Habal Masih vs Shahzad Vikcy S — 2025 MLD 2001 LAHORE-HIGH-COURT-LAHORE

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Habal Masih VS Shahzad Vikcy S.118---Civil Procedure Code (V of 1908), O.XXXVII, Rr.1 & 2---Suit for recovery on the basis of negotiable instrument / cheque---Statutory presumption in favor of a negotiable instrument, departure from---Denial of execution by alleged drawer of cheque---Rebuttal of statutory presumption in favor of negotiable instrument---Effect---Onus would shiftupon holder of cheque to establish underlying transaction and consideration---Scope---Transaction has to be essentially proved to secure decree on cheques---Principle enunciated---Present connected appeals were instituted against decrees passed under O.XXXVII Rr.(1) & (2) of C.P.C. where the respondent instituted suits based on dishonoured cheques (For Rs.5,000,000 and Rs.300,000,000) allegedly issued towards consideration for sacrificial animals---The appellant disputed the underlying transactions, claiming that no sale or purchase of animals occurred and that the cheques, delivered blank to a third party under an insurance arrangement, were misused---The central issue, therefore, was "whether the decrees were rightly granted on the basis of the cheques alone or whether the appellant's defence of absence of contractual relationship and misuse of cheques raised a valid ground negating the respondent's claim?"---Held: Original cheque contained writing with different ink whereupon signatures were made with dark ink and other details were with different ink---This discrepancy provided credibility to the plea that details on cheques were added at a later stage and in piecemeal---Evidence led by appellant if read in absolute isolation could not outrightly prove absence of consideration against the cheques but when read in context of conspicuous shortcomings / discrepancies in the evidence led by the holder of the instrument claim of presumption under S.118 of the Negotiable Instruments Act, 1881 stood rebutted---In wake of denial of alleged transaction and obligation of payment of consideration and upon discharge of initial burden by the appellant to challenge claim of presumption, onus shifted and respondent was required to bring direct evidence to substantiate conduct of commercial transaction but he had failed---No witness even alleged that transaction of sale and purchase of animals was negotiated and carried out in his / their presence---The preceding transaction had to be proved essentially to secure a decree on the cheques---Present case had to be decided on the touchstone the principle of 'preponderance of evidence'---When contrary stood established respondent could not seek refuge behind presumption in terms of S.118 of the Act 1881---Impugned judgments were unsustainable in law, being contrary to settled principles of law, hence, same were set aside---Present appeals were allowed, in circumstances.

Habal Masih vs Shahzad Vikcy S — 2025 MLD 2001 LAHORE-HIGH-COURT-LAHORE

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