Delhi HC Orders Repayment Of ₹10 Lakh Friendly Loan After Borrower Failed To Prove It Was Adjusted Against 50 Bags Of Cloves

In brief

The question

Whether the appellant proved that ₹10,00,000 was advanced to the respondent and remained repayable, despite the Trial Court’s decision to disregard the bank statement.

The court held

The High Court held that the appellant had proved that ₹10,00,000 was advanced and remained unpaid, while the respondent had failed to establish the pleaded adjustment.

It also directed

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 until realization.

01Facts

The appellant sued to recover ₹10,00,000, alleging that he had advanced the amount to the respondent as a friendly loan and that it remained unpaid.

¶ 3–12, 23–29

The respondent denied the loan characterization and pleaded that the amount related to a business transaction and had been adjusted under a 2013 settlement.

¶ 3–12, 23–29

The respondent stopped appearing after filing her written statement, did not cross-examine the appellant, and led no evidence.

¶ 3–12, 23–29

The Trial Court dismissed the suit, finding the loan insufficiently proved and declining to rely on the bank statement and Form 16A.

¶ 3–12, 23–29

The appellant appealed under Section 96 CPC.

¶ 1–2

02Issues

i.Whether the appellant proved that ₹10,00,000 was advanced to the respondent and remained repayable, despite the Trial Court’s decision to disregard the bank statement.

¶ 25–31, 38

ii.Whether the respondent’s pleaded defence that the amount was adjusted against another transaction could defeat the claim in the absence of evidence supporting that defence.

¶ 36–38

iii.Whether the Trial Court’s dismissal of the recovery suit should be set aside.

¶ 39–40

03Law Applied

The appeal was brought under Section 96 of the Code of Civil Procedure, 1908, which provides for a first appeal from an original decree.

¶ 1

The Court’s reasoning applied the evidentiary principle that a party asserting an affirmative defence—here, adjustment of the amount under a settlement—must support that defence with evidence; an unchallenged and unrebutted account of the transaction may be relied upon when the opposing party neither cross-examines the witness nor leads evidence.

¶ 24, 28, 37–38

Although the Trial Court had considered Section 65B of the Indian Evidence Act, 1872, in assessing the computer-generated bank statement, the High Court held that proof of that statement was unnecessary in the circumstances.

¶ 12, 29–31

Provisions in the judgment · 2 · Linked ones open on LawLens

Code of Civil Procedure, 1908 Section 96 Section 151

04Reasoning

The appellant’s testimony that he advanced the loan remained unrebutted, and the respondent did not cross-examine him.

¶ 24–25, 28

The Court considered that the written statement did not deny receipt of ₹10,00,000, but instead pleaded that the amount had been adjusted against another transaction.

¶ 31

It therefore concluded that the bank statement’s formal proof was not decisive to establishing receipt of the sum.

¶ 29–31

The Court also considered Form 16A, which identified Madhu Goel as the deductor, alongside the appellant’s unchallenged evidence.

¶ 27, 32–33

Since the respondent neither testified nor produced evidence of the alleged adjustment, the Court held that her defence could not displace the appellant’s evidence.

¶ 36–38

05Holding

The High Court held that the appellant had proved that ₹10,00,000 was advanced and remained unpaid, while the respondent had failed to establish the pleaded adjustment.

¶ 38

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 until realization.

¶ 39–41

LawLens.Delhi High Court

Original Court PDF