Delhi District Court
Rajender Kumar Saluja vs Gulshan Kumar Saluja on 15 April, 2023
IN THE COURT OF SH. SUDHANSHU KAUSHIK :
ADDL. DISTRICT JUDGE-02 & WAQF TRIBUNAL :
PATIALA HOUSE COURTS : NEW DELHI
CIVIL SUIT NO. 560/2018
CNR NO.DLND01-005099/2018
RAJENDER KUMAR SALUJA
S/O LATE SH. G.D. SALUJA
R/O A-15-16, BUDH NAGAR
INDER PURI, NEW DELHI-110012
.....PLAINTIFF
VERSUS
GULSHAN KUMAR SALUJA
S/O SH. ASHOK KUMAR
R/O 1115, SECOND FLOOR
SECTOR-14, GURGAON
HARYANA
ALSO AT:
ZONAL TAXATION OFFICER (3)
1ST FLOOR, M.I.G. NAGAR NIGAM
GURGAON C-1, INFO CITY
SECTOR 34, GURGAON
.....DEFENDANT
DATE OF INSTITUTION : 30.05.2018
DATE OF CONCLUSION OF FINAL ARGUMENT : 16.03.2023
DATE OF PRONOUNCEMENT OF ORDER : 15.04.2023
ORDER
1. This is a suit under Order XXXVII of Code of Civil Procedure, 1908 (hereinafter referred to as 'CPC') for the recovery of a sum of Rs. 25,00,000/- (Rupees Twenty-Five Lac only) along with CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 1 of 16 pendente-lite and future interest at the rate of 24% per annum. The suit is based on five dishonoured cheques.
2. The brief facts as disclosed in the plaint are;
(a) Plaintiff Rajender Kumar Saluja and defendant Gulshan Kumar Saluja were on friendly terms. Defendant approached plaintiff and informed him that he was in need of money and demanded friendly loan on various occasions. Plaintiff acceded to his demands and provided him loans on various occasions. Between the period February 2016 to June 2016, plaintiff advanced a friendly loan of Rs.25,00,000/- to the defendant in various parts. The amount was paid to the defendant on five different occasions through cheques as well in cash. On each occasion, defendant executed a receipt/ undertaking of having received the loan amount.
(b) It is the plaintiff's case that towards repayment of the friendly loan, defendant issued five post-dated cheques of Rs.5,00,000/- each but these cheques were dishonoured and returned by the banker with remarks 'Funds Insufficient'. Plaintiff issued separate legal notices in respect of each cheque requesting the defendant to pay the cheque amount but it did not yield result. Consequently, plaintiff filed the present suit and five separate criminal complaints under Section 138 of Negotiable Instrument Act.
CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 2 of 16
3. Summons under Order XXXVII of CPC were served on the defendant. Defendant filed appearance within the requisite period. Thereafter, on the application filed by the plaintiff, summons for judgment were served on defendant. Defendant filed the application seeking leave to defend. Plaintiff opposed the application by filing reply.
4. The averments made in the application seeking leave to defend are that; The suit is not maintainable under Order XXXVII of CPC; Defendant admitted his signatures on the cheques as well as acknowledgements but denied having taken the loan from the plaintiff; He mentioned that plaintiff was not known to him; He came up with a version that he took a loan of Rs.9,50,000/- from the brother of plaintiff; He mentioned that the brother of the plaintiff was his friend; He stated that the brother of plaintiff advanced him a loan of Rs.9,50,000/- by issuing cheques from the bank account of the plaintiff; He admitted having received this amount in his bank account; He gave an explanation about the dishonoured cheques mentioning that at the time of advancing loan, the brother of plaintiff took from him five cheques of Rs.5,00,000/- each and also made him sign certain documents; He claimed that he repaid the entire loan amount of Rs.9,50,000/- (in cash) to the brother of plaintiff but he failed to obtain from him the receipt of payment; He mentioned that he made several requests to the brother of defendant to return the cheques and the receipts/undertaking executed by him; He stated that the brother CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 3 of 16 of plaintiff informed him that the cheques and receipts were not traceable; He mentioned that the brother of plaintiff betrayed his trust and the cheques were presented by the plaintiff with his banker; He conveyed that plaintiff misused the cheques which were handed over by him as security to the brother of plaintiff. On the basis of these contentions, plaintiff has sought leave to defend.
5. I have heard the arguments advanced by the parties.
6. Counsel for plaintiff argued that defendant has failed to disclose any triable issue and the leave to defend should be dismissed. He has mentioned that the plaintiff's claim is based on cheques and the suit is perfectly maintainable under Order XXXVI of CPC. He argued that defendant has no defence to the plaintiff's claim and the defence raised by him is sham and bogus. He prayed that the suit may be decreed.
7. On the other hand, counsel for defendant has submitted that the suit is not maintainable under Order XXXVII of CPC. He contended that plaintiff has failed to place on record the original documents and therefore, the suit cannot be decreed. He mentioned that plaintiff has concocted a false story. He argued that plaintiff has misused the cheques which were handed over by the defendant to the brother of the plaintiff. He argued that plaintiff never obtained any loan from the defendant. He mentioned that the application seeking leave to defend discloses various triable CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 4 of 16 issues and defendant deserves unconditional leave to defend. In order to support these submissions, he has placed reliance on the decisions in the judgment of "Neebha Kapoor Vs. Jayantilal Khandwala And Ors" (2008) 3, SCC 770, "Aarti Bhargava vs. Kavi Kumar Bhargava", 1999 (50), DRJ, High Court of Delhi and judgment tiled as "Gangadhar Mahadev Mirashi and Ors. vs. Krishanaji Vishram Nadkarni And Ors."
8. I have perused the record in the light of respective arguments.
9. Order XXXVII of CPC provides for expeditious delivery of judgment in respect of certain documents as mentioned therein. The procedure is basically an exception to the general rule relating to the recovery of money under classes of suit specified under Order XXXVII CPC. The procedure for recovery of money under Order XXXVII CPC being summary in nature envisaged that defendant has to satisfy the court that he has defence to the suit filed by plaintiff. If the defence raised by the defendant is plausible, court would grant him leave to defend and thereafter, the defendant would be permitted to contest the suit either conditionally or unconditionally.
10. The principles governing the grant and non-grant of leave to defend under Order XXXVII Rule 3 of CPC have been laid down by the Apex Court in the matter of "IDBI Trusteeship Services CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 5 of 16 Ltd. Vs Hubtown Ltd." 2017 (1) SCC 568. The observations made in para-17 of the judgment are as follows:
"17. Accordingly, the principles stated in paragraph 18 of Mechelec's case will now stand superseded, given the amendment of Order XXXVII Rule 3, and the binding decision of four judges in Milkhiram's case, as follows;
17.1 If the defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the plaintiff is not entitled to leave to sign judgment, and the defendant is entitled to unconditional leave to defend the suit;
17.2 If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the plaintiff is not entitled to sign judgment, and the defendant is ordinarily entitled to unconditional leave to defend;
17.3 Even if the defendant raises triable issues, if a doubt is left with the trial judge about the defendant's good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security;
17.4 If the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 6 of 16 principal sum together with such interest as the court feels the justice of the case requires.
17.5 If the Defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the plaintiff is entitled to judgment forthwith;
17.6 If any part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the defendant in court."
11. Coming to the facts of the present case. It has been submitted by defendant that the suit is not maintainable under Order XXXVII of CPC. This argument deserves to be rejected. Section 6 of the Negotiable Instrument Act defines the cheque as a bill of exchange drawn on a specified banker not expressed to be payable otherwise then on demand. Normally, cheques are issued to the banks holding the money of the drawer of the cheque. The bank is in the position of the debtor of the drawer of the cheque. The cheque is thus an order of the drawer thereof as creditor, to the bank who is his debtor, to pay to the payee of the cheque on the date of presentation, the amount thereof. The relationship between the drawer of the cheque and his banker is contractual. Section 30 states that the drawer of a cheque is bound in case of dishonor of cheque by the drawee or acceptor thereof to compensate the holder provided due notice of dishonour has been given to, or CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 7 of 16 received by, the drawer. Thus, Section 30 requires due notice of dishonour to be given to the drawer of the cheque for maintaining a claim for compensation on account of dishonour of the cheque. Section 31 states that the drawee of the cheque having sufficient funds of the drawer in his hands properly applicable to the payment of such cheque must pay be cheque when duly required to do so, and, in default of such payment, must compensate the drawer for any loss or damage caused by such default. In view of these provisions, it is apparent that the dishonour of a cheque is actionable under Order XXXVII of CPC provided notice of dishonour has been given to the drawer. The present suit is based on five dishonoured cheques. Plaintiff has placed on record the certified copies of the cheques mentioning that the original cheques have been filed in the complaints filed by him under Section 138 of Negotiable Instrument Act. Plaintiff issued separate legal notices in respect of dishonoured cheques. The copies of the legal notices have been placed on record. The suit has been filed in the manner prescribed under Order XXXVII of CPC. It contains an averment to the effect that the plaintiff is not seeking any other relief which does not fall within the ambit of Order XXXVII of CPC. In view of this, the argument that the suit is not maintainable under Order XXXVII of CPC is erroneous and the same deserves to be rejected.
12. Now, coming to the aspects whether the defendant has a substantial defence to the plaintiff's claim or the defence raised by CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 8 of 16 him is sham. Section 118 of the Negotiable Instrument Act provide certain presumption in case of a negotiable instrument. Section 118(a) states that until the contrary is proved, it shall be presumed that every negotiable instrument was made or drawn for consideration and that every instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration. This is indeed a rebuttable presumption. At this stage, it has to be seen whether an opportunity for rebutting the presumption needs to be granted. It is not the defence raised by the defendant that the cheques does not bear his signatures or that the details therein were not filled by him. Defendant has admitted his signatures on the cheques. He mentioned in the leave to defend application that the brother of plaintiff advanced him a loan of Rs.9,50,000/- and took from him cheques of Rs.25,00,000/- as security for repayment of the loan. He categorically stated this fact in para-5 of the application seeking leave to defend. He clarified in para-7 of the application that each cheque was for a sum of Rs.5,00,000/- and it was issued in the name of plaintiff. He further mentioned that he not only issued these cheques but also signed certain other documents. Perhaps, this para contains contradictory pleas as he has stated at one place that the five cheques were blank and mentioned at the other place that the cheques were of Rs.5,00,000/- each and the same were in the name of plaintiff. Be as it may, defendant has admitted having issued five cheques in the name of the plaintiff. There is an admission on the part of the CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 9 of 16 defendant about the date, signatures and the name of the person in whose favour the cheques were issued. Defendant has admitted that he was the author of these cheques. His sole contention is that the cheques were handed over to the brother of the plaintiff as security for the loan of Rs. 9,50,000/-. The said line of defence is improbable.
13. It can not be conceived that a prudent man taking a loan of Rs.
9,50,000/- would issue five cheques of Rs. 5,00,000/- each as security for the repayment of the said loan. Plaintiff gave details of the manner in which the loan was advanced to the defendant. He mentioned that part loan amount was advanced through cheques while the remaining loan amount was handed over to the defendant in the form of cash. It is apparent that the defendant has taken a false and bogus plea about obtaining loan of Rs. 9,50,000/- from the brother of the plaintiff. Since, this much of loan amount was taken by him through cheques, therefore, there was no possibility of denying it as the entries would have been reflected in his bank account. In order to cover this aspects, he has presented a false defence which does not appeal to the mind of an ordinary prudent man. Defendant has submitted that he repaid the loan of Rs. 9,50,000/- to the brother of the plaintiff in cash but he did not insist on receipt. It is unbelievable that a borrower executing various receipts and handing over five security cheques of Rs. 25,00,000/- to the lender would not insist either on the execution of receipt or the return of the security cheques at the CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 10 of 16 time of repaying the loan amount. It further fortifies the conclusion that the defence raised by the defendant is moonshine.
14. Defendant has mentioned that he requested the brother of the plaintiff on several occasions to return the security cheques but he informed him that the cheques were not traceable. He mentioned that the brother of the defendant assured him that the cheques shall be returned as and when they are traced. These pleas are false and concocted. It is usual conduct of an ordinary prudent man that in such a situation, he would atleast give instructions of stop payment to his banker to ensure that the cheques are not misused. Defendant did not take any action against the brother of the plaintiff for obtaining the alleged cheques. He kept silent and did not even reply to the legal demand notices. This, further goes on to show that the pleas taken by him are false.
15. In view of the discussion made in the aforesaid paras, it is apparent that defendant has no defence to offer to the plaintiff's claim. Defendant has taken false and baseless pleas which highlights the falsity of the defence taken by him. He took a plea that although, loan was obtained by him from the brother of the plaintiff but the amount was transferred from the bank account of the plaintiff through cheques. He took a plea that the loan of Rs. 9,50,000/- was repaid by him in cash to the brother of the plaintiff but he did not insist on receipt. He admitted his signatures on the cheques as well as the acknowledgment receipt executed by him at CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 11 of 16 the time of obtaining the loan. He mentioned that the cheques and the acknowledgment receipts were not taken back by him from the brother of the plaintiff. All these pleas are sham and bogus.
16. The argument that the suit under Order XXXVII of CPC is not maintainable merely because the plaintiff has claimed interest and incidental charges does not hold ground. The High Court of Delhi observed in "Jindal Steel & Power Limited Vs N.S.Atwal" (CS- OS No.713/2010) as under:
"13. As far as the plea of the maintainability of the suit under Order 37 of the CPC is concerned, though undoubtedly there is no document on the basis whereof, the defendant can be said to have admitted the liability in the balance principal amount of Rs.2,98,39,060/- towards the plaintiff but in my opinion, in view of the subsequent admission by the defendant of the liability in the principal amount claimed in the suit, the same pales into insignificance. This Court, if were to, inspite of such admission by the defendant, go into technicalities as to the maintainability of the suit under Order 37 of the CPC, would be lending credence to the perception "the law is an ass - an idiot" echoed by Mr. Bumble in Charles Dickens 'Oliver Twist'. Justice cannot be frustrated by legalistics. It is the duty of every court to prevent its machinery from being made a sham, thereby running down the rule of law itself as an object of public ridicule. It will and must prove any stratagem self defeating if a party indulges in making the law a laughing stock, for the court will call him to order. Justice Krishna Iyer in Bushing Schmitz Private Limited v. P.T. Menghani (1977) 3 SCR 312 quoted with approval Lord Erskine "there CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 12 of 16 is no branch of the jurisdiction of this Court more delicate than that, which goes to restrain the exercise of a legal right". He further held "But the principle of unconscionability clothes the court with the power to prevent its process being rendered a parody". Once it is clear that there is no dispute of the sum of Rs. 2,98,39,060/- being due from the defendant to the plaintiff in the loan account, the Court will not enter into an academic exercise and pronounce on technicalities. The Supreme Court in T. Arvindandam Vs. T.V. Satyapal, AIR 1977 SC 2421, Liverpool & London S.P. & I Association Ltd. Vs. M.V. Sea Success I (2004) 9 SCC 512 and ITC Limited Vs. Debts Recovery Appellant Tribunal, (1998) 2 SCC 70 has held that the Courts are not to prolong litigations, the fate whereof is otherwise clear and at the expense of other cases requiring adjudication.
Even if not under Order 37of the CPC, the plaintiff under Order 12 Rule 6 CPC or under Order 15 is entitled to a decree in the principal sum of Rs.
2,98,39,060/-. Recently also, in Krishna Devi Malchand Kamathia v. Bombay Environmental Action Group, (2011) 3 SCC 363, the Supreme Court observed that justice is only blind or blindfolded to the extent necessary to hold its scales evenly; it is not, and must never be allowed, to become blind to the reality of the situation, lamentable though that situation may be."
17. Plaintiff has sought recovery of liquidated demand of money payable by defendant arising out of five cheques of Rs. 5,00,000/- each. The suit has been filed on the strength of five cheques. The liability for the payment of the debt arises out of the cheques issued by the defendant in favour of plaintiff. The receipts/undertaking serves as an additional CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 13 of 16 mode to support the plaintiff's claim. Plaintiff admitted the receipts as well as cheques. It is an admitted position that the original cheque were filed by the plaintiff in the criminal complaints under Section 138 of The Negotiable Instruments Act and therefore, only certified copies of the same were placed on record. Since, the plaintiff's claim is based on cheques, therefore, the fact that the receipts/undertaking were filed subsequently does not change the outcome.
18. I am of the considered opinion that defendant No.1 has failed to disclose that there is a triable issue for which leave to defend may be granted. The suit is based on cheques executed by defendant. Indeed, the claim of the plaintiff contains the amount towards interest and incidental charges but this does not mean that the plaintiff is dis-entitled for a decree under Order XXXVII of CPC. Question whether interest could be granted in the absence of agreement between parties came for consideration before Hon'ble Delhi High Court in "Ramesh Chander versus M/s Shiv Infra Promoters Pvt Ltd RFA No. 211/2017 dated 21st August, 2018 in which it held as under :
"No doubt there is no agreement between the parties, but counsel for the appellant/plaintiff rightly relies upon paragraph 21 of the judgment of the Supreme Court in the case of South Eastern Coalfields Ltd. Vs. State of M.P. and ors., (2003) 8 SCC 648 and which holds that interest is payable in equity in certain circumstances. This paragraph 21 of the judgment in the case of South Eastern Coalfields Ltd. (supra) reads as under:- "21. Interest is also payable in equity in certain circumstances. The rule in equity is that interest is payable even in the absence of any agreement or CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 14 of 16 custom to that effect though subject, of course, to a contrary agreement. Interest in equity has been held to be payable on the market rate even though the deed contains no mention of interest. Applicability of the rule to award interest in equity is attracted on the existence of a state of circumstances being established which justify the exercise of such equitable jurisdiction and such circumstances can be many.
19. In Ramesh Chandra's case after relying upon the judgment of in "South Eastern Coal Fields Ltd Vs State of MP and Anr" (2003) 8 SCC 648, the High Court of Delhi held that a Court can always grant an interest on equity basis to a party entitled for the same and therefore, there is nothing wrong in law for a plaintiff to claim an interest in a summary suit as grant of an interest would always be subject to discretion of the Court. Merely because a plaintiff has demanded an interest from defendant, it cannot be said that the suit filed by plaintiff would not be maintainable and therefore, contention of defendant on this account is rejected.
20. Section 80 of Negotiable Instrument Act, 1881, provides that when no rate of interest is agreed, rate of interest shall be calculated at the rate of 18% per annum from the date when such amount should have been paid by the party. Present suit is based on dishonoured instruments, therefore, plaintiff, under the law, is entitled to claim interest @ 18% on the dishonoured cheques. Accordingly, the suit is decreed against the defendant with the following reliefs;
CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 15 of 16
(a) A decree for a sum of Rs. 25,00,000/- (Rupees Twenty-Five Lac only).
(b) Pendent-elite and future interest at the rate of 18% per annum till realization of decreetal amount.
(c) Cost of the suit is also awarded to the plaintiff.
21. Decree sheet be prepared accordingly.
22. File be consigned to record room.
Announced in open Court on 15th April, 2023 (Sudhanshu Kaushik) Addl. District Judge-02 & Waqf Tribunal, New Delhi District, Patiala House Courts, New Delhi/15.04.2023 CS No. 560/2018 Rajender Kumar Saluja v. Gulshan Kumar Saluja page 16 of 16