M.M. Rajeev v. O.K. Eldhose and others

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE MARY JOSEPH** **THURSDAY, THE 15[TH] DAY OF JULY 2021 / 24TH ASHADHA, 1943 RFA NO. 201 OF 2013** **AGAINST THE JUDGMENT AND DECREE DATED 10.07.2012 IN** **O.S.NO.74/2011 OF SUB COURT, PERUMBAVOOR** ## **APPELLANT/DEFENDANT:** ## **M.M.RAJEEV S/O MADHAVAN, MULAKKAKUDY HOUSE, CHERUKUNNAMKARA, ASAMANNOOR VILLAGE** **BY ADVS. SRI.PIRAPPANCODE V.S.SUDHIR SRI.JELSON J.EDAMPADAM** ## **RESPONDENT/PLAINTIFF:** - **1. O.K.ELDHOSE (DIED) S/O KURIAKOSE, OOTHALAKODAN HOUSE, VENGOLA KARA, VENGOLA VILLAGE - 683546** **2. C.E.OMANA, W/O LATE O.K ELDOSE, OOTHALAKOTTU HOUSE, ALLAPRA P.O, VENGOLA KARA, VENGOLA VILLAGE.** **3. AJAI BASIL, S/O DO ELDOSE, DO...DO..** **4. ANSE MARY BASIL, D/O DO ELDOSE, DO...DO..** **(THE ABOVE LEGAL HEIRS OF THE DECEASED R1 ARE IMPLEADED AS ADDITIONAL R2 TO 4 AS PER ORDER DATED 26/11/13 IN IA NO.2215/13.)** **BY ADV SMT.P.V.KOCHUTHRESIA** **THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON 26.03.2021, THE COURT ON 15.07.2021 DELIVERED THE FOLLOWING:** R.F.A. No. 201 of 2013 -:2:- ## **MARY JOSEPH, J.** - - - - - - - - - - - - - - - - - - - - - - - - R.F.A. No. 201 of 2013 - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 15[th] day of July, 2021 ## **JUDGMENT** Judgment passed on 10.07.2012 by Sub Court, Perumbavooor in O.S. No.74/2011 decreeing a Suit for money based on cheques is assailed in the appeal on hand by the defendant who has suffered the decree. The appellants and respondents shall be referred to hereinafter as the defendant and the plaintiff in accordance with their status in the suit. 2. Rs.6,00,000/- was borrowed by the defendant from the plaintiff stating that the loan applied for is pending consideration of the bank and promising that the borrowed amount with interest would be repaid immediately on sanctioning the loan in his favour. 3. The repayment was delayed and therefore the plaintiff approached him demanding the same. He was told by the defendant that some technical reasons had intervened in the grant of loan in time and accordingly the period of repayment was sought to be extended for three more years. Finding no other alternative R.F.A. No. 201 of 2013 -:3:- the plaintiff was constrained to agree to extend the time for repayment to three years. A debt acknowledgment letter was executed on 25.03.2008 undertaking to repay the amount with 12% interest in six instalments. Title deeds of the defendant bearing Nos.4514/2007 and 4890/2007 and six cheques drawn from various accounts maintained by him with different banks were also drawn and issued to the plaintiff. The cheques were presented for encashment but were bounced due to want of funds in the accounts of the defendant. 4. At the time when each cheques were returned bounced, the factum was timely informed to the defendant through lawyer notices sent to him and those were also evidenced as received by him. But, the defendant neither repaid the amount as demanded nor cared to sent a reply to the notice. Thereupon the plaintiff was constrained to file the suit as O.S.No.74/2011 for realisation of six lakhs with interest at the rate of 12% per annum from the date of institution of the suit till realisation from the defendant and his assets. 5. The defendant on his appearance in the suit filed written statement denying the pleadings of the plaintiff in the plaint and raising contentions of his own. Admittedly a loan of Rs.4,75,000/- R.F.A. No. 201 of 2013 -:4:- was availed by him from the plaintiff, and interest at the rate of 60% was paid to the plaintiff till August, 2010. In the month of April 2010 a sum of Rs.2,00,000/- was given to credit towards the principal sum borrowed. At the time of availing the loan 6 signed cheque leaves for double the loan amount availed, two signed blank stamp papers, 2 signed unwritten white papers, and the original title deed with the prior deed of the property belongs to the defendant were also given to the plaintiff as security for the loan availed. Interest was defaulted after August 2010. Without crediting the amount paid by him towards principal and interest, the plaintiff presented the cheque leaves after putting dates thereon. The plaintiff had also caused the defendant to hand over a debt acknowledgement letter in a blank signed stamp paper to him at the relevant time when the loan was availed. The defendant approached the plaintiff and demanded to credit the amount already paid by him towards the principal sum and interest and the plaintiff was amenable for that. The defendant had also agreed to repay the outstanding dues towards the loan and the interest. The defendant is ready to pay the actual amount due towards principal and interest and accordingly seeks to dismiss the suit with costs. R.F.A. No. 201 of 2013 -:5:- ## 6. The trial court framed the following issues for consideration on the basis of the contra pleas raised before it by the parties to the suit. - “1. Whether the defendant borrowed an amount of Rupees - 6 lakhs from the plaintiff during 2006-07? 2. Whether on 25.3.2008 defendant issued a letter of acknowledgement to plaintiff as contended by plaintiff ? 3. Whether the plaintiff is entitled to realise the amount claimed in the plaint from the defendant ? 4. Relief and costs ?” 7. Both parties adduced oral as well as documentary evidence aiming to establish their respective pleadings. Plaintiff examined himself as PW1 and also examined a witness as PW2. Exts.A1 to A42 were also marked. Defendant examined himself as DW1 and marked Exts.B1 to B11. The Trial Court considered the issues in the light of the evidence adduced by either parties and answered those in the affirmative in favour of the plaintiff. Accordingly the suit was decreed as follows : “Defendant shall pay a sum of Rs.8,28,864/- (Rupees eight lakhs twenty eight thousand eight hundred and sixty four only) to plaintiff with interest at 12% per annum from the date of suit till realisation for the principal sum of Rs.8,00,000/-. Defendant shall pay cost also.” R.F.A. No. 201 of 2013 -:6:- 8. According to Sri.Pirappancode V.S. Sudheer, the contentions of the defendant that the cheques had been misused by the plaintiff and on the strength of falsely created documents, the plaintiff resorted to file the suit seeking realisation of excess sum than due, were successfully established by the defendant but on an erroneous appreciation of the evidence adduced by him the trial court decreed the suit. According to him, a version highly inconsistent with that of PW1, was spoken by PW2, but the trial court had decreed the suit in favour of PW1 solely relying on his solitary evidence. 9. According to the learned counsel, in view of the distinct dissimilarity visible to the naked eye itself in the handwriting in which the date and other entries have been entered into the cheques, the trial court had decreed the suit. According to him, a prudent man would not grant three more years time for repayment of the sum borrowed, that too in six instalments after receiving six cheques, to a man who was already in default. According to him, the defendant had borrowed only Rs.4,75,000/- from the plaintiff and at the relevant time itself six signed undated cheques had been given as security and since Rs.2,00,000/- and interest till August 2010 stand repaid, credit of that must be granted and R.F.A. No. 201 of 2013 ## -:7:- therefore trial court would not have accepted the version of PW1 in that line. The trial court ought to have passed the judgment to the extent of the balance sum. According to the learned counsel when execution stands denied by the defendant, the plaintiff ought to have adduced cogent and reliable evidence to establish it, in discharge of his burden. According to the learned counsel, cheques were given without dates being put in it and therefore, putting the dates in it by the defendant itself tantamount to material alteration. The learned counsel has also relied on dictums of various courts to fortify the arguments advanced by him. 10. Smt.Kochuthresia, the learned counsel for the plaintiff raised arguments supportive of the findings of the trial court. According to her, the defendant also concede the borrowal of the money from the plaintiff. But the parties are at variance on the time when loan was availed, the amount borrowed, the amount repaid and the time when six cheques were issued. According to the plaintiff, loan was availed during 2006-2007, but to the defendant, in the year 2008. According to the plaintiff when the defendant approached the plaintiff seeking to extend the time for repayment, six cheques were given but, according to the defendant, those were given as security at the relevant time when R.F.A. No. 201 of 2013 -:8:- money was borrowed. According to the plaintiff, the sum borrowed is Rs.6,00,000/- but to the defendant, it is only Rs.4,75,000/-. According to the plaintiff, interest till August 2008 was paid but, to the defendant Rs.2,00,000/- together with interest for a period were paid. According to the plaintiff, cheques with all entries filled were given whereas the defendant has a case that all entries other than date were filled and given. According to the plaintiff, the debt acknowledgment letter was genuinely executed and given by the defendant but to the defendant, the said document was falsely created by the plaintiff in a blank stamp paper given as security at the relevant time of availing of loan. 11. Borrowal of the money stands admitted by the defendant. Issuance of cheques, six in numbers were also admitted by the defendant. According to him, at the relevant time of issuance of those all entries except the dates were filled and given. Therefore, there is no dispute that the cheques were issued with figures showing the amount, duly filled up. 12. The cheques were marked in evidence by the plaintiff as Exts.A4, A9, A14, A19, A24 and A29. A perusal of the cheques would reveal that amounts were written in those respectively as Rs.2,00,000/-, Rs.2,00,000/-, Rs.1,00,000/-, Rs.1,00,000/-, R.F.A. No. 201 of 2013 ## -:9:- Rs.1,00,000/- and Rs.1,00,000/-. When the filling up of the cheques with reference to the amount stands undisputed by the defendant, the claim of the plaintiff in the suit that a total sum of Rs.8,00,000/- was due at the time when the cheques were issued and Rs.8,28,864/- (Principal sum of Rs.6,00,000/- and interest at the rate of Rs.12% per annum) is due to him at the relevant time of filing of the Suit, stands probabilised. 13. The stand of the defendant was that Rs.4,75,000/- was borrowed from defendant and the interest charged on the sum advanced was 60%. According to him interest was paid for a period and Rs.2,00,000/- was also paid towards the principal sum borrowed. 14. The admitted case of the defendant was that 6 cheques for Rs.8,00,000/- in total were given at the time of availing of the loan itself. What made the defendant to issue six cheques for Rs.8,00,000/- at the relevant time of availing of the loan amount itself is not known. No cogent explanation for that is forthcoming from DW1. Therefore, the stand taken by the defendant in defence itself is confusing. 15. Yet another important aspect to be noticed is the claim of the defendant that Rs.2,00,000/- was paid towards the principal R.F.A. No. 201 of 2013 ## -:10:- amount of loan stands unestablished. The defendant failed to produce a receipt to evidence payment of Rs.2,00,000/- towards principal sum. A prudent man would obtain a receipt when a substantial sum is repaid by him towards the loan dues especially when his specific case was that cheques for Rs.8,00,000/- are retained by the plaintiff as security. 16. An important aspect arises for consideration is whether entering the dates in the cheques, duly filled up in all other respects and also signed would amount to material alteration as contended by the learned counsel for the defendant. 17. Section 20 of the Negotiable Instruments Act, 1881 is relevant in the context and is extracted hereunder for convenient reference: “20. Inchoate stamped instruments.—Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives _prima facie_ authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount covered by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount: R.F.A. No. 201 of 2013 ## -:11:- Provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.” 18. In the case on hand the handing over of the cheques by the defendant as admitted by him, under the provision extracted supra confer the person receiving it, a prima facie authority to make or complete those. Therefore, since the defendant has handed over the six signed cheques even with entries other than the figure showing the money filled up, as holder of it the plaintiff is given prima facie authority by Section 20 of the N.I. Act to complete it. Therefore, the argument that by entering the dates in the cheques, the plaintiff has materially altered the cheques will not sustain and is discarded. 19. The plaintiff has established before the trial court that the cheques on presentation for encashment were bounced and the factum of dishonour was duly informed to the defendant by serving lawyer notices. Strictly no materials are forthcoming to establish any repayment towards the interest or the principal sum borrowed. The plaintiff has tendered oral evidence to establish his claim for realisation of money. He has also produced relevant documentary evidence to justify his claim. R.F.A. No. 201 of 2013 -:12:- 20. The decisions relied on by the learned counsel for the defendant refer to presumption contemplated under Section 118 N.I Act. In **Veluchandran v. Vilasini Amma and others** [ILR 2020 (2) Kerala 444], this Court has held that only when the execution of the cheque is satisfactorily established by the plaintiff, presumption under Section 118 of the N.I. Act on consideration would operate to aid the plaintiff seeking realisation of money based on cheques. 21. In the case on hand the execution of the cheque stands admitted by the defendant when he admits the factum of availing of loan from the plaintiff and issuance of cheques. In such a context, presumption under Section 118 N.I. Act could be drawn that those were issued for valid consideration. A contention was raised that his source to advance the huge sum was not established by the plaintiff and **Abdul Khader v. Zubair** [2015 (4) KLT SN 135 (Case No.163)] was relied on to support. In the said case PW1 has spoken during examination that he has no source of income and it was held by the court that the said version is material while drawing the presumption under the N.I. Act. It was also said by the court in the context that the accused has discharged his initial burden, successfully. R.F.A. No. 201 of 2013 ## -:13:- 22. The decisions relied on by the learned counsel cannot be said to have any relevance in the context of the case on hand when the transaction of borrowal of money stands admitted by the defendant and claim of repayment of a part towards loan stands disproved. 23. In the case on hand the specific stand of the defendant was that dates have not been written in the cheques and the plaintiff has put it prior to presentation of those. The plaintiff has a contra claim. Evenif the defendant's version is accepted as true, the filling up of the dates in an otherwise filled and signed cheque, not being material alteration, will not invalidate it. The plaintiff being the holder of the cheques undoubtedly has lawful authority to fill the blank entry under Section 20 N.I.Act. The view on the point is well fortified by the dictum in **Bir Singh v Mukesh Kumar** [2019 (1) KLT 598 (SC)] and is extracted hereunder: “If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars, and this in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence.” R.F.A. No. 201 of 2013 -:14:- 24. A scrutiny of the evidence on record convinces this Court that the trial court had a true and proper appreciation of evidence and cannot be found fault with in decreeing the suit. Interference is totally unwarranted. The appeal fails for the reasons. In the result, appeal is dismissed. No order as to costs. sd/- **MARY JOSEPH, JUDGE** ttb/07.06