case reported in Ramakrishnan v. Parthasaradhy – 2003 (2) K.L.T. 613, held thus: “When a person issued a cheques, he acknowledge his liability to pay – In the event of the cheques being dishonoured on account of insufficiency of funds, he will not be entitled to claim that the debt had become barred by limitation and that the liability was not thus enforceable”. The judgment further says as follows: “Thus, we are of the opinion that when a person writes, signs and delivers a cheques to another it is in acknowledgement of a legally enforceable liability. Thereafter, if the cheques is dishonoured on account of insufficiency of funds such a person shall not be entitled to plead that at the time of his writing the cheques the claim had become barred by limitation and thus, he is not liable to be punished under S.138. Under S.25(3), a promise can be made even in a case where the limitation for recovery of the amount has already expired. Such a promise has to be in writing”. In view of the above decisions, it cannot be said that the cheques is not enforceable. But this is a case where both sides adduced evidence. But there is nothing to show regarding the oral loan. The plaintiff when examined merely says that Rs.68,000/- was given. This part of the consideration is not proved. So also, how the total amount of Rs.4,50,000/- was arrived at is not seen. One of the mediators should have been examined to show how this amount was arrived at. Thus, the consideration is proved only for an amount of Rs.1,73,011/- (1,35,953 + 37,058). The date of Ext.A3 is 26.4.1999. Out of this amount, it is admitted that Rs.15,000/- has been paid to the defendant. So the actual amount is only Rs.1,58,011. 10. One of the mediators should have been examined to show how this amount was arrived at. Thus, the consideration is proved only for an amount of Rs.1,73,011/- (1,35,953 + 37,058). The date of Ext.A3 is 26.4.1999. Out of this amount, it is admitted that Rs.15,000/- has been paid to the defendant. So the actual amount is only Rs.1,58,011. 10. In the result, the judgment and decree of the court below are modified and a decree is given to the plaintiff for an amount of Rs.1,58,011/- with interest thereon at 12% per annum from 26.4.1999 till date of recovery. Appeal is disposed of as above.