Concurrent Findings on Loan Repayment Based on Bank Records Displace Unproven Claims of Family Settlement Offsets

The Plaintiff (Respondent) filed a suit for recovery of a friendly loan of ₹2,00,000/- advanced to the Defendant (Appellant) via two cheques in May 2009.

The cheques were encashed, but the amount was not repaid despite a legal notice.

The Defendant contended the amount was not a loan but a partial reimbursement for litigation expenses (approx. ₹5,02,000/-) incurred by their late father regarding an ancestral property in Bhatinda.

The Trial Court decreed the suit in favor of the Plaintiff, a decision upheld by the First Appellate Court.

The Defendant then filed this Regular Second Appeal.

1. Whether the First Appellate Court erred in law by not adjudicating upon the application filed under Order 41 Rule 27 of the CPC for additional evidence?

2. Whether the Trial Court erred in closing the evidence of the Appellant’s remaining witnesses?

3. Whether the lower courts erred in law by shifting the onus of proof regarding the nature of the transaction from the Plaintiff to the Defendant?

4. Whether the present appeal raises any substantial question of law under Section 100 of the CPC?

The court applied Section 100 of the Code of Civil Procedure, 1908, which restricts a second appeal to cases involving a "substantial question of law".

Order 41 Rule 27 of the CPC regarding the admission of additional evidence in the appellate court, which is generally disallowed if intended to fill lacunae in the original evidence.

Indian Evidence Act principles regarding the burden of proof, noting that once a transaction (receipt of money) is admitted, the burden shifts to the party asserting a specific character of that transaction (e.g., reimbursement vs. loan) to prove the same.

The Court observed that the receipt of ₹2,00,000/- was admitted by the Defendant and corroborated by the Plaintiff’s ITR Verification form (Ex. PW-1/D1), which listed the sum as a loan asset.

The Defendant’s claim that this was litigation reimbursement was found to be factually inconsistent; the Sale Deed (Ex. DW1/1) of the Bhatinda property showed the father was not a party (having died earlier) and that buyers bore the registration expenses.

The Court noted that the Defendant closed his own evidence after two witnesses and could not later claim "inadvertence" to seek additional evidence under Order 41 Rule 27, as this was a blatant attempt to fill gaps in a failed defense.

The testimony of PW2 (the family lawyer) further demolished the defense by clarifying that the actual litigation expenses were minimal (₹15,000-₹20,000) and were paid by the Plaintiff.

The application for additional evidence was rejected as an attempt to fill lacunae.

The appeal was dismissed, and the decree for ₹2,20,000/- with 8% interest was upheld.