Law: Negotiable Instruments Act, 1881

Section: 118

Negotiable Instruments Act (XXVI of 1881)---

----S. 118---Civil Procedure Code (V of 1908), O.XXXVII, R. 2(2)---Suit for recovery on the basis of three cheques---Negotiable instrument---Presumption of truth---Scope---Application for leave to defend, acceptance of---Effect---Onus of proof---Plaintiff impugned the judgment passed by the Trial Court as his suit was partially decreed---Held, that provisions of S. 118 of the Negotiable Instruments Act, 1881 and O. XXXVII, R. 2(2) of the Civil Procedure Code, 1908, indicate that statutory presumption is attached with a negotiable instrument---Such presumption operates in favour of plaintiff unless and until leave to defend is granted---Where the Court, seized with such a suit, refuses leave to defend or where a defendant fails to fulfill a condition attached to a leave granting order or fails to apply within the prescribed time for leave to defend, then the Court shall decree the suit without any further proof of the suit on the basis of statutory presumption under S. 118 of the Negotiable Instruments Act, 1881---However, where the very execution of instrument is denied and leave is granted by the Court, then the said initial presumption in favour of plaintiff would not arise---In such a case, the mode of disposal of the suit from summary would convert to ordinary regular form of suit---In such circumstances the consideration for discharging the burden of proof would be the same as in an ordinary civil suit pending before a Civil Court---In the present case, after grant of leave to defend, appellant's predecessor submitted written- statement and denied execution as well as consideration of three cheques, sued upon---Therefore, the burden of proof of the execution of cheques by appellant' predecessor as well as consideration was upon the appellant---Appellant produced the official witnesses who merely produced the record of impugned cheques and dishonor slips and he had not led any evidence to prove that indeed the impugned cheques were executed towards fulfillment of an obligation or towards consideration---Appellant's own statement, without proof of consideration independently through concrete evidence, was not sufficient to prove his claim---Since, the appellant failed to discharge burden of proof, therefore, the burden did not shift upon the shoulders of defendants/respondents to disproof in rebuttal as the same would not make any difference---Defendants in evidence denied execution of the impugned cheques as well as the consideration mentioned therein---Thus, the Trial Court had misinterpreted S. 118 of the Negotiable Instruments Act, 1881 and was wrong in placing the onus of proof of relevant issue on the defendants---High Court set-aside the impugned judgment being not sustainable in law; resultantly, suit instituted by the appellant was dismissed---Appeal filed by the plaintiff was dismissed with costs of Rs. 50,000/- and costs of proceedings.

Syed Haider Aabdi v. Syed Javed Aabdi 1986 MLD 2298; Habib Bank Ltd. v. Ali Mohtaram Naqvi PLD 1987 Kar. 102 and Muhammad Aziz-ur-Rehman v. Liaquat Ali 2007 CLD 1542 ref.