Punjab & Haryana High Court Restores Trial Court Decree Dismissing Recovery Suit; Finds Plaintiff Misused Cheque After Borrower’s Death and Built Case on Falsehood

Case Name: Jasvir Kaur vs. Mohinder Kaur
Date of Judgment: 03 December 2025
Citation: RSA-1038-2018
Bench: Hon’ble Mr. Justice Pankaj Jain

Held: The Punjab & Haryana High Court set aside the Lower Appellate Court’s decree and restored the Trial Court’s dismissal of a suit for recovery based on a cheque dated 14 August 2009. The Court held that the plaintiff concocted a false story after learning of the borrower’s death, misused a cheque available with the finance company, concealed material facts, and avoided cross-examination conduct rendering her claim wholly untrustworthy.

Summary: The plaintiff alleged that the defendant’s late husband borrowed ₹1,25,000 from her on 24 May 2009 and issued a cheque to repay the amount on 14 August 2009, which she failed to present before learning of his death on 23 August 2009. The defendant denied any private loan, asserting instead that her husband had earlier borrowed from a registered finance company, M/s New Dashmesh/Lucky Finance Company, in which the plaintiff herself was an active partner. She maintained that the earlier loan had been substantially repaid during the borrower’s lifetime.

The Trial Court dismissed the suit after noting that the plaintiff never proved disbursement of the alleged loan, failed to establish that the cheque was issued in her favour, and critically did not enter the witness box for cross-examination after filing an affidavit. Instead, her husband deposed as attorney, but his testimony revealed that the plaintiff was indeed a partner in the finance business, contradicting her own pleadings. The legal notice she issued in 2011 demanding ₹2,46,000 on behalf of the finance company further exposed inconsistencies in her narrative.

The High Court held that the plaintiff discovered the borrower’s death only in mid-2011 and then misused a cheque that had been with the finance company to fabricate a personal loan story. Her failure to testify, false pleadings denying her partnership in the finance company, and the absence of any proof of the alleged cash loan cumulatively demonstrated that the suit was based on falsehood. The Court ruled that the Lower Appellate Court erred in reversing the well-reasoned Trial Court decree by relying on presumptions under the NI Act and ignoring grave credibility issues.

Decision: The appeal was allowed. The Trial Court’s decree dismissing the suit was restored, and the plaintiff’s claim was rejected in full.