Delhi District Court
Also At : vs Sh. Kamal Kumar @ Rakesh Print Wala on 29 April, 2017
IN THE COURT OF SH. GURVINDER PAL SINGH
ADDITIONAL DISTRICT JUDGE01 (CENTRAL)
TIS HAZARI COURTS, DELHI
CS 10523/2016
Sh. Tilakraj,
S/o Sh. Dharamchand Arora,
R/o Flat No. B311, Budh Vihar,
Alwar, Rajasthan.
Also at :
B1/182, 2nd Floor, Moti Nagar,
New Delhi.
......Plaintiff
Versus
Sh. Kamal Kumar @ Rakesh Print Wala,
S/o Late Sh. Puran Chand,
R/o A852, Prem Nagar, Multani Dhanda,
Pahar Ganj, New Delhi110055.
Also at :
6504/3, 2nd Floor, Hanuman Mandir Gali,
Nabi Karim, New Delhi110055.
.......Defendant
CS10523/2016
Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 1 of 17
O R D E R
1.By this order I shall dispose of the application, dated 11.04.2016 filed that day by defendant under Order XXXVII Rule 3 of the Code of Civil Procedure (in short CPC), seeking leave to defend, which application was filed within time after service of summons for judgment on 30.03.2016 as on dates 09.04.2016 and 10.04.2016 the Court was closed due to holidays on account of 2 nd Saturday and Sunday, respectively.
2. I have heard arguments of Sh. Kartik Khanna, Ld. Counsel for plaintiff and Sh. Gulzari Lal, Ld. Counsel for defendant and have perused the record including the application under consideration, its reply, precedent, other material on record and given my thoughts to rival contentions put forth and borne out of application and reply.
3. Plaintiff through SPA Holder Sh. Dinesh Bhatia has filed suit under Order XXXVII of CPC for recovery of Rs. 10,67,500/ with interest @ 1.5% per month from defendant.
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4. Factual matrix of case of plaintiff in brief is as follows. Plaintiff and defendants were having cordial relations with each other. At the request of defendant, in the month of December, 2011, the plaintiff gave friendly loan of Rs. 6 Lakhs in cash to defendant. Defendant assured that the loan amount would be paid by the defendant within one year alongwith interest @ 18% per annum. It has been averred that in the first week of December 2012, the defendant paid Rs. 8000/ to the plaintiff in cash towards the interest amount and further issued a cheque bearing no. 733587, dated 10.12.2012, drawn on ICICI Bank, Sadar Bazar, Delhi, for an amount of Rs. 7 Lakhs (including Rs. 1 Lakh as interest amount) and assured the plaintiff that said cheque would be encashed on presentation. But said cheque was dishonored vide memo dated 04.02.2013 on presentation with remarks "Insufficient funds." Therefore, plaintiff issued legal demand notice on dated 11.02.2013 to the defendant by registered AD through his counsel. However, despite service of said notice the defendant failed to return the said loan amount to the plaintiff and hence this suit was filed by plaintiff claiming principal amount Rs. 7,00,000/ of cheque in question and interest of Rs. 3,67,500/ @ 18% p.a. from January, 2013 till November, 2015 on said principal sum.
CS10523/2016 Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 3 of 17
5. Initially, summons for appearance and then summons for judgment under Order XXXVII of CPC were issued to defendant. Defendants filed application for leave to defend on 11.04.2016 stating to have been served with the summons for judgment on 31.03.2016. It has been averred that defendant had a prima face case and substantial lawful defence being not liable to pay the amount as prayed in the suit as well as the plaintiff had deliberately forged the cheque in question. Also, there are triable issues which are required to be decided by leading evidence by the parties and cannot be decided in summary. Suit of the plaintiff was not maintainable under the law under Order XXXVII CPC as the alleged cheque was issued for a sum of Rs. 60,000/ as per agreement and was never in discharge of liability. In fact, plaintiff was unknown person qua the defendant and had no relation whatsoever with the plaintiff. Even the defendant had never met or seen the plaintiff before Alwar, Rajasthan District Courts, where the plaintiff had filed a complaint cases u/s 138 Negotiable Instruments Act (in short NI Act). The defendant had never shown any desire of the taking loan or had taken loan from the plaintiff at any point of time as he was unknown to defendant. Also has been averred that said complaint was filed by plaintiff at the behest of one Sh.
CS10523/2016 Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 4 of 17 Rajender Arora, who was relative of plaintiff and the cheque in question for Rs. 1 Lakh was given to said Sh. Rajender Arora in the year 2007 and not in the year 2012, which cheque was given to plaintiff by said Sh. Rajender Arora and thereafter the said cheque was forged and fabricated from 1 Lakh to 7 Lakh. Also has been averred that the cheque in question was allegedly admitted by plaintiff to be as security on the date of alleged issuance by the defendant. Also has been averred that the cheque in question was issued by the defendant for a sum of Rs. 60,000/ and the plaintiff was using the same cheque for a sum of Rs. 7,00,000/ in the present suit, which cheque was received as blank cheque as per agreement, dated 07.02.2007, whereas, the plaintiff had to mention in the cheque as Rs. 1,00,000/ only but the plaintiff manipulatedly filled up the amount on the cheque in question as Rs. 7,00,000/. Also has been averred that in the agreement, dated 07.02.2007, payment was to be made by three cheques of Rs. 1,00,000/ each, dated 07.02.2007 bearing no. 002376 to 002378, out of those five(three) cheques only one cheque was admittedly encashed and the amount was transferred in the account of defendant and the cheques were received back from the answering defendant. Also has been averred that an agreement/undertaking, dated CS10523/2016 Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 5 of 17 Nil was also fabricated by the plaintiff for the reasons best known to him. As per the agreement, dated 07.02.2007, three cheques were given by the defendant to the plaintiff and a sum of Rs. 2 Lakhs had to be given in cash but the plaintiff failed to do the same and only Rs. 1 Lakh was given to the defendant by the plaintiff but the Court of Sh. Pitambar Dutt, the then Ld. ADJ, Tis Hazari Courts, Delhi, had not relied on the said contentions of the plaintiff and had given a finding about Rs. 1 Lalkh. Plaintiff had also filed complaint under Section 138 NI Act against the defendant, which was dismissed by the concerned Court and the accused were acquitted in respect of cheque no. 733599. Prior to filing of the present suit, the plaintiff had filed a complaint under Section 138 NI Act in Rajasthan and after withdrawal of the said case, the plaintiff had filed the present suit. Also has been averred that without going through the crossexamination of the plaintiff, the defendant cannot prove his defence. Also, the defendant had substantial defence to raise in view of the afore elicited facts and circumstances. Suit of plaintiff involved adjudication of substantial issues, which could be decided after conducting full trial of the present suit. Also has been averred that the suit was liable to be dismissed under Order VII Rule 11 CPC as there CS10523/2016 Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 6 of 17 occurred no cause of action in favour of plaintiff for filing this suit. Balance of convenience also lie strongly in favour of the defendant to grant unconditional leave to defend.
6. Answering plaintiff in his reply to application, of defendant seeking leave to defend, controverted the averments of defendants in toto and in particular and reiterated the averments of the plaint. Besides that plaintiffs also averred that the defendant failed to raise any triable issue in its application and denied that defendant was entitled for any unconditional leave to defend. Also, the defence raised by the defendant was totally sham, bogus, vague and untenable at Law as defendant had miserably failed to raise any substantial defence as the defendant failed to file any document in support of his contentions. Plaintiff has prayed for dismissal of the application for seeking leave to defend, accordingly.
7. Ld. Counsel for defendant relied upon Mechalec Engineers & Manufacturers vs. Basic Equipment Corporation, 1976 Law Suit (SC) 414. The Apex Court held therein that : CS10523/2016 Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 7 of 17 "The principles applicable to cases covered under Section 37 CPC are : (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 had a defence, yet, shows such a state of facts as leads as to the inference that at the trial 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 CS10523/2016 Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 8 of 17 defence to proceed if the amount claimed is paid into Court or otherwise secured 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."
8. Suit of the plaintiff rests upon the premise of having given friendly loan of Rs. 6 Lakhs in cash in the month of December 2011 to defendant. In the first week of December 2012, the defendant had paid Rs. 8,000/ in cash to the plaintiff towards interest amount and further had issued a cheque no. 733587, dated 10.12.2012, drawn on ICICI Bank, Sadar Bazar, Delhi for Rs. 7 Lakhs (including Rs. 1 Lakh as interest amount) assuring plaintiff that said cheque shall be encashed upon presentation. On presentation said cheque was returned dishonoured with return memo, dated 04.02.2013 on ground of "Insufficient funds".
9. The projected defence of defendant rests on the premise of plaintiff having forged the cheque in question and claim of plaintiff was false, since, there was no privity of contract interse parties to the lis.
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10. Order VI Rule 4 CPC reads as follows : "4. Particulars to be given where necessary. - In all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence and in all other cases in which particulars may be necessary beyond such as are exemplified in the forms aforesaid, particulars (with dates and items if necessary) shall be stated in the pleading."
11. Since, the projected defence of defendant rests upon alleged fraud of plaintiff, it was incumbent upon defendant seeking leave to defend to elicit in clear and precise terms the complete details of the fraud perpetuated, particulars with dates and items in terms of Rule 4 of Order VI CPC.
12. It is the version of defendant in ground (iv) of application for leave to defend that cheque in question was issued for a sum of Rs. 60,000/ as per agreement and was never in discharge of liability, but is alleged by plaintiff to be as security. In ground (v) of application for leave to defend, again the defendant reiterates initially the cheque in question was for sum of Rs. 60,000/ but later in said ground, the defendant alleges that this cheque in question was received by plaintiff as CS10523/2016 Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 10 of 17 blank cheque as per agreement, dated 07.02.2007, whereby plaintiff had to mention in the cheque as Rs. 1,00,000/ only but the plaintiff has manipulatedly filled up the amount on the cheque as Rs. 7,00,000/. In ground (vi) of application for leave to defend, the defendant alleges that in the agreement, dated 07.02.2007, payment was to be made by three cheques of Rs. 1,00,000/ each, dated 07.02.2007 bearing no. 002376 to 002378, out of those five (three) cheques only one cheque was admittedly encashed and the amount was transferred in the account of defendant and the cheques were received back from the answering defendant. In ground
(vii) of the application for leave to defend, defendant alleges of an agreement/undertaking to have been fabricated by the plaintiff, dated Nil for the reasons best known to the plaintiff and that as per the agreement, a sum of Rs. 2,00,000/ was to be given in cash but the plaintiff had failed to do the same and only Rs. 1,00,000/ has been given to the defendant by the plaintiff. In ground (viii) of the application for leave to defend, the defendant adverts to the complaint filed by plaintiff with respect to dishonour of cheque no. 733599. The facet with respect to cheque no. 733599 is not the subject matter of the lis. Afore elicited averments in the grounds taken by the defendant in his application for CS10523/2016 Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 11 of 17 leave to defend make it crystal clear that not only such presented grounds are inconsistent but in fact are in material contradiction with each other. When defendant claims the cheque in question was issued by him for sum of Rs. 60,000/, defendant never claims it to have been issued as a blank cheque. No agreement of date 07.02.2007 was filed with the application for leave to defend. Original Negotiable Instrument viz., the cheque in question has been placed on record by the plaintiff and the same bears date 10.12.2012, it is in favour of plaintiff and the amount has been mentioned in figures as well as in words. Signature of defendant on the cheque in question is an admitted fact. Section 118 of NI Act, 1881 embodies the presumptions as to negotiable instruments interalia including of consideration as that every negotiable instrument was made or drawn for consideration. No law provides that writing in the body of cheque, the negotiable instrument, must be of drawer of the cheque. Signature of drawer on cheque having writing of other(s) in the body of cheque, suffices for the cheque to be validly issued and cannot be a defence to avoid the liability.
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13. In the case of Sunil Enterprises & Anr. Vs. SBI Commercial & International Bank Ltd. : 1998 IV AD (SC) 271=(1998) 5 SCC 354 it was held as follows : "(a) If the defendant satisfies the Court that he has a good defence to the claim on merits, 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 possibly good defence, 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, if the affidavit discloses that at the trial he may be able to establish a defence to the plaintiffs claim, the Court may impose conditions at the time of granting leave to defend the conditions being as to time of trial or mode of trial but not as to payment into Court or furnishing security.
(d) If the defendant has no defence, or if the defence is sham or illusory or practically moonshine, 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, the Court may show mercy to the defendant by enabling him to try to prove a defence but at the same time protect the CS10523/2016 Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 13 of 17 plaintiff imposing the condition that the amount claimed should be paid into Court or otherwise secured."
Also was held in aforesaid case that : "7. Examining the above provision carefully one finds that there are two classes of suits, one based upon bills of exchange, hundies and promissory notes and the other, where the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant, with or without interest. The latter class of suits is also not open ended and it is restricted to suits where the debt or liquidated demand arises (1) on a written contract or (2) on an enactment or (3) on a guarantee. Examining the facts of the present case in the light of this provision, it becomes clear that the present suit does not fall within the second class of suits. There is no written contract, there is no debt recoverable or liquidated demand based upon an enactment nor is there any debt or liquidated demand based upon a guarantee. The present suit, therefore, clearly, falls within the first class of suits i.e., suits upon bills of exchange, hundies and promissory notes. Section 6 of the Negotiable Instruments Act, 1881 makes it clear that a cheque is a bill of exchange. The present suit is based entirely on the four cheques referred to above and, therefore, is covered in the first class of suits referred to in Order XXXVII Rule 1 (2)."
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14. In the case of V.K. Enterprises & Anr. Vs. Shiva Steels, (2010) 9 SCC 256, the Supreme Court held that : "10. Order 37 CPC has been included in the Code of Civil Procedure in order to allow a person, who has a clear and undisputed claim in respect of any monetary dues, to recover the dues quickly by a summary procedure instead of taking the long route of a regular suit. The courts have consistently held that if the affidavit filed by the defendant discloses a triable issue that is at least plausible, leave should be granted, but when the defence raised appears to be moonshine and sham, unconditional leave to defend cannot be granted.
11. What is required to be examined for grant of leave is whether the defence taken in the application under Order 37 Rule 3 CPC makes out a case, which if established, would be a plausible defence in a regular suit. In matters relating to dishonour of cheques, the aforesaid principle becomes more relevant as the cheques are issued normally for liquidation of dues which are admitted."
15. In the case in hand, the defence would have been plausible or substantial had there been material to substantiate any of averments of application under consideration including (i) filing of the agreement, CS10523/2016 Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 15 of 17 dated 07.02.2007; (ii) any legal step including filing of complaint before police or Magisterial Court by defendant with respect to alleged offence of forgery/cheating in respect of the cheque in question consequent upon receipt of dishonour of such cheque, initially when it was dishonoured by banker of defendant and later on receipt of legal notice of date 8/11.02.2013 of plaintiff and even later when summons for judgment were received by the defendant. The version put forth by the defendant perse appears to be interse contradictory, without basis and devoid of relevant and material particulars. Nowhere, the defendant has laid any premise for having given any good defence to the claim on merits nor raised any triable issue having fair or bonafide or reasonable defence nor plausible good defence. The defence put forth perse appears to be sham or illusory or practically moonshine and thus in accordance with law laid down in the cases of Mechalec Engineers & Manufacturers (supra); Sunil Enterprises & Anr. (supra); and V.K. Enterprises & Another (supra), the leave to defend cannot be granted even conditionally. Resultant is that the application for leave to defend under Order XXXVII Rule 3 CPC lacks merits and being not maintainable, is accordingly dismissed. Consequently, plaintiff is entitled to judgment CS10523/2016 Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 16 of 17 forthwith. Plaintiff is held entitled for recovery of sum of Rs. 7,00,000/ (Rs. Seven Lakhs only) from defendant. There existed no written agreement inter se parties with respect to rate of interest on loan advanced. But, the interest has to be granted keeping in view the economic standards of the country and the conduct of the parties. In my opinion the interest @ 12% per annum is not excessive but would be sufficient and reasonable. Accordingly, plaintiff is held entitled for recovery of sum of Rs. 7,00,000/ (Rs. Seven Lakhs only) alongwith interest @ 12% per annum from defendant from the date of institution of the suit i.e., 01.12.2015 till realization, with proportionate costs. Suit is decreed in above terms. Decree sheet be prepared accordingly. File be consigned to record room.
Announced in open Court (GURVINDER PAL SINGH)
on 29th Day of April, 2017 Additional District Judge01 (Central)
Tis Hazari Courts, Delhi.
(AD)
CS10523/2016
Sh.Tilakraj Vs. Sh. Kamal Kumar @ Rakesh Print Wala Page 17 of 17