No Evidence of Loan - The sources consistently emphasize that IOUs or promissory notes are insufficient to prove a loan unless they are properly addressed and supported by concrete evidence. Several cases highlight that IOUs not explicitly addressed to the lender or lacking corroborative documentation do not establish a debt. For example, in
VELUPILLAI v. SIDEMBRAM
, IOUs not addressed to the plaintiff were deemed inadmissible as proof of a loan ["VELUPILLAI v. SIDEMBRAM
"].Prudent Man Principle - Multiple sources underscore that a prudent person would not lend money without receiving prior repayment or security, especially if previous debts remain unpaid or interest has not been received. 2022 Supreme(Online)(MAD) 28808 and 2022 Supreme(Online)(Mad) 72973 state that no prudent man would lend again without prior dues being settled or security being provided. Similarly, INDHC_HCMD010914662016 notes that lending without security after prior dishonor is highly improbable.
Lending Without Security or Documentation - Several references criticize lending without proper security, documentation, or interest, deeming such behavior unlikely for a prudent individual. For instance, 2023 Supreme(Online)(MAD) 41020 and
S.MURUGAN vs M.K.KARUNAGARAN - 2022 Supreme(Online)(MAD) 30075
highlight that no prudent person would lend large sums without security or interest, especially based solely on promissory notes or verbal promises.Lending Based on Trust and Relationship - Some sources mention that in certain cases, loans are made based on personal relationships or trust, but even then, the lack of documentation or security raises doubts about the legitimacy of the debt (
AMARASINGHE v. SILVA
).Conclusion - The overarching insight is that prudent individuals do not lend money without securing it through prior repayment, security, or clear documentation. The absence of such safeguards, especially when previous debts are unpaid or interest is not received, makes it highly unlikely that a prudent man would engage in new lending. Courts tend to scrutinize such claims, requiring substantive proof that aligns with the principles of prudence and proper lending practices.
References:-
VELUPILLAI v. SIDEMBRAM
- 2022 Supreme(Online)(MAD) 28808- 2021 Supreme(Online)(MAD) 1195- 2022 Supreme(Online)(Mad) 72973-SABARATNAM et al. v. INDO LANKA PROVIDENT INSURANCE CO.
- 2022 Supreme(Online)(Mad) 96436-AMARASINGHE v. SILVA
-RAMAN vs RAVICHANDRAN
- 2023 Supreme(Online)(MAD) 41020
