Anil Kumar Sharma V. Ram Naresh Sharma

RFA/107/2026

AI Insights

The case revolves around a dispute concerning a friendly loan of Rs. 5 lakhs taken by the Appellant from the Respondent, which was documented through a cheque. The Appellant contested the suit claiming the loan was a fabrication and the cheque was not intended to be honored. The Respondent presented evidence including the testimony of a bank official who witnessed the Appellant's actions regarding the cheque. The court found the Appellant's defenses unconvincing and upheld the decree in favor of the Respondent.

• Counselvise Citation: [] 140 COUNSELVISE.COM (IT) 833067 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 30-01-2026
• Assessment Year: misc
• Other Referred Cases: Subrata Roy Sahara v. Union of India & Ors. (2014) 8 SCC 470
• Laws Referred To: Code of Civil Procedure, 1908, Income Tax Act, 1961, NI Act
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: ROMIL PATHAK; SALIM AKHTER
• Keywords: Cause of Action; Cheque encashment; Friendly loan; Friendly loan; Legal Notice; Legally Enforceable Debt; Money recovery
• Section: 41; 96; 138; 118

Judgement Text

"$~88 * IN THE HIGH COURT OF DELHI AT NEW DELHI + RFA 107/2026, CM APPL. 6581/2026, CM APPL. 6582/2026, CM APPL. 6583/2026 & CM APPL. 6584/2026 ANIL KUMAR SHARMA .....Appellant Through: Mr. Romil Pathak and Md. Salim Akhter, Advocates versus RAM NARESH SHARMA .....Respondent Through: CORAM: HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA O R D E R % 30.01.2026 1. Appeal under Section 96 read with Order XLI of the Code of Civil Procedure, 1908 (‘CPC’) has been filed by the Appellant/ Defendant against the Judgment and decree dated 23.09.2024 whereby the Suit of the Plaintiff/Respondent for Rs.5 Lakhs along with interest @ 6% p.a. from the date of initiation of Suit till actual realization, has been decreed. 2. The facts in brief are that the Plaintiff and Defendant are relatives. In the month of January, 2018, Defendant/Appellant approached the Plaintiff/Respondent for a friendly loan of Rs.5 lakhs for a period of one year. Considering the financial difficulty of the Appellant as well as the family relations, Respondent advanced a friendly loan of Rs.5 lakhs and in discharge of the liability, Defendant/Appellant issued cheque No. 016071 dated 12.11.2018 for Rs.5 lakhs drawn on Punjab National Bank, Nangal This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/02/2026 at 13:00:00 Printed from counselvise.com Rai, Janak Puri, New Delhi in favour of the Respondent with the assurance that the same would be honoured on its presentation. 3. The Respondent presented the cheque for encashment with PNB, Janak Puri on 15.11.2018. When the Respondent visited his Bank on 16.11.2018 to inquire about the status of the cheque, Sh. Sunil Mata, employee of PNB made a phone call to Defendant upon which, he along with his father visited the Bank and tore the cheque after taking it from Sh. Sunil Mata. The Respondent immediately called the Police at No. 100. The Police officials visited and advised the Appellant to either issue a fresh cheque or pay cash. The Appellant then gave a fresh Cheque bearing No. 016073 dated 16.11.2018 for Rs.5 Lacs, to the bank official, which was kept by him. 4. The Respondent made a Police complaint on 17.11.2018 at P.S. Maya Puri, New Delhi, but not action was taken. He filed another Complaint dated 13.11.2019 with DCP, West but again no action was taken. He then issued a Legal Notice dated 06.12.2019 to the Appellant to pay the cheque amount, but the same was not complied. Thereafter, he filed a Suit for recovery of Rs.5 lakhs along with interest @ 24% p.a. 5. The Appellant contested the Suit by filing a Written Statement wherein he contended that there was no cause of action disclosed in the plaint and the entire case was based on cooked up and concocted story of the Plaintiff, with an intention to harass and extort illegal money from the Appellant. 6. He explained that on 16.11.2018 when he received a call from PNB, Nangal Rai, Delhi in relation to the impugned cheque No. 016071, he came to know about the misuse of the cheque. He immediately rushed to the Bank This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/02/2026 at 13:00:00 Printed from counselvise.com where the cheque was shown to him, but the same was damaged inadvertently. On demand of the bank officials, Defendant issued fresh cheque bearing No. 016073 dated 16.11.2018 along with an apology letter to the Bank and requested the Bank not to clear the cheque. 7. The issues were framed on the pleadings of the parties on 18.08.2022 as under: 1. Whether the suit of the plaintiff is without any cause of action? OPD 2. Whether the plaintiff is entitled for suit amount? OPP 3. Whether the plaintiff is also entitled for pendente lite and future interest, If so, at what rate and for what period? OPP 3. Relief 8. The Respondent examined himself as PW1 and Mr. Sunil Matta, the Bank official as PW2 who corroborated the narration regarding the damage of the cheque and the Appellant furnishing a new cheque. 9. The Appellant Anil Kumar Sharma examined himself as DW1. 10. The learned District Judge on consideration of the rival contentions of the parties, decreed the Suit of the Respondent for Rs.5 lakhs along with interest @ 6% p.a. from the date of institution of the Suit till the date of actual realization. 11. The judgment is impugned by the Appellant on the grounds that the judgment is bad in law. The learned Trial Court has not appreciated the relationship between the Appellant and Respondent and also failed to consider material contradictions in the deposition of the Plaintiff and his witnesses. The averments made in the Plaint, have not been supported by This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/02/2026 at 13:00:00 Printed from counselvise.com any admissible documents and all the documents have been marked and not exhibited. The Respondent neither filed any document about his income nor established the source of alleged loan amount, despite these suggestions being given by the Appellant during the cross-examination. 12. It is a settled principle of law that in a money recovery case, the lender must prove the fact and source of amount and corresponding liability of the borrower. There is significant disparity between the alleged loan amount and declared financial capacity of the Respondent. 13. Despite this issue being specifically raised and demonstrated through evidence, the non-speaking judgment on the aspect of source of income of funds, has been passed. The genesis of the alleged debt has not been established thereby vitiating the finding that a legally enforceable debt existed. 14. The uncorroborated version of Respondent regarding loan of Rs.5 lakhs in cash, entirely ignores that such a transaction prima facie violates Section 22-SS Income Tax Act, 1961 and consequently lacks legal character for a legally recoverable debt. 15. The cheque in question was not signed by the Appellant and there are no findings in regard to the execution and the genuineness of the signatures. The bank official’s evidence of cheque being misused, has been omitted. This rebuts the statutory presumption and vitiates the finding of legally enforceable debt. The cheque was fundamentally never presented or dishonored, which is essential to trigger the offence under Section 138 NI Act. The defenses of the Appellant have been ignored and the findings of the learned Trial Court are flawed. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/02/2026 at 13:00:00 Printed from counselvise.com 16. Reliance is placed on Subrata Roy Sahara v. Union of India & Ors. (2014) 8 SCC 470 wherein it was observed that sole reliance on general ledger entries cannot be the basis for accepting the transaction unless there is an authentic supporting material. 17. A prayer is, therefore, made that the impugned judgment be set aside. Submissions heard and record perused. 18. A Suit for Recovery of Rs.5,00,000/- filed by the Respondent has been decreed vide impugned Judgment dated 23.09.2024. 19. The first ground of challenge by the Defendant/Appellant is that the Respondent had claimed that a friendly loan of Rs.5,00,000/- was given by him to the Appellant. However, the source from where this money was arranged by the Respondent to be given to the Appellant has not been disclosed. The story of giving a loan to the Appellant, is a fabricated and a concocted story for which there is no basis and the Suit was filed only for illegal extortion of the money. 20. While this contention of the Respondent may seem to have some merit in the first instance, but it cannot be overlooked and ignored that there was a Cheque bearing No.010671 dated 12.11.2018 for Rs.5,00,000/- which had been issued by the Appellant, in lieu of the loan taken by him. There is no explanation forthcoming in the Written Statement or in the evidence about the explanation for the Cheque being in possession of the Plaintiff. 21. The Appellant has vaguely contended that the Cheque does not bear his signatures. However, this defence is not sustainable in the light of admitted facts that the Respondent had presented the Cheque for encashment in PNB, Janakpuri on 15.11.2018. He thereafter, had visited the Bank on This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/02/2026 at 13:00:00 Printed from counselvise.com 16.11.2018 to enquire about the status of Cheque. Shri Sunil Matta, the Bank official had then called the Defendant/Appellant to confirm about the Cheque. The Appellant admittedly, visited the Bank and when shown the Cheque, he tore it. A call was made by the Respondent to the Police. The Police visited and advised the Appellant to issue a fresh Cheque or pay cash. Consequently, he issued another Cheque No.010673 dated 16.11.2018. 22. The entire sequence of events as deposed by the Respondent and admitted by the Appellant that he had gone to the Bank and issued another Cheque on the asking of the Police as the earlier Cheque got torn, clearly establishes that the Appellant in acknowledgment of the loan taken by him, had issued the Cheque of Rs.5,00,000/-. 23. Section 118 NI Act raises a presumption of the Cheque been issued in discharge of legally enforceable liability. The onus was on the Appellant to prove that no such loan was taken, but he has miserably failed to discharge the onus. 24. Another ground of challenge is that in case the Cheque had been duly issued by the Appellant, there was no reason for the Respondent to have not filed a Complaint under Section 138 NI Act. In this context, it may noted that because there was a dispute inter-se the parties which happened in the presence of the Bank official, and that the Appellant told the bank official to not present the cheque, the Cheque was put for encashment or was dishonoured. 25. This also emerges from the testimony of PW2 Sunil Matta, the Bank official who was a witness to this entire episode. Even though the Cheque was presented to the Bank, but in the aforesaid explained circumstances, it was not put for encashment and therefore, there was no question of its This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/02/2026 at 13:00:00 Printed from counselvise.com dishonour. Therefore, there was no occasion for the Respondent to have filed a Complaint under Section 138 NI Act. 26. Learned District Judge has, therefore, rightly concluded that the loan of Rs.5,00,000/- had been given by the Respondent which never got repaid. The Suit has, therefore, been rightly decreed for Rs.5,00,000/- along with interest @ 6% per annum. 27. There is no infirmity in the impugned Judgment and the Appeal is hereby, dismissed. The pending Applications stand disposed of accordingly. NEENA BANSAL KRISHNA, J JANUARY 30, 2026 N/VA This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 06/02/2026 at 13:00:00 Printed from counselvise.com "