Delhi High Court
Delhi Travels & Tours (M/S.) vs M/S. Motorola India Ltd. on 23 February, 2000
Equivalent citations: 2000IIIAD(DELHI)351, 84(2000)DLT753, 2000(53)DRJ742, (2000)125PLR10, 2000 A I H C 2058, (2000) 53 DRJ 740, (2000) 2 PUN LR 10, (2000) 84 DLT 753, (2000) 2 CIVILCOURTC 260, (2000) 2 ARBILR 241, (2001) 1 CURLJ(CCR) 20
ORDER S.K. Agarwal, J.
1. This order shall dispose of the application filed by the defendant under Order xxxvII Rule 3(5) of the Code of Civil Procedure, 1908 (for short CPC) for obtaining leave to defend the suit filed by the plaintiff for recovery of liquidated damages of a sum of Rs. 9,99,760/- along with pendente-lite and future interest.
2. The plaintiff filed the suit alleging therein thatit is engaged in the business of travel and tour under the name and style of "APACE rent a car", it has been regularly supplying luxury vehicles to the various clients in Delhi as well as in other cities; that the plaintiff entered into three agreements with the defendant, namely : (i) Agreement on 14th June, 1995 for hiring of six Maruti Gypsy vehicles which were to be supplied at a monthly rental of Rs. 25,000/-; this agreement was valid for a period of 12 months, and it further provided that in case the vehicle was returned before the said period then the plaintiff shall be entitled to charge at the rate of Rs. 31,000/- per month, for the period for which the vehicle had been used by the defendant; (ii) Agreement dated 24th August, 1995 for hiring of one Tata Sumo/Tata Estate for a period of 24 months at a monthly rental of Rs. 29,000/-; it was also stipulated that in case the car was to be returned by the defendant before the completion of the agreement period then the plaintiff will be entitled to charge at the rate of Rs. 42,000/- per month for the total period for which the car had been used by the defendant ; (iii) Agreement dated 25th April, 1996 for the supply of Maruti Esteem at the hiring rate of Rs. 28,000/- per month provided each car remains with the defendant for a period of 24 months and in case the said vehicle was returned earlier then under the agreement the plaintiff would be entitled to charge at the rate of Rs. 35,000/- for the total period the car has been used ;
3. It is further alleged that consequent upon the fax message dated 24th June, 1996 from the defendant the plaintiff supplied 5 Gypsies w.e.f. 1.7.96 and 7 Maruti Esteems w.e.f. 1.7.1996 under the said agreements; however vide communication dated 23.9.1996 the defendants decided to disontinue with the service of car hiring from the plaintiff because of operational and business reasons with effect from 8th January, 1997; however, on 17th January, 1997 the defendant extended this period upto 27th February, 19997 on this date the defendant actually stopped the use of these cars and on 30.1.1997 defendant also withdrew the use of Tata Estate.
4. It is further alleged that the plaintiff vide letter dated 5th February, 1997 informed the defendant about the clauses, in the said agreements whereunder the defendant was obliged to pay the difference in the rates of hiring charges because of the return of the vehicles before expiry of stipulated period. The plaintiff also raised the bills at the differential rates for the 18 months i.e. for use of the Tata Estate Vehicle Rs. 2,34,000/-, for use of seven Maruti Esteem Rs. 3,92,000/- and for use of five Maruti Gypsy Rs. 2,40,000/- as the defendant failed to pay the amount due, therefore, the suit under Order xxxvII of the CPC, under the summary procedure for recovery of Rs. 8,66,000/- towards principal amount and Rs.3,33,760/- towards interest upto 30.9.98 was filed.
5. Suit was registered and summons in the prescribed form under Order xxxvII CPC were served on the defendant; they entered appearance and subsequently moved an application for leave to defend under Order xxxvII Rule 3(5) of the CPC, on the grounds which read as under : (1) the Contract dated 14.6.1995 had worked itself out and stood conclued on 13.6.1996; (2) the contract dated 24.8.1995, as produced by the plaintiff with the list of documents, the plaintiff was to provide one Tata Sumo vehicle for 24 months. However, the plaintiff did not supply the said Tata Sumo vehicle and contract was never acted upon by the parties. It is pleaded that in the body of the suit no claim has been made in the respect of Tta Sumo. Since the vehicle was not supplied and the contract was not acted upon, the question of claiming any damages does not arise; and (3) letter dated 26.4.1996 shows that the plaintiff ha offered for rent Maruti Esteem vehicles. This letter can at best be termed an offer and cannot be construed to be an agreement between the parties. Contesting the sad application, the plaintiff has filed reply repudiating the contentions raised in the application and also stating that the contract dated 14th June, 1995 was for a period of one year which means that as and when the Gypsies were taken by the defendant for their use, the terms of the agreement would apply.
6. I have heard the learned counsel for the parties and have been taken through the record. Learned counsel for the defendant in support of the application argued that the defense is bona fide and raises a triable issue. Learned counsel for the plaintiff argued that the whole transaction is one and cannot be broken in parts and that objections raised by the defendant would unnecessarily prolong the litigation and prevent the plaintiff from obtaining an early decree. It was argued that the defenses raised are sham and not plausible.
7. Law with regard to the grounds on which leave to defend can be granted is now well settled. Supreme Court in M/s. Mechalec Engineers & Manufactures Vs. M/s. Basic Equipment Corporation, approved the following principles:
"(a) If the defendant satisfies the court that he has a good defense to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconitional leave to defend.
(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defense although not a positively good defense 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 suffiient to entitle him to defend that is to say, although the affidavit does not positively and immediately make it clear that he had a defense, yet, shews such a state of facts as leads to he inference that at the trial of the action he may be able to establish a defense to the plaintiff's claim the plaintiff is not ntitled 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 moe of trial but not as to payment into Court or furnishing security.
(d) If the defendant has no defense or the defense set up is llusory 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 defense or the defense 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 defense 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 o the defendant by enabling him to try to prove a defense."
8. In this case clause 5 of the first agreement dated 14th June, 1995 ovides "this agreement shall be valid for a period of 12 months". As per the plaintiff's own showing Maruti Gypsies were not supplied within the period of one year from the date of execution of this agreement. The argument of the learned counsel for the plaintiff that the period of limitation under clause 5 of the agreement should be deemed to have been started with effect from 24th June, 1996 the date when the fax message regarding hiring Gypsies was received, prima facie it does not appear to be so. The fax message does not refer to this agreement at all. At this stage, it cannot therefore be said that the defense raised by the defendant is false, frivolous or sham or not plausible. It does raise a triable issue.
9. Further the letter dated 25th April, 1996 (second agreement) regarding the supply of Maruti Esteem Chauffeur driven on rental basis for a period of 24 months is not signed by any of the representative of the defendant. Merely because this letter was received in the office of the defendant, would not automatically convert this letter into an agreement. Evidence would be needed to determine the supply of the Maruti Esteem cars was as per the terms and conditions of this letter, which is being denied by the defendant. Terms of the letter are disuted. Learned counsel for the plaintiff argued that this letter though signed by one party should be deemed to have been accepted on account of its having been acted upon. Learned counsel for the plaintiff placed reliance on a decision of this court in Rajinder Kumar Khanna Vs. Oriental Insurance Co. & Anr., .
Perusal of the fax message dated 24th June, 1996 which has been relied by the plaintiff does not mention about the letter dated 24.4.1996, on the contrary it refers to a meeting on that day itself. It was subsequent to that meeting and discussion the order for supply of Maruti Esteem cars was placed. The issue raised by the defendant in the leave application stating that the said letter dated 25th April, 1996 cannot be termed as an agreement because it was not signed by any of the representatives again, cannot be said to be frivolous or sham or not plausible. It does raise a triable issue.
10. With regard to the third agreement, dated 24th August, 1995 for hiring of one Tata Sumo on self drive basis with Chauffeur and fuel for a period of 12 months. It was argued that this agreement was never acted upon. Learned counsel for the plaintiff on the other hand argued that the agreements dated 14th June, 1995, fax message dated 24th June, 1996, and the letter dated 23rd September, 1996, through which the services of the car hired from APACE were terminated, should be read as one transaction which again would require evidence. Therefore, it raises a triable issue and cannot be said sham or frivolous.
11. In view of the above, the application for leave to defend is granted. The defendant is allowed to file written statement within a period of six weeks from today. The plaintiff ay file replication, if any, within a period of two weeks thereafter. Parties will file original documents within two weeks thereafter and appear before the Joint Registrar for admission/denial of documents and further proceedings on 20th July, 2000. IA stands disposed of.