PR. COMMISSIONER INCOME TAX -6 vs. M/S SILVER SOFTWARE PVT.LTD.,

THIMMADAS S/O ERAPPA AGED ABOUT 52 YEARS R/AT NO.26/08, QAW ASSEMBLY H.M.T WATCH FACTORY-IV TUMKUR-572106 …APPELLANT (BY SRI MANJUNATH B R, ADVOCATE)

HEMALATHA R P W/O THEERTHAKUMAR K AGED 39 YEARS 1ST MAIN, 1ST CROSS MANJUNATHANAGAR NAGASANDRA POST BANGALORE-560073

ACCOUNTS OFFICER WAGES SECTIONS H.M.T. WATCH FACTORY-IV TUMKUR -572 106 …RESPONDENTS (BY SRI N SURESHA, ADVOCATE FOR R1; VIDE ORDER DATED 14.12.2015 NOTICE TO R2 IS DISPENSED WITH)

Facts in brief which are utmost necessary for disposal of the present appeal are as under: Plaintiff filed a suit contending that first defendant barrowed a sum of Rs.4,50,000/- in the month of April 2013 and a cheque bearing No.993684, dated 23.07.2013 came to be issued towards the repayment of the said amount, drawn on Allahabad Bank, J.C. Road Branch, Tumakuru.

It is further contention of the plaintiff that the said cheque on presentation came to be dishonored with an endorsement ‘account closed on 29.08.2013’.

The fact of dishonor of the cheque was intimated to the first defendant and demanded the payment and when the first defendant failed to make payment, the plaintiff filed the suit.

Upon receipt of the suit summons, first defendant appeared before the Trial Court and filed the written statement denying the plaint averments except para 2 of the plaint.

Based on the rival contentions of the parties, the Trial Court raised following issues: “1. Does the plaintiff proves that defendant No.1 had availed a hand loan of Rs.4.5 lakhs from her on 10.4.2013 for his family necessities agreeing to repay the said amount along with interest @ 12% p.a? 2. Does she further proves that for the repayment of the Hand Loan availed from her defendant No.1 had issued a cheque for Rs.4.5 lakhs dt.20.7.2013 and the same was returned dishonoured when presented for encashment with shara - 'Account closed'?

Whether defendant No.1 proves that a lost cheque has been misused by the plaintiff to make wrongful gain and a false suit has been filed against him for recovery of the suit claim amount? 4. Whether the suit of the plaintiff is bad for mis- joinder and non-joinder of necessary parties? 5. Whether the plaintiff is entitled for Judgment and decree as prayed under the suit against the defendant? 6. What order or decree?”

In order to prove the case of the plaintiff, plaintiff got examined herself as P.W.1 and placed on record five documents namely; dishonored cheque, bank endorsement, memorandum issued by the bank, statement of account, which were exhibited and marked as Exs.P.1 to P.5.

In the detail cross-examination, suggestions were put to the plaintiff with regard to lending capacity as well as opening of the account.

Plaintiff in her cross-examination has categorically stated that she had not produced any documents to show that she had the lending capacity, but she has answered that her father had retired from the service and from the retirement benefits, the loan was paid.

She also admitted in the cross-examination that she does not remember when she has opened the account in Karnataka Bank, CMM Court Branch.

She denied the suggestion that she is a stranger to the first defendant.

As against the evidence placed on record by the plaintiff and to rebut the presumption available to the plaintiff under Section 118 of the Negotiable Instruments Act, first defendant got examined himself as D.W.1.

In his examination in chief, the defendant reiterated the contents of the written statement and contended that plaintiff is a stranger to the defendant and when he had been to his relatives house in Pavagada, he lost a cheque book containing several cheque leaves of Allahabad Bank and in that regard, he had filed a complaint before the Pavagada Police on 27.04.2011 and the cheque in question is also part of the said complaint and therefore, the cheque has been misused with the help of one Lokesha and sought for dismissal of the suit.

In his cross-examination, D.W.1 admits that he was working as an operator in HMT watch factory. He has further answered that the cheque in question has been dishonored is false.

He admits that the plaintiff is not aware of the complaint lodged by the defendant vide Ex.D.3 with Pavagada Police.

Based on the above evidence, learned Trial Judge decreed the suit of the plaintiff as under: “The suit of the plaintiff is decreed with cost. The defendant No.1 is liable to pay a sum of Rs.4,50,000/- along with interest at 12% per annum from the date of suit till its realization. The suit against defendant No.2 is dismissed. Draw decree accordingly.”

Being aggrieved by the same, first defendant is in appeal on following grounds:  The impugned judgment and decree passed by the court below is not sustainable either in law or on facts and the same is liable to be set aside.  The impugned judgment and decree passed by court below is not sustainable as the respondent is a

Sri Manjunatha B.R., learned counsel for the appellant reiterating the grounds urged in the appeal memorandum vehemently contended that the plaintiff is a total stranger to the first defendant and therefore, the question of plaintiff lending sum of Rs.4,50,000/- to the first defendant would not arise.

He also pointed out that the cheque in question has been misused by the plaintiff with the help of one Lokesha and therefore, the Trial Court ought not to have decreed the suit.

He further contended that the Trial Court misdirected itself in not noticing that the cheque is dated 23.07.2013, but the account of the defendant was closed by giving a letter to the bank at Ex.D.1 on 01.06.2009 itself. Therefore, there was no legally recoverable debt under Ex.P.1 cheque and the Trial Court misdirected itself in decreeing the suit based on Ex.P.1 and sought for allowing the appeal.

Per contra, Sri N. Suresha, learned counsel for the respondent supports the impugned judgment. He further contended that when once the cheque is dishonored and that is the suit document, the plaintiff enjoys the presumption under Section 118 of the Negotiable Instruments Act. Therefore, no further proof is necessary in respect of Ex.P.1 and it is for the first defendant to rebut the presumption by placing cogent evidence on record which has not been done by the first defendant. Therefore, sought for dismissal of the appeal.

Having heard the parties, following points would arise for consideration: 1) Whether the plaintiff has successfully established that the plaintiff is due in a sum of Rs.4,50,000/- with interest as prayed for under Ex.P.1.? 2) Whether the first defendant has proved that the cheque at Ex.P.1 has been misused by the plaintiff in active collusion with one Lokesha? 3) Whether the impugned judgment is suffering from legal infirmity and perversity and thus calls for interference? 4) What order

Regarding point Nos.1 to 3 : In the case on hand, the plaintiff has discharged the initial burden cast on her by examining herself and producing the documents at Exs.P.1 to P.5.

Admittedly, the cheque has been dishonored with an endorsement ‘Account Closed’.

The fact of the cheque being issued and the signature of the defendant No.1 in the said cheque is not in dispute.

According to the first defendant, as per Ex.D.3 - complaint, he has lost the cheques when he had been to Pavagada.

A complaint came to be lodged on 27.04.2011 and the case came to be registered in C.Mis.No.44/2011. Endorsement is also issued in that regard. But, no further action has been taken by the first defendant in that regard.

Admittedly, after filing the suit and after receipt of the suit summons, the defendant came to know that one of the

Further, according to the first defendant, the plaintiff has misused the cheque in active collusion with one Lokesha. Defendant has not chosen to examine said Lokesha on his behalf or at least taken the witness summons to summon him before the Court.

Except suggesting to the plaintiff that she has come to the Court along with one Lokesha, which has been denied by the plaintiff, no other evidence is forthcoming on record.

If it is definite case of the first defendant, he would have a plea in the written statement that it is Lokesha, who has come into contact with the plaintiff and handed over the signed cheque of the first defendant, nothing prevented the first defendant to file a private complaint before the jurisdictional

Under such circumstances, the evidence placed on record by the first defendant simply denying the plaint averments and also contending that the plaintiff is a stranger to the first defendant would not be sufficient enough to rebut the presumption available to the plaintiff under Section 118 of the Negotiable Instruments Act. Accordingly, the Trial Judge was justified in decreeing the suit of the plaintiff.

In view of the foregoing discussion, point No.1 is answered in the affirmative and point Nos.2 and 3 in the negative.

Regarding Point No.4: In view of finding of this Court on point Nos.1 to 3 as above, following order is passed: ORDER (i) Appeal is meritless and hereby dismissed.