2022 (12) TMI 1196 - HC - Money Laundering

Seeking return of amount given to plaintiff - Defendant contested the plaintiff's claim by filing his written statement submitting inter alia that he was never in need of money and has never taken any amount from plaintiff and had not executed any promissory note in his favour - claim barred by virtue of Section 269SS of the Income Tax Act and is also barred by the provisions of the Money Lending Act or not - HELD THAT - It is a solitary instance of advancement of loan by plaintiff to the defendant for which no license under the Money Lending Act was required by plaintiff. There is no evidence adduced by defendant to show that plaintiff is in the business of money lending and had advanced similar loans to different persons hence his contention that plaintiff was required to be registered under the Money Lending Act is without any merit. Likewise it was not mandatory for plaintiff to have advanced the sum to the defendant by way of cheque alone and it cannot be said that he could not have done the same by way of cash. The provisions of Section 269SS of the Income Tax Act are not applicable to the present facts. In any case, the defendant upon receiving loan amount from plaintiff cannot take shelter of such a hyper technicality. A perusal of proceedings of the trial Court shows that the defendant ever since the very inception had been totally negligent in prosecution of his case and had been taking repeated adjournments firstly for filing of the written statement and thereafter for cross-examining plaintiff's witnesses. His right to cross-examine plaintiff's witnesses was eventually closed by the trial Court on 21.06.2018 observing that last opportunity on imposition of costs had already been granted to him earlier hence no further opportunity can be granted to him. It cannot be said that the trial Court has committed any illegality in closing the right of defendant to cross-examine plaintiff's witnesses. There are no illegality committed by the Courts below in decreeing the claim of plaintiff. The findings arrived at by them are based upon due appreciation of the oral as well as the documentary evidence available on record and no error or perversity in the same is found. The findings being findings of facts are not liable to be interfered with at the second appellate stage - appeal dismissed.

Summary

Issues:
- Appeal under Section 100 of the C.P.C. against judgment and decree for refund of Rs.80,000/- with interest.
- Plaintiff's claim of advancing Rs.80,000/- to defendant on interest.
- Defendant's denial of receiving the amount and executing a promissory note.
- Trial Court's findings on the execution of the promissory note and the claim not being barred.
- Defendant's challenge to the judgment and decree on various legal grounds.
- Examination of evidence and witnesses to establish the advancement of the amount.
- Defendant's failure to prove the promissory note as forged.
- Service of notice and compliance with Money Lending Act provisions.
- Defendant's objection on the promissory note being deficiently stamped.
- Defendant's negligence in prosecuting the case and right to cross-examine witnesses.

Analysis:
1. The appeal was filed against a judgment decreeing the plaintiff's claim for a refund of Rs.80,000/- with interest, based on the advancement of the amount by the plaintiff to the defendant on interest, supported by a promissory note and witnesses' testimonies.
2. The plaintiff asserted that the defendant received the amount but failed to repay it despite a promissory note and notice, while the defendant denied receiving the amount or executing the promissory note, raising legal objections under the Income Tax Act and Money Lending Act.
3. The Trial Court found in favor of the plaintiff, establishing the advancement of the amount, validity of the promissory note, and absence of legal bars, leading to the modification of the judgment on the rate of interest in the appellate court.
4. The defendant challenged the judgment, alleging lack of evidence for the advancement of the amount and the execution of the promissory note, along with procedural irregularities and legal defenses under the Income Tax Act and Money Lending Act.
5. The High Court examined the evidence, confirming the plaintiff's claim through witness testimonies and the promissory note's execution, rejecting the defendant's claims of forgery and lack of execution due to his failure to provide contrary evidence or expert opinions.
6. The Court also addressed issues related to the service of notice, compliance with the Money Lending Act, stamping of the promissory note, and the defendant's negligence in prosecuting the case, concluding that no substantial legal questions arose for further review, dismissing the appeal.