2026 Supreme(Del) 451

IN THE HIGH COURT OF DELHI AT NEW DELHI
NEENA BANSAL KRISHNA, J.
Mr. Pradeep, S/o. Sh. Om Prakash - Appellant
Versus
Ms. Kiran Naithani D/o. Sh. Shanti Srup Naithani - Respondent
RFA 23 of 2025, CM APPL. 1520 of 2025 & 1521 of 2025
Decided On : 01-06-2026

In the absence of a formal loan agreement or common genesis, individual monetary transfers are treated as independent transactions for the purposes of limitation, requiring that each claim for recovery satisfies statutory limitation requirements individually starting from the date of transfer.

Headnote:(A) Code of Civil Procedure, 1908 - Order XLI Rule 1 - Section 96 - Limitation Act, 1963 - Section 5 - Recovery of money - Suit for recovery - Limitation - Multiple money transfers - Whether individual transactions or one continuous debt - In the absence of a written loan agreement or common genesis linking various monetary transfers, each transaction is considered distinct and independent; consequently, the limitation period for recovery must be calculated individually from the date of each transaction, rather than as one continuous whole. (Paras 24, 45)

(B) Evidence - Burden of proof - Money transfers - Bank statements - Mere receipt of funds does not automatically imply the existence of a personal loan agreement when the nature of the transfers is contested; the burden lies on the claimant to demonstrate the specific nature of the debt to satisfy the court of its entitlement to recovery. (Paras 35, 37, 38)

(C) Counter-claim - Maintainability - An unproved assertion of a cross-loan, unsupported by documentary evidence or surrounding circumstances and contradicted by the established flow of funds, is liable for rejection. (Paras 49, 50)

Facts of the case:
The plaintiff initiated a recovery suit for money allegedly advanced as a personal loan. The defendant contended the transfers were business-related expenses and filed a counter-claim asserting a prior loan was granted by him to the plaintiff. The trial court decreed the suit in favor of the plaintiff and dismissed the counter-claim. The appellate court examined whether the various transfers constituted a single transaction or independent events for limitation purposes and reviewed the evidence regarding the conflicting loan claims.

Findings of Court:
The court found that while the receipt of funds was admitted, the lack of a formal loan agreement and the nature of the transfers suggested they were independent. Consequently, transfers that occurred beyond the prescribed limitation period were held to be time-barred. The defendant’s claims regarding his counter-proposal were found speculative and unsupported by credible evidence.

Issues: Whether the series of monetary transfers were time-barred under the limitation framework; whether the defendant established a valid counter-claim for a separate loan.

Ratio Decidendi: In the absence of a composite agreement, individual monetary transfers represent distinct debts, each attracting its own limitation period starting from the date of transfer. Unsupported allegations regarding the nature of transfers do not substitute for tangible proof of loan agreements or rebut liability once the receipt of funds is established.

Result: Appeal partly allowed; decreetal amount reduced.