MUNI LAL NARINDER PAL Vs. GUPTA TRADING COMPANY

JUDGEMENT

(1.) The following substantial questions of law arise for consideration in the second appeal:-

(2.) The suit for recovery of money for Rs. 24,800/- with interest was sought by the plaintiff describing himself as M/s Muni Lal Narinder Pal through Muni Lal Karta of the firm in the Grain Market, Nawanshahr. The contention was that the loan of Rs. 24,800/- was advanced to the defendant through a cheque issued on 07.01.1981. The amount had been withdrawn by the defendant and he had issued a cheque for Rs. 24,800/- on 07.09.1981, but when it was presented in the Bank on 21.09.1981, it was dishonoured. The suit was filed, therefore, for recovery of the amount. The defendant would contend that the suit as framed in the present form was not maintainable since no notice of dishonour was made and communicated to the defendant. The defendant would also deny that he had withdrawn any money from the plaintiff and that the 3rd defendant had some dealings with M/s Sehajpal Cold Storage and that he had been issuing blank cheques. The contention was that the plaintiff had fraudulently managed the cheque to be dishonoured by the 3rd defendant and converted the same for enforcement of liability against the defendants.

(3.) The trial Court had decreed the suit on the evidence produced before it that the cheque that had been issued on 07.01.1981 had been enchashed by the 2nd defendant Hans Raj, who was also described as a partner of Gupta Trading Company arrayed as 1st defendant. When the loan was repaid, the cheque issued was by the 3rd defendant Om Parkash and, therefore, the Court held that the loan had been in favour of the 1st defendant partnership of which defendants 2 and 3 were partners, and there was evidence of encashment by the 2nd defendant and the admission of liability by issuance of cheque by the 3rd defendant. The lower appellate Court was looking for a proof of the cheque which was issued by the plaintiff to be produced to support a plea for recovery of the money. The mistake was in placing the burden on the plaintiff for a liability that was admitted by issuance of a cheque. Section 118 of the Negotiable Instruments Act presumes negotiable instrument is fully supported by consideration and, therefore, when the 3rd defendant issued a cheque that was dishonoured which was submitted by PW3 that the cheque issued in the name of the plaintiff had been dishonoured, unless the defendants had a contention that the cheque was not issued by anyone of them or was forged, the plaintiff could not have been non-suited.