2018 (11) TMI 929 - HC - Indian Laws

Court Upholds Judgment in Favor of Plaintiff, Rejects Defendant's Arguments

Balinder Yadav Versus Sh. Ram Saran Singh

The court upheld the trial court's judgment, dismissing the appeal and ruling in favor of the plaintiff. The plaintiff was awarded Rs. 1,85,000/- with 10% ... Dishonor of Cheque - recovery of loan - defendant/appellant contended that the said cheques were issued towards payment of insurance and not in discharge of any alleged loan amount - rebuttal of presumption presumption under section 139 of the N.I Act. Whether suit filed by the respondent/plaintiff is barred under section of 3 of Punjab Registration of Money Lenders' Act? - Held that:- Apparently, the factum of the respondent allegedly running a money lending business would require determination of facts and evidence which is not within the domain of this Court in terms of Section 100 of the CPC, 1908, as amended, RSA No. 160/20-18 and thus no issue in relation thereto is necessitated, and thus no such issue can be framed. Whether question of law regarding maintainability of the suit can be raised at the stage of first appeal? - Held that:- The aspect of issue of law of the suit being barred under the Provisions of Punjab Registration of Money Lenders Act has already been taken into account by the First Appellate Court and has been negated on the basis of the evidence led during the trial before the learned Trial Court and does not need any further reagitation. Whether appellant rebuttal rebutted the presumption under section 139 of the N.I Act, when respondent failed to prove that any loan was given to the appellant? - Held that:- No such issue is sought to be framed arises as any substantial question of law in the instant case which is in fact based purely on facts qua which there are concurrent findings of the learned Trial Court and the First Appellate Court. Whether if respondent claimed that he was charging the monthly interest, can it be a friendly loan or doing money lending covered under Punjab registration of Money Lenders' Act? - Held that:- The plaintiff i.e. the respondent to the present appeal did not bring forth that the defendant was running any business of money lending and that thus merely because interest was sought to be charged by the plaintiff on the loan given to the defendant/appellant. Whether issuing of cheque is amount (sic) (amounts) to presumption that cheque is issued for re-payment of loan? - Held that:- The presumption of law on issuance of a cheque in favour of the holder of the cheque, unless the contrary is proved that the holder of the cheque received the cheque of the nature referred to in Section 138 for the discharge in whole or in part of any debt or other liability, exists in law in terms of Section 139 of the Negotiable Instruments Act, 1881 as rightly held by the learned Trial Court and upheld by the First Appellate Court, and thus the formulation of the question of law to submit as to whether the issuance of a cheque amounts to a presumption that the cheque was issued for repayment of a loan as sought by the appellant does not arise in relation to repayment of any debt or other liability falling with the ambit of Section 139 of the Negotiable Instruments Act, 1881 itself. No substantial question of law having arisen or being involved which is per se the sine qua non for exercise of jurisdiction under Section 100 of the Code of Civil Procedure 1908 (as amended) - Application dismissed. Issues Involved:1. Privity of contract between the plaintiff and the defendant.2. Non-joinder of necessary parties.3. Entitlement of the plaintiff to recover Rs. 2,44,200/- along with interest.4. Applicability of the Punjab Registration of Money Lenders Act.5. Rebuttal of presumption under Section 139 of the Negotiable Instruments Act.6. Issuance of cheques as presumption of repayment of loan.7. Nature of the loan as friendly or money lending.Detailed Analysis:1. Privity of Contract:The court held that there existed a privity of contract between the parties. The defendant/appellant issued cheques to the plaintiff/respondent in his personal capacity, not on behalf of any firm, establishing a direct contractual relationship. The court concluded that the suit was not bad for non-joinder of any necessary party.2. Non-joinder of Necessary Parties:The court found that the suit was not bad for non-joinder of necessary parties. The transaction was between the plaintiff/respondent and the defendant/appellant personally, and the firm of the defendant/appellant was not involved in the loan transaction.3. Entitlement to Recover Amount:The plaintiff/respondent claimed a loan of Rs. 2,65,000/- given to the defendant/appellant, with Rs. 80,000/- repaid. The court observed that the defendant admitted issuing cheques but claimed they were for investment purposes. The statutory presumption under Section 139 of the Negotiable Instruments Act favored the plaintiff, presuming the cheques were issued for a legally enforceable debt. The defendant failed to rebut this presumption convincingly. The court decreed the suit for Rs. 1,85,000/- (after deducting the repaid amount) with 10% interest per annum from April 2009 onwards.4. Punjab Registration of Money Lenders Act:The defendant contended that the suit was barred under the Punjab Registration of Money Lenders Act. The court rejected this, noting no evidence was presented to show the plaintiff was engaged in money lending. The plaintiff was identified as an insurance advisor and involved in the readymade garments business, not money lending.5. Rebuttal of Presumption under Section 139 of the Negotiable Instruments Act:The court held that the defendant/appellant failed to rebut the presumption under Section 139 of the Negotiable Instruments Act. The defendant's contradictory statements and lack of evidence to support his claims about the cheques being for investment purposes weakened his defense. The cheques were not issued in the name of any investment company or scheme, further supporting the plaintiff's claim.6. Issuance of Cheques as Presumption of Repayment of Loan:The court reiterated the legal presumption under Section 139 of the Negotiable Instruments Act that cheques are issued in discharge of a debt or liability. The defendant's failure to provide evidence to the contrary upheld this presumption.7. Nature of the Loan:The court found that the loan was a friendly loan, not a money lending transaction. The plaintiff did not have a money lending license, and the interest rate claimed was not proven to be agreed upon. The court reduced the interest rate to 10% per annum, deeming it just and fair.Conclusion:The court dismissed the appeal, upholding the trial court's judgment. The plaintiff was entitled to recover Rs. 1,85,000/- with 10% interest per annum from April 2009 onwards. The costs of the suit were also awarded to the plaintiff. The defendant's arguments regarding the applicability of the Punjab Registration of Money Lenders Act and the nature of the loan were rejected. The statutory presumption under Section 139 of the Negotiable Instruments Act was upheld, and the defendant's failure to rebut this presumption led to the dismissal of the appeal.