Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2023 Supreme(Del) 2589

IN THE HIGH COURT OF DELHI AT NEW DELHI
Jyoti Singh, J.
Narinder Kumar Chaudhary – Appellant
Versus
Rajesh – Respondent
RFA 134 of 2023
Decided On : 20-02-2023

Advocates appeared:
Mr. Anish Roy, Mr. Kapil Gautam and Mr. Chandrakant Tiwari, Advocates, for the Appellant.
Mr. Yashpal Rangi, Advocate, for the Respondent.

The main legal point established in the judgment is that the presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881, can be relied upon in civil proceedings for recovery of money, and the burden of proof lies on the party seeking to rebut these presumptions.

Headnote:
Negotiable Instruments Act - Recovery of Loan - Sections 118, 139 of the Negotiable Instruments Act, 1881 - The court allowed the application for exemptions and disposed of the applications. The present appeal assailed the judgment and decree passed by the Trial Court in Civil DJ No.609684/2016. The Plaintiff sought recovery of Rs.5,00,000/- along with interest @ 12% p.a. under Order 37 CPC. The Trial Court decreed the suit in favor of the Plaintiff, relying on the testimony of the prosecution witnesses, provisions of Sections 118 and 139 of the Negotiable Instruments Act, and the admission of the Defendant in a related case. The Defendant's defense was that the cheque in question was stolen and he had never borrowed any money from the Plaintiff. However, the Defendant's admission in a related case contradicted his defense. The Trial Court rightly decreed the suit in favor of the Plaintiff. The Defendant failed to rebut the presumptions under Sections 118 and 139 of the N.I. Act, and the Court found that the Plaintiff had proven the advance of the loan and issuance of the cheque.
Fact of the Case:

The Plaintiff filed a suit seeking recovery of Rs.5,00,000/- along with interest @ 12% p.a. from the Defendant under Order 37 CPC, alleging that the Defendant had approached the Plaintiff for financial help and failed to repay the loan. The Defendant denied borrowing any money and claimed that the cheque in question was stolen.
Finding of the Court:

The Trial Court decreed the suit in favor of the Plaintiff, relying on the testimony of the prosecution witnesses, provisions of Sections 118 and 139 of the Negotiable Instruments Act, and the admission of the Defendant in a related case.
Issues: The issues involved whether the Plaintiff was entitled to recovery of the loan amount and whether the documents relied upon by the Plaintiff were forged and fabricated.
Ratio Decidendi: The Court found that the Defendant's defense was contradicted by his admission in a related case, and he failed to rebut the presumptions under Sections 118 and 139 of the N.I. Act. The Plaintiff successfully proved the advance of the loan and issuance of the cheque.
Final Decision: The appeal was dismissed, and the Trial Court's decision in favor of the Plaintiff was upheld.

JUDGMENT

Jyoti Singh, J. (Oral)

C.M. APPL. 8334/2023 & 8335/2023 (Exemptions)

1. Allowed, subject to all just exceptions.

2. Applications stand disposed of.

RFA 134/2023 & C.M. APPL. 8333/2023 (Stay)

3. Present Regular First Appeal has been filed assailing the judgment and decree dated 30.01.2023 passed by the Trial Court in Civil DJ No.609684/2016. Appellant herein is the Defendant and Respondent is the Plaintiff before the Trial Court and the parties are hereinafter referred to as their litigating status before the Trial Court.

4. Factual score to the extent necessary for deciding the present appeal is that the Plaintiff filed a suit against the Defendant seeking recovery of Rs.5,00,000/- along with interest @ 12% p.a. till the date of realization under Order 37 CPC. For ready reference, the reliefs sought in the plaint are as follows:

"In view of the facts and circumstances mentioned hereinabove it is most respectfully prayed that this Hon'ble Court will be pleased to:

(a) Pass a decree for recovery of Rs.5,00,000/- in favour of the plaintiff and against the defendant;

(b) Award interest at the rate of 12% p.a. from the date which the loan was advanced i.e. on August, 2012 till the date of realization.

(c) Award pendent-lite interest at the rate of 12% p.a. from the date of filing of the suit till the date of realization of the amount.

(d) Award the cost of the present proceeding as well as the legal expenses and counsel fee in favour of the plaintiff."

5. Plaintiff had pleaded in the plaint that Defendant had approached the Plaintiff through a common friend for financial help and on the assurance that the amount will be returned within six months along with interest @ 12% p.a. on the loan amount, Plaintiff advanced a loan amount of Rs.5,00,000/- to the Defendant. Thereafter, Plaintiff requested the Defendant to repay the loan on numerous occasions, however, each time the Defendant sought more time for repayment on account of financial constraints.

6. It was also averred that in January, 2013, Defendant assured the Plaintiff that he would repay the loan by February, 2013 and to discharge his liability, also issued a cheque bearing No.395800, for an amount of Rs.5,00,000/- dated 28.02.2013, in favour of the Plaintiff, drawn on State Bank of India, DDA Shopping Centre, A-1, Paschim Vihar, New Delhi. However, on presentation of the cheque, the same was dishonoured by a Cheque Return Memo dated 18.03.2013. After dishonour of the cheque, Defendant requested the Plaintiff to grant some more time and present the cheque after third week of May, 2013. Going by the assurance given by the Defendant, Plaintiff again presented the cheque, which was dishonoured for the reason `insufficient funds' vide return memo dated 24.05.2013.

7. Realising that the Defendant would not keep his commitment, Plaintiff sent a legal notice dated 01.02.2016 seeking repayment of the loan alongwith interest. Constrained by the fact that the Defendant did not honour his commitment, Plaintiff filed the present suit for recovery under Order 37 CPC.

8. Upon receipt of summons, Defendant entered appearance and after the summons for judgment were issued filed an application under Order 37 Rule 3(5) CPC seeking leave to defend, to which reply was filed by the Plaintiff. The Trial Court allowed the application for leave to defend, vide order dated 10.02.2017, subject to deposit of 50% of the cheque amount in the form of FDR in the Court.

9. Written statement was filed by the Defendant in which it was pleaded that Defendant had never taken any loan from the Plaintiff and therefore, there was no question of issuing any cheque in discharge of the alleged liability. Allegations were made that Plaintiff is one of the accomplices in committing fraud and forgery against the Defendant, for which criminal complaints had been filed by the Defendant on 25.01.2013, 28.05.2013 and 15.09.2015 against several persons including the Plaintiff. It was averred that in the complaints

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