MR. K VASUDEVA vs T ESHWARAPPA
- Court
- Karnataka High Court
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ND
DATED THIS THE 22 DAY OF SEPTEMBER, 2026
PRESENT
THE HON'BLE MR. JUSTICE D K SINGH
AND
THE HON'BLE MR. JUSTICE H.SHANTHI BHUSHAN
COMMERCIAL APPEAL NO. 417 OF 2026
BETWEEN:
MR. K VASUDEVA
S/O LATE KEMPAIAH,
AGED ABOUT 61 YEARS,
R/O. BHARATI NILAYA, WARD NO. 23,
MARGADA CAMP BIRUR TOWN, KADUR TALUK,
CHIKKAMAGALURU DISTRICT -577 548.
…APPELLANT
(BY SRI. BHARATH KUMAR.V.,ADVOCATE
AND:
T ESHWARAPPA,
S/O. K.T. THIMMAIAH,
AGED ABOUT 64 YEARS,
PROPRIETOR SRI. ANJANEYA TRADERS,
UDEVA VILLAGE AT AND
POST LINGADAHALLI HOBLI, TARIKERE TALUK
CHIKKAMAGALURU DISTRICT – 577 228.
…RESPONDENT
THIS COMAP / COMMERCIAL APPEAL UNDER SECTION
13 (1A) OF THE COMMERCIAL COURTS ACT, 2015 PRAYING TO
ALLOW THE APPEAL AND SET ASIDE THE JUDGMENT AND
DECREE DATED.23.06.2026 PASSED BY THE PRL. DISTRICT
AND SESSIONS JUDGE AND PRESIDING OFFICER,
COMMERCIAL COURT, CHIKKAMAGALURU IN MATTER BEARING
COMM.O.S. NO.18/2024 (ANNEXURE-A), CONSEQUENTLY
DIRECT THE RESPONDENT HEREIN TO PAY THE APPELLANT A
SUM OF RS.13,60,000/- ANNUM ALONG WITH A PENDENT LIT
Digitally
signed by
MALA K N
Location:
HIGH COURT
OF
KARNATAKA
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INTEREST 18% P.A. FROM THE DATE OF INITIATION OF THE
SUIT TILL REALIZATION.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE D K SINGH
AND
HON'BLE MR. JUSTICE H.SHANTHI BHUSHAN
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE H.SHANTHI BHUSHAN)
This Commercial Appeal is filed calling in question the
judgment and decree dated 23.06.2026 passed by the Principal
District and Sessions Judge and Presiding Officer, Commercial
Court at Chikkamagaluru ( ‘Commercial Court’ ), in
Commercial Original Suit No.18/2024, whereby the suit came
to be dismissed.
2. For the sake of convenience and to avoid any
confusion, the parties are referred to herein by their respective
rankings before the Commercial Court.
I. Facts of the plaintiff:
3. The plaintiff, K. Vasudeva, aged about 59 years,
resident of Margada Camp, Birur Town, Kadur Taluk,
Chikkamagaluru District, instituted Com.O.S.No.18/2024 on
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04.04.2024 against the defendant, T. Eshwarappa, proprietor of
Sri Anjaneya Traders, Udeva Village, Tarikere Taluk, seeking
recovery of Rs.13,60,000/- together with interest at 18% per
annum and costs. The plaintiff's case was that he had been
carrying on money-lending business under the name and style
of Sri Channakeshava Investments for about 15 to 20 years
and that he and the defendant were known to each other.
According to him, the defendant approached him for financial
assistance to improve his business and borrowed
Rs.10,00,000/- on 01.12.2021, agreeing to repay the amount
within three months. As the defendant failed to repay the loan,
he allegedly issued cheque No.089629 dated 14.03.2022,
drawn on the State Bank of India, B.H. Road, Tarikere, for
Rs.10,00,000/- towards discharge of the said liability. The
plaintiff presented the cheque through his banker, Karnataka
Bank Limited, but it was returned on 19.03.2022 with the
endorsement “payment stopped by the drawer”, of which the
plaintiff was informed on 24.03.2022. He contended that the
defendant had deliberately instructed his banker to stop
payment despite the subsisting liability.
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4. The plaintiff further pleaded that he caused a legal
notice to be issued on 20.04.2022, calling upon the defendant
to pay the cheque amount, and that the defendant sent a reply
dated 08.06.2022 disputing the claim without making payment.
Pre-institution mediation was also initiated, but it did not result
in settlement. The plaintiff calculated interest at 18% per
annum on Rs.10,00,000/- from 14.03.2022 and claimed
Rs.3,60,000/- towards interest as on the date of the suit,
making the total claim Rs.13,60,000/-, apart from future
interest. In support of his case, he examined himself as PW.1
and produced Exs.P.1 to P.14. The documents included the
original cheque, cheque-return memo and related banking
records, legal notice and postal documents, the defendant's
reply notice at Ex.P.8, the plaintiff's bank statement at Ex.P.9
showing withdrawal of Rs.17,00,000/- on 24.11.2021, income-
tax return acknowledgments at Exs.P.10 and P.11, the
defendant's GST registration certificate at Ex.P.12, and money-
lending licences at Exs.P.13 and P.14. The plaintiff relied upon
these documents to contend that he had the financial means to
advance the amount and that the cheque had been issued
towards repayment of the loan.
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II. Defence of the defendant:
5. The defendant entered appearance and filed his
written statement denying the alleged loan of Rs.10,00,000/-
dated 01.12.2021 and the assertion that cheque No.089629
dated 14.03.2022 had been issued towards repayment of such
loan. He admitted that he knew the plaintiff but disputed the
plaintiff's version of the transaction. According to the
defendant, he had been carrying on business in fertilizers and
pesticides under the name and style of Sri Anjaneya Traders
from about 2012 and had discontinued the business in 2019
owing to his age and health difficulties. He alleged that the
plaintiff was an unauthorised money lender who obtained
documents from persons and subsequently used them to
wrongfully raise claims against them. He also questioned the
institution of the suit in the plaintiff's individual name,
contending that it ought to have been instituted in the name of
the finance concern. The defendant's specific case was that he
had borrowed only Rs.10,000/- from the plaintiff in the year
2015, when his wife was unwell and he was facing difficulties at
home. At that time, he had handed over a signed blank cheque
to the plaintiff. He claimed that the said amount had been
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repaid in 2016, but the plaintiff did not return the cheque
despite his request and instead retained it.
6. The defendant further contended that, the plaintiff
had misused the old cheque to put forward a false claim for
Rs.10,00,000/- in the present suit. He specifically relied upon
the stop-payment instruction given to his bank on 15.03.2019
in respect of cheque No.089629 and contended that the
instruction predated the alleged loan of 01.12.2021 by more
than two years. According to him, the cheque could not have
been issued on 14.03.2022 towards repayment of a loan
allegedly advanced in December 2021 when payment
instructions in respect of that very cheque had already been
issued in March 2019.
7. He also pleaded that the transaction dated back to
2015, rendering the claim barred by limitation for want of a
subsisting cause of action. In support of his defence, he
examined himself as DW.1 and produced Exs.D.1 and D.2.
Ex.D.1 was the letter dated 14.07.2025 issued by the Assistant
Director of Agriculture, recording the closure of the defendant's
fertilizer business from 2020 and cancellation of the relevant
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licence, while Ex.D.2 contained the bank information
concerning the stop-payment instruction dated 15.03.2019. On
these grounds, the defendant sought dismissal of the suit with
exemplary costs.
III. Judgment of the Commercial Court:
8. The Commercial Court, after considering the
pleadings, oral evidence and documentary material, observed
that the plaintiff had failed to prove that the defendant had
obtained financial assistance of Rs.10,00,000/- from him on
01.12.2021 or that he issued cheque No.089629 dated
14.03.2022 towards discharge of the said liability. Insofar as
the defendant's plea that the plaintiff had utilized a blank
cheque issued in respect of a debt of Rs.10,000/- borrowed in
2015 is concerned, the Court held that the question did not
arise for consideration, as it was sufficient for the defendant to
establish the improbability of the plaintiff's case. The plaintiff's
entitlement to recover Rs.13,60,000/- with interest at 18% per
annum from the date of suit was also negatived. The Court
noted that the plaintiff's bank statement showing withdrawal of
Rs.17,00,000/- on 24.11.2021 did not establish that
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Rs.10,00,000/- had actually been paid to the defendant on
01.12.2021. It also considered the plaintiff's admission that he
was aware of the restrictions applicable to cash transactions
exceeding Rs.20,000/- and the fact that no contemporaneous
loan document had been obtained. Of particular significance
was Ex.D.2, which showed that the stop-payment instruction
concerning the very cheque relied upon by the plaintiff had
been issued on 15.03.2019, well before the alleged loan
transaction. The Court found that the plaintiff had failed to
reconcile this circumstance with his assertion that the cheque
was issued on 14.03.2022 towards repayment of the alleged
loan.
9. The Court also considered the defendant's reply
notice dated 08.06.2022, in which the defence regarding the
earlier Rs.10,000/- transaction and the blank cheque had been
raised, and observed that the plaintiff had not satisfactorily
explained the discrepancy when he instituted the suit on
04.04.2024. Though the plaintiff had produced the GST
registration certificate of Sri Anjaneya Traders and the money-
lending licences, the Court held that these documents did not
establish the alleged loan of Rs.10,00,000/- or the purpose for
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which Ex.P.1 had been issued. It distinguished the authorities
cited by the plaintiff concerning presumptions arising from an
admitted signature on a promissory note, holding that those
decisions did not resolve the factual circumstances surrounding
the cheque in the present case. Applying the standard of
preponderance of probabilities, the Court concluded that the
defendant's explanation was more probable than the plaintiff's
version and that the plaintiff had failed to establish the
underlying loan transaction and his entitlement to recover the
principal amount or the claimed interest. Accordingly, by
judgment dated 23.06.2026, the suit was dismissed with costs.
10. We have heard Sri.V.Bharath Kumar.V., learned
counsel for the appellant/plaintiff. Upon consideration of the
pleadings, the records placed before this Court and the
submissions advanced on behalf of the plaintiff, the following
point arises for our consideration:
"Whether the appellant/plaintiff has made out any
ground to allow the appeal and consequently set
aside the judgment and decree dated 23.06.2026
passed by the learned Principal District and Sessions
Judge and Presiding Officer, Commercial Court at
Chikkamangaluru in Commercial O.S.No.18/2024?"
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IV. Analysis & Reasons:
11. Having regard to the pleadings, the oral evidence and
the documentary material placed on record, the principal
question for consideration in this appeal is whether the plaintiff
established that the respondent had borrowed Rs.10,00,000/-
on 01.12.2021 and issued cheque No.089629 dated 14.03.2022
towards repayment of the said amount. The case of the plaintiff
is founded substantially on Ex.P.1, the cheque drawn on the
State Bank of India, B.H.Road, Tarikere, and the assertion that
it was issued in discharge of the liability arising out of the
alleged loan. The respondent, while admitting that the cheque
belonged to his bank account, specifically disputed the purpose
for which it was said to have been issued. His defence was that
the cheque was handed over as a signed blank cheque in the
year 2015 when he had borrowed only Rs.10,000/- from the
plaintiff, that the said amount was repaid in 2016, and that the
cheque was not returned despite his request. This was not a
defence raised for the first time in the course of trial. The
respondent had also referred to the earlier transaction in his
reply notice dated 08.06.2022, which was produced as Ex.P.8.
The Commercial Court was, therefore, required to examine not
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merely the fact that the cheque belonged to the respondent,
but whether the evidence established the particular transaction
pleaded by the plaintiff and whether the respondent's
explanation was rendered probable by the contemporaneous
documents.
12. The most material circumstance emerging from the
record is the date of the stop-payment instruction. The cheque
relied upon by the plaintiff is dated 14.03.2022, whereas
Ex.D.2, the information obtained from the bank and produced
by the respondent, records that the instruction to stop payment
of cheque No.089629 had been given on 15.03.2019. Thus, the
stop-payment instruction preceded the alleged loan dated
01.12.2021 by more than two years and the date borne by the
cheque by almost three years. This circumstance goes to the
root of the plaintiff's case. If the cheque was issued on
14.03.2022, as asserted by the plaintiff, towards repayment of
a loan advanced on 01.12.2021, the earlier stop-payment
instruction in respect of the very same cheque required a clear
and convincing explanation. The plaintiff's case was that the
respondent had issued the cheque after borrowing the amount
and had thereafter caused it to be dishonoured by instructing
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the bank to stop payment. However, Ex.D.2 establishes that
the bank instruction was already in existence on 15.03.2019,
long before the alleged loan transaction. The cheque was
subsequently returned with the endorsement “payment stopped
by the drawer”, as reflected in the banking documents at
Exs.P.2 and P.5. The fact of dishonour, by itself, does not
resolve the dispute concerning the purpose for which the
cheque had been given. The Commercial Court was justified in
attaching considerable weight to the date recorded in Ex.D.2,
particularly when the plaintiff did not satisfactorily reconcile
that date with his specific assertion that the cheque had been
issued towards repayment of the loan of December 2021.
13. The evidence of PW.1 assumes significance when
considered alongside this documentary discrepancy. In his
cross-examination, PW.1 stated that, in the ordinary course of
his finance business, documents such as an on-demand
promissory note, receipt and Form No.6 would be obtained
when loans were advanced. Nevertheless, in the present
transaction, he claimed to have advanced Rs.10,00,000/-
personally, without obtaining any such document, on the
strength of his relationship with the respondent. He further
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admitted that the amount had been paid in cash and that he
was aware of the restriction concerning cash payments
exceeding Rs.20,000/-. The Court is not required to reject the
plaintiff's case merely because the transaction was alleged to
be a personal loan or because no promissory note was
executed. The material consideration, however, is that the
alleged advance was of a substantial amount, there was no
contemporaneous written acknowledgment of its receipt, and
the cheque relied upon was already subject to a stop-payment
instruction dated 15.03.2019. The absence of any supporting
document assumes greater significance when the plaintiff's oral
assertion is tested against the respondent's specific defence
and the bank record. The plaintiff's admission that he knew the
usual documentation followed in lending transactions, coupled
with his explanation that no document was obtained in this
case, was a circumstance which the Commercial Court was
entitled to consider while assessing the reliability of his version.
14. The plaintiff relied upon Ex.P.9, the bank statement
showing withdrawal of Rs.17,00,000/- on 24.11.2021, to
support his assertion that he had the funds available to
advance the loan. That document may establish the withdrawal
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of the amount from his account, but it does not establish that
Rs.10,00,000/- was actually paid to the respondent on
01.12.2021. The distinction between the availability of funds
and the actual advancement of the loan is material in the facts
of this case. Similarly, Exs.P.10 and P.11, being income-tax
return acknowledgments in which the loan was stated to have
been disclosed, and Ex.P.12, the GST registration certificate of
Sri Anjaneya Traders bearing the date 15.08.2019, do not
independently establish the alleged payment on 01.12.2021.
Exs.P.13 and P.14 establish that the plaintiff possessed money-
lending licences, but the existence of such licences does not, by
itself, prove the particular transaction in dispute. The
Commercial Court considered these documents and found that
none of them satisfactorily established the actual payment of
Rs.10,00,000/- to the respondent. That finding is supported by
the nature and contents of the documents themselves. The
plaintiff's evidence establishes that he had withdrawn money
before the alleged transaction, but the missing link is proof that
the amount claimed in the suit was in fact advanced to the
respondent on the date pleaded.
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15. The cross-examination of DW.1 also requires
consideration in its entirety. The respondent admitted that he
knew the plaintiff from 2015, that they had money
transactions, that Ex.P.1 belonged to his State Bank of India
account and that he had instructed the bank to stop payment.
These admissions establish the respondent's connection with
the plaintiff and the cheque; they do not, in themselves,
amount to an admission that the cheque was issued towards
repayment of Rs.10,00,000/- borrowed on 01.12.2021. DW.1
consistently maintained that he had borrowed only Rs.10,000/-
in 2015 on account of difficulties arising from his wife's ill
health, had repaid that amount in 2016 and had not received
the cheque back. He denied the suggestion that he had
borrowed Rs.10,00,000/- in December 2021 or that the cheque
had been issued on 14.03.2022 in discharge of that liability.
Significantly, his explanation regarding the earlier cheque was
supported by Ex.D.2, which recorded the stop-payment
instruction dated 15.03.2019. The respondent also admitted
that he had not initiated separate civil or criminal proceedings
against the plaintiff for non-return of the cheque. That omission
was a circumstance available for consideration, but it did not
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erase the documentary evidence concerning the date of the
bank instruction. The Commercial Court assessed the defence
not as an independently established claim for recovery of
Rs.10,000/-, but as an explanation offered to show that the
plaintiff's account of the later transaction was improbable. On
the evidence available, the Commercial Court found that the
respondent's explanation was more probable than the plaintiff's
version.
16. The contention concerning the respondent's business
records does not displace the central evidentiary difficulty in
the plaintiff's case. Ex.P.12 bears the commencement date of
15.08.2019, while Ex.D.1, the letter dated 14.07.2025 issued
by the Assistant Director of Agriculture, records the closure of
the respondent's fertilizer business from 2020 and cancellation
of the relevant licence. The respondent, in his cross-
examination, stated that he had stopped the business owing to
health problems. These materials were considered by the
Commercial Court, but the decisive question was not simply
whether the respondent's business had continued in 2021. Even
if the plaintiff disputed the respondent's account regarding the
closure of his business, such dispute would not establish that
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the respondent had received Rs.10,00,000/- on 01.12.2021.
The burden of proving the transaction pleaded by the plaintiff
could not be discharged merely by questioning the respondent's
business history. The plaintiff was required to establish the
alleged loan and the connection between that loan and Ex.P.1.
In the absence of satisfactory proof of the payment, and in
view of the bank record showing the stop-payment instruction
on 15.03.2019, the Commercial Court rightly declined to treat
the respondent's admission of the cheque and his banking
relationship as sufficient proof of the alleged liability.
17. The plaintiff's reliance on the decisions concerning the
evidentiary effect of an admitted signature on a promissory
note does not answer the factual difficulty arising in the present
case. As noticed by the Commercial Court, the authorities cited
on behalf of the plaintiff concerned the presumption arising in
circumstances involving a promissory note and its execution.
The present case turns on the specific evidence surrounding
Ex.P.1, the respondent's explanation regarding the earlier
transaction and, above all, the date of the stop-payment
instruction recorded in Ex.D.2. The respondent's admission that
the cheque belonged to his account is not in dispute. What
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remains unproved is the plaintiff's assertion that the cheque
was issued towards discharge of the particular loan allegedly
advanced on 01.12.2021. The Commercial Court was therefore
justified in distinguishing the authorities relied upon by the
plaintiff and in assessing the case on the evidence actually
adduced. The relevant dates cannot be treated as an
insignificant discrepancy: the alleged loan was advanced on
01.12.2021, the cheque bears the date 14.03.2022, but the
stop-payment instruction concerning that cheque was recorded
on 15.03.2019. In the absence of a satisfactory explanation for
this sequence, the plaintiff's case could not be accepted merely
on the basis of the cheque and the fact of its dishonour.
18. On an overall consideration of the oral and
documentary evidence, this Court finds no sufficient ground to
interfere with the findings recorded by the Commercial Court.
The plaintiff's case was not rejected merely because the loan
was allegedly advanced in cash or because a promissory note
was not obtained. It was rejected after the Court examined the
absence of contemporaneous proof of the alleged payment, the
limited evidentiary value of the withdrawal reflected in Ex.P.9,
the admissions made by PW.1 in cross-examination and the
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material contradiction arising from Ex.D.2. The respondent, on
the other hand, admitted the cheque and the stop-payment
instruction but consistently denied the alleged loan of
Rs.10,00,000/-. His explanation that the cheque related to an
earlier transaction was found probable in the light of the bank
record dated 15.03.2019. The Commercial Court accordingly
answered Issue Nos.1, 2 and 4 in the negative and held that
Issue No.3 did not arise for consideration. Consequently, the
plaintiff failed to establish entitlement to recover
Rs.13,60,000/- or interest at 18% per annum as claimed in the
suit. The dismissal of the suit with costs by judgment dated
23.06.2026, together with the direction vacating the
attachment before judgment, is supported by the findings
recorded on the evidence. The impugned judgment does not
call for interference in appeal.
V. Conclusion:
19. For the foregoing reasons, we find that the plaintiff
has failed to demonstrate any material error in appreciation of
the evidence by the Commercial Court, particularly the
significance of the stop-payment instruction dated 15.03.2019,
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which preceded the alleged loan dated 01.12.2021 and the
cheque dated 14.03.2022.
ORDER
Accordingly, the appeal is dismissed;
The judgment and decree dated 23.06.2026 passed by
the Principal District and Sessions Judge and Presiding Officer,
Commercial Court at Chikkamagaluru in Commercial Original
Suit No.18/2024 is hereby affirmed.
Upon careful perusal of the impugned judgment, we
found that the appellant/plaintiff had failed to make out any
ground warranting admission of the appeal. We were satisfied
that the appeal did not merit consideration even at the
threshold. In these circumstances, we felt that calling for the
Commercial Court records or issuing notice to the respondent
would serve no useful purpose and would only prolong the
proceedings. Accordingly, we declined to issue notice on
admission and proceeded to dismiss the appeal at the
admission stage itself.
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The parties shall bear the consequences as to costs in
accordance with the order of this Court.
Sd/-
(D K SINGH)
JUDGE
Sd/-
(H.SHANTHI BHUSHAN)
JUDGE
KNM
List No.: 1 Sl No.: 2