CA Claimed Rs. 50 Lakh Bank Transfers Were Repayment of Cash Loan; Delhi High Court Rejects Defence, Orders Recovery of Rs. 72.14 Lakh:

CA Claimed Rs. 50 Lakh Bank Transfers Were Repayment of Cash Loan; Delhi High Court Rejects Defence, Orders Recovery of Rs. 72.14 Lakh

The Delhi High Court has upheld a summary decree passed in favour of Zavenir Developers Pvt. Ltd. against Chartered Accountant Sandeep Goel, holding that a signed confirmation of accounts acknowledging a Rs 50 lakh loan constituted a valid written contract and acknowledgment of liability. The Court also modified the decree to grant future interest at 9% per annum until payment.

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Zavenir Developers Pvt. Ltd. filed a summary suit under Order XXXVII of the Code of Civil Procedure seeking recovery of Rs.50 lakh advanced to Sandeep Goel in September 2018 along with contractual interest at 15% per annum compounded quarterly. According to the company, the amount was transferred through banking channels in two instalments of Rs.30 lakh and Rs.20 lakh.

The company relied heavily on a Confirmation of Accounts dated 1 April 2019 signed by both parties, which recorded the loan transactions, stipulated interest at 15% per annum with quarterly compounding, and reflected an outstanding balance of Rs.53.90 lakh.

Goel, however, claimed that the amount received was not a loan. He contended that he had earlier arranged Rs.50 lakh in cash for the company and that the bank transfers merely represented repayment of that amount. He relied upon WhatsApp communications to support his defence and sought leave to defend the summary suit.

The Trial Court rejected the leave to defend application, describing the defence as sham and illusory, and decreed the suit for Rs.72.13 lakh with pendente lite interest at 9% per annum.

On the plaintiff’s separate appeal seeking contractual interest, the High Court observed that while pre-suit interest could be awarded at the agreed rate, pendente lite and post-decree interest fall within the Court’s discretion under Section 34 CPC.

The Court found no arbitrariness in the Trial Court’s decision to award pendente lite interest at 9% simple interest instead of the contractual rate of 15% compounded quarterly.

However, it noted that no reasons had been provided for denying future interest altogether. Accordingly, the Court modified the decree and directed that future interest at 9% simple interest per annum would be payable from the date of decree until realization of the decretal amount.

The Delhi High Court dismissed Sandeep Goel’s appeal and upheld the summary decree passed in favour of Zavenir Developers Pvt. Ltd. It partly allowed the company’s appeal by granting future interest at 9% per annum from the date of decree until payment, while maintaining the pendente lite interest awarded by the Trial Court.

To Read Full Judgment, Download PDF Given Below.