BRITISH BANK OF MIDDLE EAST Vs. ALMAL BROTHERS

JUDGEMENT

(1.) THIS is an action by the plaintiff as holder in due course of a cheque drawn by the defendant in favour of Gunny Trading Company or bearer and duly negotiated by Gunny Trading Company in favour of the plaintiff. The plaintiff's case is that on June 20, 1956, the defendant drew the cheque No. 413642 for Rs. 5,14,937/8/-on the Hindusthan Mercantile Bank Ltd. , in favour of Gunny Trading Company. The cheque was drawn "pay Gunny Trading Company or bearer- Rupees Five lakhs fourteen thousand nine hundred and thirty seven and annas eight only" and was crossed by the drawer "account payee only. " It is stated that on June 20, 1956, Gunny Trading Company negotiated the cheques in favour of the plaintiff for valuable consideration and that they are the holders in due course of the cheque. The cheque was duly presented for payment but was dishonoured. Further the defendant countermanded payment of the cheque. It is also stated that due notice of dishonour was served upon the defendant, but in any event, the defendant having countermanded payment was not entitled to any notice. The defendant did not pay inspite of demands and thus tie plaintiff claimed Rs. 5,14,937/8/-with interest at 6 per cent per annum and costs.

(2.) IN the written statement the defendant admits the drawing of the cheque in favour of Gunny Trading Company but states that the cheque was made over to Gunny Trading Company in connection with proposal for a loan, Gunny Trading Company agreed to pay interest and commission and to offer as security certain negotiable Pucca Delivery Orders in respect of jute goods. Gunny Trading Company further agreed to hand over pucca Delivery Orders of the requisite value to the defendant's representative who would call on them with the cheque and that the cheque would not be presented until the defendant confirmed in writing that the Pucca Delivery Orders were acceptable. Upon these terms the said cheque was made over to Gunny Trading Company. It is further stated that the pucca Delivery Orders offered by Gunny Trading Company were found to be not acceptable and the defendant thereupon requested them to submit fresh Delivery Orders in exchange thereof immediately, to enable them to arrange for passing cheque for payment. Gunny Trading Company did not comply, so the defendant did not arrange for payment: and thereafter countermanded payment of the cheque. Gunny Trading; Company had no right to present the: cheque or to cause the same to be presented for payment. The rest of the defence is complete denial. It is denied that the cheque is a bearer cheque. It is crossed and marked 'account payee'. Negotiation and consideration are denied and it is also denied that the plaintiff is the holder of the cheque or the holder in due; course. It is further stated that the Gunny Trading Company did not endorse in favour of the plaintiff but merely paid in the cheque to the credit of their account with the plaintiff. It is denied that the plaintiff presented the cheque for payment. The plaintiff merely acted as the Agent for collection and had no right or title to the cheque. Dishonour of the cheque is denied and it is further denied that due notice of dishonour was served next the defendant denies liability for any sum to the plaintiff and lastly states that without prejudice to any of the contentions aforesaid, in any event, the plaintiff is bound by the equities which were binding on Gunny Trading Company. It is stated that the suit is collusive as between the plaintiff and Gunny Trading Company and should be dismissed.

(3.) UPON the pleadings the following issues were raised: 1. (a) Was the cheque dated June 20, 1956 referred to in paragraphs 1 and 2 of the plaint a, bearer cheque as alleged? (b) Was the said cheque crossed and marked "a/c payee?" 2. (a) Did Messrs. Gunny Trading Co. negotiate the said cheque on June 21, 1956 in favour of the plaintiff? (b) If so, was such negotiation for valuable consideration? 3. (a) Is the plaintiff the holder of the said cheque? (b) If so, is the plaintiff a holder in due course? (c) Did the plaintiff merely act as the agent of the said firm Messrs. Gunny Trading Co. for collection?