* IN THE HIGH COURT OF DELHI AT NEW DELHI + RFA 575/2007 Reserved on : 31 st March, 2008 Date of Pronouncement :22 nd April, 2008 PAWAN KUMAR GUPTA ..... Appellant Through : Mr. M.R. Vig, Advocate. versus VED PRAKASH ..... Respondent Through : Mr. Navin Kumar and Ms. Geeta Dalal, Advocates. CORAM: HON'BLE MR. JUSTICE MUKUL MUDGAL HON'BLE MS. JUSTICE ARUNA SURESH 1. Whether the Reporters of local papers may be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes JUDGMENT 22-04-2008 1. This appeal has been filed against the impugned judgment and decree RFA No.575/2007 page 1of 13 passed by the learned Additional District Judge in Suit No. 460/2004 dated 3 rd August, 2007 wherein a decree was passed in favour of the respondent and against the appellant for the sum of Rs.3,90,000/- together with interest @ 9% per annum with effect from 14 th October, 2004 till the realization of the entire decretal amount. 2. The facts of the case are restated as follows: - a. The appellant was engaged in the transport business. In the month of December 1998, the appellant approached the respondent no.1 for some financial assistance as he was facing tremendous financial problems. b. The respondent no.1 considered the request of the appellant and paid him a sum of Rs.7,73,000/- on 1 st December, 1998. The appellant acknowledged having received an amount of Rs.7,73,000/- by executing a note dated 1 st December, 1998. c. The appellant assured the return of the loan in the monthly installment of Rs.30,000/- on 22 nd of each month. The appellant paid a sum of RFA No.575/2007 page 2of 13 Rs.3,83,000/- in cash as well as through cheques on different dates. d. On 20 th November, 2001 the appellant again executed a receipt thereby confirming the balance payable amount as Rs.3,90,000/-. The appellant assured the respondent no.1 that he would repay the outstanding amount in monthly installments of Rs.10,000/-. e. A cheque for Rs.5000/- dated 22 nd June, 2003 drawn on United Bank of India, Kirti Nagar, New Delhi issued by the appellant in favour of the respondent no.1 on presentation was returned dishonoured with the remarks “Insufficient Funds”. f. The respondent no.1 served a legal notice thereby demanding a total sum of Rs.3,92,565/- along with interest @ 24% per annum on 4 th October, 2004. 3. The learned counsel for the appellant Shri M.R. Vig contended as follows: a) The balance due from the appellant was shown on a paper as RFA No.575/2007 page 3of 13 7,73,000/- which does not show what that figures of 7,73,000/- is and to whom it is due. It also does not show the name of the father of the appellant nor the address of the appellant from whom it is due. The name and address of the witness has also not been given on it. b) The balance due from the appellant has been shown on 20 th October, 2001 as Rs.3,90,000/-. The paper had been written by respondent no.1 himself which has been denied by the appellant. This papers has also not been witnessed by any person. c) A cheque of Rs.5,000/- was issued by the appellant on 22 nd June 2003 which was dishonoured for the reasons “insufficiency of funds in account”. However, the cheque in question was never issued by the appellant towards the outstanding amount of the loan. The appellant never took loan from from the respondent No.1, rather the respondent no.1 being on friendly terms with the appellant had requested him for a loan of Rs.5,000/- and the appellant had issued the said cheque in favour of Respondent no.1 towards RFA No.575/2007 page 4of 13 advancing loan to the respondent no.1 which he stated that he had arranged from other sources. d) Subsequently, the respondent no.1 informed the appellant that he had not presented the cheque for encashment as he had arranged the loan from some other person in cash. The appellant made several requests to the respondent no.1 to return the cheque but the respondent no.1 withheld the same with his malafide intention. 4. The principal plea raised by the learned counsel for the appellant is that the alleged extended loan of Rs.7,73,000/- to the appellant has not been accepted by the appellant and the alleged note is defective and not acceptable in the eyes of law. The learned Additional District Judge framed the following issues on 11 th January 2007: 1. Whether the suit of the plaintiff is not maintainable in view of the preliminary objection of the written statement? OPD 2. Whether the plaintiff extended any loan of Rs.7,73,000/- to the defendant on 01.12.1998? OPP 3. Whether the suit is barred by time? OPD RFA No.575/2007 page 5of 13 4. Whether any amount is due and payable by the defendant to the plaintiff towards the repayment of the loan? OPP 5. Whether the plaintiff is entitled to any interest whatsoever? OPP 6. Relief.” 5. By his judgment dated 3 rd August 2007 the learned Additional District Judge decided the above mentioned issues in favour of the respondent and against the appellant with the following observations: “9. Onus to prove this issue was on the defendant. However, defendant has not led any evidence to show that plaintiff is a money lender and that he required a money lender's license before extending loan to the defendant. A friendly loan can be extended by any person. Accordingly, this issue is decided in favour of the plaintiff and against the defendant. 10. Both these issues are inter related and are decided together. PW1 has stated that defendant was in financial problems and had approached the plaintiff for some financial assistance. PW1 has categorically deposed that he had extended loan of Rs.7,73,000/- to the defendant on 01.12.1998. Defendant acknowledged the loan by executing a note dated 01.12.1998. This document has been proved by the plaintiff as Ex.PW1/1 and it bears signatures of the defendant. Ex.PW1/1 has also been witnessed by one Mr. Shyam Sunder. In his cross examination defendant has admitted that Mr. Shyam Sunder was his maternal uncle. DW1 has RFA No.575/2007 page 6of 13 further deposed that PW1/1 does not bear either his signatures or signatures of his uncle Mr. Shyam Sunder. However, he has not produced Mr. Shyam Sunder in the witness box to depose to this effect. He has also deposed that defendant had paid a sum of Rs.3,83,000/- uptil 20 th October 2001. Details given in affidavit shows that a sum of Rs.30,000/- each was paid on 22.12.1998, 21.01.1999 and 22.02.1999. A sum of Rs.10,000/- each was paid on 09.04.1999, 24.04.1999, 23.08.1999, 12.09.1999, 5.12.1999, 13.01.2000, 16.01.2000, 12.02.2000 and 12.03.2000. A sum of Rs.20,000/- was paid on 26.03.1999. A sum of Rs.15,000/- each was paid on 06.05.1999, 12.06.1999 and 27.7.1999. A sum of Rs.9,000/- was paid on 14.10.1999. A sum of Rs.8,000/- each was paid on 14.02.2000, 18.05.2000 and 13.06.2000. A sum of Rs.7,500/- each was paid on 15.07.2000, 17.08.2000 and 12.09.2000. A sum of Rs.7,000/- each was paid on 13.10.2000, 13.11.2000, 14.12.2000 and 15.01.2001. A sum of Rs.6,000/- each was paid on 15.02.2001, 18.04.2001 and 19.06.2001. Similarly, a sum of Rs.5,800/- each was paid on 18.05.2001 and 20.10.2001. A sum of Rs.5,500/- each was paid on 20.07.2001 and 20.09.2001. A sum of Rs.6,200/- was paid on 21.08.2001. In cross examination no question has been put to PW1 that these payments were not made by the defendant to the plaintiff. Rather PW1 has reiterated in his cross examination that the payments detailed in para six of his affidavit were made by the defendant in cash as well as through cheques. He has deposed that receipts were issued by him to the defendant. The plea taken by the plaintiff that defendant had paid a sum of RFA No.575/2007 page 7of 13 Rs.3,83,000/- on different dates towards acknowledgment dated 20.10.2001 duly signed by the defendant at point 'X' and which has been proved as Ex.PW1/2. DW1 has deposed that Ex.PW1/2 did not bear his signatures but except his bald statement in this regard he has not led any other evidence to show that signatures appearing on Ex.PW1/2 were not that of defendant. As per this document a sum of Rs.3,90,000/- was due and payable by the defendant to the plaintiff. 11. In his written statement defendant has stated that he had given one cheque for Rs.5,000/- to the plaintiff. However, he has stated that the said cheque was given to the plaintiff as a loan. He has not stated either in the written statement or in his affidavit that he had been extending loans to the plaintiff and had issued some more cheques. Plaintiff has placed on record photocopies of three cheques of Rs.10,000/- each dated 11 th September, 1999 and 14 th December, 1999 issued by the defendant to the plaintiff from his bank account maintained in State Bank of Patiala Bali Nagar, New Delhi. Though plaintiff has marked these cheques in his affidavit Ex.PW1/7 to Ex.PW1/9 but these cheque being photocopies have not been proved in accordance with law. At the same time defendant has not put any question to the PW1 in his cross examination that these cheques were not issued by the defendant to the plaintiff. Rather in his cross examination DW1 has set up a new story by saying that he might have issued one/two more cheques from his bank account maintained in State Bank of Patiala, Bali Nagar, New Delhi. This answer clearly shows that defendant has taken RFA No.575/2007 page 8of 13 shifting stand to suit his convenience. This conduct of the defendant makes him highly unreliable and untrustworthy witness. This fact further strengthens the plea taken by the plaintiff that defendant had made payments as detailed in para five of the plaint towards repayment of the loan. So far as story of the defendant that he had been extending loan to the plaintiff is concerned, same is not at all convincing for the simple reason that even a cheque of Rs.5,000/- issued by the defendant was returned dishonoured on presentation with the remarks “insufficiency of funds”. Accordingly, I am of the view that defendant is not a truthful witness and his testimony cannot be preferred as against the plaintiff which has otherwise been supported by documentary evidence. Besides this, the case of the plaintiff is duly supported by the documents Ex.PW1/1 and Ex.PW1/2. 15. In the light of above discussions I pass a decree in favour of the plaintiff and against the defendant in the sum of Rs.3,90,000/- together with interest @ 9% per annum with effect 14.10.2004 till the realization of the entire decretal amount. Cost of the suit is also awarded. Decree sheet be drawn. File be consigned to record room.” 6. In our view, the learned Additional District Judge has rightly come to the finding that the respondent had extended the loan of Rs.7,73,000/- to the appellant on 1 st December, 1998. The respondent acknowledged the loan by executing a note dated 1 st December, 1998 that the appellant had paid a sum RFA No.575/2007 page 9of 13 of Rs.3,83,000/- on different dates towards repayment of the loan, is also corroborated from the acknowledgment dated 20 th October, 2001 duly signed by the appellant himself. As per this document a sum of Rs.3,90,000/- was due and payable by the appellant to the respondent. There is also no evidence to support the plea of the appellant that the respondent was in any requirement of loan and the cheque dated 22 nd June 2003 for Rs.5,000/- which was dishonoured was not issued by the appellant because the respondent had requested him for loan but to pay was part of the balance payment of the loan extended to the appellant by the respondent on 1 st December, 1998. Thus, the learned Additional District Judge had categorically come to the finding that the loan was extended by the appellant to the respondent on 1 st December, 1998 and a balance payment of Rs.3,90,000/- was due on the appellant as per the acknowledgment note dated 20 th October, 2001 duly signed by the appellant himself. RFA No.575/2007 page 10of 13 7. It is not in dispute that the document Ex. PW1/1 acknowledging the loan of Rs.7,73,000/- to the appellant was duly proved by the plaintiff/respondent and bore the signatures of the appellant and it was also witnessed by Shri Shyam Sunder who was the maternal uncle of the appellant himself. The bare allegation of the appellant that Shri Shyam Sunder had not signed the said document has not been proved by the appellant producing the said Shyam Sunder in the witness box. 8. The respondent having duly approved the execution of document of loan of Rs.7,73,000/- it was entirely up to the appellant / defendant to show the said loan was discharged. The appellant has not demonstrated the discharge of the debt acknowledged by the said note Ex.PW1. It is the plaintiff/respondent who has very fairly stated that out of the said amount of Rs.7,73000, a sum of Rs.3,83,000/- was paid both by cash and cheque. He has also proved the document Ex. PW 1/2 by which after adjusting the payment of Rs.3,83,000/- by the appellant the balance amount of RFA No.575/2007 page 11of 13 Rs.3,90,000/- was acknowledged by the appellant. Except his bare statement disputing the signatures, the appellant has not led any other evidence to show that the signature bearing Ex. PW1/2 was not his. The learned Additional District Judge has rightly come to the conclusion that the acknowledgment of Rs.3,90,000/- on 20 th October, 2001 as per Ex. PW1/2 clearly showed that the appellant owed this sum to the respondent. The pre- validating stand of the appellant about the cheques issued by him has been noticed by the learned Additional District Judge and we affirm the said finding in toto. The shifting stands of the appellant have been noticed and adversely commented upon by the trial court and in our view, rightly. The trial court having observed the statement of the witness was the best judge to judge the veracity of the appellant's testimony. Accordingly, we find no merit in this appeal while affirming the findings of the trial court. 9. Thus, in light of the categorical finding of the learned Additional District Judge to the effect that the loan was extended to the appellant by the RFA No.575/2007 page 12of 13 respondent and a balance payment of Rs.3,90,000/- was due on the appellant, which findings we entirely agree with, the appeal is dismissed. (MUKUL MUDGAL) JUDGE (ARUNA SURESH) JUDGE April 22, 2008 sk/dr RFA No.575/2007 page 13of 13