1. Shree Electricals And Hardware ... vs Mool Chand Nanda S/O Lt. Sh. N.C. Nanda ... on 19 March, 2026

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Delhi High Court - Orders

1. Shree Electricals And Hardware ... vs Mool Chand Nanda S/O Lt. Sh. N.C. Nanda ... on 19 March, 2026

Bench: Neena Bansal Krishna

                          $~56
                          *         IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +         RFA 246/2026, CM APPL. 17111-17113/2026
                          1.        SHREE ELECTRICALS AND HARDWARE
                                    (Sole-proprietorship Firm through its sole proprietor)

                          2.        VIVEK GUPTA
                                    (Sole-proprietor) S/o Sh. S P Gupta
                                    Address: H. No A-21, Sheetla Enclave,
                                    Gali No.6, Gurugram, Haryana.                    .....Appellants
                                                       Through: Appearance not given
                                                                  versus
                                    MOOL CHAND NANDA
                                    S/o Lt. Sh. N.C. Nanda
                                    R/o H. No. 1 & 2 First Floor,
                                    Friends Enclave, Pitam Pura.                                                           .....Respondent
                                                       Through:                       None
                                    CORAM:
                                    HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA

                                                                  ORDER

% 19.03.2026 CM APPL. 17112/2026 (condonation of delay)

1. The present application has been filed seeking condonation of delay of 372 days in filing the Appeal. The reasons stated are that the Appellant was facing multiple litigations, had changed legal counsel in January 2025, and the said counsel, despite assurance, failed to file the Appeal and delayed handing over the case files.

2. It is further stated that the Appellant thereafter, applied for certified copies of the Trial Court record, which were prepared on 22.11.2025, but came to his knowledge only in February 2026, whereafter the present RFA 246/2026 Page 1 of 12 This is a digitally signed order.

3. This Court finds that the reasons furnished are neither specific nor convincing and do not satisfactorily explain the inordinate delay of 372 days. Nevertheless, in the interest of justice, this Court is inclined to condone the delay.

4. Accordingly, the delay of 372 days in filing the Appeal, is condoned. The application is disposed of in the above terms.

RFA 246/2026:

5. The present Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (hereinafter referred to as "CPC") has been preferred against the Judgment and Decree dated 06.11.2024, whereby the learned District Judge dismissed the Appellants' Application seeking leave to Defend and decreed the Suit under Order XXXVII CPC, for recovery of Rs.5,00,000/- along with interest @ 9% p.a., from the date of institution of the Suit till actual realisation.

6. The Plaintiff/Respondent, Sh. Mool Chand Nanda, instituted the aforesaid summary Suit under Order XXXVII CPC for recovery of Rs.5,00,000/- along with pendente lite and future interest.

7. It was averred that the Appellant No.1 is the proprietorship firm of Appellant No.2, namely, Vivek Gupta, who is its sole proprietor. According to the Plaintiff/Respondent, the Defendant No. 2, had approached the Plaintiff in April 2015, through his relative, namely Sh. Jetha Nand Saluja, and obtained a friendly loan of Rs.5,00,000/- with an assurance to repay the entire loan amount within a period of approximately 8 months, from the date of borrowing.

8. In order to secure this loan, the Defendants also issued one cheque RFA 246/2026 Page 2 of 12 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 10/04/2026 at 20:52:51 bearing No. 611215 dated 08.12.2015 for a sum of Rs.5,00,000/- drawn on Syndicate Bank, SMH Branch, Sector 17, Gurgaon, Haryana with an assurance that the same shall be honoured on presentation. A Receipt admitting the aforesaid liability, was also executed.

9. When the Plaintiff approached the Defendant for encashment, the Defendant stated that he did not have sufficient funds at that time and requested the Plaintiff to present the cheque after some time. The cheque was subsequently presented in March, 2016, but was dishonoured upon presentation, vide Return Memo dated 04.03.2016 with the remarks "payments stopped by drawer".

10. The Plaintiff served a Legal Notice dated 29.03.2016, to the Defendant but did not get any satisfactory reply. He thereafter, filed a Complaint under Section 138 Negotiable Instruments Act, 1881, which is pending adjudication.

11. The Plaintiff also filed the present Suit under Order XXXVII CPC, for recovery of the loan of Rs.5,00,000/- along with interest.

12. The Appellants/Defendants filed an Application seeking leave to defend, wherein, inter alia, it was asserted that they had no acquaintance with the Plaintiff and had, in fact, never even met him. It was alleged that Sh. Jetha Nand Saluja, the power of attorney holder of the Plaintiff, was an unlicensed money-lender, who advanced loans in the names of his friends and relatives. It was contended that the Plaintiff's claim of having advanced the loan to the Appellants, was inherently improbable.

13. It was further submitted that there existed no friendly relationship between the parties and that the Appellant had never seen the Plaintiff prior to the institution of the present proceedings. Thus, the story of the Plaintiff RFA 246/2026 Page 3 of 12 This is a digitally signed order.

14. The Defendants, have categorically denied any acquaintance or friendly relationship with the Plaintiff. It is their case that they have been defrauded by Sh. Jetha Nand Saluja, the Special Power of Attorney (SPA) holder of the Plaintiff, who is alleged to be a "chronic litigant", involved in over 50 proxy litigations.

15. The Defendants contend that the cheque in question, was one of sixteen cheques, obtained by Sh. Saluja, along with corresponding Receipt, not toward any loan liability, but as a matter of "security" for an entirely distinct transaction.

16. Detailing the nature of this transaction, the Defendants asserted that Sh. Jetha Nand Saluja was involved in FIR No. 0372/2014, P.S. Civil Lines, Gurugram, and had approached the Defendant to assist in settling with his investors, by promising to repay the amounts. While Sh. Jetha Nand Saluja initially paid some amounts, he later requested the Defendant to pay the Investors from his own pocket. As a safeguard for this balance payment, Sh. Saluja purportedly handed over "transfer rights" in his name, to the Defendant, as security.

17. Believing the representations made by Sh. Jetha Nand Saluja, the Defendants claimed to have paid more than Rs.1.40 crores to the said investors and on the strength of these payments, the investors provided "No Objection Certificates" (NOCs), which led to the exoneration of Sh. Saluja in the aforementioned FIR.

18. However, the Defendant alleged that once his purpose was served, Sh. Jetha Nand Saluja turned dishonest and sold the property to a third party, and has since been summoned to face trial, in the same FIR.

RFA 246/2026 Page 4 of 12

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 10/04/2026 at 20:52:51

19. The Defendants maintained that the original transfer rights and Agreements to Sell between the investors and one Suresh Kumar Ahuja remain in his possession, thereby raising a triable issue regarding the fraudulent nature of the Plaintiff's claim.

20. The Defendant further asserted that he had no concern or privity with the Plaintiff, whose case has been handled as a "proxy" by Sh. Jetha Nand Saluja. There are various cases under Section 138 Negotiable Instruments Act, 1881, pending in various courts in Delhi and in Jhajjar, Haryana, the details of which have not been disclosed. Sh. Jetha Nand Saluja, the power of attorney holder of the Plaintiff, is also pursuing all those Complaints.

21. The Defendants further challenged the Suit on the ground of limitation, asserting that the alleged loan was advanced in April 2015 and therefore, the Suit instituted in December, 2018, was barred by limitation.

22. It was also contended that no part of the cause of action arose within the jurisdiction of the Delhi Courts, as the security cheques were handed over to Sh. Jetha Nand Saluja in Gurugram, and the Defendant's bank Account is likewise, situated in Gurugram.

23. On these grounds, the Defendants sought Leave to Defend, claiming that the pleas of fraud, proxy litigation, lack of territorial jurisdiction and the bar of limitation, raised several "triable issues" entitling them to a full trial.

24. The learned District Judge, in the impugned Judgment dated 06.11.2024, observed that the Plaintiff's claim was not merely based on the dishonoured cheque, but was supported by a written Receipt signed by the Appellant. The Court noted that in this Receipt, the Appellant had categorically admitted to borrowing Rs.5,00,000/- as a "friendly loan" from RFA 246/2026 Page 5 of 12 This is a digitally signed order.

25. Since the Appellant did not deny his signatures on this Receipt, nor did he plead that it was obtained through coercion or was a blank document, the Trial Court found his defense of "security cheques" and "fraud" to be unsubstantiated.

26. Furthermore, the Court reaffirmed its territorial jurisdiction by applying the common law principle of "debtor must seek the creditor,"

noting that the Plaintiff is a resident of New Delhi and the debt was payable to him, at his place of residence. Finding the defence to be illusory and failing to raise any triable issue, the learned District Judge dismissed the Application for Leave to Defend and the Suit of the Plaintiff/Respondent was decreed.

27. Aggrieved by the said judgment, the present Appeal has been preferred.

28. The grounds of challenge are that the learned District Judge failed to appreciate that it lacked territorial jurisdiction to entertain the Suit. The Plaint is completely silent about which part of the transaction took place in Delhi or what part of the cause of action arose in Delhi, except for the mere presentation of the cheque with the Plaintiff's banker, in Delhi. It is not even the case of the Plaintiff that the loan was given in Delhi, or that the subject cheque was drawn and handed over in Delhi, or that the Receipt in question was executed and handed over in Delhi.

29. It is a settled proposition of law that the cause of action arises, inter alia, when the payment is refused by the drawee bank. In the present case, the bank is situated in Gurugram, Haryana; thus, the Appellants contended RFA 246/2026 Page 6 of 12 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 10/04/2026 at 20:52:51 that the cause of action arose entirely in Gurugram, and the Delhi Courts had no jurisdiction to entertain the present Suit.

30. It was further contended that the alleged loan amount was given in April, 2015. Accordingly, limitation expired in April 2018. The Suit has been filed in December, 2018 and is barred by limitation.

31. The learned District Judge further failed to appreciate that the dishonour of a security cheque, allegedly given at the time of the advancement of the loan, can neither extend the period of limitation for the underlying debt nor independently give rise to a fresh cause of action, to save or revive a time-barred claim.

32. It has not been appreciated that there was no proof or document filed by the Appellants in respect of the alleged loan being given in April 2015 or that it was given for a period of 8 months. The cash Receipt is also silent about the date of execution or the date of giving the loan.

33. It has also not been considered that according to the Plaintiff, the Defendant had approached him through Sh. Jetha Nand Saluja, for the alleged loan and had issued the cheque and cash Receipt in his favour, whereas the Defendants have asserted that there existed an altogether different transaction between them and Sh. Jetha Nand Saluja, in the course of which the cheque and cash Receipt in question, were fraudulently obtained by Sh. Jetha Nand Saluja. This defence finds support from the fact that the present Suit has been filed by Sh. Jetha Nand Saluja, as the SPA holder of the Plaintiff.

34. It is contended that triable issues were raised, which required evidence to establish whether the cheque in question was fraudulently obtained by Sh. Jetha Nand Saluja from the Defendant or was issued in RFA 246/2026 Page 7 of 12 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 10/04/2026 at 20:52:51 connection with some other transaction, as stated in the Leave to Defend Application. The Defendant was thus, entitled to an opportunity to explain and prove the alleged fraud during the trial.

35. The various documents including copies of cases, plaints, complaints, etc., filed by the defendant, have not been considered. There are almost 14 Complaint cases under Section 138 NI Act and Civil Suits which are pending against the Appellants/Defendants in Delhi District Courts, filed by various persons and in most of the cases, the Complainant is being represented by Jetha Nand Saluja, as SPA holder.

36. The learned Trial Court further failed to consider the Status Report dated 19.08.2016 filed in FIR No. 0818, PS City, Gurugram under Sections 420, 406, 120-B of the IPC, lodged by Jetha Nand Saluja against the Appellant and others. In the said Report, Sh. Jetha Nand Saluja categorically admitted to having "arranged" funds from various relatives and friends and obtaining the subject cheques and Receipts from the Appellant, within the jurisdiction of Gurugram, Haryana.

37. The learned Trial Court has not taken into consideration the copy of Suit bearing CS No. 578 of 2019 titled Jetha Nand Saluja v. Manjula Mehta, wherein he has alleged that Sh. Jetha Nand Saluja has arranged funds of Rs.75 lakhs from his relatives to give to the Appellants, for which the Appellants have issued Receipts and post-dated cheques, in their name.

38. In the statement under Section 161 Cr.P.C. given by Sh. Jetha Nand Saluja on 27.12.2019, in FIR No. 0523/2018, he admitted that on 16.06.2015, one of the investors, Lachman Singh Negi received Rs.40 lakhs from the Appellants herein, which has not been considered, as it clearly supports the Appellants' defence.

RFA 246/2026 Page 8 of 12

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 10/04/2026 at 20:52:51

39. The Appellants in support of their case, have relied on B.L. Kashyap and Sons Ltd. v. JMS Steels and Power Corporation and Another, 2022 LiveLaw (SC) 59, wherein the Supreme Court held that the grant of Leave to Defend, with or without conditions, is the ordinary rule and the denial is an exception. Even if there remains a reasonable doubt about the probability of defence, sterner or higher conditions may be imposed while granting Leave, but denial of Leave would be ordinarily countenanced only in such cases where the Defendant fails to show any genuine triable issue.

40. The Appellants have also placed reliance on Empire Home Appliances Pvt. Ltd. v. M/s Suraj Enterprises and Others, 2016 SCC OnLine Del 3954, RFA No. 208/2016 decided on 03.05.2016, wherein it is held that if a Plaintiff institutes a Suit for recovery based on a cheque, he is also required to specifically plead the underlying consideration, for which the said cheque was issued.

41. It is submitted that no claim for recovery of money can be entertained solely on the basis of a dishonoured Instrument, unless the underlying consideration for which the cheque was issued is specifically pleaded and proved on record.

42. In light of the above, it is submitted that various triable issues were raised by the Appellants in their Leave to Defend Application, which was wrongly dismissed. Consequently, the Appellants pray that the impugned Judgment and Decree, be set aside and they be granted an opportunity to defend the Suit on merits.

Submissions heard and record perused.

43. It is not in dispute that the cheque in question for a sum of Rs.5,00,000/- dated 08.12.2015 bears the signatures of the Appellants.

RFA 246/2026 Page 9 of 12

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 10/04/2026 at 20:52:51 However, the Appellants have disputed the underlying transaction and have taken the plea that the cheque was not issued towards any "friendly loan,"

but in connection with another transaction allegedly involving Sh. Jetha Nand Saluja. The cheque, admittedly on presentation in March 2016, stood dishonoured with the remarks "payment stopped by drawer".

44. Pertinently, while the Appellant has not denied the foundational fact of signing the acknowledgment/Receipt and the cheque, he claims that he never had any direct dealings with the Plaintiff and that the said documents were obtained by Sh. Jetha Nand Saluja, in the course of an independent transaction.

45. It is further alleged that Sh. Jetha Nand Saluja was an accused in FIR No. 0372/2014 (P.S. Civil Lines, Gurugram) and the said cheques were issued as "security" in connection with payments allegedly made by the Appellant, towards settlement with certain Investors, amounting to approximately Rs. 1.40 crores.

46. The aforesaid defence does not merit any credence. While there may be other criminal litigations inter se Sh. Jetha Nand Saluja and the Appellant, such disputes do not dilute the evidentiary value of the cheque in question for Rs.5,00,000/-. The liability is supported by the signed Receipt/acknowledgment as well as the cheque, which, upon presentation, was dishonoured.

47. The Appellant has put up a convoluted defence that he had given Rs.1.40 crores to the investors on behalf of Jetha Nand Saluja and the Cheque/Receipt was given as a security. Once the money was given by the Appellant, where was the question of his giving the Cheque/Receipt and that too, in the name of the Plaintiff.

RFA 246/2026 Page 10 of 12

This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 10/04/2026 at 20:52:51

48. The mere existence of independent disputes or alleged cross-claims do not, by itself, create any defence in favour of the Appellant or give rise to a triable issue, particularly in the face of the admitted signatures of the Appellants, on the cheque and the receipt. The learned Trial Court has rightly observed that no substantial triable issue was raised by the Appellants, in support of their defense.

49. The Appellants have also raised an objection to the territorial jurisdiction of the Delhi Courts, contending that no part of the cause of action arose in Delhi. However, admittedly, the Plaintiff is a resident of Delhi and the amount in question, was payable to him. The cheque was also presented for encashment in Delhi.

50. For the purposes of proceedings under Section 138 of the Negotiable Instruments Act, 1881, jurisdiction may be determined with reference to the location of the drawee bank. However, insofar as a civil suit for recovery is concerned, jurisdiction is to be assessed on a different footing. In the facts of the present case, it cannot be said that no part of the cause of action arose in Delhi, particularly when the Plaintiff is resident here and the cheque was presented for encashment, in Delhi. The learned District Judge has, therefore, rightly concluded that this Court had the territorial jurisdiction to entertain the present Suit.

51. Regarding the plea of limitation, it is observed that the subject cheque is dated 08.12.2015. In a Summary Suit instituted under Order XXXVII CPC, the cause of action arises specifically upon the dishonour of the negotiable instrument, as held in Ajanta Raj Proteins v. Himanshu Industries, 2018 SCC OnLine Del 6874. In the present case, the cheque was dishonoured on 04.03.2016. As the Suit was filed on 10.12.2018, it is well RFA 246/2026 Page 11 of 12 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 10/04/2026 at 20:52:51 within the three-year period of limitation computed from the date of such dishonour. Consequently, the learned Trial Court rightly affirmed that the Suit was filed within the period of limitation.

52. It is settled law that while considering an Application for Leave to Defend under Order XXXVII CPC, the Court is required to examine whether the defence raises a substantial triable issue. In B.L. Kashyap and Sons Ltd. v. JMS Steels and Power Corporation (supra), the Hon'ble Supreme Court has reiterated that while grant of Leave to Defend is the ordinary rule where a plausible defence is disclosed, such leave can be refused where the defence is found to be illusory, sham or moonshine.

53. In the present case, the defence sought to be raised by the Appellants is found to be illusory and unsupported, and does not disclose any bona fide or substantial triable issue. The reliance on other litigations allegedly involving Sh. Jetha Nand Saluja, in the absence of any direct nexus to the present transaction, does not dilute the evidentiary value of the admitted documents.

54. The learned District Judge has rightly concluded that no triable issue was raised in the Leave to Defend Application and has rejected the same. The Suit of the Plaintiff/Appellant has rightly been dismissed.

55. There is no merit in the present Appeal, which is hereby dismissed. Pending Applications, if any, also stands disposed of.

NEENA BANSAL KRISHNA, J.

MARCH 19, 2026 N RFA 246/2026 Page 12 of 12 This is a digitally signed order.

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 10/04/2026 at 20:52:51

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