M/S Ishwar Builders Pvt Ltd vs Ajit Pal Singh Bindra on 16 October, 2017

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Delhi High Court

M/S Ishwar Builders Pvt Ltd vs Ajit Pal Singh Bindra on 16 October, 2017

1. This application is filed by the defendant for seeking an unconditional leave to defend this suit. Before coming to the issues raised in the application it would be appropriate to advert to the facts stated in the plaint.

2. The plaintiff has filed this summary suit under Order 37 of CPC for recovery of an amount of `2,29,64,250/- plus interest on the basis of a dishonored cheque.

3. The plaintiff, a company having its registered office at Janak Puri, New Delhi alleges:-

IA No.3349/2017in CS(OS) No.532/2016 Page 1 of 10

i) the plaintiff was approached by the defendant in connection of sale of property bearing no. A-26 Kirti Nagar, New Delhi admeasuring 500 square yards;

ii) it was agreed between the plaintiff and the defendant that the said property shall be purchased in the name of defendant but the profit generated out of the resale of such property or from the settlement, if any, arrived at with the owners of property No.A-26 (supra) shall be shared equally by the plaintiff and defendant in the ratio of 50% each;

iii) the plaintiff paid an amount of `1,00,30,000/- to the defendant for the purchase of this property through banking transactions duly credited in the defendant's savings account no. 19484, Indian Overseas Bank, Safdarjung Enclave New Delhi. The amount of `50,00,000 was paid on 14.09.2009; `5,30,000 was paid on 31.03.2010; `15,00,000 was paid on 22.11.2010; `30,00,000 was paid on 28.04.2011;

iv) upon the receipt of initial `50,00,000/- from the plaintiff, the defendant entered into an agreement with Smt.Shanti Devi, the owner of property No. A-26 (supra) and paid the said amount to her as an advance of the sale consideration. Later some disputes arose between the defendant and Smt.Shanti Devi and hence the defendant filed a suit CS(OS) 775/2010 against Smt.Shanti Devi in the High Court of Delhi. The suit was settled between the parties and ultimately the said property was sold to a third person without the knowledge of the plaintiff. As plaintiff IA No.3349/2017in CS(OS) No.532/2016 Page 2 of 10 intended to initiate the proceedings against the defendant and Smt.Shanti Devi, the defendant approached the plaintiff and handed over a cheque bearing no. 366570 for a sum of `2,01,00,000/- dated 16.12.2015 drawn on Indian Overseas Bank, Safdarjung Enclave, New Delhi viz. the loan amount of `1,00,30,000 plus interest;

v) however the said cheque when presented, was dishonored due to insufficient funds vide banker's memo dated 19.12.2015 and a complaint under section 138 of the Negotiable Instruments Act was also filed;

vi) by this suit the plaintiff seeks recovery of an amount of `2,29,64,250 plus interest @ 18% per annum and costs.

4. The defendant filed this application under Order 37 Rule 3(5) of CPC seeking unconditional leave to defend, interalia, on following grounds:-

a) the plaintiff never gave any amount to the defendant as a loan for purchase of the subject property but the plaintiff paid it as an investment as it used to invest in properties through the defendant;

b) the suit is barred by the limitation and the plaint is liable to be rejected;

c) the impugned cheque used by the plaintiff is a fabricated document as signatures of defendant appending on the purported cheque are forged. The defendant rather has filed an handwriting expert report of Truth Lab Forensic Services to the IA No.3349/2017in CS(OS) No.532/2016 Page 3 of 10 effect the signatures of defendant on the impugned cheque as also on the admitted documents do not match with each other;

5. Coming to contention (a) the defendant has contended that no loan was ever granted to the defendant and rather the plaintiff used to invest money through the defendant in properties and the amount so paid by the plaintiff was also for purchase of different properties located at Tagore Garden, New Friends Colony, Kirti Nagar etc. and the amount so paid was utilized for purchase of properties at Tagore garden and New Friends Colony. The amount given was never utilized for purchase of property no. A-26 (supra).

6. In support of his contention the learned counsel for the defendant has referred to para 3 of plaint wherein the plaintiff himself has alleged both the parties decided to purchase the property and for which the plaintiff had paid to the defendant `1,00,30,000/- and though the money was to be provided by the plaintiff but the property was to be purchased in the name of defendant. The pleading do show the amount was never to be treated as loan but was an investment by the plaintiff company in sale/purchase of properties, its development and construction etc., hence the defendant has rightly alleged he used to purchase the properties on behalf of the plaintiff and had never taken any loan. Even the income tax returns (ITRs) filed by the plaintiff company show the company had advanced the amount against properties at Tagore Garden and New Friends Colony, New Delhi. It is contended Mr. L.M. Madhan, Director of the plaintiff company had entered into an oral agreement in the month of September, 2009 for sale of property at Tagore Garden (owned by the IA No.3349/2017in CS(OS) No.532/2016 Page 4 of 10 defendant) and further an oral agreement in the month of November, 2010 for purchase of New Friends Colony property (for which the defendant had already entered into an agreement to sell with the owners for assignment of rights) on as is where is basis, since the property was under litigation. The total sale consideration(s) of the aforesaid properties was Rs.2 crore and 1.5 crore respectively which payment was to be made by 30.04.2010 and 03.05.2011 and it was clearly understood the defendant would be entitle to forfeit the earnest money in case the plaintiff fails to make further payment.

7. As per the defendant, the plaintiff had paid a sum of `50,00,000/- on 14.09.2009 and a sum of `5,30,000/- on 31.03.2010 towards earnest money to the defendant for purchase of Tagore Garden property and not for the purchase of Property No. A-26 (supra). The plaintiff acknowledges this fact viz. the transaction of Tagore Garden property in its ITRs (schedule B) for the financial year 2009-2010. Further the statutory records of the plaintiff company, including but not limiting to the ITRs, balance sheet etc. filed with the appropriate authorities do show that the amount paid by the plaintiff was not for A-26 (supra) but was for two other properties stated above.

8. The plaintiff made yet another payment of `15,00,000/- on 22.11.2010 towards earnest money and `30,00,000/- on 28.04.2010 towards purchase of property at New Friends Colony. The plaintiff's own ITR record for the financial year 2011-2012 show the plaintiff had given advance of `1,00,30,000/- against properties at Tagore Garden and IA No.3349/2017in CS(OS) No.532/2016 Page 5 of 10 New Friends Colony. The defendant has filed the ITRs of the plaintiff for the years 2011-12, 2012-13, 2013-14, 2014-15 which notes the amount of `1,00,30,000/- was advanced against properties at New friends Colony and Tagore Garden, New Delhi though in its ITR for the financial year 2015-16, the plaintiff company noted it as an advance against the property No.A-26 (supra).

9. The defendant's plea the amount paid by the plaintiff company was towards investments in different properties and was never to be treated as a loan is in fact supported by the ITRs of the plaintiff company and do raise a concern qua the very basis of filing of this suit.

10. Further contention (b) is the suit being barred by limitation also do not appear to be frivolous as admittedly the last payment of `30,00,000/- was made by the plaintiff to the defendant on 28.04.2011 and whereas the impugned cheque, allegedly given by defendant for discharge of loan is of 16.12.2015. The issuance of subject cheque on dated 16.12.2015 would not help the plaintiff in extending the limitation of this suit per section 18 of the Limitation Act. The section read as under:

"18. Effect of acknowledgment in writing.--

(1) Where, before the expiration of the prescribed period for a suit of application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of IA No.3349/2017in CS(OS) No.532/2016 Page 6 of 10 limitation shall be computed from the time when the acknowledgment was so signed.

(2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.

Explanation.--For the purposes of this section,--

(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right;

(b) the word "signed" means signed either personally or by an agent duly authorised in this behalf; and

(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right."

11. If one peruse the section it mandates the acknowledgement of the liability needs to be done within the prescribed period for filing the suit and any acknowledgement beyond the period of limitation would not extend the limitation for filing the suit. The learned counsel for the defendant in support of its contention has also referred to M/s Vijay Polymers Pvt. Ltd. & Anr. Vs. M/s Vinnay Aggarwal Crl. M.C. No. 1682/2008 decided by this Court on 24.04.2009.

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12. Coming to contention (c) viz. the impugned cheque is fabricated, the learned counsel for the defendant has argued the cheque is purportedly issued from the cheque book obtained in the year 2011-12 having 20 leaflets viz. cheque nos.366561-80 and only the impugned cheque (leaf no.10) is allegedly used, per information provided by the bank and 19 cheques from the said cheque book are still unused, which show the mischief.

13. Further the defendant has already moved an application seeking forensic examination of the cheque in the complaint filed under section 138 of the Negotiable Instruments Act. It is argued that there was never any reason for the defendant to issue the impugned cheque of `2 crores towards any alleged profit earned from A-26 (supra) as in the compromise entered into between the defendant and Smt.Shanti Devi, the defendant was entitle to only 25% of the sale consideration. The defendant has file copy of IA No. 19045/2011 viz. the compromise entered into between the defendant and Smt.Shanti Devi in CS(OS) 775/2017, under Order 23 Rule 3 CPC which runs as under:

i. It is agreed between the plaintiff and the defendant that in the suit property, A-26, Kirti Nagar, New Delhi, Plaintiff shall have 25% shares/right and defendant shall have 75% share/right and that the suit property be sold to a third party at the highest price with mutual efforts and consent of both the parties.

ii. It is further agreed that from sale consideration received upon sale of the suit property, the same will be distributed in the manner that Plaintiff shall receive 25% of the sale consideration and IA No.3349/2017in CS(OS) No.532/2016 Page 8 of 10 defendant shall receive 75% of the sale consideration.

iii. It is further agreed that the sum of `51 lakhs which has been paid by plaintiff to defendant, shall remain with the defendant and will not be counted towards the sale consideration meaning thereby that defendant will receive 75% of the sale consideration and will also keep `51 lakhs. The balance 25% of the sale consideration received, will go to the plaintiff.

14. The defendant alleges the property No. A-26 (supra) was sold on 03.12.2015 for a total sale consideration of `6 crore out of which the Smt.Shanti Devi got `3.5 crores and the defendant was paid `1.5 crores.

The defendant though had made payment of `51 lakhs to Smt.Shanti Devi as earnest money so after deducting the said amount the defendant was left with only `99 lakhs and he rather suffered a loss. If the defendant was to pay to the plaintiff the profits from property No. A-26 (supra) it could only be `49.50 lakhs and not `2,01,00,000 as is alleged by the plaintiff.

15. Thus on all the three counts the defendant has raised tribal issues which needs evidence and accordingly the defendant is granted an unconditional leave to defend. The application is allowed.

CS(OS) 532/2016

16. The written statement be filed by the defendant within four weeks from today. Replication thereto, if any, be also filed by the plaintiff within two weeks of filing the written statement.

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17. List for compliance and completion of pleadings before the Joint Registrar (Judicial) on 07th December, 2017.

18. Be listed in Court upon completion of pleadings.

YOGESH KHANNA, J OCTOBER 16, 2017 DU IA No.3349/2017in CS(OS) No.532/2016 Page 10 of 10

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