Delhi District Court
Lal Bahadur vs Nandan Singh on 1 May, 2025
IN THE COURT OF MS. RICHA GUSAIN SOLANKI,
DISTRICT JUDGE-02, SOUTH-WEST DISTRICT, DWARKA
COURTS, NEW DELHI
CS DJ ADJ No. 516322/2016
CNR No. DLSW010010112014
IN THE MATTER OF:
LAL BAHADUR
S/o Shri Nathu Ram Singh
R/o RZ-10-C/1, Gali No.23,
Indra Park, Palam Colony,
New Delhi-110045
........Plaintiff
Versus
NANDAN SINGH
S/o Shri Kushal Singh
R/o WZ-200-A, Gali No.3
4th Floor, Sadh Nagar, Palam Colony
New Delhi-110045
also at:WZF-769/5/6, Gali No.11
Raj Nagar Part-II, Palam Colony,
New Delhi-110045 .......Defendant
Date of institution 14.08.2014
Date of reserving judgment 29.04.2025
Date of pronouncement of judgment 01.05.2025
JUDGMENT
This is a suit for recovery of ₹9,50,000 with pendente lite and future interest. The suit was instituted under Order 37 CPC but the defendant was granted unconditional leave to defend. The brief facts of the case are:− PLAINT 1 It is stated that the plaintiff was the owner of property CS DJ ADJ No.516322/16 Lal Bahadur vs Nandan Singh Page 1/10 bearing No.WZ-200A, Gali No.3, Sadh Nagar, Palam Colony, New Delhi-45, in khasra no. 67/19 & 12, situated in village Palam (hereinafter referred to as "the subject property" ) and he agreed to sell its fourth floor, ad-measuring 70 yd.² out of total area 160 yd.², to the defendant for ₹20 lakhs vide agreement to sell dated 29.10.2013. It is stated that the defendant paid ₹10.50 lakhs in instalments till 28.01.2014, that is, ₹7 lakhs through cheques on 29.10.2013 and ₹3.50 lakhs till 28.01.2014. It is stated that after the payment of ₹7 lakhs on 29.10.2013, the plaintiff handed over the possession of the (sixth floor of the) subject property to the defendant.
2 It is stated that on 28.01.2014, the plaintiff contacted the defendant for the remaining payment and the defendant issued a cheque no. 016062 dated 30.01.2014 in the sum of ₹9.50 lakhs drawn on Syndicate Bank, Palam Branch (hereinafter referred to as "the cheque in question or Ex PW1/E"). It is stated that the defendant requested two months time before presenting the cheque in question. The plaintiff waited till 04.04.2014 before presenting the cheque in question, however, it was returned dishonoured vide return memo 17.04.2014 with the remarks "Fund Insufficient." The plaintiff approached the defendant but he kept avoiding the issue. The plaintiff sent a legal notice dated 04.07.2014 to the defendant calling upon him to pay the cheque amount with interest, but to no avail.
3 Hence, this suit for the recovery of ₹10,92,500/- (₹9.50 lakhs with interest at the rate of 18% from 29.10.2013 till 30.07.2014) along with pendente lite and future interest. WRITTEN STATEMENT 4 The defendant filed a written statement stating that the CS DJ ADJ No.516322/16 Lal Bahadur vs Nandan Singh Page 2/10 cheque in question was given as a security for the balance sale consideration as it had been decided that the defendant would pay cash on the date of execution of the sale deed. The cheque in question only had the signatures of the defendant and he had not authorised the plaintiff to fill it up. The agreement was in respect of the fourth floor ad measuring 70 yd.² but in haste, the defendant took possession of the sixth floor which measures 50 yd.² Further, the sale deed of the sixth floor is not permissible nor is it permissible to obtain water and electricity connection for the same. It is also stated that before the agreement was executed, the subject property had already been booked for unauthorised construction. It is stated that the plaintiff had assured that he would instal a lift in the subject property and handover the NOC and completion certificate from the MCD. It is further stated that ₹14 lakhs has already been paid to the plaintiff. ISSUES 5 Vide order dated 20.10.2015, following issues were framed:
"1) If the plaintiff is entitled to a money decree, if yes, on what amount and under what heads? .........OPP.
2) Whether the plaintiff is entitled to receive any pendentelite and future interest, if yes, at what rate? ..........OPP.
3) Relief."
EVIDENCE 6 Both parties entered the witness box in support of their respective cases.
7 The plaintiff/PW1 tendered his affidavit Ex PW-1/1 in evidence which reiterates the facts mentioned in the plaint. He relied on the following documents:
CS DJ ADJ No.516322/16 Lal Bahadur vs Nandan Singh Page 3/10 S. Document Marked as
No.
1. Copy of the agreement to sell Ex PW1/A
2. Legal notice, its postal receipts and its reply Ex PW1/B to given by the defendant Ex PW1/D
3. Cheque in question and its return memo Ex PW1/E and Ex PW1/F 8 The defendant/DW1 tendered his affidavit Ex DW-1/A in evidence which reiterates the facts mentioned in the written statement. (It also mentions several assertions which were not part of the pleadings, like description of payments and reply received under RTI regarding the stamp papers used in the documents whereby the plaintiff claims to have purchased the subject property. Those averments, being beyond pleadings, have not been considered as evidence in this judgment.) He relied on the documents already Ex PW1/A to Ex PW1/C. FINDINGS 9 I have heard Sh. Ashwani Kumar Sharma, Ld Counsel for the plaintiff and Sh. P.K. Bhardwaj, Ld Counsel for the defendant.
10 Issue-wise findings are as under:
11 "1) If the plaintiff is entitled to a money decree, if yes, on what amount and under what heads? .........OPP." 11.1 Fundamentally, the plaintiff seeks recovery of the amount stated in cheque Ex PW1/E on the premise that the defendant owed him this sum as part of the sale consideration under the agreement, Ex PW1/A. 11.2 The defendant objected to the admissibility of documents Ex PW1/A and Ex PW1/C on the ground that they were mere photocopies. However, the defendant himself has CS DJ ADJ No.516322/16 Lal Bahadur vs Nandan Singh Page 4/10 relied upon both documents, and it is undisputed between the parties that the agreement Ex PW1/A was executed between them, following which legal notices and replies, Ex PW1/B and Ex PW1/C, were exchanged. Therefore, the defendant's objection regarding these documents is overruled.
11.3 The defendant has further admitted that cheque Ex PW1/E bears his signature and that he had handed it over to the plaintiff as security for the payment of the balance sale consideration.
11.4 While the plaintiff has testified that the total sale consideration was ₹20 lakhs, of which the defendant paid only ₹10.50 lakhs, the defendant asserts that the sale consideration was subsequently corrected in the agreement to ₹18.50 lakhs, out of which he paid ₹14 lakhs.
11.5 Notably, the plaintiff did not file the agreement to sell, which forms the basis of the defendant's alleged liability. Instead, the agreement was filed by the defendant and was later relied upon in evidence by the plaintiff as Ex PW1/A (the original document is available in the case file of cross suit bearing CS DJ ADJ No. 515223/2016). This document contains written acknowledgements by the plaintiff confirming receipt of payments in the following manner: ₹2 lakhs through cheques at the time of signing the agreement, ₹2 lakhs through four cheques on 30.10.2013, ₹3 lakhs in cash on 19.11.2013, ₹2 lakhs on 15.12.2013, ₹2 lakhs via account transfer on 15.01.2014, ₹1 lakh by cheque on 29.04.2014, and ₹2 lakhs in cash on 29.04.2014, amounting to a total of ₹14 lakhs. While the plaintiff relied on this document during his examination-in-chief, he did not refute the handwritten acknowledgements recorded therein. In fact, he CS DJ ADJ No.516322/16 Lal Bahadur vs Nandan Singh Page 5/10 expressly admitted that the signature at point 'A' was his. He also did not deny that the sale consideration had been modified to ₹18.50 lakhs due to the subject matter of the agreement being changed from the fourth floor to the sixth floor. 11.6 The plaintiff asserts that he received ₹10.50 lakhs by 28.01.2014, out of which ₹7 lakhs was received through cheques. However, he failed to specify the dates on which he received these amounts and did not provide details of the cheques amounting to ₹7 lakhs or the cash component. During his cross- examination, he stated that he could furnish details of the payments, but despite being granted an opportunity to do so, he failed to produce them. This omission warrants an adverse inference against him under Section 114 of the Indian Evidence Act.
11.7 Sure enough, law presumes that every cheque is drawn for consideration, until the contrary is proved under Section 118(a) of the Negotiable Instruments Act, however it is no longer res integra that such presumption is rebuttable. 11.8 As to the ambit and scope of Section 118 of the Act, the Hon'ble Supreme Court observes in Kundan Lal Rallaram vs. Custodian, A.I.R. 1961 SC 1316 as under :
"As soon as the execution of the promissory note is proved, the rule of presumption laid down in Section 118 of the Negotiable Instruments Act helps him to shift the burden to the other side. The burden of proof as a question of law rests, therefore, on the plaintiff; but as soon as the execution is proved, Section 118 of the Negotiable Instruments Act imposes a duty on the Court to raise a presumption in his favour that the said instrument was made for consideration. This presumption shifts the burden of proof in the second sense, that is, the burden of establishing a case shifts to the defendant. The defendant may adduce direct evidence to prove that the promissory note was not supported by consideration and, if he adduced acceptable evidence, the burden again shifts to the plaintiff and so on. The defendant may also rely upon circumstantial evidence and, if the circumstances so realised upon are compelling, CS DJ ADJ No.516322/16 Lal Bahadur vs Nandan Singh Page 6/10 the burden may likewise thrift again to the plaintiff. He may also rely upon presumptions of fact, for instance those mentioned in Section 114 and other Sections, of the Evidence Act. Under Section 114 of the Evidence Act the Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case. Illustration (g) to that Section shows that the Court may presume that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it. A plaintiff, who says that he had sold certain goods to the defendant and that a promissory note was executed as consideration for the goods and that he is in possession of the relevant account books to show that he was in possession of the goods sold and that the sale was effected for a particular consideration, should produce the said account books, for he is in possession of the same and the defendant certainly cannot be expected to produce his documents. In those circumstances, if such a relevant evidence is withheld by the plaintiff, Section 114 enables the Court to draw a presumption to the effect that, if produced, the said accounts would be unfavourable to the plaintiff. This presumption, if raised by a Court, can under certain circumstances rebut the presumption of law raised under Section 118 of the Negotiable Instruments Act. Briefly stated, the burden of proof may be shifted by presumptions of law or fact, and presumptions of law or presumptions of fact may be rebutted not only by direct or circumstantial evidence but also by presumptions of law or fact...."
(emphasis supplied) 11.9 Further, it has been held in Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal, (1999) 3 SCC 35:
"12. Upon consideration of various judgments as noted hereinabove, the position of law which emerges is that once execution of the promissory note is admitted, the presumption under Section 118(a) would arise that it is supported by a consideration. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence. If the defendant is proved to have discharged the initial onus of proof showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument. The burden upon the defendant of proving the non-existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. ... The court may not insist upon the defendant to disprove the existence of consideration by leading direct evidence as the existence of negative evidence is neither possible nor contemplated CS DJ ADJ No.516322/16 Lal Bahadur vs Nandan Singh Page 7/10 and even if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist...."
(emphasis supplied) 11.10 In the present suit, the plaintiff has himself relied on the agreement Ex PW1/A but failed to deny the written acknowledgments made therein. These payments total to ₹14 lakhs and thus, the defendant has effectively discharged his onus by establishing, through the cross-examination of the plaintiff, that the existence of consideration was improbable and doubtful. Consequently, the burden then shifted to the plaintiff to prove, independent of such presumption, that there was a valid and lawful consideration for the issuance of cheque Ex.PW1/E. It was incumbent upon the plaintiff to establish this fact, as a cheque issued without a lawful consideration does not create any obligation of payment under Section 43 of the Negotiable Instruments Act.
11.11 Reference may be made to the case of W.S. Sethu Narayana Babu and Ors. vs. S. Sathindar and Ors., MANU/TN/3052/2023, wherein it was held:
"173. There are two parts to Section 43 of the Negotiable Instruments Act, 1881. First part provides for a common consequence where a negotiable instrument is made, drawn and accepted without consideration. In such a case, it creates no liability on the person who has drawn the instrument. ...
178. The burden upon the defendant of proving the non- existence of the consideration can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. The defendant can prove the CS DJ ADJ No.516322/16 Lal Bahadur vs Nandan Singh Page 8/10 non- existence of a consideration by raising a probable defence. If the defendant discharges initial burden showing that the existence of consideration was improbable or doubtful or the same was illegal, the onus would shift to the plaintiff who will be obliged to prove it as a matter of fact and upon its failure to prove would disentitle him to the grant of relief on the basis of the negotiable instrument.
179. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist. Thereafter, the onus can shift on the plaintiff. If the plaintiffs fail to discharge the burden of proof, they will fail in their endeavour. "
(emphasis supplied) 11.12 This brings us to another aspect of the dealings between the parties. The cheque Ex PW1/E was given by the defendant towards the part 'sale consideration'. The agreement to sell Ex PW1/A is an admitted document and thus, it is acknowledged that the plaintiff had agreed to sell, and the defendant had agreed to purchase, the fourth floor of the subject property. It is further admitted that, subsequently, the plaintiff handed over possession of the sixth floor of the subject property in lieu of the fourth floor, and the defendant accepted the same. It is at the time of handing over of possession that the cheque Ex PW1/E was admittedly handed over to the plaintiff. Consequently, it can be inferred that the agreement Ex PW1/A was modified by way of novation, thereby altering the subject matter of the agreement from the fourth floor to the sixth floor.
11.13 It also remains undisputed that the subject property lacks a sanctioned building plan and, consequently, does not possess a completion certificate from the relevant authority. The Unified Building Bye-Laws permit construction only up to the fourth floor from the stilt parking level in a residential building.
CS DJ ADJ No.516322/16 Lal Bahadur vs Nandan Singh Page 9/10The construction of a sixth floor is unauthorised, and as such, it cannot be lawfully sold or purchased. The agreement for the sale of an unauthorised construction is void under Section 23 of the Indian Contract Act as its consideration is illegal. 11.14 Once it is established that the consideration was illegal, Section 43 of the Negotiable Instruments Act would also come into play as per W.S. Sethu Narayana Babu (supra) and the cheque Ex PW1/E would create no obligation on the defendant to pay.
11.15 For these reasons, the plaintiff is not entitled to recover any amount from the defendant on the basis of the cheque Ex PW1/E or the agreement Ex PW1/A. This issue is decided against the plaintiff.
12 "2) Whether the plaintiff is entitled to receive any pendentelite and future interest, if yes, at what rate? ..........OPP." 12.1 Since the plaintiff is not entitled to recover any money, this issue does not survive. The issue is accordingly decided.
13 "3) Relief."
13.1 The suit of the plaintiff is dismissed. Parties to bear their own costs.
14 Decree sheet be prepared accordingly.
15 File be consigned to record room after due compliance.
Digitally signed by RICHA RICHA GUSAIN
GUSAIN SOLANKI
Date: 2025.05.01
SOLANKI 14:38:42 +0530
Announced in open Court today (Richa Gusain Solanki)
on 01st May, 2025 District Judge-02,
South-West District
Dwarka Courts: New Delhi
CS DJ ADJ No.516322/16 Lal Bahadur vs Nandan Singh Page 10/10