Dishonoured cheque claims and money-lender bar found illusory, with conditional leave to defend granted.

Defences that the claim arose from a running account, that the cheques were only collateral security, and that presentment failed after the signatory's death were found untenable on the face of the record. The suit was treated as one on dishonoured cheques, with the antecedent loan serving only as consideration for the negotiable instruments and not as the immediate cause of action. On that footing, the Bombay Money Lenders Act, 1946 bar did not apply to the suit as framed. The defendants' letters were also held incapable of raising a substantial defence, though leave to defend was granted conditionally on deposit of the principal sum.

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Issues: Whether the defences raised in the summons for judgment disclosed a bona fide or triable defence, and whether the suit was barred by the Bombay Money Lenders Act, 1946 so as to warrant unconditional leave or dismissal of the summary suit.

Analysis: The pleaded defences that the claim arose from a running account, that the cheques were merely collateral security, and that presentment was invalid after the death of the cheque signatory were held to be untenable on the face of the record. The suit was treated as one founded on dishonoured cheques, with the antecedent loan operating only as consideration for the negotiable instruments and not as the immediate cause of action. On that basis, the bar under the Bombay Money Lenders Act, 1946 was held not to apply to the suit as framed. The letters relied upon by the plaintiffs were also held incapable of creating a substantial defence to the claim on negotiable instruments.

Conclusion: The defences were held to be illusory and moonshine, but leave to defend was granted conditionally on deposit of the principal sum of Rs. 67 crores.

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