TaxTMI 
TaxTMI 
2026 (6) TMI 1046
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....nnum. The defendant also deposited the original sale deed of her property dated 10.02.2006 with the plaintiff. Since the defendant did not repay the principal amount nor paid any interest, the plaintiff sent legal notice on 19.06.2017 (Ex.A3). The defendant received the same and sent the reply notice on 03.07.2017 (Ex.A4). The defendant did not comply with the demand set out in the notice. Hence, the plaintiff instituted the suit for recovery of the aforesaid sum with interest. 3.The defendant did not file any written statement. The Court below framed the following three issues:- 1.Whether the plaintiff has proved the sources of income to lend loan to the defendant? 2. Whether the plaintiff has proved the mode of payment of such huge amount? 3. Whether the plaintiff has proved the execution of promissory note with the best available evidence? 4.The plaintiff examined himself as P.W.1 and marked Ex.A1 to Ex.A4. On the side of the defendants, no evidence was adduced. The defendant not having filed any written statement could not have adduced evidence. The defendant also did not cross-examine the plaintiff (P.W.1). The Court below answered all the thre....
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....2024 SCC OnLine Mad 12874) 9.We went through the testimony of the plaintiff. The defendant no doubt had been set exparte because he had not filed written statement. A person who has not filed written statement cannot be allowed to lead evidence. This is because of the principle that one's evidence must have foundation in one's pleadings. No amount of evidence can be looked into in the absence of pleadings (vide Siddik Mahomed Shah v. Saran, 1929 SCC OnLine PC 79). This well settled principle was reiterated by the Hon'ble Supreme Court in Manjusha v. United India Assurance Co. Ltd. (2025 SCC OnLine SC 1512). That is why, the defendant who has not filed written statement cannot be permitted to adduce evidence. But he can very well participate in the proceedings by cross-examining the witnesses for the plaintiff (vide Modula India v. Kamakshya Singh Deo (1988) 4 SCC 619). But the defendant did not even cross-examine the plaintiff. If the court had any doubt regarding the plaintiff's capacity to lend such a huge sum, it ought to have posed questions to the witness. Section 165 of the Indian Evidence Act, 1872 enables the Judge to ask any question he pleases, in any f....
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....y to lend the amount. It is true that in the reply notice (Ex.A4), the defendant had taken a stand that the plaintiff had been set up by a third party. She has taken a stand that she had dealings with one Shanthanakrishnan and that she was ready to repay a sum of Rs. 75,00,000/- to him. In other words, the receipt of money was not denied by the defendant. Her only stand was that the plaintiff had been a front for the said Santhanakrishnan. Order 8 Rule 5 CPC reads as follows: "5. Specific denial.- (1) Every allegation of fact in the plaint, if not denied specifically or by necessary implication, or stated to be not admitted in the pleading of the defendant, shall be taken to be admitted except as against a person under disability." The rule of non-traverse would apply. The plaintiff's claim that he had advanced the said amount and that the defendant had executed the suit pro-note must be deemed to be admitted in the circumstances of this case. The Hon'ble Karnataka High Court in M. Jeetendar Gandhi v. Huthappa, 1999 SCC OnLine Kar 225 was dealing with exactly a similar set of facts. The defendant/borrower therein had also neither filed written statement nor subj....
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....he respondent herein in her reply notice does not dispute her signatures on the promissory note. She claims that blank promissory note was obtained from her husband and herself. The onus is thus on the defendant to show that no consideration passed. She failed to discharge the onus cast on her. We can understand if the defendant had completely denied the transaction. She took the defence that the plaintiff had been set up by one Santhanakrishanan. If that be so, this assertion should have been substantiated by the defendant by getting into the witness box. She failed to do so. 14.It is true that as per the provisions of Section 269SS of the Income Tax Act, any transaction beyond Rs. 20,000/- should be through an instrument. In this case, the plaintiff claimed that he had advanced a sum of Rs. 25,00,000/- in cash. Obviously, the plaintiff has breached the provisions of the Income Tax Act,1961. The Income Tax authorities are very much at liberty to take action against the plaintiff in this regard. But then, the fact that the transaction was carried out in breach of Section 269 SS of the Income Tax Act will not render the transaction illegal or disentitle the plaintiff to seek reco....