2023 (3) TMI 376 - HC - Indian Laws

Suit for recovery of money - Loan or gift. Whether the plaintiff had given a loan to the defendant in each of the suits and if so, on what terms, if any, as to repayment and interest? - HELD THAT - The defendant had set up a sole defence that the amounts were being remitted by the plaintiff regularly to the accounts of various family members as gift, but the entire amount was being credited back to the Chirag International Pvt. Ltd., a Company held by the plaintiff in Sri Lanka. It was his defence that the money, though being shown as a gift to defendant and other family members, was being remitted back immediately to the plaintiff in a circuitous manner. It was first transferred to Vipin Enterprises and the Dinesh International Pvt. Ltd. which were the family Companies/Partnership Firms and thereafter, transferred to Chirag Pvt. Ltd. located in Sri Lanka and owned by the plaintiff - While this defence has been taken and the affidavit of evidence was tendered by the defendant, but he failed to step into the witness box for cross-examination and, therefore, failed to tender any evidence in proof of his defence. No admissible evidence has been led by the defendant to prove that the money received from the plaintiff was returned. It is thus held that it is proved by the evidence on record that the plaintiff had admittedly remitted a sum of USD 4,70,000/- (in CS(OS) 1240/2008) to the defendant Mr. Daya Kishan Goel and a sum of 2,30,000 to the defendant (in CS(OS) 1239/2008) through his father which the defendants have failed to return. Whether the defendant in each of the suit had received the monies as gift? - HELD THAT - The defendant himself has failed i.e., admissible evidence to substantiate his defence that the amount had been received as a gift. However, as already discussed above, he himself has admitted that the amount received by him was intended to be returned to the plaintiff in a circuitous manner through the partnership firms/Companies of the family members and the plaintiff and the defendant in India, to Chirag Pvt. Ltd. - defendant has failed to prove his defence of the money having been received as gift which was not intended to be returned. The issue is decided against the defendant. Whether the defendant in each suit is not liable for refund of the monies, also for the reason of transfer of monies at the instance of the plaintiff, as averred in the written statement? - HELD THAT - The defendant was liable to refund the monies to the plaintiff which he failed to do. If the plaintiff is found entitled to recovery of money but no agreed term of rate of interest is proved, whether the plaintiff is entitled to any interest, and if so, at what rate and for what period? - HELD THAT - The plaintiff has further asserted that the defendant had agreed to pay an interest @18 per annum from the date of transmitting the loan amount to his account, but there is no cogent evidence produced in this regard. The Legal Notice Ex.PW1/5 demanding the money and the interest was served upon the defendant Daya Kishan Goel only on 27th March, 2008. The plaintiff has not been able to prove that there was any agreement to pay interest @18 per annum - the plaintiff is entitled to interest @ 6% from the date of institution of the Suits till the realization of the amount. The two Suit of the plaintiff are accordingly decreed.

Issues Involved:
1. Whether the plaintiff had given a loan to the defendant in each of the suits and if so, on what terms, if any, as to repayment and interest?
2. Whether the defendant in each of the suits had received the monies as a gift?
3. Whether the defendant in each suit is not liable for refund of the monies, also for the reason of transfer of monies at the instance of the plaintiff, as averred in the written statement?
4. If under issue No. 1 the plaintiff is found entitled to recovery of money but no agreed term of rate of interest is proved, whether the plaintiff is entitled to any interest, and if so, at what rate and for what period?
5. Relief.

Detailed Analysis:

Issue No. 1:
The plaintiff claimed to have given a loan of USD 4,70,000 (INR 2,04,92,000) to the defendant and USD 2,30,000 (INR 1,00,28,000) to the defendant's son, both amounts remitted from his personal account in Colombo, Sri Lanka to the defendants' accounts in New Delhi. The plaintiff asserted that the loan was to be repaid within six months with 18% interest per annum. The defendant admitted receiving the amounts but claimed they were gifts and that the money was remitted back to the plaintiff's company in Sri Lanka. However, the defendant failed to provide admissible evidence to substantiate this claim. Thus, the court found that the plaintiff had indeed given a loan to the defendants, who failed to return it.

Issue No. 2:
The defendant contended that the monies were received as gifts, not loans. However, no evidence was provided to support this claim. The defendant's own admission that the money was intended to be returned to the plaintiff in a circuitous manner undermined this defense. Therefore, the court decided that the defendant failed to prove that the money was received as a gift.

Issue No. 3:
Given the findings on Issues 1 and 2, the court held that the defendant was liable to refund the monies to the plaintiff, as the defense of the money being a gift and the subsequent transfer back to the plaintiff's company was not substantiated with evidence.

Issue No. 4:
The plaintiff claimed an agreed interest rate of 18% per annum but failed to provide cogent evidence of such an agreement. The court, considering the prevailing market situation, assessed the interest rate at 6% per annum from the date of the institution of the suit until the recovery of the amount.

Relief:
The court decreed that the plaintiff is entitled to recover Rs. 1,00,28,000 in CS(OS) 1239/2008 and Rs. 2,04,92,000 in CS(OS) 1240/2008, along with pendente lite and future interest at 6% per annum from the date of the institution of the suits until the date of payment. The parties were ordered to bear their own costs.

Conclusion:
The two suits filed by the plaintiff were decreed in his favor, with the court granting the recovery of the loan amounts along with interest at 6% per annum from the date of filing the suits until the realization of the amounts. The court also prepared the decree sheet accordingly.

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