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TMI Blog2016 (8) TMI 1549X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 executed a promissory note dated 14th August, 2012 in which defendant No. 2 promised to pay back the amount of Rs. 1 crore within the period of 60 days of executing the said promissory note. In the promissory note it is also mentioned that four blank cheques have been deposited with the plaintiff towards security for the amount of Rs. 1 crores and the plaintiff was at liberty to deposit the said cheques at any time after the specific period for the amount not exceeding Rs. 1 crore. Though four cheques have been mentioned in the promissory note, it appears that only two cheques of Rs. 50 lacs were given to the plaintiff. 2. The defendant No. 2 has not disputed that any promissory note was signed or that she has issued two cheques. Before these cheques could be encashed, defendant No. 2 issued a fresh promissory note dated 26th December, 2012 in which defendant No. 2 has once again confirmed having received a sum of Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be liable alongwith defendant No. 3 to pay the defaulted amount with interest. The parties also agreed that the plaintiff will be entitled to continue to prosecute the proceedings filed under section 138 of the Negotiable Instruments Act and those cases will be withdrawn only upon payment of the entire amount as per the said agreement. 5. Though parties to the agreement were mentioned to be plaintiff, original defendant No. 1, defendant No. 2, defendant No. 3 and one Rajesh Ranjan, the said Rajesh Ranjan has not signed the memorandum of settlement and the Counsel for the plaintiff stated that it was for that reason he is not made a party to the suit. The plaintiff has also filed complaint against defendant Nos. 2 and 3 with the police for offences punishable under section 406, 420 read with section 34 of the Indian 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 stag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted herein above, the suit is barred by law of limitation; (i) without prejudice to whatever stated herein above, the present suit shall be dismissed against defendant No. 3 as contemplated in Order 7, Rule 11(a) of Code of Civil Procedure, 1908; and (j) without prejudice to whatever stated herein above, defendant No. 3 had never executed any memorandum of settlement dated 9th May, 2013, thereby guarantee the alleged payment to the plaintiff as alleged." 8. During the hearing when I asked the Counsel for the defendant No. 3, if defendant No. 3 is denying having signed the memorandum of settlement then, why did he admit signing the memorandum of settlement and that the amount was payable when his anticipatory bail application was heard. The Counsel for the defendant No. 3 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act by paying in cash a sum of Rs. 1 crore and under the provisions of section 269SS the plaintiff could not have given more than Rs. 20,000/- in cash and therefore, it was in violation of law. 16. In my view, the Income Tax provisions do not state anywhere that there is a prohibition on recovering amounts not disclosed in the Income Tax Returns. I have not come across any provision nor did the Counsel point out in the Income Tax Act, which makes an amount not shown in the Income Tax Returns unrecoverable. It ought to be seen that the moment the plaintiff seeks to recover through a cheque an amount advanced in cash it gets accounted for in the system and the revenue authorities can keep a track of that and if 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 deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), which in fact amounts to reading an additional requirement in section 138 of the Negotiable Instruments Act, and legislating that such amounts becomes irrecoverable. At the cost of repetition, for saying that an amount not disclosed in income tax returns cannot be legally recoverable liability, some provisions of law to that effect would have to be shown. Such provision was not noticed by me and even the learned Counsel for the respondent could not show any such provision to me." 17. I also find support in the judgment of this Court in the matter of Krishna P. Morajkar v. Joe Domnic Ferrao & Anr. Paragraph 31 of the said judgment reads as under: "31. Before I conclude, with all humility at my command, it 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 irrespon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idavit in reply to the summons for judgment, these orders have been literally brushed aside by stating that the statements were made by the advocate in the interest of defendant No. 2. 21. Similarly, when the anticipatory bail application of defendant No. 3 came up for hearing on 9th June, 2015, 24th June, 2015, 1st July, 2015 and 15th July, 2015, the defendant No. 3 also has admitted that the amounts were payable to the plaintiff and they were making efforts to reconcile the transactions. In the affidavit in reply the defendant No. 3 has not given any explanation as to how and why these statements were made on behalf of the defendant No. 3. 22. It is necessary to note that in the order 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, and thereby show mercy to the defendant by enabling him to try to prove a defence." 25. In my view, the defendant No. 2 having not denied the fact that the defendant No. 2 had issued cheques for Rs. 1 crore towards repayment of the amount of Rs. 1 crore that the plaintiff had given, the defendant No. 2 not having denied the promissory notes or the memorandum of settlement and the fact that the defendant Nos. 2 and 3 have admitted their liability when their anticipatory bail application was being heard by this Court, the amount of Rs. 1 crore with interest as mentioned in the memorandum of settlement, is payable to the plaintiff. The defences raised by the defendants 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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