S. 58 Evidence Act | Proving Bank Statements Unnecessary When Receipt Of Money Is Undenied And Plea Of Adjustment Raised: Delhi High Court

Delhi High Court has held that formal proof of bank statements is not mandatory in a money recovery suit where the defendant admits the receipt of funds and merely sets up a defense of adjustment against an independent transaction. Bench of Justice Amit Bansal, delivering the judgment on October 29, 2026, held that where receipt of funds is not denied in pleadings and the defendant chooses to stay away from the witness box, the plaintiff’s unrebutted deposition discharges the initial onus, warranting a decree.

The appellant instituted a civil suit for the recovery of a friendly loan of Rs. 10,00,000 advanced to the respondent through banking channels in February 2012. The respondent filed a written statement acknowledging the receipt of the amount while contending that the funds were owed under a business deal and were subsequently adjusted against cloves withheld by the appellant. After filing the written statement, the respondent failed to appear, was proceeded ex parte, and did not cross-examine the appellant or lead any evidence, yet the Trial Court dismissed the suit citing failure to prove the bank statement under Section 65-B of the Indian Evidence Act.

Whether strict proof of a bank statement under Section 65-B of the Indian Evidence Act or the Bankers' Books Evidence Act is essential when the defendant does not dispute receipt of funds in the written statement?

Whether a defendant who sets up a defense of an oral settlement and adjustment of pending amounts can prevail without stepping into the witness box or leading rebuttal evidence?

Admission of fund receipt relieves plaintiff of technical proof requirements

The High Court observed that the Trial Court committed a material error in de-exhibiting the appellant's statement of account on technical grounds. The Bench noted that proving the statement of account would only be imperative if the respondent had specifically denied receiving the amount.

No strict proof required when defendant admits receiving the funds

Justice Amit Bansal emphasized that the pleadings clearly reflected that the monetary transfer was never contested. The Court held that even if the bank statement were to be disregarded, the admission in the written statement made it indisputable that the funds reached the respondent.

The Bench observed that the respondent did not deny the receipt of Rs. 10,00,000 from the appellant and merely took the defense that the said amount was to be adjusted towards another transaction between the parties.

Failure to lead evidence defeats plea of settlement and adjustment

Addressing the Trial Court's refusal to rely on the TDS certificate in Form 16A, the High Court observed that while the form was issued in the trade name of M/s Madan Lal Shyam Sunder, it expressly designated the respondent as the deductor. Since the respondent did not cross-examine the plaintiff on this document, it retained significant corroborative weight.

Onus shifts to the defendant once monetary receipt is established

The Court underscored that setting up a defense of an oral amicable settlement in the written statement casts an active obligation upon the defendant to substantiate it through cogent evidence.

The Court held that in light of the defense taken by the respondent in the written statement, it was incumbent upon the respondent to enter the witness box and to lead evidence to show that the amount was adjusted towards another transaction.

Unrebutted testimony of plaintiff entitles recovery decree

The Bench pointed out that the respondent completely abstained from proceedings after filing the written statement and failed to cross-examine the appellant. Consequently, the Trial Court had no justifiable ground to discard the sworn testimony of the appellant.

The High Court ruled that the appellant had fully discharged his onus to prove the loan advancement, whereas the respondent failed to substantiate the alleged adjustment or settlement, rendering the Trial Court's dismissal wholly unsustainable.

Allowing the appeal, the High Court set aside the Trial Court's judgment and decreed the suit in favor of the appellant for Rs. 10,00,000 along with interest at the rate of 6% per annum from the date of institution of the suit until final realization.

Date of Decision: October 29, 2026