2021 (7) TMI 1435 - HC - Indian Laws

Signed cheques with dates filled later valid under Section 20 NI Act, borrower's appeal dismissed

Kerala HC dismissed defendant's appeal in money suit for Rs. 6 lakhs borrowed during 2006-07. Defendant argued that plaintiff's filling of dates in ... Decree for Suit for money based on cheques - amount of Rupees 6 lakhs borrowed from the plaintiff during 2006-07 - issuance of a letter of acknowledgement to plaintiff as contended by plaintiff - realisation of amount claimed in the plaint from the defendant - whether entering the dates in the cheques, duly filled up in all other respects and also signed would amount to material alteration as contended by the learned counsel for the defendant? - HELD THAT:- In the case on hand the handing over of the cheques by the defendant as admitted by him, under the provision, confer the person receiving it, a prima facie authority to make or complete those. Therefore, since the defendant has handed over the six signed cheques even with entries other than the figure showing the money filled up, as holder of it the plaintiff is given prima facie authority by Section 20 of the N.I. Act to complete it. Therefore, the argument that by entering the dates in the cheques, the plaintiff has materially altered the cheques will not sustain and is discarded. The plaintiff has established before the trial court that the cheques on presentation for encashment were bounced and the factum of dishonour was duly informed to the defendant by serving lawyer notices. Strictly no materials are forthcoming to establish any repayment towards the interest or the principal sum borrowed. The plaintiff has tendered oral evidence to establish his claim for realisation of money. He has also produced relevant documentary evidence to justify his claim. In the case on hand the specific stand of the defendant was that dates have not been written in the cheques and the plaintiff has put it prior to presentation of those. The plaintiff has a contra claim. Even if the defendant's version is accepted as true, the filling up of the dates in an otherwise filled and signed cheque, not being material alteration, will not invalidate it. The plaintiff being the holder of the cheques undoubtedly has lawful authority to fill the blank entry under Section 20 N.I. Act - A scrutiny of the evidence on record convinces this Court that the trial court had a true and proper appreciation of evidence and cannot be found fault with in decreeing the suit. Interference is totally unwarranted. Appeal dismissed. Issues Involved:1. Whether the defendant borrowed an amount of Rupees 6 lakhs from the plaintiff during 2006-07.2. Whether on 25.3.2008 defendant issued a letter of acknowledgment to the plaintiff as contended by the plaintiff.3. Whether the plaintiff is entitled to realize the amount claimed in the plaint from the defendant.4. Relief and costs.Detailed Analysis:Issue 1: Borrowal of Rs. 6 lakhsThe defendant admitted to borrowing money but contended that it was Rs. 4,75,000/-, not Rs. 6,00,000/-. The plaintiff claimed the loan was Rs. 6,00,000/- and provided six cheques as evidence, which the defendant did not dispute regarding the amounts filled in. The trial court found the plaintiff's claim probable, as the defendant's explanation for issuing cheques totaling Rs. 8,00,000/- was unconvincing and unsupported by evidence.Issue 2: Issuance of Acknowledgment LetterThe plaintiff asserted that the defendant issued a debt acknowledgment letter on 25.03.2008, promising repayment with 12% interest. The defendant claimed the letter was falsely created on a blank stamp paper provided as security. However, the court noted that the defendant’s argument lacked credibility, as he admitted to signing and delivering the cheques, thereby granting the plaintiff prima facie authority under Section 20 of the Negotiable Instruments Act to complete the cheques.Issue 3: Entitlement to Realize the Claimed AmountThe plaintiff established that the cheques were dishonored due to insufficient funds and that the defendant was duly notified. The defendant's claim of having repaid Rs. 2,00,000/- was unsupported by any receipt or evidence. The court held that the plaintiff's evidence, including oral testimony and documentary proof, justified the claim for Rs. 8,28,864/- (principal and interest).Issue 4: Relief and CostsThe trial court decreed that the defendant should pay Rs. 8,28,864/- with 12% interest per annum from the date of the suit till realization and also bear the costs. The appellate court upheld this decision, finding no fault in the trial court's appreciation of evidence and reasoning.Conclusion:The appeal was dismissed, affirming the trial court's judgment that the defendant must pay the decreed amount with interest and costs. The court emphasized that the plaintiff had lawful authority to complete the cheques under Section 20 of the Negotiable Instruments Act and that the defendant's defenses were unsubstantiated.