2018 (3) TMI 314 - HC - Indian Laws

Default in repayment of loan - suit for recovery - plaintiff s case is that he had given a loan of ₹ 3 lakhs to the Defendant, in cash, on 1st April, 2008 which not in accordance with income tax act, hence loan amount cannot be recognized - Held that - The categorical admission of the Defendant and the lack of any evidence to support the case of the Defendant, clearly lead to the conclusion that the Trial Court was in error in holding that the Plaintiff has not discharged his onus in proving that the loan was taken. The Receipt dated 4th September, 2008 exists and the Defendant does not deny his signatures on the same. The Plaintiff is thus entitled to a decree in his favour. The Trial Court judgment is accordingly set aside and the suit is decreed for a sum of ₹ 3 lakhs with interest @ 6% per month from the date of filing of the suit till the date of payment.

Summary

Issues:
Delay condonation due to jaundice, ex-parte proceedings, loan recovery suit dismissal, loan agreement authenticity, witness testimonies, defendant's contradictory statements, compliance with Income Tax Act, loan transaction validity, lack of evidence supporting defendant's case, decree for plaintiff.

The judgment begins with the counsel for the Appellant seeking condonation of delay due to the Plaintiff's jaundice, which is granted. Moving to the main appeal, the Defendant was proceeded against ex-parte as per the publication order. The suit was filed for recovery of a loan amount, with the Plaintiff alleging providing a loan to the Defendant with a written agreement and legal notice for repayment. Witness testimonies were presented, with the Defendant denying availing the loan and claiming coercion in signing the receipt. Notably, the Defendant's contradictory statements and lack of corroborating evidence weaken his case.

The Trial Court dismissed the suit citing Income Tax Act provisions, stating that loans above a certain limit should be through proper banking channels. However, the Court clarified that the violation of these provisions falls under the Income Tax Authorities' purview. The judgment highlights the Defendant's admission and lack of evidence supporting his case, leading to the conclusion that the Trial Court erred in not recognizing the loan transaction. The existence of the receipt and the Defendant's signature on it support the Plaintiff's claim, resulting in a decree in the Plaintiff's favor.

In conclusion, the Trial Court's judgment is set aside, and the suit is decreed for the Plaintiff for the loan amount with interest. The judgment allows the appeal with no order as to costs, emphasizing the importance of evidence and compliance with legal provisions in loan recovery suits.