TMI Blog2008 (1) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... of Standard Chartered Bank, D.N. Road, Mumbai. According to the Plaintiff, the Bill of Exchange has been executed on 8th May 1996. Further, the said Bill of Exchange was accepted by the Defendant Nos.3 and 4 on the same day by endorsing their signatures thereon. The Plaintiff asserts that the Bill of Exchange was presented on 8th May 1997 to Defendant Nos.3 and 4 for payment, however, the same was dishonoured for non-payment. Consequently, the Plaintiff called upon the Defendant No. 1 to make good the amount along with interest at the rate of 24% per annum as provided in the said Bill of Exchange. It is the case of the Plaintiff that after repeated demands, the Defendant No. 1 made over cheque No. 376545 dated 7th February 1999 in the sum of Rs. 1,20,000/- (Rupees One Lakh Twenty Thousand) drawn by Defendant No. 1 in favour of the Plaintiff on Abhyudaya Co-operative Bank Ltd. towards interest. The said cheque, when presented, however, was dishonoured by the Bank on 9th February 1999 and returned with remark Refer to Drawer which was forwarded by the Union Bank of India to the Plaintiff along with Memorandum dated 10th February 1999. The Plaintiff further asserts that on repeated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amounts of both the aforesaid cheques. It is stated that the Plaintiff has already received the entire principal amount in relation to the suit Bill of Exchange and part of the interest thereof, therefore, the present Suit for interest only is not maintainable and liable to be dismissed with costs. Besides, the Defendants assert that the Plaintiff has unlawfully and wrongfully claimed interest at the rate of 24% per annum and also interest on interest i.e. compound interest, for which reason, Suit requires to be dismissed with cost. According to the Defendants, amount of Rs. 6,20,000/- (Rupees Six Lakhs Twenty Thousand) paid by the Defendant No. 1 to the Plaintiff was paid without admitting the execution of the suit Bill of Exchange and liability therein. Moreover, the Plaintiff accepted the said amount of Rs. 6,20,000/-(Rupees Six Lakhs Twenty Thousand) towards full and final settlement of the entire claim in respect of the two complaints and also withdrew the criminal cases filed against the Defendants. The Defendants have thus denied their liability to pay any amount to the Plaintiff. The Defendants have also denied that Defendant Nos.3 and 4 are acceptors of the purported Bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the principal amount of Rs. 5,00,000/-(Rupees Five Lakhs). Against that, the Plaintiff has provided adjustment of Rs. 6,20,000/-(Rs.5,00,000/-+ Rs. 1,20,000/-) received by the Plaintiff from Defendant No. 1 on 29th June 2004. The Plaintiff has included interest at the rate of 24% per annum, from the date of filing of the Suit till the amount of Rs. 6,20,000/- (Rupees Six Lakhs Twenty Thousand) was received by the Plaintiff from the Defendant No. 1 on the principal amount of Rs. 5,00,000/ (Rupees Five Lakhs), which amount has been determined as Rs. 6,18,000/-(Rupees Six Lakhs Eighteen Thousand). Having regard to the above calculation, according to the Plaintiff, the Defendants, as on August 2004, were liable to pay Rs. 8,57,000/-(Rupees Eight Lakhs Fifty-seven Thousand) and cost of the Suit in addition to the amount of Rs. 6,20,000/- (Rupees Six Lakhs Twenty Thousand) already paid by them. The Plaintiff, besides filing the affidavit of evidence, entered the witness box and in the first place, proved the suit Bill of Exchange dated 8th May 1996 as that was the only document not admitted by the Defendants. In the first place, the Plaintiff has deposed about execution of the said Bil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two cheques. He has also admitted that he did not even amend the Summons for Judgment after receipt of demand drafts. The Plaintiff has, however, denied that he was pressing the original claim for the full amount despite having received Rs. 6,20,000/-(Rupees Six Lakhs Twenty Thousand). The Plaintiff was then confronted with the suit Bill of Exchange dated 8th May 1996. He has stated that the written portion of the Bill of Exchange is in the handwriting of one of the staff members of the Defendant No. 1 which was written in his presence. The Plaintiff admits that the said document is not filled by Defendant Nos.2, 3 or 4. The Plaintiff has admitted that handwritten portion in the said Bill of Exchange (Exhibit P-9) is of two persons. The Plaintiff admits that he did not know the names of those persons. He also admits that he did not object to the two staff members filling up the Bill of Exchange. The Plaintiff however asserts that the Bill of Exchange was filled up in the Office of the Defendants. The Plaintiff has then stated that the Defendants' Office is on the first floor of Kothari Mansion, Opposite G.P.O., Boribunder, Mumbai - 400 001. He stated that he was sitting in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Defendants have not chosen to adduce any evidence in support of their case. Left with this situation, the matter will have to be examined on the basis of the oral and documentary evidence adduced by the Plaintiff alone. 7. Having considered the rival submissions, I shall now proceed to deal with the argument canvassed on behalf of the parties in the context of issues framed. ISSUE NO. 1: 8. This issue has been framed essentially because of the plea taken by the Defendants in the Written Statement in Para 1(b) that the Suit is barred by the Law of Limitation. Except this bare statement, no other details are forthcoming as to why the suit claim is barred by Law of Limitation. On the other hand, according to the Plaintiff, the present Suit is filed in relation to the Bill of Exchange drawn on 8th May 1996 and in particular, on account of dishonour of the said Bill of Exchange by the Defendants on 8th May 1997. The limitation would obviously start running from the said date. The present Suit having been filed on 5th May 1999, therefore, in my view, is well within limitation. ISSUE NO. 4: 9. The Defendants have asserted that the Plaintiff is carrying on business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of suit Bill of Exchange (Exhibit P-9). ISSUE NOS.3, 5, 6 7: 10. As the matters to be discussed in the context of these four issues would be overlapping, for the sake of convenience, I am answering all the four issues together. 11. In the first place, the question is: whether the Plaintiff has proved that the Defendant No. 1 drew a Bill of Exchange for Rs. 5,00,000/ (Rupees Five Lakhs) on 8th May 1996 upon the Defendant Nos.3 and 4 ordering them to pay to the Plaintiff or order payable on demand, the said amount of Rs. 5,00,000/- for value received by the Defendant No. 1 by two Cheques bearing Nos.386445 dated 8th May 1996 for Rs. 2,50,000/-and 190601 dated 8th May 1996 for Rs. 2,50,000/-. The Plaintiff in his evidence has reiterated his case stated in the Plaint. The Defendants have admitted all the documents relied upon by the Plaintiff, except the Bill of Exchange. Insofar as the suit Bill of Exchange dated 8th May 1996 is concerned, in my opinion, my predecessor has rightly taken that document on record and marked it as Exhibit P-9 having been proved by the Plaintiff. 12. The Counsel for the Defendants, would, however, argue that in the examination-in-chief, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Rs. 5,00,000/-which were issued by the Defendants but dishonoured upon presentation-in relation to which criminal action came to be instituted and eventually settled upon Defendants making payment towards full and final payment of the respective dishonoured cheque amount. Document at Exhibit P-6 is the legal notice sent to the Defendants which refers to the Bill of Exchange dated 8th May 1996. Exhibit P-7 is the complaint along with Annexures thereto from pages 14 to 25 in respect of criminal case No. 1069/S/2003 in relation to dishonoured cheque of Rs. 1,20,000/-. Exhibit P-8 at Pages 26 to 48 in the compilation of documents is the complaint along with accompaniments thereto in relation to criminal case No. 765/S/1999 in respect of dishonoured cheque of Rs. 5,00,000/-. One of the accompaniment of the said complaint (Exhibit F thereto at page 39 of the compilation) is the reply given by the Defendants sent through Advocate dated 26th March 1999. In Paragraph 3 of the said reply, it is clearly admitted on behalf of the Defendants that the Defendants have taken loan from the Plaintiff and have executed the Bill of Exchange in the year 1996. This document has been admitted by the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill of Exchange. Thus understood, in view of the admission of the Defendants that they have executed Bill of Exchange, no further enquiry would be necessary. 16. However, as is noted earlier, the Plaintiff has already proved the execution of the Bill of Exchange on 8th May 1996 by Defendant No. 1 for consideration. It is only after details of such execution was spoken by the Plaintiff, my predecessor advisedly took that document on record and marked it as Exhibit P-9. Once it is found that this document is proved in evidence, it necessarily follows that the Plaintiff has established his case to that extent. 17. In the Written Statement filed by the Defendants, in the first place, the Defendants disputed having executed any Bill of Exchange. That plea will have to be discarded for two reasons. Firstly, because the Plaintiff has spoken about the details of execution of the said Bill of Exchange. That evidence has not been shaken at all. The original document has been placed on record which indicates that the same has been duly signed by Defendant No. 2 on behalf of the Defendant No. 1 and accepted by Defendant Nos.3 and 4 respectively. The signatures of Defendant No. 2, Defenda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff. In my opinion, the Plaintiff has rightly asserted that the Bill of Exchange has been duly executed by Defendant No. 2 for and on behalf of Defendant No. 1 as well as accepted by Defendants 3 and 4. 19. The next question is: whether the Defendants are liable to pay any amount under the said Bill of Exchange. In the Plaint, it is stated that on repeated demand of the Plaintiff, the Defendants offered two cheques for Rs. 1,20,000/ and Rs. 5,00,000/- to the Plaintiff. Those cheques were dishonoured when presented. For that reason, the Plaintiff proceeded to file the present Suit for recovery of the amount payable under the said Bill of Exchange. During the pendency of the present Suit, the criminal proceedings taken out by the Plaintiff in relation to the self same two dishonoured cheques came to be withdrawn, as the Defendants paid towards full and final payment in relation to the respective dishonoured cheques. That fact has been stated by the Plaintiff in the examination-in-chief. Keeping in mind the two demand drafts made over to the Plaintiff in the sum of Rs. 1,20,000/-and Rs. 5,00,000/- on 28th June 2004 and upon giving adjustment for the said amount, the Plaintiff has co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner the Defendants stood discharged. The Defendants have not chosen to adduce any evidence in support of that claim. Assuming that it is pure question of law, the argument clearly overlooks that the requirement under Section 82 of the N.I. Act is that the maker, acceptor or endorser makes payment in due course of the amount due thereon. The emphasis will have to be placed on words makes payment . Handing over of two cheques to the Plaintiff by itself does not result in making of payment. It is only on realisation of the cheques so handed over, the maker, acceptor or the endorser would stand discharged, provided the amount so offered is the payment of the amount due thereon , and not otherwise. The Defendants have not proved the factum that amount of Rs. 6,20,000/ offered by way of two cheques was the payment of the entire amount due in relation to the stated Bill of Exchange . Moreover, admittedly, in the present case, both the cheques for the sum of Rs. 1,20,000/-and Rs. 5,00,000/- were dishonoured. The Plaintiff was required to not only file the present Suit in relation to the claim arising under the Bill of Exchange but also take recourse to the criminal proceedings in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued by the Counsel for the Plaintiff, in view of Section 79 of the N.I. Act, the Defendants would be liable to pay interest at the agreed rate of 24% per annum. Counsel for the Defendants, however, argued that the rate of interest is not only excessive; but the claim of the Plaintiff, if accepted, would result in granting interest over interest. Both these contentions will have to be turned down. This is so because, as per Section 79 of the N.I. Act, the Plaintiff can justly insist for interest at the rate of 24% per annum from 8th May 1996 till the claim amount is fully realised. There is nothing in the Written Statement nor it has come in the evidence that there was any agreement between the parties as to how the part payment if made by the Defendants was to be adjusted. In that, whether the same was first to be adjusted against the interest or the principal amount, or otherwise. The apprehension of the Defendants that on accepting the claim of the Plaintiff, it would result in granting interest over interest is also ill-advised. For, the nature of order that I propose to pass, that will not be the consequence, which would flow from such order. 23. Suffice it to observe that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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