Delhi District Court
Hari Krishan Yadav vs Sunita And Others on 2 November, 2023
IN THE COURT OF MS. SHILPI M JAIN: ADDL. DISTRICT
JUDGE-05, SOUTH WEST DISTRICT, DWARKA
COURTS, NEW DELHI
CS DJ ADJ 969/21
HARI KRISHAN YADAV ...Plaintiff
Versus
SUNITA & ORS. ...Defendants
ORDER
1. Vide this order I shall dispose off application U/o XXXIX Rule 3 (5) r/w. Sec. 151 CPC for seeking leave to defend on behalf of defendants.
2. Briefly stated, present suit for recovery of Rs.35,00,000/-(Rupees Thirty five lacs only) has been filed by the plaintiff against the LRs of Late Sh. Jai Prakash Kataria U/o XXXVII CPC. It is the case of the plaintiff that, he has given Rs. 35,00,000/- as friendly loan to Late Sh. Jai Prakash Kataria in following manner:
MODE BANK CHEQUE AMOUNT
Cheque Syndicate Bank 668567 Rs.8,00,000/-
Cash N.A. N.A. Rs.27,00,000/-
3. It is further averred that, for the said loan, 'a loan agreement' dt. 22.10.2018 was also executed between the plaintiff and Late Sh. Jai Prakash Kataria. It is further submitted that, to discharge his liability Late Sh. Jai Prakash Kataria handed over two cheques no. 000029 dated 24.10.2019 of Rs.20,00,000/-(Rupees Twenty lacs only) and cheque no. 000031 dated 24.10.2019 of Rs.15,00,000/-(Rupees Fifteen lacs only) drawn on HDFC Bank, Kapashera Branch, in favour of plaintiff Sh. Hari Krishan, for clearing the dues payable by Late Sh. Jai Prakash Kataria. However, both above said cheques were dishonoured on representation for the reason "Fund CS DJ ADJ 969/21 Hari Krishan Yadav vs. Sunita & Ors. Page 1 of 7 insufficient". It is further submitted that, plaintiff filed a complaint u/s 138 N.I. Act in February, 2020 but same was withdrawn on 29.01.2021. It is further submitted that, since Late Sh. Jai Prakash Kataria left for heavenly abode in November, 2020 leaving behind defendants as Class-1 legal heirs and same would be liable for the aforesaid liability of Late Sh. Jai Prakash Kataria. Lastly, it is submitted that, defendants failed to make payment towards the above loan amount despite repetitive requests. Hence, present suit is filed.
4. Plaintiff relied upon the judgment passed by Hon'ble Supreme Court of India in case titled as Mechelec Engineers And Manufacturers v/s M/S. Basic Equipment Corporation, 1977 AIR 577, 1977 SCR (1)1060 wherein it is held that, "8. In Smt. Kiranmoyee Dassi & Anr. v. Dr. J. Chatterjee(1), Das. J., after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by order 17 C.P.C. in the form of the following propositions (at p. 253):
(a) If the Defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the Defendant is entitled to unconditional leave to defend.
(b) If the Defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the Defendant is entitled to unconditional leave to defend.
(c) If the Defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence, yet, shews such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff's claim the Plaintiff is not entitled to judgment and the Defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security.
(d) If the Defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the Plaintiff is entitled to leave to sign judgment and the Defendant is not entitled to leave to defend.
(e) If the Defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the Plaintiff is entitled to leave to sign judgment, the Court may protect the Plaintiff by only allowing the defence to proceed if the amount CS DJ ADJ 969/21 Hari Krishan Yadav vs. Sunita & Ors. Page 2 of 7 claimed is paid into Court or otherwise se- cured and give leave to the Defendant on such condition, and thereby show mercy to the Defendant by enabling him to try to. prove a defence".
5. Per contra, in their leave to defend application, defendants make following submissions:
i) Present suit U/o XXXVII CPC is not maintainable against defendants as right to sue does not survive after the demise of Late Sh. Jai Prakash Kataria;
ii) None of the defendants stood surety or guarantor for repayment of alleged due, hence is not personally/legally liable for aforesaid dues;
iii) It is settled preposition of law that, liability of person dies with debt of person and defendants have not inherit anything from Late Sh. Jai Prakash Kataria;
iv) Subjected cheques are only security cheques in lieu of loan agreement which is infact forged and fabricated by plaintiff;
v) No proof of payment of Rs. 35,00,000/- has been filed by the plaintiff;
vi) Without prejudice, the loan if taken by Late Sh. Jai Parkash Kataria, the same must have been taken for illegal and immoral purposes as none of the family members of Late Sh. Jai Parkash Kataria is aware bout such alleged loan;
vii)Lastly, there is no law under which defendants can be held responsible/liable for the dues of Late Sh. Jai Prakash Kataria.
6. During the course of argument, Ld. Counsel for the defendant also submits that, grant for leave to defend is ordinarily rule and denial of leave to defend is exception. It is further submitted that defendants have good defence and leave to defend should be granted in the facts and circumstances of the present case. Ld. Counsel for the defendants relied upon the judgement passed by Hon'ble Supreme Court in B.L. Kashyap CS DJ ADJ 969/21 Hari Krishan Yadav vs. Sunita & Ors. Page 3 of 7 and Sons Ltd. Vs. JMS Steels and Power Corporation and Ors. SLP (C) No. 19413 of 2018).
7. In rebuttal, Plaintiff relied upon judgment passed by Hon'ble Delhi High Court in Sarvesh Bisaria Vs Hari Om Anand CS (OS) 160/2020 wherein it is held "16. In support of his submission that, the present suit is maintainable against the legal heirs of Late Mr. Hari Om Anand, the senior counsel for the plaintiff has correctly placed reliance on the judgment in Sanjeev Jain (supra). In the said case also, the plaintiff had advanced loan to one Mr. Virendra Dhingra, who defaulted in repayment of the loan. The cheque given by him for repayment of the loan was dishonoured. Mr. Virendra Dhingra passed away on 30th April, 2018 and the suit was filed under Order XXXVII of the CPC on 30th july, 2018 against the legal heirs of Mr. Virendra Dhingra. The submissions on behalf of the legal heirs in the said case was that, an Order XXXVII suit was not maintainable against the legal heirs. Relying upon various judgments, this Court came to the following conclusion:
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15. Thus, the above judgments are conclusive as to the maintainability of the present suit against the LRs of Late Mr. Virendra Dhingra. This Court however, is not going into the issue as to whether the said LRs in fact came into possession of any assets of Mr. Dhingra, or if the decree which may be passed in the present suit is executable against Mr. Dhingra's assets and if so, against which of the assets. This is not an issue that, has been raised in the present suit."
8. Arguments heard. Record perused.
9. In the present suit, plaintiff relied upon a loan agreement dated 22.10.2018, two cheques i.e. cheque No. 000029 for Rs. 20,00,000/- and cheque No. 000031 for Rs. 15,00,000/- both dated 24.10.2019 along with cheque returning memos dated 24.10.2019 and 05.12.2019 respectively and legal notice dated 05.10.2021 with receipt and delivery report, but no plausible defence is given by defendants for above documents.
10. The principles of law for grant or refusal of leave to defend has been well settled by the Hon'ble Supreme Court in IDBI Trusteeship Services Limited vs. Hubtown Limited, (2017) 1 SCC 568 whereby it was CS DJ ADJ 969/21 Hari Krishan Yadav vs. Sunita & Ors. Page 4 of 7 held that Order XXXVII CPC was subject matter of amendment in the year 1976 and the same has resulted in the difference in the law laid down by earlier judgments i.e., principally Mechelec Engineers & Manufacturers vs. Basic Equipment Corpn., (1976) 4 SCC 687. The Apex Court further held that principles stated in para 8 of Mechelec Engineers & Manufacturers vs. Basic Equipment Corpn., (supra) were superseded, given the amendment of Order XXXVII and the binding decision of the Constitutional Bench of four judges in Milkhiram (India) (P) Ltd. vs. Chamanlal Bros, AIR 1965 SC 1698 would apply. The relevant portion of the judgement summarizing the principles to be followed while adjudicating grant leave to defend in a summary suit are as follows:
"18. Accordingly, the principles stated in paragraph 8 of Mechelec's case will now stand superseded, given the amendment of O.XXXVII R.3, and the binding decision of four judges in Milkhiram's case, as follows: a. 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;
b. 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;
c. 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 44 see that such triable issues are not shut out by unduly severe orders as to deposit or security;
d. 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 principal sum together with such interest as the court feels the justice of the case requires.
e. 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;
f. 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 CS DJ ADJ 969/21 Hari Krishan Yadav vs. Sunita & Ors. Page 5 of 7 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. In present matter, main contention of defendants is that, right to sue does not survives after the demise of Late Shri Jai Prakash Katari and as such no case made out against defendants. It is further submitted that, since defendants never stood surety or guarantor for repayment of alleged dues, no legal or personal liability arises on the part of defendants. In the considered opinion of this court, this contention as no merits as it is well settled law that, a summary suit can be filed against the heir and legal representative of a deceased defendant and the provisions of Order XXXVII CPC apply in full to such a suit also. The decree, however, can be executed only to the extent of the estate of the deceased in the hands of judgment debtor.
12. Reliance is placed upon judgment passed by Hon'ble Bombay High Court in Bank Of India vs Industrial Polymer, (1991) 93 BOMLR 218 wherein it was held that:
"7. Order XXXVII docs not exclude from its purview a suit where the heirs and legal representatives of a deceased are party defendants. Nor is there any protection under the Civil Procedure Code to the heirs and legal representatives of a deceased defendant from a decree being passed against them, provided of course, that the right to sue them survives. The protection which Section 52 of the Civil Procedure Code gives to the heirs and legal representatives of a defendant is a protection against the enforcement of a decree against them in execution. Under Section 52, where a decree is passed against a party as the legal representative of a deceased person and the decree is for the payment of money out of the property of the deceased, it may be executed by the attachment and sale of such property. The decree can be executed to the extent of the property of the deceased in his hands. This is a protection which is granted at the stage of execution. Hence even in a case where a decree is passed against such an heir or legal representative under Order XXXVII of the Civil Procedure Code, the decree can be executed only to the extent of the estate of the deceased coming to his hands."
13. Above decision in Bank of Baroda (Supra) was reaffirmed in the judgment passed by Hon'ble High court of Delhi in Sanjeev Jain vs Rajni Dhingra & Ors. (CS(OS) 378/2018, wherein while rejecting leave to defend application, Hon'ble High court of Delhi held that, the defences CS DJ ADJ 969/21 Hari Krishan Yadav vs. Sunita & Ors. Page 6 of 7 available to the LRs under Section 52, CPC shall continue to be available in any execution of the present decree.
14. Thus, in lieu of well settled position of law and considering the facts and circumstances of present case, this court is in the considered opinion that, Defendant has no substantial defence and/or raises no genuine triable issues in their leave to defend application rather all defences seems to be illusive, vague and contradictory. Thus, leave to defend is hereby rejected.
Relief
15. In the light of the aforesaid discussion, this court is of the considered opinion that the defendant has failed to raise any triable issues. Accordingly, suit of the plaintiff is hereby decreed for a sum of Rs. 35,00,000/ (Rupees Thirty five lacs only). However, plaintiff claim for interest @18% per annum, is at higher side and in fact, loan agreement dated 22.10.2018 does not bear any clause for interest. Thus, plaintiff shall be entitle for interest @ 6% per annum from the date of filing of the suit till its realization.
Decree sheet be prepared accordingly. File be consigned to record room.
Announced in the open court on 02.11.2023.
(SHILPI M JAIN) ADJ-05 (SW)/Dwarka Courts New Delhi: 02.11.2023 CS DJ ADJ 969/21 Hari Krishan Yadav vs. Sunita & Ors. Page 7 of 7