NIJJER AGRO FOODS LIMITED Vs. NASIB CHAND

JUDGEMENT

(1.) The petitioner entered into an agreement with respondent no.1 for production of tomoto crop in 1000 acres, 500 acres at Central State Farms Suratgarh and 500 acres at Central State Farm, Ladhowal on the terms and conditions mentioned in the agreement. The relevant terms and conditions of payment are as under:-

(2.) Admittedly in terms of para 9 of the terms and conditions, the petitioner gave two post dated cheques dated 1.6.1996 and 30.6.96 in favour of respondent no.1 for Rs.20 lac each. In terms of the agreement, these cheques were to be replaced by the petitioner company by way of demand draft of the total value of Rs.20 lac each. Admittedly demand drafts amounting to Rs.40 lac were given to respondent no.1. Instead of replacing the cheques with these demand drafts respondent no.1 presented those cheques which obviously were dishonoured.

(3.) The question before the learned trial court was whether there was any liability of the petitioner towards these cheques in question or not. Merely because some amount or remaining balance payment was due from the petitioner does not mean that respondent no.1 was entitled to recover those payments by virtue of the aforesaid two cheques given by the petitioner as security which were replaceable by way of demand drafts.