Delhi District Court
Prahalad Singh vs Paytel Financial Technologies Pvt Ltd on 22 December, 2025
1
IN THE COURT OF MRS. VEENA RANI, DISTRICT JUDGE (COMMERCIAL
COURT)-8, SOUTH-EAST DISTRICT, SAKET COURTS, NEW DELHI
CS (COMM.) No.2872/2024
CNR No. DLSE01-007043-2024
Prahalad Singh
S/o Late Sh. Subhash Chand
R/o WZ-30-E/2, Gali No.2,
Shad Nagar, Palam Colony,
New Delhi ........Plaintiff
Versus
1. M/s Paytel Financial Technologies Pvt. Ltd.
Registered Office At:C-312, 1st Floor,
Defence Colony, New Delhi-110024 .....Defendant no.1
2. Sh. Arjun Vashishth
M/s Paytel Financial Technologies Pvt. Ltd.
Registered Office At:C-312, 1st Floor,
Defence Colony, New Delhi-110024
Mob:9650702205 .....Defendant no.2
3. Sh. Alok Kumar Yadav (Deleted)
Suit withdrawn by plaintiff qua
Defendant no.3 on 22-11-2024. .....Defendant no.3
4. M/s KS Impex
Through Proprietor Aniruddh Tiwari
Veena S/o Bharat Lal Tiwari, B-262,
rani Ground Floor Swarn Jayanti
Puram Govind Puram Ghaziabad,
Digitally signed
by Veena rani
Date: Utter Pradesh 201013
2025.12.24
15:59:31
+0530
Mob:8630397041 .........Defendant no.4
CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
2
Date of filing of suit : 12-07-2024
Arguments heard on : 09-12-2025
Date of Judgment : 22-12-2025
JUDGMENT
1) The Plaintiff has instituted the present Commercial Suit under Section 6 of The Commercial Courts Act, 2015, seeking the recovery of:
i) Principal Sum: Rs.7,31,000/- (Rupees Seven Lakhs Thirty-One Thousand Only).
ii) Interest: Pendentelite and future interest at the rate of 24% per annum from the bill payment due date until the date of realization.
iii) Ancillary Costs: Litigation expenses and damages.
Brief Facts of the Case
2) The Plaintiff, operating a proprietary money transfer firm named Tejas Traders, was associated with Defendant No. 1, M/s Paytel Financial Technologies Pvt. Ltd., and other Defendants, who are engaged in the online money transfer business. The association was formalized through a Network Partner Agreement for providing distributor/retailer network services. The Plaintiff is stated to have primarily communicated with Defendant No. 3 and one Mr. Mohit Mahajan, a frontline employee of Defendant No. 1, regarding queries and technical issues. Veena rani3) The Transaction (03/05/2023): The Plaintiff's neighbour, Sh. Rajesh Kumar, requested the Plaintiff to facilitate the transfer of Rs.7,31,000/- from the account of Digitally signed by Veena rani Date: 2025.12.24 M/s KS Impex (Defendant No. 4) to the Plaintiff's business account linked with 15:59:32 +0530 Defendant No. 1. Since the Plaintiff's business account had a low capacity/limit, Mr. CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
3Mohit Mahajan (Employee of Defendant No. 1) was contacted for confirmation regarding direct transfer to Defendant No. 1's company account. Mr. Mahajan allegedly confirmed that Defendant No. 1 had no problem receiving the amount directly. Based on this confirmation, the Plaintiff provided Defendant No. 1's SBI account details to Mr. Rajesh Kumar. A sum of Rs.7,31,000/- was transferred from M/s KS Impex/Defendant No. 4's account and was duly received by Defendant No. 1's SBI account.
4) Non-Release of Funds: Despite the receipt, the Defendants allegedly failed to transfer the said amount to the Plaintiff's business account ID. Upon inquiry, the Defendants allegedly started making excuses and demanded the Plaintiff to file a Declaration Form and a Consent Form, which the Plaintiff complied with, but the amount was still not released. The Defendants subsequently demanded the KYC documents of M/s KS Impex/Defendant No. 4 and threatened that non-completion would prevent the release of the funds. The Plaintiff allegedly managed the KYC details of M/s KS Impex/Defendant No. 4 and sent them via email on 13/07/2023. Defendants No. 2 and 3 then allegedly assured the Plaintiff that the amount would be released. Despite all compliance and assurances, the Defendants have allegedly not released the amount, which remains pending. The Plaintiff claims that Sh. Rajesh Kumar, who initiated the transfer, has started threatening the Plaintiff for the return of his money, causing the Plaintiff great mental, physical, and financial harassment.
5) The plaintiff filed Police Complaints and the Legal notice as follows:
a) DD No. 728/PC dated 10/05/2023.
Veena rani b) Complaint to DCP via reference number 7628 dated 02/06/2023.
Digitally signed by Veena rani Date:c) Complaint to ACP & CP dated 05/07/2023.
2025.12.24 15:59:28 +0530CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
4d) Complaint before EOW (Complaint No. C-1207/23/DCP/EOW dated 16/08/2023 and Dy No. D-1912/DCP/EOW dated 11/08/2023).
e) Legal Notice: A Legal Notice dated 08/01/2024 was sent to the Defendants via speed post, which was duly served, but payment was not made.
f) The Plaintiff filed for pre-mediation on 29/02/2024, but the Defendants allegedly avoided appearance, resulting in a Non-Starter Report.
Defence of Defendants No. 1 and 2
6) The Defendant No. 1 (M/s Paytel Financial Technologies Pvt. Ltd.) is a registered Business Correspondent to multiple banks, providing financial services (AePS, Micro ATM, DMT, etc.) through its network for financial inclusion, as directed by the Reserve Bank of India (RBI).
7) The Defendant No. 1 admits receiving Rs.7,31,000/- in their SBI account on 03/05/2023 from an unknown sender. The bank deemed the transaction suspicious and informed Defendant No. 1. However, the Investigation revealed that the sender's account had been frozen. However, the said defendants have expressed their inability to Reverse/Release the amount. The Defendant No. 1 asserts they have no involvement with the funds and attempted to reverse the transaction. However, due to the sender's account being frozen, they are currently unable to return the amount to the sender. The Defendant No. 1 filed a Cyber Complaint (bearing no. 20805230034562, PS: Cyber Police Station South East) regarding the suspicious Veenatransaction. The defendants denied that the Plaintiff has any involvement, right, or rani title to claim the said amount. Also denied that the Plaintiff contacted Mr. Mohit Mahajan to discuss the direct transfer. Further denied that Mr. Mohit Mahajan Digitally signed by Veena rani Date: consulted with the Respondents, gave any assurance, or provided the Defendant No. 2025.12.24 15:59:31 +0530 1's account details to the Plaintiff. The defendants stand remains that the amount was CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
5received from an unknown suspicious source. Defendants No. 1 and 2 are not familiar with Mr. Rajesh Kumar. The defendants specifically denied that the KYC of Respondent No. 4 was completed or received. The details sent by the Plaintiff allegedly belonged to the Plaintiff, not Respondent No. 4. Denied that all documentary formalities for Respondent No. 4's account were completed as required by law. The answering defendants alleged that the Plaintiff's conduct in claiming the amount from an unknown and questionable source indicates an ulterior motive and dishonest intention to siphon off the amount. The answering defendants further alleged that the Petitioner was visiting the house of Respondent No. 2, accompanied by "goons," to threaten and intimidate Respondent No. 2 and his family. It is also stated that the Respondent No. 3 has resigned and is no longer associated with Respondent No. 1. The said Defendants No. 1 and 2 deny any ill or dishonest intention, conspiracy, cheating, or fraud. They maintain that the Plaintiff is not entitled to the reliefs sought and pray for the dismissal of the suit with costs.
Replication
8) Plaintiff filed replication to the written statement of defendants, wherein the averments and assertions of the written statement have been denied and plaintiff has reiterated its stand as taken in the plaint.
9) It is pertinent to mention here that suit qua the defendant no.3 Mr. Alok Kumar Yadav was withdrawn by the plaintiff on 22-11-2024. It is further pertinent to mention here that the right of defendant no.4 to file the written statement was closed vide order dated 15-01-2025.
Veena raniIssues Digitally signed by Veena rani Date:
10) From the pleadings of the parties, the following issues were framed on 2025.12.24 15:59:30 +0530 15.01.2025:-
CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.6
i) Whether plaintiff is entitled for recovery of an amount of Rs.7,31,000/- as prayed for? OPP.
ii) Whether plaintiff is entitled for pendente lite and future interest, if so, at what rate? OPP.
iii) Relief.
Evidence of parties
11) In support of his case, plaintiff Sh. Prahalad Singh examined himself as PW1.
He filed his evidence by way of affidavit, Ex.PW1/A, wherein he has reiterated and reaffirmed the same facts as stated in the plaint and exhibited and marked the documents i.e. Ex.PW1/1 to Ex.PW1/16 and Marked A, B, C,D & E. The witness PW1/plaintiff was duly cross examined by the ld. Counsel for the defendant no.1 &
2.
12) On the other hand, defendants in their defence have examined Mr. Arjun Vashisht (defendant no.2), the partner of defendant no.1 as DW1. He filed his evidence by way of affidavit Ex.DA. He has exhibited copy of Resolution of Board of Directors is Ex. DW1/1. The said witness DW1 was duly cross examined by the ld. Counsel for the plaintiff.
13) No other witness was examined either by the plaintiff or the defendants.
14) Both the parties i.e. plaintiff and the defendants have filed their written Veena rani submission and copies of the same were supplied to opposite party.
Digitally signed by Veena rani Date:Findings and Observations:
2025.12.24 15:59:29 +0530CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.7
15) I have heard and considered the rival submissions of both the parties and perused the material on record. Issue wise findings are as under:-
"Issue no.(i) Whether plaintiff is entitled for recovery of an amount of Rs.7,31,000/- as prayed for? OPP"
16) Onus to prove this issue lies on plaintiff. In order to discharge the onus to prove the issue, Prahalad Singh, the proprietor of plaintiff firm, examined himself as PW1. He filed his evidence by way of affidavit, Ex.PW1/A, wherein, he has deposed and corroborated about the facts mentioned in the plaint. He has proved the documents, Ex.PW1/1 to Ex.PW1/6 (colly.) and also relief upon the documents Marked A to E as mentioned in his examination-in-chief recorded on 25.04.2025.
17) The Plaintiff's claim for recovery is founded on the principles of unjust enrichment (Section 70 of the Indian Contract Act, 1872) and breach of trust/contract (implied contract of bailment or agency). The transfer of sum of Rs.7,31,000/- was consensual, made under a specific instruction/assurance from Defendant No. 1's employee (Mr. Mohit Mahajan) to overcome the Plaintiff's account limit, and was meant to be immediately credited to the Plaintiff's business ID. This suggests a pre- arranged agency or trust relationship.
18) Per contra, the Defendant No. 1, as a Business Correspondent / Financial Technology Company (engaging in financial inclusion services as per the Written Statement), is subject to strict Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines issued by the Reserve Bank of India (RBI). The core Veenadefense is the inability to release the funds because the transaction is suspicious, the rani sender's account is frozen, and the KYC of the remitting entity (M/s KS Impex/Defendant No. 4) was allegedly incomplete.
Digitally signed by Veena rani Date: 2025.12.2415:59:29 WRITTEN SUBMISSIONS OF THE PLAINTIFF:
+0530CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.8
19) The plaintiff has filed the written submissions and asserted that there is a breach of contract coupled with fiduciary misconduct, unjust enrichment and deficiency in commercial services on part of the defendants. The plaintiff further pivoted its case on the following pointers:
a) The defendants No.1 & 2 are legally bound to return money wrongfully detained by them;
b) Fiduciary duty breach inasmuch that the money entrusted must be disbursed;
c) No entity can freeze / withhold funds without lawful order;
d) Blanket suspicion or KYC cannot justify withholding fund;
e) Third party payment plea is invalid;
f) Failure to produce records invites adverse inference.
WRITTEN SUBMISSIONS OF THE DEFENDANT's No. 1 & 2:
20) The Defendant's No.1 & 2 have also submitted written arguments and have asserted the following points of arguments;
a) Due diligence exercised and after internal assessment filed the cyber-complaint as the sender's account (M/S K.S. IMPEX defendant No.4) was found to be frozen, Veena preventing reversal of the transaction amount as per law; rani
b) Acted in good faith and followed the due process;Digitally signed by Veena rani Date: 2025.12.24
15:59:30 c) The plaintiff's repeated emails / visits were harassment to the Defendants No.1 & +0530 CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
92;
d) Lack of locus standi as the plaintiff's claim on Rs.7,31,000/- were never transferred from his own account (admitted by the plaintiff PW-1 in his own cross-examination);
e) No privity of contract as the plaintiff failed to produce any document to show that he was authorized to realize money on behalf of M/s K.S. IMPEX;
f) Verification based on hearsay;
g) Improper invocation of the commercial jurisdiction as the plaintiff has attempted to cloak a third-party dispute as a commercial dispute.
21) The general right to recover money wrongfully withheld falls under the common law principle of "Money had and received," which operates on the doctrine of unjust enrichment. The Hon'ble Supreme Court, in CELIR LLP v. Bafna Motors (Mumbai) Pvt. Ltd. & Ors. (Civil Appeal Nos. 5542-5543 of 2023, decided on 21/09/2023), while in the context of SARFAESI, reaffirmed the requirement of fair conduct and adherence to due process by banks/financial institutions. The Defendant No. 1 must demonstrate legally sufficient grounds for continued detention of the funds, beyond merely stating that the transaction was suspicious and the sender's account is frozen, especially after the Plaintiff claims to have completed the requested formalities. It is an established principle of law that the plaintiff has to first stand on its own feet.
Veena rani22) In the present caser the plaintiff was dealing with the defendant no.1 (M/S Paytel Financial Technologies Pvt. Ltd.). However, the plaintiff PW-1 could not Digitally signed by Veena rani Date: place on record any Network Partner Agreement with D-1. The plaintiff PW-1 stated 2025.12.24 15:59:33 +0530 the following in his cross-examination (relevant portion only) :
CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.10
".... It is correct that the said document is not on the judicial record. It is correct that the suit amount transferred on 03.05.2023 was not sent from my account. (Vol. The amount was sent on my behalf K.S. Impex on the confirmation of Defendant No.1) Q. Have you placed on record any document showing youe authority to send suit anount by KS Impex to Defendant no.1?
Ans. I have got transferred from M/S KS Impex the said amount to Defendant no.1 after prior talking to said Sh. Mohit Mahajan, the employee of the Defendant No.1 and as such there is no document to that effect. However,, the printout of the whatsapp chats have been placed on record by me which are Mark-A collectively.
Q. Whether the screen shot of the whatsapp chat Mark-A (colly) mentioned that the money was transferred by M/s K,S. Impex to defendant no.1 for plaintiff?
Ans. The declaration attached in the screen shot Mark A on the first page gives a declaration to that effect and this declaration was sent to defendant no.1.
It is correct that the declaration containing in Email is not from M/S K.S. Impex (Vol. this declaration was sent to defendant No.1 on its demand by me through email dated 03.05.2023.
Q. Whether you were authorized by M/S K,S. Impex to give declaration as mentioned in your email dated 03.05.2023?
Veena rani Ans. The nature of my business was to received payment from clients i.e. the third parties and the said payment used to be forwarded to the defendant no.1 Digitally signed by Veena rani Date: through its portal and the defendant No.1 used to send its e-balance popularly 2025.12.24 15:59:31 +0530 called e-wallet on its portal and thereafter I used to perform the transaction for CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.11
various purposes as provided by defendant No.1. As such there was no written or direct authority for every transaction but in the above said process, the authority was by default.
Q. Is it correct that there is no term in the agreement between you and the defendant No.1 regarding receipt of payment / money from third party?
Ans. I was having no knowledge in this regard. Whatever payments I have transferred from third parties to the defendant No.1 was at the direction of said Sh. Mohit and if I had known that there was no such agreement between me and the defendant no.1, I would not have done the said transaction.
Q. Whether from the document Mark B, can you show or tell as to from which bank account, the money has been transferred to defendant No.,1?
Ans. The bank account from which the payment has been transferred is not shown in the said document Mark B (vol. The sender of the money for his privacy has hidden the same).
...
Q. What was your limit in your account with the defendant No.1?
Ans. So far as the limit of account with defendant no.1 is concerned, there was no limit. Whatever, I have mentioned in my affidavit of examination-in-chief, refers Veena to limit of my personal bank account.
rani I have my saving bank account in Punjab National Bank, Sector-7, Dwarka Digitally signed by Veena rani Date: Branch New Delhi.2025.12.24 15:59:30 +0530
CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.12
Q. Whether you can get in writing from your bank that you cannot deposit the suit amount into your said bank account?
Ans. I could have received the suit amount but I could not have transferred the same more than Rs.1,00,000/- in one day to the account of defendant No.1 (Confronted with the Para 5 of affidavit of examination-in-chief of the witness where it is recorded otherwise.) It is correct that a payment can be transferred from my account through RTGS but as it was time consuming process and the client wants his work urgently, the said RTGS transfer was never used by me for the said purpose."
23) The plaintiff deposing as witness PW-1 has admitted in his cross-examination the followings:
a) Source of Funds and Authority to Act: The Plaintiff-herein confirmed that the suit amount transferred on 03/05/2023 was not sent from the Plaintiff's personal bank account. The Plaintiff-herein clarified, volunteering that the amount was sent on the Plaintiff's behalf by M/s K.S. Impex following confirmation from Defendant No. 1. The Plaintiff-herein was specifically questioned regarding any documentary authority empowering the Plaintiff-herein to instruct M/s K.S. Impex to send the suit amount to Defendant No. 1. The Plaintiff-herein admitted that no specific document existed to that effect, asserting that the transfer was made after a prior conversation with Mr. Mohit Mahajan, an employee of Defendant No. 1.
Veena rani b) Documentary Evidence and Declarations: The Plaintiff-herein relied on the printouts of WhatsApp chats (Mark-A collectively) as evidence of the Digitally signed by Veena rani Date: communication. When asked whether the WhatsApp screenshots (Mark-A) 2025.12.24 15:59:32 +0530 explicitly stated that the money was transferred by M/s K.S. Impex to Defendant CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
13No. 1 for the Plaintiff-herein, the Plaintiff-herein conceded that the declaration contained in the email was not issued by M/s K.S. Impex. However, the Plaintiff- herein volunteered that this declaration was sent to Defendant No. 1 through email on 03/05/2023 on the Defendant No. 1's demand.
c) Regarding the authority to issue this declaration on behalf of M/s K.S. Impex, the Plaintiff-herein explained the nature of the business relationship. The Plaintiff's business involved receiving payments from third-party clients, which were then forwarded to Defendant No. 1 via its portal in exchange for an e-balance (e- wallet) used for transactions. The Plaintiff-herein stated that although there was no written or direct authority for every single transaction, the authority was "by default" within the context of this operating process.
d) Agreement Terms and Account Limit Discrepancy: The Plaintiff-herein was asked if the agreement with Defendant No. 1 contained any term regarding the receipt of payments from third parties. The Plaintiff-herein pleaded lack of knowledge in this regard, asserting that all transfers from third parties to Defendant No. 1 were conducted at the direction of Mr. Mohit Mahajan. The Plaintiff-herein further stated that if he had the knowledge of the absence of such an agreement, the transaction would not have been completed.
e) On the issue of the bank account limits: The Plaintiff-herein clarified that the limit referenced in the Examination-in-Chief affidavit related to the Plaintiff's personal bank account (a savings account with Punjab National Bank), and not the Plaintiff's account/e-wallet with Defendant No. 1, which the Plaintiff-herein Veena stated had no limit.
rani
f) Inconsistency in Affidavit and the Cross-examination : The Plaintiff-herein later Digitally signed by Veena rani Date: corrected a prior statement regarding the ability to receive the suit amount. The 2025.12.24 15:59:31 +0530 Plaintiff-herein confirmed that the suit amount could have been received into the CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
14personal savings account but could not have been transferred from that account to Defendant No. 1 in an amount exceeding ₹1,00,000/- in a single day.
g) The Plaintiff-herein admitted to the correctness of the fact that payment could be transferred via RTGS but explained that this mode was never used for the said purpose as it was time-consuming, and the client (M/s K.S. Impex) required urgent completion of the work.
h) Source Account Information : When confronted with document Mark B, the Plaintiff-herein was unable to identify or state the bank account from which the money had been transferred to Defendant No. 1. The Plaintiff-herein volunteered that the sender had hidden the bank account details for privacy.
24) In the present case the Plaintiff's testimony and assertions suffers from critical inconsistencies between the affidavit (Examination-in-Chief) and the cross- examination, coupled with key admissions, which undermine the credibility and legal basis of the claim.
a) Inconsistency Regarding Account Limits Affidavit Contradiction: The Plaintiff-herein's Examination-in-Chief affidavit apparently suggested that the suit amount could not be received in the Plaintiff's account due to a limit.
Cross-Examination Admission (Correction): The Plaintiff-herein explicitly Veena admitted that the limit referred to was that of the personal savings bank rani account, and the Plaintiff's business account/e-wallet with Defendant No. 1 had no limit.
Digitally signed by Veena rani Date: 2025.12.24 15:59:30 +0530b) Lack of Documentary Authority for M/s K.S. Impex : The Plaintiff-herein CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
15admitted that no document exists on record showing the Plaintiff's authority to direct M/s K.S. Impex to send the suit amount to Defendant No. 1. Moreover, the cross-examination of DW-1 (Arjun Vashisht / D-2 who is the one of the Directors of D-1) reveals that the relationship between the plaintiff and the M/S K.S. Impex could not be established and even the identity of M/S K.S. Impex could not be established. The bank account details provided by the plaintiff were found freezed.
c) Voluntary Admission: The Plaintiff-herein admitted that the Declaration emailed to Defendant No. 1 was not from M/s K.S. Impex. The justification was that authority was "by default" due to the nature of the business (money transfer agency) and based on the oral direction of the employee, Mr. Mohit Mahajan. While commercial usage allows for implied authority, the absence of written authorization from the original remitter (M/s K.S. Impex) for a substantial sum of ₹7,31,000/- makes the transaction highly vulnerable to the Defendant No. 1's claim of "suspicious source," especially in the context of financial regulations (KYC/AML). This admission severely weakens the link between the Plaintiff- herein and the remitter.
d) Agreement Terms and Direction : The Plaintiff-herein admitted to having no knowledge whether the agreement with Defendant No. 1 contained terms regarding the receipt of money from third parties. The Plaintiff's reliance is entirely on the oral direction of Mr. Mohit Mahajan, stating, "if I had known that there was no such agreement between me and the defendant no.1, I would not have done the said transaction." The reliance on an oral instruction from a Veena frontline employee, coupled with the Plaintiff's own admitted ignorance of the rani underlying Network Partner Agreement terms, shifts the risk of an unauthorized or non-compliant transaction entirely onto the Plaintiff-herein. The Defendant Digitally signed by Veena rani Date: No. 1 can argue that the employee acted outside the scope of his authority, or the 2025.12.24 15:59:32 +0530 transaction violated the core agreement's terms for receiving payments.
CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
16e) Transaction Details Hidden : The Plaintiff-herein admitted that the bank account details of the sender are not visible in the document Mark B, volunteering the explanation that the sender "has hidden the same for his privacy." This admission aligns with the Defendant No. 1's defence that the money came from an "unknown sender." Hiding the source account details further contributes to the transaction's suspicious nature, strengthening the Defendant No. 1's justification for freezing the funds under banking compliance rules. Thus the claim for the direct transfer of the suit amount has been proven false. Moreover, The Plaintiff- herein lacks documentary authority from the remitter (M/s K.S. Impex) or explicit support from the Network Partner Agreement. Furthermore, the plaintiff-herein has not been able to satisfy the process of KYC
25) On the other hand the cross-examination of the witness DW-1 (who is one of the directors of D-1 revealed the following (only relevant portion)"
"....
Q. When plaintiff claimed the suit amount, what steps you took thereafter?
Ans. The money of the plaintiff was out on hold by us. We made enquiries from the plaintiff. The money was shown having sent by one K.S. Impex which was not the name of the plaintiff and we thereafter inquired as to what relations said M/S K.S. Impex was having with the plaintiff and asked for KYC of the said K.S. Impex as we were not knowing as to whether said K.S. Impex was an individual, a partnership firm, a company or any other entity. Further the relationship between M/S K.S. Impex and the plaintiff could not be established. Several Veena notices were sent to M/S K.S. Impex by the plaintiff himself as well as the court rani but till date its identity has not been established. The bank account details which were provided to us by the plaintiff was also found freezed. One Rajesh along Digitally signed by Veena rani Date: with the plaintiff came to us and informed that the said amount if od bet (satta) 2025.12.24 15:59:29 +0530 amount.
CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.17
It is correct that one Rishabh Kaushik is our Legal Executive who sent the email Ex. PW-1/4 which mentions in the email dated 09.05.2023 that KYC documents are needed by defendant No.1 to clear the transaction and to initiate the fund in your wallet. (Vol.) The documents sent by the plaintiff could not be verified and identity of the plaintiff could not be established. ..."
26) The assertions of the defendants No.1 & 2 are able to prove a defense that the transaction of the plaintiff was not validated due to the lack of KYC of M/S K.S. Impex. The core justification for withholding the funds is the non-completion of KYC for the originating entity, M/S K.S. Impex. The Defendants No. 1 & 2 clearly stated that the money was shown as being sent by M/S K.S. Impex, which was not the name of the plaintiff. They made enquiries and "asked for KYC of the said M/S K.S. Impex" because "Defendants No. 1 & 2 were not knowing as to whether said M/S K.S. Impex was an individual, a partnership firm, a company or any other entity." Furthermore, the essential "relationship between M/S K.S. Impex and the plaintiff could not be established." This failure to establish the identity of the remitting party and its relationship with the recipient is a fundamental red flag under Indian financial law.
27) Regulated entities in India (which include banks, financial institutions, and potentially platforms handling monetary transactions) are mandatorily required to adhere to the Master Direction - Know Your Customer (KYC) issued by the Reserve Bank of India (RBI), which is rooted in the Prevention of Money-Laundering Act, 2002 (PMLA). The PMLA and its corresponding rules cast a duty upon reporting entities to identify their clients and the beneficial owner. The transaction at hand, Veenawhere the source (M/S K.S. Impex) is unverified and its relationship with the rani recipient (plaintiff) is unclear, presents a high risk of money laundering or illicit financial activity.
Digitally signed by Veena rani Date: 2025.12.2415:59:31 28) The Hon'ble Delhi High Court, in RBI v. V. M. Investments (2013) SCC +0530 CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
18Online Del 2503, upheld the RBI's power to enforce strict compliance with its directions, particularly those relating to financial sector integrity. The requirement for a financial entity to demand and verify the KYC of both the sender and the recipient of a substantial amount is thus a statutory obligation, not a mere internal policy. Defendants No. 1 & 2 were, therefore, acting to comply with their legal duties to prevent the misuse of their platform for illegal activities. The email Ex. PW-1/4, which explicitly mentions the need for KYC documents to clear the transaction, substantiates the claim that the withholding was for regulatory compliance.
29) The deposition mentions a highly suspicious circumstance: "One Rajesh along with the plaintiff came to Defendants No. 1 & 2 and informed that the said amount is bet (satta) amount." The realization that the funds might be proceeds from illegal betting (satta) provides an independent and compelling justification for both withholding the money and escalating the matter to law enforcement. In S. P. Gupta vs. Union of India, AIR 1982 SC 149, the principle that public interest and the prevention of crime override private claims in certain circumstances is implicitly recognized. Defendants No. 1 & 2, by raising an alarm about the possibility of the money being "satta amount," were acting in the larger public interest of preventing a crime and avoiding the facilitation of illegal activity. This action, coupled with the inability to complete the mandatory KYC, strengthens the defense.
30) The deposition notes two other factors that support the Defendants' precautionary stance. The bank account details provided by the plaintiff "were also found freezed," suggesting the account was already under scrutiny by authorities, Veenawhich further validates the Defendants' initial suspicion and decision to hold the rani funds. The documents sent by the plaintiff "could not be verified and identity of the plaintiff could not be established." While the primary issue is M/S K.S. Impex's Digitally signed by Veena rani Date: KYC, the fact that the plaintiff's own identity documents were also found wanting 2025.12.24 15:59:33 +0530 provides a secondary, but significant, justification for the continued withholding of CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
19the amount.
31) Needless to say that he Know Your Customer (KYC) process, which involves collecting and verifying the identity and address details of all transacting parties, is of paramount significance for online portals remitting money. It is not merely a procedural step but a mandatory legal requirement central to India's regulatory framework for combating financial crime.
32) The Hon'ble Delhi High Court has consistently penalized entities for regulatory breaches related to KYC, highlighting the corporate liability involved. In M/S Augmont Gold Pvt Ltd v. One97 Communication Limited [2021 SCC OnLine Del 4485] though primarily dealt with contractual obligations regarding KYC, the ruling implicitly affirmed that the legal obligation to "carry out KYC requirements for every customer" rests squarely on the regulated entity (in this case, the platform/financial institution). Failure to adhere to these requirements in relation to both the sender and the receiver exposes the entity to regulatory action and potential civil liability.
33) In the present case the plaintiff could not stand on its own feet. As per Union of India v. Vasavi Co-operative Housing Society Ltd. [(2014) 2 SCC 269]: "It is an established principle of law that the plaintiff must succeed on the strength of his own title and not on the weakness of the case of the defendant." The Hon'ble Supreme Court affirmed that even if the defendant's title is found to be deficient or fails, the plaintiff cannot be granted the relief unless he has independently established his own superior title. Similarly it has been hled by the Hon'ble Delhi High Court in Sita VeenaRam Iron Foundry and Engineering Works v. Hindustan Technocast (P) Ltd. and Anr. rani [ 2025 DHC 5395]: "Plaintiff cannot succeed on the basis of failure, if any, on the part of a defendant to prove his case and plaintiff must stand on its own legs. To put Digitally signed by Veena rani Date: it in other words, a plaintiff must succeed on the basis and on the strength of his own 2025.12.24 15:59:32 +0530 case and not on the strength of deficiencies, if any, in defendant's case."
CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
20EVALUATION OF THE WRITTEN SUBMISSIONS OF THE PLAITIFF AND THE DEFENDANT'S NO. 1 & 2:
34) In view of the whole facts of the case - particularly the cross-examination - it can be well inferred that the Defendants' arguments have "more force" because they are anchored in statutory compliance and the fundamental contractual principle of Privity, whereas the Plaintiff's case relies on equitable claims (unjust enrichment) which cannot override express statutory and contractual bars. The following points of arguments have gone in favour of the defendants No.1 & 2 ;
a) Lack of Locus Standi and Privity of Contract : The Plaintiff suing for the recovery of ₹7,31,000/-. admitted that this money was transferred from the account of M/s KS Impex (Defendant No. 4), not from the Plaintiff's own account;
b) Doctrine of Privity: Under the Indian Contract Act, 1872, only parties to a contract can sue to enforce it. The transaction occurred between Defendant No. 4 and Defendant No. 1. In M.C. Chacko v. State Bank of Travancore (1970) 1 SCC 58, the Hon'ble Supreme Court held that a person not a party to a contract cannot, subject to certain well-recognized exceptions, enforce any rights under it. The Plaintiff-herein has failed to produce any authorization letter or legal assignment of debt from M/s KS Impex. Without being the "remitter" or having a "Power of Attorney," the Plaintiff is a "stranger to the consideration" and the contract, thus lacking the locus standi (legal standing) to claim the funds.
Veenac) Statutory Compliance : The Defendant No. 1, as a Business Correspondent, is rani strictly governed by RBI's Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines. The Defendant No. 1 flagged the transaction as Digitally signed by Veena rani Date: "suspicious" and filed a Cyber Complaint. Under the Prevention of Money 2025.12.24 15:59:30 +0530 Laundering Act (PMLA), 2002, and RBI Master Directions, financial entities are CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
21legally obligated to freeze or report transactions that do not have a clear economic purpose or involve unknown third parties. The Plaintiff's argument that "suspicion cannot justify withholding funds" is legally weak. Defendant No. 1's act of filing a cyber-complaint demonstrates "Good Faith" and legal compliance, which shields them from claims of "wrongful detention.;
d) Improper Invocation of Commercial Jurisdiction: The Plaintiff has filed this as a commercial suit. However, the dispute appears to be a "recovery of money" based on a third-party's transaction, which may not fit the strict definition of a "Commercial Dispute" under Section 2(c) of the Commercial Courts Act, 2015. In Ambalal Sarabhai Enterprises Ltd. v. K.S. Infraspace LLP (2020) 15 SCC 1, the Supreme Court cautioned that the provisions of the Commercial Courts Act must be strictly interpreted. If the dispute does not arise directly out of the "ordinary transactions of merchants," it should not be cloaked as a commercial suit. Since the Plaintiff admitted in cross-examination that the money did not move from his account, the "commercial" nature of the relationship for this specific sum is extinguished.
35) 4. Evidentiary Infirmities (Hearsay Evidence) : The Plaintiff relies heavily on alleged oral confirmations from an employee (Mr. Mohit Mahajan). As per Rajesh Jain v. Ajay Singh (2023) 10 SCC 148, the burden of proof (Onus Probandi) lies on the Plaintiff to prove the existence of a specific agreement to receive third-party funds. The Plaintiff's reliance on emails containing his own documents (rather than the remitter's KYC) further weakens the claim of "due compliance."
36) Veena As far as the judgment of Indian Bank v/ M/s Satyam Fibres (India) Pvt. Ltd.
rani [AIR 1996 SC 2529)] the Plaintiff's reliance on this case is fundamentally misplaced. That judgment stands for the proposition that a party cannot secure a Digitally signed by Veena rani Date: judicial order through misrepresentation or forgery. In the present case, it is the 2025.12.24 15:59:29 +0530 Plaintiff who seeks to recover a sum to which he has admitted he had no original title CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
22or ownership, having originated from the account of Defendant No. 4. Conversely, Defendants No. 1 & 2 have acted with utmost transparency by filing a Cyber Complaint. As per the ratio in Satyam Fibres, the integrity of the transaction is paramount; since the transaction is flagged as suspicious and involves a third-party account that is frozen, the Defendants are legally prohibited from releasing the funds to a stranger to the transaction (the Plaintiff).
37) Furthermore, the Plaintiff's reliance on Kotak Mahindra Bank Ltd. v. State of Maharashtra, 2018 SCC OnLine Bom 2445 is legally untenable and contextually irrelevant. The ratio of the said judgment pertains to the 'Priority of Rights' between a secured creditor under the SARFAESI Act and the State's recovery of arrears. It provides no legal gateway for a Plaintiff to claim funds that did not originate from his account and are currently subject to a 'frozen' status due to suspicious activity. Unlike the bank in the cited case, which was protecting a legitimate secured interest, the Plaintiff herein has admitted in cross-examination (PW-1) that he is not the remitter of the funds. Consequently, the Plaintiff cannot invoke the protective umbrella of Kotak Mahindra Bank to bypass the mandatory Anti-Money Laundering (AML) protocols and the pending Cyber Complaint (No. 20805230034562) filed by Defendant No. 1. The Defendants No. 1 & 2 are legally bound by RBI Circulars and the PMLA, 2002, which supersede the Plaintiff's claim of 'Deficiency of Service' in the face of a suspicious third-party transaction.
38) In view of the facts & evidence of the case and after perusing the Written Arguments of the Plaintiff as well as the Defendant's No. 1 & 2 , the claim of the plaintiff is found non-maintainable by the plaintiff-herein and the same is hereby Veenadismissed with no order as to cost.
rani
39) Thus the ISSUE No.1 is decided against the plaintiff and in favour of the Digitally signed by Veena rani Date: Defendants No.1 & 2 and I hold that plaintiff is not entitled for recovery of an 2025.12.24 15:59:32 +0530 amount of Rs.7,31,000/- from the defendant as prayed in the present suit.
CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
2340) Issue no.(ii) "Whether plaintiff is entitled for pendente lite and future interest, if so, at what rate?OPP.
41) In view of my findings on the issue no.1, wherein I have held that plaintiff is not entitled to any amount from the defendant as prayed for in the present suit, the issue no.2 is also decided against the plaintiff-herein.
42) Relief
43) In view of my findings on the issue no.1 and 2, the suit of the plaintiff is
hereby dismissed. There is no order as to cost. Decree Sheet be prepared
accordingly. File be consigned to Record Room.
Announced in the open court
Dated: 22.12.2025 (VEENA RANI)
District Judge (Commercial Court)-08,
South-East District, Saket Courts,New Delhi
Veena
rani
Digitally signed
by Veena rani
Date:
2025.12.24
15:59:32
+0530
CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
24IN THE COURT OF MRS. VEENA RANI, DISTRICT JUDGE (COMMERCIAL COURT)-8, SOUTH-EAST DISTRICT, SAKET COURTS, NEW DELHI CS (COMM.) No.2872/2024 CNR No. DLSE01-007043-2024 Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.
22.12.2025 Present: Sh. Pankaj Kumar, ld. counsel for the plaintiff with plaintiff in person.
Ms. Yashivi Sood ,ld. counsel for the defendant no.1 & 2.
The suit qua the defendant no.3 Mr. Alok Kumar Yadav has already been withdrawn by the plaintiff on 22-11-2024.
Defendant no.4 is ex-parte.
Vide my separate judgment, the suit of the plaintiff is dismissed. There is no order as to cost. Decree sheet be prepared accordingly. File be consigned to record room.
Announced in the open court
Dated: 22.12.2025 (VEENA RANI)
District Judge (Commercial Court)-08,
South-East District, Saket Courts,New Delhi
Veena
rani
Digitally signed
by Veena rani
Date:
2025.12.24
15:59:31
+0530
CS (COMM.) No.2872/2024, Prahalad Singh Vs. M/s Paytel Financial Technologies Pvt. Ltd.