Delhi District Court
Dr. S.K. Singh vs M/S Har Shree Jee Financial Leasing Co on 8 December, 2017
IN THE COURT OF SH. DHARMENDER RANA
ADDITIONAL DISTRICT JUDGE-12, CENTRAL,
TIS HAZARI COURTS, DELHI
Suit No. 85/12
New No.14363/16
1. Dr. S.K. Singh
S/o Sh. Rajender Singh
2. Smt. Purnima Singh
through her legal heirs
(a) Mr. Rakshit Kumar Singh,
S/o Dr. S.K. Singh
(b) Ms. Anu Singh,
D/o Dr. S.K. Singh
(c) Dr. S.K. Singh
S/o Sh. Rajender Singh
already plaintiff No.1 herein,
all Resident of
H-69, Saket, New Delhi-110017,
....Plaintiffs.
S.K. Singh
V.
Har Shree Jee Finance 1 / 40 Dt. 08.12.2017
Vs.
1. M/s Har Shree Jee Financial Leasing Co.
Ltd. .
Through its Director,
Sh. Pankaj Singhal
F-52, Khanpur Extn.
New Delhi
2. Sh. Pankaj Singhal
Proprietor,
Shree Jee Finance Company
F-52, Khan Pur Extn.
New Delhi
3. Smt. Savita Singhal
W/o Sh. Pankaj Singhal,
F-52, Khan Pur Extn.
New Delhi
...Defendants.
Date of institution : 09.12.2006
Date of reserving order : 30.11.2017
Date of decision : 08.12.2017
S.K. Singh
V.
Har Shree Jee Finance 2 / 40 Dt. 08.12.2017
SUIT FOR RECOVERY OF RS. 19,50,000/-
(RUPEES NINETEEN LACS FIFTY THOUSAND
ONLY)
Present: Sh. Sanjay Aggarwal Ld. Counsel for
the plaintiff.
Sh. Ashish Kapoor, Ld. Counsel for
the defendant
JUDGMENT
1. By way of present judgment, I propose to decide the present suit filed by the plaintiffs Dr. S.K. Singh and Smt. Purnima Singh.
2. Briefly stated plaintiff No.1 claims himself to be a Doctor by profession. Plaintiff No.2 is his wife. It is averred that somewhere in the year 2001 Sh. Pankaj Singhal, (defendant No.2) and Smt. Savita S.K. Singh V. Har Shree Jee Finance 3 / 40 Dt. 08.12.2017 Singhal; wife of Sh. Pankaj Singhal (defendant No.3) approached plaintiff No.1 and represented that they are into the business of chits and financing. Defendants assured that incase plaintiffs invest with the defendants, plaintiffs shall get good returns on the investments. Sh. Pankaj Singhal(defendant No.2.) and Smt. Savita Singhal (defendant No.3)further claimed that they are running the aforesaid business under the name and style of M/s Shree Jee Finance Company (proprietorship concern of defendant No.2), M/s Shree Jee Chits Pvt. Ltd. and M/s Har Shree Jee Finance Company of which defendant No.2 and 3 were either Proprietor(s) or Director(s). Defendant NO.2 and 3 further claimed that they were duly registered with Reserve Bank of India and authorized to carry business of chits and financing. Defendants No.2 and 3 accordingly lured plaintiffs to pay a sum of S.K. Singh V. Har Shree Jee Finance 4 / 40 Dt. 08.12.2017 Rs.15 lacs to defendants No.2 and 3 in cash and the following receipts were issued against the said payments:-
Receipt No. 151 dated 9.09.2001 for a sum of Rs.two lacs (Ex. PW1/1), receipt No.218 dated 26 th June 2002 for a sum of Rs.five lacs (Ex.PW1/2), receipt NO.223 dated 8th August 2002 for a sum of Rs.one lac (Ex. PW1/3), receipt No.224 dated 10 th August 2002 for a sum of Rs.one lac, (Ex.PW1/4) and receipt No.225 dated 12th August 2002 for a sum of Rs. one lac (Ex. PW1/5) (Total Rs.10 lacs) It is further claimed that besides the above said receipts a sum of Rs.5 lacs was also paid against receipts dated 10.3.2001, 10.4.2001, 10.5.2001, 10.6.2001 and 10.7.2001 which were deposited/tendered to defendant No.3 for payments.
The aforesaid amounts deposited with the defendants S.K. Singh V. Har Shree Jee Finance 5 / 40 Dt. 08.12.2017 carried different rate of interest varying from 24% p.a. to 30% per annum.
Subsequently, plaintiffs realized that the defendants have cheated various other persons also and duped them with lacs of rupees. The plaintiffs once again approached the defendants and requested defendant NO.2 and 3 to refund the principal amount of Rs.15 lacs in December 2003. Defendants assured to pay the interest. Subsequently, in discharge of the liabilities, Sh. Pankaj Singh(defendant No.2), as Director of M/s Nupur Financial Ltd., issued a cheque dated 25.12.2003 bearing No. 962428 drawn on Syndicate Bank, for a sum of Rs.15 lacs in favour of plaintiff No.1. However upon presentation, the said cheque was dishonoured by the banker of the defendant for want of sufficient funds. Upon inquiry from the office of Registrar of Companies, it was S.K. Singh V. Har Shree Jee Finance 6 / 40 Dt. 08.12.2017 further revealed that name of Nupur Finance Services Ltd. was changed to Harshree Jee Financial Leasing Co. Ltd. (defendant No.1) on 13.9.2000 itself. It is further averred that defendants No.2 and 3 cheated plaintiffs and other various innocent persons and, therefore, an FIR was lodged against the defendants bearing No.14/2004 U/s 406/420/120B/34 IPC. It is claimed that defendant No.1 to 3 are jointly and severely liable to pay the amount to the plaintiffs.
3. It is further claimed that the defendants are liable to pay interest @ 24% per annum as stipulated on the receipts which was the contractual rate. Plaintiffs have however, restricted their claim of interest to Rs.4,50,000/- only. Thus, the plaintiffs are entitled for Rs.15,00,000/- lacs towards principal amount and Rs.4,50,000/- towards interest till the date S.K. Singh V. Har Shree Jee Finance 7 / 40 Dt. 08.12.2017 of institution. Thus, the plaintiffs have filed the present suit for recovery of Rs.19,50,000/- (Rs. Nineteen Lacs Fifty Thousand only), with interest pendente-lite and future @ 24% per annum with cost, against the defendant. Hence, the present suit.
4. Defendants have contested the claim of the plaintiffs by filing a joint written statement. It is averred in the preliminary objections that the suit is bad for mis-joinder of parties, barred under limitation and defective U/o 7 R 11 CPC.
On merits it is averred by the defendants that the plaintiff approached the defendants with the intention to finance a property bearing No.9 Ground floor, CSC, Part-III, Secor -9, Vasant Kunj, New Delhi. It is asserted that shop No.9 was allotted to one Sh. Parveen Singh and it was subsequently transferred to Sh. Rambir Singh (DW3) through GPA and plaintiff S.K. Singh V. Har Shree Jee Finance 8 / 40 Dt. 08.12.2017 No.1 financed the money to Sh. Rambir Singh for purchase of the said shop. Both plaintiffs and Sh. Rambir Singh (DW3) approached defendant No.2 for financing the money to Sh. Rambir Singh and defendant No.2 accordingly advanced an amount of Rs.6,26,000/- to Sh. Rambir Singh, who in turn transferred the said shop in the name of defendant No.2 by executing a GPA. The said sum of Rs.6,26,000/- was paid through cheque and the plaintiff deposited (deposing sic.) the same with the defendant NO.2 and defendants accordingly issued the receipts of the said amount. Plaintiff No.2 purchased the shop directly from Sh. Parveen Singh on 7.7.2005 and thus a dispute arose between Sh. Rambir Singh, plaintiff No.1 and defendant No.2. Consequently, the dispute was settled whereby the defendants transferred the shop to the plaintiffs S.K. Singh V. Har Shree Jee Finance 9 / 40 Dt. 08.12.2017 against the money as per receipt No.151, 218, 223, 224 and 225. The defendant No.2 accordingly returned the GPA to plaintiff No.1. The defendants have claimed that the plaintiff has not paid a sum of Rs.15 lacs to the defendants in cash against the receipt mentioned in the suit. It is averred that a sum of Rs.10 lacs was given to the defendants against shop No.9 which was financed by defendant No.1 and 2 to Sh. Rambir Singh under directions from the plaintiffs and the said amount was also returned to the plaintiffs by defendant No.1 and 2. it is further averred that defendant No.1 was working in the name and style of M/s Nupur Financial Services Pvt. Ltd. and thereafter it was converted into Nupur Financial Services Ltd. On 15.3.2000. On 13.9.2000 it was converted as M/s Har Shree Jee Finance and Leasing Company Ltd.(defendant No.1). The S.K. Singh V. Har Shree Jee Finance 10 / 40 Dt. 08.12.2017 remaining averments of the plaint have been denied and the defendants have prayed for the dismissal of the suit.
5. Replication was filed on behalf of the plaintiffs to the WS of defendants, in which the averments made in the written statement have been denied and averments made in the plaint have been reaffirmed and decree of the suit is prayed for.
6. Vide order dt. 18.5.2007, the Ld. Predecessor of this Court had framed the following issues for trial, which read as under:-
(I) Whether the suit of the plaintiff is bad for misjoinder of defendant No.3. If so, its effect? (OPD)
(ii) Whether the plaintiff paid Rs.15 lacs including Rs.5 lacs in cash against receipt dated S.K. Singh V. Har Shree Jee Finance 11 / 40 Dt. 08.12.2017 10.3.2001 to 10.7.2001 to the defendants? OPP
(iii) Whether the amount of Rs.10 lacs out of Rs.15 lacs was given to the defendants against shop No.9, which was financed by defendant No.1 and 2 to Sh. Ram Bir Singh as per direction of the plaintiff and the amount was returned to the plaintiffs by defendant No.1 and 2 ? OPD
(iv) Whether defendant No.2 issued cheque dated 25.12.2003 as Director of Nupur Financial Services Limited in discharge of liability of amount of Rs.15 lacs in favour of plaintiff No.1 which was bounced. If so, its effect?OPP
(v) Whether the plaintiff is entitled to the interest @ 24% p.a. as claimed in the suit on the amount of Rs.15 lacs? OPP
(vi) Relief; And in support of the plaintiffs case, Dr. S.K. Singh, appeared on behalf of the plaintiffs as PW-
S.K. Singh V. Har Shree Jee Finance 12 / 40 Dt. 08.12.2017 1, who has proved his evidentiary affidavit as Ex.PW1/A and proved documents Ex PW 1/1 to Ex. PW1/10. The witness was cross-examined at length by the Ld. Counsel for the defendant.
7. In support of the defendants case, the defendants examined DW1 Sh. Pankaj Singhal, who has proved his evidentiary affidavit as Ex. DW1/A and proved documents Ex. DW1/1 and DW1/2. Defendants also examined DW2 Sh. Veer Singh, Ahlmad in the court of Sh. T.S. Kashyap Ld. ADJ, who has brought the summoned record and proved the certified copy of the plaint Ex. DW2/A.
8. DW3 is Sh. Rambir Singh, who proved the documents Ex. DW3/1 to Ex. DW3/7. The witness was cross examined at length by the Ld. Counsel for the plaintiff.
S.K. Singh V. Har Shree Jee Finance 13 / 40 Dt. 08.12.2017
9. DW4 is Mrs. Savita Singhal, who proved her evidentiary affidavit Ex.DW4/A. The witness was cross examined, at length by the Ld. Counsel for the plaintiff.
10. DW5 was Sh. Devender Dahiya, Sr. Tax Assistant from the office of ITO, Delhi, who proved document mark D5A.
11. DW6 was Ms. Mohini Gupta, IT inspector, Ward No.37(2), who proved documents Ex. DW6/1 to Ex. DW6/5.
12. The defendants further examined DW7 Sh. P.C. Singhal Sr. Branch Manager, Syndicate Bank, who proved documents Ex.PW7/1 and Ex. PW7/2. However his testimony cannot be considered being S.K. Singh V. Har Shree Jee Finance 14 / 40 Dt. 08.12.2017 incomplete.
13. I have heard arguments by the Ld. Counsels for the parties and in this scenario of the case, my categorical findings on the above issues, are as under:-
14. Issue No.1 Whether the suit of the plaintiff is bad for misjoinder of defendant No.3. If so, its effect?(OPD) In my considered opinion, the suit is not bad for misjoinder of defendant No.3 as the plaintiffs have claimed refund of amount invested by them with defendant No.2 and 3. It is categorically testified by Dr. S.K. Singh (PW1) that defendant NO.2 and defendant No.3 approached him for investment. It is also claimed that money was invested by the plaintiffs S.K. Singh V. Har Shree Jee Finance 15 / 40 Dt. 08.12.2017 with the defendant No.2 and 3. Defendant No.3 in witness box has herself admitted that she is a sole proprietor of M/s Shree Jee Financial Company Ltd, which issued the receipt Ex.PW1/1 to Ex. PW1/5. She has also admitted that the said receipts Ex.PW1/1 to Ex. PW1/5, against which the plaintiffs are claiming refund, were issued by her company. She admitted that her husband used to assist her in her business in the name and style of M/s Shree Jee Financial Co. Ltd. Consequently, it cannot be said that defendant No.3 is not a necessary party. The issue is accordingly disposed of in favour of plaintiffs and against defendant No.2 and 3.
15. Issue No.2 Whether the plaintiff paid Rs.15 lacs including Rs.5 lacs in cash against receipt dated 10.3.2001 to 10.7.2001 to the S.K. Singh V. Har Shree Jee Finance 16 / 40 Dt. 08.12.2017 defendants? OPP The defendant has not disputed the receipt of Rs.10 lacs, out of the total amount of Rs.15 lacs. However the defendants have attempted to dispute the receipt of Rs.5 lacs.
For the sake of convenience, I first propose to take up the issue of Rs.5 lacs. The plaintiff has categorically testified that he has also deposited Rs.5 lacs by way of receipts dated 10.3.2001, 10.4.2001, 10.5.2001, 10.6.2001 and 10.7.2001. The testimony of plaintiff has not only remained undemolished on this count but is further corroborated by the issuance of cheque Ex. PW1/6 by defendant No.2. The issuance of cheque amounts to an admission of the liability of the defendants for a sum of Rs. 15 lacs against the contradictory claim of the defendants that they merely received a sum of Rs.10 lacs.
S.K. Singh V. Har Shree Jee Finance 17 / 40 Dt. 08.12.2017
16. Although, defendants have attempted to claim that the cheque in question was never issued by them in genuine. It was claimed that it was obtained by the plaintiffs from the defendants and the same was thereafter, used by the plaintiffs.
However the defence seems to be implausible in light of the attendant circumstances. The defendants have failed to elaborate as to how the plaintiffs procured the possession of said cheque and why the matter was not reported to the police. The cheques in question was admittedly dis-honoured for insufficiency of funds. There is absolutely no palpable reason as to why the defendants have not instructed their bankers to stop payment of a stolen/misused cheque. The sheer indolence on the part of the defendants in checking the mis-use of the cheque in question demolishes the credibility of the defendants S.K. Singh V. Har Shree Jee Finance 18 / 40 Dt. 08.12.2017 version.
Now I move on to analyse the claim of the plaintiff regarding balance Rs.10 lacs. The defendants have admitted that they have received a sum of Rs.10 lacs against receipts Ex.PW1/1 to Ex. PW1/5. However they have claimed that the said amount was repaid by them to the plaintiff. It is claimed that the amount of Rs.10 lacs was given to the defendants against the shop No.9, which was financed by the defendants to Sh. Rambir Singh, under direction of the plaintiff and the same amount was returned to the plaintiffs by defendant No.2.
As per section 103 of the Indian Evidence Act, burden lies upon the defendants to prove that they infact repaid Rs.10 lacs to the plaintiffs or the cheque in question ws mis-used by the plaintiffs.
Defendants claim that they have repaid Rs.10 S.K. Singh V. Har Shree Jee Finance 19 / 40 Dt. 08.12.2017 lacs but they have stopped short of revealing the date, time or the place as to when the money was repaid. The defendant No.2 in his cross-examination admits that he cannot produce any receipt for payment made to the plaintiffs as police has seized the entire record. However no explanation has been tendered by the defendants as to why the detailed record was not summoned or the police officers were not examined to prove the seizure of any receipts regarding the repayments. Defendant NO.2 further went on to testify that he can produce the statement of his bank account to show that he has paid money to Sh. S.K. Singh (plaintiff No.1). However after summoning Sh. P.C. Singhal (DW7), his testimony remained incomplete and the defendant never bothered to re-summon him for examination to prove the factum of repayment.
The defendants have miserably failed to lead S.K. Singh V. Har Shree Jee Finance 20 / 40 Dt. 08.12.2017 any credible evidence to prove the factum of repayment to the plaintiffs.
17. Rather, contrary to the claim of the defendants regarding the repayments, the cheque of Rs.15 lacs (Ex. PW1/6) is reflected to have been dishonoured by the defendants banker vide return memo Ex. PW1/7 for insufficiency of funds. The defendants have not only failed to establish the factum of repayment but have also failed to establish the factum of theft/misuse of cheque Ex. PW1/6. The issuance of cheque by defendant No.2 on behalf of M/s Nupur Financial Services Pvt. Ltd. goes a long way in establishing the claim of the plaintiffs.
During the course of arguments Ld. Counsel for the defendants have further attempted to dispute the claim of the plaintiffs by asserting that the payment S.K. Singh V. Har Shree Jee Finance 21 / 40 Dt. 08.12.2017 invested by the plaintiffs was not disclosed by them with the income tax authorities. It is further argued that non disclosure of the investments to the income tax authorities, not only amounts to an offence but also raises a question mark upon the capacity of the plaintiffs to have paid a huge amount to the defendants. As far as the non disclosure of the loan to the income tax authorities is concerned, the same would not absolve the defendants of their liability towards the plaintiff. The defendants may report the issue to the income tax authorities. The plaintiffs might be liable for their misdeeds towards the income tax authorities but that does not absolve the defendants from their primary liability to repay the debt owed by them to the plaintiffs.
In the matter of Mukesh Gupta vs. P.K. Bajaj and Anr. CS (OS) No. 1615/2003 date of decision S.K. Singh V. Har Shree Jee Finance 22 / 40 Dt. 08.12.2017 20.11.2006, dealing with a similar issue, Hon'ble Delhi High Court has observed that : -
"37. Learned counsel for the defendants could not show any statutory provision under the Income Tax Act 1961 or any other law which stipulates that a loan transaction not recorded in the Income Tax Return or a loan transaction which is in violation of Section 69-A, 69-B or Section 269SS of the Income Tax Act would be void.
38. I accordingly hold that the suit is not barred under Sections 69-A, 69-B or Sections 269SS of the Income Tax Act."
As far as the issue of capacity of the plaintiffs is concerned, the defendant themselves have admitted the receipt of Rs.10 lacs from the plaintiffs demolishing the capacity claim of defendants herein.
18. In these circumstances I have no hesitation in S.K. Singh V. Har Shree Jee Finance 23 / 40 Dt. 08.12.2017 holding that a sum of Rs.15 lac including Rs.5 lac in question was deposited by the plaintiff with the defendant No.2 and 3. Accordingly issue NO.2 is decided in favour of the plaintiffs and against the defendant No.2 and 3.
19. ISSUE NO.3 Whether the amount of Rs.10 lacs out of Rs.15 lacs was given to the defendants against shop No.9, which was financed by defendant No.1 and 2 to Sh. Ram Bir Singh as per direction of the plaintiff and the amount was returned to the plaintiffs by defendant No.1 and 2 ? OPD The defendants claim that Rs.10 lacs was given to the defendants against shop No.9 which was financed by defendant No.1 and 2 to Sh. Rambir Sigh as per the directions of the plaintiff. The claim of the S.K. Singh V. Har Shree Jee Finance 24 / 40 Dt. 08.12.2017 defendants does not seems to be palpable in the light of the material available on record. It is asserted by the defendants that defendant No.2 had financed a sum of Rs.6,26,000/- to Sh. Rambir Singh. There is no explanation forth coming on record as to why plaintiffs paid Rs.10 lacs to the defendants against a sum of Rs.6,26,000/- financed by the defendants to one Sh. Rambir Singh. There is not only variance in the two amounts but there appears to be no quid pro quo for the plaintiffs in the bargain. More so, as per the claim of the defendants, the plaintiffs directly purchased the said shop from its earstwhile owner Sh. Parveen Singh. Further more, even if for the sake of argument, it is presumed that the defendants financed the said amount to Sh. Rambir Singh for purchase of the said shop, even then it would not help the cause of the defendants. It is not legally permissible for the S.K. Singh V. Har Shree Jee Finance 25 / 40 Dt. 08.12.2017 defendants to claim set off for the money given by them to Sh. Rambir Singh, even though presumed to be under the request of the plaintiffs, against the sum owed by them to the plaintiffs. The defendants might be having their legitimate claim for refund of a sum of Rs.6,26,000/- from Sh. Rambir Singh but they cannot be absolved of their independent liability towards the plaintiffs, for a sum given by them to a third person. It is also baffling that why would plaintiffs deposit an amount of Rs.10 lacs with the defendants for purchase of a shop by a third person. The money, if any, was paid by the defendants to Sh. Rambir Singh (DW3), who in turn executed a GPA in favour of the defendants. The defendants claim that when the dispute arose between them and the plaintiffs, they returned the GPA to the plaintiff. However, except for bare assertions, the defendants have failed to lead S.K. Singh V. Har Shree Jee Finance 26 / 40 Dt. 08.12.2017 any credible evidence to support their claim. It appears highly unlikely that the defendants would not have insisted for execution of any written document/acknowledgement at the time of return of money or GPA, despite conscious of the fact that plaintiffs are having receipts issued by them. It is surprising that when the defendants financed Rs.6,26,000/- to Sh. Rambir Singh for purchase of the shop in question, they ensured the execution of GPA in their favour but when they returned the GPA or Rs.10 lacs to the plaintiffs they neither pressed for execution of any receipt or document nor they demanded the return of the receipts/cheque issued by them. It is also surprising that even thereafter the defendants remained silent and never moved to the authorities or served any legal notice upon the plaintiffs for return of their receipts ex. PW1/1 to Ex. S.K. Singh V. Har Shree Jee Finance 27 / 40 Dt. 08.12.2017 PW1/5 and cheque Ex. PW1/6. More so, when the cheque was presented for payment by the plaintiffs, its dishonour must have put the defendants on guard requiring them to take remedial measures.
The defendants claim in their written statement that payment was made to Ram Singh through cheque. On specific question, in cross-examination of defendant No.2, he resiles from his earlier version and answers the question of the payment made to Sh. Ram Bir Singh by cheque in negative.
The defendants have examined Sh. Rambir Singh as DW3. However DW3 has simply placed on record certified copies of his plaint in the suit for declaration and injunction filed by him against the plaintiff and has also placed on record certified copy of GPA, agreement to sell, Will, receipt and two receipts , but he has stopped short of endorsing defendants S.K. Singh V. Har Shree Jee Finance 28 / 40 Dt. 08.12.2017 version that defendants financed his shop at the asking of the plaintiffs. He further went on to testify that he had never taken any money from anybody except the plaintiffs. He also expressed ignorance regarding any investment made by the plaintiffs with the defendants. However, surprisingly in his cross examination, he refuted a suggestion that he has not taken any loan from Pankaj Singhal. Consequently, the testimony of Sh. Ram Bir Singh (DW3) does not inspire confidence and is not of much help to the defendants. Consequently, the claim of the defendants does not sounds to be convincing and thus deserves to be discarded. Accordingly, issue No.3 is decided against the defendants and in favour of the plaintiffs.
20. Issue No.4 Whether defendant No.2 issued cheque dated 25.12.2003 as Director of Nupur Financial S.K. Singh V. Har Shree Jee Finance 29 / 40 Dt. 08.12.2017 Services Limited in discharge of liability of amount of Rs.15 lacs in favour of plaintiff No.1 which was bounced. If so, its effect?OPP The defendants have taken contradictory plea regarding cheque dated 25.12.2003 Ex.PW1/6. In para No.12 of the written statement, the defendants claim that the plaintiffs obtained the cheque in question from the office of the defendants and thereafter used it. Whereas in para No.14, it is claimed that cheque in question is a forged and frivolous document. However the plea of forgery is vague and evasive. The defendant have failed to explain the circumstances under which it was forged. They have also opted to remain silent regarding the signatures upon the cheque in question. Admittedly, the cheque in question was dishonoured by the defendants banker for insufficiency of funds. The S.K. Singh V. Har Shree Jee Finance 30 / 40 Dt. 08.12.2017 defendants have not only stopped short of explaning as to how the cheque reached the plaintiffs or how it was forged by them but they have also offered no palpable explanation as to why they have opted not to report the matter to the police or atleast to the bank officials. Thus I am of the considered opinion, weighing the rival version on the scale of preponderance of probability, the claim of the plaintiffs appears to be truthful compared to the defendants claim. Accordingly this issue is also decided in favour of the plaintiffs and against the defendants.
21. ISSUE NO.5 Whether the plaintiff is entitled to the interest @ 24% p.a. as claimed in the suit on the amount of Rs.15 lacs? OPP The plaintiff has claimed interest @ 24% per S.K. Singh V. Har Shree Jee Finance 31 / 40 Dt. 08.12.2017 annum.
The receipts Ex. PW1/1 to Ex. PW1/5 also reflect that the defendants have agreed to pay interest at varying rate of 24% to 30% upon the deposits made with them. Defendant No.2 Sh. Pankaj Singhal in his cross-examination has also admitted that his company undertook to pay interest @ 24% to 30% per annum to the investors. Thus, I have no hesitation in holding that the plaintiffs are entitled for the recovery of interest upon the aforesaid sum. However, the agreed rate of interest, seems to be exorbitant and usurious. On a closure scrutiny of the material on record, it emanates that the interest was voluntarily admitted by the parties involved in commercial transactions. The money invested by the plaintiffs with the defendants was unsecured and thus I have no hesitation in awarding interest @ 13% p.a. upon the money S.K. Singh V. Har Shree Jee Finance 32 / 40 Dt. 08.12.2017 invested. The period of interest is an issue which requires consideration. The plaintiff is silent about the period regarding which the interest is being claimed. However in para No.14, the plaintiffs claim that the cause of action accrued in favour of the plaintiffs and against the defendants when cheque Ex. PW1/6 was dishonoured and as and when demand was raised. Therefore, the period of interest shall commence w.e.f. date of dishonour i.e. 29.12.2003 till the date of filing of the suit. The issue is accordingly decided in favour of the plaintiffs and against the defendants.
22. During the course of arguments Ld. Counsel for the defendants has agitated a very important legal issue i.e. issue of limitation. Although as reflected from the record, the issue of limitation was neither framed nor pressed for by the defendants, but that being a S.K. Singh V. Har Shree Jee Finance 33 / 40 Dt. 08.12.2017 legal issue, was accordingly taken up by the court.
23. The issue is accordingly framed as under:
Whether the suit is barred by limitation? Admittedly, neither the pleadings nor the receipts Ex. PW1/1 to Ex.PW1/5 reveals the date of repayment. Once that is so, the loan would be a loan repayable on demand. Suit for recovery of loan without fixed period or a date of repayment is a suit governed by Article 113 of the Limitation Act 1963. As per Article 113, the suit has to be filed within three years from the date on which the right to sue accrues. Reliance is placed upon judgement of the Hon'ble High Court in the matter of Sh. Virender Kumar Jain Vs. M/s Alvnate India Pvt. Ltd in RFA No.153/2014 date of decision dated 2.3.2012.
As per the plaintiff the cause of action in the instant matter arose on 27.12.2003 when the cheque S.K. Singh V. Har Shree Jee Finance 34 / 40 Dt. 08.12.2017 ex. PW1/6 was dis-honoured by the defendants bankers. As per Para no. 2 on merits of the written statement, the dispute arose on 7.7.2005 when the plaintiff purchased the shop directly from Parveen Singh. The suit in question was filed on 9.12.2006 i.e. within 3 years of the date of dishonour or when, as per the claim of the defendant, the dispute arose.
Further more, even if we presume that the first receipt, upon which the plaintiffs relies, issued on 10.3.2001 was to be immediately repaid. The acknowledgement of a writing of the liability would give a fresh life to the claim of the plaintiffs U/s 18 of the Limitation Act. The limitation for the first receipt, as per Article 19 of the Limitation Act, would have expired on 9.3.2004. However the issuance of cheque Ex.
PW1/6 on 25/12/2003 would give rise to a fresh cause of action U/s 18 of the Limitation Act. Although, it can S.K. Singh V. Har Shree Jee Finance 35 / 40 Dt. 08.12.2017 be argued that the cheque in question was issued only by defendant No.2 but defendant No.3 has herself admitted that defendant No.2 was acting as her agent in her business. Therefore defendant No.3 cannot escape her liability.
Further, even if we assume that the limitation period for the payments made by the plaintiffs has expired, yet the same would not help the case of the defendants. Hon'ble Delhi High Court in the matter of State Bank of India vs. Kanhyalal & Others in RSA No.248/215 dated 2.5.2016, has observed that a promise to pay, as required U/s 25 (3) of the Indian Contract Act, need not be expressed and can be implied. It was observed that a promise U/s 25(3) of the Indian Contract Act, even made after the expiry of the period of limitation would cause revival of the claim. Consequently, the issuance of cheque S.K. Singh V. Har Shree Jee Finance 36 / 40 Dt. 08.12.2017 Ex.PW1/6 would tantamount to a fresh acknowledgement providing revival of the claim of the plaintiffs. The cheque was admittedly issued on 25.12.2003. Therefore the suit cannot be said to be time barred. The issue is decided in favour of the plaintiffs and against the defendants.
24. Having decided all the issues framed above, I propose to dispose off the issue of liability of the defendants. It is categorically testified by the plaintiff No.1 in the witness box that it was defendant No.2 and 3 who approached the plaintiff for investment with them. In para No.5 of the affidavit of examination in chief Ex. PW1/A it is testified that a sum of Rs.15 lacs was invested by the plaintiffs with defendant No.2 and 3. It is neither averred nor testified that the impugned money were invested with defendant No.1. Although plaintiff makes a mention of S.K. Singh V. Har Shree Jee Finance 37 / 40 Dt. 08.12.2017 the fact that defendant No.2 and 3 were running business of investment under various name and style but he stays short of categorically testifying that money was invested with Har Shree Financial Leasing Co. Ltd. (defendant No.1) or defendant No.2 and defendant No.3 were acting on behalf of defendant No.1. Even receipts Ex.PW1/1 to Ex. PW1/5 were evidently issued by proprietor of Shree Jee Finance Co. Even cheque dated 25.12.2003 Ex. PW1/6 was issued by Director of Nupur Financial Services Private Ltd on 25.12.2003, whereas it emanates from record that M/s Har Shree Financial Leasing Co. Ltd. (defendant No.1) was in existence on 13.9.2000 itself.
It is an admitted case of the plaintiff that Har Shree Jee Financial Leasing Co. Ltd. is a private limited company, which is a juristic person having independent existence distinct from defendants No.2 S.K. Singh V. Har Shree Jee Finance 38 / 40 Dt. 08.12.2017 and 3. In the cross-examination plaintiff has admitted that the plaintiff deposited money only with Shree Jee Finance Company and Shree Jee Chits Private Ltd. He categorically went on to testify that except for the above said amount, he had not given or deposited any amount to defendant No.2 or any of his companies. He further admits that he has not deposited any amount with Nupur Financial Services. He also admits that he is not aware of status of defendant No.2 in defendant No.1. In the absence of any evidence to the contrary, it cannot be presumed that the impugned money was invested with defendant No.1 by the plaintiff. Consequently, defendant No.1 cannot be held liable for re-payment of loan against a sum which was only deposited with defendant No.2 and 3. Consequently, there is no right of relief in respect of the impugned transactions, against defendant No.1 S.K. Singh V. Har Shree Jee Finance 39 / 40 Dt. 08.12.2017 and defendant No.1 has been unnecessarily joined as a party in the instant case.
25. Relief.
In view of my findings on the above issues, the suit of the plaintiffs stand decreed for a principal sum of Rs.15,00,000/- (Rs. Fifteen Lacs only) alongwith interest @13% p.a. from the date of dishonour of the cheque Ex. PW1/6 dated 29.12.2003 till the date of judgment against defendant NO.2 & 3. Plaintiff is also held entitled for future interest @ 6% per annum till the date of payments. Cost of the suit is also awarded in favour of the plaintiffs. Decree sheet be prepared accordingly. File be consigned to Record Room.
Announced in the open Court on 08.12.2017.
(DHARMENDER RANA) Additional District Judge-12, (Central), Tis Hazari Courts, Delhi S.K. Singh V. Har Shree Jee Finance 40 / 40 Dt. 08.12.2017