K.L. Mehta vs Pawan Kumar
2011 Latest Caselaw 2670 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

%                             Judgment reserved on : 12.05.2011
                              Judgment delivered on: 18.05.2011

+                  R.S.A.No. 222/2007

K.L. MEHTA                                    ...........Appellant
                        Through:    Mr. Manish Bishnoi, Advocate.

                   Versus

PAWAN KUMAR                                     ..........Respondent
                        Through:    None.

CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR

    1. Whether the Reporters of local papers may be allowed to
       see the judgment?

    2. To be referred to the Reporter or not?                Yes

    3. Whether the judgment should be reported in the Digest?

             Yes

INDERMEET KAUR, J.

1 This appeal has impugned the judgment and decree dated

18.02.2006 which has endorsed the finding of the trial judge dated

02.05.2005 whereby the suit filed by the plaintiff K.L. Mehta

seeking recovery of `44,850/- along with interest had been

dismissed.

2 The case of the plaintiff is that the defendant was his

colleague; he had borrowed a sum of `30,000/- which was given to

him vide cheque No.093561 dated 09.07.1997 drawn on SBI, IOC

extension counter, Yusaf Sarai, New Delhi. This advancement of

loan was witnesses by two persons. After six months i.e. on

05.01.1998, the plaintiff had demanded the loan from the

defendant but the defendant avoided to pay the amount on one

pretext of other. Legal notice dated 30.01.1999 was issued but of

no avail. On 30.03.2000, the plaintiff contacted the defendant and

demanded the money but the payment was refused. Suit was filed.

3 Contention of the defendant was that he had not borrowed

any money. A sum of `30,000/- was the payment given by the

plaintiff to the defendant in a committee which was returned by

the defendant by a cross cheque; the plaintiff has concealed the

material facts; he is not entitled to any relief.

4 On the pleadings of the parties, the following three issues

were framed:-

1. Whether the plaintiff is entitled to recover the rincipal amount of `30,000/- as prayed in the plaint? OPP

2. Whether the plaintiff is entitled to the interest, if so at what rate and for what period? OPP

3. Relief.

5 Oral and documentary evidence was led. PW-4 had produced

the record from the bank; he had deposed that the cheque in

question was a bearer cheque issued in favour of Ashok Kumar

and the payment was received by Pawan Kumar; cheque had been

proved as Ex. PW-4/1. The court had noted that it is not the case

of the plaintiff that the cheque had been issued in the name of

Ashok Kumar and the payment had been received by the

defendant; his case was that he had made payment to the

defendant whereas Ex.PW-4/1 coupled with the testimony of PW-4

had noted otherwise. There was no material on record to suggest

that this amount of cheque had been received by the defendant;

cheque was issued in the name of Ashok Kumar; it was a bearer

cheque; there was no endorsement on the back side of the cheque

about the receipt of payment by the defendant. Oral testimony of

the plaintiff was not by itself sufficient to substantiate his claim;

suit was accordingly dismissed.

6     In appeal, this finding was endorsed.


7     This is a second appeal. It has been admitted and

on16.11.2010, the following substantial question of law was

formulated.

"Whether the finding in the impugned judgment dated 18.02.2006 is

perverse in view of the provision of Section 47 of the Negotiable Instruments Act, 1881? If so its effect:

8 On behalf of the appellant, it has been urged that Section 47

of the Negotiable Instruments Act clearly presupposes

negotiations by delivery; Ex.PW-1/4 was a bearer cheque; it was

negotiated by delivery; it was in the name of Ashok Kumar but

was delivered to Pawan Kumar and payment had been received by

Pawan Kumar which is evident from the version of PW-4. Ex.PW-

1/1 which is a promissory note is also admitted by the defendant;

the witnesses to this document have also proved it. The impugned

judgment dismissing the suit of the plaintiff is a perversity.

9 None has appeared for the respondent although on the last

date request had been made for an adjournment by the

respondent who had appeared in person. Matter has been kept

since morning but none has appeared for the respondent.

10 The case of the plaintiff is hinged upon a loan of `30,000/-

which he had advanced to the defendant. As per the plaint, this

payment was made vide cheque No. 093561 dated 09.07.1997

drawn on SBI, IOC extension counter, Yusaf Sarai, New Delhi; it

was payable with interest @ 18% per annum. Receipt in this

regard had also been executed by the defendant which was

witnessed by two witnesses.

11 Defendant had admitted that a sum of `30,000/- had been

received by him; contention was that he had received it in a

committee and the same had been repaid vide cheque in separate

proceedings under Section 138 of Negotiable Instruments Act.

12 Ex. PW-1/4 is a bearer cheque. It is in the name of Ashok

Kumar. PW-4 had produced the summoned record from the

concerned branch and had deposed that payment of this cheque

had been received by Pawan Kumar. This was evidenced by the

endorsement on the back of Ex.PW-1/4 showing the signatures of

Pawan Kumar; thereby substantiating the claim of the plaintiff

that this sum of `30,000/- had been received by Pawan Kumar.

The impugned judgment had dismissed the claim of the plaintiff

holding that it could not perceive of a situation that if a loan is

given to Pawan Kumar, the cheque would have issued in a

different name i.e. in the name of Ashok Kumar. This was one

reason for dismissal of the suit. The second reason was the

submission of the defendant that he had returned back this

cheque in proceedings under Section 138 of Negotiable

Instruments Act had found favour; the impugned judgment had

noted that in these circumstances it was incumbent upon the

plaintiff to have proved that he had not received this amount in

the criminal proceedings. The third reason which had weighed in

the mind of the first appellate court to dismiss the claim of the

plaintiff was that witnesses to the promissory note were shaky in

their testimonies; their version was suspicious as both had given

conflicting statements on the names with regard to the cheque.

13 The impugned judgment had endorsed the findings of the

trial Judge. These are two fact findings by the two courts below.

The second appellate court can interfere with fact findings only if

the same are perverse. What is perversity has been expounded by

numerous judgments. For a finding to be perverse it must be

based on no evidence or a mis-reading or it must be not right,

turned the wrong way; distorted from right, deviating from what

is right, proper, correct etc.

14 The written statement of the defendant admits that the

plaintiff had given an amount of `30,000/- to the defendant; the

defendant had returned the sum by means of crossed cheque; a

sum of `22,000/- has been paid by the defendant in proceedings

under Section 138 of the Negotiable Instruments Act which are

pending in the court of Mr. Vinod Kumar, Learned MM, Patiala

House Court. The criminal complaint pending in the Court of

learned MM shows that the complainant K.L.Mehta had taken a

stand to the effect that the accused (Pawan Kumar) had borrowed

a sum of `30,000/- vide cheque No.9520807 drawn on SBI, IOC

extension counter, Yusaf Sarai, New Delhi ON 15.01.1999; this

cheque was cleared; the accused thereafter issued a cheque to the

complainant bearing No. 166288 dated 01.02.1999 drawn on SBI,

IOC extension counter. The said cheque was dishonoured.

Criminal complaint had been filed on the aforenoted cheque. The

present suit is based on different cheque i.e. cheque No.093561

dated 09.07.1997. Thus the defence of the defendant that he

returned this amount in the pending criminal proceedings is not

sustainable. PW-4 had produced the summoned record from the

bank; cheque No.093561 dated 09.7.1997 showed that it was a

bearer cheque in the name of Ashok Kumar but the payment had

been received by Pawan Kumar; endorsement of Pawan Kumar on

the back of Ex.PW-1/4 was was noted. DW-1 in his cross-

examination had also admitted that the document Ex.PW-1/1

bears his signatures. This document also contains the details of

the present transaction i.e. the cheque details. It was witnessed

by O.P. Gogia and S.G. Monga who were examined as PW-3 & PW-

2 respectively. The finding in the impugned judgment dismissing

the claim of the plaintiff was thus a perversity. Evidence was writ

large; DW-1 had in fact was the executant of PW-1/1; his defence

that he had repaid the amount to the plaintiff in the criminal

proceedings was negatived by the criminal complaint; this

complaint had been placed on record showing that the cheque

number in the present suit and the criminal complaint were

different transactions. Even otherwise, it was for the defendant to

have proved this which he did not do so. The impugned judgment

holding otherwise is a perversity.

15 Scope of interference in findings of fact is limited in second

appeal. However, the findings noted hereinabove clearly make out

a case of perversity. Both the courts below have misread the

evidence both oral and documentary. The plaintiff was entitled to

a decree. Appeal is allowed. The suit of the plaintiff is accordingly

decreed.

16 There is no stipulation of interest either in Ex.PW-1/1 or

Ex.PW1/4. However, being a commercial transaction, the plaintiff

is entitled to interest. It is accordingly granted interest @ 6% per

annum from the date of filing of the suit till realization.

17 Section 47 of the Negotiable Instruments Act is an

undisputed proposition. A bearer cheque can be negotiated by

delivery.

18 In view of the aforenoted discussion, substantial question of

law is answered in favour of the appellant and against the

respondent. Appeal is allowed. Suit is decreed.

INDERMEET KAUR, J.

MAY 18, 2011 a