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"When payment of a certain amount of money and the repayment of only a portion of the same are admitted, the party pleading that such a part repayment was in full and final settlement, has a huge burden cast upon him to show that there was a settlement. ", observed a bench of Justices Hemant Gupta and V. Ramasubramanian on Thursday.

The Court further noted that oral evidence of the third party mediators, is not sufficient to establish full and final settlement, in cases where all transactions have happened only through banking channels and the defendants claimed them to be business transactions.

Anita Rani had approached the top court after her two money suits having been dismissed by the trial Court, but decreed by the First Appellate Court, the decrees so passed by the First Appellate Court were reversed by the High Court in two second appeals.

In the first recovery suit, the appellant alleged that the respondents borrowed a sum of Rs. 10,50,000 and repaid only Rs. 5,00,000. In the second suit, the appellant alleged that the respondent lured the appellant and her husband into his real estate business and got the signature of the appellant in some blank papers for ease in business transactions. Later, the appellant found out that an amount of Rs. 54,50,000 had been withdrawn from her account without her knowledge.

Thus, an FIR was lodged against the respondents under Section 420, 467, 468 and 471 read with Section 120-B of the IPC. However, the respondents were granted anticipatory bail upon furnishing a bank guarantee of Rs. 50,00,000.

The the respondents admitted the receipt of the money and took the plea that they had paid Rs. 5,00,000 in August 2006 as full and final settlement. For the second suit, the respondents submitted that the money was received for business transactions, out of which Rs 30,00,000 was given to the respondents by the appellant and his son out of love and affection.

"It is unbelievable that the respondents, who reached such a settlement, failed to have the same recorded in black and white, either in the form of a memo or in the form of a receipt.", noted the bench.

The Court further remarked that when a party who admits receipt of certain amount of money on a particular date and pleads discharge by way of a full and final settlement at a latter date, is the one on whom the onus lies.

“This onus was not discharged by the respondents in the first suit and, hence, the plaintiff was entitled to succeed in the first suit. The High Court completely overlooked this aspect.”

Moreover, the bench observed that in a suit for recovery of money, a defendant admitting the receipt of money but pleading that the same was a gratuitous payment, is obliged to prove that it was a gratuitous payment.

While allowing the appeal, the Court held that the respondents miserably failed to discharge the onus of proof so cast upon them.

“Hence, the plaintiff­-appellant is entitled to a decree despite a few discrepancies in her evidence, especially when the discrepancies have no bearing upon the payment/flow of monies from the plaintiff to the defendants.”

Cause Title: ANITA RANI v ASHOK KUMAR & ORS.