Undated Cheques May Lack Enforceability, But They Can Still Prove a Debt: Delhi High Court Upholds Money Decree Based on Promissory Notes

“Signatures Not Specifically Denied—Forgery Cannot Be Pleaded at Final Stage” In a judgment affirming the evidentiary weight of promissory notes and corroborative documentation in friendly loan disputes, the Delhi High Court dismissed RFA filed by the legal heirs of a deceased borrower, upholding a ₹50 lakh recovery decree based on two promissory notes and five undated cheques.

Justice Amit Bansal, while disposing of the appeal and allowing cross-objections, awarded pendente lite interest at 9% per annum and full litigation costs to the lender, reiterating that technical objections cannot defeat genuine financial transactions proven on a preponderance of probabilities.

“A civil suit is to be decided on balance of probabilities. Once the signatures are not specifically denied and the borrower’s cheques are unexplained in the lender’s possession, the burden shifts. The defendants failed to rebut the initial case set up by the plaintiff,” the Court ruled.

“Undated Cheques Are Not Bills of Exchange, But Still Prove the Debt”—Corroborative Role of Instruments Recognized

The plaintiff, a neighbour and friend of Late Rakesh Bahadur Mathur, claimed to have extended a friendly, interest-free loan of ₹50 lakhs over a year (2013–2014), against which two promissory notes and five undated cheques were executed by the deceased. Upon non-repayment and the borrower’s death in 2015, the plaintiff sued his legal heirs for recovery.

The defendants denied the loan and alleged that all documents were forged and fabricated. However, the Court held:

“Though the five cheques handed over by late Rakesh Mathur were undated and blank in payee name and therefore not enforceable under the Negotiable Instruments Act as bills of exchange, they support the existence of the debt since the cumulative value matches the promissory notes.”

“Defendants failed to produce any counterfoil or explanation of how the cheques came into plaintiff’s possession—there is no claim of theft or fraud in pleadings.”

“Forgery Plea Unsustainable Without Specific Denial or Handwriting Evidence”—Court Finds Defence Baseless

Justice Bansal sharply criticised the defendants' failure to specifically deny signatures in their pleadings, holding that under the CPC and the Evidence Act, vague denials are insufficient to dispute execution of documents.

“No specific plea of forgery or denial of handwriting was taken in the written statement. Defendants did not seek expert examination nor lead any evidence to contradict signatures.”

“At the stage of arguments, one cannot turn around and allege forgery without foundational pleadings and rebuttal evidence.”

The Court affirmed the trial court’s findings that the bank witness, summoned by the plaintiff, confirmed the authenticity of the signatures by comparing them with records. Meanwhile, the defendants failed to produce a single document with the deceased’s handwriting, or any income records to counter the plaintiff’s financial capacity.

“Promissory Notes Bear Both Parties’ Names—Minor Discrepancies Do Not Invalidate Acknowledged Debt”

The defendants had raised objections over the lack of witnesses on the promissory notes, and the absence of transaction-wise breakdown in the document. However, the Court held that:

“Both promissory notes bear the signatures of Rakesh Mathur and record the names of borrower and lender—this suffices under law. The absence of cheque numbers or split values does not discredit their validity.”

Relying on settled contract and evidence law, the Court observed that friendly loans are often informal in nature, and documentation may not reflect perfect commercial precision. What matters is the substance of acknowledgment, not formality.

“Civil Law Is About Probabilities, Not Mathematical Certainty”—Court Applies Balanced Evidentiary Standard

Justice Bansal reiterated that civil suits do not require proof beyond reasonable doubt, and are to be assessed on balance of probabilities. The plaintiff having produced two valid promissory notes, backed by undated but corroborative cheques, and having led consistent oral and bank evidence, had satisfied the legal threshold.

“The defendants were evasive and failed to rebut even basic facts. In contrast, the plaintiff’s case was coherent, supported by documents, and partially admitted by the defendants.”

Cross-Objections Allowed—Court Grants Pendente Lite Interest and Costs

The Trial Court had awarded future interest at 12% per annum, but denied pendente lite interest without assigning any reason. The High Court found this omission legally unsustainable:

“Even if promissory notes are silent on interest, a successful plaintiff is entitled to pendente lite interest under Section 34 CPC. The absence of reasons in the Trial Court’s judgment is an error.”

Accordingly, the Court awarded 9% interest per annum from the date of filing the suit (1 October 2015) till date of decree (3 September 2019).

Additionally, the Court allowed the plaintiff’s prayer for litigation costs, including Local Commissioner’s fee, holding:

“Costs follow the event. Trial court overlooked its own prior order directing that Local Commissioner’s fee would be recoverable as litigation expense. Successful party cannot be denied reimbursement.”

Appeal Dismissed—Registry Directed to Release Deposited Amount with Interest

The Court, while dismissing the appeal, directed that the balance of the deposited decretal amount lying in fixed deposit be released to the plaintiff along with accrued interest, subject to adjustment against total recoverable dues.

Date of Decision: 29 January 2026