Cheque liability presumption applies on admitted execution, but unexplained correspondence justified only conditional leave to defend.

Admitted execution and voluntary delivery of a cheque triggered the statutory presumption of liability under Section 139 of the Negotiable Instruments Act, 1881, and a bare assertion that the cheque was blank or issued as security was insufficient to rebut it. However, the plaint and surrounding correspondence left unexplained gaps about the earlier lower figure and the later enhancement of the claim, creating a limited triable issue. The defendant therefore was not entitled to unconditional leave to defend, but conditional leave to defend was appropriate, preserving the defence while allowing the suit to proceed on a deposit condition.

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Issues: (i) Whether the admitted execution and voluntary handing over of the cheque attracted the statutory presumption of liability and the defence of a blank or security cheque could rebut it at the stage of leave to defend. (ii) Whether the plaint and surrounding correspondence were so incomplete or unexplained as to entitle the defendant to unconditional leave to defend, or only conditional leave to defend.

Issue (i): Whether the admitted execution and voluntary handing over of the cheque attracted the statutory presumption of liability and the defence of a blank or security cheque could rebut it at the stage of leave to defend.

Analysis: The admitted signature and delivery of the cheque brought the presumption under Section 139 of the Negotiable Instruments Act, 1881 into operation. A blank cheque voluntarily handed over does not, by itself, displace that presumption. The defence of absence of consideration or of the cheque being a mere security instrument required a specific and credible factual foundation, which was not sufficiently shown on the materials placed before the Court.

Conclusion: The statutory presumption applied and the defendant could not avoid liability merely by asserting that the cheque was blank or given as security.

Issue (ii): Whether the plaint and surrounding correspondence were so incomplete or unexplained as to entitle the defendant to unconditional leave to defend, or only conditional leave to defend.

Analysis: Although the plaintiff's case disclosed dealings between the parties, the plaint did not satisfactorily explain the material correspondence relied upon by the defendant, especially the earlier letter reflecting a lower amount and the later increase to the suit amount. The absence of a clear explanation as to when and how the consideration arose and how the amount was enhanced created a triable issue. The defendant's money-lending and financier objections were not accepted as complete answers, but the incomplete pleading justified only limited protection at the threshold.

Conclusion: The defendant was not entitled to unconditional leave to defend, but conditional leave to defend was warranted.

Final Conclusion: The suit could proceed, but only after the defendant's right to defend was preserved on a deposit condition, reflecting a balance between the statutory cheque presumption and the need to test the unexplained aspects of the plaintiff's claim at trial.

Ratio Decidendi: In a summary suit based on a dishonoured cheque, admitted execution and voluntary delivery activate the presumption of liability under Section 139 of the Negotiable Instruments Act, 1881, but where the pleadings leave material gaps and the surrounding correspondence raises a limited triable issue, the proper course is to grant conditional leave to defend rather than unconditional leave.

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