Civil suit for recovery of a dishonoured cheque. The court held that failure of consideration was an afterthought due to lack of reply to the demand notice. Conditional leave to defend was granted subject to the deposit of the cheque amount.
Conditional leave to defend the suit granted subject to deposit of Rs.1,25,000/- within four weeks.
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IN THE HIGH COURT OF JUDICATURE OF BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
SUMMONS FOR JUDGEMENT NO. 543 OF 2003
IN
SUMMARY SUIT NO. 479 OF 2003
Udaykumar Mishra .. Plaintiff
versus
Chandru Dhanwani & Anr. .. Defendants
Mr.O.P. Pandey for the plaintiff.
None for the defendant.
CORAM : D.G. KARNIK,J.
DATED : 9th March 2005.
P.C.:
1. Heard the learned counsel for the plaintiff.
None present for the defendants.
2. The defendants have also not filed any
affidavit in reply in the Court. The learned counsel
for the plaintiff however states that a copy of the
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reply in advance was served on him and hands in the
copy. I have perused the said copy and the defences
raised therein are considered hereafter.
3. For a valuable consideration, the defendant
no.1, who is the proprietor of defendant no.2, issued
a cheque dated 12th December 2001 to the plaintiff in
the sum of Rs.1,25,000/-. However, the said cheque
was dishonoured when presented for payment. The
plaintiff therefore, has filed this suit for recovery
of the amount of the said cheque and interest thereon
u/s.80 of the Negotiable Instruments Act.
4. In the affidavit in reply served on the
plaintiff in advance the defendants have not denied
issuance of the cheque. They however contended that
cheque was without consideration. Under section 118
of the Negotiable Instruments Act, there is a
presumption of consideration and mere denial of
consideration would not be a sufficient defence.
Furthermore, the plaintiff had issued a notice dated
8th January 2002. However, no reply was sent to the
said notice. If there was really a failure of
consideration, the defendants would have sent the
reply and explained the circumstances in which the
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cheque was issued. In the circumstances, in my view,
the defence of failure of consideration is an
afterthought. In view of this, the plaintiff is
ordinarily entitled to a decree forthwith. However,
merely as an act of mercy, I am inclined to grant
conditional leave to defend the suit to the
defendants. Hence, I pass the following order:-
5. The defendants are accordingly granted
conditional leave to defend the suit subject to their
depositing in the Court the principal amount of the
cheque being Rs.1,25,000/- within a period of four
weeks. On such deposit, the plaintiff is permitted
to withdraw the same by furnishing security to the
satisfaction of Registrar (OS) and Prothonotary.
6. On deposit of the money, suit shall stand
transferred to the list of commercial causes. The
defendant shall then file written statement within
a period of one month.
D.G. KARNIK, J
2 issues framed by the court
Whether the defence of failure of consideration is valid when the defendant did not reply to the plaintiff's demand notice.
Whether the plaintiff is entitled to a decree forthwith or may the defendant be granted conditional leave to defend.
2 provisions across 1 enactments
D.G. KARNIK
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court