IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE FRIDAY, THE 4TH JULY 2008 / 13TH ASHADHA 1930 AS.No. 99 of 1995() ------------------- OS.84/1993 of PRL.SUB COURT, KOZHIKODE .................... APPELLANT(S)/DEFENDANT -------------- MRS.LALITHA SREENIVASAN, W/O KANANGOT SREENIVASAN CHEVAYOOR AMSOM DESOM KOZHIKODE TALUK BY ADV. SRI.M.C.SEN,JAYAPRAKASH SEN. RESPONDENT(S)/PLAINTIFF --------------- P.R.RAMESH, S/O P.RAGHAVAN AGED 47 YEARS RESIDING AT AYODHYA KACHERI AMSOM DESOM NADAKKAVU, KANNUR ROAD CALICUT - 17 ADV. SRI.C.P.CHANDRASEKHARAN THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 04/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON C.M.P.NO.856/1995 IN A.S.NO.99 OF 1995 DISMISSED 4-7-08 Sd/-, PIUS.C.KURIAKOSE, JUDGE /True Copy/ PIUS C. KURIAKOSE, J. ----------------------------------------------- AS. No. 99 of 1995 ----------------------------------------------- Dated this the 4th day of July, 2008 J U D G M E N T The defendant in a suit for money which was decreed by the trial court is the appellant. In brief the plaint averments were that the plaintiff, the defendant and the defendant's husband one Sreenivasan were friends. On 20-12-1989 the defendant borrowed a sum of Rs.32,000/- from the plaintiff for improvement of her business “Princy Ice Cream” on the agreement that repayment will be made within one month. Plaintiff made several unsuccessful demands for repayment. Lastly defendant issued cheque No.038843 for Rs.32,000/- drawn on State Bank of Travancore, Calicut to the plaintiff. The cheque on presentation was returned with the endorsement “exceeds arrangement”. A lawyer notice was issued to which the defendant sent reply raising false contentions. In continuation of the lawyer notice the plaintiff initiated criminal proceedings before the local Judicial First Class Magistrate Court as C.C. No. 173 of 1990 under section 138 of the Negotiable Instruments Act. That complaint was dismissed for default. Suit is therefore instituted for recovery of the cheque amount with interest at the rate of 19.5% per annum. The defendant filed written statement raising various contentions. Defendant never AS. No. 99/95 -2- borrowed any amount from the plaintiff and never issued the alleged cheque. The plaintiff was running business concern in the name and style “Premier Machine Tools” dealing with selling of machineries including freezer. Defendant was in need of two freezers and other machineries for her concern “Princy Pickle Industries” and “Princy Ice Cream” and for getting financial assistance defendant applied for a loan from the Kerala Financial Corporation. K.F.C. sanctioned the loan on condition that the KFC will pay 85% of the value of the machineries and that 15% has to be raised by the borrower himself. For sanctioning the loan defendant had placed quotation before the KFC obtained from concerns dealing with machineries. Accordingly defendant approached the plaintiff and obtained copies of quotations. Copy of the quotation dated 21-6-89 issued by the plaintiff was placed before the KFC. The KFC showed willingness to examine the machineries supplied by the plaintiff to the defendant. But the plaintiff was of the line that he has to get 15% of the value of the machineries before placing them in the premises of the defendant. Defendant took the stand that she will pay the amount to the plaintiff only after the KFC sanctions the loan. Plaintiff was not agreeable and as requested by the defendant issued three blank signed cheques and a blank AS. No. 99/95 -3- revenue stamp affixed signed white paper to the plaintiff. The cheque leaves are bearing Nos. 038843, 038844 and 038846, The cheque leaves and the blank papers were entrusted with the plaintiff in December 1989 and the plaintiff installed the machineries in the business premises of the defendant. The defendant's technical officer inspected the machineries, but on the very next day the plaintiff took away the machineries. The freezer, the machineries installed by the plaintiff in the defendant's premises were found to be old ones and this led to KFC's displeasure KFC took the view that they will not entertain the quotation submitted by the plaintiff. KFC intimated this fact to the plaintiff and also to the defendant. Defendant informed the plaintiff that she is not willing to purchase the machineries from the plaintiff. Plaintiff got antagonised. The suit has been filed by the plaintiff misusing one of the blank cheque leaves issued to him. On 19-1-1990 defendant sent letter to the bank for stopping payment on cheque Nos. 038843, 038844 and 038846. It was thereafter that the defendant received the lawyer notice issued at the instance of the plaintiff. The criminal complaint C.C.173/90 was instituted by making use of the signed blank cheque leaves entrusted with the plaintiff. The defendant has received notice from Advocate Sri.P.Vasavan of Palakkad alleging AS. No. 99/95 -4- that the defendant has issued a cheque to his client Sri.K.Cherian David. Another noticed was issued from Advocate Sri.P.K.Mohanan of Palakkad alleging that certain amounts are due from the defendant to one S.Balan based on a cheque. The plaintiff has misused all the three blank cheque leaves which had issued to him in the year 1989. The suit is filed without any bona fides and it is only to be dismissed with compensatory costs to defendant. 2. On the above pleadings the learned Subordinate Judge raised the following issues. 1. Whether the suit is maintainable? 2. Whether the defendant has borrowed Rs.32,000/- from the plaintiff as claimed ? 3. Whether the cheque No.038843 was issued by the defendant to repay the loan as claimed ? 4. Whether the plaintiff is entitled for the reliefs claimed ? 5. Order as to costs ? At trial the evidence in the case consisted of testimony of PW-1 and Exts. A1 to A5 on the side of the plaintiff and testimony of DW-1 and Exts. B1 to B7 on the side of the defendants. As regards issue No.1 the learned Subordinate Judge noticed that at the time it was submitted that contention that the suit is not maintainable was raised AS. No. 99/95 -5- in the context of limitation. It was found with reference to the relevant provision of the Limitation Act and to a judgment of the Allahabad High Court in AIR 1966 Allahabad 137 and the date of the cheque is date of its presentation and date of filing of the suit, that the suit was not barred by limitation. Issue Nos.2 and 3 three were considered by the learned Judge together and both those issues were answered in favour of the plaintiff. Answering issue No.4 it was held that the plaintiff is not entitled for interest at the rate of 18% per annum. Consequently issue No.5 was also answered in favour of the plaintiff. 3. It was Smt.Shahana Karethikeyan who addressed me on behalf of the appellant. She submitted that it is not correct to say that the suit is based on dishonoured cheque. Suit is based on original cause of action and in that view of the matter it should have been seen that the suit is barred by limitation. She submitted that in holding that it is difficult to believe that the defendant would have handed over blank cheques to the plaintiff, the learned Sub Judge failed to appreciate the fact that the plaintiff, defendant and the defendant's husband were family friends and that defendant had reposed much trust upon the plaintiff. She highlighted that the handwriting in the AS. No. 99/95 -6- cheque and the signatures on the cheque are different and are in different inks. This is an aspect which had been admitted by the plaintiff himself. She submitted that the plaintiff's case that the defendant handed over the cheque to him on 2-2-90 is absolutely unworthy of belief since Ext.P6 letter dated 19-1-1990 was sent by the defendant to the bank to stop payment. This vital circumstance should have been given due weight by the learned Sub Judge. She argued that contrary to the plaintiff's impossible case that the cheque having been handed over to him on 2-2-90 the defendant's case regarding the circumstances in which the cheque reached the hands of the plaintiff finds support from Ext.B6. The learned counsel submitted that the plaintiff was unable to explain how the amount of Rs.32,000/- was arrived at. The learned counsel further submitted that the alleged loan leading to the alleged issuance of the cheque in the circumstances averred in the plaint was not proved by any document and also by any oral evidence of witness. The learned counsel submitted that due importance was not given by the learned Subordinate Judge to the undeniable fact that the Kerala Financial Corporation had black listed the plaintiff for attempting to cheat the Corporation and the probability of the KFC's action antagonising the plaintiff to misuse the blank AS. No. 99/95 -7- cheque entrusted with him by the defendant. Handing over to me a copy of the judgment in ST.229/93, complaint filed by Sri.C.Balan against the appellant, Smt.Shahana Karthikeyan argued that the defence contentions in this case, in the suit which was the defence case of the appellant in that case had been completely accepted by the learned Magistrate. The appellant did get adequate opportunity for producing the judgment in S.T. No. 229/93 and the learned counsel sought my leave to produce the judgment before this court. She further submitted that the circumstance that though notice was issued by one Cherian David on the basis of alleged dishonour of the third cheque handed over by the defendant as a blank check to the plaintiff on receiving reply from the defendant no action was pursued was a circumstance of considerable movement. Smt.Shahana Karthikeyan placed also before me photostat copies of two editions of Madhyamom daily containing reports about the present plight of the appellant's family which is described to be on the verge of suicide on account of financial constraints. Even though the case was posted on several dates for hearing the counsel for the respondent plaintiff did not turn up for resisting the submissions of Smt.Shahana Karthikeyan. It appears to me that two or three circumstances of considerable AS. No. 99/95 -8- movement attending on this case have not been given due significance by the learned Subordinate Judge. The defence case of the respondent plaintiff is that the cheque in question was duly issued to him by the appellant defendant on 2-2-90. But then it is seen from Ext.B6 which is dated 19-1-1990 that the appellant has issued instructions to the bankers for stopping payment of not only the cheque which is subject matter of the suit but also the other two cheques referred to in her written statement. 4. The suit notice was issued against the appellant defendant at the instance of one K.Cherian David in respect of one among the three cheques claimed by the defendant appellant to have been entrusted with the plaintiff as blank cheques. A reply was sent by the appellant raising the very same contentions which are raised by him in the present suit. Sri.K.Cherian David did not pursue any action against the appellant on receiving the reply notice. More importantly Sri.C.Balan, custodian of the third cheque claimed by the appellant to have been entrusted with the plaintiff as a blank cheque leaf on the basis of the alleged dishonour of that cheque. Defence contention of the appellant before the Chief Judicial Magistrate, Palakkad in ST. No. 229/93 filed by Sri.C.Balan was that the appellant has no acquaintance with Balan AS. No. 99/95 -9- and had no transaction at all with him. Defence was that three blank cheques including the one which was subject matter of S.T. No. 229/93 and the one which is subject matter of the present suit had been entrusted by her with the respondent plaintiff through P.R.Ramesh and that the respondent plaintiff himself caused lawyer notice to be sent to her by one Cherian David on the basis of one of the cheques and caused S.T. No.229/93 to be filed by Sri.Balan on the basis of the second cheque and the present suit to be filed against her directly. It is seen from the judgment that the defence case put up by the appellant in an S.T. Case No. 229/93 was completely accepted by the learned Chief Judicial Magistrate. Paragraph 9 of the judgment of the learned Chief Judicial Magistrate in S.T. No. 229/93 will be quoted below. “PW-1 when examined before this court has stated that he is working as Manager in a theatre at Palakkad drawing a monthly salary of nine hundred rupees. According to his admission his monthly saving is Rs.800/-. He has stated that one Ramesh, a teacher of Kozhinjampara School told him that there was an advertisement in the newspaper and he went to Calicut with Ramesh. According to PW1 he raised the money from three different persons. PW1 has no expertise to run a unit where food products are manufactured. He is a welder by training and having 20 years of service. The very story told by PW1 appears to be highly improbable, unnatural and unbelievable. He could not give any convincing evidence with regard to his trip to Calicut and encounter with the accused for the employment. Apart from that the defence story told by the accused and the AS. No. 99/95 -10- documents proved by her have exploded the entire prosecution story built up by PW1. It is come in evidence that the accused had issued three cheques out of which one was used to file a complaint in the Calicut Court which ended in acquittal. As regards the second cheque no complaint was filed though a notice was served on the accused after the dishonour from one David Cherian who is totally a stranger. The evidence would show that this is the third cheque issued to one P.R.Ramesh. I do not find any reason to disbelieve the testimony of DW-1 which has been fortified by the documents. The presumption in favour of the complainant has been rebutted by the accused. It has been established beyond any doubt that PW-1 and the accused had absolutely no transactions. OW-1 was used as a cat's paw. There is nothing on record to show that PW-1 had any transaction with the accused. There was no liability to discharge on the part of the accused as far as PW-1 ws concerned. PW-1 is obviously a projectile triggered by any invisible hand. The complainant has miserably failed to prove that the accused issued a cheque to PW1 to discharge any liability. The ingredients of Section 138 of the Negotiable Instruments Act have not been satisfied. Therefore the complainant's case is bound to fail. I hold that the complainant has failed to prove the charge against the accused beyond reasonable dount.” Of course the findings entered by the learned Chief Judicial Magistrate would not bind the learned Subordinate Judge. Even the judgment in S.T. 229/93 had been produced before the learned Subordinate Judge. But I find that if the appellant had been permitted to place on record the judgment in S.T. No. 229/93 and also to examine Sri.Balan the complainant in that case as a witness on her side perhaps such additional evidence would have turned the tables against the plaintiff AS. No. 99/95 -11- before the learned Sub Judge. Untimately the decision in civil cases is to be taken on a preponderance of probability. Having seen the judgment in S.T. No.229/93 I am inclined to think that the version of the appellant as to how the cheque in question reached the hands of the respondent plaintiff is equal if not more probable. At the same time in the absence of evidence I am unable to decide the appeal finally. The circumstances brought out before me by the unresisted submissions of the learned counsel for the appellant persuade me to remit the matter back to the court below, so that the appellant gets an opportunity for adducing further evidence including the judgment in S.T. No.229 of 1993 and the oral evidence of the complainant in that case. 5. The result of the above discussion therefore is that the judgment and decree of the court below are set aside. The suit is remanded back to the Subordinate Judge's Court, Kozhikode. That court will take fresh decision in the suit in the light of the observations contained herein and giving opportunity to the appellant to produce whatever further evidence that she is desirous of . Refund full court fee paid on the appeal memorandum to the counsel for the appellant. Parties will appear before the court below on 19-11-2008. Transmit AS. No. 99/95 -12- the records back to the court below forthwith. (PIUS C.KURIAKOSE, JUDGE) ksv/ AS. No. 99/95 -13- PIUS C. KURIAKOSE, J. AS. No. 99 of 1995 JUDGMENT 4th July, 2008