Veni Mehta vs Uma Shankar Sitani
2014 Latest Caselaw 6639 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                              RESERVED ON : 19th NOVEMBER, 2014
                              DECIDED ON : 10th DECEMBER, 2014

+                           CS (OS) 2388/2010

       VENI MEHTA                                    ..... Plaintiff
                            Through :     Ms.Deeksha L.Kakar, Advocate.


                            VERSUS

       UMA SHANKAR SITANI                            ..... Defendant
                            Through :     Mr.Rajeev Awasthi, Advocate.


       CORAM:
       HON'BLE MR. JUSTICE S.P.GARG

S.P.GARG, J.

1. The plaintiff has instituted the present suit for recovery of

`21,90,000/- along with pendente-lite and future interest. Case of the

plaintiff as set up in the plaint is as under :

2. The defendant was introduced to the plaintiff by a common

family friend. Thereafter, he approached her for a loan of ` 25 lacs urging

compelling family exigencies assuring to return it within six months along

with interest @ 24% per annum. She advanced the loan of ` 25 lacs by

issuing cheque No.441417 dated 05.12.2005 drawn on ING Vysya Bank,

in the presence of her husband - Mr.Ved Prakash Mehta. The said cheque

was duly encashed by the defendant. In the first week of May, 2006, she

requested the defendant to pay back the entire loan amount with interest.

To show his bonafide, the defendant made part payment of ` 5 lacs vide

cheque No. 022026 dated 19.05.2006 in her favour. Acceding to the

request of the defendant to give him time to pay back the remaining

amount, six months period was given. In December, 2007, again, the

defendant was requested to pay back the balance amount along with

interest. Again, the defendant made a payment of ` 5 lacs vide cheque

No.180529 dated 13.12.2007 and requested for more time to make the

balance payment. The defendant, thereafter, failed to make the payment

despite various requests. Legal notice dated 08.07.2010 was served upon

the defendant. Hence the present suit.

3. The suit is contested by the defendant. In the written

statement he has pleaded that the suit is not maintainable in the present

form and the plaintiff has no cause of action. The plaintiff has no locus

standi to file the present suit as no contract was entered into with her.

There were no friendly relations between the plaintiff and the defendant.

Case of the defendant is that the plaintiff‟s husband approached him after

reading the hand written advertisement at the gate of his property

available for rent. The plaintiff‟s husband contacted him on mobile and

showed keenness to take the portion of the house on rent for a short term

urgently. A meeting was fixed and the plaintiff‟s husband agreed to take

portion of the property i.e. 115, Sainik Farm, New Delhi, on monthly rent

@ ` 5 lacs for five months on the pretext that their house was under

construction and was likely to be completed within 3 - 4 months. The

plaintiff‟s husband issued a cheque No.441417 dated 05.12.2005 in the

sum of ` 25 lacs in his favour which was duly credited in the account.

4. Further case of the defendant is that the plaintiff or her

husband did not turn up to occupy the rented accommodation. In the

month of April, 2006, he cancelled the oral understanding and declined to

give possession of the portion of the house. The plaintiff and her husband,

thereafter, pleaded for refund of the amount. He being a God fearing

person agreed to refund ` 5 lacs out of ` 25 lacs and issued a cheque

bearing No.022026 dated 19.05.2006 in favour of the plaintiff. Again,

after some time, the plaintiff and her husband started demanding more

money from him which he declined to give. When the plaintiff and her

husband put pressure on him through relatives and friends, he agreed to

refund another amount of ` 5 lacs on the assurance that no further demand

for return of the money would be made. Accordingly, a cheque for a sum

of ` 5 lacs bearing No.180529 dated 13.12.2007 was issued in favour of

the plaintiff, which was duly credited.

5. In the replication, the plaintiff reiterated her stand in the

plaint and refuted the assertions of the defendant.

6. On the basis of the pleadings of the parties and documents on

record, following issues were framed by an order dated 03.09.2013 :

"1. Whether the sum of Rs.25,00,000/- advanced by the plaintiff to the defendant vide cheque no.441417 dated 05.12.2005 drawn at ING Vysya Bank was by way of a loan, returnable within 6 months alongwith interest at the rate of 24% per annum? OPP

2. Whether the payment of Rs.5,00,000/- made by the defendant to the plaintiff vide cheque no.022026 dated 19.05.2006 drawn at Lord Krishna Bank was towards part repayment of the loan of Rs.25,00,000/- advanced to him? OPD

3. Whether the payment of Rs.5,00,000/- made by the defendant to the plaintiff vide cheque no.180529 dated 13.12.2007 drawn at Standard Chartered Bank was towards further part repayment of the loan of Rs.25,00,000/- advanced to him? OPP

4. Whether the defendant is entitled to retain any amount from out of the amount of Rs.25 lacs advanced by the plaintiff toward rent for the premises bearing No.115, Sainik Farms, New Delhi? OPD

5. Whether the plaintiff is entitled to a decree in the sum of Rs.21,90,000/- alongwith pendente lite and future interest calculated at the rate of 24%

per annum pending payment and realisation thereof? OPP

6. Reliefs. "

7. The plaintiff examined herself as PW-1 besides examining

her husband - Mr.Ved Prakash Mehta, as PW-2. The defendant examined

himself as DW-1.

8. I have heard the learned counsel for the parties and have

examined the file. Findings on the issues are as under :

9. All these issues are taken together as they are interconnected.

10. Learned counsel for the plaintiff urged that the plaintiff had

advanced a loan of ` 25 lacs to the defendant along with interest @ 24%

per annum, which the defendant was to return after six months. The

defendant, however, did not pay back the entire amount. After great

persuasion, on two different occasions, the defendant returned only ` 10

lacs by issuing two cheques in the sum of ` 5 lacs each. Despite issuance

of the legal notice, the defendant failed to pay back the balance amount.

She further contended that, at no stage, any portion of the premises in

occupation of the defendant was agreed to be taken on rent as alleged. The

plaintiff and her husband were in occupation of premises No. 183/D1,

Lane W-13B, Sainik Farms, New Delhi and after the purchase of property

No. C-2/59, SDA, New Delhi, they shifted to that accommodation.

11. Learned counsel for the defendant has vehemently urged that

the defendant was justified to forfeit the amount of ` 25 lacs given as

advance rent for the occupation of the portion of his premises. Advance

rent of ` 25 lacs was given by the plaintiff‟s husband to take the premises

on rent for five months when construction in his premises was in progress.

When the plaintiff and her husband did not occupy the rented

accommodation for four months, he got suspicious and did not allow them

to occupy the premises for the remaining one month. However, as a

goodwill gesture, he at two different occasions returned ` 10 lacs in all to

the plaintiff‟s husband by issuing two cheques in the name of the plaintiff

at his instance to avoid some income tax problems. There was no

agreement to pay interest whatsoever on the amount of ` 25 lacs. The

plaintiff has no cause of action. The evidence led by the plaintiff is

beyond pleadings and cannot be taken into consideration. He further urged

that the plaintiff was not expected to advance a loan of ` 25 lacs to a

stranger without any written agreement. The cheque in question was

issued by the plaintiff‟s husband. There is no privity of contract between

the plaintiff and the defendant.

12. Admitted position is that by a cheque No.441417 dated

05.12.2005 an amount of ` 25 lacs was given to the defendant. The said

cheque was duly encashed by the defendant. It is also not in controversy

that subsequently, the defendant issued two cheques of ` 5 lacs each, one

bearing No. 022026 dated 19.05.2006 and another No.180529 dated

13.12.2007 in favour of the plaintiff. It is also admitted position that no

agreement in writing was executed between the parties. Apparently, it was

an oral agreement.

13. The moot question is whether the amount ` 25 lacs was

given as a loan to the defendant or it was an advance payment for rent to

occupy the portion of the premises of the defendant for five months. On

perusal of the evidence led by both the parties, it stands established that

`25 lacs were given to the defendant as a loan in an oral agreement. PW-

1, in her evidence by way of affidavit (Ex.PW-1/A), proved the averments

in the plaint. In the cross-examination, she categorically asserted that the

amount of ` 25 lacs was given to the defendant from her own bank

account. She admitted that the cheque (Ex.PW-1/D1) was issued by her

husband. She, however, elaborated that she had authorized her husband to

put signatures on her behalf. She volunteered to add that she had

authorized her husband to sign on her behalf in all her financial matters.

She specifically claimed that the account from which the amount was

withdrawn belonged to her. The relevant cheque had been issued from her

individual bank account. The said bank account was operated by her

husband who had the signing authority on her behalf. PW-2 (Ved Prakash

Mehta) also supported her version and stated that the amount of ` 25 lacs

was paid to the defendant out of her bank account which used to be

operated by him. The defendant did not examine any official from the

bank to establish that the bank account in question did not belong to the

plaintiff or that amount of ` 25 lacs was not given from the said account

of the plaintiff.

14. The very fact that the two cheques of ` 5 lacs each

subsequently were issued by the defendant in the name of the plaintiff

shows that there was privity of contract between the plaintiff and the

defendant. The defendant had no occasion to issue the cheques for ` 5 lacs

each in favour of the plaintiff on the mere asking of the plaintiff‟s

husband. These cheques were duly encashed by the plaintiff in her

account. Endorsement on the back of the cheque Ex.PW-1/2 at point „A‟

also confirms the version given by the plaintiff.

15. Both PW-1 and PW-2 in their evidence before the Court have

categorically deposed that amount of ` 25 lacs was given to the defendant

who was introduced by a common family friend as a loan to be returned

after about six months. The plaintiff was fair enough to disclose the name

of the common family friend in the cross-examination i.e. Mr.Bhushan

Arora. The defendant did not summon the said individual to show that he

had no role in arranging the loan. Since the defendant was introduced by a

common family friend - Mr.Bhushan Arora, there was nothing unusual

for the plaintiff to give the amount of ` 25 lacs as loan to the defendant

without written document.

16. The defendant has miserably failed to establish that the

amount of ` 25 lacs was given as advance rent for the portion of his

premises which were to be occupied by the plaintiff‟s husband for five

months. Again, there is no written document / lease deed to substantiate

the defendant‟s version. The defendant did not elaborate as to which

specific portion in the premises was agreed to be taken on rent by the

plaintiff‟s husband and on what date. It is also not clear as to when the

plaintiff and her husband were to occupy the said accommodation and

from which date the rent was to start. It is also uncertain if it was inclusive

of electricity or water charges or other services. The defendant did not

examine any independent witness to show if any portion of the said

premises was vacant to let out to the tenant at the relevant period. No

evidence has emerged if any portion of the defendant‟s house used to be

on rent before or after the said period, and if so, at what rate. The

defendant did not file on record any proof of rental income. It is not

expected that the plaintiff will pay entire advance rent of ` 25 lacs as

lump sum and would not occupy it even for a day. Had it been so, the

plaintiff or her husband must have requested the defendant to refund the

said amount of ` 25 lacs at the earliest. Payment of ` 5 lacs was made for

the first time by the defendant by a cheque dated 19.05.2006. Again,

second payment of ` 5 lacs was made in December, 2007. There was no

oral agreement to forfeit unilaterally the amount of ` 25 lacs. In the

endorsement on the back of the cheque (Ex.PW-1/2 at point „A‟), there is

no mention if the amount was being returned after forfeiture of advance

rent of ` 25 lacs. The defence taken by the defendant deserves outright

rejection and does not inspire confidence. The plaintiff and her husband

categorically stated that they were in occupation of the premises No.

183/D1, Lane W-13B, Sainik Farms, New Delhi till August, 2007 and

shifted to their new accommodation thereafter. There was no occasion for

the plaintiff and her husband to get rented accommodation.

17. Regarding interest, the plaintiff did not adduce any cogent

evidence to show if the defendant had agreed to pay it @ 24% per annum.

There are only oral testimonies of PW-1 and PW-2 in this regard which

has been controverted by the defendant in his evidence. The cheques in

question do not reflect if there was any agreement to pay interest @ 24%

per annum. Since the amount of ` 25 lacs was advanced to the defendant

through a common family friend, it was imperative for the plaintiff to

examine the common family friend in whose presence the rate of interest

@ 24 % was agreed to be paid for the loan. In the absence of any credible

evidence, it cannot be inferred that the defendant was liable to pay interest

@ 24% per annum.

18. In the light of above discussion, it stands established that the

loan of ` 25 lacs was advanced to the defendant by the plaintiff. The

defendant returned ` 10 lacs and without any sufficient reasons failed to

return the balance amount of ` 15 lacs, which he is liable to pay to the

plaintiff. Regarding interest, in the absence of any worthwhile evidence,

the defendant cannot be held liable to pay interest at the said amount.

19. The issues stand disposed of in the above terms.

Issue No.5

20. In view of the findings on issues No.1 to 4, the plaintiff is

entitled only to a decree of ` 15 lacs of the principal amount along with

pendente-lite and future interest thereon.

Relief

21. The suit of the plaintiff is decreed in the sum of ` 15 lacs

with proportionate costs. The plaintiff shall be entitled to interest @ 12%

per annum from the date of filing of the suit till the realization of the

outstanding amount. Counsel‟s fee is assessed to ` 20,000/-.

22. Decree-sheet be prepared accordingly.

23. The suit and pending IAs (if any) stand disposed of.

(S.P.GARG) JUDGE DECEMBER 10, 2014 / tr