2001 (3) TMI 1081 - HC - Indian Laws

Appellate Court Decision: A.S. No. 105 allowed, A.S. No. 180 dismissed. Business dealings, valid consideration key.

C.T. Joseph Versus I.V. Philip

The appellate court allowed A.S. No. 105 of 1991 and dismissed A.S. No. 180 of 1991. It held that the plaintiff had no business dealings with the first ... - Issues Involved:1. Whether the plaintiff had any dealings with the first defendant-Firm, and if so, whether any amount was due from the first defendant to the plaintiff.2. Whether the defendants are estopped from contending that the cheque was unauthorisedly filled up by the plaintiff.3. Whether the Court below was correct in decreeing the suit against the fourth defendant after finding earlier that the case set up by the plaintiff was not proved.Detailed Analysis:Issue 1: Dealings and Amount DueThe plaintiff failed to produce any account books or documents kept in the course of business to prove that he was supplying rubber to the first defendant-Firm. The evidence consisted only of Exts. A3 to A15, which did not bear the seal of the Firm or the signature of any liable person. The court noted that the first defendant-Firm was a dealer in rubber, required to file returns to the Rubber Board, issue purchase bills, and pay sales tax. The court found it difficult to accept the plaintiff's argument without proper documentation. The plaintiff's reliance on Ext. XI, a cash cheque for Rs. 3,500/-, was also dismissed as it was proven that this cheque was used by the defendants for their own banking purposes and not as a payment to the plaintiff. Thus, the court concluded that the plaintiff did not have any business transactions with the first defendant-Firm.Issue 2: Authority and Validity of the ChequeExt. A1, the cheque dated 19-8-1985, bore the signature of the second defendant, the Managing Partner. Ext. A2, a slip produced by the plaintiff, was deemed unreliable as it suffered from the same infirmities as other slips. The court found it implausible that the first defendant-Firm would engage in transactions worth lakhs of rupees without proper documentation. The cheque book (Ext. B2) showed that the cheque leaf was marked as cancelled and that the second defendant had signed several blank cheques, which were entrusted to the fourth defendant for business transactions. The court found no evidence to support the claim that the cheque was issued for any consideration related to business transactions. The court also dismissed the plaintiff's argument based on Section 20 of the Negotiable Instruments Act, stating that it did not apply to cheques as they do not require stamps under the Stamp Act. The court concluded that the cheque was not issued for any valid consideration and that the defendants were not estopped from denying liability.Issue 3: Decree Against the Fourth DefendantThe lower court had decreed against the fourth defendant based on the finding that the fourth defendant had issued the cheque to the plaintiff. However, the court noted that the plaintiff's case was based on alleged business transactions with the first defendant-Firm, which were not proven. The court emphasized that the cheque was not issued by the fourth defendant personally but was a cheque of the Firm. The court found that the plaintiff had not come with clean hands and had not told the true story before the court. The court concluded that the decree against the fourth defendant was incorrect as the plaintiff had failed to establish his case.Conclusion:A.S. No. 105 of 1991 was allowed, and A.S. No. 180 of 1991 was dismissed. The court held that the plaintiff did not have any dealings with the first defendant-Firm, the cheque was not issued for any valid consideration, and the decree against the fourth defendant was wrong. The parties were ordered to bear their respective costs.