Delhi District Court
Sh. Amarjeet Singh Rana vs Ravinder Kumar Decided On 10.08.2017. ... on 27 March, 2018
In the Court of Ms. Vineeta Goyal: Additional District Judge
(South District) Saket Court Complex, New Delhi.
Suit No. 6781/16
CNR No. DLST010003462010
In the matter of :
Sh. Amarjeet Singh Rana
S/o Late Sardar Rajinder Singh
R/o Flat no. 33 Main Market
Nehru Place,
New Delhi. ......Plaintiff
V E R S U S
1.Shri Balasubramanium Sekar R/o G49, 2nd Floor Kalkaji, New Delhi
2. Smt. Geetha Sekar R/o G49, 2nd Floor Kalkaji, New Delhi .....Defendants Date of institution : 09.12.2010 Reserved for Judgment : 13.03.2018 Date of decision : 27.03.2018 Appearance : Sh. Rajender Singh, counsel for plaintiff.
Sh. Kapil Sankhla with Sh. Shiv Chetry, Counsel for the defendants.
SUIT FOR RECOVERY
CS No:6781/2016 Page no. 1 of 22
J U D G M E N T
1. This is a suit for recovery of Rs.7,99,700 (Rupees Seven Lakhs Ninety Nine Thousand Seven hundred only) along with pendentelite and future interest and costs, instituted under the provisions of Order XXXVII of the Code of Civil Procedure, 1908 (in short 'the CPC').
2. Facts as epitomized in the plaint are that the defendants approached the plaintiff through Sh. Brij Mohan Soni, who is related to the plaintiff and requested for the money. It is averred in the plaint that the plaintiff gave friendly loan of Rs.5,00,000/ to the defendant no(s). 1 and 2 in the presence of Shri Brij Mohan Soni and the defendant no. 1 issued 5 cheques totaling for an amount of Rs.5,00,000/ as security amount for the loan amount from their joint account. It is further averred that the defendant no(s). 1 and 2 agreed that they will repay the loan amount alongwith interest @ 3% and also executed a promissory note in favour of the plaintiff. The defendant no. 2 there and then only issued a cheque for Rs.50,000/ as payment in advance towards the interest on the loan amount, which was also handed over to the plaintiff. The plaintiff tried to contact the defendant no(s). 1 and 2 for the repayment of the loan amount, however, the defendants kept mum about the repayment and avoided the plaintiff on one pretext or other. The plaintiff sent a notice dated 12.11.2007 to the defendants and informed them that the plaintiff will be presenting the said cheques for encashment and there should be enough money in the accounts of the defendants for the honouring of the cheques. The cheques were presented by the plaintiff for encashment through its banker, the same were got dishonoured with the remarks 'payment CS No:6781/2016 Page no. 2 of 22 stopped by drawer' vide the bank memo dated 12.12.2007. Upon receiving the bank memo, the plaintiff issued a communication/notice to the defendants dated 16.01.2008. The said communication was duly replied by the defendants. In the meanwhile, both the defendants approached to the plaintiff and requested the plaintiff not to take any legal action against them and further requested for some time as they are trying to make arrangements for proper funds in their joint account so that next time the cheques be honoured on their presentation. Keeping in view of the requests of the defendants, the plaintiff did not initiate any action against the defendants. The plaintiff again presented the cheques and upon their presentation they were dischonoured with the remarks "payment stopped by drawer" vide ICICI bank memos dated 29.03.2008. The plaintiff upon receiving the intimation of dishonured cheques issued legal demand notice to the defendants on 01.05.2008 and demand notice was received by the defendants and the plaintiff received reply dated 14.05.2008 to its legal demand notice, however, despite service of legal notice, the defendants failed to liquidate their liability towards plaintiff and the plaintiff is entitled to recover the said amount alongwith interest @ 12% per annum, hence the present suit.
3. Summons in the forms specified under Order XXXVII CPC were served. The defendants filed an application for entering his appearance. Thereafter, summons for judgment were served upon the defendants and they made an application for leave to defend which was allowed vide order dated 17.10.2012.
CS No:6781/2016 Page no. 3 of 22
4. The defendants contested this suit by filing joint written statement interalia raising various preliminary objection that present suit for recovery is not maintainable; that the case is barred under Order II Rule 2 CPC; the plaintiff has not approached this Court with clean hand and has suppressed the material facts from this Court; the plaintiff is misusing cheques which were given to one Mr. Brij Mohan Soni, S/o Sh. Harnam Singh. It is submitted that in the year 1995, the defendants were residing in G50B, First Floor, Kalkaji, New Delhi as tenants and desirous of purchasing residence for themselves and for this purpose came in touch with Shri Brij Mohan Soni and the plaintiff as well. The defendants were taken by the plaintiff and his fatherin law and shown the premises /Flat no. G49, Second Floor, Kalkaji, New Delhi representing that the same was in the budget. Mr. Soni won over the trust of the defendants by stating that since they were neighbours, they could pay the consideration as per their convenience, more so, as the said property was lease hold and even Mr. Soni required some time to get the same converted to free hold. The plaintiff and his fatherin law further approached the defendants in the month of May 1995 and expressed their desire to sell the second floor premises of building no. G49, Kalkaji, New Delhi urgently as they were in need of money, accordingly, after some days of negotiation between the parties on 31 st May 1995, the defendants purchased the said property for a sale consideration of Rs.8 Lacs. The defendants made payment of Rs. 1 Lakh as advance at the time of entering into the agreement to sell vide Cheque no. 459987 dated 08.5.1995, however a formal agreement to sell was drawn up on 01.06.1995 and General Power of Attorney was also executed in favour of the defendant no. 2. The rest of the money ie.
CS No:6781/2016 Page no. 4 of 22 Rs. 7 Lacs was paid at the time of delivery of possession vide cheque no. 459990 dated 31.05.1995. After taking full and final payment of the said property, defendants made a number of requests to Mr. Soni for the registration of sale documents but he did not seem to be interested. Mr. Soni did not take any steps for the fulfillment of remaining part of his obligations in terms of agreement to sell, neither by executing the proper sale documents nor by getting the water and electricity connections transferred. The defendants also did not strongly pursue the matter at the relevant time as the defendant no. 2 is a housewife and the defendant no. 1 was employed in an export house which required extensive travelling and staying out of the house for days together. The defendants paid a sum of Rs.8 Lacs as a sale consideration of the said property and an agreement to sell and GPA was duly executed in the names of the defendants by Mr. Soni. Infact, Mr. Soni had approached the defendants showing his willingness and readiness to dispose of his second floor for handsome amount of Rs.8Lacs as a result of which an agreement to sell and GPA dated 01.06.1995 was executed by Mr. Soni in favour of the defendants. The defendants wanted to equitably mortgage the property for meeting the expenses for funding their son's higher education, the bank officials refused to accept the photocopies of the documents and requested the defendants to approach Mr. Soni to get the balance documents done. To the utter surprise and shock of the defendants, instead of concluding the sale transaction legally, Mr. Soni promised to execute the documents within a short period and volunteered to give him a bridge loan of Rs. 8 Lacs which was what he was negotiating with the bank. No amount was mentioned as interest and the defendants kept under CS No:6781/2016 Page no. 5 of 22 the impression that a bonafide gesture was made. Soon after the defendants were shocked to find Mr. Soni and his son Rish Soni harassing and repeatedly abusing the defendants and their family members. Mr. Soni threatened to throw them out of the building unless interest @3% per month was paid on the amount. This was adding insult to injury and amounted to extortion. In these facts and circumstances, the defendants had no choice but only to deliver a cheque of a further sum of Rs.50,000/ in advance on account of interest. Even after that Mr. Soni further threatened the defendants that unless and until the amount was paid, he will not execute the documents. By coercing and threating the defendants with ejection from the unit, Mr. Soni and the plaintiff forced him to sign several post dated cheques. Mr. Soni also coerced him into signing some blank white papers. Mr. Soni extracted from the defendants cheque of Rs.8 Lacs and of Rs.5,00,000/ as security and a further cheque of Rs. 50,000/ claiming the same to be interest /damages. The said cheques were without date and name and were entrusted as security for the above said loan amount to Mr. Soni, who malafidely passed the cheques of Rs.5,50,000/ to the plaintiff in an absolute and criminal breach of trust. Furthermore, the said cheques of Rs.5,50,000/ as well as the cheque of Rs.8 Lacs were issued as a security for one and same transaction of loan of Rs.8 Lacs which the defendants borrowed from Mr. Soni at the time of sending their son to America for higher studies. Thus, the said cheques were obtained by Mr. Soni in collusion with the present plaintiff by taking under advantage of the urgent need of the defendants. The defendants have nothing to do with the plaintiff. It is also averred that Mr. Brij Soni also filed a suit for possession against CS No:6781/2016 Page no. 6 of 22 defendants bearing Suit no. CS (OS) 285/08 and this fact has been concealed by the plaintiff. It is also averred that the defendants have already paid Rs.5,80,000/ in cash to Sh. B.K. Soni and it is made clear that they will pay the remaining sum of Rs.3,00,000/ once he return the cheuqes taken by him for Rs.8,00,000/ as well as Rs.5,00,000/ and gets the property registered in the name of the defendants as promised.
On merits, the averments in the plaint were denied and aforesaid averments were again pleaded. On these grounds a prayer was made that the suit of the plaintiff deserves dismissal.
5. Replication to the written statement was filed reiterating and reaffirming the contents of plaint. It is averred that the defendants are trying to mislead with false and concocted story.
6. From the pleadings of the parties, following issues were framed on 18.07.2014 for trial, namely: 1 Whether the suit is bared under the provisions of Order 2 Rule 2 CPC or in alternative liable to be dismissed U/s 11 CPC? OPD 2 Whether the suit is barred as there was no privity of contract between the plaintiff and the defendant?OPD
3. Whether the suit is liable to be dismissed under the provisions of Money Lending Act?OPD
4. Whether the suit is without cause of action as there is no existing liability of the defendant towards the plaintiff?OPD
5. Whether the plaintiff is entitled to recovery of Rs.7,99,700/ alongwith pendentelite and future interest, if so, at what rate and for what period?OPP
6. Relief.
CS No:6781/2016 Page no. 7 of 22
7. In order to prove its case, the plaintiff examined only two witnesses. Sh. Amarjeet Singh Rana is examined as PW1 who tendered his evidence as Ex.PW1/A. Sh. Brij Mohan Soni is examined as PW2 who tendered his evidence as Ex.PW2/A. 7.1. In defence, the defendants examined only one witness. Sh. Balasubrmanium Sekar examined as DW1 who tendered his evidence as DW1/A.
8. I have heard arguments advanced by learned counsel for the parties and gone through the documents on record. My issuewise findings are as under: Issue no. 1 8.1. This issue was not pressed by both the parties in view of findings given by the then Ld. Presiding Officer while declining application under Section 10 read with Section 151 of CPC of the defendants for stay of suit. Accordingly, this issue needs no adjudication being not pressed for.
Issue no. 2 and 5 8.2. These issues are taken up together being interconnected. The onus probandi for issue no. 2 was upon the defendants and issue no. 5 was on the plaintiff. The plaintiff in order to establish its case while tendering evidence by way of affidavit made statement in accordance CS No:6781/2016 Page no. 8 of 22 with the averments made in the plaint categorically stressed that plaintiff advanced a loan of Rs.5,00,000/ in cash to the defendants on the asking of his fatherinlaw Sh. Brij Mohan, in whose building the defendants were staying on the second floor. The defendants at the time of receiving loan issued 5 cheques of Rs.1,00,000/ each Ex. PW1/1 to Ex. PW1/5 from their joint account and another cheque of Rs.50,000/ Ex. PW1/6 towards interest which was issued by defendant no. 2 from her sole account. The said cheques were presented for encashment but were returned dishonoured on 12.12.2007. A legal notice Ex. PW1/9 was issued to the defendants but defendants failed to give any reply and upon presentation of the aforesaid cheques, the same were again dishonoured vide returning memo dated 29.03.208 Ex. PW1/7 and Ex. PW1/8. A legal notice was also sent Ex. PW1/10 to which the defendants replied vide reply Ex. PW1/11 but defendants did not pay the said amount. The plaintiff preferred a complaint under Section 138 of Negotiable Instruments Act which were dismissed being barred by law of limitation. The plaintiff also examined Sh. Brij Mohan Soni as PW2 to corroborate his case.
8.3. In rebuttal, the defendants only examined defendant no. 1 as DW1. He also deposed on the lines of the defence taken by the defendants in their joint written statement.
8.4. Ld. Counsel for plaintiff argued that this is a suit for recovery of loan which has been advanced by the plaintiff to the defendants and Ex. PW1/1 to Ex. PW1/5 are the cheques which were issued by the defendants from their joint account acknowledging the liability to pay CS No:6781/2016 Page no. 9 of 22 the aforesaid loan amount. A promissory note was executed but it was lost by the previous counsel. The case of the plaintiff amply stood proved from the deposition of PW1 and PW2 and crossexamination of the plaintiff PW1, conducted by the defendants solely revolves around the income tax returns of the plaintiff and whether the plaintiff has shown the amount of loan given by him in his returns and on nonfiling of promissory note. The plaintiff stood his grounds and supported the contents made in the suit. The plaintiff explained each and every circumstances regarding Income Tax returns and promissory note during crossexamination and relied upon citation Dilip Chawla vs. Ravinder Kumar decided on 10.08.2017. It is also argued that during his lengthy crossexamination by the defendants, the plaintiff was never put any question or suggestion regarding the defence taken by the defendants in the written statement. The defendants have nowhere disputed the issuance of the cheques and DW1 has admitted their signatures and the amount filled. Further, the crossexamination of PW2 was with respect to his dispute with the defendants on account of his filing of suit for possession against the defendants. No suggestion or question were put to PW2 that cheques were given as security to the PW2 and have been misused rather PW2 totally supported the case of the plaintiff. It is further argued that defence of defendants is afterthought without any supporting evidence as in the reply Ex. PW1/11, there is no whisper about his defence raised in the written statement. The defendant no. 1 in his evidence by way of affidavit has claimed in para 9 that plaintiff alongwith Mr. Soni under coercion and threat of ejection forced him to sign some blank white papers and several post dated cheques which is contrary to the CS No:6781/2016 Page no. 10 of 22 contention made in para no. 10 of the affidavit where DW1 has stated that the cheques were given as security. It is further argued that in one para, defendant no. 1 is saying that the cheques were given as security and there is no claim of threat or force and in other para, his stand is different which proves that defendant is speaking plain lies before this Court. It is further argued that the defendants have claimed in para 12 that they refunded the amount of Rs.5,50,000/ in cash but has not produced any receipt of the same neither took back original cheques which is highly improbable and not believable. Further, he has not stated when the amount was returned back. The admission by defendant regarding liability of Rs.5,50,000/ completely support the case of the plaintiff. It is further argued that plaintiff in his crossexamination has stated that he refunded Rs.5,50,000/ in presence of one Mr. K. Mariappan in AugustSeptember, 2007, however, the said person has not been examined by the defendants to prove his claim which in turn demolishes the claim of defendants. It is further argued that documents relied upon by the defendants in para 3,4 and 5 of affidavit of evidence are not in any manner connected with the present suit nor was put to the plaintiff during crossexamination nor they bear the signatures of plaintiff. The documents pertain to year 1995 and the loan transaction between the plaintiff and defendants took place in the year 2007 and the cheques were issued by the defendants to the plaintiff in the year 2007, as such the claim of the defendants that cheques were given as security with respect to some transactions of year 1995 is completely unsustainable. It is further argued that despite claiming in para 9 of his affidavit of evidence that plaintiff forced the defendants to issue cheques, no complaint to police CS No:6781/2016 Page no. 11 of 22 or to any authority was made by the defendants at any point of time i.e. when the cheques were taken, cheques were presented and even after service of legal notice of dishonour of cheques and as such the plea of forcibly taken cheques does not stand anywhere and is a false and concocted story. Reliance is placed upon Krishna Mohan Kul vs. Partima Maity & ors (2004) 9 SCC 468 and Shashi Kumar Banerjee & ors vs. Subodh Kumar Banerjee & ors AIR 1964 SC 529 and further argued that defendant no. 1 is a habitual defaulter and offender. During the crossexamination, the defendant no. 1 admitted that he was arrested by Hyderabad police and had remained in custody for number of days on account of an FIR registered against him under Section 420 IPC on account of financial transactions. He even admitted that his passport has been seized by the Hyderabad police. It is argued that this clearly shows that the defendants are in habit of taking loan from persons and then failing to pay intentionally.
8.5. Per contra, Ld. Counsel for the defendants, explaining the averments of the written statement, argued that malafidely by coercion and under threat from Mr. Soni and the plaintiff, the defendant No. 1 was forced to sign some blank papers and furnish various cheques as security and interest and damages and these cheques bear no name but were handed over and given to Mr. Soni as security. It is further argued that the defendants have already paid Rs. 5,00,000/ in cash to Mr. Soni along with a sum of Rs. 50,000/ as interest. Thereafter, better sense prevailed upon the defendants who made it clear to Mr. Soni that they will only pay the remaining Rs. 3,00,000 (or Rs.2,50,000 adjusting Rs.50,000) only after he returns the security cheques of the defendants CS No:6781/2016 Page no. 12 of 22 and honours his commitment to get the registration of the property in their name, as promised. It is further argued that since dispute arose Mr. Brij Mohan Soni and the defendants entered into litigation in the Hon'ble High Court of Delhi (since transferred and pending in District Courts). Thereafter, to get over the said order, Mr Soni in collusion with his soninlaw/ plaintiff filed the present case, misusing the cheques given to Mr. Soni as security, by illegally and unlawfully interpolating the name of the plaintiff though there was no liability qua the plaintiff whatsoever. It is further argued that since the said suit was filed prior to the present suit and the issues are joined and substantially similar and the defendants are same in both the suits, while the plaintiff and Mr. Soni are related and claiming from substantially the same facts and cause of action, the suit is hit by Section 11 CPC, although in fairness, vide order dated 22.5.15 this issue stands decided. It is further argued that there is/was no liability on the part of the defendants for any payment/ debt or dues to the plaintiff, therefore there was no occasion for them to agree to pay any interest to the plaintiff as claimed. The plaintiff is a complete stranger to defendants and has no privity of contract with him no promissory note or any other document in favour of the plaintiff has even been executed by defendants. The said alleged promissory note does not exist and thus was never filed by the plaintiff. The plaintiff is, thus, not entitled to any relief from this Hon'ble Court as he approached this Hon'ble Court with unclean hands and has played fraud upon the Court by not disclosing these material facts. Reliance is placed upon S.P. Chengal Varaya Naidu V. Jagannath, (1994)1 SCC 1.
CS No:6781/2016 Page no. 13 of 22 8.6. It is further argued that the alleged urgency of defendants not proved by plaintiff, either by documentary evidence or otherwise. Admittedly, there is no mention of date, month and year when the alleged loan was given as PW2 in his crossexamination dt. 21.3.2017 has admitted that he cannot tell the date, month and year when the alleged loan transaction was struck amongst plaintiff and defendants further stated that it is correct that he has not stated any date of alleged loan in my affidavit. It is further argued that there are even serious contradictions as to filling up of cheques & persons who were present at the time of execution of alleged loan. Legal Notice Ex. PW 1 /10 contains names of Mr. B.M. Soni and Mr. Rishi Soni, while plaint contains names of Shri BM Soni, plaintiff and defendants, thus, pleading is contradictory to legal notice Ex.PW1/10. It is further argued that as regards who filled the cheques, PW1 in his cross examination dt. 29.3.2016 stated that blank cheques were filled in by him subsequently, while PW2 in his crossexamination dt. 31.5.2016 stated that the cheques were filled in by the defendant. It is further argued that the plaintiff has miserably failed to prove or bring any evidence that he had the amount to disburse loan, or that he borrowed the same from friends/ relatives, and neither filed his statement of accounts. There is absolutely no pleading that money was lent from friends/relatives, nor details of such friends/ relatives were disclosed or brought as witnesses as PW1 in his crossexamination dt. 02.03.2016 admitted that he cannot tell the name of the persons from whom he has borrowed the money and despite specific question, the plaintiff didn't bring/show his statement of accounts Admittedly, plaintiff didn't have the money to loan with him as PW1 in his crossexamination dt.
CS No:6781/2016 Page no. 14 of 22 29.3.2016 stated that he was in possession of a sum of Rs. 2,50,000/ being cash in hand and remaining amount was borrowed by him from his friends. It is further argued that admittedly alleged promissory note was not filed, nor its execution was proved, moreover, the plaintiff did not even remember its date of execution, nor brought even the photocopy of the same. It is further argued that the plaintiff has taken contradictory stand as to nature of loan and interest thereon. He claimed that the loan was friendly, and contradictorily claimed that he was charging interest of 3% p.m. This too is contradicted in the plaint where the alleged 3% p.m. changes to 3% p.a. and then to 12% p.a. Thus, the plaintiff has not only failed to prove his ability to give loan but also the interest thereon. PW1 in his crossexamination dt. 2.3.2016 stated that he does not remember the rate of interest mentioned in the demand promissory note and voluntarily stated that it may be 3% per month and upon specific question to show any documentary proof regarding the alleged loan or interest, he replied that the only document that he had to show that he had to charge monthly interest, was the promissory note. The said promissory note was never filed. The burden of proof to prove interest was upon the plaintiff which too he failed to discharge. Reliance is placed upon Texmaco Ltd. vs Union of India CS(OS) No. 1439/1991. It is further argued that even otherwise and without prejudice any alleged loan would be illegal and even non recoverable as Section 3 of the Punjab Registration of MoneyLender's Act, 1938, suits and applications by moneylenders is barred, unless moneylender is registered and licensed. PW1 in his crossexamination dt. 2.3.2016 admitted he had no license for money lending granted by the Government; therefore CS No:6781/2016 Page no. 15 of 22 could not have lent money on interest to the defendants and reliance is placed upon Narsi Dass V. Surender, 2014 SCC Online P&H 24818 and Virender Singh V. Deepak Bhatia, 2013 CrLJ 2593. It is further argued that the plaintiff is guilty of misrepresentation and non disclosure of material facts, as is disclosed in crossexamination of PW1 dt. 02.03.2016 wherein he claims that he was not even aware of any property dispute/ litigation between Mr. Soni and defendants, but in crossexamination dated 29.03.2016 contradicted himself on this front by stating that there is a dispute pending between his fatherinlaw and defendants before Hon'ble High Court of Delhi. Further, regarding financial transactions with Mr. Soni and defendants which was contradictory to replication PW 2, in his crossexamination dt.
31.05.2016, in reply to specific question "Was the Plaintiff aware that you had entered into a Sale agreement with the defendant...?" gave a vague reply, however admitted that he had executed agreement to sell and power of attorney in favour of defendants on 01.06.1995. It is further argued that as regards the alleged loan also PW2 in his cross examination dt. 21.03.2017 stated that he cannot show any document regarding the loan transaction and further stated to be correct that he had executed documents in favour of defendant against consideration, which fortifies the case of the defendants and disproves plaintiff's case. It is further argued that the plaintiff had the opportunity to bring best evidence to prove his case but he failed to do so. It is further argued that plaintiff failed to file the promissory note or even its photocopy; did not even bring any witness from whom he allegedly took the money to give the alleged loan to the defendants or any other proof regarding payment of alleged loan; failed to file and withheld his ITR & Book of CS No:6781/2016 Page no. 16 of 22 accounts. The plaintiff in his crossexamination has admitted that he had not brought his income tax returns for the financial year of 2007 08, 200809 and 200910 and stated to be correct that he has not shown the loan extended by him in his IT return. It is argued that the plaintiff has withheld these relevant evidences and adverse inference is liable to be drawn against him and reliance has been placed upon M.S. Narayana Menon alias Mani vs. State of Kerala & Anr. (2006) 6 SCC 39; United Technical Consultants Pvt.Ltd. vs. Shanti Devi 2006 (133) DLT 337; Shukla Chakraborty vs. Sudeep Mitra 2010 (172) DLT 583. It is further argued that it is well established that case of a party cannot travel beyond his pleadings and reliance is placed upon Bachhaj Nahar vs. Nilima Mandal & Anr. (2008) 17 SCC 491. It is further argued that plaintiff is thus not entitled to any recovery and has further has grave contradictions on the rate or period. It is further argued that it is clear that the suit was filed by plaintiff in collusion with Mr. Soni, who illegally handed over the security cheques of the defendants to the plaintiff, who thereafter without any liability or dues filled his name on the said security cheques. The suit is without cause of action as there is no existing liability of the defendants towards the plaintiff. It is further argued that the veracity and authenticity of affidavit of evidence is itself doubtful as PW1 in his crossexamination dt. 21.03.2017 has denied the affidavit itself stating that he has not given this affidavit and cannot say anything about the interest clause. It is further argued that the plaintiff has not been able lead any evidence to show that he even gave any loan to the defendants. Considering the matter pending in the High Court with Mr Soni, it is clear that the cheques were given to Mr Soni (plaintiff's father in law) CS No:6781/2016 Page no. 17 of 22 as security. The plaintiff was never a party to the agreement/s with Mr Soni. The defendants lead positive evidence regarding the property dispute between Mr Soni and defendants and the consistent stand of the defendants even in the High Court. There was never any privity of contract between the plaintiff and the defendant. The alleged Promissory Note on which the plaintiff based his case to show privity of contract was never filed and no evidence was lead upon the same, nor its execution proved. It is further argued that the plaintiff failed to prove his case as well as the issue framed against him. The plaintiff's case has to stand on its own legs and the plaintiff has miserably failed to do so and reliance is placed upon Devender Bhati vs Chander Kanta 2015 SCC Online Del 142224.
8.7. I have given careful consideration to the facts of the case in the light of evidence adduced and arguments advanced by the rival parties, I find substance in the arguments of the defendants. The present suit for recovery of amount filed by the plaintiff is based on dishonoured cheques allegedly issued by the defendants in lieu of an alleged loan advanced by the plaintiff to the defendant. The right to recover an amount advanced presupposes an agreement of loan between the parties. It is this agreement whether written or oral which is the foundation of right to recover. In the present case, the plaintiff claims to have executed a promissory note between the parties but the same was never produced. The explanation tendered by the plaintiff for nonproduction of the promissory note was that the said promissory note has been lost by the earlier Counsel of the plaintiff. There is no effort by the plaintiff to substantiate execution of the promissory note CS No:6781/2016 Page no. 18 of 22 with the help of secondary evidence i.e. photocopy of the promissory note and compliance of other requirements of secondary evidence.
8.8. Further, in the absence of a written document of agreement of loan, the plaintiff has contended that the cheques issued by the defendants are sufficient to presume agreement between the parties. It has been contended that possession of cheques by the plaintiff ipso facto raises a presumption that there was an agreement of loan between the parties. I have given careful consideration to the contention and find that on reference to section 139 of NI Act, there emerges a reasonable presumption that provides that unless the contrary is proved the holder of a cheque received the cheque for discharge, in whole or in part, of any debt or any other liability. However, this presumption is rebuttable to the extent that the other party who happen to have issued the cheque/negotiable instrument is at liberty to bring on record evidence to the contrary explaining the circumstances under which such instrument has landed into the hands of the claimant party.
8.9. In the present case, in written statement the defendants completely denied any transaction whatsoever with the plaintiff but admitted series of interactions and transactions with the fatherinlaw of the plaintiff namely Sh. B.M. Soni. The defendants contended that there are transaction of sale and purchase of immovable property with this person as well as procurement of education loan for his son. The transactions with this person were alleged to be under litigation and dispute for number of reasons which are not relevant for adjudication CS No:6781/2016 Page no. 19 of 22 of the present suit. The important contention which comes out of these pleadings is that the defendants have denied any agreement and transaction with the plaintiff here in. However, the defendant to rebut the presumption of any loan agreement with the plaintiff has relied upon various contradictions such as the documents submitted in the ongoing litigation with Mr. B. M. Soni and averments contained in those documents clearly show that a similar kind of transaction of education loan has been claimed to be under consideration in that litigation. This primarily shows that Mr. Soni who happen to be father inlaw of the present plaintiff is making an attempt to use the cheques handed over to him in the present dispute. Further, the plaintiff appearing as PW1 failed to prove any document in the form of Income Tax Return to show that such an advance was loaned to the defendants. There are contradictions about the person who has filled the cheques in question as PW1 in crossexamination stated that blank cheques were filled by him whereas PW2 states that cheques were filled by the defendant. Similarly, the presence of persons at the execution of alleged loan is equally doubtful because the legal notice Ex. PW1/10 states presence of Sh. B.M. Soni and Sh. Rishi Soni whereas in the plaint the names of plaintiff Sh. B.M. Sini and defendants were mentioned. Further, the plaintiff could not establish the source of funds for advancing said loan because in cross examination, plaintiff stated to have taken money from friends / relatives but no such details could be given by him. There are contradictions in evidence regarding rate of interest also because PW1, in his crossexamination, expressed inability about rate of interest mentioned in Promissory note but on memory based stated to be 3% CS No:6781/2016 Page no. 20 of 22 per month.
8.10. The abovementioned evidence show that there are certain contradictions which are fatal to the case of the plaintiff and goes against the plaintiff. Moreover, the provision of Income Tax Act, Section 269 prohibits transactions of cash loan exceeding Rs.20,000/ between the parties. In the present suit, the plaintiff claims to have advanced a loan of Rs.5,00,000/ in cash. In entirety of circumstances above, the plaintiff has miserably failed to show the source available with him for advancing the loan and alleged cash loan otherwise in accordance with I.T. Act. Therefore, by no stretch of imagination, it can be stated the liability to repay unaccounted cash amount is legally enforceable. Thus, he cannot be permitted to claim the amount and interest. The plaintiff has failed to establish its case and in view of above discussion, it cannot be said that there was any privity of contract between the plaintiff and defendants and accordingly these issues are decided against the plaintiff.
Issue no. 3 8.11. The onus to prove this issue was upon the defendants. The contention of the defendants that suit is barred by Section 3 of Punjab Registration of Money Lenders Act, is not acceptable because there is nothing on record that plaintiff has been habitually or regularly advancing loan to the different persons. It is also not proved on record that grant of alleged loan to the defendants was part of larger commercial activity. The isolated transaction of lending does not CS No:6781/2016 Page no. 21 of 22 require licence. Therefore, this issue is decided in favour of the plaintiff. However, while deciding this issue in favour of the plaintiff it does not mean that loan transaction becomes lawful for the reason discussed in above paragraphs.
Issue no. 4 8.12. In view of observation made in issue no(s). 2 and 5, there is no cause of action against the defendants and there is no existing liability of the defendants towards the plaintiff. Therefore, this issue is decided in favour of defendants.
Relief :
9. In view of above findings given in issue no. 2, 4 and 5, the suit of the plaintiff is dismissed. Parties are left to bear their own cost. Decree sheet be prepared.
File be consigned to record room.
Pronounced in the Open Court on 27.03.2018 (Vineeta Goyal) Additional District Judge03 South District: Saket: New Delhi CS No:6781/2016 Page no. 22 of 22