Case Note & Summary
The appellant, K. Ravindra Shetty, was the defendant in a suit filed by Vijaya Bank for recovery of Rs. 3,20,835.20 with interest. The bank claimed that the defendant had a savings account and that on 12.12.2003, it received a letter along with two cheques - one for Rs. 3,20,000 belonging to B.S. Hussain Beary and another for Rs. 2,67,856 pertaining to the defendant, along with a letter from the Employees Provident Fund Organisation. The bank alleged that it inadvertently credited the amount of the cheque belonging to Hussain Beary to the defendant's account, and when the mistake was discovered, the defendant refused to repay. The trial court decreed the suit. On appeal, the High Court examined the evidence. The court noted that the bank failed to produce the original letter and cheques, and did not prove the service of notice under Section 138 of the Negotiable Instruments Act. The court held that the bank did not discharge its burden of proof and that the defendant's version that the cheque was stolen and misused was plausible. The appeal was allowed, setting aside the trial court's judgment and decree.
Headnote
A) Civil Procedure - Recovery Suit - Burden of Proof - The plaintiff bank failed to prove the debt and liability of the defendant as the cheque was not issued towards any existing liability but was a stolen cheque misused. The court held that the plaintiff must prove the debt and that the defendant is liable, and mere production of cheque and notice is insufficient. (Paras 2-10) B) Negotiable Instruments Act, 1881 - Section 138 - Dishonour of Cheque - Service of Notice - The plaintiff failed to prove that the notice under Section 138 was served on the defendant as the postal acknowledgment was not produced. The court held that without proof of service, the presumption under Section 118 cannot be invoked. (Paras 11-15) C) Evidence Act, 1872 - Section 65 - Secondary Evidence - The plaintiff did not lay foundation for leading secondary evidence of the cheque and letter. The court held that secondary evidence is inadmissible without proving the loss or destruction of the original. (Paras 16-20)
Issue of Consideration
Whether the plaintiff bank proved the debt and liability of the defendant, and whether the notice under Section 138 of the Negotiable Instruments Act, 1881 was properly served?
Final Decision
The appeal is allowed. The judgment and decree dated 01.11.2010 passed in O.S. No.8248/2007 by the XII Addl. City Civil and Sessions Judge, Bangalore, is set aside. The suit of the plaintiff is dismissed. No order as to costs.
Law Points
- Burden of proof in recovery suits
- Presumption under Section 118 of Negotiable Instruments Act
- 1881
- Service of notice under Section 138 of Negotiable Instruments Act
- Admissibility of secondary evidence under Section 65 of Indian Evidence Act
- 1872
