Delhi HC Orders Catering Firm, Co-Defendant To Repay ₹10 Lakh Loan After Settlement Defence Goes Unproved

The appellant, proprietor of M/s Murari Lal Prem Prakash, alleged that he advanced a friendly loan of ₹10,00,000 to the respondents on 27 January 2012 through a bank transfer.

He sued for repayment after the amount remained unpaid.

The respondents’ written statement denied the loan but asserted that the amount related to a business transaction and had been adjusted under a 2013 settlement against the value of cloves.

They later stopped appearing and led no evidence.

The Trial Court dismissed the suit, finding that the loan had not been sufficiently proved, including because the bank statement was not properly proved and the TDS certificate was in the name of a non-party entity.

The appellant appealed under Section 96 CPC.

In a civil recovery claim, the plaintiff must establish the claim on the evidence; however, where the defendant’s pleading does not deny receipt of the amount and instead asserts that it was adjusted or discharged, the defendant must prove that affirmative defence.

A document’s formal proof may be unnecessary where the material fact it is offered to establish—here, receipt of the money—is not denied.

The Court considered the respondents’ arguments concerning Section 65B of the Indian Evidence Act, 1872 and the Bankers’ Books Evidence Act, but did not need to rely on the bank statement once receipt of the amount was undisputed on the pleadings.

The appeal was considered under Section 96 CPC.

The appellant’s affidavit stated that he had advanced the loan, and the respondents did not cross-examine him; his evidence therefore remained unrebutted.

Although the bank statement was not proved in the manner required, the Court held that this did not defeat the claim because the respondents had not denied receiving ₹10,00,000 and had instead pleaded that it was adjusted against another transaction.

The TDS certificate identified Absolute Catering Services Private Limited as the deductor, and the appellant’s evidence on this point was also unchallenged.

The respondents produced no evidence to prove either the alleged business adjustment or the settlement; the Court therefore rejected that defence.

It set aside the Trial Court’s judgment and decree and decreed the suit for ₹10,00,000 with interest at 6% per annum from the date of filing of the suit until realization.