Court rules directors’ funds to brother were a gift, not loan

Court rules directors’ funds to brother were a gift, not loan

The sessions court rules the money constituted ‘familial support’ given in better times.

Vel Manoharan and counsel Asmawi Ismail at the courthouse after the decision. (Vel Manoharan pic)
PETALING JAYA:
The Seremban sessions court ruled on Friday that funds provided by two directors of a prominent industrial engineering firm to their younger brother were a gift, not a loan.

Sessions judge Abu Bakar Manat ruled that monies totalling RM221,044, which brothers M Natarajen and M Satishkumar—both “Datuks”—gave their younger sibling, Vel Manoharan, constituted “familial support”.

Of the sum, RM160,600 was meant for Vel’s education, while the remaining RM60,444 was a down payment for his purchase of a house from family-owned firms Linsun Engineering Sdn Bhd and Linsun Global (M) Sdn Bhd.

Abu Bakar said Natarajen and Satishkumar, the plaintiffs, failed to prove that there was a contract between them and Vel, the defendant.

“There is no written agreement between the plaintiffs and the defendant,” the judge said, adding that Natarajen and Satishkumar had failed to prove the terms of the alleged oral agreement between the trio.

“There is no credible and cogent evidence to show these were loans given to Vel.”

“Based on the witnesses’ testimonies, the court finds that the existence of any oral agreement or implied contract, as claimed, was not proven,” said Abu Bakar.

The judge found that the three brothers shared a close relationship at the time the money was provided.

Abu Bakar said Natarajen and Satishkumar were estopped from disputing the purpose for which the money was given, meaning the court will not allow them to go back on a statement, promise, or position previously made or taken.

“The money was not a loan, but a sponsorship or grant given to the defendant by the family company.

“The claim by the plaintiffs was an afterthought when the family relationship broke down,” the judge said.

He also noted that the plaintiffs could only show that the payments were made via bank transfers. However, as acknowledged by Natarajen and Satishkumar, no reasons were provided when payment was made to indicate that these were loans.

Asmawi Ismail appeared for Vel, while Karthigesan Shanmugam and A R Thamayanthi represented the plaintiffs.

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