P C CHERIVAN Vs. VARKEV GEORGE

JUDGEMENT

(1.) Second counter petitioner in I. A. No. 1238 of 1971 in O. S. No. 16 of 1971 on the file of the Sub Court of Kottayam, is the revision petitioner. He is stated to be a prominent member of the Indian National Congress (Organisation). In connection with the mid term poll of the Kerala Legislative Assembly held in September, 1970, an electoral arrangement was brought about between the Congress (0), and the Kerala Congress by which the former agreed to pay two lakhs rupees to the latter towards its election funds. In pursuance of this arrangement, the revision petitioner issued two cheques to one Varkey George of the Kerala Congress (defendant in the suit) drawn on the Indian Bank Ltd. The cheques are dated 2-9-1970. The defendant took the cheques to the plaintiff bank (The Padinjarekkara Bank) on 4-9-1970, and the bank received the cheques for collection, and paid the defendant the entire Rs. 50,000/- covered by the cheques. When the plaintiff bank presented the cheques to the Indian Bank on 27-10-1971, they were returned dishonoured. Thereupon, the suit was filed against the defendant for the money covered by the cheques with interest at 6% from the date of discounting viz., 4-9-1970. The plaintiffs allege that at the time the cheques were presented to the plaintiff bank, the defendant had given the assurance that he would pay back the entire amount on 19-9-1970, and that the plaintiff need not send the cheques for collection in the mean time. The plaintiff waited till 27-10-1970 and seeing that the amount was not returned, sent the cheques for collection. It is in this background that the suit was filed by the plaintiff bank against the defendant, leaving aside the revision petitioner third party, who had issued the cheques.

(2.) Defendant's case is that the plaintiff and the third party are related to each other, and are close business associates. The cheques were presented to the plaintiff bank on the specific direction of the third party; the cheques are drawn for valuable consideration and that the defendant had not given any personal assurance to the plaintiff as alleged in the plaint. Even no notice of dishonour has been sent to the third party. The suit, therefore, is not maintainable and that the plaintiff's remedy is against the third party, the drawer of the cheque The third party's case is that it is true that the cheques were issued by him; but they were issued only as accommodation cheques. He bad given no personal undertaking to the plaintiff bank for discounting the cheques. The cheques are drawn without consideration, and were brought into existence in pursuance of illegal transaction. There was an understanding that both the Congress (0) and the Kerala Congress would jointly collect funds for the election and out of the funds so collected, the Kerala Congress would be given initially rupees two lakhs on the expectation that the Central Organization of the Congress (0) would contribute liberally for the election expenses of the Kerala Congress. Since there was delay in making available the funds from the Indian National Congress, the cheques in question were issued so that, the defendant might borrow on the strength of the cheques. They were not intended for collection at all.

(3.) I. A. No. 1236 of 1971 was filed under O.8A of the CPC. praying for leave of the court to issue notice to the third party for his impleadment as according to the defendant, he is entitled to contribution and indemnity against the third party.