Delhi District Court
Having Its Northern Regional Office At vs Mr. Devender Shahi on 29 July, 2022
IN THE COURT OF SH. SUDHANSHU KAUSHIK :
ADDL. DISTRICT JUDGE-02 & WAQF TRIBUNAL :
PATIALA HOUSE COURTS : NEW DELHI
CIVIL SUIT NO.428/2019
CNR NO.DLND01-009009-2019
HOUSING DEVELOPMENT FINANCE
CORPORATION LIMITED
RAMON HOUSE, H.T.PAREKH MARK,
169, BACKBAY RECLAMATION,
CHURCHGATE, MUMBAI-400020
HAVING ITS NORTHERN REGIONAL OFFICE AT:
THE CAPITAL COURT,
MUNIRKA, OLOF PALME MARG,
NEW DELHI-110067
.....PLAINTIFF
VERSUS
MR. DEVENDER SHAHI
J-37, F-2, DILSHAD COLONY,
DELHI-110095
ALSO AT:
ADOBE SYSTEMS INDIA PVT. LTD.
PLOT NO.05, BLOCK-A, SECTOR-132,
NOIDA-201304 (UTTAR PRADESH)
.....DEFENDANT
DATE OF INSTITUTION : 23.05.2019
DATE OF CONCLUSION OF FINAL ARGUMENT : 27.07.2022
DATE OF PRONOUNCEMENT OF ORDER : 29.07.2022
CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 1 of 22
ORDER
1. This is a suit under Order 37 of Code of Civil Procedure, 1908 (hereinafter referred to as 'CPC') for the recovery of a sum of Rs. 46,56,649/- (Rupees Forty-Six Lac Fifty-Six Thousand Six Hundred and Forty-Nine Only). The suit is based on a written loan agreement and a promissory note.
2. The brief facts disclosed in the plaint are;
A) Plaintiff/Housing Development Finance Corporation Limited is a company duly incorporated under the Companies Act, 1956. It is engaged in the business of providing housing and commercial loans.
B) On 11.03.2014, plaintiff advanced a housing loan of Rs.38,00,000/- (Rupees Thirty-Eight Lac only) to the defendant/ Devender Sahi for buying a flat in a project at Taj Nagari-II, Agra (Uttar Pradesh). Defendant executed a loan agreement and a promissory note undertaking to repay the loan amount. It was agreed upon between the parties that the loan shall carry variable interest at the rate of 10.25% per annum and the defendant shall repay the same in Equated Monthly Installments (EMIs). C) In terms of the agreed repayment scheduled, defendant paid EMIs till 07.01.2016 but thereafter, stopped paying the same. Plaintiff CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 2 of 22 served various demand notices on the defendant but the loan amount remained unpaid.
D) On 15.05.2017, defendant sent a written communication to the plaintiff wherein he acknowledged his liability and expressed inability to repay the outstanding loan amount.
E) Plaintiff was maintaining the loan statement of the defendant and as per the statement of account maintained by the plaintiff, a sum of Rs.46,56,649/- (Rupees Forty-Six Lac Fifty-Six Thousand Six Hundred and Forty-Nine only) was outstanding, which includes the principal amount as well as interest and incidental charges. F) Legal notice dated 29.04.2019 was sent to the defendant calling upon him to repay the outstanding loan amount but the amount remained unpaid. Hence, the present suit.
3. Summons under Order XXXVII of CPC were issued to the defendant and he filed appearance within the requisite period. Thereafter, on the application filed by the plaintiff, summons for judgment were served on the defendant and leave to defend was filed by him within the stipulated period. Plaintiff filed reply and opposed the application seeking leave to defend.
4. In the application seeking leave to defend, defendant admitted the loan but stated that the EMIs were payable by the builder till the possession CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 3 of 22 of the flat was delivered to him. The averments in the leave to defend application are;
i. That the suit has not been instituted by a competent person and the allegations contained in the plaint are false.
ii. That the loan was directly disbursed in the account of the builder without any information being given to the plaintiff. iii. That the loan was arranged by the builder of the project, who assured the plaintiff that he would pay the EMIs of the loan till the possession of the flat is handed over by him.
iv. That the builder took the signatures of defendant on blank papers and cheques on the assurance that the same are required for the purpose of loan.
v. That no person from the bank was present at the time when the defendant signed the loan agreement No.611166462 on 11.03.2014.
vi. That the builder neither constructed the flat nor handed over its possession to the defendant and the defendant has already surrendered the flat to the plaintiff.
5. I have heard the rival contentions.
6. Counsel for the defendant has argued that the suit is not maintainable under Order XXXVII of CPC. She has contended that plaintiff entered CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 4 of 22 into a tripartite agreement with the defendant and the builder of project but the builder has not been made a party in the present suit. She argued that the loan was arranged by the builder and the defendant was made to sign blank papers and cheques. She has contended that the plaintiff directly transferred the sanctioned loan amount in the bank account of the builder without seeking instructions from the defendant. She has mentioned that the builder gave an assurance to the defendant that he would pay the EMIs of the loan till the time he delivers the possession of the flat. Counsel has contended that plaintiff has concealed all these material facts and on account of the said concealment, unconditional leave to defendant should be granted. Counsel has contended that the possession of the flat was never delivered by the builder. She has submitted that the defendant is a victim as on the one hand, the builder did not deliver the possession of the flat and on the other hand, the bank is demanding the repayment of loan. She has submitted that defendant has already surrendered the flat to the bank. She has argued that the builder was under an obligation to repay the loan along with the interest accrued thereon but the plaintiff has instituted the suit against the defendant. Counsel has contended that defendant has a plausible defence and therefore, leave to defend should be granted. She has submitted that the defence raised by the defendant raises triable CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 5 of 22 issues. In order to support her contentions, counsel has relied on the judgment in "IDBI Trusteeship Services Limited Vs Hubtown Limited"
AIR 216 SC 5321.
7. On the other hand, counsel for the plaintiff has argued that defendant has failed to demonstrate that he has a substantial defence to the plaintiff's claim. Counsel has submitted that defendant has admitted the disbursal of loan as well as the defaults in the EMIs. He has contended that the application seeking leave to defend contains admissions by the defendant and in view of these admissions, the suit should be decreed. He has pointed out that defendant made a correspondence dated 15.05.2017 with the plaintiff wherein he acknowledged the loan and the defaults committed by him in the payment of EMIs. He has mentioned that in this correspondence, defendant expressed his inability to pay the outstanding EMIs. Counsel has contended that similar admissions have been made by the defendant in the application seeking leave to defend. He has submitted that defendant has no defence to offer to the plaintiff's claim and the defence raised by him is illusionary. Counsel has mentioned that the suit is perfectly maintainable under Order XXXVII of CPC. He has argued that even in case of tripartite agreement, the borrower is solely responsible to repay the loan amount. He has argued that defendant has raised false pleas that he was made to CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 6 of 22 sign on blank documents and cheques. Counsel has submitted that builder was not a necessary party in the present suit. He has argued that the defence raised by the defendant is sham and bogus. He has prayed that application seeking leave to defend deserves dismissal. In order to support his contentions, counsel for the plaintiff has relied on the decisions in "Housing Development Finance Corporation Ltd. Vs Vikas Garg" (CS-OS No.217/2011, decided on 20.05.2014), "Jindal Steel & Power Limited Vs N.S.Atwal" (CS-OS No.713/2010), "N.S.Atwal Vs Jindal Steel & Power Limited" (RFA (OS) 125/2013, decided on 27.09.2013), IFCI Factors Limited Vs Ramsarup Industries Limited & Ors." (CS (Comm.) 752/2018, decided on 01.08.2019 by the High Court of Delhi), "Sandeep Kumar Vs Housing Development Finance Corporation Limited & Anr." (RFA (OS) 50/2015), decided on 25.08.2015 by the High Court of Delhi) and "Housing Development Finance Corporation Limited. Vs Umesh Kumar Rai & Anr." (CS (OS) 2894/2012, decided on 02.09.2014 by the High Court of Delhi).
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 CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 7 of 22 procedure for recovery of money as envisaged 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 III 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:
"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, CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 8 of 22 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.
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 argued by the defendant that the suit is not maintainable under Order XXXVII of CPC. The plea of maintainability of the suit under Order XXXVII of CPC was not taken in the application seeking leave to defend but since it has been raised during the course of arguments, the same needs to be answered. The present suit is for recovery of a housing loan advanced CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 9 of 22 by the plaintiff to the defendant. The suit has been instituted on the basis of loan agreement bearing No.611166462 dated 11.03.2014 and a promissory note dated 11.03.2014 wherein the defendant has undertaken to repay the loan along with interest @ 6.5% per annum. Counsel for the defendant has not specifically argued but it appears from her contentions that she has taken a plea that the suit is not maintainable under Order XXXVII of CPC as the plaintiff has not sought the recovery of a liquidated amount. She has conveyed that the plaintiff has instituted the suit for recovery of amount mentioned in the statement of loan account of the defendant and therefore, the suit under Order XXXVII of CPC is not maintainable. She has contended that the amount sought to be recovered includes the interest and incidental charges. Counsel has submitted that for recovering such an amount, the plaintiff has no option but to seek recourse of filing an ordinary recovery suit. I am not convinced with these arguments.
12. Plaintiff has sought recovery of liquidated demand of money payable by defendant arising out of loan agreement bearing No.611166462 dated 11.03.2014. The suit has been filed on the strength of a loan agreement and a promissory note executed by the defendant. The original loan agreement and the promissory note are on record. Defendant has admitted that he entered into a loan agreement with the CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 10 of 22 plaintiff. He has admitted in para-2 (a) of the application seeking leave to defendant that the plaintiff advanced him a home loan of Rs.38,00,000/- for purchasing flat No.801, 8th Floor, Taj Nagari-II, Agra against loan agreement No.611166462. He also admitted that the loan was repayable in EMIs. The loan agreement bears the signatures of the defendant and the Deputy Manager of the plaintiff. The loan amount and the rate of interest have been mentioned in the schedule annexed with the loan agreement. The schedule provides that the loan would be repayable in 356 EMIs of Rs.34,435/- each. The loan agreement contains a receipt of disbursal of loan wherein it has been mentioned that the loan was disbursed in favour of the builder M/s Nikhil Home Associates by means of cheque No.465622. All the documents bear the signatures of defendant.
13. 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. Similarly situation came up for consideration before the High Court of Delhi in the matter of "Housing Development Finance Corporation Limited Vs Umesh Kumar Rai & Ors." (CS (OS) 2894/2012, decided on 02.09.2014) and the court held that in such like situation, suit under Order XXXVII of CPC is maintainable. In fact, the decision rendered by the High Court CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 11 of 22 of Delhi in the matter of "Housing Development Finance Corporation Limited Vs Vikas Garg" (CS (OS) 2017/2011, decided on 20.05.2014) squarely covers the present issue. The observation made in para-26 of the judgment are as under:
"26. Counsel for the defendant has placed strong reliance on the case of M/s.K.K. Health Care (Supra) and on GE Capital Services India (Supra), in support of his argument that the present suit is not maintainable under the provisions of Order XXXVII of the Code of Civil Procedure in the absence of a liquidated debt. This submission of counsel for the defendant / applicant is without any force, as the judgments sought to be relied upon by the counsel are not applicable to the facts of this case. In the case of M/s.K.K. Health Care (Supra), a learned Single Judge of this Court observed that the suit could not have been filed under order XXXVII of the Code of Civil Procedure, as the amount claimed in the suit was not the amount, as mentioned in the bills which was stated to be written contracts containing the liquidated demands of money payable. In the case of GE Capital Services India (Supra) the earlier judgment in the case M/s.K.K. Health Care (Supra) was followed by the learned Single Judge. In the present case the suit is not based on invoices and the suit is based on a written contract, which is home equity loan agreement together with a promissory note. This loan agreement is an exhaustive document and contains various terms and conditions including, with regard to payment of interest, the schedule of payments, receipts evidencing loan disbursed by the plaintiff to the defendant. The defendant has neither denied receipt of the loan nor it is the case of the defendant that the plaintiff has not truly reflected the number of installments paid by them, but a stereo-typed defence has been raised that the documents were blank and collusion between officers of the plaintiff, which are without any substance. Against the cogent evidence produced by the plaintiff, there is only CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 12 of 22 oral denial which is not supported by any corroborative evidence by the defendant.
27. Having regard to the loan agreement which has been placed on record and the promissory note, I am satisfied that this suit is maintainable under the provisions of Order 37 CPC, and the defence of the defendant is sham and moonshine as no triable issue has been raised".
14. In Vikas Garg's case (supra), the High Court of Delhi cited with approval the decision in "Jindal Steel & Power Limited Vs N.S.Atwal"
(CS-OS No.713/2010) wherein it was observed 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 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 CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 13 of 22 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."
15. In the present matter, defendant has admitted the execution of loan agreement and the fact that he defaulted in the payment of EMIs. The printouts of the statement of loan account of defendant have been placed on record along with a certificate under Section 65B of Indian Evidence Act. The statement of account reveals that a sum of Rs.46,56,649/- was due towards the defendant. In view of the position of law laid down in N.S.Atwal's case (supra), there is no substance in the plea raised by the defendant that suit for a balance amount due on a loan account does not fall under Order XXXVII of CPC. The schedule of loan agreement categorically records that the loan would carry an CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 14 of 22 interest at the rate of 10.25% per annum. It is a settled preposition that a plaintiff can claim interest even in a suit under Order 37 of CPC. It cannot be held that the summary suit is not maintainable merely because the plaintiff has demanded interest from the defendant. Reference in this regard can be made to the decision in "Eastern Coal Fields Ltd. Vs. State of MP & Anr." 2003 (8) SCC 648.
16. Defendant has sought leave to defend alleging that the loan agreement was not executed in the presence of the bank officials. He has come up with a version that the builder arranged the loan from the bank. He has alleged that on the pretext of arranging loan, the builder obtained his signatures on blank papers and cheques. This version is improbable and the same has been simply presented to create defence even though, the same is non-existing. The fact that defendant admitted the loan agreement and the disbursal of loan leaves no scope for doubt that the loan was obtained by him. Defendant has raised false pleas and the same is evident from the fact that he has failed to mention either the date or the place where the builder purportedly took his signatures on blank papers and cheque.
17. Defendant has made a bald plea that he was made to sign on blank papers and cheques. Counsel for the defendant has argued that the loan agreement and the promissory note are forged and fabricated. CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 15 of 22 Defendant has tried to convey that the blank papers on which his signatures were obtained have been misused. This argument deserves to be rejected. The loan agreement contains the signatures of defendant on each page. The schedule and the receipt annexed with the loan agreement also bears his signatures. The loan agreement is in the form of printed booklet and it cannot be conceived that the blank pages signed by the defendant could have been converted into a loan in the form of a booklet. Defendant has failed to place on record any document to show that till date, he has lodged any complaint about the fabrication of these documents.
18. Similar pleas of forging and fabrication were raised by the defendant in Vikas Garg's case (supra) but the same were rejected. The observation made by the High Court of Delhi in para-24 of the judgment counters the plea taken by the defendant.
24. A careful reading of the application for leave to defend would show that the defendant has not disputed that loan in the sum of Rs.1.50 crores was sanctioned by the plaintiff; and the amount was deposited in the account of the defendant. It has also not been disputed that three installments were paid by the defendant to the plaintiff towards repayment of the loan amount. The signatures on the loan document have not been disputed, although a submission has been made that the documents were filled in later and thus they are forged and fabricated. This submission of counsel for the defendant is unacceptable, as the documents were signed in the year 2009 and till date there is not a single document placed on record to CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 16 of 22 show that any objection was raised by the defendant before the plaintiff with respect to any of the document being filed upon or that any complaint was made to the police that the plaintiff coerced and forced the defendant to sign the document or that the defendant's signatures were obtained on the basis of any misrepresentation, as alleged in the application for leave to defend.
19. Defendant has alleged collusion between the plaintiff and the builder but there is no material to substantiate these submissions. The version of the defendant that the loan was directly disbursed to the builder without any information being given to him is patently false. Plaintiff has submitted that the cheque whereby the loan was disbursed to the builder was handed over to the defendant. Defendant has executed a receipt acknowledging that he has received the cheque No.465622 dated 11.03.2014 in favour of the builder. The argument that the transaction becomes doubtful because the loan was credited in the account of the builder and not in the account of the defendant is misconceived. It is a matter of common understanding and judicial notice can be taken of the usual practice of the financial institutions whereby the housing loans are disbursed by issuing cheque in the name of the vendor from which the borrower is purchasing the house. Similar plea of collusion between the bank and the builder was taken in Umesh Kumar Rai's case (supra) but the same was rejected on the ground that CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 17 of 22 the borrower has failed to place on record even a single document to show as to what action has been taken by him against the builder.
20. Defendant has argued that the loan agreement was a tripartite agreement. Counsel for the defendant has submitted that because of the tripartite agreement, the builder was under an obligation to refund the loan amount directly to the plaintiff and in view of this clause, the suit for recovery of loan could not have been instituted against the defendant. In order to support this argument, counsel has pointed towards the reply dated 24.05.2017 given by the plaintiff to the legal notice dated 15.05.2017 issued by the defendant. I do not find force in this line of argument. In terms of notice issued on 15.07.2017, defendant surrendered the possession of the flat in favour of the plaintiff. In response to this notice, plaintiff issued reply dated 24.05.2017 wherein reference was made to clause-9 of tripartite agreement which was as under:
"That if the borrower fails to pay the balance amount representing the difference between the loan sanctioned by HDFC and the actual purchase price of the flat/residential apartment, or in the event of death of the borrower or in the event of cancellation of the residential apartment for any reason whatsoever the entire amount advanced by HDFC will be refunded by the builder to HDFC forthwith. The borrower hereby subrogates all his rights for refund with respect to the said residential apartment in favour of HDFC."
CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 18 of 22
21. The argument that the suit is not maintainable because of the tripartite agreement is flawed. In a similar situation, it has been held by the High Court of Delhi in the matter of "Housing Development Finance Corporation Limited Vs Sandeep Kumar" (CS (OS) 2502/2012, decided on 11.03.2015) that the tripartite agreement does not absolve the borrowers liability. The division bench of the High Court of Delhi confirmed the legal position in the matter of "Sandeep Kumar Vs Housing Development Finance Corporation Limited" (RFA OS 50/2015, decided on 25.08.2015) holding that even if the builder was to return money directly to the lender bank and he having failed to do so, the same does not absolve the borrower of his liability.
22. Defendant has come up with a version that he obtained loan from the bank on the assurance that the builder of the flats would be paying the EMIs till the handing over of the possession. He has contended that the builder neither constructed the flat nor gave him the possession and therefore, the suit for the recovery of loan amount is not maintainable. This is a flawed argument. The loan agreement was executed between the defendant and the plaintiff. Admittedly, builder was not a party to this agreement. The agreement was executed for a valid consideration and therefore, it took the shape of a binding contract between the parties. Plaintiff voluntarily entered into the contract with free consent. CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 19 of 22 The fact that the builder did not hand over the possession of the flat to the defendant has no bearing on the mutual obligation created under the loan agreement. The loan agreement was an enforceable contract and the plaintiff has a legal right to recover the loan advanced on the force of the said agreement. Similarly, the fact that defendant surrendered the possession of the flat in favour of the plaintiff in terms of correspondence dated 15.05.2017 does not absolve his liability to repay the loan amount. Unilateral act of a party to the contract does not alter the terms of the initial contract. The initial contract remained fully binding.
23. Record shows that in the letter dated 15.05.2017, defendant admitted that he executed the loan agreement with the plaintiff and committed defaults in payment of EMIs. In this letter, defendant expressed his inability to pay the outstanding amount. This admission goes on to show that the defendant has no defence to the claim of plaintiff. The defence that the plaint has not been filed by a duly authorized person has no legs. Plaintiff has instituted the plaint through Sh. Prasun Prasad, Assistant Manager (Legal), who has been authorized to do so by Ms. Madhumita Ganguly, Member of Executive Management of the plaintiff. The relevant copy of the resolution of Board of Directors and the authorization letter have been placed on record. In view of this, the CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 20 of 22 argument that the plaint is defective deserves rejection. The argument that plaintiff has suffered on account of the conduct of the builder is no ground for granting leave to defend as it does not raise a triable issue. Reference can be made to the decision in Sandeep Kumar's case (supra) wherein leave to defend was refused even when the defendant was duped by the builder.
24. 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 written loan agreement and promissory note executed by the defendant. Indeed, the claim of the plaintiff contains the amount outstanding towards interest and incidental charges but this does not mean that the plaintiff is dis-entitled for a decree under Order XXXVII of CPC. In terms of clause-2.7(b) of the loan agreement, the plaintiff agreed upon that delay in payment of EMIs would render him liable to pay additional interest @ 18% per annum. He also agreed that he would be liable to pay incidental charges and cost. The statement of account filed by the plaintiff merely sets out the outstanding amount along with overdue interest computed by the plaintiff. The entries contained in the statement of account filed by the plaintiff have not been questioned by the defendant. In such like cases, in view of the position of law laid down in the matter of "GE Capital Services India Vs G.Neuromed CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 21 of 22 Diagnostic Centre" 2007 (VIII) AD Delhi 464 and Umersh Kumar Rai's case (supra), a suit under Order 37 of CPC is maintainable and the same can be decreed. Defendant has failed to raise any triable issue. The judgment relied on by the defendant in IDBI Trusteeship's case (supra) is clearly distinguishable and does not advance his cause. The material on record leaves no scope for doubt that defendant has no substantial defence and the defence raised by him is sham and bogus. Accordingly, the suit is decreed with the following reliefs;
(a) A decree for a sum of Rs.46,56,649/- (Rupees Forty-Six Lac Fifty-
Six Thousand Six Hundred and Forty-Nine Only).
(b) Pendent-elite and future interest at the rate of 10% per annum till realization of decreetal amount.
(c) Cost of the suit is also awarded to the plaintiff.
25. Decree sheet be prepared accordingly.
26. File be consigned to record room.
Announced in open Court on 29.07.2022 (Sudhanshu Kaushik) Addl. District Judge-02 & Waqf Tribunal, Patiala House Courts, New Delhi/29.07.2022 CS No.428/19 Housing Development Finance Corporation Ltd. Vs Devender Shahi page 22 of 22