SRINAGAR: The Jammu Kashmir and Ladakh High Court has dismissed a petition challenging an order allowing two defendants to contest a Rs 1.35-crore recovery suit unconditionally, holding that their claim that the disputed Rawalpora land was State property raised genuine issues requiring a trial.
Justice Rajnesh Oswal, while delivering the judgment on October 14, upheld the May 30, 2025, order of the 3rd Additional District Judge, Srinagar, granting Mohammad Amin Wani and another defendant unconditional leave to defend the suit filed by Mushtaq Ahmad Rafiqee.
The petitioner had approached the High Court under Article 227 of the Constitution, seeking to set aside the trial court’s order in a summary suit filed under Order XXXVII of the Code of Civil Procedure for recovery of Rs 1.35 crore.
The dispute stems from a proposed sale of four kanals of land at Rawalpora, Srinagar, for a consideration of Rs 4 crore. According to Rafiqee’s case, the defendants approached him and other joint owners in April 2022 with an offer to purchase the land, following which several cheques totalling Rs 4 crore were issued on May 14, 2022.
The petitioner claimed that most of the cheques were dishonoured. He further submitted that the defendants subsequently assured him that Rs 1.35 crore would be paid within a few months and requested him not to initiate legal proceedings. When the payment was not made, he filed the recovery suit.
The defendants disputed the petitioner’s claim, arguing that the cheques had been issued as security under an arrangement to identify prospective buyers and facilitate the sale of the land. They maintained that the cheques were to be encashed only after the execution and registration of sale deeds.
In their application seeking permission to defend the suit, the defendants alleged that the petitioner and his co-sharers had failed to provide the required revenue extracts, or Fard, for the property. They claimed that enquiries with revenue officials subsequently revealed that the land was State property classified as Shamilat Kahcharai, and that the petitioner and his co-sharers had no subsisting rights to sell it.
The defendants also referred to an earlier investigation into alleged manipulation of revenue records involving State land in Hyderpora and adjoining areas. According to their plea, FIR No. 18 of 2001 was registered by the Crime Branch, Kashmir, and a charge sheet was subsequently filed against 57 accused, including seven revenue officials. They further claimed that fraudulent mutations relating to the land had been cancelled and that government agencies had retrieved encroached land from alleged illegal occupants.
Before the High Court, the petitioner argued that the trial court had failed to apply the statutory presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act, contending that the admitted issuance and dishonour of the cheques supported his claim of an enforceable liability.
He also relied on an agreement to sell dated March 2, 2022, to argue that the defendants were aware of disputes concerning the property before issuing the cheques.
Rejecting this argument, Justice Oswal observed that the agreement cited by the petitioner referred to land bearing Survey Nos. 112, 113, 112/1 and 113/1 at Umarabad, Sector B, in the Rawalpora estate. The land forming the basis of the recovery suit, however, comprised Survey Nos. 145/1 (part), 148 (part) and 166 (part).
The court noted that the agreement had not been mentioned in the original plaint and did not establish that the defendants were aware of the disputes concerning the specific land against which the cheques had allegedly been issued.
On the issue of statutory presumptions under the Negotiable Instruments Act, the High Court held that the suit was not based solely on the cheques. The petitioner’s own case linked their issuance to the proposed purchase of four kanals of land for Rs 4 crore, while the defendants disputed the ownership rights underlying that transaction.
The court observed that once the foundational basis for issuing the cheques was disputed through material presented by the defendants, the question of whether they represented a legally enforceable debt or liability became a triable issue.
Relying on the Supreme Court’s judgment in B.L. Kashyap and Sons Ltd. v. JMS Steels and Power Corporation (2022), the High Court reiterated that leave to defend a summary suit should ordinarily be granted where the defendant raises a genuine and reasonable defence. Refusal is generally warranted when no genuine triable issue is established and the defence is found to be frivolous or vexatious.
Finding that the defendants had raised a substantial defence that could not be dismissed as doubtful or fanciful, Justice Oswal held that they were entitled to unconditional leave to defend the suit.
The High Court consequently found no infirmity in the trial court’s order and dismissed Rafiqee’s petition as meritless.
The judgment allows the recovery suit to proceed before the trial court. It does not determine the final liability of the defendants to pay Rs 1.35 crore.
