Delhi District Court
Sh. Kishan Garg vs Sh. Pankaj Kumar on 7 April, 2016
IN THE COURT OF SH. RAKESH KUMAR SHARMA, ADJ03 (N/W)
ROHINI COURTS:DELHI
CS No: 477/14
Sh. Kishan Garg .........Plaintiff
Versus
Sh. Pankaj Kumar .........Defendant
ORDER
1. By this order, I shall dispose of the application for leave to defend filed by the defendant.
2. Brief facts are that the plaintiff has filed the present suit for recovery of Rs. 5 lacs with pendentelite and future interest @ 24 per annum with costs u/o 37 CPC. It is stated in the plaint that on the request of defendant, the plaintiff advanced a loan of Rs. 4 lacs on 02 032012 and Rs. One lac on 21032012 to the defendant. The defendant had assured to repay the loan amount within a period of six months i.e. by September 2012. However, the defendant failed to repay the loan. After much persuasion by the plaintiff, the defendant issued three cheuqes, details of which have been given in para 4 of the plaint. All the three cheques were dishonoured on presentation. The plaintiff apprised the defendant about the fate of the cheques and asked him to repay the loan amount. However, the amount has not been paid by the defendant on one pretext or the other. Hence, the Kishan Garg Vs. Pankaj Kumar Page 1 of 13 present suit.
3. Summons for appearance u/o 37 CPC were sent to the defendant, in pursuance to which he filed his appearance. Thereafter, summons for judgment were sent to him, in response to which the application for leave to defend has been filed by the defendant.
4. It is stated in the application for leave to defend filed by the defendant that plaintiff is running a shop of building material at A 4, Rithala Road, Budh Vihar, Delhi. In November 2010, the defendant wanted to renovate the ground and first floor of his property bearing no. E17, Sharma Colony, Budh Vihar, PhII, Delhi and also to construct the second floor. He approached the plaintiff for supply of building material. The plaintiff put the condition of handing over of blank cheques as security with the defendant stating that as and when payment in respect of the building material was made by the defendant, the cheques shall be returned by the plaintiff. The defendant accepted the condition of the plaintiff and handed over signed blank cheques to the plaintiff. The plaintiff supplied building material at the construction site from time to time and the defendant also made payment to the plaintiff in cash against the building material so supplied. The defendant also got a payment of Rs. 50,000/ made into the account of plaintiff through his maternal uncle namely Sh. Anand Kumar in the month of August 2011. The defendant cleared all the dues of the plaintiff and in the month of Kishan Garg Vs. Pankaj Kumar Page 2 of 13 September, 2011, demanded return of his cheques. The plaintiff put off the matter on the pretext that cheques were not traceable in his shop and at his house and that he shall return the same as and when the same are traced. Even thereafter, the defendant approached the plaintiff for return of the cheques but the same were not returned by the plaintiff. The plaintiff has misused the cheques for filing the present suit. The defendant never obtained any loan from the plaintiff. The defendant has sought unconditional leave to defend.
5. In his reply to the application, it is admitted by the plaintiff that he is running a shop of building material. The other contents of the application are denied by him. It is submitted by the plaintiff that payment which was received by the plaintiff from Sh. Anand was on account of dealing of the plaintiff with the said Sh. Anand and the same was never received on behalf of defendant. The plaintiff has sought dismissal of the application with exemplary cost.
6. Counsel for defendant relied upon the following authorities in support of his contentions:
(a) Order dated 24082012 passed by Hon'ble Mr. Justice V. K. Shali, Delhi High Court in Crl. L. P. 461/2011 Vipul Kumar Gupta Vs. Vipin Gupta;
(b) 187 (2012) DLT 285 Hari Niwas Gupta Vs. Om Propmart (P) Ltd. & Ors.;
(c) 219 (2015) DLT 294 Vinod Popli Vs. Ragini Popli & Ors.;
Kishan Garg Vs. Pankaj Kumar Page 3 of 13(d) V (2005) SLT 599 G. Pankajakshi Amma & Ors. Vs. Mathai Mathew.
7. Counsel for plaintiff relied upon the following authorities in support of his contentions:
(a) 1993 (26) DRJ 204, B. B. Patel Vs. M/s Nexim Exports Pvt. Ltd. and Anr.;
(b) 2014 VI AD (Delhi) 675, SRI Balaji Financer Vs. Suraj Prakash;
(c) Manu/SC/ 0127/2002, Gujarat Lease Financing Ltd. Vs. Abdulla Akbarali & Co. and Ors.
8. I have heard counsels for the parties on the application and also gone through the records as well as the authorities relied upon by them.
9. As noted above, the suit is based on three cheques. The Defendant has not disputed his signatures on all these cheques.
10. It is contended by the defendant that the cheques were given as security for the building material to be supplied by the plaintiff to the defendant. It is difficult to believe that as many as three cheques were given for security, particularly when the case of the defendant is that cheques were given in blank with his signatures only i.e. without filling even the amount. Normally, under such Kishan Garg Vs. Pankaj Kumar Page 4 of 13 circumstances, only one cheque would have sufficed.
11. On the one hand, the defendant has claimed that cheques were given as security for supply of building material by the plaintiff to the defendant, on the other hand it is specifically stated in the leave to defend that "the plaintiff supplied the material time to time and defendant also made payment to the plaintiff in cash against the building material supply." In case, as put up by the defendant, the defendant made payment to the plaintiff in cash "against" the building material supplied, there was no need for the defendant to hand over the cheques as security. This casts serious doubt about the case put up by the defendant.
12. As noted above, the case of the defendant in the leave to defend is that building material was purchased in November 2010. The present suit was filed on 16052011. The defendant was served with the summons for appearance on 21062013. It is nowhere the case of the defendant that he ever gave even a notice, much less instituted any proceedings against the plaintiff, for return of the cheques before receiving notice of the present suit.
13. Only one receipt is placed on record by the defendant in respect of the building material. The receipt does not bear any date or names or even signatures of the plaintiff or even the defendant.
Kishan Garg Vs. Pankaj Kumar Page 5 of 1314. One of the contentions of the defendant is that cheques were given in blank with his signatures only to the plaintiff. I have compared the handwriting on the cheques. I am of the prima facie view that handwriting on the cheque for Rs. 4 lacs is different from the handwriting on the other two cheques. The handwriting on the other two cheques appears to be of the same person.
15. During the arguments, it was contented by the counsel for the defendant that there is no document of loan, not even a receipt. Prima facie, I find force in the contention. As per plaint, the plaintiff advanced a loan of Rs. 5 lacs to the defendant. Rs. five lacs is not a small amount. It is difficult to believe that such a big amount was given as loan by the plaintiff to the defendant without there being any document. The case of the plaintiff is that cheques were issued six months after advancing of the loan and not simultaneously therewith.
16. It is stated in the leave to defend that an amount of Rs. 50,000/ was paid directly into the account of plaintiff by the uncle Sh. Anand of the defendant. In this regard, it is submitted by the plaintiff that said amount pertained to some other transaction between the plaintiff and Sh. Anand and has nothing to do with the loan advanced to the defendant by the plaintiff. During the arguments, it was submitted by the counsel for plaintiff that even the said cheque issued by Sh. Anand was dishonoured. This was disputed by the counsel for defendant.
Kishan Garg Vs. Pankaj Kumar Page 6 of 1317. I have found that it has been held by Hon'ble Delhi High Court in MANU/DE/4582/2010, Sanjay Kumar Vs. Suresh Chand Gupta as follows:
"8. The law with regard to deciding an application for leave to defend is well settled. The defendant is not entitled to leave to defend where the defendant fails to establish the facts alleged by him and the defence raised by him is illusionary and practically moonshine. In Sunil Enterprises and Another Vs. SBI Commercial and International Bank Ltd. Reported in Manu/SC/0334/1998; (1998) 5 SCC 354 the Apex Court observed:
4. The position in law has been explained by this Court in Santosh Kumar V. Bhai Moon Singh, Milkhiram (India) (P) Ltd. V. Chamanlal Bros. and Mechelec Engineers & Manufacturers V. Basic Equipment Corpn.
The propositions laid down in these decisions may be summed up 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 Kishan Garg Vs. Pankaj Kumar Page 7 of 13 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 plaintiff's 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 defendant.
(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 plaintiff imposing the condition that the amount claimed should be paid into court or otherwise secured.
9. Further in the case of Mrs. Rai Duggal V. Ramesh Kumar Bansal reported in Manu/SC/0393/1990 : 1991 Supp 1 SCC 191 and more particularly in para 3 thereof, the Apex Kishan Garg Vs. Pankaj Kumar Page 8 of 13 Court observed:
3. Leave is declined where the court is of the opinion that the grant of leave would merely enable the defendant to prolong the litigation by raising untenable and frivolous defences. The test is to see whether the defence raises a real issue and not a sham one, in the sense that if the facts alleged by the defendant are established there would be a good or even a plausible defence on those facts. If the court is satisfied about that leave must be given.
If there is a triable issue in the sense that there is a fair dispute to be tried as to the meaning of a document on which the claim is based or uncertainty as to the amount actually due or where the alleged facts are of such a nature as to entitle the defendant to interrogate the plaintiff or to crossexamine his witnesses leave should not be denied. Where also, the defendant shows that even on a fair probability he was a bona fide defence, he ought to have leave. Summary judgments under Order 37 should not be granted where serious conflict as to matter of fact or where any difficulty on issues as to law arises. The court should not reject the defence of the defendant merely because of its inherent implausibility or its inconsistency.
Kishan Garg Vs. Pankaj Kumar Page 9 of 1310. A similar view was expresses in Defiance Knitting Industries (P) Ltd. v. Jay Arts reported in Manu/ SC/ 3668/2006 : (2006) 8 SCC 25 wherein the court observed that "if the court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexations, it may refuse leave to defend altogether."
(underlining by me)
18. Similarly, it has been held by Hon'ble Supreme Court in MANU/ SC 0567/2010, V. K. Enterprises Vs. Shiva Steels as follows:
"8. Order XXXVII C.P.C. 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. What is required to be examined for grant of leave is whether the defence taken in the application under Order XXXVII Rule 3 C.P.C. makes out a case, which if Kishan Garg Vs. Pankaj Kumar Page 10 of 13 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. In the instant case, the defence would have been plausible had it not been for the fact that the allegations relating to the interpolation of the cheque is without substance and the ledger accounts relating to the dues, clearly demonstrated that such dues had been settled between the parties. Moreover, the issuance of the cheque had never been disputed on behalf of the Petitioner whose case was that the same had been given on account of security and not for presentation, but an attempt had been made to misuse the same by dishonest means."
(underlining by me)
19. It is clear from the authorities that where the facts alleged by the defendant, if established, would be a good or even a plausible defence, leave should be given.
20. I have held above that the cheques which are the basis of the present suit are, prima facie, not in the handwriting of the same person. It is, prima facie, difficult to believe that an amount as big as Rs. 5 lacs was given as loan without any document. The cheque issued by Sh. Anand into the account of the plaintiff also requires trial.
Kishan Garg Vs. Pankaj Kumar Page 11 of 13It is also a matter of trial whether any building material was purchased by the defendant from the plaintiff and whether the cheques were given as security. Hence, I am of the considered view that this is a fit case where leave to defend should be allowed.
21. However, as noted above, signatures of the defendant on the cheques are not disputed. As held by me above, it is difficult to believe that three cheques were given as security, particularly when the same, as per the defendant, were given blank. As per the defendant, payments were made in cash against building material purchased by defendant. If this was so, there was no need for giving any security. Admittedly, no action was taken by the defendant for return of the cheques for more than two years till receipt of notice of the present suit. Virtually nothing has been placed on record by the defendant to show that he purchased any building material much less from the plaintiff. Hence, I am of the considered view that it is a fit case where defendant should be put to terms.
22. I have gone through the authorities relied upon by the parties. There cannot be any doubt about the propositions of law laid down in the authorities. However, it is settled law that each case is to be decided according to its own facts. Leave to defend necessarily depends upon the facts of the case. I am of the considered view that facts of the present case are materially different from those in the authorities.
Kishan Garg Vs. Pankaj Kumar Page 12 of 1323. Since the payment of Rs. 50,000/ by Sh. Anand to the plaintiff is disputed, the defendant is granted leave to defend subject to deposit of Rs. 4,50,000/ in Fixed Deposit in the name of the Court initially for a period of two years with automatic renewal after every two years, within three months from today. The defendant is also directed to file his written statement within a period of 30 days from today. The application is disposed of accordingly. Announced in the open Court on 07042016.
(RAKESH KUMAR SHARMA) ADJ03 (N/W) ROHINI COURTS DELHI: 07042016 Kishan Garg Vs. Pankaj Kumar Page 13 of 13