TMI Blog2016 (8) TMI 1549X X X X Extracts X X X X X X X X Extracts X X X X ..... laintiff. The defences raised by the defendants are nothing but after thoughts. Once having admitted before this Court, they cannot take a contrary view - Admission is the best form of evidence and an admission does not require any proof. The admission made by the defendant Nos. 2 and 3 as recorded in the orders passed by this Court that they owed money to the plaintiff and they are trying to settle the claim with the plaintiff, is an admission of fact which requires no proof. The defendant Nos. 2 and 3 cannot take the defences which they have raised in their affidavit in reply. The defendant Nos. 2 and 3 are granted a chance to defend the suit but subject to a condition that defendant Nos. 2 and 3 jointly or severally deposit a sum of ₹ 1 crore with the Prothonotary and Senior Master, High Court, Bombay, within six weeks from today and the Prothonotary and Senior Master will invest the same in fixed deposit with a nationalised bank initially for a period of one year and renew it year to year until the hearing and final disposal of this suit - If this amount is deposited, leave to defend to defendant Nos. 2 and 3 is granted. If this amount is deposited, then the defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having received a sum of ₹ 1 crore from the plaintiff as a friendly loan for personal use before execution of the promissory note and promised to refund the said amount on or before 11th January, 2013. Alongwith the promissory note, the defendant No. 2 has also issued two post dated cheques both dated 11th January, 2013 for ₹ 50 lacs each. Both the cheques when presented for payment were dishonored with the endorsement payments stopped by the drawer . In the meanwhile, the defendant No. 2 had issued three other cheques from a different bank account to the plaintiff for ₹ 30 lacs, ₹ 30 lacs and ₹ 40 lacs. These cheques when they were deposited were also dishonored with the endorsement payments stopped by the drawer . After these cheques were issued, the defendant No. 2 issued three other cheques, two of which were for ₹ 30 lacs and one was for ₹ 40 lacs. When these cheques were deposited, the cheques were dishonored with the endorsement funds insufficient . Thereafter, the plaintiff through his advocate caused a notice dated 22nd April, 2013 to be issued to defendant No. 2, which notice was returned with the endorsement left . Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Penal Code. The defendant Nos. 2 and 3 had separately applied for anticipatory bail in this Court and the anticipatory bail application of both the defendant Nos. 2 and 3 was rejected. The defendant Nos. 2 and 3 were arrested and are now enlarged in bail. The orders passed while disposing the anticipatory bail application are relevant and are dealt with at a later stage in this order. 6. The defences taken by the defendant No. 2 are as under: (a) the promissory note and cheques were given only as security documents for amounts given by the plaintiff to defendant No. 3 and others for liasoning work for the plaintiff for various persons in Delhi for the plaintiffs own purpose of his posting. I must add that except this bald averment, there is no explanation as to whom these amounts were paid and what was the meaning of plaintiffs own purpose of his posting . (b) the amount of ₹ 1 crore was given in cash and therefore, it is unaccounted and undeclared amount, plaintiff required some sort of security which was provided by defendant No. 2 by executing the promissory notes and cheques at the request of defendant No. 3; (c) the source of ₹ 1 crore for the pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that he has no instructions. 9. I should also add that Mr. Halai, Counsel for the defendant No. 2 stated that he was not pressing the defence of the plaintiff being a money lender and he did not have license under the Money Lenders Act. 10. The Counsel for the plaintiff relied on the following judgments: (1) (Mr. Mohammed Iqbal v. Mr. Mohammed Zahoor), I.L.R. 2007 KAR 3614. (2) (C.K. Antony v. Mathai M. Paikeday), (3) (Krishna P. Morajkar v. Joe Domnic Ferrao Anr), 2014(2) Bom.C.R. (Cri.) 738 (P.B.). (4) (Rangappa v. Sri Mohan), 2010 Bom.C.R. 652 (S.C.) : (2010)11 S.C.C. 441. (5) (Lekh Raj Sharma v. Yash Pal Gupta), and (6) (Deelip Apte v. Nilesh P. Salgaonkar), 2006(6) Bom.C.R. 653 (P.B.) . 11. The Counsel for the defendant No. 2 relied on the following judgments: (1) (Surajmull Nargoremull v. Triton Insurance Company Limited), (2) (Sanjay Mishra v. Kanishka Kapoor @ Nikki anr.), 2009(5) Bom.C.R. 464. 12. The only thing common in the judgments referred above is that if the transaction between the parties was illegal, no Court can come to the aid of the party in an illegal transaction. It is settled law that in such cases the loss mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary tax the plaintiff. I find support from the judgment of Delhi High Court in the matter of Lekh Raj Sharma v. Yash Pal Gupta in this regard. Paragraph 21 of the said judgment reads as under: 21. The finding that, as the amount of loan disbursed to the respondent was not shown in the balance sheet and ITR, the appellant could not be said to have proved its case beyond reasonable doubt, is also erroneous. In this regard, reference may be placed on the decisions of the Bombay High Court in: i) Deelip Apte v. Nilesh P. Salgaonkar Anr., 2006(6) Bom.C.R. 653, wherein the Court observed: The learned J.M.F.C. has also held against the complainant the fact that the complainant had not shown the amount advanced by him in his income tax returns. I do not think that every person who gives friendly loans does in all cases show such loans in their income tax returns more so if they are payable on demand after short time. The learned acquitting J.M.F.C. entirely lost sight of the several presumptions which the law has enacted in favour of the complainant. ii) Mr. Krishna P. Morajkar v. Mr. Joe Ferrao, 2013 CRIJ (NOC) 572 Bombay (Decided on 19.7.2013), wherein the Court ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has to be noted that even after noticing the object of enacting section 138 of Negotiable Instruments Act, namely to enhance the acceptability of cheques, courts have been accepting virtually any argument advanced to nullify the liability created, like ignoring or misreading presumption under section 139 of the Act, misreading provisions of sections 269-SS and 271-D of the Income Tax Act, unmindful of the consequence that unscrupulous individuals go on signing cheques irresponsibly. When a person signs a cheque and delivers it, even if it is a blank cheque or a post dated cheque, presumptions under sections 118(b) and 139 of the Negotiable Instruments Act would have to be raised and would have to be rebutted by the aced, albeit by raising a probability. Unless the courts start discouraging flimsy defences, acceptability of cheques would not increase. The problem of unaccounted money would be reduced if transactions take place by cheque. Even a cash advance when repaid by cheque gests accounted. Making it unrecoverable, would only push the persons to extra judicial methods of recovery. The courts would thus not only be defeating the object of the provision but also indirectly be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 15th July, 2015 while disposing the anticipatory bail application of defendant No. 3, in paragraph 7 the Court has observed that only the defendant No. 3 knew that the plaintiff had sold his bungalow and had sufficient funds and right from very inception there was an element of cheating on the part of defendant No. 2 and defendant No. 3. 23. Considering these facts and circumstances of the case, I cannot come to a conclusion that the transaction between the plaintiff and the defendants was an illegal transaction. If the plaintiff has not disclosed these amounts in his Income Tax Returns, if the cheques given by defendant No. 2 had been honored, the Income Tax Authorities would have asked the plaintiff to explain the source of that money and if necessary would have taxed the plaintiff. 24. The Apex Court in (M/s. Mechelec Engineers Manufactures v. M/s. Basic Equipment Corporation), (1976)4 S.C.C. 687, in paragraph 8 has stated as under: 8. In (Smt. Kiranmoyee Dassi v. Dr. J. Chatterjee) (1945)49 Cal WN 246 at p. 253., Das J., after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by Order 17 CPC in the form o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endants are nothing but after thoughts. Once having admitted before this Court, they cannot take a contrary view. 26. Admission is the best form of evidence and an admission does not require any proof. The admission made by the defendant Nos. 2 and 3 as recorded in the orders passed by this Court that they owed money to the plaintiff and they are trying to settle the claim with the plaintiff, is an admission of fact which requires no proof. The defendant Nos. 2 and 3 cannot take the defences which they have raised in their affidavit in reply. 27. At the same time, I would grant the defendant Nos. 2 and 3 a chance to defend the suit but subject to a condition that defendant Nos. 2 and 3 jointly or severally deposit a sum of ₹ 1 crore with the Prothonotary and Senior Master, High Court, Bombay, within six weeks from today and the Prothonotary and Senior Master will invest the same in fixed deposit with a nationalised bank initially for a period of one year and renew it year to year until the hearing and final disposal of this suit. If this amount is deposited, leave to defend to defendant Nos. 2 and 3 is granted. If this amount is deposited, then the defendant Nos. 2 a ..... 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