Delhi High Court
Datt Enterprises Ltd. vs V.K. Dua And Anr. on 7 March, 2005
Equivalent citations: AIR2006DELHI16, III(2005)BC321, 118(2005)DLT408, 2005(81)DRJ277, (2005)140PLR45, AIR 2006 DELHI 16, 2006 A I H C 1040, (2005) 3 BANKCAS 321, (2005) 81 DRJ 277, (2005) 118 DLT 408
Author: Pradeep Nandrajog
Bench: Pradeep Nandrajog
JUDGMENT Pradeep Nandrajog, J.
1. Present order disposes of the application filed by the defendants seeking leave to defend. Needless to state, suit filed by the plaintiff seeks a summary judgment under Order 37 CPC.
2. In brief, plaintiff claims that defendant no. 2 was carrying on the business of sale and purchase of shares as the Sole Proprietor of defendant No. 1 and was a member of Delhi Stock Exchange. On accounts being settled, evidenced by writing of letter dated 7.2.1997, a sum of Rs.31.1 lacs was acknowledged by the defendants as payable to the plaintiff. In satisfaction of the amount due and acknowledged, defendants issued 5 cheques as under :
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Sl.No. Cheque No. Date Amount
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1. 263076 13.2.97 Rs.6,00,000/-
2. 263077 13.2.97 Rs.6,00,000/-
3. 263078 19.2.97 Rs.6,00,000/-
4. 263079 25.2.97 Rs.7,10,000/-
5. 263080 28.2.97 Rs.6,00,000/-
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Total : Rs.31,10,000/-
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3. Acknowledgment relied upon reads as under :
"Mr. Sanjeev Oberoi,
Group Financial Controller
M/s Datt Enterprises Limited
56, Community Centre
East of Kailash,
New Delhi - 110065
Dear Sir,
SUB: SETTLEMENT OF ACCOUNT
Further to my letter dated 06.06.96 and the discussions held by the undersigned with you and your Chairman Dr. Brahm Datt and subsequent understanding arrived at between us, we are enclosing fresh five cheques amounting to Rs.31.10 lacs the details of which is as per Annexure-1 attached, to be presented by you on due dates. These cheques, being issued against our three cheques lying with you, the details of which is as per Annexure-2 attached. You are requested to return cheques as per Annexure-2 to the undersigned after receiving the enclosed cheques as per Annexure-1.
It is also requested that the letter to the effect that the legal notice sent by your Advocate M/s Tikku & Tikku u/s 138 and 142 of the Negotiable Instruments Act on your behalf has been withdrawn may kindly be issued to the undersigned in terms of settlement arrived at.
Kindly acknowledge the receipt of this letter and do the needful.
Thanking you, for V.K. DUA & CO.
sd/-
VINOD KUMAR DUA PROPRIEtor"
4. As per averments made in paras 16 and 17 of the plaint, cheques aforesaid were returned by the plaintiff and thereafter on 5.8.1997, defendants gave 4 cheques in sum of Rs.22,10,000/-. Said cheques were No. 263078, 263079, 263080 and 501118 in sum of Rs.6 lacs, Rs.7.1 lacs, Rs.6 lacs and Rs.3 lacs respectively. When deposited for realization, said 4 cheques were returned unpaid by the defendants' banker with the remarks "insufficient funds".
5. Plaintiff pleads that it issued a notice under Section 138 of the Negotiable Instruments Act. Payments were not received. Criminal complaints were filed. Present action was resorted to since limitation was expiring.
6. Prayer made is to pass a decree against the defendants in the sum of Rs.35,80,200/-. Basis for the said sum, as set out in para 32 of the plaint, is principal sum being Rs.22.1 lacs. together with interest @ 24% per annum from 1.9.1997 till the date of suit.
7. While seeking leave to defend, defendants have pointed out to this Court that evidenced by averments made in para 17, suit is based on four cheques being cheque No. 263078, 263079 and 263080 and 501118 dated 19.2.1997, 25.2.1997, 28.2.1997 and 24.4.1997 in the sum of Rs.6 lacs, Rs.7.1 lacs, Rs.6 lacs and Rs.3 lacs respectively. Total of four cheques comes to Rs.22.1 lacs.
8. Suit having been filed on 31.7.2000, it is asserted that suit was barred by limitation. It has been stated in the leave to defend application that five cheques were issued under the cover of letter dated 7.2.1997. Though stated as settlement of accounts, cheques were handed over as security not to be encashed. Evidence of some kind of oral understandings is that cheque No. 263076 and 263077 were handed back and cheque No. 501118 was replaced in lieu of the earlier two cheques, and that too for a much lesser sum.
9. A perusal of the plaint would reveal that the plaintiff has jumped from paragraph to paragraph and has not linked the case as pleaded. In para 13, plaintiff has relied upon the acknowledgment dated 7.2.1997. In para 17, plaintiff has referred to four cheques being cheque Nos. 263078, 263079, 263080 and 501118. Plaintiff has not explained, not even stated, the circumstances under which cheque No. 263076 and 263077 were handed over to defendants. Plaintiff has not explained as to how sum of Rs.31.1 lacs got reduced to Rs.22.1 lacs.
10. Circumstances under which the said two cheques in the sum of Rs.12 lacs came to be replaced by cheque No. 501118 in the sum of Rs.3 lacs, require evidence.
11. In the application seeking leave to defend, defendants have referred to various transactions entered into by defendants on behalf of plaintiff pertaining to sale and purchase of shares.
12. At the stage of deciding whether a defendant is entitled to leave to defend, this Court has to consider whether friable issues are raised or not. Sustainability of the defense has to be left, post evidence.
13. Suit claims principal sum of Rs.22.1 lacs being the amount covered by cheque No. 263078, 263079, 263080 and 501118 dated 15.2.1997, 25.2.1997, 28.2.1997 and 24.4.1997 respectively. Suit has been filed in July,2000. Plaintiff pleads that the cheques were sent for encashment in August,1997 as these cheques were handed over in the month of August,1997.
14. Letter of settlement of accounts dated 7.2.1997 filed by the plaintiff records that the five cheques were enclosed therewith. Three cheques out of five cheques are included in the present suit.
15. The defendants have raised the issue of limitation which would require adjudication.
16. Plaintiff would have to explain as to under what circumstances, it handed over back two cheques in the sum of Rs.6 lacs each and received one cheque in lieu thereof and that too in the sum of Rs.3 lacs. Defendants would be entitled to leave to defend and prove the defense that the cheques in question were handed over as security.
17. Defendants would be entitled to leave to defend on the pleas stated in the leave to defend application. In this context, it has also to be noted that as per the application seeking leave to defend, plaintiff had approached the Delhi Stock Exchange to recover the amount from the defendants. Defendants submitted the response. Matter was under investigation at the stage when plaintiff filed the suit. In the leave to defend application, defendants have pleaded as under :
11. That the plaintiff, in his account, has debited a sum of Rs.7,62,792/- as speculative profit on account of a difference bill in the transaction of shares of Reliance Industries Ltd. and State Bank of India. This difference bill was prepared by the plaintiff along with the complaint filed with Delhi Stock Exchange on 29.98.1997 (Annexure L-1, page 53-55 of the suit) and to SEBI on 10.10.1997 (Annexure L-1, page 56-59 of the suit). It is submitted that this entry also is false and bogus. Before the Delhi Stock Exchange, the defendants filed a reply on 5.3.1999 (Annexure M, page 60-66 of the suit) disputing the said claims on the following grounds :
a) The plaintiff in support of his claim, enclosed a copy of a manual difference bill dated 8.7.1996 which is without serial number whereas the defendant, after 1992-93, used to issue only computer generated difference bills/inward-outward bills etc. No such transaction took place between the plaintiff and the defendants.
b) That the business dealings between the plaintiff and the defendants were closed after 31.3.1995, hence no transaction could have taken place as stated in the said difference bill.
c) That no contract notes were issued by the defendants for the alleged transactions covered under the difference bill dated 8.7.1996 whereas contract notes for all other transactions were produced by the plaintiff, in their complaint before the Delhi Stock Exchange. It is submitted that the plaintiff has not placed before this Hon'ble Court any contract notes, malafidely, to cover the fact that the plaintiff is not in possession of contract notes to support the transactions covered under the said difference bill.
d) The aforesaid manual difference bill covers two settlement periods, namely, the settlement No. 7 from 10.6.96 to 24.6.96 and the settlement No. 8 from 25.06.96 to 05.07.96 whereas one bill can cover only one settlement period, as per manual trade practice. This clearly shows that the said difference bill is a forged document.
e) That the plaintiff has never done any speculative business with the defendants whereas the transactions covered under the said difference bill are purely speculative transactions. It is pertinent to mention that the plaintiff since very beginning has dealt with the defendants only on delivery based non- speculative transactions. This evidences the forgery in the making of the difference bill.
f) The plaintiff have fabricated/forged the documents and books of accounts with malafide and ulterior motives.
12. That besides the aforesaid major discrepancies there are various other differences/disputes etc. in the accounts and the same have been replied to, in detail, by the defendants vide reply dated 5.3.1999 (Annexure M, page 60-66 of the suit) to Delhi Stock Exchange in response to a complaint made by the plaintiff.
13. That as per Annexure G, page 37-38 read with Annexure M, page 60-66 of the suit, the defendants show a credit of Rs.2,39,381/- due to the plaintiff against which the plaintiff is holding 39400 shares of various companies as per Annexure L-1, page 53-55 of the suit at page 54 para 4 (reproduced below), which are valued much more as per then prevailing rates than the amount of Rs.2,39,381/- and as such nothing is payable by the defendants to the plaintiff :-
"In addition to above M/s V.K. Dua & Co. had given us the following shares as security against amounts payable by them vide their letter dated 13.12.1995 which are attached as Annexure I & II.
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SCRIPTS NO. OF SHARES
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1 M.B. Industries 8100
2. Western Ind. Sugar 4500
3. James Hotel 7800
4. Morgan Stanley 6600
5. Glietlager 6500
6. Reliance Petroleum 1000
7. Birla Century 4900"
14. That in view of the above state of affairs, various cheques were given by the defendants to the plaintiff from time to time, in good faith, as continuing security as per past practice and pending reconciliation of the accounts and not towards discharge of any alleged admitted liability as falsely and dishonestly claimed by the plaintiff. It is categorically denied that the plaintiff had any claim/right to present the said cheques for payment."
18. defense raised is substantial. friable issues arise. Defendants would be entitled to unconditional leave to defend.
19. IA. No. 2467/2002 is allowed. Defendants are granted unconditional leave to defend.