IN THE HIGH COURT OF KERALA AT ERNAKULAM
AS.No. 467 of 1995()
1. GOPINATHAN
... Petitioner
Vs
1. VISWANATHAN
... Respondent
For Petitioner :SRI.P.R.VENKITESH
For Respondent :SRI.N.P.SAMUEL
The Hon'ble MR. Justice P.N.RAVINDRAN
Dated :22/01/2009
O R D E R
P.N.Ravindran, J.
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A.S. No.467 of 1995
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Dated this the 22nd day of January, 2009.
JUDGMENT
The plaintiff in O.S.No.954 of 1990 on the file of the Court of the
Subordinate Judge of Thrissur is the appellant in this appeal. The
respondent is the sole defendant therein. The suit instituted by the
appellant for realisation of the sum of Rs.34,050/- together with interest
thereon and costs of the suit was dismissed by the trial court. Hence,
this appeal.
2. The case set out by the plaintiff is that the defendant had
requested him to advance a sum of Rs.25,000/- as loan and had assured
him that he would repay the loan amount with 12% interest on demand,
that he thereupon issued a cheque dated 18.12.1987 for Rs.25,000/-
drawn in favour of the defendant on the Syndicate Bank, Thrissur branch,
that the cheque was encashed by the defendant on 18.12.1987 itself,
that in spite of repeated requests, the defendant did not repay the loan,
that the defendant had sent Ext.A1 letter dated 14.8.1990 stating that
he would repay the amount without delay, that when the defendant did
not repay the loan as promised in Ext.A1, he caused Ext.A2 lawyer notice
dated 31.10.1990 to be issued and that though the defendant received
the said notice, he did not send a reply or repay the loan.
3. The defendant entered appearance and resisted the suit. He
AS 467/95 -: 2 :-
denied the averment in the plaint that he had availed a loan of
Rs.25,000/- from the plaintiff. He contended that the cheque referred to
in the plaint was issued by the plaintiff towards repayment of money lent
by him to the plaintiff on various occasions. He also denied having sent
Ext.A1 letter agreeing to repay the loan availed by him from the plaintiff.
He also contended that on receipt of Ext.A2 lawyer notice, he met the
plaintiff in person, that the plaintiff thereupon stated that the notice was
sent by mistake, that he would not proceed further in the matter and
that believing the plaintiff, he did not send a reply to Ext.A2 notice.
4. In the trial court, the plaintiff examined himself as PW1 and a
witness to the transaction as PW2. Exts.A1 to A3 were produced and
marked on his side. The defendant examined himself as DW1 and
produced Ext.B1, stated to be an account book maintained by him. The
trial court on an analysis of the evidence oral and documentary available
in the case held that the plaintiff has not proved that the cheque dated
18.12.1987 was issued by him to the defendant as loan, as contended by
him in the plaint. The trial court also held that no reliance can be placed
on the testimony tendered by PW2 for the reason that the presence of a
witness at the time of the alleged lending is not referred to either in the
plaint or in Ext.A2 notice. The court below held that Ext.A1 cannot be
relied on in view of the vast difference in the signature purporting to be
that of the defendant appearing therein and the admitted signature of
the defendant in the written statement and in Ext.A3 postal
AS 467/95 -: 3 :-
acknowledgment card. The suit was accordingly dismissed.
5. Sri.T.R.Rajan, the learned counsel appearing for the appellant
contended that as the defendant has not denied the issuance of the
cheque and he has not proved that the cheque was issued in repayment
of the loan availed by the plaintiff from him, the finding of the court
below cannot be sustained. The learned counsel further contended that
there is no dissimilarity between the signatures in Exts.A1 and A3 and
that the inference drawn by the court below that Ext.A1 does not bear
the signature of the defendant cannot be sustained. The learned counsel
also contended that failure of the appellant to refer to the presence of
PW2 at the time of the lending in Ext.A2 lawyer notice and in the plaint,
is not of much importance in the facts and circumstances of the case.
The learned counsel appearing for the appellant also submitted that the
plaintiff may be given an opportunity to prove that the signature in
Ext.A1 is similar to the signature of the defendant in Ext.A3 and in the
written statement filed by him and that the suit may be remitted to the
lower court for fresh disposal after affording the appellant an
opportunity to get the signature in Ext.A1 examined by an expert. Per
contra, Sri.N.P.Samuel the learned counsel appearing for the respondent
contended that the plaintiff has not proved that the amount covered by
the cheque was given as loan to the defendant, that there is a
presumption that a cheque is always issued in repayment of a loan and
that in the absence of any cogent evidence to prove the alleged lending,
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the finding of the court below cannot be upset. The learned counsel
appearing for the respondent also referred to the vast difference in the
admitted signatures of the defendant in Ext.A3 and in the written
statement with the disputed signature in Ext.A1 and contended that even
without the assistance of an expert, it can be seen that the signatures in
Exts.A1 and A3 are not similar. The learned counsel for the respondent
also contended that apart from the testimony tendered by PW2 which
was rightly rejected by the court below, the plaintiff has not adduced any
evidence to show that he had lent and advanced the sum of Rs.25,000/-
to the defendant as claimed by him, on 18.12.1987.
6. I have considered the submissions made at the Bar by the
learned counsel appearing on either side. The short question that arises
in this appeal is whether the appellant has proved that the amount
covered by the cheque dated 18.12.1987 issued by him to the defendant
was lent and advanced to him by the defendant as loan. The plaintiff
relies on the testimony tendered by PW2 and the recitals in Ext.A1 letter
alleged to have been sent by the defendant in support of his contention.
A Division Bench of this Court has in Ramachandran v. Velayudhan
-1986 KLT 647, held as follows:
“4. The burden of proving that the sum advanced to
the 1st defendant was towards loan is on the plaintiff.
Merely because 1st defendant admitted that he received the
cheques it would not follow that he obtained a loan of the
said amount. No legal presumption arises when a sum is
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admitted to have been received, that it was meant to be
repaid because the same may have been paid for various
reasons. It is for the plaintiff to substantiate his case that
the amount covered by the cheques was really given to the
1st defendant as a loan.
5. All payments by cheques are prima facie indicative
of the fact that they are issued to extinguish an existing
debt and not to create a new one. A cheque issued to a
person by itself is not indicative of the fact that money was
lent to him. On the other hand, it is prima facie evidence
of the repayment of money owed by the drawer to the
payee. Of course, it is always open to the plaintiff to
establish that the payment of the amount by cheque was in
fact a loan to the 1st defendant. In this context, it is
apposite to refer to Sangappa Basappa Gogi v.
Chidananda Baswantraya Aski (I.L.R. (1980) 2 Karnataka
1133) wherein it is held as follows:
“A cheque drawn, presented and paid is by itself
no evidence of any money lent or advanced by the
drawer to the payee. It may be a prima facie evidence
to extinguish an existing debt, however, not to create a
new one. However, it is open to the drawer to show by
other evidence that the cheque was in fact loaned to the
payee. A mere issue of a cheque in favour of the payee,
by itself will not be evidence of a loan even if the
cheque is encashed by the payee. That it was loaned to
the payee must be proved by the drawer by other
evidence. The burden is upon the person who sets up a
case of loan based on the issuance of a cheque to
establish by other evidence that it was a loan to the
payee.”
AS 467/95 -: 6 :-
6. The burden of proving that the sum paid as per
the cheque was towards a loan is always on the plaintiff. In
Bihari Lal v. Lala Chandu Lal (A.I.R. 1939 Lahore 386) it
has been held as follows:
“When a sum is admitted to have been received,
there is no legal presumption that it was meant to be
repaid. The payment may have been made for various
reasons and it is for the person who comes to Court
and sues for recovery of the sum of money to prove
that it was meant to be repaid.”
Merely because 1st defendant admitted receipt of the
cheques it would not follow that he received the amount as
a loan. As the burden is always on the plaintiff in a suit
where he claims amounts due to him from the defendant to
substantiate his case, in the absence of evidence to prove
the alleged loan given to the 1st defendant, mere issuance
of cheques will not raise any presumption in his favour.”
7. In the instant case, the plaintiff contends that as the defendant
admits having received the cheque, a presumption would arise that the
amount covered by the cheque was given as loan. As held by the Division
Bench of this Court in Ramachandran v. Velayudhan (supra), the mere
admission by the defendant that he had received the cheque would not
lead to the conclusion that he had received the amount covered by the
cheque as loan and that the burden is always on the plaintiff to
substantiate that the amount covered by the cheque was given as loan.
The Division Bench also held that in the absence of evidence to prove
that the amount covered by the cheque was given as loan to the payee,
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the issuance of the cheque will not raise any presumption in favour of the
plaintiff.
8. The plaintiff relies on Ext.A1 to substantiate his contention that
the defendant has admitted receipt of the amount of Rs.25,000/- as loan
and had also agreed to repay the same at the earliest. The defendant
has even in the written statement denied having sent Ext.A1 letter.
Apart from the fact that there is no specific reference in Ext.A1 letter to
the sum of Rs.25,000/-, as noticed by the court below the signature
purporting to be that of the defendant in Ext.A1 bears no resemblance or
similarity with his admitted signature in the written statement and in
Ext.A3 postal acknowledgment card. The address of the sender is also
not given in Ext.A1. Ext.A1 shows that one Sri. Viswanathan had sent a
letter to Sri. T.B.Gopi, M/s. Thalikulam Engravers, South Bazaar, Thrissur.
The name of the plaintiff as shown in the plaint is Gopinathan and the
address given in the plaint is different from the address shown in Ext.A1.
Apart from the ipse dixit of the plaintiff examined as PW1 there is no
evidence to show that Ext.A1 letter was sent by the defendant to the
plaintiff. The defendant has denied having sent Ext.A1 letter even in the
written statement filed by him. The plaintiff has not either in the plaint
or when examined as PW1 stated that he is running a business under the
name and style “Thalikulam Engravers, South Bazaar, Thrissur. PW1 has
deposed that he is doing business in gold and is also a goldsmith.
Further, the signature in Ext.A1 purporting to be that of the defendant
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bears no similarity or resemblance to his admitted signature in Ext.A3
postal acknowledgment card and in the written statement. I therefore
agree with the court below that no reliance can be placed on Ext.A1.
9. Apart from Ext.A1, the plaintiff also relies on the testimony
tendered by PW2 in support of his contention that he had lent and
advanced the sum of Rs.25,000/- to the defendant on 18.12.1987. PW2
is a broker by profession. His version is that the defendant had informed
him that he is on the look out for a parcel of land, that for that purpose
he went over to the shop of the plaintiff, that in his presence, the
defendant asked the plaintiff for a loan of Rs.25,000/- and that as the
plaintiff did not have cash with him, he issued the cheque. The court
below held that his testimony cannot be relied on for the reason that
neither in Ext.A2 nor in the plaint there is any reference to the presence
of any person especially PW2 at the time of the alleged lending. The
court below held that in these circumstances, it would not be safe to rely
on the testimony tendered by PW2. His version is that about 6 years
back when he went over to the plaintiff’s shop, the defendant was
present there, that the defendant asked for a loan of Rs.25,000/- and
that as the plaintiff did not have cash with him, he issued the cheque.
PW2 was examined on 16.2.1994. Going by the version of Ext.PW2, the
alleged lending would be some time in February/March, 1988. Further,
going by the version of PW2 he went over to the shop of the plaintiff
because the defendant had asked him to find out a parcel of land for him
AS 467/95 -: 9 :-
to purchase. The statement of PW2 that he went over to the shop of the
plaintiff in order to speak to the defendant about the land transaction
and that when he went to the shop of the plaintiff for that purpose, he
happened to witness the loan transaction does not inspire confidence.
Apart from Ext.A1 which cannot be relied on, the plaintiff has not
adduced any evidence to show that the amount covered by the cheque
dated 18.12.1987 was given to the defendant as loan. As held by the
Division Bench of this Court in Ramachandran v. Velayudhan (supra) in
the absence of any evidence to hold that the amount covered by the
cheque was given by the plaintiff to the defendant as loan, merely
because the defendant has admitted having received the cheque, it
cannot be held that amount covered by the cheque was given as loan by
the plaintiff to the defendant. As the plaintiff has not adduced any
cogent evidence to prove the alleged lending, the court below was right
in dismissing the suit.
For the reasons stated above, I hold that there is no merit in this
appeal. The appeal fails and is accordingly dismissed. No costs.
P.N.Ravindran,
Judge.
ess 29/1
