Law: Code Of Civil Procedure, 1908.

Section: 84

Core Points

• The respondent filed a summary suit under Order XXXVII CPC to recover Rs.700,000 based on a cheque allegedly issued by the appellant.
• The trial court decreed the suit, relying on the cheque and the statutory presumption under the Negotiable Instruments Act.
• The appellant challenged the decree before the High Court.

Findings of the High Court

• A cheque alone is not sufficient to maintain a summary suit under Order XXXVII CPC.
• Before filing such a suit, the cheque must be presented to the bank within a reasonable time and dishonoured.
• The respondent failed to prove:
  • Presentation of the cheque before the bank.
  • Dishonour of the cheque.
  • Any bank return memo or bank certificate.
• The cheque was dated 25.05.2015, whereas the suit was filed on 11.09.2017, making it a stale cheque.
• A stale cheque cannot create a valid cause of action for a summary suit.
• Although there may have been an underlying business transaction, it cannot validate a summary suit based on an unpresented and stale cheque.
• The trial court wrongly relied only on the existence of the cheque without proving the legal requirements for a summary suit.

Decision

• Appeal Allowed.
• Judgment and decree dated 07.12.2023 were set aside.
• The respondent's suit under Order XXXVII CPC was dismissed.
• No order as to costs.

Relevant Law & Sections

1. Order XXXVII, Code of Civil Procedure, 1908 (CPC)

• Governs summary suits based on negotiable instruments.
• A plaintiff must establish a valid cause of action, including presentation and dishonour of the cheque.

2. Negotiable Instruments Act, 1881

Section 6

• Defines a Cheque as a bill of exchange payable on demand.

Section 72

• Requires presentment of a cheque for payment before liability can be enforced.

Section 84

• Requires a cheque to be presented within a reasonable time.
• A cheque not presented within a reasonable period becomes stale, and the drawer may be discharged from liability.

Case Laws Relied Upon

1. Khalifa Azhar Mumtaz v. Ghulam Akbar

Citation: 2014 CLC 1448

Principle:

• If a cheque is not presented to the bank, no cause of action arises for filing a suit under Order XXXVII CPC.

2. Syed Matiullah Agha v. Haji Muhammad Hussain alias Haji Muhammad Hassan

Citation: PLD 2025 Balochistan 28