Case Note & Summary
The plaintiff, Kishore K. Shah, filed a suit for recovery of Rs. 48,168/- with interest against the defendants, Vasanti Babli Borkar and Govind Babli Borkar. The plaintiff alleged that the defendants had taken a loan of Rs. 73,168/- for purchasing a property and issued two cheques as security: one for Rs. 48,168/- in the plaintiff's name and another for Rs. 25,000/- in the name of the plaintiff's wife. The defendants requested the plaintiff not to present the cheques before 31/10/1992 via a letter dated 3/10/1992, but the plaintiff presented the cheque for Rs. 48,168/-, which was dishonoured due to insufficient funds. The defendants paid Rs. 25,000/- but failed to pay the remaining amount, leading to the suit. The defendants denied the loan, claiming that the plaintiff had sought a loan from them and that the cheques were issued as security for a loan to the plaintiff, which could not be given due to delay in GPF loan. The trial court decreed the suit in favour of the plaintiff, and the first appellate court confirmed the decree. In the second appeal, the High Court held that no substantial question of law arose, as the findings of fact were based on evidence, including the letter and the dishonour of the cheque, and the defendants failed to rebut the presumption of consideration under Section 118 of the Negotiable Instruments Act, 1881. The appeal was dismissed with costs.
Headnote
A) Civil Procedure - Second Appeal - Substantial Question of Law - The court considered whether the findings of fact by the lower courts were perverse or based on no evidence, and held that no substantial question of law arose for interference under Section 100 of the Code of Civil Procedure, 1908 (CPC). (Paras 1-2) B) Evidence Act - Burden of Proof - Loan Transaction - The plaintiff proved the loan by producing cheques and a letter requesting postponement of presentation; the defendants failed to rebut the presumption that the cheques were issued for consideration. (Paras 3-5) C) Negotiable Instruments Act, 1881 - Section 118 - Presumption of Consideration - The court applied the presumption that every negotiable instrument was made or drawn for consideration, and the defendants did not discharge the burden to prove otherwise. (Paras 4-5)
Issue of Consideration
Whether the defendants had taken a loan from the plaintiff and were liable to repay the amount of Rs. 48,168/- with interest.
Final Decision
Second Appeal dismissed with costs; decree of trial court confirmed directing defendants to pay Rs. 48,168/- with interest at 9% p.a.
Law Points
- Burden of proof
- Loan transaction
- Dishonour of cheque
- Presumption under Negotiable Instruments Act
- 1881
- Section 118
- Section 138
