In a recent ruling, Justice Sathish Ninan of the Kerala High Court stated that when a cheque is issued as security, it becomes eligible for presentation upon default when the payment is due. The court further emphasized that in cases where the amount remains unpaid, the plaintiff is obliged to present the cheque for payment.
The presentation of the cheque is solely to enforce security. The Court was deliberating on the appeal filed by a plaintiff who had initiated a lawsuit in the lower court concerning a dishonored cheque and a claim for money.
Brief Facts:
The second defendant, the first defendant's wife, borrowed Rs. 5,50,000/- from the plaintiff in March 1995. They were friends and coworkers in Saudi Arabia. The loan was supposed to be repaid within three months, but it wasn't. To provide security, the first defendant issued a post-dated check for Rs. 5,50,000/-, but the amount remained unpaid. When the check was presented, it bounced. Consequently, the plaintiff filed a lawsuit. The first defendant admitted to borrowing Rs. 50,000/- but argued that the plaintiff had filled out the check without authorization, rendering it unenforceable. The defendants requested the dismissal of the suit. The trial court found that it lacked territorial jurisdiction and that the plaintiff failed to prove the payment of Rs. 5,50,000/-. Thus, the suit was dismissed.
Contentions of the Applicant:
The applicant argued that the suit is one regarding a dishonored cheque.
Contentions of the Respondent:
The Defendant argued that since no notice was given for the dishonour of the cheque, the lawsuit was not valid. Furthermore, the Defendant claimed that the Plaintiff was given a blank cheque solely as security, and it was the Plaintiff who filled in the amount without authorization, making the cheque unenforceable.
Observations by the Court:
The High Court disagreed with the trial court's opinion that it lacked territorial jurisdiction to hear the case regarding the dishonored cheque. The High Court stated that since the cheque was presented and dishonored within the trial court's jurisdiction, it had the authority to handle the lawsuit. Additionally, the court highlighted that if the trial court truly lacked jurisdiction, it should have returned the plaint under Order VII Rule 10 of the Code of Civil Procedure. However, the defendant did not raise any specific objection regarding territorial jurisdiction, as required by Section 21(1) of the Code of Civil Procedure. Furthermore, the trial court did not raise the issue of territorial jurisdiction during the trial and solely focused on determining the correct amount due to the plaintiff.
“So also, the defendant had not raised a specific contention regarding lack of territorial jurisdiction. In terms of Section 21(1) of the Code of Civil Procedure, objections with regard to territorial jurisdiction is to be raised at the earliest possible opportunity, and in all cases where issues are settled, at or before such settlement. That apart, the trial court had not even raised an issue with regard to the territorial jurisdiction. The only issue that was raised for trial was, “What is the correct amount due to the plaintiff?”. Further, even if the court found that it did not have jurisdiction to entertain the suit, the plaint should have been returned in terms of Order VII Rule 10 of the Code of Civil Procedure. Anyhow, as held earlier, the court was not right in having held that it lacks territorial jurisdiction to entertain the suit.”
Consequently, the court overturned the trial court's decree and judgment, granting the plaintiff a decree to recover Rs. 5,50,000/- along with 6% annual interest from the date of the appeal until the date of the decree.
The decision of the Court:
The decree and judgment of the trial court was set aside.
Case Name: Ashok Kumar V. Sankarankutty Pillai
Coram: Hon’ble Mr. Justice Sathish Ninan
Case No.: RFA NO. 390 OF 2003
Advocate of the Applicant: Advs. P Parameswaran Nair, Sreelatha Parameswaran Nair, T S Sarath, Uma
Advocate of the Respondent: Sr. Adv. O V Radhakrishnan, Advs K Radhamani Amma, Antony Mukkath
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