Virender Mohan vs New Highflying Travels (P) Ltd.
2007 Latest Caselaw 2483 Del

JUDGMENT

Manmohan Sarin, J.

1. Appellant in this Regular First appeal impugns the judgment/decree dated 25.1.2006 passed by the Additional District Judge, Delhi in Suit No. 440/2004. Learned Judge decreed the suit in favor of the respondent and against the appellant for a sum of Rs. 1,95,738/- with costs and interest @ 18% per annum from the date of issue of the cheque, i.e. 15.12.2001. Before considering the various grounds urged by the appellant to assail the impugned judgment and decree, the relevant facts may be noted.

2. It was the respondent-plaintiff's case that the appellant purchased foreign exchange from the respondent, who was engaged in the travel agency business, for his father-in-law Shri Som Prakash Bakshi and mother-in-law Smt.Kailash Bakshi. The appellant issued cheque bearing No. 533580 dated 15.12.2001 in the sum of Rs. 1,95,738/- towards the purchase of the said travellers cheques. The said cheque when presented for encashment, was dishonoured and returned by the bankers vide Cheque Return Memo dated 19.12.2001. Respondent served a notice of demand on the appellant on 3.5.2002. Appellant sought time up to March, 2004 but eventually failed to make the payment in respect of the dishonoured cheque. Appellant ignored the reminder given by the respondent to make the payment in July, 2004. Respondent, thus, filed the suit against the appellant for recovery of a total sum of Rs. 3,05,164/- with costs and pendente lite and future interest @ 18% per annum.

3. The appellant in the written statement filed, took the defense that he did not purchase any foreign exchange from the respondent and that the cheque had been obtained by the respondent by deceit and misrepresentation. The appellant contended that respondent had failed to give any consideration for the said cheque. Respondent, however, did not return the cheque despite the appellant asking for the same. Appellant denied that he ever sought time to make payment after receipt of the legal notice. Appellant claims that he did not receive any foreign exchange from the respondent and he was not liable to make any payment.

4. Following issues were framed by the Trial Court:

1. Whether defendant had not issued cheque No. 533580 dated 15.12.2001 in the sum of Rs. 1,95,738 in favor of plaintiff for consideration? If so, its effect? OPD

2. Whether plaintiff is entitled to recover the amount as claimed by it? OPP

3. If issue No. 2 is decided in favor of plaintiff, whether it is entitled to recover any amount on account of interest, if so, at what rate, for what period and to what amount? OPP

Respondent in order to prove its case, filed affidavit by way of evidence of one Shri Sunil Talwar and Inderjeet Mukherjee, who were also cross-examined. The appellant filed his own affidavit by way of evidence and was cross-examined. The respondent by examining PW-1 and PW-2, had duly proved that appellant/defendant had purchased foreign exchange for Shri Som Prakash Bakshi and Smt. Kailash Bakshi and issued cheque No. 533580 dated 15.12.2001 in the sum of Rs. 1,95,738/-. Respondent claimed that the cheque was given by the defendant against valuable consideration as the payment was against foreign exchange purchased by the appellant for his father-in-law and mother-in-law, who were going to USA. Appellant's plea of the cheque having been obtained by fraud and misrepresentation is bereft of all material particulars. The plea sought to be raised by the appellant is that under the Foreign Exchange Manual and RBI Guidelines and Rules, foreign exchange purchased through third party is prohibited. The payment for purchase of foreign exchange has to be made from the traveller's own bank account. It was further urged that the transaction as claimed by the respondent, would be in contravention of the RBI guidelines and Foreign Exchange Manual and thus, the respondent cannot enforce the same. Appellant also contended that the balance sheet of the respondent company does not figure the name of the appellant as a debtor. We find that the learned Trial Judge has succinctly dealt with these pleas in his well reasoned judgment.

5. Before us, Mr. Rajiv Bahl, learned Counsel for the appellant, sought to reiterate the same pleas by urging that it was the respondent's own case that the foreign exchange was sold to Shri Ashok Kumar Bakshi and Smt. Kailash Bakshi by way of travellers cheques. Accordingly, the amount cannot be recovered from the defendant-appellant, who would not have any liability in the matter. The respondent could recover the price of the travellers cheque from persons in whose favor the travellers cheques were issued. Appellant was neither liable nor could the same be recovered from them. In the alternative, learned Counsel urged that apart from the appellant having no liability as aforesaid due to the travellers cheques having not been sold to him there was a prohibition of recovery under the Foreign Exchange Manual and the Court should not support or help a party in breach of the Foreign Exchange Regulation provisions and the RBI guidelines by permitting recovery of such amount. He submits that there was an embargo on the respondent from having accepted the payment from any one other than the persons to whom the travellers cheques were sold in view of the provisions of 3B.5(i) of the Manual.

6. Learned Counsel further added that father-in-law and mother-in-law do not fall in the category of 'close relatives' as per the definition given in Schedule 4(iv) Explanation and Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2000, from whom payment could be made by the close relation. As regards the interest, he submitted that once the primary liability for the amount is not there, there could be no liability for the interest. Mr. Bahl also urged that an adverse inference should be drawn on account of the respondent's failure to produce the balance sheet showing the respondent as a debtor even though having offered it to do so in the cross-examination. Counsel also sought to raise some doubts about Shri Som Prakash Bakshi and Smt. Kailash Bakshi being non-residents in view of their passports having been issued from Stockholm.

7. We may also note at this stage, the averment in the Memorandum of Appeal as made by the appellant. The appellant has averred that cheque No. 533580 dated 15.12.2001 was issued without consideration. He claims that the cheque was issued by him in advance in favor of the respondent in connection with his own travel. He contends that the appellant had been a regular customer of the respondent for the last many years and had purchased foreign currency worth lacs of rupees. The said cheque had been given in advance to the respondent to supply the foreign exchange for his own travel as the respondent failed to supply foreign exchange to the appellant, therefore, the said cheque in question was not allowed to be encashed. Mr. Bahl also sought to urge that the suit against the appellant in the absence of impleadment of Shri Som Prakash Bakshi and Smt. Kailash Bakshi was not maintainable. He submitted that Shri Som Prakash Bakshi and Smt. Kailash Bakshi were principal debtors in the suit. The respondent had only imp leaded the alleged guarantor or surety at best. He submits that the appellant cannot be treated as a principal debtor since he was not a beneficiary and the guarantor or agent would stand discharged from the contract from which the principal debtor is released.

8. We have given our anxious consideration to the submissions made by Mr. Rajiv Bahl on behalf of the appellant. Let us take the first submission of the cheque having been obtained fraudulently by deceit and misrepresentation. There are no particulars of either the fraud, deceit or misrepresentation given. Not only this, the said plea is completely belied by the averment in the memorandum of appeal where the appellant claims that the cheque had been issued by him towards the advance payment of foreign exchange for his own travel. The above averment runs contrary to the plea of respondent obtaining the cheque fraudulently and deceitfully. Secondly, the cheque was issued for an exact amount and it negates any payment on account of advance payment. The above pleas do not inspire any confidence and are stated to be rejected.

9. The next plank of the appellant's submission is that no travellers cheques were supplied to him and the cheque was without consideration. It is not the respondent's case that the travellers cheques were sold to the appellant. It is the respondent-plaintiff's case that the cheques were purchased by the appellant for the foreign travel of his father-in-law and mother-in-law and he made payment therefore. Here,the plea sought to be raised by the appellant is that the Foreign Exchange Manual and the RBI guidelines prohibit payment for the foreign exchange by any person other than the person to whom the travellers cheque/foreign exchange is sold. Proceeding on the basis that the Foreign Exchange Manual and the RBI Guidelines prescribe that the payment for the travellers cheque should be made by the person to whom the travellers cheques are sold and through his account, the question to be considered is effect of non-compliance of any such provision. We had repeatedly put to learned Counsel for the appellant to point out to us any provision which stipulates that non-compliance with this provision would be visited with any penal consequence or that any such transgression would vitiate the transaction as opposed to public policy. Appellant has not been able to demonstrate this. Assuming that there has been a technical violation or breach of any of the provisions of the guidelines, it would be for the concerned authorities to take such action, if any, as admissible at law. However, the same would not preclude or absolve the appellant from its liability of making the payment for the cheque which has been issued for consideration. We also notice that the appellant had been taking inconsistent stands. The appeal has no merit and is dismissed. The stay granted against the execution of the decree stands vacated. The appellant would be entitled to adjustment of the sum of Rs. 1 lac, which he claims to have paid during the proceedings in appeal, subject to verification against the decree.