The Delhi High Court has upheld a money decree of Rs. 50 lakhs against the legal heirs of a deceased borrower, ruling that undated cheques, while not amounting to bills of exchange, possess corroborative value in establishing a loan transaction.
Justice Amit Bansal, while dismissing the appeal filed by the defendants, also allowed the cross-objections filed by the plaintiff, holding that a successful party cannot be deprived of pendente lite interest and costs without justification.
Background of the Case
The appeal (RFA 1003/2019) was filed by Renu Mathur and others (Appellants/Defendants), the legal heirs of the late Sh. Rakesh Bahadur Mathur, challenging the judgment and decree dated September 3, 2019, passed by the Additional District Judge, Patiala House Courts. The Trial Court had decreed the suit for recovery of Rs. 50 lakhs in favor of the respondent/plaintiff, Ramesh Chander Gupta, along with future interest at 12% per annum.
The plaintiff’s case was that he and the late Rakesh Mathur were neighbors and friends. Between July 2013 and August 2014, the plaintiff allegedly extended an interest-free friendly loan of Rs. 50 lakhs to Mathur, partly by cheque and partly in cash. It was claimed that Mathur executed two promissory notes and issued five undated cheques totaling Rs. 50 lakhs.
Following Rakesh Mathur’s death in July 2015, the plaintiff sought repayment from his legal heirs. Upon their failure to pay despite a legal notice, the plaintiff filed the suit.
The defendants denied the loan, alleging that the promissory notes and cheques were forged and fabricated. They argued that the promissory notes did not reflect individual transactions and that the cheques were undated with the payee’s name left blank.
Submissions of the Parties
Mr. Jai Sahai Endlaw, counsel for the appellants, argued that the promissory notes were for consolidated amounts and lacked witnesses. He submitted that the plaintiff failed to produce receipts for the cash components of the alleged loan. It was further argued that the onus to prove the handwriting and signatures of the deceased on the instruments lay with the plaintiff, which was wrongly shifted to the defendants.
Per contra, Mr. Sachin Gupta, counsel for the respondent, supported the Trial Court’s findings. Additionally, through cross-objections, he argued that the Trial Court erred in not granting pendente lite interest and costs, including the fee paid to the Local Commissioner for recording evidence.
High Court’s Analysis and Observations
On Promissory Notes and Cheques
The High Court affirmed the Trial Court’s finding that the promissory notes were valid. Justice Bansal noted that the instruments bore the signatures of the deceased and the names of both parties. The Court observed that the discrepancies pointed out by the defendants were not material.
Regarding the undated cheques, the Court held:
“The five cheques handed over by late Sh. Rakesh Mathur to the plaintiff being undated would not amount to bills of exchange, however, would have corroborative value.”
The Court observed that the plaintiff had discharged the burden of proof by summoning a witness from the deceased’s bank to prove the signatures. The defendants failed to lead evidence to show that the signatures were forged.
On Burden of Proof
The Court highlighted the cross-examination of the defendants’ witness (DW-1), the son of the deceased. When asked to produce documents containing his father’s signatures or counterfoils of chequebooks, DW-1 stated they were unavailable.
The Court held:
“No doubt, the onus to prove that the promissory notes as well as the cheques contained the handwriting/signatures of late Sh. Rakesh Mathur was on the plaintiff. The plaintiff has duly fulfilled the onus by summoning the official record from late Sh. Rakesh Mathur’s bank. However, the defendants did not lead any evidence to disprove the evidence led on behalf of the plaintiff.”
The Court further noted that the defendants offered no explanation as to how the cheques came into the plaintiff’s possession if they were not handed over by the deceased.
On Pendente Lite Interest and Costs
Addressing the cross-objections, the Court found no justification for the Trial Court’s refusal to award pendente lite interest.
Justice Bansal stated:
“A successful party in the suit cannot be deprived of pendente lite interest.”
Regarding costs, the Court observed that the Trial Court overlooked an order dated July 26, 2016, which recorded that payments made to the Local Commissioner were to be recovered as costs. The High Court reiterated the settled principle that costs are ordinarily required to be awarded in favor of the successful party.
Decision
The High Court dismissed the appeal filed by the defendants. Simultaneously, it allowed the plaintiff’s cross-objections. The Court modified the decree to include:
- Pendente Lite Interest: Interest at the rate of 9% per annum from the date of filing the suit (October 1, 2015) till the date of the decree (September 3, 2019).
- Costs: The plaintiff was held entitled to the costs of the suit, including the remuneration paid to the Local Commissioner.
The Registry was directed to release the deposited amount to the plaintiff after necessary adjustments.
Case Details:
- Case Title: Renu Mathur & Ors v. Ramesh Chander Gupta
- Case Number: RFA 1003/2019, CM APPL. 50426/2019, CM APPL. 54558/2019 & CM APPL. 27979/2025
- Citation: 2026:DHC:700
- Coram: Justice Amit Bansal
