Dishonoured cheque claims and personal guarantees: sham defences fail, limitation runs from dishonour, and guarantors remain jointly liable.

In a summary suit based on dishonoured cheques, leave to defend was refused because the defendants' plea that the cheques were blank security instruments was treated as an afterthought, contradicted by written admissions of liability and correspondence showing issuance toward principal and interest. The court also held that cross-claims on excise, MODVAT and conversion charges raised no triable issue, as no timely claim had been made and those claims were time-barred. Limitation for the cheque-based suit ran from the date of dishonour, so the filing was within time. The guarantors' personal undertakings were enforced as co-extensive and joint and several with the principal debtor.

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Issues: (i) whether the defendants had disclosed a triable issue warranting leave to defend in the summary suit; (ii) whether the suit was barred by limitation; (iii) whether the guarantors were liable along with the principal debtor.

Issue (i): Whether the defendants had disclosed a triable issue warranting leave to defend in the summary suit.

Analysis: The defence that the cheques were blank and were filled up later was rejected in view of the contemporaneous correspondence and the defendants' written admission of outstanding dues and issuance of the cheques towards principal and interest. The Court found that the plea of blank security cheques was an afterthought and that the defendants had failed to show any genuine defence to the claim. The alleged cross-claims regarding excise, MODVAT and conversion charges were also held not to raise any triable issue, as no timely claim had been made and the claim was treated as barred by limitation.

Conclusion: No triable issue was disclosed and leave to defend was rightly refused.

Issue (ii): Whether the suit was barred by limitation.

Analysis: The Court held that limitation for the suit on the dishonoured cheques ran from the date of dishonour and return unpaid, not from the date of issuance of the cheques. Since the suit was filed within three years from dishonour, the limitation objection was rejected.

Conclusion: The suit was within limitation.

Issue (iii): Whether the guarantors were liable along with the principal debtor.

Analysis: The Court accepted the personal guarantees executed on behalf of the principal debtor and held that the guarantors' liability was co-extensive, joint and several with that of the principal debtor.

Conclusion: The guarantors were liable with the principal debtor.

Final Conclusion: The defendants' application for leave to defend failed, and the plaintiff was entitled to a money decree with costs and interest at the rate awarded by the Court.

Ratio Decidendi: In a summary suit, leave to defend must be refused where the defence is found to be sham or illusory and the record shows a clear admission of liability; limitation for a suit founded on dishonoured cheques is computed from dishonour.

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