Kulwant Singh vs Paramjeet Singh & Anr.

* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Reserved on: 7 September, 2026
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Pronounced on: 5 November, 2026
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Uploaded on: 5 November, 2026

# CNR No. DLHC010601312024

+ RFA 606/2024

SH. KULWANT SINGH
S/o Late Sh. Nadar Singh
R/o 173, Nirankari Colony,
Delhi-10009 .....Appellant
Through: Mr. Sudhir Kumar Singh & Ms.
Suruchi Jain, Advocates.

versus

1. PARAMJEET SINGH

2. SH. GURMEET SINGH

Both S/o Sh. Inderjeet Singh
R/o 6/255, Nirankari Colony
Delhi-110009. .....Respondents
Through: Ms. Khushbu, Advocate.
CORAM:
HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA

J U D G M E N T
NEENA BANSAL KRISHNA, J.
1. The First Regular Appeal under Section 96 read with Order 41 of the
Code of Civil Procedure, 1908 ( hereinafter referred to as the ‘CPC’ ), has
been filed on behalf of the Appellant against the Judgment and decree dated
30.05.2024, whereby the Suit of the Plaintiff bearing CS DJ No.
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 1 of 14

59411/2016 , for Recovery of Rs.10,34,000/- along with the pendente lite
and future interest, was dismissed.
2. The facts in brief as stated in the Plaint, are that the Plaintiff was
carrying on the business of manufacturing and the Defendants were dealing
in sale and purchase of properties. Both the Plaintiff and Defendants
developed a friendly relationship over a period of time.
3. It was stated that on 14.12.2012, the Defendants approached the
Plaintiff at his residence and requested him for a loan of Rs. 5,00,000/-, as
they intended to purchase land in Delhi for a sale consideration of Rs.
7,00,000/- against which they had paid Rs.2,00,000/- as earnest money, and
the balance amount of Rs.5,00,000/- was to be paid on the same date, or else
the earnest money was going to be forfeited. The Plaintiff, accordingly,
arranged the said amount from different sources and advanced the same to
the Defendants in cash, on the same date.
4. The Plaintiff further averred that the Defendants executed a
Promissory Note dated 14.12.2012 in respect of the said amount, and agreed
to pay interest @ 3% per month. It was agreed that the loan amount would
be repaid within 30 months, i.e. 13.06.2015. However, despite repeated
requests, the Defendants failed to return the amount within the stipulated
period. Consequently, a Legal Notice dated 07.10.2015 was served upon the
Defendants, despite which, the loan amount was not paid.
5.
Aggrieved, the Plaintiff filed the Suit for Recovery of
Rs.10,34,000/- along with the pendente lite and future interest @3%
p.m.
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 2 of 14

6. The Defendants, in their joint Written Statement , admitted that the
Plaintiff was known to the Defendants, as they resided in the same vicinity
and the Plaintiff was residing with his brother, Niranjan Singh.
7. It was claimed that the Plaintiff and his brother were interested in
purchasing the property, preferably a floor built over a plot of land, as they
felt a space constraint in the property where they were residing, and they
used to visit the Defendants for the said purpose. The Defendants claimed
that over a period of time, they had shown a number of properties to the
Plaintiff and his brother, but they did not meet their requirements.
8. It was further stated that the Defendants, due to financial problems,
approached the Plaintiff, who was also a moneylender, and they took a loan
of Rs.25,00,000/-, which was given in cash. However, the Plaintiff
requested the Defendants to execute the Promissory Notes and cheques in
his favour.
9. It was also averred that due to the friendly relationship between the
parties, it was agreed that no interest would be charged on the loan amount,
but the Defendants voluntarily promised to pay some monthly.
Consequently, the Defendants signed five blank Promissory Notes and also
handed over blank cheques to the Plaintiff.
10. It was further stated that in the year 2014, the Plaintiff and his brother
expressed the intention and desire to buy a property in the locality. The
Defendants, at that time, were constructing a property over a plot of land
bearing No. 307A, Dhirpur Mukherjee Nagar, New Delhi-09 ( hereinafter
referred to as ‘Property’), which was in their ownership. The Plaintiff and
his brother, being satisfied with the construction, agreed to purchase the
First Floor of the said property from the Defendants. The sale consideration
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 3 of 14

of the said Property was fixed at Rs.1,00,00,000/-. It was agreed that the
loan of Rs.25,00,000/-would be adjusted in the sale consideration and the
remaining Rs.51,00,000/- would be paid in cash. It was also agreed that the
Sale Deed would be registered for a sum of Rs. 24,00,000/-, in order to
avoid the payment of exorbitant stamp duty that entailed the sale of property
worth Rs.1 Crore.
11. Consequently, the Sale Deed dated 14.03.2014 was executed in favour
of Smt. Jasbir Kaur w/o Mr. Niranjan Singh , in respect of the entire First
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Floor, without terrace rights, along with 1/4 share in the parking of the
property.
12. It was further submitted that Smt. Jasbir Kaur, at the instance of the
Plaintiff and her husband, instituted the Suit bearing CS No. 127/2015 for
Permanent and Mandatory Injunction against the Defendants in respect of
the property, which was pending adjudication.
13. The Defendants asserted that, as a counter-blast to the Written
Statements filed in the above-mentioned Suit, the Plaintiff sent a Legal
Notice dated 14.10.2015 and the reply to the same was sent on 14.11.2015.
14. It is asserted that the Suit of the Plaintiff was false, frivolous and
fictitious and had been filed merely to avoid the payment of Rs.51, 00,000/-
along with the interest, to the Defendants.
15. The Defendants took the preliminary objection that there was no
cause of action disclosed in the Suit. It was further claimed that the Plaintiffs
were involved in the business of money lending, for which they had no valid
license. It was stated that the Suit of the Plaintiff is barred by the Prevention
of Money Laundering Act and is liable to be dismissed.
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 4 of 14

16. On merits , the claims of the Plaintiff were denied, and it was
reiterated that in fact, the Defendants were entitled to seek Recovery of
Rs.51,00,000/- as part of the sale consideration for the property sold by them
to Smt. Jasbir Kaur w/o Mr. Niranjan Singh, the brother of the Plaintiff.
17. The Plaintiff in the Replication , reaffirmed the assertions as made in
the Plaint and denied the allegations made in the Written Statement. It was
denied that the Property was agreed to be purchased for a sale consideration
of Rs.1, 00, 00,000/-. It was further denied that the balance consideration of
Rs.51, 00,000/- was to be made in cash and that the Sale Deed merely
mentioned the part sale consideration in the sum of Rs.24, 00,000/-. It was
further denied that the Plaintiff is a moneylender.
18. It was admitted that Smt. Jasbir Kaur had purchased the suit property
from the Defendants, but it was asserted that no doors and windows were
provided in the property. Despite repeated requests, the same were not
provided, and therefore, she filed a Suit for Mandatory and Permanent
Injunction, which is pending trial. It was denied that the Suit had been filed
as a counter-blast to the Suit.
19. The Issues on the pleadings were framed on 03.03.2016 , which are
as under:-
i. Whether the plaintiff is entitled to recovery of
Rs.10,34,000? OPP

ii. Whether the plaintiff is entitled to the interest of so, at
what rate and what amount? OPP

iii. Relief.

Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 5 of 14

20. The Plaintiff in support of his case, examined himself as PW-1 and
tendered his evidence by way of evidence, Ex.PW-1/A. The documents
proved are as under:-
S.No. Documents Exhibits
1. Promissory Note dated 14.12.2012 Ex.PW-1/1 (OSR)
2. Legal notice dated 07.10.2015 Ex.PW-1/2
3. Original postal receipt Ex.PW-1/3 to Ex.PW-1/6
4. Original AD Cards Ex.PW-1/7 and Ex.PW-1/8

21. The Defendants examined DW-1, Mr. Paramjeet Singh, Defendant
No. 1, and DW-2, Mr. Gurmeet Singh, Defendant No. 2, who tendered
their evidence by way of Affidavits, Ex.DW-1/A and Ex.DW-2/A
respectively, and reiterated the defence as taken in their Written Statement.
22. The learned District Judge, on appreciation of the testimony of the
PW-1, noted that he had deposed that he had arranged Rs.2,00,000/- from
his family members and Rs.3,00,000/- from Mr. Jagir Singh, his mama, but
he had failed to examine any of his family members, to prove the source of
Rs.5,00,000/-. It was further stated that the Promissory Note was witnessed
by one, Mr. Hari Chand, but he was also not examined, and no reason was
given for the same. It was also observed that the Plaintiff had admitted the
purchase of the First Floor of the Property for Rs.24,00,000/- by Smt. Jasbir
Kaur.
23. Further, on appreciation of the testimony of the Defendants, it was
observed that they had taken a consistent stand throughout that they had
taken a loan of Rs.25,00,000/- from the Plaintiff and his brother, which was
to be adjusted towards the sale consideration of Rs. 1,00,00,000/-.
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 6 of 14

24. It was held that the testimony of the defendants, were more probable
than that of the Plaintiff and therefore, the Suit of the Plaintiff for
recovery was dismissed.
25. Aggrieved by the Decree and dismissal of the Suit, the Plaintiff has
filed the present Appeal.
26. The grounds of challenge are that the learned Trial Court failed to
appreciate that the Respondents, in their Written Statement as well as in
their cross-examination, had admitted the existence of a loan transaction and
execution of Promissory Notes in favour of the Appellant. The signatures of
the Respondents on the Promissory Note, Ex.PW-1/1, were never disputed
and, therefore, its execution stood admitted. Once the execution of the
Promissory Note was admitted, the Respondents could not dispute its
contents.
27. It is further contended that the learned Trial Court failed to appreciate
the testimony of PW-1, Mr. Kulwant Singh, who, in his cross-examination,
had categorically stated that the Promissory Note, Ex.PW-1/1, was filled
and thereafter, signed by the Respondents and that the handwriting
appearing thereon was that of Mr. Paramjeet Singh. The Appellant had
specifically denied the suggestion that the Promissory Note was signed in
blank by the Respondents and was subsequently, filled up by him. It is,
therefore, argued that the learned Trial Court erred in doubting the execution
of the Promissory Note.
28. It is also asserted that once the execution of the Promissory Note
stood admitted, the non-examination of the family members of the
Appellant, his maternal uncle, Mr. Jagir Singh, from whom he had allegedly
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 7 of 14

arranged the funds, or the witness to the Promissory Note, Mr. Hari Chand,
could not have been held fatal to the case of the Appellant.
29. The Appellant has challenged the defence of the Respondents
regarding the alleged property transaction. The Respondents alleged that the
total sale consideration was Rs.1 Crore, out of which Rs.24,00,000/- was
reflected in the Sale Deed, Rs.51,00,000/- was payable in cash, and
Rs.25,00,000/- stood adjusted against the loan.
30. It is contended that the Respondents claimed that they had allegedly
executed five Promissory Notes and handed over blank cheques, for the loan
of Rs.25,00,000/- taken by them from the Appellant. However, they
subsequently set up a defence that the said amount had been adjusted
towards the sale consideration of the First Floor of the property purchased
by Smt. Jasbir Kaur, wife of Mr. Niranjan Singh, brother of the Appellant.
31. It is contended that there is no documentary evidence, to substantiate
the alleged arrangement. It is further asserted that had the Appellant
intended to manipulate the Promissory Note, he could have filled it up for a
much higher amount or for Rs.51,00,000/-, as alleged by the Respondents to
be the outstanding sale consideration.
32. It is further stated that had there been any amount of Rs.51,00,000/-
due from Smt. Jasbir Kaur, there is no explanation as to why no Suit for
Recovery for Rs.51,00,000/- against Smt. Jasbir Kaur or the Plaintiff, has
been filed, in the last 10 years. Therefore, the assertions that the Suit of the
Plaintiff was a counter-blast, is patently incorrect.
33. It is, therefore, submitted that the alleged outstanding sale
consideration is merely an afterthought. The impugned Judgment, failed to
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 8 of 14

appreciate the aforesaid circumstances, and is liable to be set aside and the
Suit of the Appellant be decreed.
34. The Appellant/Plaintiff has also filed Written Submissions reiterating the
grounds urged in the Appeal and contending that the learned Trial Court failed
to properly appreciate the admissions made by the Respondents in their
pleadings and evidence, as well as the execution of the Promissory Note,
Ex.PW-1/1.

35. Learned counsel for the Respondents has argued that the learned
Additional District Judge has rightly observed that the Appellant failed to
establish his financial capacity to advance the alleged loan of Rs.5,00,000/-.
It is further submitted that the Appellant did not examine his family
members or his maternal uncle, Mr. Jagir Singh, from whom he allegedly
arranged the money, or the witness, Mr. Hari Chand, to the Promissory
Note, to prove the loan transaction. It is, therefore, contended that the
learned Trial Court rightly dismissed the Suit.
36. It is, therefore, prayed that the impugned Judgment and Decree be set
aside and the Suit be decreed.
Submissions heard and the record perused.
37. It is an admitted case of the parties that the Plaintiff/Appellant, Mr.
Kulwant Singh was known to the Defendants, Mr. Paramjeet Singh and Mr.
Gurmeet Singh, the two brothers as they all lived in the same vicinity
38. The case of the Plaintiff in the plaint as well as his evidence as PW-1
is that on the request of the Defendants, he had given a loan of Rs.5,00,000/-
which was evidenced by a Promissory Note, Ex.PW-1/1, signed by both the
Defendants. Furthermore, the interest @3% per month was agreed to be
paid.
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 9 of 14

39. The Defendants, in their Written Statement , did not deny knowing the
Plaintiff. It is rather their own case that they had taken a loan, not of
Rs.5,00,000/- but of Rs.25,00,000/-, for which they had executed
Promissory Notes and had given advance cheques. It is thus, the admission
of the Defendants themselves that they took a loan and executed Promissory
Notes.
40. The pertinent fact, which has emerged, from the testimony of the
Plaintiff that the Promissory Notes were signed by both the Defendants. In
his cross-examination, the Plaintiff deposed as below:
“I only got the Promissory Note Ex. PW1/1 executed from
the Defendants. The promissory notes, Ex. PW1/1 was filed
up and then signed by the Defendants. The writing on
Ex.PW-1/1 is not mine but is that of Mr. Paramjeet Singh.
It is wrong to suggest that the Promissory Note was signed
by the Defendants in blank and thereafter, the same had
been filled up by me. It is wrong to suggest that the rate of
interest was not agreed to between the parties at the time
when the Promissory Note, Ex.PW-1/1 was signed in blank
by the Defendants.
41. The cross-examination of PW-1 by the Defendants, itself shows that
the authenticity of the Promissory Note, Ex.PW-1/1, has not been disputed.
Rather, the Defendants admit having executed Promissory Notes, though not
one but five, for an alleged loan of Rs.25,00,000/-.
42. It is also pertinent to refer to the testimony of DW-1, Mr. Paramjeet
Singh, who in his cross-examination deposed:
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 10 of 14

“ It is wrong to suggest that in the Written Statement
nowhere it is written that the Plaintiff is doing the money
lending business. Voluntarily, the Plaintiff has given me
the loan on interest .
…. … …
We had given the interest to the Plaintiff till 2013 on the loan taken
by us . ”
43. DW-1 had further stated in his cross-examination:
“ we were having one paper showing that the deal of
property was with the Plaintiff and Mr. Niranjan Singh for
Rs.1 Crore and loan amount to be adjusted therein , but
presently I do not have the same. ”
44. Similar admissions have been made by DW-2, Mr. Gurmeet Singh, in
his cross-examination. It is thus, evident from the Written Statement and the
testimony of the Defendants themselves, that they admit having taken a loan
from the Plaintiff, having executed the Promissory Notes, and had paid
interest on the loan till 2013. The dispute is, therefore, confined to the
amount of the loan, which the Defendants states to be Rs.25,00,000/- while
the Plaintiff, as Rs.5,00,000/-.
45. The defence of the Defendants that, in fact, they had taken a loan of
Rs.25,00,000/-, goes against them, particularly when no date of the alleged
loan has been mentioned. In fact, the admissions of the Defendants
established that not only was the loan taken, but the same has not been
returned.
46. The second defence, which has been taken by the Defendants, is that
they were in the business of property dealing and that the Plaintiff and his
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 11 of 14

brother, were residing in the same premises and were facing a space
constraint and were inclined to purchase the Property.
47. Smt. Jasbir Kaur, wife of Mr. Niranjan Singh, the brother of the
Plaintiff, purchased the First Floor vide Sale Deed dated 14.03.2014, for
which the sale consideration was Rs.1 Crore, according to the Defendants.
However, in the Sale Deed, in order to avoid payment of exorbitant stamp
duty, the sale consideration was mentioned as Rs.24,00,000/-. It is further
their case that the remaining Rs.51,00,000/- was agreed to be paid in cash,
while Rs.25,00,000/- was adjusted towards the loan taken by the
Defendants, from the Plaintiff.
48. This defence of the Defendants is absolutely flimsy. Firstly , because
the loan had been taken on 14.12.2012 vide a Promissory Note, Ex.PW-1/1.
Even otherwise, this Promissory Note has been duly proved. Secondly , the
property was purchased on 14.03.2014 by Smt. Jasbir Kaur, wife of Mr.
Niranjan Singh, and not by the Plaintiff, and the alleged due amount could
not have been adjusted towards the loan taken from the Plaintiff.
49. Admittedly, there are no documents whatsoever to substantiate that
there was any such adjustment made as claimed by the Defendants; rather, it
has been admitted by them that the sale consideration has been mentioned as
Rs.24,00,000/- in the Sale Deed. The entire defence of the Defendants, has
no legs to stand on. In fact, there are admissions made by the Defendants,
which corroborate the testimony of the Plaintiff, in regard to taking of the
loan.
50. The Defendants have asserted that they have to recover
Rs.51,00,000/-, which was promised to be paid in cash by Smt. Jasbir Kaur
and the Plaintiff at the time of purchase of the property, vide Sale Deed
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 12 of 14

dated 14.03.2014. However, it has been rightly submitted on behalf of the
Appellant that Rs.51,00,000/- is not a small amount and till date, no steps
whatsoever have admittedly been taken by the Defendants for recovery of
this alleged amount of Rs.51,00,000/-, which also belies the defence taken
by the Defendants.
51. The learned Additional District Judge noted that the family members
and the Maternal Uncle, from whom the money had been arranged by the
Plaintiff, were not examined to prove the financial capacity of the Plaintiff.
However, when the loan transaction itself was admitted by the Defendants
and is also evidenced by the Promissory Note, Ex.PW-1, the non-
examination of the family members or Mamaji, cannot be held against the
Plaintiff; rather, they were not even material in view of the admissions made
by the Defendants.
52. The contention of the Defendants that the Plaintiff was a moneylender
and the transaction was barred under the Money Lenders Act, may also be
considered. Admittedly, the parties had a friendly relationship, and the loan
had been taken by the Defendants accordingly, as per their own averments
made in the Written Statement. Merely because @3% per month was agreed
to be paid would not make the transaction one of money lending which is
barred under the Prevention of Money Laundering Act.
53. The learned Additional District Judge fell in error in overlooking the
admissions made by the Defendants in their Written Statement and in their
evidence, to disbelieve the case of the Plaintiff. The Suit of the Plaintiff has
been wrongly, dismissed.
54. Accordingly, in view of the aforesaid discussion, the impugned
Judgment dated 30.05.2024 is hereby, set-aside.
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 13 of 14

55. Accordingly, the Suit of the Plaintiff is decreed in the sum of
Rs.5,00,000/- with pre-Suit and pendente lite and future interest @6% p.a.
till the date of payment.
56. The Appeal is accordingly allowed, and the suit of the Plaintiff is
decreed. The pending Applications, if any, are disposed of.

(NEENA BANSAL KRISHNA)
JUDGE

NOVEMBER 5, 2026/RS
Signature Not Verified
Signed By:ANIL
KUMAR BHATT
Signing Date:05.11.2026
17:46:56
RFA 606/2024 Page 14 of 14