Delhi District Court
Rajender Gupta vs Smt. Dhanesh Tyagi on 9 June, 2023
IN THE COURT OF SH. SUDHANSHU KAUSHIK :
ADDL. DISTRICT JUDGE-02 & WAQF TRIBUNAL :
PATIALA HOUSE COURTS : NEW DELHI
CIVIL SUIT NO. 646/2018
CNR NO.DLND01-006275/2018
IN THE MATTER OF:
RAJENDER GUPTA
S/O LATE SH. RAGHUNATH GUPTA
R/O RZ-37/322-323, GALI NO.8,
GEETANJALI PARK, SAGARPUR,
NEW DELHI-110046
.....PLAINTIFF
VERSUS
SMT. DHANESH TYAGI
W/O SH. VINESH TYAGI
R/O 712-A/314, 1st FLOOR,
GALI NO.6, GEETANJALI PARK,
SAGARPUR, NEW DELHI-110046
.....DEFENDANT
DATE OF INSTITUTION : 06.07.2018
DATE OF CONCLUSION OF FINAL ARGUMENT : 01.06.2023
DATE OF PRONOUNCEMENT OF ORDER : 09.06.2023
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 CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 1 of 16 of Rs.4,00,000/- (Rupees Four Lac only) along with interest at the rate of 24% per annum. The suit is based on a dishonoured cheque.
2. The brief facts as disclosed in the plaint are;
(a) Plaintiff Rajender Gupta and defendant Smt. Dhanesh Tyagi were on good terms. Defendant used to reside in the same property from where the plaintiff was running his office. In the month of July, 2015, on the request of defendant, plaintiff advanced her a friendly loan of Rs.4,00,000/- for a period of 12 months. Loan was advanced on an understanding that it would not carry any interest and defendant would repay it by the month of July 2016;
(b) The loan was advanced in cash. Plaintiff explained the source of the funds mentioning that he took a sum of Rs.3,50,000/- from his father and paid the balance loan amount of Rs.50,000/- from his own funds. He claimed that his father was holding cash as he had recently sold his shop at West Sagarpur, New Delhi;
(c) On completion of the agreed term, plaintiff demanded the repayment of the loan amount. Defendant issued a cheque bearing No.203321 dated 08.08.2016 for a sum of Rs.4,00,000/- drawn on Syndicate Bank, Nangal Raya Branch, New Delhi towards the repayment of the loan amount. Plaintiff presented the cheque with his banker but the same was dishonoured and received back with remarks 'Account Closed' vide cheque return memo dated 09.08.2016;
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(d) Plaintiff served a legal notice on the defendant calling upon her to repay the loan amount but it did not yield result. Plaintiff filed a criminal complaint under Section 138 of Negotiable Instrument Act. Thereafter, plaintiff again issued a legal notice dated 15.06.2018 demanding that defendant should repay the amount within 10 days but the situation remained same. Hence, the present suit under Order XXXVII of CPC.
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; The plaintiff has concealed and suppressed material fact; Defendant stated that her husband was doing property business with the father of the plaintiff; She claimed that during the course of business, her husband handed over certain undated signed cheques to the father of plaintiff. She conveyed that plaintiff has misused one of those cheques; She mentioned that plaintiff stated in his criminal complaint under Section 138 of Negotiable Instrument Act that he had received a post-dated cheque whereas in the present suit, he claimed that the cheque was handed over CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 3 of 16 after the completion of the tenure of loan. She mentioned that although, the cheque in question bears her signatures but it was a blank cheque. She conveyed that defendant filled up the details in the cheque and presented the same with his banker. On the basis of these averments, defendant sought an unconditional 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 rejected. He has mentioned that the plaintiff's claim is based on a cheque 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. Plaintiff has filed written submissions along with the certified copy of judgment dated 31.05.2022 passed by the court of Ms. Medha Arya, MM (NI Act), South-West District, Dwarka Courts, New Delhi whereby defendant was convicted under Section 138 of Negotiable Instrument Act.
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 cheque and therefore, the suit cannot be decreed. He mentioned that plaintiff has concocted a false story. He argued that plaintiff CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 4 of 16 has misused the cheque which were handed over by the defendant to the father 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 issues and defendant deserves unconditional leave to defend.
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 Ltd. Vs Hubtown Ltd." 2017 (1) SCC 568. The observations made in para-17 of the judgment are as follows:
CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 5 of 16 "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 principal sum together with such interest as the court feels the justice of the case requires.
CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 6 of 16 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 is an admitted position that plaintiff filed a criminal complaint under Section 138 of Negotiable Instrument Act in respect of the cheque in question. Defendant was convicted under Section 138 of the Negotiable Instrument Act vide order dated 31.05.2022 passed by the court of Ms. Medha Arya, MM (NI Act), South-West District, Dwarka Courts, New Delhi. Defendant did not prefer appeal against her conviction. She has undergone an imprisonment for six months on account of non-payment of the fine and compensation awarded by the said court. Certified copy of the judgment and the order of sentence passed by the court is on record.
12. Now, let us first deal with the ground taken by the defendant regarding the maintainability of the present suit. 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 CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 7 of 16 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.
13. Section 30 of the Negotiable Instrument Act 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 received by, the drawer. Thus, Section 30 of the Act 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 of the Act 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.
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14. The present suit is based on a dishonoured cheque. Plaintiff has placed on record the certified copy of the cheque mentioning that the original cheque has been filed in the complaint filed by him under Section 138 of Negotiable Instrument Act. Plaintiff issued legal notice in respect of the dishonoured cheque. The copy of the legal notice has 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.
15. Now, coming to the aspects whether the defendant has a substantial defence to the plaintiff's claim or the defence raised by her is sham. Section 118 of the Negotiable Instrument Act provides 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 cheque does not bear her signatures. Defendant has admitted her CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 9 of 16 signatures on the cheque. She mentioned in the leave to defend application that her husband gave some undated signed cheques to the father of plaintiff and one of those cheques has been misused by the plaintiff. Record shows that plaintiff has taken contradictory stand. The stands taken by the defendant is in contradiction with the version presented by her in the criminal complaint under Section 138 of Negotiable instrument Act.
16. Record shows that during trial of the criminal complaint, defendant stated at the time of the framing of notice under Section 251 Cr.P.C that she took loan from the plaintiff on two occasions and on each occasion, issued a blank cheque. She mentioned that on each occasion, blank cheque was given to the plaintiff to secure the repayment of the loan. She further stated that she repaid the first loan of Rs.1,00,000/- to the plaintiff but he did not return the security cheque. She mentioned that the second loan amount of Rs.1,50,000/- remained unpaid. This version is in sharp contrast with the stand taken in the application seeking leave to defend. Plaintiff has submitted in her application seeking leave to defend that the cheque in question was handed over by her husband to the father of the plaintiff and it was misused by the plaintiff whereas in the criminal complaint, she stated that she herself handed over two security cheques to the plaintiff. The contradictory versions demonstrate that defendant has no defence to the plaintiff's claim.
CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 10 of 16
17. Defendant has admitted having issued the cheque in question in the name of the plaintiff. Defendant has admitted that she was the author of the cheque. She presented a defence in her trial in the criminal complaint that she had repaid the loan of Rs.1,00,000/- to the plaintiff but he failed to return the security cheque. The said line of defence is improbable. It can not be conceived that a prudent man would not take back the security cheque at the time of repaying the loan. It is apparent that the defendant has taken a false and bogus plea about the misuse of the cheque. It further fortifies the conclusion that the defence raised by the defendant is moonshine.
18. Defendant has taken a ground that plaintiff had no capacity to advance a loan of Rs.4,00,000/- in cash. Plaintiff has placed on record the sale-deed whereby his father sold his shop against a consideration of Rs.3,50,000/-. He has mentioned that he obtained the said amount from his father and advanced the balance loan amount from his own funds. This explains the source of funds. Moreover, defendant has admitted in the criminal complaint that she received loan on two occasions. She has stated that on the first occasion, she received a loan of Rs.1,00,000/- while on the second occasion, plaintiff advanced her a loan of Rs.1,50,000/-. She has admitted that she has not repaid the second loan. This counters the argument of the defendant that plaintiff has failed to disclose the source of funds.
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19. In view of the discussion made in the aforesaid paras, it is obvious 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 her.
20. 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 CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 12 of 16 SCR 312 quoted with approval Lord Erskine "there 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."
21. Plaintiff has sought recovery of liquidated demand of money payable by defendant arising out of a cheque of Rs.4,00,000/-. The suit has been filed on the strength of a cheque. The liability for the payment of the debt arises out of the cheque issued by the defendant in favour of plaintiff. It is an admitted position that the CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 13 of 16 original cheque was filed by the plaintiff in the criminal complaint filed under Section 138 of the Negotiable Instruments Act and therefore, only certified copy of the same was placed on record.
22. I am of the considered opinion that defendant has failed to disclose that there is a triable issue for which leave to defend may be granted. The suit is based on a cheque executed by the defendant. 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 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."
CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 14 of 16
23. 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.
24. Section 80 of the 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 instrument, therefore, plaintiff, under the law, is entitled to claim interest @ 18% on the dishonoured cheque. Accordingly, the suit is decreed against the defendant and in favour of plaintiff with the following reliefs;
(a) A decree for a sum of Rs.4,00,000/- (Rupees Four Lac only).
(b) Interest at the rate of 18% per annum from the date of filing of the suit till realization of decreetal amount.
(c) Cost of the suit is also awarded to the plaintiff.
25. Decree sheet be prepared accordingly.
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26. File be consigned to record room.
Announced in open Court on 09.06.2023 (Sudhanshu Kaushik) Addl. District Judge-02 & Waqf Tribunal, New Delhi District, Patiala House Courts, New Delhi/09.06.2023 CS No.646/2018 Rajender Gupta Vs Dhanesh Tyagi page 16 of 16