The Delhi High Court has reaffirmed an important principle concerning cheque-based recovery proceedings: a discrepancy regarding the date on which a cheque was handed over does not, by itself, defeat an underlying loan claim when the drawer admits that the cheque belongs to him and bears his signatures.
In Rakesh Srivastava v. Pradeep Yadav, RFA 811/2026, decided on 10 August 2026, Justice Neena Bansal Krishna dismissed the appeal filed by Rakesh Srivastava and upheld the decree passed by the District Court directing recovery of ₹6 lakh, along with pendente lite and future interest at 9% per annum.
Background of the Dispute
The dispute arose from an alleged friendly loan of ₹6 lakh. Pradeep Yadav claimed that Srivastava had approached him on 27 February 2020, seeking financial assistance of ₹8 lakh for his mother’s medical treatment and other personal requirements.
According to Yadav, he advanced ₹6 lakh to Srivastava. When the amount was subsequently demanded in March 2022, Srivastava allegedly issued a cheque for ₹6 lakh dated 2 May 2022.
The cheque was presented for payment but was dishonoured on 11 May 2022. Yadav thereafter issued a legal notice dated 27 May 2022, demanding repayment. When the amount remained unpaid, he instituted a recovery suit.
The District Court accepted Yadav’s claim and decreed recovery of ₹6 lakh with interest. Aggrieved by the decision, Srivastava approached the Delhi High Court.
Defendant’s Defence
Srivastava denied having borrowed money from Yadav. His principal defence was that the cheque relied upon by Yadav was an old cheque leaf that had allegedly been misplaced from his office and was subsequently misused.
He also questioned Yadav’s financial capacity to advance the alleged loan and raised objections relating to service of the legal notice, territorial jurisdiction and the grant of interest at 9% per annum.
One of the arguments before the High Court concerned an alleged discrepancy relating to when the cheque had actually been handed over. The appellant contended that this inconsistency undermined the plaintiff’s version of events.
Admission of Signature Proved Significant
The High Court found the defendant’s admission regarding the cheque to be particularly important. Srivastava had admitted in his written statement that the cheque belonged to him and carried his signatures.
However, the Court noted that he had not produced convincing evidence explaining when or how the cheque was misplaced, or how Yadav had obtained possession of it.
There was also no assertion that Yadav had access to Srivastava’s office from where the cheque was allegedly misplaced. In the absence of such an explanation, the defence of misuse remained unsupported by evidence.
The Court therefore concluded that the circumstances pointed towards the cheque having been handed over by Srivastava to Yadav towards repayment of the ₹6 lakh loan.
Cheque Handover Date Not a Material Contradiction
Rejecting the appellant’s argument, the Delhi High Court held that the discrepancy concerning the precise time of handing over the cheque could not be treated as a contradiction going to the root of the case.
The Court observed that once the cheque bearing the appellant’s admitted signatures was established to have been given to the plaintiff, the precise date of its handover was not sufficient to destroy the plaintiff’s case.
The ruling demonstrates that courts will examine the overall evidentiary circumstances rather than treating every inconsistency as fatal to a recovery claim.
Interest Under Section 34 CPC Upheld
The High Court also upheld the award of interest at 9% per annum.
The Court relied upon Section 34 of the Code of Civil Procedure, 1908, which empowers a civil court to grant interest during the pendency of proceedings and after the decree, subject to the circumstances of the case.
Therefore, even in the absence of a specifically agreed contractual rate of interest, the court can award reasonable pendente lite and future interest while passing a money decree.
Key Legal Takeaway
The decision is significant for cheque-based loan recovery cases. Merely alleging that a signed cheque was an old or misplaced cheque may not be sufficient to rebut a recovery claim, particularly where the defendant fails to provide a credible explanation regarding the cheque’s possession and subsequent use.
The judgment also highlights the importance of admissions in pleadings. Once the drawer admits ownership of the cheque and his signatures, the surrounding circumstances and the absence of a plausible explanation for the cheque reaching the claimant can become important factors in determining liability.
Conclusion
The Delhi High Court’s decision in Rakesh Srivastava v. Pradeep Yadav reinforces the principle that minor discrepancies concerning the handover of a cheque cannot automatically override substantive evidence supporting a loan transaction.
Where the cheque is admittedly drawn on the defendant’s account and bears his admitted signatures, the defendant must provide a credible and evidentially supported explanation for how the cheque came into the claimant’s possession if misuse is alleged.
The ruling therefore serves as a useful precedent in civil recovery suits, cheque-related disputes and loan recovery litigation, particularly where the defence rests primarily on alleged misuse of a signed cheque.
Case: Rakesh Srivastava v. Pradeep Yadav
Case No.: RFA 811/2026
Court: Delhi High Court
Decision Date: 10 August 2026
Amount: ₹6 lakh
Interest: 9% per annum
Judge: Justice Neena Bansal Krishna