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IN THE HIGH COURT OF DELHI AT NEW DELHI
Gaurang Kanth, J.
Randhir Singh – Appellant
Versus
Suman Kundra & Anr. – Respondents
RFA 420 of 2023
Decided On : 29-05-2023
Loan Transaction - Recovery of Loan Amount - Evidence Act, 1872 - Section 101, Indian Contract Act, 1872 - Section 73, Transfer of Property Act, 1882 - Section 54, Specific Relief Act, 1963 - Section 16
Fact of the Case:
The case involved a dispute between the parties regarding the nature of a financial transaction. The respondent claimed to have advanced a loan of Rs.10 Lakhs to the appellant for the purchase of a property, while the appellant contended that the amount was paid as earnest money for a property sale.
Finding of the Court:
The court found that the respondent had successfully proven the loan transaction through documentary evidence, including bank statements, ledger accounts, and the sale deed. The appellant failed to provide any written agreement or documentary evidence to support the claim of earnest money. The court held that the appellant's claim of forfeiture of the amount was unsubstantiated, and the respondent was entitled to recover the loan amount along with interest.
Issues: The main issues included determining the nature of the financial transaction, the entitlement of the respondent to recover the loan amount, and the validity of the appellant's claim of forfeiture of the amount.
Ratio Decidendi: The court emphasized the importance of documentary evidence in proving the nature of a transaction. It held that in the absence of written agreements or documentary support, oral claims may not be sufficient to establish the nature of a financial transaction. Additionally, the court highlighted the requirement for a party to prove incurred losses in order to justify the forfeiture of earnest money.
Final Decision: The court dismissed the appeal and upheld the trial court's judgment, decreeing the suit in favor of the respondent for the recovery of the loan amount. All pending applications were also dismissed.
JUDGMENT
Gaurang Kanth, J. (Oral)
The hearing has been conducted through hybrid mode (physical and virtual hearing).
CM APPL. 28117/2023
1. Exemption allowed, subject to all just exceptions.
2. The application stands disposed of.
RFA 420/2023 and CM APPL. 28116/2023 & 28118/2023
3. The Appellant (original defendant no.1) is aggrieved by the Impugned Judgment and Decree dated 25.11.2022 passed by the Principal District & Sessions Judge (South), Saket Courts, New Delhi in CS No. 969/2017 titled as `Suman Kundra Vs. Randhir Singh and Anr.'. The learned Trial Court, vide the Impugned Judgment, was pleased to decree the Suit filed by the Respondent No. 1 (original plaintiff) against the Appellant for recovery of loan amount.
4. Learned counsels for both the parties state that the present appeal can be taken up for hearing today and no date for hearing of the appeal shall be fixed, as contemplated in Sub-Rule 1 of Rule 11 of Order XLI CPC. It is observed that Trial Court record is available with this Court, so on request of parties, the present Appeal is being heard today.
5. It is the case of Respondent No. 1 that she was introduced to the Appellant by Respondent No. 2 in the year 2014. The Appellant informed Respondent No.1 that he was planning to purchase plot No. 849, Block No. A, Sushant Lok, Phase-I, Gurgaon, admeasuring 291.550 sq. mtr. ("Suit Property"), however, he was falling short of Rs.10 Lakhs. Respondent No. 1 further contended that the Appellant requested her to advance a loan of Rs.10 Lakhs to him so that he can pay the complete sale consideration with regard to the Suit Property. Respondent No. 1 further claims that she was assured an interest rate of 18% per annum by the Appellant on the loan amount and she was also assured that Respondent No. 2 (original defendant no. 2) would stand as a surety to the said loan transaction. Respondent No.1 claims that on the said assurances, she advanced a loan amount of Rs.10 Lakhs to the Appellant through a cheque bearing No. 152001 dated 08.11.2014, drawn on Punjab National Bank, Tughlakabad Extension, Delhi. It is further claimed by Respondent No.1 that the said loan was advanced for a period of 36 months.
6. It is further the case of Respondent No. 1 that the Appellant duly encashed the said cheque on 11.11.2014. However, the Appellant failed to repay the said loan within the agreed period of 36 months. Hence, Respondent No.1 issued a notice dated 16.10.2017 to the Appellant. On failure of the Appellant to repay the said loan despite service of notice dated 16.10.2017, Respondent No. 1 was left with no other option but to initiate the present suit for recovery against the Appellant.
7. The Appellant entered appearance and filed his written statement to the Suit. It is the case of the Appellant that in the month of September 2014, Respondent No. 1 had approached the Appellant expressing her willingness to purchase the Suit Property. The parties settled the deal for a total sale consideration of Rs.4 Crores. Out of the said agreed sale consideration, Respondent No. 1 paid Rs.10 Lakhs as token money/earnest money. The balance sale consideration of Rs.3,90,00,000/- was to be paid by Respondent No.1 to the Appellant within 60 days or at the time of registration of the sale deed in respect of the Suit Property, whichever was earlier. It was further agreed between the parties that if Respondent No. 1 fails to pay the aforesaid balance sale consideration within 60 days, then the token money of Rs.10 Lakhs shall stand forfeited by the Appellant. It is the case of Appellant that Respondent No. 1 failed to pay the balance sale consideration within the stipulated period of time and therefore, the Appellant forfeited the token amount of Rs.10 Lakhs, as agreed between the parties. The Appellant further contends that subsequently real estate market crashed and he was forced to sell the Suit Property for a lesser sale consideration of Rs.3,13,00,000/-, due to which he suffered huge loss w
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