Presumption as to negotiable instrument

2022 CLC 2115 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

O.XXXVII Rr.1 & 2Negotiable Instruments Act (XXVI of 1881), Ss.4 & 118Negotiable instrumentProofPresumption as to negotiable instrumentAdmission in cross-examinationEffectRespondent/plaintiff filed a suit for recovery of sum on basis of promissory note before Trial CourtAppellant/defendant contested the suit and denied the execution of any promissory note or receipt in respect thereofTrial Court decreed the suit against appellant/defendant

Held, that appellant in his written statement stated that he had no introduction with the respondent, but conceded that respondent was well known to appellant's elder brother; that he borrowed an amount from the respondent; and appellant had also conceded that he put his thumb impressions on some documents securing the borrowed amount from respondent

In appellant's depositions as witness, he conceded that he had affixed his thumb impressions on papers and that the respondent obtained his picture

In appellant's examination-in-chief ,he had deposed that he borrowed an amount for his elder brother "A.Y" who was never produced in evidence, but during cross-examination appellant had admitted that said amount was borrowed for appellant's own use

Appellant admitted that while making repayments, no one accompanied him nor he obtained any receipts of those repayments

Serious contradictions were found in the evidence of appellant and after such glaring admissions in appellant's cross-examination ,there was no need for the respondent to produce any evidence in rebuttal whose deposition was even otherwise consistent with his suit and also consistent with the depositions of other witnesses

Once in affirmative evidence respondent had discharged his onus, the same was shifted to appellant who had an opportunity to rebut the same through trustworthy and reliable evidence

Not only serious contradictions were found in appellant's deposition, but also categorical admission of appellant's thumb impressions on promissory note and receipt of promissory note

Promissory note as well as receipt annexed in plaint had clearly reflected that the suit amount was mentioned in Urdu language as well as in numbers in three different columns and even the receipt described the half amount

Stance of appellant that through forgery, amount of Rs. 25000/- had been mentioned as Rs.125,000/- represented a concocted story

Subject matter was lawfully proved and presumption attached to it under S.118 of the Negotiable Instruments Act, 1881, was not rebutted or proved to be contrary by appellant/defendant, rather the admissions made by appellant/ defendant in his cross-examination demolished the whole defence and the grounds agitated in the appeal

Simple denial in appellant's evidence or reply to every sentence, the question or suggestion in the negative in pleadings or depositions also operated against appellant

Appeal was dismissed being meritless.

2022 CLC 2115 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S.118Presumption as to negotiable instrumentInitial presumptionOnus to prove

Initial presumption is that the negotiable instrument is made, drawn, accepted or introduced for consideration , but under the law this is a rebuttable presumption and onus is on the person who denies consideration to allege and prove the same.

2021 CLD 783 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S. 118Civil Procedure Code (V of 1908), O. XXXVII, R. 2Limitation Act (IX of 1908), Art. 159Presumption as to negotiable instrumentSummary suits upon bill of exchangeLimitationExtension in time by courtScope

Appellant assailed judgment passed by Trial Court whereby respondents' suit filed under O.XXXVII, C.P.C. on the basis of cheque was decreed

Case set up by the respondents was that one of them had advanced certain sum of amount to the appellant for business purposes, upon a dispute having subsequently arisen and time being sought by appellant for repayment of the balance amount, a cheque was issued in favour of the other respondent to secure such obligation but the cheque was dishonoured, following which suit was filed

Contention of appellant was that he was condemned unheard as his application for leave to defend was wrongly dismissed; that he had applied for an adjournment which was granted and the application was filed on that date; that as the Court had granted adjournment, therefore, the appellant ought not to have been penalized on the point of limitation and that he had entered into a contract for purchase of vehicle with the respondent in whose favour the cheque was issued

Validity

Trial Court without any extension had simply put off the matter for another date

Period of 10 days of limitation prescribed in terms of Art. 159 of the Limitation Act, 1908 had already lapsed by the date when the appellant had sought adjournment

High Court while looking to the merits of the defence sought to be raised in terms of the Application for Leave to Defend observed that no date of the so-called transaction was given nor any document in that regard was referred

Plea raised by appellant could not serve to unsettle the presumption to be made in terms of S. 118 of the Negotiable Instruments Act, 1881

Appeal was dismissed.

2021 MLD 850 KARACHI-HIGH-COURT-SINDH Judicial Precedent

O.XXXVII, R.2Negotiable Instruments Act (XXVI of 1881), S.118Limitation Act (IX of 1908), Art.159Presumption as to negotiable instrumentSummary suits upon bill of exchangeLimitationExtension in time by courtScope

Appellant assailed judgment passed by Trial Court whereby respondents' suit filed under O.XXXVII, C.P.C., on the basis of cheque was decreed

Case set up by the respondents was that one of them had advanced certain sum of amount to the appellant for business purposes, upon a dispute having subsequently arisen and time being sought by appellant for repayment of the balance amount, a cheque was issued in favour of the other respondent to secure such obligation but the cheque was dishonoured, following which suit was filed

Contention of appellant was that he was condemned unheard as his application for leave to defend was wrongly dismissed; that he had applied for an adjournment which was granted and the application was filed on that date; that as the Court had granted adjournment, therefore, the appellant ought not to have been penalized on the point of limitation and that he had entered into a contract for purchase of vehicle with the respondent in whose favour the cheque was issued

Validity

Trial Court without any extension had simply put off the matter for another date

Period of 10 days of limitation prescribed in terms of Art. 159 of the Limitation Act, 1908, had already lapsed by the date when the appellant had sought adjournment

High Court while looking to the merits of the defence sought to be raised in terms of the Application for Leave to Defend observed that no date of the so-called transaction was given nor any document in that regard was referred

Plea raised by appellant could not serve to unsettle the presumption to be made in terms of S.118 of the Negotiable Instruments Act, 1881

Appeal was dismissed.

2020 CLD 1424 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 118Civil Procedure Code (V of 1908), O. XXXVII, Rr. 1 & 2Suit on negotiable instrumentPresumption as to negotiable instrumentNegotiable instrument drawn without considerationBurden of proofScope

Appellant/defendant assailed order passed by Trial Court whereby respondent's/plaintiff's suit for recovery of amount under O. XXXVII, Rr. 1 & 2, C.P.C., was decreed

Validity

Defendant himself had admitted that he had filled and signed the cheque (negotiable instrument in question) but had stated that it was a guarantee cheque

Onus to prove that the cheque was issued as a guarantee was on the defendant, after admission of the execution of cheque, but he failed to prove his version through oral or documentary evidence

Impugned judgment and decree did not suffer from any infirmity, legal or factual, requiring interference, therefore, appeal was dismissed.

2020 CLD 1424 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 118Presumption as to negotiable instrumentScope

Initial presumption is that the negotiable instrument is made, drawn, accepted or endorsed for consideration and in a case to the contrary, onus is on the person who is claiming to have executed a guarantee cheque.

2020 MLD 772 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

O. XXXVII, Rr. 1 & 2Negotiable Instruments Act (XXVI of 1881), S. 118Summary suits upon bills of exchangePresumption as to negotiable instrumentDishonoured chequeEndorsement for considerationBurden of proofScope

Plaintiff filed suit for recovery of Rs.5,00,000/- on the basis of dishonoured cheque and claimed that the defendant had borrowed the said amount

Defendant contended that he had issued an open cheque on account of fiscal liability but the liability stood discharged on account of certain transactions and he was liable to pay only Rs. 13,000

Trial Court decreed the suit

Validity

Plaintiff had not mentioned any specific date either in the plaint or in evidence as to when the loan amount was advanced to the defendant

Stance of plaintiff was not believable that just on the request of defendant such a huge amount was advanced without any documentation or even issuance of cheque at that time

Parties had no blood or family relation

Plaintiff contended that cheque was a negotiable instrument and since the defendant had not denied its issuance therefore burden of proof of non-payment of consideration was on the defendant

Presumption under S. 118 of Negotiable Instruments Act, 1881 was not a conclusive presumption of drawing consideration of a negotiable instrument, rather it was rebuttable in nature and initial burden of proving that the negotiable instrument was executed against consideration was on the plaintiff

Plaintiff had failed to discharge the initial onus of passing on Rs. 5,00,000/- to the defendant

Appeal was allowed; impugned judgment and decree was set aside and the suit of plaintiff was dismissed.

2020 MLD 772 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 118Presumption as to negotiable instrumentsDishonoured chequeEndorsement for considerationBurden of proofScope

Presumption under S. 118 of Negotiable Instruments Act, 1881 is not a conclusive presumption of drawing consideration of a negotiable instrument, rather it is rebuttable in nature and initial burden of proving that the negotiable instrument is executed against consideration is on the plaintiff.

2020 CLC 1496 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S.118Presumption as to negotiable instrumentScope

Initial presumption was that the negotiable instrument was made, drawn, accepted or endorsed for consideration and in a case to the contrary, onus was on the person who was claiming to have executed a guarantee cheque.

2016 CLD 920 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 9, 10 & 2(e)Negotiable Instruments Act (XXVI of 1881), S. 188Recovery of loan amountLeave to defendLiability of Bank's customerExtentPresumption as to negotiable instrument

Defendants denied their liability to the claim filed by the plaintiff-Institute on ground that the same was false and frivolous, as the registered mortgage created by defendant in his capacity as duly constituted attorney was not enforceable under the law and the letters of guarantees had been signed in blank

Validity

Under S. 2(e) of Financial Institutions (Recovery of Finances) Ordinance, 2001, Bank's customers were not only under legal obligation and duty bound to perform and fulfil their undertakings and promises in relation to repayment of the outstanding amount of the finance facility granted to and availed by the defendant but also in respect of all other amount relating to mark-up charges etc.

Musharaka Finance Agreement in question was also coupled with promissory notes

Under S. 118 of Negotiable Instruments Act, 1881, presumption of truth was attached to the promissory note

Presumption attached to a negotiable instrument is not only statutory but also mandatory in nature

Such presumption ex-facie could not be dispelled in absence of any solid proof

Defendants had not specifically denied their signatures on the financial and security documents including the promissory note, and had only pleaded that the same had been obtained in blank and/or otherwise, the same were without consideration

Defendants were, therefore, liable to pay and liquidate the outstanding amounts as per Musharaka Finance Agreement

High Court, refusing leave to defend application and decreed the suit.