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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 10.12.2012
+ CS(OS) No. 767/2010
GURDEV SINGH ..... Plaintiff
Through: Ms. Kusum Sanchi, Adv.
versus
SHRUTI FASTNERS PVT. LTD.& ANR .....Defendants
Through: Mr. J.P. Sengh, Sr. Adv.with Mr.
Durgesh, Ms. Rama Yadav and Ms.
Ankita Gupta, Advocates
And
+ CS(OS) No. 768/2010
JASPAL SINGH ..... Plaintiff
Through: Ms. Kusum Sanchi, Adv.
versus
SHRUTI FASTNERS PVT. LTD.& ANR .....Defendants
Through: Mr. J.P. Sengh, Sr. Adv.with Mr.
Durgesh, Ms. Rama Yadav and Ms.
Ankita Gupta, Advocates
CORAM:
HON'BLE MR. JUSTICE V.K.JAIN
JUDGMENT
V.K.JAIN, J. (ORAL) IA No.723/2012 (under Order XXXVII Rule 3(5) Code of Civil Procedure for leave to defend by defendants in CS(OS) No. 767/2010 And CS(OS)767/2010&768/2010 Page 1 of 9 IA No.541/2012 (under Order XXXVII Rule 3(5) Code of Civil Procedure for leave to defend by defendants in CS(OS) No. 768/2010
1. The plaintiff in CS(OS) No.767/2010 Mr. Gurdev Singh as also the plaintiff in CS(OS) No.768/2010 namely Mr. Jaspal Singh were employed with the defendant no.1 company till 31.12.2006. The plaintiffs claim that even after leaving the employment of defendant no.1, they as per their agreement with defendant no.1 were entitled to increase at the rate of one percent of the sale made by the defendant no.1. The case of these plaintiffs is that besides salary, they were also entitled to commission at the rate of one percent of the total sale of the defendant no.1 company. According to them, though the salary up to December, 2006 was paid to them, the commission remained unpaid for the period from 1.4.2002 to 31.3.2008. It is alleged in the plaint that the account between the parties were finally settled on 22.5.2008 whereby a sum of Rs.67,54,554/- become payable to them. The amount of commission payable to them, according to the plaintiffs, was rounded off to Rs.65,00,000/- and after adjusting the advance payment of Rs.9,75,000/-, which they had already received, the balance amount which remained payable to them was worked out to Rs.55,25,000/-. It is further alleged that defendant no.1 issued five post dated cheques of Rs.11,05,000/- each, three in the name of Mr. Jaspal Singh and two in the name of Mr. Gurdev Singh. The cheques when presented to the bank were returned with endorsement 'account CS(OS)767/2010&768/2010 Page 2 of 9 closed'. Out of these five cheques, one was drawn on UTI Bank, Green Park Branch and one was drawn on Vaish Cooperative New Bank. The plaintiffs have now sought recovery of the amount of these above referred five cheques along with interest @ 24% per annum. The principal amount claimed in the suit filed by Mr. Gurdev Singh is Rs.22,10,000/- whereas the principal amount claimed by Mr. Jaspal Singh is Rs.33,15,000/-.
2. In the applications for leave to contest the suits, the defendants have, inter alia, alleged that (i) no commission was ever agreed to be paid either to Mr. Gurdev Singh or to Mr. Jaspal Singh, (ii) The signatures of the defendant no.2 on the cheques have been forged, (iii) the cheque book from which four cheques of UTI Bank have been taken was issued on 10.12.2004 whereas the cheque book from which cheque of Vaish Cooperative New Bank has been taken was issued on 25.2.2003, (iv) as many as 66 cheque books from Vaish Cooperative Bank were issued after issue of the cheque book from which the cheque in question was taken out and 60 cheque books of 50 leaves each of UTI Bank were issued after the cheque book from which four cheques of UTI Bank were taken was issued and those cheques books were consumed by defendant no.1 company, (v) the bank account with UTI Bank was closed on 13.2.2007 whereas the account with Vaish Cooperative Bank was closed on 31.7.2004. This is also the case of the defendants that in fact the plaintiffs had taken personal loan from defendant no.2, which they CS(OS)767/2010&768/2010 Page 3 of 9 are yet to pay and the suit filed by the defendant no.2 against them for recovery of the amount of those loans and interest thereon are pending in District Court. It is also pointed out in the applications that the suit filed by defendants no.2 were instituted prior to filing of these suits.
3. In M/s Mechalec Engineers and Manufactures v. M/s Basic Equipment Corporation (1977) 1 SCR 1060, the Supreme Court set out 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 unconditional leave to defend.
(b) if the defendant raises a friable 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 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 defense, yet, shows such a state of facts as leads to the 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 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 defense or the defense set up is illusory or sham or practically moonshine then ordinarily the CS(OS)767/2010&768/2010 Page 4 of 9 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 to the defendant by enabling him to try to prove a defense."
In these circumstances, the defence taken in the application does not appear to be bona fide and appears to be sham and illusory.
4. There is no documentary evidence of there being any agreement between the parties with respect to payment of commission except the settlement agreement dated 22.5.2008 which the defendants claim to be a forged document. The learned senior counsel appearing for the defendants states that their case is that the purported signatures of defendant no.2 Mrs. Asha Rani on the Settlement dated 22.5.2008 are forged. Therefore, the genuineness or otherwise of the purported signatures of defendant no.2 on the settlement is required to be gone into during trial and this itself is an adequate ground to grant unconditional leave to the defendants.
5. The case of the plaintiffs is that they were entitled to commission on the entire sale made by defendant no.1. This is not their case that they were entitled to CS(OS)767/2010&768/2010 Page 5 of 9 commission only on the sales made from their efforts. It seems unusual that an employer should be paying commission to the employees in addition to salary even for the sale in which no contribution is made by them. The second material aspect in this regard is that according to the plaintiff they were entitled to commission even after they had left the employment of defendant no.1. I fail to appreciate why defendant no.1 should agree to pay any commission to the plaintiffs even in respect of the sale made after they had left its employment. Yet another material circumstance in this regard is that according to the plaintiffs, they were not paid commission with effect from 2002. There is no explanation as to why they did not insist upon commission being paid to them when they left the employment of defendant no.1 company in December, 2006.
6. A perusal of the certificate issued by Axis Bank, which was earlier known as UTI Bank, shows that the cheques bearing number 021474, 021448, 021499 and 021500 were issued to defendant no.1 on 10.12.2004 and thereafter as many as 60 cheque books of 50 leaves each were issued to the said company. The certificate issued by Vaish Cooperative Bank would show that the cheque bearing number 773951 to 773975 were issued to defendant no.1 on 25.2.2003 and thereafter as many as 66 cheque books of 25 leaves each were issued in the account of defendant no.1. It is also certified by the bank that the account with Vaish Cooperative Bank was closed on 31.7.2004 whereas account with UTI Bank was closed on 13.2.2007. CS(OS)767/2010&768/2010 Page 6 of 9 Since the plaintiffs were working with defendant no.1 till December 2006, it is difficult to accept that they would be unaware of the account with Vaish Cooperative Bank having been closed. Naturally, if they were aware of the account with Vaish Cooperative Bank having been closed on 31.7.2004, they would not accept the cheque of the said bank on 22.5.2008. The learned counsel for the plaintiffs states that the plaintiffs were not posted with Account Section and, therefore, they were not aware of the account with the said banks having been closed. I, however, find it difficult to accept that despite working in the company for more than four years, they were unaware of the closure of the accounts with Vaish Cooperative Bank. Be that as it may, what is more important is that the cheques on which the plaintiffs are relying were issued by the bank years before they purport to have been issued by the defendants. It is difficult to accept that the defendants had preserved these cheques from the time they were issued, so that they could be used in future to cheat the plaintiffs by issuing other cheques of a closed bank account in the year 2008. Since the plaintiffs were still working with the defendants when the other cheques contained in the cheque books from which these cheques have been taken, were used by the defendants and there was no dispute between the parties at that time, there could be no reason for the defendants to retain those blank cheques with them. It is rather difficult to accept that these cheques were not deliberately used so that they could be later on issued to the CS(OS)767/2010&768/2010 Page 7 of 9 plaintiffs. The case of the defendants is that since the plaintiffs were in their employment, the cheque books duly signed by the defendant used to be in their custody for carrying out transaction on behalf of defendant no.1 company and since there were umpteen transactions made by the defendant no.1 company during the period the plaintiffs were in its employment, it was quite possible that they committed theft of these cheques without knowledge of the management and, thereafter, prepared cheques in their own favour.
7. During arguments, I specifically asked the learned counsel for the plaintiffs as to who had filled the cheques and who had written the Settlement Agreement dated 22.5.2008. The learned counsel on instructions from one of the plaintiffs, who was present in the Court, stated that all the cheques were filled and the Settlement Agreement dated 22.5.2008 was written by the Accountant of defendant no.1 company Mr. Mahmood Khan, who has since left the employment of defendant no.1. However, no affidavit of Mr. Mahmood Khan, has been filed by the plaintiffs in support of their assertions.
8. For the reasons stated hereinabove, I am of the view that the averments made in the applications disclose triable issues, adjudication of which can be possible only after recording evidence. The defendants are, therefore, entitled to unconditional leave to contest the suit. Ordered accordingly. The observations made in this order will not affect the decision of the suits on merit. CS(OS)767/2010&768/2010 Page 8 of 9
The applications stands disposed of.
CS(OS) No. 767/2010 & IA 5206/2010 (under Order 39 Rule 5 CPC) And CS(OS) No.768/2010 & IA No.5210/2010 (under Order 38 Rule 5 CPC) Written statement be filed within four weeks. Replication be filed within four weeks thereafter.
List before the Joint Registrar on 31.1.2013 for admission/denial of documents.
The matter be listed before the Court on 22.3.2013 for framing of issues and disposal of IAs.
V.K. JAIN, J DECEMBER 10, 2012/rd CS(OS)767/2010&768/2010 Page 9 of 9