Delhi High Court
Yogender Singh vs Kotak Mahindra Bank Ltd. & Ors. on 11 September, 2013
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 11th September, 2013
+ RFA No.321/2013
YOGENDER SINGH ..... Appellant
Through: Mr. Praveen Kr. Singh with Mr.
Madhukant Jha, Advs.
Versus
KOTAK MAHINDRA BANK LTD. & ORS. ..... Respondents
Through: Mr. Pratiti Rungta, Mr. Prashant
Singh & Mr. Sumit Dayal, Advs.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
RAJIV SAHAI ENDLAW, J
1. The appeal impugns a money decree (dated 25 th August, 2012 of the
Court of Addl. District Judge (Central-07), Delhi in Civil Suit No.250/2010
filed by the respondent-1 Bank under Order XXXVII of the CPC) against
the appellant pursuant to the order of the same date of dismissal of the
application for leave to defend filed by the appellant.
2. The respondent no.1 Bank had filed the said suit against the
respondents no.2&3 herein and the appellant (impleaded as defendant no.3),
pleading:-
(a). that its predecessor in interest had disbursed commercial
vehicle loan to the respondent no.2 Sh. Pratap Singh (defendant
No.1 in the suit) and the respondent no.3 Sh. Sohan Singh
(impleaded as defendant No.2) was the co-borrower and the
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appellant/defendant no.3 the guarantor in the said
Contract/Agreement;
(b). that the appellant/defendant no.3 and the respondents no.2 & 3
failed to adhere to the financial discipline and committed
default in regular repayment of the loan by way of equated
monthly installments;
(c) that the predecessor of the respondent no.1 Bank accordingly in
accordance with the Agreement recalled the loan but the
appellant/ defendant no.3 and the respondents no.2&3 did not
even reply to the legal notice;
(d). that as per the accounts maintained by the respondent no.1
Bank, the appellant/defendant no.3 and the respondents no.2&3,
as on 30th November, 2007 were liable to pay a sum of
Rs.5,42,096/- towards principal, interest, penal interest and
other dues and were also liable to pay interest @ Rs.24% per
annum from 30th November, 1997 till realization; and,
(e). the suit was filed under Order XXXVII of the CPC on the basis
of the documents executed by the appellant/defendant no.3 and
the respondents no.2&3.
accordingly the decree in the aforesaid amount was sought jointly and
severally against the appellant and the respondents no.2&3.
3. The suit was entertained under Order XXXVII of the CPC and
summons for appearance issued. Only the appellant/defendant no.3 entered
appearance; the respondents no.2&3 failed to even enter appearance.
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Summons for judgment were thereafter issued to the appellant/defendant
no.3 who filed an application for leave to defend inter alia pleading that the
respondent no.1 Bank has no cause of action against the appellant/defendant
no.3 who was an outsider and had no concern with the respondent no.1 Bank
and the respondents no.2&3 in any manner and had not stood as guarantor
for the respondents no.2&3.
4. The respondent no.1 Bank filed a reply to the application for leave to
defend, denying the contents thereof and reiterating the case in the plaint.
5. The learned Addl. District Judge has vide order dated 25 th August,
2012 dismissing the application of appellant/defendant No.3 for leave to
defend, held:-
(a). that though the counsel for the appellant/defendant no.3 had
argued that the Deed of Guarantee had not been executed by the
appellant/defendant no.3 but the application for leave to defend
was silent to this effect;
(b). that in the application for leave to defend the
appellant/defendant no.3 had not denied the Guarantee
Agreement and his signature thereon;
(c). once the respondent no.1 Bank had produced the original
Guarantee Deed on record and the appellant/defendant no.3 had
even thereafter not pleaded the said fact on record, the said
contention was beyond pleadings;
(d). there appeared some similarity between the signatures of the
guarantor on the Guarantee Deed and the sample signature of
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the appellant/defendant no.3 taken in the Court on 31 st May,
2012; and,
(e). that the appellant/defendant no.3 had in the leave to defend not
denied having received the legal notice and had also not taken
the plea of having protested thereagainst;
accordingly the leave to defend application was dismissed and the
judgment and decree for recovery of monies aforesaid pronounced against
the appellant/defendant no.3 besides against the respondents no.2&3 herein.
6. It is inter alia the contention of the appellant/defendant no.3 in the
Memorandum of Appeal that the Guarantee Deed on the basis whereof claim
was made against the appellant/defendant no.3 as guarantor, was not even
filed along with the plaint and was filed subsequent to the filing of
application for leave to defend by the appellant/defendant no.3.
7. It was enquired from the counsel for the appellant/defendant no.3 on
16th July, 2013 when this appeal first came up for consideration, whether any
copy or photocopy of the said Guarantee Deed was filed along with the suit.
8. Upon the counsel for the appellant/defendant defendant no.3
expressing inability to answer, and being of the prima facie view that if at
the time of issuance of summons for appearance and summons for judgment
there was no document on record on the basis whereof the suit could be
maintainable under Order XXXVII, the issuance of such summons would be
without jurisdiction, the notice of the appeal was issued and the Trial Court
record requisitioned.
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9. A perusal of the Trial Court record on 26 th August, 2013 showed that
the Guarantee Deed, which according to the counsel for the respondent no.1
Bank also was the only document signed by the appellant/defendant no.3,
was not filed, neither the original nor any copy thereof, when the suit against
the appellant/defendant no.3 was entertained under Order XXXVII or when
summons for appearance and summons for judgment were issued and served
on the appellant/defendant no.3. The original Guarantee Deed was found to
have been filed after the leave to defend application had been filed by the
appellant/defendant no.3. It was accordingly enquired from the counsel for
the respondent no.1 Bank whether in such circumstances the suit, at least in
so far as against the appellant/defendant no.3, could have been entertained
under Order XXXVII of the CPC. On request of the counsel for the
respondent no.1 Bank the matter was adjourned to today.
10. The counsel for the respondent no.1 Bank has today invited attention
to Neebha Kapoor Vs. Jayantilal Khandwala (2008) 3 SCC 770. In the
said case, the suit under Order XXXVII of the CPC was filed on the basis of
a promissory note and dishonoured cheques and even though no application
for leave to defend was filed by the defendant, the Court granted
unconditional leave to defend for the reason that the original documents had
not been filed by the plaintiff and were reported to have been misplaced.
The Supreme Court while upholding the said order held/ observed, (i) that
for the purpose of obtaining a summary judgment ordinarily the original
documents must be produced and in the event of original documents being
not available, the plaintiff is obligated to prove the loss of documents; (ii)
that only because a suit has been entertained as a summary suit, the same by
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itself may not be ground for passing of a judgment on mere asking; (iii) that
a decree could not have been granted on the basis of even photostat copies of
documents; (iv) where applicability of Order XXXVII itself is in question,
which appeared to be the principal reason given by the Courts below for
grant of unconditional leave to defend, grant of leave may be permissible;
(v) that the Court before passing a decree, is entitled to take into
consideration the consequence thereof; (vi) that the CPC does not put any
embargo on the Courts exercising a suo motu power of granting leave in a
case of this nature, even when no application for leave to defend is filed;
and, (vii) that the Court can always refuse to exercise its discretion as the
original documents were not produced and to call upon the plaintiff to prove
that the documents are lost.
11. As the aforesaid analysis of the judgment supra would show, the same
rather than coming to the rescue of the respondent No.1 Bank is against the
respondent No.1 Bank. The counsel for the respondent No.1 Bank has
however emphasized that from the observations of the Supreme Court that
"ordinarily the original documents must be produced" it follows that it is not
mandatory.
12. I may in this regard mention that I have in Madan Lal Ltd. Vs.
Growth Techno Projects Ltd. MANU/DE/1689/2009 held that Rule 5 of
Order XXXVII of CPC empowering the Court to order the bill, hundi or
note on which the suit is founded to be deposited with an officer of the
Court, is indicative of there being no mandatory requirement of the original
document on the basis whereof the suit is filed being filed and that Order
XXXVII of CPC does not prohibit proceeding with the suit in the absence of
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the original document, though the Court can, where filing of the original is
deemed necessary, refuse to proceed without the original document being
produced.
13. I again had occasion to consider the said aspect in S.M.V. Agencies
Pvt. Ltd. Vs. M/s. Cross Country Heritage Hotel MANU/DE/1363/2013
where it was observed that Neebha Kapoor (supra) was a case where the
original document on which the suit under Order XXXVII was filed being
not available till the date of consideration of the application for leave to
defend and not as laying down that without the original document the suit
cannot be maintained.
14. However, the present is a case where what to talk of original, no copy
also of the document, on the basis of which claim against the
appellant/defendant No.3 under Order XXXVII of CPC was made, was filed.
Order XXXVII of CPC prescribes a summary procedure for dealing with the
suits upon bills of exchange, hundis, promissory notes, written contracts,
enactments, guarantees etc. The Legislature in its wisdom has deemed it
appropriate to provide for expeditious disposal of suits, claim wherein is
based on documents of commercial nature. Though, Rule 2 thereof while
prescribing the procedure for institution of summary suits does not provide
for the document to be filed along with the suit but in my opinion, there can
be no summary suit unaccompanied by the document on which it is based,
whether it is original or a copy thereof. I say so because the procedure
prescribed for disposal of such suits enables the Court to, upon the defendant
not entering appearance despite service of summons for appearance or upon
the defendant not filing the leave to defend application despite service of
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summons for judgment, to immediately decree the suit. The question of the
Court decreeing the suit in such situations would not arise if the document
on which the suit is based, is not before the Court.
15. This is also evident from Rule 3 of Order XXXVII of CPC which
requires the plaintiff to together with the summons of the suit serve on the
defendant a copy of the plaint and annexures thereto. The reference to such
annexures has but to be a reference to the document on which the suit is
based.
16. The next question which arises is the effect of the subsequent filing of
the document.
17. In my view, though non-filing of the document on which the suit is
based (original or copy) along with the suit would not be fatal and the Court
can grant time to the plaintiff to file the document but the summons for
appearance cannot be issued without such document being before the Court
and copy thereof being served on the defendant along with the summons for
appearance. A defendant who is served with summons for appearance
without the document on which the suit is based being before the Court and
being served, upon the defendant along with the summons for appearance,
would be entitled to even without entering appearance contend that the suit
is not maintainable under Order XXXVII of the CPC.
18. This Court in Goyal MG Gases Ltd. Vs. Premium International
Finance Ltd. 138 (2007) DLT 259 held that a suit under Order 37 is
necessarily required to be accompanied by the original documents which are
the basis of the claim before the Court. Finding, that the same had not been
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filed, the decree even though passed was set aside under Order 37 Rule 4 of
the CPC.
19. I have in Aktiebolaget Volvo Vs. R. Venkatachalam 160 (2009) DLT
100 held that reference in the CPC to documents is not necessarily to
originals.
20. In the present case, as aforesaid, the Deed of Guarantee on the basis
whereof, the claim in the plaint against the appellant/defendant No.3 under
Order XXXVII of CPC was made, was not before the Court neither in
original nor any copy thereof and not served on the appellant/defendant No.3
till after the filing of the leave to defend application by the
appellant/defendant No.3. The suit against the appellant/defendant No.3 was
thus not maintainable under Order XXXVII of CPC and was wrongly
entertained.
21. The counsel for the respondent No.1 Bank has argued that the
appellant/defendant No.3 in the leave to defend application did not
controvert having signed the Guarantee Deed or his signatures thereon and
which reason as aforesaid also prevailed with the learned Additional District
Judge in dismissing the leave to defend application. However, the said
reason losses sight of the fact that if the suit for the aforesaid reason was not
maintainable under Order XXXVII of the CPC, the question of the
appellant/defendant No.3 filing the leave to defend did not arise. Moreover,
without the Deed of Guarantee being served on the appellant/defendant No.3
along with the summons for appearance and the summons for judgment, the
appellant/defendant No.3 could not be expected to defend the same or his
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signatures thereon and could only state that he was an outsider and had not
stood as a guarantor and which he did.
22. The Supreme Court also in Neebha Kapoor (supra) has held that the
Court is entitled to examine the question of applicability of Order XXXVII
of CPC at any stage and merely because a suit has been entertained as a
summary suit, is no reason for the Court to even in the absence of a leave to
defend application, decree the same.
23. As far as the filing by the respondent No.1 Bank of the Deed of
Guarantee after the filing of the leave to defend application is concerned,
the same cannot make the suit, which was till then was not maintainable
under Order XXXVII of CPC, maintainable. Though the possibility of, in
an appropriate case, at that stage reinitiating the procedure prescribed
under Order XXXVII of CPC de novo but the present is not found to be a
case deserving therefor.
24. Thus, the order of the learned Additional District Judge treating the
suit maintainable under Order XXXVII and considering the leave to
defend application of the appellant/defendant No.3 and dismissing the
same, cannot be sustained; axiomatically, the judgment and decree in
pursuance thereto cannot also be sustained and are set aside. The suit
insofar as against the appellant/defendant No.3 is ordered to be treated as
an ordinary suit and remanded to the Trial Court for decision in
accordance with law.
25. The appeal therefore succeeds. The order dated 25 th August, 2012
dismissing the application of the appellant/defendant No.3 for leave to
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defend and the judgment and decree against the appellant/defendant No.3 in
pursuance thereto are set aside and the suit filed by the respondent No.1
Bank insofar as against the appellant/defendant No.3 is remanded to the
Trial Court for decision afresh in accordance with law. The
appellant/defendant No.3 to within four weeks hereof file a written statement
with advance copy to the counsel for the respondent No.1 Bank and the
parties to appear before the Additional District Judge (Central-07), Delhi on
20th November, 2013 for further proceedings in the suit.
No costs. Decree sheet be drawn up.
RAJIV SAHAI ENDLAW, J.
SEPTEMBER 11, 2013 pp/bs..
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