TMI Blog2021 (12) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... s regard does not require any interference. Whether the cheques have been endorsed in favour of the plaintiff as per the provisions of the Negotiable Instruments Act? - HELD THAT:- As per section 50, the endorsement of a Negotiable Instrument followed by its delivery gives a right to the endorsee for further negotiation. The effect of an endorsement of a Negotiable Instrument with the endorsements as illustrated above has the effect of transferring to the endorsee the property therein with the right to further negotiate. However, the endorsement may expressly restrict or exclude such a right or merely constitute an endorsee right of further negotiation - the plaintiff has not proved the endorsement in the manner known to law and the Judgment of the Trial Court which has elaborately considered this issue does not require any interference. Whether the Judgment and Decree of the Trial Court calls for any interference? - HELD THAT:- The plaintiff has not made out any case to find fault with the findings of the Trial Court and its consequent Judgment. Appeal dismissed. - A.S.Nos.824 and 825 of 2008 - - - Dated:- 9-9-2021 - THE HONOURABLE Ms. JUSTICE P.T. ASHA For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.No. Cheque No. Date of cheque Drawn on Sent for Collection Amount 5. 133120 04-02-03 Andhra Bank 22-01-04 1,60,000 6. 133121 10-12-03 Andhra Bank 22-01-04 1,58,000 3,18,000 When the cheques were presented by the plaintiff for collection, the same was returned with the endorsement exceeds arrangements . The plaintiff therefore has instituted criminal proceedings under Section 138 of the Negotiable Instruments Act before the Judicial Magistrate No. II, Erode, in C.C.No. 584 of 2004, in respect of one of the cheques, namely cheque No. 133123 dated 23.12.2003. 4. The plaintiff therefore made demands for the payment on the defendants, however there was no response from them. Thereafter, the plaintiff had issued legal notices dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6572 26-11-03 Andhra Bank 08-05-04 1,63,000 2. 0106574 16-12-03 Andhra Bank 18-15-14 1,56,000 3. 0106575 19-12-03 Andhra Bank 20-09-03 1,55,000 4,74,000 In all other respects the plaint was more or less identical to the plaint in the suit O.S.No.48 of 2007. Written Statement of the 1s t d efendant in O.S.No.50 of 2007: 8. The 1st defedant had taken identical defence in this suit as well. 9. The I Additional District Judge, Erode (Trial Court) before whom the two suits were pending, on considering the pleadings in the two suits had framed issues. i. Issues framed in O.S.No. 48 of 2007: 1) Whether the plaintiff's firm is a registered one and K.Venkatesh its partner? 2) Whether plaintiff is the holder in due course of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to prove that the 2nd and 3rd defendants had actually discounted the cheques and that he had business dealings with them. The Court took note of the fact that the summons which were issued to the 2nd and 3rd defendants at the address mentioned by the plaintiff had been returned with the endorsement no such addressee . The learned Judge held that this only further strengthens the case of the 1st defendant that the plaintiff had no direct knowledge about the defendants 2 and 3. Ultimately, the learned Judge had dismissed the two suits. It is challenging the said Judgment and Decree in O.S.No. 48 of 2007 that the plaintiff has filed A.S.No. 824 of 2008 and A.S.No. 825 of 2008 has been filed, challenging the Decree and Judgment in O.S.No. 50 of 2007. Submissions: 13. Mr.Vadivel Murugan, learned counsel appearing on behalf of the plaintiff / appellant in both the appeals would submit that the the Trial Court has placed too much of reliance on the fact that one Anbalagan has represented the plaintiff company in the Criminal Case and that he has not filed the suit. Being a partnership firm, it is well open to any of the partners to represent the firm and therefore, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge had observed as follows: A staff in the Plaintiff's institution has deposed as P.W.2 and in her cross examination, she has stated that the plaintiff Venkatesh and one Kumar were partners in Murugavel textiles. It is very very important to note that the present plaintiff Murugavel finance and Murugavel Textiles are distinct establishments and according to P.W.2 a staff in the plaintiff's institution Venkatesh and Kumar were partners only in Murugavel Textiles. 15. The learned counsel would further submit that the said Venkatesh was totally in the dark about the facts of the case which is clearly evident from his cross-examination. All these put together would only go to show that Venkatesh had nothing to do with the plaintiff firm and this coupled with the facts that the plaintiff has not produced any evidence to prove that Venkatesh is a partner will only aid the 1st defendant. He would further submit that the learned Trial Judge has discussed the fact that the cheques had not been endorsed in the manner contemplated under the Act. In support of this argument regarding the valid endorsement, the learned Counsel has relied upon the following Judgements: (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecame payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. 20. Section 15 defines endorsement as follows: 15. Indorsement.-When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or on a slip of paper annexed thereto, or so signs for the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to indorse the same, and is called the indorser . 21. Section 16 of the Negotiable Instruments Act talks about the Indorsement in blank and in full and about the indorsee which is extracted herein below: If the indorser signs his name only, the indorsement is said to be in blank , and if he adds a direction to pay the amount mentioned in the instrument to, or to the order of, a specified person, the indorsement is said to be in full , and the person so specified is called the indorsee of the instrument. [(2) The provisions of this Act relating to a payee shall apply with the necessary modifications to an indorsee.] 22. Section 50 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilip Shivani has endorsed the cheques Exs.P.2 to P.4 to Maya Shivani are not forthcoming. Consideration for passing of the cheque is not satisfactorily proved. It is relevant to note that the transaction between the parties relates not merely to one cheque; but relate to as many as six chques. Substantial evidence ought to have been adduced to prove the endorsement. In the absence of endorsement in compliance of Sec. 50 of N.I.Act, the presumption that the holder of cheque is of a holder in due course cannot be drawn in favour of the complainant. 25. This Judgment has been followed in the later Judgments reported in 2010 CRI.L.J. 3323 - M/s Jayaram Finance, Kancheepuram and Anr. Vs. Jayaprakash, 2010 (1) LW CRL 542 - Palaniappa Mills rep. by its partner, P. Natarajan Vs. A.Vaithiyalingam and 2012 (2) MLJ CR 621 G.B.Finance, rep, by Power of Attorney Agent, Thiru. Kotteeswaran. The last of the judgments was a similar case where except for the signature there was no endorsement to indicate the passing of consideration. The learned Judge observed as follows: Except the signatures, there is no endorsement to indicate passing of any consideration under the same and any date ..... X X X X Extracts X X X X X X X X Extracts X X X X
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