TaxTMI 
TaxTMI 
2021 (12) TMI 326
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....business at Erode. The firm is a registered firm. The first defendant which was a proprietary concern doing business in Textiles under the name and style of "Lakshmi Textiles" had issued cheques favouring the 2nd and 3rd defendants, which were also firms and close business associates of the 1st defendant. The defendants 2 and 3 would discount these cheques on commission payment with the plaintiff on the assurance that the same would be honoured by the 1st defendant on presentation. 3. The 1st defendant had issued the following cheques which were discounted by the defendants 2 and 3 are detailed below: M/s. Sri Lakshmi Saraswathi Textile (2 n d Defendant): S.No. Cheque No. Date of cheque Drawn on Sent for Collection Amount 1. 133123 23-12-03 Andhra Bank 19-05-04 1,60,000 2. 133124 26-12-03 Andhra Bank 20-05-04 1,62,000 3. 133134 09-01-04 Andhra Bank 20-05-04 1,50,000 4. 133135 22-01-04 Andhra Bank 20-05-04 1,47,000 6,19,000 M/s. Sivasakthi Textiles (3rd defendant): S.No. Cheque No. Date of cheque Drawn on Sent for Collection Amount 5. 133120 04-02-03 Andhr....
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....efendant would further submit that the plaintiff has introduced new cheques into the plaint which does not find mention in Section 138 proceedings before the Judicial Magistrate. Further, the suit is barred by time and there is no cause of action for filing the suit. Plaintiff's case in O.S.No.50 of 2007: 7. The plaintiff had raised the very same contentions as in the suit O.S.No.48 of 2007, except for the fact that in this suit the subject matter were the following cheques: S.No. Cheque No. Date of cheque Drawn on Sent for Collection Amount 1. 0106572 26-11-03 Andhra Bank 08-05-04 1,63,000 2. 0106574 16-12-03 Andhra Bank 18-15-14 1,56,000 3. 0106575 19-12-03 Andhra Bank 20-09-03 1,55,000 4,74,000 In all other respects the plaint was more or less identical to the plaint in the suit O.S.No.48 of 2007. Written Statement of the 1s t d efendant in O.S.No.50 of 2007: 8. The 1st defedant had taken identical defence in this suit as well. 9. The I Additional District Judge, Erode (Trial Court) before whom the two suits were pending, on consideri....
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....d. The learned Judge also observed that there was no endorsement as contemplated under the Negotiable Instruments Act and further, the plaintiff has not been able to prove the passing of consideration. 12. The learned Judge had also taken note of the fact that the plaintiff was not able to prove that the 2nd and 3rd defendants had actually discounted the cheques and that he had business dealings with them. The Court took note of the fact that the summons which were issued to the 2nd and 3rd defendants at the address mentioned by the plaintiff had been returned with the endorsement "no such addressee". The learned Judge held that this only further strengthens the case of the 1st defendant that the plaintiff had no direct knowledge about the defendants 2 and 3. Ultimately, the learned Judge had dismissed the two suits. It is challenging the said Judgment and Decree in O.S.No. 48 of 2007 that the plaintiff has filed A.S.No. 824 of 2008 and A.S.No. 825 of 2008 has been filed, challenging the Decree and Judgment in O.S.No. 50 of 2007. Submissions: 13. Mr.Vadivel Murugan, learned counsel appearing on behalf of the plaintiff / appellant in both the appeals would submit that the t....
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.... more or less identical. He would also point out the admission of P.W.2, who would submit that Venkatesh is not a partner in the plaintiff firm and that it was only Anbalagan who was the partner. He would point out the discussion of the Trial Court in this regard. The learned Judge had observed as follows: " A staff in the Plaintiff's institution has deposed as P.W.2 and in her cross examination, she has stated that the plaintiff Venkatesh and one Kumar were partners in Murugavel textiles. It is very very important to note that the present plaintiff Murugavel finance and Murugavel Textiles are distinct establishments and according to P.W.2 a staff in the plaintiff's institution Venkatesh and Kumar were partners only in Murugavel Textiles." 15. The learned counsel would further submit that the said Venkatesh was totally in the dark about the facts of the case which is clearly evident from his cross-examination. All these put together would only go to show that Venkatesh had nothing to do with the plaintiff firm and this coupled with the facts that the plaintiff has not produced any evidence to prove that Venkatesh is a partner will only aid the 1st defendant. He ....
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....rse as follows: "Holder in due course".-"Holder in due course" means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof, if 1[payable to order], before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title." 20. Section 15 defines endorsement as follows: "15. Indorsement.-When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to indorse the same, and is called the "indorser". 21. Section 16 of the Negotiable Instruments Act talks about the Indorsement "in blank" and "in full" and about the indorsee which is extracted herein below: "If the indorser signs his name only, the indorsement is said to be "in blank", and if he adds a direction to pay the amount mentioned in the instrume....
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....r in due course" means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer,or the payee or endorsee thereof. No doubt, complaint under Sec.138 of N.I.Act by such holder in due course is maintainable. But, in this case, the facts and circumstances under which Dilip Shivani has endorsed the cheques Exs.P.2 to P.4 to Maya Shivani are not forthcoming. Consideration for passing of the cheque is not satisfactorily proved. It is relevant to note that the transaction between the parties relates not merely to one cheque; but relate to as many as six chques. Substantial evidence ought to have been adduced to prove the endorsement. In the absence of endorsement in compliance of Sec. 50 of N.I.Act, the presumption that the holder of cheque is of a holder in due course cannot be drawn in favour of the complainant." 25. This Judgment has been followed in the later Judgments reported in 2010 CRI.L.J. 3323 - M/s Jayaram Finance, Kancheepuram and Anr. Vs. Jayaprakash, 2010 (1) LW CRL 542 - Palaniappa Mills rep. by its partner, P. Natarajan Vs. A.Vaithiyalingam and 2012 (2) MLJ CR 621 - G.B.Finance, rep, by Power of Attorney ....