Unrebutted Testimony and Failure to Lead Evidence Fatal to Defense: Delhi HC

The Delhi High Court has reinforced the evidentiary weight of unrebutted testimonies in recovery suits, ruling that a defendant's failure to cross-examine a plaintiff or lead evidence to prove a claimed settlement is fatal to their defense. This judgment overturns a Trial Court's decision that had dismissed a recovery suit on overly technical grounds despite the defendant's implied admission of receiving funds.

A single-judge bench of Justice Amit Bansal was hearing an appeal under Section 96 read with Section 151 of the Code of Civil Procedure, 1908 against a Trial Court judgment that had dismissed a suit for the recovery of Rs. 10,00,000/-. The appellant, a proprietor engaged in the sale of kiryana items, challenged the dismissal of his suit which was based on a friendly loan advanced through banking channels.

Key Takeaways

Unrebutted Evidence Holds Weight

When a witness is not cross-examined, their testimony regarding the advancement of a loan is deemed unrebutted and should generally be accepted by the court.

Burden of Proof on Defense

If a defendant admits to receiving a sum but claims it was adjusted against a different transaction or settlement, the burden lies entirely on the defendant to prove such an adjustment.

Overcoming Technical Objections

The strict requirement for proving bank statements under Section 65-B of the Indian Evidence Act, 1872 may be relaxed if the receipt of the amount itself is not denied by the opposing party.

TDS Certificates as Corroborative Proof

Form 16A (TDS Certificate) issued by a defendant in favor of a plaintiff serves as strong corroborative material to establish a financial nexus, even if the deductor's name differs slightly from the party name, provided the link is clear.

Court's Observations on Evidentiary Requirements

The High Court observed that the Trial Court adopted an "unduly technical approach" regarding the statement of account. The Court noted that since the respondents did not deny the receipt of Rs. 10,00,000/-, the necessity of proving the bank statement in strict accordance with the Indian Evidence Act, 1872 was diminished.

The Court, in its reasoning, observed: "In the opinion of this Court, the proving of the bank statement would have been necessary if the respondents had denied the receipt of the sum of Rs.10,00,000/- from the appellant. The respondents in their written statement, did not deny the receipt of Rs.10,00,000/- from the appellant and took the defense that the said amount was to be adjusted towards another transaction between the parties."

Furthermore, the Court highlighted that the respondents failed to lead any evidence to substantiate their claim of an amicable settlement or business adjustment. The Court has the following directions:

"The suit is decreed in favour of the appellant and against the respondents for a sum of Rs. 10,00,000/- along with interest @ 6% per annum, from the date of filing of the suit till the date of realization. Decree sheet be drawn accordingly."

Ratio

In a suit for recovery, where the defendant admits the receipt of funds but pleads a defense of adjustment or settlement, the onus of proof shifts to the defendant. If the defendant fails to cross-examine the plaintiff's witnesses or lead independent evidence to prove the alleged settlement, the plaintiff’s unrebutted testimony and documentary evidence of the transfer are sufficient to decree the suit.

Background

The appellant, Prem Prakash Modi, filed a suit alleging he advanced a friendly loan of Rs. 10,00,000/- to the respondents in January 2012 via bank transfer. While the respondents initially filed a written statement claiming the amount was adjusted against a business deal involving 'cloves' in cold storage, they subsequently stopped appearing and were proceeded ex parte.

The Trial Court dismissed the suit despite the lack of opposition during the evidence stage, citing non-compliance with Section 65-B of the Indian Evidence Act, 1872 for the computer-generated bank statements and questioning the relevance of a TDS certificate (Form 16A). The Trial Court had relied on precedents like Gopal Krishnaji Ketkar v. Mohamed Haji Latif & Ors. ( "AIR 1968 SC 1413": 1968 CaseBase(SC) 30), Parasnath Hiral Lal v. Kishan Lal Chuni Lal, and Trimbak Narayan Hardas v. Babu Lal Motaji regarding the production of best evidence. However, the High Court found that the Trial Court erred in ignoring that the core transaction was not effectively challenged. Consequently, the High Court set aside the Trial Court's judgment and decreed the suit in favor of the appellant.

Case Details:
Case No.: RFA 67/2016 & CM APPL. 81531/2025
Case Title: Prem Prakash Modi v. M/S Absolute Catering Services & Anr.
Appearances:
For the Petitioner(s): Mr. Hitender Kapur and Mr. Yatin Dhawan, Advocates.
For the Respondent(s): Mr. R.K. Rathore, Mr. Rakesh Chander Agrawal and Mr. Kartik Kumar Agarwal, Advocates.

Source: 2026 CaseBase(DEL) 7511