TaxTMI 
TaxTMI 
2023 (6) TMI 1149
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....rchase of certain properties. ii. It is stated that on 3rd February 2021, the Defendant issued to the Plaintiff the said cheque for valuable consideration. iii. On 27th April 2021, the Plaintiff deposited the said cheque with the Saraswat Co-operative Bank Ltd., Mazgaon, Mumbai branch for realization. At the time of deposit, it was noticed that the amount mentioned in figures on the said cheque was Rs. 2,25,000/- instead of Rs. 2,25,00,000/-. The amount in words was however correctly stated, however, crore was misspelt as 'caror'. iv. On 4th May, 2021, the Plaintiff received notice of dishonour from the bank. The reason for dishonour was stated as "55- Account blocked (situation covered in 21-25)". v. It was in these circumstances that the Plaintiff issued a statutory notice dated 19th May, 2021 under Section 138(b) of the Negotiable Instruments Act, 1881 calling upon the Plaintiff to make payment of the said sum within 15 days. The Defendant vide his Advocate's letter dated 27th May, 2021 responded to the statutory notice inter alia contending that the Plaintiff had never entered into any transaction with the Defendant nor had the Defendant issued any cheque towards di....
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....e said cheque that the Defendant had raised various false, frivolous and untenable contentions. 5. Mr. Mogre then submitted that since the Plaint was based on the dishonour of a cheque, there was neither need nor necessity to mention the consideration in respect of which the said cheque was issued. He submitted that once payment was made by cheque for discharge of a loan, even if the consideration was advanced in cash, the liability under the loan is substituted by the liability to honour the cheque. He submitted that in fact the original liability to pay the said loan gets discharged by means of execution of a cheque and if such cheque is not honoured, it gives rise to a distinct cause of action under the provisions of the Negotiable Instruments Act. In support of his contention, he placed reliance upon judgments in the case of Parikh Aluminex Limited vs M/s. Ashok Commercial Enterprises and Another 2014 SCC Online Bom 2304 and Mour Marbles Industries Private Limited vs Motilal, Laxmichand, Shalech HUF 2018 SCC Online 1387. He therefore submitted that the Defendant's contention that the Plaintiff was a moneylender or that amounts had been advanced in cash were both wholly immater....
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.... drawn. He reiterated that the presumption in law under Section 139 of the Negotiable Instruments Act would squarely apply and therefore it was not open for the Defendant to now contend that, (i) no consideration had passed from the Plaintiff to the Defendant or (ii) that the same was not properly set out/explained in the Plaint and (iii) that the Plaintiff was a money lender or that amount had been advanced in cash. He therefore submitted that the Summons for Judgment must necessarily be made absolute as prayed for. Submissions of Mr. Savant on behalf of the Defendant. 9. At the outset Mr. Savant, pointed out that there was no privity between the Plaintiff and Defendant since the Plaintiff had never advanced any monies to the Defendant. He pointed out that even the Plaint was silent as to the details of the consideration based on which the said cheque was allegedly advanced. He pointed out that the Plaint was totally silent as to when and where the said consideration had been given. 10. Learned counsel then submitted that the Defendant was entitled to unconditional leave to defend the present Suit on account of the gross suppression on the part of the Plaintiff. In sup....
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....s thus clear that the Plaintiff had filled in the said cheque and was seeking to recover sums purportedly paid by the Plaintiff to third parties on behalf of the Defendant absent any agreement or instruction from the Defendant. He submitted that on this ground alone, the Defendant was entitled to leave to defend the present Suit. 12. Learned counsel then submitted that it was well settled that a party cannot determine what is material and what is not. He submitted that a litigant must come up-front with all the material facts pertaining to its claim. In support of his contention, he placed reliance upon a judgment of the Hon'ble Supreme Court in the case of Bhaskar Laxman Jadhav and Ors. Vs. Karamveer Kakasaheb Wagh Education Society and Anr.6. He submitted that the letter dated 8th April, 2021 was a material letter and it was therefore essential for the Plaintiff to have dealt with and explain what was stated therein in the Plaint. He submitted that suppression of a material fact amounted to fraud on the Court and would by itself disentitle a party to any relief. In support of his contention, he placed reliance upon the judgment of the Hon'ble Supreme Court in the case of S. P. C....
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.... repayment of their entire principal amount. 16. Then dealing with the order dated 20th April, 2022, passed by the Sessions Court under Section 397 of the Code of Criminal Procedure, 1973, which directed the Defendant to make a deposit, he pointed out that the same was only an interim order and no final adjudication of liability of conviction of the Defendant had been undertaken. He without prejudice submitted that this, being an interim order, would not in any event bind this Court. 17. Learned counsel then submitted that it was well settled that the presumption under Section 139 of the Negotiable Instruments Act was a rebuttable presumption and thus when determining whether the presumption has been rebutted, the test of proportionality must guide such determination. He submitted that the standard of proof for rebuttal of the presumption under Section 139 of the Negotiable Instruments Act was guided by the preponderance of probabilities. In support of his contention, he placed reliance upon a judgment of the Hon'ble Supreme Court in the case of ANSS Rajashekar Vs. Augustus Jeba Ananth (2020) 15 SCC 348. Placing reliance upon the said judgment, he submitted that the Defendant had....
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.... virtue of the said definition itself the Plaintiff was a financier and thus someone who commercially lent money, i.e. a money lender. He therefore submitted that the said loan transaction could only be defined as being a commercial dealing between the parties and thus had the flavour of money lending. He therefore submitted that unconditional leave was required to be granted to the Defendant. In support of his contention, he placed reliance upon the judgments in the case of Sha Damji Deraj Vs. Megraj Bhikumchand and Co. 1958 SCC OnLine Bom 110 and Yellava Nagappa Kunchikorve Vs. Kantabi Malli (2012) 3 MhLJ 856. 20. In conclusion, learned counsel submitted that the Plaintiff's claims of having advanced monies in cash which was disputed by the Defendant were therefore not covered by the judgments relied upon by the Plaintiff. He submitted that these judgments pertain only to cases where the receipt of the amount had not been disputed. He submitted that Courts have repeatedly frowned upon litigants who had sought recourse to justice through Courts based on transactions in breach of the statutory provisions and tax laws. In support of his contention, he placed reliance upon a judgme....
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....e were no dealings between the Plaintiff and the Defendant or that the Defendant had not received any consideration from the Plaintiff. Additionally, it is completely unintelligible as to how a party can force another to take money on heavy interest and against one's own free will. Indeed, if this was the case, it was incumbent upon the Defendant to have set out adequate details in the Affidavit-in-Reply. The Affidavit-in-Reply is however completely bereft of any such details. iii. Additionally, while it is the Defendant's contention that he had handed over 30 cheques to the Plaintiff towards security for due repayment of the loans advanced by other individuals/entities, the Defendant has (a) not set out any details of the said 30 cheques and (b) not demanded the return thereof in writing despite claiming that the loans, in respect of which they were given as security, were repaid. This fact also prima facie militates against the contention that 30 cheques were infact given as security. iv. The Defendant's contention that the Plaintiff carries on the business of money lending is ex facie untenable given the fact that the Defendant has expressly pleaded that the Plaintiff had ....
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....oubt that the presumption under Section 139 of the Negotiable Instruments Act in this case arises, it is well settled that the same is a rebuttable presumption. ii. Additionally, for the reasons indicated above, while I have no doubt that there were dealings between the Plaintiff and the Defendant, one aspect on which I found merit in the argument of the Defendant was that the Plaint was bereft of the necessary details for the Plaintiff to be entitled to a decree. The Plaint is silent on when and how the consideration passed. It is now clear that the same was in cash and that by itself is not an impediment given the judgments of this Court in the case of Dr. Jagannath Ganesh Hegde (supra) and M. Shantilal & Co. (supra). However, there was merit in the contention of the learned counsel for the Defendant that the Plaintiff's letter dated 8th April, 2021 was completely unexplained in the Plaint. There is not a whisper of (a) when and how the consideration for the cheque dated 23rd January, 2016 for Rs. 1,95,00,000/- had passed and (b) the reasons for which the amount subsequently increased to Rs. 2,25,00,000/-. It prima facie appears that the Plaintiff had added the amounts to t....