TMI Blog2021 (10) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... , it would not be rendered void. If the lender has advanced a certain amount which ought to have been reflected in the tax returns but he failed to disclose the same in his returns, that would not exonerate the borrower from the liability to repay. The default committed by the lender may attract penal action from the department. But his right to recover the amount from the borrower cannot be extinguished - the law of limitation can render a claim otherwise valid unenforceable. The government of the day can bring in legislation offering succour to debtors. If the suit transaction falls within the scope of a debt relief legislation, the lender cannot maintain an action outside its framework. But failure to disclose in the tax returns cannot render the amount irrecoverable. It cannot extinguish the right of the creditor. A civil remedy can be stifled only by a statutory provision and not by judicial innovation. In the case on hand, the first appellate court contrary to the statutory mandate failed to presume a certain fact in favour of the plaintiff and that led to the dismissal of the suit. It also misconstrued the evidence on record - the substantial questions of law is answered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r considering the evidence on record, the trial Court by judgment and decree dated 07.01.2008 decreed the suit as prayed for. Aggrieved by the same, the defendant filed A.S.No.5 of 2008 before the Principal District Judge, Thanjavur. By the impugned judgment and decree dated 19.12.2008, the first appellate Court set aside the decision of the trial Court and allowed the appeal and dismissed the suit. Challenging the same, this second appeal came to be filed. 4.The learned counsel appearing for the appellant reiterated all the contentions set out in the memorandum of grounds and called upon this Court to answer the substantial questions of law in favour of the appellant and set aside the impugned judgment and decree and restore the decision of the trial Court. 5.During the pendency of the appeal, the defendant passed away and his legal heirs have been brought on record as respondents 2 to 4. Their counsel submitted that the impugned judgment and decree do not call for any interference. In response to the suit notice, the defendant had given a detailed reply vide Ex.A.3. The plaint did not meet the defence projected in the said reply. It is rather cryptic. By examining himself a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial capacity of the plaintiff to lend the suit amount, the written statement not only did not raise the said contention but went to the extent of admitting that whenever the defendant was in financial difficulties, he sought the intervention of the plaintiff to raise funds. The case of the plaintiff cannot be doubted merely because it does not meet the contentions raised by the defendant in response to the pre-suit notice. The plaint has to conform to the requirements of Order VII of CPC. Appendix A Form No.1 of CPC contains the format of a plaint in a money suit. It expects the plaintiff to aver that he lent the defendant a certain sum of rupees repayable by a certain date and that the defendant has not paid the same in full. As contemplated by Order VII Rule 6 of CPC, if the suit is instituted after the expiration of the limitation period, the ground on which exemption is claimed must be shown. The plaintiff need not exert his drafting skills beyond what is required. 8.The promissory note was marked as Ex.A.1. The signature attributed to the defendant in Ex.A.1 was not denied. The plaintiff examined himself and also the attestor of the document. The trial Court rightly in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f course, considering the amount involved, the suit transaction ought to have been reflected in the income tax returns of the plaintiff. It is equally true that Section 269SS of the Income Tax Act was not followed. On this ground, the first appellate court went to the extent of holding that presumption under Section 118 of the Negotiable Instruments Act, 1881 could not have been invoked. The question is whether the first appellate court was right in adopting such an approach. 11.Section 269SS of the Income Tax Act, 1961 is as follows : Mode of taking or accepting certain loans, deposits and specified sum. 269SS.No person shall take or accept from any other person (herein referred to as the depositor), any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account [or through such other electronic mode as may be prescribed], if,- (a) the amount of such loan or deposit or specified sum or the aggregate amount of such loan, deposit and specified sum; or (b) on the date of taking or accepting such loan or deposit or specified sum, any loan or deposit or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge was accepted within a reasonable time after its date and before its maturity; (d) as to time of transfer:-- that every transfer of a negotiable instrument was made before its naturity; (e) as to order of indorsements:-- that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; (f) as to stamp:-- that a lost promissory note, bill of exchange or cheque was duly stamped; (g) that holder is a holder in due course:-- that the holder of a negotiable instrument is a holder in due course : provided that, where the instrutment has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burthen of proving that the holder is a holder in due course lies upon him. Section 118 occurs in Chapter XIII which bears the heading Special Rules of Evidence . Section 4 of Indian Evidence Act, 1872 states that whenever it is directed by the Act that the court shall presume a fact, it shall regard such fact as proved, unless and until it is disproved. Since 118 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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