Case Note & Summary
The appeal arises from an order making a Summons for Judgment absolute and decreeing a suit for recovery of Rs.64,02,308/- with interest at 18% p.a. from the date of suit till payment. The suit was based on nineteen dishonoured cheques issued by the appellant (Vijay Baburao Malankar, sole proprietor of Vijay Kerosene Agency) to the respondent (Indian Oil Corporation Ltd.) for the price of lubricants sold and delivered under 14 indents and 33 invoice-cum-delivery challans. The appellant contended that he was pressurized to buy lubricants under threat of non-supply of kerosene and light diesel, that the respondent breached a dealership agreement by withholding supply from October 1998, and that his customers failed to pay him. The learned Single Judge rejected these defences as unsustainable. The main legal issue was whether a cheque is an 'instrument' under Section 80 of the Negotiable Instruments Act, 1881, entitling the payee to interest at 18% per annum on a dishonoured cheque. The appellant argued that Section 80 applies only to 'notes' and 'bills', not cheques. The respondent contended that a cheque is an instrument and falls within Section 80. The court held that a cheque is an instrument within the meaning of Section 80, and the payee is entitled to interest at 18% per annum from the date of presentation of the cheque. The court dismissed the appeal, confirming the decree with interest at 18% p.a. from the date of the suit till payment.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Interest under Section 80 - Cheque as 'instrument' - The main question was whether a cheque is an 'instrument' under Section 80 of the Negotiable Instruments Act, 1881, entitling the payee to interest at 18% per annum on dishonour. The court held that a cheque is an instrument within the meaning of Section 80, and the payee is entitled to interest at 18% per annum from the date of presentation of the cheque. (Paras 3, 7-8) B) Civil Procedure Code - Summary Suit - Order 37 - Defences - The appellant raised defences of coercion, breach of dealership agreement, and failure of customers to pay. The court held that these defences were not triable issues and were rightly rejected by the learned Single Judge. (Paras 4-5)
Issue of Consideration
Whether a cheque is an 'instrument' within the meaning of Section 80 of the Negotiable Instruments Act, 1881, entitling the payee to interest at 18% per annum on a dishonoured cheque.
Final Decision
Appeal dismissed. The order making the Summons for Judgment absolute and decreeing the suit for recovery of Rs.64,02,308/- with interest at 18% p.a. from the date of the suit till payment or realisation is confirmed.
Law Points
- Cheque is an instrument under Section 80 of the Negotiable Instruments Act
- 1881
- Interest at 18% per annum on dishonoured cheque
- Summary suit under Order 37 CPC
- Defences must be triable issues
