J U D G M E N T

GAURANG KANTH, J.

1. The present appeal has been filed under Section 96 of the Code of Civil Procedure r/w Order XLI Rule 1 & Section 151 of the Code of Civil Procedure („CPC‟) for impugning the judgment and decree dated 04.05.2022 (“Impugned Judgment”) passed by the Learned Principal District & Sessions Judge (HQs), Tis Hazari Courts, Delhi in Civil Suit No. 381/2019 titled as „Smt. Archana Jain vs. Ms. Deep Shikha @ Dolly’. Vide the said Impugned Judgment, the learned Trial Court was pleased to dismiss the application filed by the Appellant (Original Defendant) seeking leave to defend the suit for RFA 355/2022 Page 1 of 15 Signature Not Verified Digitally Signed recovery filed by the Respondent (Original Plaintiff) under Order XXXVII CPC and decreed the Suit filed by the Respondent.

FACTS RELEVANT FOR ADJUDICATION OF THE PRESENT APPEAL

2. It is the case of the Respondent that the Appellant and Respondent were having cordial relations. As and when the Appellant needed any financial help, the Respondent used to advance friendly loans to the Appellant and she used to return back the same on time. In November 2015, the Appellant requested the Respondent for a friendly loan of Rs.60,00,000/- (Rupees Sixty Lakhs only) on the ground that her husband was admitted in hospital and is in a very critical condition. In view of the said request made by the Appellant, the Respondent arranged a sum of Rs.53,50,000/- (Rupees Fifty Three Lakhs Fifty Thousand only) by borrowing from different sources and the same was paid as loan to the Appellant in the month of December 2015. The Appellant issued a cheque bearing No. 008060 dated 22.04.2016 in favour of the Respondent drawn on the Axis Bank (“subject cheque”) towards repayment of the aforesaid loan. The Respondent presented the subject cheque for encashment, however, the same got dishonored and was returned with the endorsement “instrument outdated/stale” vide return memo dated

26.07.2016.

3. The Respondent made several requests to the Appellant for repayment of the said loan. After much persuasion, the Appellant RFA 355/2022 Page 2 of 15 Signature Not Verified Digitally Signed issued five post-dated cheques bearing No.000017, 000019, 000020, 000022 and 000023 each for a sum of Rs.8,00,000/-. The Appellant asked the Respondent to present each cheque for encashment for 5 consecutive months starting from September 2016. The Appellant also assured that the balance amount of Rs.13,50,000/- along with interest shall be cleared within a short period. The Appellant also executed a promissory note in favour of the Respondent. Based on the assurances of the Appellant, the Respondent presented the cheques for encashment for 5 consecutive months starting from September 2016. However, all the aforesaid cheques were dishonored and returned with the endorsement „funds insufficient‟.

4. Despite repeated requests, the Appellant failed to repay the said loan and the Respondent filed a police complaint dated 03.09.2016 against the Appellant. The Respondent also initiated proceedings under Section 138 of the Negotiable Instruments Act, 1881 against the Appellant and the said proceedings are still pending before Metropolitan Magistrate (Central), Tis Hazari Court. Subsequently, on 18.04.2019, the Respondent instituted a summary suit under Order XXXVII CPC for recovery of Rs.72,76,000/- with pendente lite and future interest thereon @ 12% per annum against the Appellant. The Respondent subsequently amended the suit and restricted the prayer to recovery of the principal loan amount of Rs.53,50,000/- with pendente lite and future interest.

5. On serving the summons under Order XXXVII CPC, the Appellant entered appearance and filed an application seeking leave to defend.

RFA 355/2022 Page 3 of 15 Signature Not Verified Digitally Signed In the said application, the Appellant categorically stated that she never took any friendly loan from the Respondent. It is the case of the Appellant that the Respondent and h