Delhi District Court
Smt. Ashu Jain vs Sh. Kishan Lal Jain on 7 November, 2019
IN THE COURT OF SHRI VISHAL SINGH
ADDITIONAL DISTRICT JUDGE 06: CENTRAL : DELHI
CS DJ No. 15714/16
IN THE MATTER OF:
Smt. Ashu Jain
W/o. Sh. Mool Chand Jain
R/o. Y106, Loha Mandi,
Naraina, New Delhi. ....PLAINTIFF
VERSUS
Sh. Kishan Lal Jain
Proprietor of M/s. Eskay Tractors,
Jind Road, Safidon (Jind),
Haryana. ....DEFENDANT
Other Details:
Date of Institution : 02.06.2008
Date of Reserving Judgment : 26.09.2019
Date of Judgment : 07.11.2019
SUIT FOR RECOVERY OF RS. 5,55,345/ WITH INTEREST
JUDGMENT
1. Plaintiff is an unpaid creditor. In August, 2000, defendant approached plaintiff through Mr. Prem Chand Jain (plaintiff's uncle) and obtained loan of Rs.4 lakh from the plaintiff through demand draft no. 135449, dated 12/08/2000. Defendant agreed to repay the loan with interest @ 12% per annum.
Smt. Ashu Jain Vs. Sh. Kishan Lal Jain CS No. 15714/16 Page No. 1/8
2. The defendant had been acknowledging the principal amount of Rs.4 lakh and interest accrued thereon @ 12% per annum by issuing TDS Certificates in favour of plaintiff till the year 20062007. The plaintiff filed TDS Certificates received from the defendant alongwith her income tax returns.
3. Defendant paid interest on loan till 31/03/2005 through bank instruments. Thereafter, defendant neither paid interest nor repaid loan despite repeated demands and legal notice dated 05/05/2008.
4. In response to the suit, the defendant filed written statement and pleaded that the suit was devoid of cause of action and there was no privity of contract between the parties. Defendant asserted that he had no money transaction with the plaintiff; the transactions of loan allegedly granted by the plaintiff and interest paid by the defendant were only shown in papers for the purpose of income tax entries. No amount was paid as loan by plaintiff to defendant, whereas, no amount was paid as interest by defendant to plaintiff. The crux of defence raised by the defendant was that the parties created sham and bogus entries in their account books to avoid payment of income tax.
Smt. Ashu Jain Vs. Sh. Kishan Lal Jain CS No. 15714/16 Page No. 2/8
5. Pursuant to rival pleadings of the parties, the issues were framed on 10/09/2008. However, issue no.2 was modified by the court vide order dated 05/05/2016. The issues framed by the court are:
(i) Whether there is privity of contract between the parties? OPP.
(ii) Whether there is just entry of the amount in the name of plaintiff in the account of defendant for the purpose of saving income tax without exchange of money? OPD.
(iii) Whether plaintiff is entitled to recover the suit amount with interest from the defendant? OPD.
(iv) Relief.
6. To prove her case, plaintiff examined three witnesses. PW1 M.C. Jain is husband of plaintiff. He relied upon the documents Ex. PW1/1 to Ex. PW1/18 (all the documents were objected to by Ld. defence counsel being photocopies and on the ground of competency of witness to prove them). PW2 Sh. Prem Chand Jain is uncle of plaintiff's husband. He replied upon the documents Ex. PW2/1 and Ex. PW2/2. PW3 Ravi Sharma, Chief Manager, Oriental Bank of Commerce, produced attested copy of saving account statement of plaintiff's bank account bearing no. Smt. Ashu Jain Vs. Sh. Kishan Lal Jain CS No. 15714/16 Page No. 3/8
10086 (old) and 50592010026980 (new) for the period between 09.08.2000 and 16.04.2003, Ex. PW3/1. On the other hand, defendant Kishan Lal Jain deposed as DW1, to prove his defence.
7. I have heard the final arguments and analyzed the pleadings and evidence adduced by the parties. My findings on issues are as under:
8. Defendant objected to the testimony of PW1 M.C. Jain on two grounds - one that he did not rely upon original documents and other that plaintiff herself did not enter the witness box on account of which PW1 was not competent to depose the facts on behalf of the plaintiff. In this regard, the testimony of PW1 reflects that he was privy to the transactions conducted between the parties and was himself personally aware of all the facts deposed by him; he did not depose on the basis of knowledge derived from plaintiff. Thus, he was competent to depose as a witness in his own right. Nonexamination of plaintiff as a witness did not adversely affect her case due to deposition of facts by PW1 on the basis of personal knowledge.
9. (a) In his crossexamination, defendant/DW1 Kishan Lal Jain admitted Smt. Ashu Jain Vs. Sh. Kishan Lal Jain CS No. 15714/16 Page No. 4/8 that the receipt Ex. PW1/3 dated 14/08/2000 was signed and issued by him to the plaintiff. This is an original receipt issued by the defendant in acknowledgement of receipt of Rs.4 lakh from plaintiff Mrs. Ashu Jain by way of DD No. 135449, dated 12/08/2000, issued by Oriental Bank of Commerce, Sector9, Rohini, Delhi. This, in itself, is a sufficient proof of money transaction between the parties for an amount of Rs.4 lakh and privity of contract between them.
9.(b) In his crossexamination, defendant/DW1 Kishan Lal Jain gave evasive reply that he did not remember if he had received the demand draft, the photocopy of which is Ex. PW1/2, from the plaintiff. He did not deny the genuineness of this document. The document Ex. PW1/2 is photocopy of demand draft bearing no. 135449, dated 12/08/2000, in the amount of Rs.4 lakh, issued by plaintiff through Oriental Bank of Commerce, paid to Eskay Tractors, of which defendant is the sole proprietor.
9.(c) In crossexamination, defendant/DW1 gave evasive reply that he did not know if he had paid to the plaintiff the amounts by way of bank drafts, the photocopy of which is Ex. PW1/4 to Ex. PW1/7. Similarly, Smt. Ashu Jain Vs. Sh. Kishan Lal Jain CS No. 15714/16 Page No. 5/8 DW1 gave evasive reply that he did not remember if TDS Certificate vide Form No.16A, Ex. PW1/9 was submitted by him to Income Tax Department. The TDS document Ex. PW1/9, dated 26/05/2007 reflects that defendant deducted TDS of Rs.5,422/ on account of payment made to the plaintiff for an amount of Rs.53,155/ on 31/03/2007. DW1 admitted that his firm deducts TDS on the payment of interest made to parties and declaration is made in this regard before Income Tax Department.
9.(d) In his crossexamination, defendant/DW1 gave evasive and irresponsible reply that he did not remember if he had obtained a loan of Rs.4 lakh from plaintiff by way of bank draft dated 12/08/2000. He replied that he did not remember if he had paid the interest on the amount of Rs.4 lakh to plaintiff @ 12% per annum after deducting TDS upto 31/03/2005. He further replied that he did not remember if after 31/03/2005 he had neither paid interest nor the principal amount to the plaintiff. Instead of deposing openly and frankly about the transactions conducted with the plaintiff, DW1 opted to evade and prevaricate. The replies of defendant do not sound honest and credible. Smt. Ashu Jain Vs. Sh. Kishan Lal Jain CS No. 15714/16 Page No. 6/8
10. The defendant cannot be heard taking the frivolous and untenable defence that the transactions between the parties as reflected from the documents, were not genuine but were mere paper entries, to evade the payment of income tax; it would tantamount to taking advantage of one's own wrong.
11. PW2 Prem Chand Jain deposed that he introduced defendant to the plaintiff. He was privy to grant of loan by plaintiff to defendant. He stood his ground in crossexamination. His testimony is cogent, unwavering and reliable.
12. There is no doubt about privity of contract between the parties. The transaction between the parties was not bogus or sham, calculated to avoid the payment of income tax. The plaintiff is entitled to recover the suit amount from the defendant. Issues No. (i) to (iii) are decided in favour of plaintiff and against the defendant.
13. Relief: In view of decision upon issues, the suit is decreed in faovur of the plaintiff. The defendant shall pay Rs.5,55,345/ to the plaintiff alongwith interest @ 12% per annum w.e.f. institution of the suit Smt. Ashu Jain Vs. Sh. Kishan Lal Jain CS No. 15714/16 Page No. 7/8 till the date of recovery of decreetal amount. Plaintiff shall be entitled to cost of the suit. Decree sheet be prepared accordingly.
14. File be consigned to record room after completion of all legal formalities. Digitally signed by VISHAL Announced in open Court VISHAL SINGH SINGH Date:
2019.11.07 Dated: 07.11.2019 15:01:25 +0530 (VISHAL SINGH) Addl. District Judge06 (Central) Tis Hazari Courts, Delhi Smt. Ashu Jain Vs. Sh. Kishan Lal Jain CS No. 15714/16 Page No. 8/8