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M/S Fair Communication and Consultants & Anr. v. Surendra Kerdile

Civil Appeal · 2020 INSC 57Decided 20 Jan 2020
Civil Appeal No. 106 of 2010
Justice Indira Banerjee · Justice S. Ravindra Bhat

Background

The respondent (plaintiff), who held property in Indore managed through his nephew acting as Power of Attorney holder, sued to recover Rs. 80,000 that he said he had lent to his nephew for business expansion, which was never repaid despite post-dated cheques being issued and later dishonoured. The nephew's defence was that he had returned the money the very next day and that the cheques were wrongly retained by his uncle. The trial court dismissed the suit, persuaded that a matching bank deposit by the plaintiff supported the nephew's version, but the High Court reversed this and decreed the suit in the plaintiff's favour, reasoning that the deposit actually came from a separate property-sale transaction worth more than what was formally documented.

Decision Breakdown

The Supreme Court dismissed the appeal and upheld the High Court's decree in favour of the plaintiff. It rejected the appellants' argument that a photocopy of a sale agreement relied on by the High Court was inadmissible, since the appellant himself had admitted his signature on it during cross-examination and had explained why only a copy (not the original, which was with the property buyer) was available. It also rejected the argument that examining the true, higher sale consideration of the property amounted to enforcing a "benami" transaction, since the plaintiff was not asserting ownership through a benami arrangement but merely explaining the source of the funds he later deposited: a straightforward evidentiary point, not a claim barred by the Benami Transactions (Prohibition) Act.

Lesson Learnt

In a civil money dispute, admissions made during cross-examination, even about a mere photocopy of a document, can be used against the person who made them, and explaining where your money came from is not the same as making a legal claim based on a "benami" (nominee) property arrangement, which is a narrower and separate legal concept.

Official source (sci.gov.in)View Judgment (PDF)

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