Delhi High Court
M/S Darashaw & Comapny Private Ltd vs Kapil Kumar on 11 October, 2013
Author: Mukta Gupta
Bench: Mukta Gupta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ IA 6979/2012 in CS(OS) 127/2011
% Reserved on: 24th September, 2013
Decided on: 11th October, 2013
M/S DARASHAW & COMAPNY PRIVATE LTD ..... Plaintiff
Through Mr. Subhash C. Vashishth, Adv.
versus
KAPIL KUMAR ..... Defendant
Through Mr. R. Ramachandra, Mr. Sujeet
Kumar Mishra, Advs.
Coram:
HON'BLE MS. JUSTICE MUKTA GUPTA
1.By this application the defendant seeks leave to defend the suit filed by the plaintiff under Order XXXVII CPC.
2. Learned counsel for the defendant/ applicant states that by mere issuance of a cheque it cannot be presumed that the defendant was liable to pay a debt and the cheque was issued in discharge of the liability. Since the plaintiff in the entire plaint has not shown that a concluded contract which was legally enforceable, with regard to sale and purchase of Convertible Warrants was entered between the parties and the defendant on that account was indebted to pay to the plaintiff the amount mentioned in the cheque, the plaintiff cannot be granted the permission to seek a judgment against the defendant by way of summary procedure. In the entire plaint or the documents enclosed it is nowhere stated that the possession of the 7,50,000 IA 6979/2012 in CS(OS) 127/2011 Page 1 of 5 Convertible Warrants was handed over to the defendant. The cheque that was dishonoured was thus issued in discharge of the liability. From a perusal of the e-mails between the parties a clear inference can be drawn that the possession of the Convertible Warrants was never handed over, and thus Order XXXVII CPC has no application to the facts of the present case. Thus, leave to defend be granted to the defendant.
3. Learned counsel for the plaintiff on the other hand contends that from the perusal of the document it is clear that the defendant was handed-over the Convertible Warrants and the cheque was issued in lieu of the said liability. Thus, no leave to defend be granted.
4. Heard learned counsel for the parties. The facts pleaded in the plaint are that the defendant is a promoter/ managing director of M/s. Brushman (India) Limited a company registered under the Companies Act. Brushman (India) Limited issued 36,50,000 Convertible Warrants of Rs. 10/- each at a premium of Rs. 115/- to its promoters and others on preferential basis. As per the terms of issue of Convertible Warrants a sum of Rs. 12.50 per Convertible Warrant was to be paid at the time of making the application. The plaintiff applied for 7,50,000 Warrants and forwarded a cheque along with the application. The plaintiff was finally allotted 7,50,000 Convertible Warrants on 22nd June, 2007 amounting to Rs. 93,75,000/- By his letter dated 27th October, 2007 the defendant approached the plaintiff for purchase of the Convertible Warrants of Brushman (India) Limited which were allotted to the plaintiff. The plaintiff by its letter dated 14th November, 2007 consented to sell the same to the defendant at Rs. 12.50 per Convertible Warrant. The defendant by his letter dated 2nd January, 2008 forwarded to IA 6979/2012 in CS(OS) 127/2011 Page 2 of 5 the plaintiff two cheques dated 3rd January, 2008 and 25th January, 2008 bearing numbers 623498 and 179070 amounting to Rs. 23,43,750/- and Rs. 70,31,250/- respectively. Though the first cheque of the defendant for Rs. 23,43,750/- got cleared and the plaintiff received the payment of the same, however the defendant by his e-mail dated 22nd January, 2008 stated, inter alia, that he could get the balance amount proceeds funded only after producing the proof that 25% of the payment of the Warrants has been made by him. He needed three clear weeks from the date of payment of 25%. The defendant kept on postponing the payment, when finally the plaintiff deposited the defendant's second cheque being cheque no. 179070 for Rs. 70,31,250/- which was dishonoured due to "insufficient funds". The defendant gave another cheque to the plaintiff's representative being cheque No. 225308 dated 22nd July, 2008 amounting to Rs. 70,31,250/- for payment of the balance amount of 7,50,000 Convertible Warrants of Brushman (India) Limited, agreed to be purchased by the defendant from the plaintiff. The defendant again requested not to deposit the cheque and when finally the plaintiff deposited the aforesaid cheque on 3rd December, 2008 the same was returned dishonoured with the remarks "funds insufficient". The plaintiff filed a criminal complaint under Section 138 of the Negotiable Instruments Act and the present suit under Order XXXVII CPC.
5. The case of the defendant is that in the entire suit it is no where pleaded that 7,50,000 Convertible Warrants were handed over to the defendant along with a duly executed transfer deed by the plaintiff making the defendant a bona fide holder of the warrants and in the absence thereof there was no concluded contract between the parties. Hence the defendant IA 6979/2012 in CS(OS) 127/2011 Page 3 of 5 incurred no liability for payment of the dishonoured cheques and thus the same cannot be enforced by a suit under Order XXXVII CPC. Both the learned counsel for the defendant and the plaintiff seek to draw inferences in their favour from the e-mails with regard to possession of Convertible Warrants, however the documents of none of the parties clearly admit/ deny that the Convertible Warrants have been transferred to the defendant. There is no specific averment in the entire plaint that 7,50,000 Convertible Warrants have been handed over to the defendant. Further as noted above, since there is no clear evidence on record placed by the plaintiff to prove that the Convertible Warrants were transferred to the defendant, it cannot be presumed that the defendant incurred a liability and thus the cheque which got dishonoured was issued in discharge of the liability. The affidavit of the plaintiff is silent on this aspect.
6. On the facts of the case the defendant has made out a triable issue and thus the leave to defend is required to be granted to the defendant. Consequently, the leave to defend is granted.
7. Application is disposed of.
CS(OS) 127/2011 Written statement be filed within four weeks. Replication in four weeks thereafter.
List before the learned Joint Registrar for completion of pleadings and admission/ denial of documents on 13th January, 2014.
IA 6979/2012 in CS(OS) 127/2011 Page 4 of 5The matter be placed before this Court on 14th April, 2014 for framing of issues.
(MUKTA GUPTA) JUDGE OCTOBER 11, 2013 'ga' IA 6979/2012 in CS(OS) 127/2011 Page 5 of 5