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2023 (6) TMI 536 - HC - Indian LawsDishonour of Cheque - Insufficient Funds - issuance of cheque for investment or repayment of loan - inadvertent mention of names in the cheque - HELD THAT:- The fact that the name of Manish Bhawani was inadvertently been mentioned is evident from the fact that the name of Tejal V. Bhawani was mentioned on the last page and was to be executed by Vipul Bhawani and Tejal Bhavani. Thus, the Defendants’ contention that the letter has been fraudulently altered by the Plaintiff is patently false. Most importantly the said letter also refers to the said cheques in Annexure A as being issued for repayment of loan. The defences raised by the Defendants are really frivolous and/or vexatious. Even Exhibit C to the Affidavit-in- Reply which the Defendants contend is the agreement between the parties makes reference to the cheques set out in Annexure A thereto as being repayment of loan and not investment. Thus, it is clear that the Defendants at all times had agreed to treat the said cheques as being repayment towards loans and not investments. Additionally, as has been held in the case of MOTILAL LAXMICHAND SALECHA, HUF VERSUS M/S. MOUR MARBLES INDUSTRIES PVT. LTD. & ORS. [2018 (4) TMI 1950 - BOMBAY HIGH COURT] that once a party issues a cheque for repayment of a loan, then the liability under the loan is substituted by the liability to honor the cheque and in a sense the original liability to pay the loan is discharged by means of execution of cheque. And in the event such cheque is not honored, a new liability arises under the provisions of the Negotiable Instruments Act. In the present case, the Defendants have not denied issuance of the said cheques but have only attempted to contend that the same were for return of investments and not loans. That argument is not open to the Plaintiff anymore in view of the ratio laid down in the case of Motilal Laxmichand Salecha HUF. Thus even on merit the Defendants’ contentions are untainable and devoid of merit. Since there was no contract as regards the rate at which the interest was to be charged on the said amount of Rs. 1,47,64,000/-, it would be justifiable to apply the interest at 12% per annum from 31st December, 2019, the date on which the cheques drawn by the Defendants in favour of the Plaintiff were payable. Defendants to pay the Plaintiff sum of Rs. 1,47,64,000/- along with interest at 9% per annum on the sum of Rs. 1,47,64,000/- from 31st December, 2019 till realization - suit decreed.
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