RVG Consulting International Pte. Ltd. v Shanti Overseas Pte. Ltd.

RVG Consulting International Pte. Ltd. (the claimant), whose sole director was Mr Rohit Goyal, transferred USD 100,000 to Shanti Overseas Pte. Ltd. (the defendant), whose director was Mr Manoj Banwari Pasari, on 5 November 2018. That transfer was not disputed. The claimant said it was a short-term loan carrying interest at 3% per annum and repayable by 30 November 2018. It accepted that USD 50,000 was repaid on 29 November 2018 and that USD 6,000 was paid in July 2020, which it said went first to interest. In District Court Originating Claim No 875 of 2023 it sought USD 50,758, or alternatively USD 44,000 if interest was not proved.

The defendant denied any loan. According to Mr Pasari, the two companies had a business relationship going back to 2017, buying commodities such as cloves in Indonesia for resale in India, and the money was the claimant's contribution towards payments to suppliers. In the alternative, the defendant pleaded that it had repaid USD 56,000 and that the parties had agreed to set off the remaining USD 44,000 against monies connected with a sale of cloves to Aarel Import Export Pvt Ltd, which Mr Goyal was alleged to have collected from third-party buyers without passing on to Aarel.

1. Whether the USD 100,000 was a loan or an advance for joint business ventures
2. Whether, if it was a loan, it was due for repayment and carried interest at 3% per annum
3. Whether the remaining balance was discharged by an agreed set-off involving Aarel

On the nature of the transfer, the court relied on Mr Pasari's own WhatsApp message on the day of the transfer asking for a loan, a word the claimant had not prompted, and on the defendant's internal ledger recording the receipt as a loan. In an exchange on 25 October 2019 Mr Pasari did not deny that the money was to be returned, but said it was stuck in cloves and proposed a circular route of payments, which the court read as a tacit acknowledgement that repayment was owed. The defendant's account of a meeting and of lopsided business arrangements gave the impression of afterthoughts, and its evidence of bank credit lines did not show what was available at the time.

On the terms, no document fixed a repayment date, but the 2019 exchange showed both sides understood the time for repayment had passed before the action began. The 3% interest rested only on a bare assertion in Mr Goyal's affidavit, and the claimant's later submission that it was agreed orally was unsupported. Both parties accepted that a loan need not carry interest, so the court could find a loan without the pleaded interest. The USD 6,000 was therefore applied to principal.

On set-off, the debts lacked mutuality: the loan was owed by the defendant to the claimant, while any sum collected by Mr Goyal was owed to Aarel. A contractual set-off could override this, as in Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank International), Singapore Branch v Motorola Electronics Pte Ltd [2010] 3 SLR 48, but no one from Aarel gave evidence that it had agreed to such an arrangement, and Mr Pasari's messages describing Aarel's position were at best inadmissible hearsay.

The District Court allowed the claim in part. It found that the money was a loan, now due, but that interest at 3% per annum was not proved, so both payments went to principal. It gave final judgment for the claimant for USD 44,000 with interest at 5.33% per annum from the date of the Originating Claim until payment, and rejected the set-off defence. Costs were to be fixed by the court if not agreed.