2019 (2) TMI 1012 - HC - Indian Laws

Court upholds loan agreement, rejects additional claims based on res judicata principle. Outstanding balance decreed.

The High Court affirmed the trial court's judgment in a case involving the validity of an Affidavit-cum-Undertaking, determining a loan amount of Rs. ... Dishonor of Cheque twice - recovery of loan amount - Section 138 of the Negotiable Instruments Act, 1881 - entitlement of the respondent/plaintiff to recover the suit amount - Section 92 of the Indian Evidence Act, 1872 - Held that:- As regards the issue of repayment, the trial court has held that since the respondent/plaintiff in his cross-examination admitted to receiving a sum of ₹ 1,30,000/-, this amount has to be deducted from the principal loan of ₹ 6,00,000/-, and therefore the respondent/plaintiff is only entitled to the amount of ₹ 4,70,000/- as the balance principal amount. The trial court has rejected the defence of the appellant/defendant no.1 of making a payment of ₹ 18,500/- in cash because no evidence has been led with respect to proof of this payment of ₹ 18,500/- - Further, the trial court has held that the payment given for the settlement of the case pertaining to the Negotiable Instruments Act was for the settlement of the cheque issued by the brother of the appellant/defendant no.1 for his liability to the respondent/plaintiff, and not for and by the appellant/defendant no.1, and therefore the payment made for settlement of the Negotiable Instruments Act case under Section 138 filed against the brother of the appellant/defendant no. 1 cannot be taken as discharge of liability of the appellant/defendant no. 1 towards the subject and different loan of ₹ 6,00,000/- - The trial court has therefore rightly held against the appellant/defendant no.1. The trial court has rightly held that the loan amount was of ₹ 6,00,000/-, and that the appellant/defendant no.1 had only repaid a sum of ₹ 1,30,000/- and that the appellant/defendant no.1 did not pay any other amount as was contended by him. The Suit therefore has been rightly decreed for a sum of ₹ 4,70,000/- alongwith interest @ 12% per annum simple - appeal dismissed. Issues Involved:1. Validity of the Affidavit-cum-Undertaking dated 13.12.2007.2. Determination of the actual loan amount.3. Repayment of the loan amount by the defendant.4. Application of the principle of res judicata.5. Admissibility of oral evidence under Section 92 of the Indian Evidence Act, 1872.6. Calculation of the outstanding loan liability and interest.Issue-wise Detailed Analysis:1. Validity of the Affidavit-cum-Undertaking dated 13.12.2007:The trial court relied on the Affidavit-cum-Undertaking dated 13.12.2007 (Ex.P1) to determine the loan amount. The appellant/defendant no.1 had previously challenged the validity of this document in a civil suit, which was dismissed by the Ld. Civil Judge on 04.07.2013. The judgment from the civil suit was held as final, and the appellant/defendant no.1 was barred by res judicata from questioning the undertaking or the loan amount stated therein.2. Determination of the Actual Loan Amount:The trial court concluded that the loan amount was Rs. 6,00,000/- as stated in the Affidavit-cum-Undertaking, and not Rs. 4,10,000/- as contended by the appellant/defendant no.1. This conclusion was based on the document being final and the amount being written by the appellant/defendant no.1 himself.3. Repayment of the Loan Amount by the Defendant:The trial court found that the appellant/defendant no.1 had repaid only Rs. 1,30,000/- out of the Rs. 6,00,000/- loan. The court rejected the appellant/defendant no.1's claim of additional payments, including Rs. 18,500/- in cash and Rs. 1,70,000/- paid through demand drafts for the settlement of a cheque issued by his brother. The court held that the payment made for the settlement of the Negotiable Instruments Act case was not towards the loan liability of the appellant/defendant no.1.4. Application of the Principle of Res Judicata:The trial court applied the principle of res judicata, stating that the issue of the validity of the Affidavit-cum-Undertaking had already been decided in the previous civil suit, and thus, the appellant/defendant no.1 could not re-litigate this issue.5. Admissibility of Oral Evidence under Section 92 of the Indian Evidence Act, 1872:The court held that the contention of the appellant/defendant no.1 regarding an oral agreement to consider the loan amount as Rs. 4,10,000/- instead of Rs. 6,00,000/- was barred by Section 92 of the Indian Evidence Act, 1872. The court emphasized that once a document is taken as final, no oral evidence can alter or modify its terms.6. Calculation of the Outstanding Loan Liability and Interest:The trial court calculated the outstanding loan liability as Rs. 4,70,000/- (Rs. 6,00,000/- minus Rs. 1,30,000/-). The court decreed the suit for this amount along with interest at 12% per annum simple. The High Court upheld this calculation and dismissed the appeal, affirming the trial court's judgment.Conclusion:The High Court dismissed the appeal, affirming the trial court's judgment that the loan amount was Rs. 6,00,000/-, of which only Rs. 1,30,000/- had been repaid. The remaining balance of Rs. 4,70,000/- was decreed along with interest at 12% per annum simple. All pending applications were also disposed of.