Delhi District Court
Surjeet Kaur vs Smt. Vimla Arora( Now Deceased) on 9 January, 2017
IN THE COURT OF MS RAJRANI: ADDITIONAL DISTRICT
JUDGE05: WEST: TIS HAZARI COURTS: DELHI.
RCA DJ/60947/2016
Surjeet Kaur
Widow of Late S. Tirlochan Singh
A41, Amar Colony,
Lajpat Nagar, New Delhi110024. ...........Appellant
Versus
Smt. Vimla Arora( now Deceased)
W/o Sh. Ved Prakash
(through her LRs) and another
(a) Shri Neeraj Arora,
son of Shri Ved Prakash Arora
(b) Shri Ved Prakash Arora
Son of Late DesRaj
(c) Ms. Vanita Arora
daughter of Shri Ved Prakash Arora
(d) Ms Preeti Arora
daughter of Shri Ved Prakash Arora
(a) to (d) residents of
B14, Kirti Nagar,
New Delhi110015.
2.Smt. Raman Jeet Bindra
A41, Amar Colony
Lajpat Nagar, New Delhi110024. ........Respondents
RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.1/13
Date of institution of the present appeal: 02.01.2014 Date of reserving of orders : 15.12.2017 Date of judgment : 09.01.2017 J U D G M E N T
1. Vide this judgment, I shall dispose of the present appeal under Section 96 of CPC against the Order dated 06.11.2013 passed by Sh. V.K. Jha, Ld. Civil Judge on dismissal of the application of the appellant under Order 37 Rule 4 of CPC for setting aside the Order dated 09.02.2004 passed in suit No.174/2003 titled as "Vimla Arora Vs. Ramanjit Bindra and Another'.
2. The case of the plaintiff before the Ld. Trial Court was that the plaintiff filed the suit under Order 37 CPC against the defendants stating that the defendant no. 1 borrowed a loan of Rs. 1 lacs from the plaintiff on 03.09.2000 which was advanced to the defendant no.1 vide cheque no. 532085 dated 03.09.2000 drawn on UCO Bank Kirti Nagar, New Delhi and the defendant no. 1 executed a receipt dated 03.09.2000 acknowledging the said loan amount. The defendant no. 1 promised to repay the loan amount with interest at the rate of 2% per month. The defendant no. 1 also issued a cheque no. 465237 dated 03/10/2000 for amount of Rs. 1 lacs in lieu of the said loan amount in favour of plaintiff drawn on Punjab & Sind Bank. The defendant no. 2 stood guarantor of defendant no. 1 for the repayment of aforesaid amount at the time of advancing the loan to defendant no. 1 by the plaintiff. Defendant no. 2 verbally promised to repay the entire loan amount RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.2/13 along with interest to the plaintiff in case defendant no. 1 fails to repay the same. When the plaintiff presented said cheque dated 03.10.2000 to the bank, the same became dishonoured. The plaintiff sent demand notices dated 26.02.2001 and 04.07.2001 to the defendants. But the defendants not paid the said amounts despite the service of demand notices and plaintiff filed the suit under Order 37 CPC for recovery of the said amount.
3. Ld. Trial Court issued summons for appearance to defendants and defendant no. 1 filed his appearance on 18.08.2003 and thereafter summons for judgment were issued to defendant no. 1. Pursuant to summons for judgment, defendant no. 1 filed leave to defend. However, Ld. Trial Court dismissed the application for leave to defend vide order dated 05.06.2004 and decreed the suit against the defendants vide judgment and decree dated 17/07/2004.
4. Appellant/defendant no. 2 did not file her appearance within the stipulated period of ten days despite being served and suit of the plaintiff was decreed against defendant no. 2 vide order dated 09/02/2004. On 24.09.2008 defendant no. 2/appellant filed an application under Order 37 Rule 4 CPC for setting aside the judgment and decree dated 09/02/2004 stating that the plaintiff has filed a false and frivolous suit under the provisions of Order 37 CPC for the recovery of Rs.1,64,000/ against the defendants which was based on cheque bearing no.465237 dated 03.10.2000. The plaintiff in the suit had averred that the defendant no.1 had signed and executed the receipt in favour of the plaintiff after receiving a sum of Rs. 1,00,000/. It is stated that in the entire plaint, the allegation against RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.3/13 the defendant no.2 was that the defendant no.2 stood guarantor for repayment of the amount given by the plaintiff to the defendant no.1 and defendant no. 2 verbally promised to repay the entire loan amount alongwith interest to the plaintiff in case the defendant no.1 fails to pay the amount to the plaintiff. The suit of the plaintiff against the defendant no.2 was not maintainable under the provisions of Order 37 CPC for the reason that defendant no.2 was not known to the plaintiff and the defendant no.2 never gave any verbal guarantee/surety to the plaintiff regarding the payment of Rs. 1,00,000/ to the defendant no.1 who is the daughterinlaw of the defendant no.2. It is stated that the plaintiff had filed a criminal complaint under the provisions of the Negotiable Instruments Act with respect to the same cheque on which the suit of the plaintiff was based and the plaintiff received the whole amount alongwith compensation from the criminal court and there was no liability of the defendant no.2 to pay any amount to the plaintiff. It is further stated that the summons of the suit of the plaintiff were never served upon the defendant no.2 and the process server gave a false report in the Court. The defendant no.2 came to know about the passing of the judgment/decree dated 09.02.2004 on 02.08.2008 when the bailiff of the Court visited the premises of the defendant no.2 for execution of the decree.
5. In reply to the application under Order 37 CPC, it has been stated by the plaintiff that application is liable to be dismissed being time barred. In the reply it is admitted by the plaintiff that "in the entire plaint, filed by the plaintiff, the plaintiff has alleged that the defendant no.2 stood guarantor for repayment of amount given by the plaintiff to the defendant no.1. The plaintiff has specifically pleaded that the defendant no.2 verbally promised to RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.4/13 repay the entire loan amount alongwith interest to the plaintiff in case the defendant no.1 fails to pay the loan amount to the plaintiff. Other contents of the application are also denied by the plaintiff/respondent no. 1.
6. The application under Order 37 Rule 4 CPC, was dismissed by the Ld. Trial Court vide Order dated 06/11/2013. Aggrieved by the said order appellant has filed the present appeal.
7. Appellant has filed the present appeal on the following grounds:
(i)The Court below has gone beyond the purview of settled principles of law and the suit cannot be filed by the deceased respondent no. 1 on the basis of alleged oral guarantee as alleged by her in the plaint.
(ii)The court has also not considered the documentary evidence filed by the appellant in support of her contentions that she was not personally served in the suit filed by respondent no. 1 under the provisions of Order 37 CPC as she was not residing at the given address by the respondent no. 1 in the suit. The court below had also not considered the record of the previous dates in which the service of the respondent no. 2 was ordered.
(iii)The court has ignored the judgment passed by the Hon'ble Judge of High Court as reported in 114 (2004) DLT 264 in case titled as "Hans Raj Vs Rakhi Ram" decided on 17.09.2004.
(iv) The court has also ignored the judgment cited by the counsel for appellant that criminal proceedings as reported in VI (2008) SLT 663 in case titled as "D.Purushotam Reddy & Anr. Vs K. Sateesh"
(v)There is judgment passed by the Apex Court as reported in AIR 1990 2218 in case titled as 'Raj Duggal Versus Ramesh Kumar Bansal" in the RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.5/13 context of leave to defend.
(vi)No notice was issued to the appellant regarding dishonour of cheque by the respondent no. 1. The court has ignored the said facts and passed an impugned order dated 06.11.2013 without going through the entire records of the case.
(vii)The court has also not considered that the suit on the basis of oral guarantee as pleaded by the respondent no. 1 is not covered as per the provisions of Order 37 Rule 2 CPC. There must be a written contract between the parties as per the amended provisions of Order 37 Rule 2 CPC.
(viii) The court has also not considered that no date of alleged guarantee given by the appellant has been mentioned in the suit filed by plaintiff Vimla Arora in the suit for recovery of amount.
(ix)The court also ignored the judgment passed by the Hon'ble Judge of High Court in case titled as "New Bank of India Vs Master Steel Marketing Co." as reported in 59 1995 DLT 521, judgment passed by Hon'ble Judge of Madras High Court as reported in (1986) 1 Mad LJ 108.
(x) The court has ignored that the court had awarded two rates of interest to the deceased respondent no. 1 in the two decrees passed, one on 09.02.2004, the rate of interest was awarded @ 18% p.a from the date of filing of suit. On the other hand, the same Civil Judge had awarded the interest @ 24% as per the decree/judgment dated 17.07.2004 passed by him against the defendant no. 2.
8. It has been argued by the Ld. Counsel for the appellant that the suit Order 37 is not maintainable against the appellant/defendant no. 2 as there is no written guarantee by the appellant/defendant no. 2. It is argued that RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.6/13 plaintiff/respondent no. 1 has not mentioned exact date on which the alleged guarantee was given by the appellant/defendant no. 2. No notice was issued to the appellant when the cheque was dishonoured and plaintiff/respondent no. 1 filed complaint under Section 138 NI Act. No written document has been placed on record by the plaintiff to show that appellant has given guarantee for repayment of amount of loan of Rs. 1,00,000/ to the plaintiff/respondent no. 1. In support of his arguments Ld. Counsel for the appellant relied upon following judgments:
(i)D.Purushotama Reddy & Anr. Vs. K. Sateesh, VI(2008)SLT 663 passed by Hon'ble Supreme Court.
(ii)Yogesh Mehra Vs. Amit Aggarwal 232(2016) DLT 189 passed by Hon'ble Delhi High Court.
9. On the other hand it has been contended by the Ld. Counsel for the plaintiff/respondent no. 1 that Section 126 of Indian Contract Act defines guarantee which may be oral or written guarantee and even word "written" has not been used with guarantee under Order 37 CPC. It has been argued that suit under Order 37 is maintainable even if there is verbal guarantee for payment of debt of liquidated demand. In support of his arguments, Ld. Counsel for the respondent relied upon judgment "Reliance Industries Limited Vs. Adarsh Packers Pvt. Ltd. & Ors. 71(1998) DLT 168 passed by Hon'ble Delhi High Court".
10. It has been held by the Ld. Trial Court that Order 37 CPC applies to a guarantee, where the claim against the principal is in respect of a debt of liquidated demand only. The suit of the plaintiff was based on cheque in RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.7/13 which the averments qua the defendant no. 2 was that the defendant no. 2 gave the verbal promise to repay the entire loan amount along with interest to the plaintiff in case the defendant no. 1 failed to pay the amount to the plaintiff. As per the provisions of Indian Contract Act, an agreement can be made verbally also unless required by law to be effected in writing and a contract of guarantee can be verbal. Section 128 of the Contract Act provides that the liability of the surety is coextensive with that of the principal debtor. Subrule (2) (b)(ii) of Rule 1 or Order 37 does not provide that the guarantee has to be in writing. For the maintenance of the suit under Order 37 of Code of Civil Procedure against the guarantor it is sufficient that claim against the principal is in respect of a debt or liquidated demand only which is the case in the suit filed by the plaintiff as the suit of the plaintiff was based on negotiable instrument that is a cheque. Ld. Trial court observed that the suit of the plaintiff against the defendant no. 2 was maintainable under the provisions of Order 37 of Code of Civil Procedure.
11. Order 37 Rule 1 of Sub Rule (2) provides as under:
"Subject to the provisions of subrule (1), the Order applies to the following classes of suits, namely:
(a) suits upon bills of exchange, hundies and promissory notes;
(b)suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant, with or without interest, arising,
(i)on a written contract; or
(ii)on an enactment, where the sum sought to be recovered is a fixed sum of money or in the nature of a debt other than a penalty; or
(iii) on a guarantee, where the claim against the principal is in RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.8/13 respect of a debt of liquidated demand only.
(iv) suit for recovery of receivables instituted by any assignee of a receivable.
12. The arguments of Ld. Counsel for the appellant that suit under Order 37 CPC is not maintainable in case of verbal guarantee, has no force as the plain reading of above rule shows that the legislature has omitted the word "written" with guarantee. The word "written" has been added with "contract" in the said sub rule but word "written" has been omitted with guarantee. It has been held by Hon'ble Delhi High Court in judgment "Reliance Industries Limited Vs. Adarsh Packers Pvt. Ltd. & Ors. 71(1998) DLT 168" wherein it is observed that: "The arguments advanced by Mr. Aggarwal that as the Legislature has intends in Subclause (b)(i) on a 'written contract' and Subclause (b)(ii)'on an enactment on the basis of which sum is sought to be recovered, are both written, therefore, with the guarantee appearing in Sub clause (iii) of Subrule (b) word 'written' should be read for harmonious constructin of the Rule. I am afraid that the argument of learned counsel for the applicant/defendant no. 2 is of no force. The mere fact that the Legislature has omitted the word 'written' with guarantee signifies that Legislature in its wisdom has deliberately omitted the word 'written' in the said subclause. More so, Legislature was conscious of the definition of the guarantee as defined in the Indian Contract Act.
RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.9/13Held further: This Court cannot substitute 'written guarantee' in Order XXXVII, Rule 1 (2) (b) (iii) of CPC as that would not be haramonious construction of the Statute."
13. It has been further argued by Ld. counsel for the appellant that appellant was not personally served in the suit filed by respondent no. 1 under the provisions of Order 37 CPC as she was not residing at the given address by the respondent no. 1 in the suit. The court below had also not considered the record of the previous dates in which the service of the respondent no. 2 was ordered.
Perusal of Trial Court record shows that address of the appellant/defendant no.2 mentioned by the plaintiff/respondent no. 1 herein in the memo of parties filed with the plaint is the same address which has been mentioned by the appellant in the memo of parties filed with the present appeal and the summons through ordinary process or by registered post has been sent to the appellant number of times by the Ld. Trial Court but many of times, summons received with the report out of station, not available on repeated visits. On 16.12.2003 Ld. Trial Court directed to serve appellant/defendant no.2 by way of affixation in case of nonavailability or refusal. There is no force in the arguments of Ld. Counsel for appellant. When appellant has herself mentioned the same address which has been mentioned by plaintiff/respondent no.1 in the plaint and at the same address service has been effected on appellant, it does not lie in the mouth of the appellant to state that she is not residing at that address. There is no infirmity or legality in the findings of the Ld. Trial Court.
RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.10/1314. Judgment D.Purushotama Reddy & Anr. Vs. K. Sateesh (Supra) filed by the appellant is not applicable to the facts and circumstances of the present case as in that case Ld. Trial Court did not take into account the sum already recovered by the plaintiff as compensation in terms of Section 357 Cr.PC. In the present case plaintiff/respondent no. 1 is seeking for recovery of balance amount which remained due after adjusting the amount already recovered by the respondent no. 1 in criminal proceedings under Section 138 Negotiable Instrument Act against respondent no. 2.
15. Judgment Yogesh Mehra Vs. Amit Aggarwal (Supra) filed by appellant is also not applicable to the facts and circumstances of the present case, as in that case the suit under Order 37 CPC was based on screen shot of SMS which is admittedly not a written contract, in that case cheque was also not dishonoured but the same was returned for alteration. However, in the present case plaintiff/respondent no. 1 has filed the suit against respondent no. 2/defendant no.1 on the basis of cheque and against appellant/defendant no. 2 on the basis of verbal guarantee stated to be given to the plaintiff/respondent no. 1 for repayment of loan amount.
16. Judgment Mrs. Raj Duggal Vs Ramesh Kumar Bansal, AIR 1990 Supreme Court 2218 filed by Ld. Counsel for appellant is not applicable to the facts and circumstances of the present case as in that case Hon'ble Supreme Court held when leave to defend should be granted and when leave to defend can be declined. In the present case, appellant has not entered her appearance so there is no question of any leave to RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.11/13 defend filed by appellant.
17. Judgment New Bank of India Vs Master Steel Marketing Co., PLR 1995 111 Del 45 Delhi High Court filed by Ld. Counsel for appellant is not applicable to the facts and circumstances of the present case as in that case defendants were never supplied the copy of plaint and documents whereas in the present case summons for appearance has been sent to appellant several times but could not be served and lastly she was served by way of affixation. The address mentioned by the appellant in the present appeal is the same that is the mentioned by the plaintiff/respondent no. 1 in her suit.
18. In view of judgment Reliance Industries Limited Vs. Adarsh Packers Pvt. Ltd. & Ors. (Supra), the suit under Order 37 CPC on the basis of verbal guarantee is maintainable. As per Section 128 of Indian Contract Act verbal guarantee is as good as written guarantee. It is also settled proposition of law that liability of surety/guarantor is coextensive that is of the borrower. And appellant being guarantor of respondent no. 2 cannot escape from liability. There is no illegality or infirmity in the findings of the Ld. Trial Court and the suit of the plaintiff/respondent no. 1 has been rightly decreed by the Ld. Trial Court.
19. Ld. Trial Court also held, while dismissing the application filed by appellant under Order 37 Rule 4 of CPC that the application was beyond the period of limitation. The appellant has not challenged the impugned order on the ground of dismissal of her application being time barred nor appellant RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.12/13 has been able to show this Court how the application under Order 37 Rule 4 of CPC was within time.
20. In view of above discussion, this court finds no infirmity or illegality in the impugned order dated 06.11.2013 passed by Ld. Trial Court and therefore, appeal has no merit. Accordingly, the present appeal is hereby dismissed.
Parties to bear with own costs.
Decree sheet be prepared accordingly.
Trial Court record be sent with a copy of this judgment placed on it. Appeal file be consigned to Record Room after due compliance.
Announced in the open Court (RAJRANI)
Dated : 09.01.2017 Additional District Judge:05
West: Tis Hazari Courts:
Delhi
RCA DJ/60947/2016 Surjeet Kaur Vs. Vimla Arora & Anr. Page No.13/13