Sh. Dharshan Singh And Anr. vs Sh. Avtar Singh
2002 Latest Caselaw 1160 Del

JUDGMENT

A.K.Sikri, J.

1. The plaintiff has filed suit for recovery of Rs. 7,36,000/- under the provisions of Order xxxvII of the Code of Civil Procedure. The suit is based on the averments that the plaintiff had advanced a sum of Rs. 4,00,000/- to the defendant out of which Rs. 85,000/- were given by way of cheque and a sum of Rs. 3,15,000/- was given in cash. Out of this Rs. 4,00,000/- the plaintiff No. 1 had given Rs. 2,OO,000/- and likewise the plaintiff No. 2 gave balance sum of Rs. 2,00,000/-. It was agreed that the defendant shall pay interest at the rate of 36% P.A. and it was a short term loan given for a period of one year on the condition that the monthly interest of Rs. 12,000/- each would also be paid. The defendant in order to secure the said loan and ensure repayment issued a post-dated cheque in the sum of Rs. 4,00,000/- bearing No. 786085 dated 16,5.1997 drawn on Haryana State Co-operative Apex Bank Ltd., Chandigarh towards the repayment of the principal amount. He also issued 5 post-dated cheques of Rs. 12,000/- each bearing No.786086, 786087, 786088, 786089 and 786090 dated 16.06.1996, 16.07,1996, 16.08.1996, 16.09.1996, 16.10.1996 respectively representing interest which was payable on this loan. Cheques dated 16.06.1996, 16.07.1996, 16.08.1996, 16.09.1996 were presented for payment on due dates and were honoured. However, when cheque dated 16.10,1996 was presented it was returned back with the remarks "Account Closed". The plaintiff intimated the defendant about the return of the unpaid cheque. However, the defendant did not give any response. Subsequently, the wife of the plaintiff No. 2 wrote letter dated 23.07.1.997 to the Police Authorities complaining about the aforesaid act of the defendant but no action was taken by the police. The plaintiff No. 1 also approached one of the acquaintances of the defendant for prevailing upon the defendant to make payment of the aforesaid loan. Even this did not yield any result. The plaintiffs also tried to persuade the defendant to make payment by adopting various legitimate means. However, when it was realised that the defendant would not make the payment, the present suit was filed under Order xxxvII of the Code of Civil Procedure.

2. It is stated in the plaint that the defendant was 1iable to pay the interest of Rs. 48,000/- up to 16.5.1997 and Rs. 2,88,000/- from 16.5.1997 till the date of filing of the suit. In this manner the plaintiff is claiming a decree in the sum of Rs. 7,36,000/- in his favor.

3. The defendant has contested the suit on receiving summons for judgment. IA.2586/2001 has been filed by the defendant seeking leave to defend the suit. The plaintiff has filed reply thereto to which the defendant has filed rejoinder. Arguments were heard at length on this application which is subject matter of the present order.

4. In the application for leave to defend it is alleged by the defendant that the plaintiffs have filed a false and fabricated suit for recovery of Rs. 7,36,000/- on the basis of fabricated cheque which is without any consideration as there was no oral agreement between the plaintiffs and the defendant for making the aforesaid payment of Rs. 4,00,000/- on any account whatsoever. It is alleged that the defendant did not receive any amount as a short term loan as alleged by the plaintiffs in two parts of Rs. 85,000/- by way of cheque and Rs. 3 ,15,000/- in cash. In fact, the defendant received only Rs. 83,000/- from plaintiff No. 1 as a friendly loan without interest and which was to be refunded on monthly basis of Rs. 12,000/- till the entire amount is refunded. For refund of the same 5 cheques in advance amounting to Rs. 12,000/- each were given to the plaintiff No. 1 by the defendant and the rest of Rs. 23,000/- was to be paid in cash. The plaintiff No. 1 just to secure his payment obtained a blank cheque from the defendant which was not to be used and was to be returned when the entire payment is made to the plaintiff No. 1. It is absolutely incorrect that a cash of Rs. 1,15,000/- was given by plaintiff No. 1 and another sum of Rs. 2,00,000/- were given by the plaintiff No. 2 to the defendant. No such payment was ever received by the defendant from the plaintiffs. It is further submitted that out of the 5 cheques of Rs. 12,000/- each issued by the defendant to the plaintiff No. 1, four cheques were encashed and the plaintiff No. 1 realised and received the payment of Rs. 48,000/- by encashing those cheques and rest of Rs. 35,000/- was paid to the plaintiff No. 1 by the defendant in cash when he visited the defendant at Chandigarh some time in June or July, 1997. After returning the above said interest free loan of Rs. 83,000/- to the plaintiff No. 1, the defendant requested the plaintiff No. 1 to return the blank cheque No. 786085 dated 16.5.1997 to the defendant which the plaintiff No. 1 avoided on the pretext that the same is not readily available and assured the defendant that it would be returned to the defendant positively. The said cheque has not been returned to the defendant till date and has been misused and fabricated for filing the present suit against the defendant.

5. It is thus the case of the defendant that only a sum of Rs. 83,000/- was taken as loan which has been repaid. No interest was payable on this amount and no amount of Rs. 1,15,000/- and Rs. 2,00,000/- in cash were received from plaintiffs No. 1 and 2. The plaintiffs have fabricated cheque No. 786085 dated 16,5,1997 drawn on Haryana State Co-operative Apex Bank Ltd., Chandigarh and, therefore, there is no cause of action to file the present suit. According to the defendant the present suit has been filed malafide and with the ulterior motives to harass the defendant who is a outsider and to extract some money from him without any reason.

6. Apart from the aforesaid defense taken on Merit, it is contended that this Court has no territorial jurisdiction to entertain the present suit as the defendant resides in Chandigarh and the cause of action also arose outside the territorial limits of this court. The defendant accordingly submits that there are sufficient friable issues warranting unconditional leave to contest the suit. At the time of arguments, Mr. H.P. Sharma, learned counsel for the defendant also took the plea that the plaint in the present suit was signed by plaintiff No. 1 and the suit was filed by him for himself and on behalf of plaintiff No. 2, However, such a suit was not competent as plaintiff No. 1 had no authority to file the suit on behalf of plaintiff No. 2,

7. I have given utmost consideration to the submissions of the counsel for the parties and gone through the records. We may note the admitted facts first. The defendant does not deny the receipt of the cheque in the sum of Rs. 83,000/-. The defendant also does not deny that he gave 5 post-dated cheques for Rs. 12,000/- each. He also does not deny that cheque bearing No. 786085 dated 16.5.1997 from his cheque book relating to the same account from where other 5 post-dated cheques of Rs. 12,000/- each were issued. However, he disputes having given this cheque to the plaintiffs. According to him the plaintiffs have fabricated this cheque. Although according to the plaintiffs 5 post-dated cheques of Rs. 12,000/- each were given by the defendant to the plaintiffs representing interest, according to the defendant these cheques are towards repayment of principle-amount of Rs. 83,000/- as according to the defendant only a loan of Rs. 83,000/- was taken by him and no amount in cash was given to him. In the circumstances of the present case the story putforth by the defendant does not inspire any confidence and the defense is not bonafide but appears to be sham. I am forced to hold this opinion, in view of the following formidable facts and circumstances staring at the face of the case:

A. The defendant admits having received Rs. 83,000/- which was given to him by means of cheque. The explanation of the defendant is that amount of Rs. 83,000/- was to be paid back in the form of 5 cheques of Rs. 12,000/- each and the balance of Rs. 23,000/- was to be paid in cash. The explanation given by the defendant for giving the alleged blank cheque is that it was given to secure the payment of Rs. 23,000/- which was to be paid in cash. This does not inspire any confidence. If the defendant had received Rs. 83,000/- from plaintiff No. 1 by means of cheque, while making the payment why only Rs. 60,000/- was paid in cheque and Rs. 23,000/- was to be paid in cash. Moreover, even if the payment of Rs. 23,000/- was to be secured as contended by the defendant why the blank cheque was required? Any prudent person with little common sense would have given a cheque for Rs. 23,000/- in stead of blank cheque, if it was to be given as security.

B. As already mentioned above, if the defendant had received only a sum of Rs. 83,000/- (and not the cash amount as alleged by the plaintiffs) there was no reason to give 5 cheques for Rs. 12,000/- each representing Rs. 60,000/-. If the purpose was to secure the amount of Rs. 83,000/- when the payment was made in cheque, the plaintiffs would have expected and the defendant would have paid in normal circumstance, this amount by means of cheques only. Further if t he

purpose of giving post-dated cheques was to secure this loan amount, the defendant would have given cheques for the entire amount of Rs. 83,000/- and not just 5 cheques of Rs. 12,000/- each.

C. The explanation that after 4 cheques were encashed, the defendant paid balance amount of Rs. 35,000/- in cash when the plaintiff No. 1 visited the defendant at Chandigarh some time in June, 1997 is also clearly an after thought. The defendant knew fully well that loan in question was received by him by means of account payee cheque. He would not have paid Rs. 35,000/- without taking back 5th cheque of Rs. 12,000/- and alleged blank cheque. The least which was expected that the defendant would get a receipt for payment of Rs. 35,000/- in cash. No such plea is taken or receipt is filed on record. Furthermore, the defendant alleges that the plaintiff No. 1 was asked to return the cheque subsequently which the plaintiff No. 1 avoided. There is no request for returning the 5th cheque of Rs. 12,000/-. Why such a request was not made when the payment was made in fu11 is not explained above.

D. The another fact which clinches the entire issue and exposes the falsity of the stand taken by the defendant regarding alleged blank cheque is that cheque in the sum of Rs. 4 lakhs is written in the handwriting of the defendant himself. It is apparent to the naked eye. The handwriting in which 5 cheques of Rs. 12,000/- each are written is of the same person who has written the disputed cheque of Rs. 4 lakhs. Out of those 5 cheques, we have on record 5th cheque dated 16.10.96 which is in the same handwriting. The learned counsel for the plaintiffs at the time of arguments had vehemently highlighted this point and the counsel for the defendant did not dispute the same.

E. It is also not explained as to why and under what circumstances the defendant closed his account with the Haryana State Co-operative Apex Bank Ltd. from which the cheques in question were issued, It shows that this is also a circumstance which calls against the defendant and adverse inference can be drawn against him.

8. Once we come to the conclusion that cheque No. 786085 in the sum of Rs. 4 lakhs was in fact written by t he defendant himself and given by him to the plaintiffs, the entire story putforth by the defendant falls flat. It is thus clear that the defendant has given a cheque for Rs. 4 lakhs. In that view of the matter, it cannot be believed that only Rs. 83,000/- was received by the defendant. This lends credence to the version of the plaintiffs that remaining amount was paid in cash. Furthermore, although this cheque of Rs. 4 lakhs is the first cheque in the series of six cheques, the date of this cheque is 16.5.1997 whereas other 5 post dated cheques bear dates of 16.06.1996, 16.07.1996, 16.08.1996, 16.09.1996, 16.10.1996 respectively. From this also one can infer that these cheques must have been issued by the defendant for payment of interest and the cheque of Rs. 4 lakhs represented securing the loan / principle amount which was a post dated cheque. Even otherwise once this Court comes to the conclusion that the defendant had given a cheque of Rs. 4 lakhs to the plaintiffs, the presumption is that the cheque was issued for consideration and it was for the defendant to show as to how the same was without consideration.

9. It may be mentioned at this stage that the learned counsel for the defendant had also argued that the suit on the basis of the cheques in question was not maintainable as cheque of Rs. 4 lakhs was not presented. Although no such plea was taken in the application, for leave to defend, even otherwise this plea is without any merit. The plaintiffs had in fact presented cheque dated 16.10.96 for Rs. 12,000/- when such cheque was returned by the banker on the ground that the defendant had closed the account. There could not be any purpose for presenting the cheque of Rs. 4 lakhs which bore dated 16.5.1997 when the plaintiffs had already come to know that the account had been closed by the defendant.

10. However, after noticing the aforesaid position relating to the defense of the defendant on merit it would be in the fairness of the things to mention that the plaintiff in the plaint had alleged that a sum of Rs. 85,000/- was given by means of cheque and the balance amount of Rs. 3,15,000/- was given in cash whereas the defendant controverter this by pointing out that the cheque was in the sum of Rs. 83,000/- only. Realizing this the plaintiff in reply to application for leave to defend stated that the defendant was paid Rs. 83,000/- by means of cheque and cash in the sum of Rs. 3,17,000/-. Moreover, few other contentions of the defendant, also need to be noticed at this stage. The defendant has challenged the maintainability of the suit on the ground of incompetency of plaintiff No. 1. Since such an objection had not been taken in the application for leave to defend but goes to the route of the matter, the plaintiff No. 1 was directed to file Power of Attorney given to him by plaintiff No. 2. The plaintiff No. 1 has filed Power of Attorney dated 29.4.2000 executed by plaintiff No. 2. The Power of Attorney gives a narration of the transaction between the plaintiff and the defendant whereby a sum of Rs. 4 lacs was given to the defendant which facts are stated in the plaint also. It is also stated that the plaintiff No. 2 repeatedly called the defendant from America for return of the money but the defendant has not paid this amount. It further states that the plaintiff No. 2 is unable to come to India to demand the money from the defendant and authorises the plaintiff No. 1 in the following manner:

"I, therefore, authorise and give the Power of Attorney to Mr. Darshan Singh to collect the sum of money from Mr. Avtar Singh".

11. It was submitted by Mr. H.P.Sharma that the aforesaid Power of Attorney merely authorised the plaintiff No. 1 to collect the money from the defendant. There was no specific power given to the plaintiff No. 1 to file the suit on behalf of the plaintiff No. 2 for the recovery of the amount, The law requires, according to learned counsel, specific power to institute and file the suit on behalf of plaintiff No. 2 by the plaintiff No. 1 and in the absence of such specific power the suit could not be filed by the plaintiff No. 1 on behalf of the plaintiff No. 2. Although learned counsel for the plaintiff tried to argue that the authorisation given by the plaintiff No. 2 in favor of the plaintiff No. 1 "to collect the sum of money" from the defendant authorises the plaintiff No. 1 to file the present suit as well, this contention of the defendant cannot be summarily rejected and needs consideration. As is well-known the power of attorney has to be construed very strictly. Admittedly, there is no specific power to file the suit, engage the lawyer etc. Furthermore, issue of territorial jurisdiction is also raised by the defendant.

12. In view of the aforesaid position, it would be reasonable to grant leave to the defendant to defend the suit but such a leave should not be unconditional. Keeping in view the facts and circumstances of this case, the defendant is accordingly granted leave to contest the present suit with the condition that he shall deposit a sum of Rs. 4,00,000/- (principle amount) in this Court and shall furnish the security of the balance amount to the satisfaction of the concerned Joint Registrar. The said amount may be kept in a fixed deposit in the name of the Registrar General of this Court. These conditions shall be complied with within a period of six weeks from the date of this order.

I.A. 2586/2001 stands disposed of

Suit... No. 1020-2000.

13. The defendant shall file written statement within 8 weeks from today. Replication thereto shall be filed within two weeks thereafter. Parties shall file documents in their power and custody within 10 weeks from today.

14.The matter be listed before the Joint Registrar for admission/denial of documents on 21st October, 2002 and thereafter matter be listed before the Regular Bench for framing of issues.