Full Text
HIGH COURT OF DELHI
Date of Decision: 08.08.2025
28673/2025 NITIN TANWAR .....Petitioner
Through: Mr. Sachin Mittal & Mr. Aman Gupta, Advocates.
Through: Mr. Bhavneet Singh, Advocate.
JUDGMENT
1. The present Petition has been filed on behalf of the Petitioner under Section 115 of the Code of Civil Procedure, 1908 [hereinafter referred to as “CPC”] against the order dated 15.01.2025 [hereinafter referred to as “Impugned Order”] passed by the Learned District Judge-03, New Delhi District, Patiala House Courts, New Delhi [hereinafter referred to as “Trial Court”]. By the Impugned Order, unconditional Leave to Defend to the Respondent was allowed by the learned Trial Court.
2. Briefly the facts are that the Suit for recovery under Order XXXVII of the CPC was filed based on various UPI and cash transactions which amounts to a sum of total amounting to Rs. 40,14,782/- (Rupees Forty Lakhs Fourteen Thousand Seven Hundred Eighty-Two). The Respondent has previously made part payment of an amount of Rs.2,39,000/- (Rupees Two Lakhs Thirty-Nine Thousand), and a sum of Rs.37,75,782/- is still due. Thus, a Suit for recovery in the sum of Rs.37,75,782/- (Rupees Thirty-Seven Lakhs Seventy-Five Thousand Seven Hundred Eighty-Two Only) along with interest thereon has been filed by the Respondent under Order XXXVII of the CPC. 2.[1] It is the case of the Petitioner that the Petitioner and Respondent shared a long-standing friendly relationship, and since April 2021, the Respondent frequently took money from the Petitioner on the pretext of his father's medical issues. The Petitioner paid a total sum of Rs.40,14,782/- to the Respondent, out of which Rs. 21,14,782/- (Rupees Twenty-One Lakhs Fourteen Thousand Seven Hundred Eighty-Two) was paid through various UPI transactions and Rs. 19,00,000/- (Rupees Nineteen Lakhs) in cash, between the period of year 2021-23. The Respondent has acknowledged his liability in the sum of Rs.37,75,782/- by an Undertaking dated 15.03.2023, and set out details of UPI and transactions therein which are reproduced below: - “Undertaking Date: 15.03.2023 … UPI Transactions: S.No. Date Mode of Transfer Received from Nitin Tanwar
1. 14.06.2021 UPI 1
2. 14.06.2021 UPI 45,000
3. 18.07.2021 UPI 1
4. 18.07.2021 UPI 9,999
5. 24.07.2021 UPI 1
6. 24.07.2021 UPI 20,000
7. 13.08.2021 UPI 30,000
8. 17.08.2021 UPI 20,000
9. 20.08.2021 UPI 25,000
10. 30.08.2021 UPI 10,000
11. 30.08.2021 UPI 50,000
12. 31.08.2021 UPI 30,000
13. 09.09.2021 UPI 55,000
14. 11.09.2021 UPI 50,000
15. 12.09.2021 UPI 50,000
16. 14.09.2021 UPI 30,000
17. 14.09.2021 UPI 5,000
18. 14.09.2021 UPI 36,280
19. 15.09.2021 UPI 1,00,000
20. 17.09.2021 UPI 60,000
21. 26.09.2021 UPI 20,000
22. 01.10.2021 UPI 80,000
23. 01.10.2021 UPI 20,000
24. 04.10.2021 UPI 80,000
25. 21.10.2021 UPI 1,00,000
26. 23.10.2021 UPI 70,000
27. 08.03.2022 UPI 40,000
28. 10.03.2021 UPI 8,000
29. 12.03.2021 UPI 50,000
30. 12.03.2021 UPI 5,000
31. 17.03.2021 UPI 5,000
32. 26.03.2021 UPI 12,000
33. 26.03.2021 UPI 43,000
34. 01.04.2022 UPI 35,000
35. 03.04.2022 UPI 30,000
36. 07.04.2022 UPI 15,000
37. 08.04.2022 UPI 50,000
38. 30.04.2022 UPI 40,000
39. 14.05.2022 UPI 60,000
40. 17.05.2022 UPI 32,000
41. 21.05.2022 UPI 85,000
42. 28.05.2022 UPI 65,000
43. 02.06.2022 UPI 35,000
44. 03.06.2022 UPI 50,000
45. 04.06.2022 UPI 30,000
46. 07.06.2022 UPI 40,000
47. 09.06.2022 UPI 1,00,000
48. 11.06.2022 UPI 20,000
49. 16.06.2022 UPI 70,000
50. 20.06.2022 UPI 80,000
51. 22.06.2022 UPI 50,000
52. 26.06.2022 UPI 25,000
53. 27.06.2022 UPI 75,000
54.
1. 06.04.2021 Cash 40,000
2. 07.06.2021 Cash 1,00,000
3. 20.06.2021 Cash 1,00,000
4. 14.08.2021 Cash 60,000
5. 15.08.2021 Cash 1,00,000
6. 18.09.2021 Cash 1,00,000
7. 26.10.2021 Cash 1,00,000
8. 29.10.2021 Cash 1,00,000
9. 24.07.2022 Cash 1,00,000
10. 18.08.2022 Cash 1,00,000
11. 25.08.2022 Cash 1,00,000
12. 07.09.2022 Cash 1,00,000
13. 15.10.2022 Cash 1,00,000
14. 15.11.2022 Cash 1,00,000
15. 16.11.2022 Cash 1,00,000
16. 24.11.2022 Cash 1,00,000
17. 26.11.2022 Cash 1,00,000
18. 09.01.2023 Cash 1,00,000
19. 11.01.2023 Cash 1,00,000
20. 14.01.2023 Cash 1,00,000 TOTAL 19,00,000/-
3. In his defence, the Respondent has stated that the Petitioner has concealed material facts in his plaint. The amounts that were transferred by the Petitioner on various occasions, were transferred against security/collateral in jewellery, which includes 11 chains, 30 kade and bangles, one bracelet, five earrings, three necklaces, one ring totalling 512 gm and other items [hereinafter referred to as “Collateral gold”]. Reliance is placed on WhatsApp Chat, between the parties, annexed with Affidavit filed by the Defendant No.1 in support of his Leave to Defend Application to submit that this has been acknowledged in the Chat. 3.[1] The Respondent submits that the Petitioner has in his reply to the Application for Leave to Defend has alleged that the abovementioned Chat is forged, fabricated and incomplete, however, has failed to file anything in support of this allegation that the WhatsApp is not true and correct. 3.[2] The Respondent further submitted that the Plaintiff had taken blank signed cheques and signed sheets of paper from him, which was misused to create a fake Undertaking dated 15.03.2023.
4. The learned Trial Court has examined the Plaint and the defence, and based on the principles of adjudicating a Leave to Defend and giving some credence to the story of the Respondent, has allowed the Leave to Defend unconditionally.
5. The learned Trial Court examined the Reply of the Petitioner to the Leave to Defend of Application and observed that the WhatsApp Chat reflects that on 01.04.2022, that Defendant had requested the Petitioner for some money from and the Petitioner replied that he will not lend money without any security/collateral. The learned Trial Court thus concluded that averments of Defendant to the extent of collateral/security were true. 5.[1] The learned Trial Court as far as concerns the Collateral gold held that Petitioner failed to explain the mention of gold in his Chats with Defendant, and the denial of the Petitioner in this behalf was evasive.
6. Given that a plausible defence has been raised by the Petitioner, the learned Trial Court has deemed it apposite to allow the Application under Order 37 Rule 3 (5) of CPC, and was inclined to grant an unconditional Leave to Defend to the Respondent.
7. Learned Counsel for the Petitioner has averred, that since the Respondent owes the Petitioner Rs. 17,20,782/-, unconditional leave could not have been be granted by the learned Trial Court.
8. The Supreme Court in the judgment in B.L. Kashyap & Sons Ltd. v. JMS Steels & Power Corporation & Anr.[1] while relying on the judgment in IDBI Trusteeship Services Ltd. v. Hubtown Ltd.[2] has set out that in what circumstances leave can be granted and also whether the defendant would be entitled to conditional or unconditional leave. The Supreme Court has held that if the defendant satisfies the Court that he has substantial defence and is likely to succeed, he is entitled to unconditional leave to defend. If a Defendant raises triable issues indicating a fair, bonafide or reasonable defence, even if it is not a positive defence, and is likely to succeed, he would ordinarily be entitled to unconditional leave to defend. However, where he raises some triable issues, but those issues are still doubtful, as to whether they are good faith, the learned Trial Court may impose conditions both as to time or mode of trial. It has further been held that where the defence appears to be plausible but improbable, the learned Trial Court may direct the furnishing of the entire amount as security/collateral. The relevant extract of B.L. Kashyap case is set out below:
and of not shutting out triable issues by unduly severe orders on the other. Therefore, the trial court may impose conditions both as to time or mode of trial as well as payment into the court or furnishing security. In the fourth eventuality, where the proposed defence appears to be plausible but improbable, heightened conditions may be imposed as to the time or mode of trial as also of payment into the court or furnishing security or both, which may extend to the entire principal sum together with just and requisite interest.
33.2. Thus, it could be seen that in the case of substantial defence, the defendant is entitled to unconditional leave; and even in the case of a triable issue on a fair and reasonable defence, the defendant is ordinarily entitled to unconditional leave to defend. In case of doubts about the intent of the defendant or genuineness of the triable issues as also the probability of defence, the leave could yet be granted but while imposing conditions as to the time or mode of trial or payment or furnishing security. Thus, even in such cases of doubts or reservations, denial of leave to defend is not the rule; but appropriate conditions may be imposed while granting the leave. It is only in the case where the defendant is found to be having no substantial defence and/or raising no genuine triable issues coupled with the court's view that the defence is frivolous or vexatious that the leave to defend is to be refused and the plaintiff is entitled to judgment forthwith. Of course, in the case where any part of the amount claimed by the plaintiff is admitted by the defendant, leave to defend is not to be granted unless the amount so admitted is deposited by the defendant in the court.
33.3. Therefore, while dealing with an application seeking leave to defend, it would not be a correct approach to proceed as if denying the leave is the rule or that the leave to defend is to be granted only in exceptional cases or only in cases where the defence would appear to be a meritorious one. Even in the case of raising of triable issues, with the defendant indicating his having a fair or reasonable defence, he is ordinarily entitled to unconditional leave to defend unless there be any strong reason to deny the leave. It gets perforce reiterated that even if there remains a reasonable doubt about the probability of defence, sterner or higher conditions as stated above could be imposed while granting leave but, denying the leave would be ordinarily countenanced only in such cases where the defendant fails to show any genuine triable issue and the court finds the defence to be frivolous or vexatious.” [Emphasis Supplied]
9. As stated above, the learned Trial Court after examining the Reply to Leave to Defend Application filed by the Petitioner gave a finding that an admission has been made by the Respondent that he has received a loan in the sum of Rs. 21,14,782/- from the Petitioner and he has repaid Rs. 3,94,000/-. However, after an examination of the WhatsApp Chats as well as the Reply to Leave to Defend Application filed by the Petitioner, found that the Chat contains a definitive mention of gold and of the sale of gold if the payment is not made. The learned Trial Court thus found that the messages corroborate the version of Respondent that for the loan taken, a security in the form of gold is available with Petitioner. 9.[1] The learned Trial Court also found that the Petitioner failed to disclose that the Respondent had deposited, the collateral gold as security in his Petition and found that the Petitioner had not disclosed all material facts including the circumstances in which the loan had been given to the Respondent. It is apposite to set out the relevant paragraphs of the Impugned Order in this behalf below:
30. It is further argued by him that it is not natural for anyone to make payment of Rs.10,00,000/- in cash without obtaining any acknowledgment in written and therefore, the averment of the defendant that he has paid interest of Rs.10,00,000/- in cash is false. xxx xxx xxx xxx
36. This Court is of the opinion that the Plaintiff has not come to the Court with clean hands since he has not disclosed all the material facts. The plaintiff has concealed the circumstances in which he purportedly gave a loan of Rs.19,00,000/— to the defendant in cash without obtaining any acknowledgment at the time of giving of loan and without obtaining any security.
37. The plaintiff has also not explained the mention of gold in his WhatsApp messages sent to the defendant, which as per the defendant was collateral security given by the plaintiff to the defendant. Even though the plaintiff has denied the chats saying that the chats are incomplete, the plaintiff has not filed the correct and complete chats and therefore, the denial of the plaintiff is bald and evasive. In the case of SP Chengalvaraya Naidu (Dead) by LRs Vs. Jagannath (Dead) by LRs and Ors. (1994) 1 SCC 1, it was held that the Courts are meant for imparting justice between the parties and one who comes to the Court must come with the clean hands. It was held that a person whose case is based on falsehood has no right to approach the Court. It was held that such person can be summarily thrown out at any stage of the litigation.” [Emphasis supplied] 9.[2] The learned Trial Court further, while acknowledging the admission of the Respondent of its liability and that the unconditional leave to defend cannot be granted in view of the acknowledgment, gave a finding that no security can be directed to be deposited by the Respondent since the Collateral gold was still available with the Petitioner. Thus, unconditional leave to defend was granted to the Respondent to lead his evidence in relation to the amounts loaned. The relevant extract of the Impugned Order is set out below:
liable to pay. However, the same cannot be directed as long as the collateral security i.e., gold is not returned by the plaintiff to the defendant. The plaintiff cannot be permitted to retain the gold while the defendant is called upon to pay/deposit the admitted amount of liability.”
10. As discussed above, the defence as raised by the Respondent is that he has only received an amount of Rs. 21,14,782/- through bank transfers and no amounts have been received through cash. The Petitioner has stated that Respondent has returned only an amount in the sum of Rs. 3,94,000/- of the total amounts received. The Respondent has stated that for the loan taken, a substantial security of about 500 gms. of gold [the Collateral gold] belonging to the Respondent has been given to the Petitioner as security. Thus, the Petitioner is already secured. The Respondent has also taken a defence that the Petitioner is a money lender and that he has taken blank cheques and taken his signatures on blank papers which was thereafter, misused by the Petitioner including for filing of criminal complaint under Section 138 of the Negotiable Instruments Act, 1881. 10.[1] In addition, the Respondent has in his Leave to Defend Application clearly set out the details of the gold in the following manner:
11. The fact that there was some gold exchanged is also apparent from the WhatsApp Chats which is extracted below, which has not been denied by the Petitioner. The WhatsApp Chats also contains a reference to some amounts. In addition, it contains an excel sheet as an attachment and a voice note. There is also a clear reference to gold by a statement that ‘I am selling gold’ on 21.10.2022 by the Petitioner. The extract of the WhatsApp Chat relied upon is set out below:
12. In its Reply to the Leave to Defend Application, the Petitioner failed to place on record any document to support his allegations or to clearly deny the claims of Defendant as far as concerns the Collateral gold. 12.[1] The Petitioner relied on Para 13 of his Reply, which is his Reply to paragraph 9 of the Leave to Defend Application, however, the same does not reflect any clear denial as is observed by the Trial Court. The Reply to Leave to Defend Application only sets out that that the Respondent has not produced any receipt in support of his contentions that he owned the collateral gold nor has produced a receipt of handing over of the gold to the Petitioner. It further states that the value of gold articles is in crores. It is apposite to extract the relevant paragraph of the Reply to Leave to Defend Application below: “13. That in Para no. 9 of the application under reply, though the Defendant has contended that he had gave the gold articles including11 gold chain, 30 Kade and Chudi (Bangles), 1 Bracelet, 5 Earring, 3 necklace, 1 Ring totaling 512 gms to the Plaintiff as collateral security against the loan taken from the Plaintiff, however, no document as to the receipts of purchase of alleged gold articles so as to prove the date of purchase and amount of purchase of the same has been filed by the Defendant along with the Application under reply. Also no receipt or document has been placed before this Hon’ble Court to prove that the alleged gold articles have been allegedly given to the Plaintiff as collateral security. Without prejudice to the aforesaid, it is submitted that according to the quantity of the alleged gold articles as contended to be given by the Defendant to the Plaintiff, the same are estimated to be in value of Crores of Rupees and it is highly improbable that in exchange of those alleged gold articles estimated to be valued in Crores of Rupees given as collateral security, no receipt or document has been obtained by the Defendant from the Plaintiff which itself proves that the contention of the Defendant of giving the alleged gold articles as collateral security to the Plaintiff is false and vexatious.”
13. The record reflects that the that the factum of a transaction existing between the parties not subject to a dispute. The only contention between the parties is that whether the leave to defend should have been granted conditionally or subject to deposit of security. It is settled law that ordinarily unconditional leave to defend is not granted where the amounts in issue are admitted, however, in the present case, it does seem plausible that the amounts transferred by the Petitioner were secured by the Respondent. The WhatsApp chat’s reference to sale of gold, in this context is also relevant. However, the efficacy of this evidence will have to be finally examined by the Ld. Trial Court. This Court agrees with the finding of the Ld. Trial Court that there is also no clear and unambiguous denial of the factum of receipt of the Collateral gold by the Petitioner.
14. The Supreme Court in Ambadas Khanduji Shinde v. Ashok Sadashiv Mamurkar[3], has held that the revisional jurisdiction of the High Court is restricted to cases of illegal or irregular exercise of jurisdiction by the subordinate courts. The Supreme Court in Ambadas Khanduji case has held:
15. In view of the aforegoing discussions, this Court finds no infirmity with the Impugned Order, which would warrant interference by this Court in exercise of its revisionary jurisdiction.
16. The Petition is accordingly dismissed. All pending Applications stand closed.
TARA VITASTA GANJU, J AUGUST 8, 2025/ ha