2025 (3) TMI 180 - HC - Indian Laws

Defendant's appeal dismissed in Rs 3 lakh cheque bounce case after failing to rebut Section 118 presumptions

Kerala HC dismissed defendant's appeal in dishonour of cheque case involving Rs.3,00,000. Trial court's decree was upheld after finding plaintiff proved ... Dishonour of cheque - insufficient funds - discharge of legal liability or not - plaintiff proved the transaction led to execution of Ext.A1, so as to get the suit amount, as claimed or not - trial court went wrong in holding that the plaintiff proved Ext.A1 and the defendant’s case is contrary, to be acted upon - HELD THAT:- On reappreciation of the available evidence, the case of the plaintiff as to borrowing of Rs.3,00,000/- during the month of January, 2005, by the defendant and consequential issuance of Ext.A1 cheque dated 31.05.2005, were proved by the evidence of PW1, since the substantive evidence given by PW1 in this regard was not shaken. The defendant, in fact, had inconsistent contentions. That is to say, before filing the written statement, when Exts.A6 and A8 notices were issued, the case of the defendant was that the plaintiff was attempting to misuse the blank signed papers and blank signed cheques of the defendant, stolen away by Sri.Vijayakumar. But, thereafter in the the written statement even the signature in the cheque was also denied. It is the well settled law that, when a fact is disputed, the evidence to prove the same is substantive evidence, though corroborative evidence also can be adduced to support the substantive evidence. Indubitably, corroborative evidence will not stand unless there is no substantive evidence. In the instant case, the substantive evidence as that of the plaintiff in the matter of transaction, which led to execution of Ext.A1 cheque was not shaken during cross-examination. Therefore, presumptions under Section 118 (a) to (g) of the NI Act is to be adjudged in favour of the plaintiff. The inconsistent case put up by the defendant is not supported by even remote piece of evidence and therefore the said case not at all established, inturn the presumptions in favour of the plaintiff not rebutted. In such view of the matter, the trial court rightly granted decree. In fact, the said verdict does not require any interference. In view of the above, remand cannot be made merely for the purpose of enabling a party to fill up the lacuna in the evidence. Accordingly, the remand plea at the instance of the learned counsel for the defendant also is liable to fail. Conclusion - The presumption under Section 118 of the NI Act in favor of the holder of a negotiable instrument and the necessity for defendants to provide credible evidence to rebut such presumptions. The appeal stands dismissed and the verdict under challenge stands confirmed. Considering the nature of the case, there is no reason to disallow the cost of this proceedings to the plaintiff/respondent. 1. ISSUES PRESENTED and CONSIDEREDThe following core legal questions were considered in the judgment:Whether the plaintiff proved the transaction that led to the execution of the cheque (Ext.A1) to claim the suit amount.Whether the trial court erred in holding that the plaintiff proved Ext.A1 and the defendant's case was contrary, thereby justifying the decree.Whether the verdict required interference.Reliefs and costs associated with the case.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Proof of Transaction Leading to Execution of Ext.A1Relevant Legal Framework and Precedents: The case primarily involved the application of Section 118 of the Negotiable Instruments Act, 1881, which presumes the consideration, date, time of acceptance, and other aspects of a negotiable instrument unless proven otherwise. The precedent from Mohammed v. Velayudhan & Another was considered for understanding the implications of signing documents.Court's Interpretation and Reasoning: The court evaluated the evidence presented by the plaintiff, including the testimony of PW1 and documentary evidence (Exts.A1 to A11). The court noted that the defendant failed to present oral evidence to counter the plaintiff's claims effectively.Key Evidence and Findings: The plaintiff's evidence, particularly the testimony of PW1, was found credible. The defendant's failure to present herself for cross-examination led to an adverse inference against her, as per the precedent set in Vidyadhar v. Mankik Rao.Application of Law to Facts: The court applied the presumption under Section 118 of the NI Act in favor of the plaintiff, as the defendant could not rebut the presumption effectively.Treatment of Competing Arguments: The defendant's argument of forgery and theft of blank cheques by a third party was not substantiated with evidence. The court noted inconsistencies in the defendant's claims.Conclusions: The court concluded that the plaintiff successfully proved the transaction that led to the execution of the cheque, and the defendant's contentions were not credible.Issue 2: Trial Court's Findings on Ext.A1Relevant Legal Framework and Precedents: The court considered the presumption of correctness of the trial court's findings unless significant error or miscarriage of justice is evident.Court's Interpretation and Reasoning: The appellate court found no error in the trial court's reliance on the evidence presented by the plaintiff and the adverse inference drawn against the defendant.Key Evidence and Findings: The trial court's observations regarding the plaintiff's evidence and the defendant's lack of rebuttal were upheld.Application of Law to Facts: The appellate court agreed with the trial court's application of the presumption under Section 118 of the NI Act.Treatment of Competing Arguments: The defendant's request for remand to present further evidence was denied as it was deemed an attempt to fill evidentiary gaps post-trial.Conclusions: The appellate court upheld the trial court's findings, confirming the decree in favor of the plaintiff.Issue 3: Necessity for Interference with the VerdictRelevant Legal Framework and Precedents: The appellate court considered the standards for appellate review, emphasizing the need for compelling reasons to overturn a trial court's decision.Court's Interpretation and Reasoning: The court found no compelling legal grounds to interfere with the trial court's verdict.Key Evidence and Findings: The evidence presented was deemed sufficient to support the trial court's decision.Application of Law to Facts: The appellate court applied principles of finality and judicial economy, emphasizing the sufficiency of the existing record.Treatment of Competing Arguments: The defendant's plea for remand was rejected, as the appellate court found the trial court's proceedings were neither irregular nor defective.Conclusions: The appellate court concluded that the trial court's verdict was sound and required no interference.Issue 4: Reliefs and CostsRelevant Legal Framework and Precedents: The court considered the principles governing the award of costs in civil litigation.Court's Interpretation and Reasoning: The court awarded costs to the plaintiff, finding no reason to disallow them.Key Evidence and Findings: The plaintiff's successful prosecution of the claim justified the award of costs.Application of Law to Facts: The appellate court applied standard principles for awarding costs to the prevailing party.Treatment of Competing Arguments: The defendant's arguments against the award of costs were not persuasive.Conclusions: The court confirmed the award of costs to the plaintiff.3. SIGNIFICANT HOLDINGSPreserve verbatim quotes of crucial legal reasoning: The court emphasized the importance of substantive evidence in proving the transaction leading to the execution of a negotiable instrument, stating, 'The substantive evidence as that of the plaintiff in the matter of transaction, which led to execution of Ext.A1 cheque was not shaken during cross-examination.'Core principles established: The judgment reinforced the presumption under Section 118 of the NI Act in favor of the holder of a negotiable instrument and the necessity for defendants to provide credible evidence to rebut such presumptions.Final determinations on each issue: The appellate court upheld the trial court's decree, confirming the plaintiff's entitlement to the suit amount and associated costs, and dismissed the appeal.