Indian Hotels Co. Ltd. vs V.P. Singh
1995 Latest Caselaw 387 Del

JUDGMENT

R.C. Lahoti, J.

(1) This is a suit under Order37CPC seeking recovery of Rs. 22,02,55.87p. The defendant having been served with the summons in the suit has filed appearance. The plaintiff took out summons for judgment, which was served on the defendant.

(2) An application under Order 37 Rule 3(5) Civil Procedure Code seeking leave to defend the suit was filed on 12th November, 1993 duly supported by an affidavit. Reply to this application has been filed supported by an affidavit and documents. On behalf of the defendant a rejoinder has been filed. It is submitted on behalf of the plaintiff that the application seeking leave to defend has not disclosed any such facts as would entitle the defendant to the leave sought for and on the contrary from the perusal of the pleadings and the documents (which are not disputed or which are not under challenge) filed in the case it is dear that it is a case of setting up a defense which is illusory or sham or practically a moonshine and hence the plaintiff is entitled for leave to sign the judgment and the defendant is not entitled for leave to defend.

(3) The plaintiff is a company running a Five Star Hotel known as Taj Palace Inter-Continental. The defendant was staying in the Hotel since 1986 and has continued to stay so even till the date of filing of the suit. Summons were served on the defendant when she was still in the Hotel. The suit is for the claim arising out "of services and facilities rendered by the plaintiff and enjoyed by the defendant .between 1st May, 1992and 1st July, 1993. The principal amount is Rs. 19,68,925.85p. A claim of Rs. 2,33,630.02p is on account of interest calculated @18% p.a. for the" period commencing one week each after the dates of the bills, till the date of filing of the suit. The suit is based on written documents executed by the defendant, the computerised invoices raised from time to time by the plaintiff and the interest as per the terms recited in the bills and impliedly agreed upon by the defendant.

(4) First the non-controverter facts.

4.1.The defendant has admittedly stayed in the Hotel since 1986 up to the date of the filing of the suit and certainly during the period for which the plaintiff has filed the suit. For the period expiring with 30th April, 1992, the defendant has paid all the bills and that too in cash. All the bills have been drawn upon the defendant in her name. The receipts issued up to 30th April, 1992 are in the name of the defendant showing payment by her in cash. The receipts are initialled by the defendant.

4.2.On 31st March, 1993, the defendant wrote a letter to the plaintiff in her own handwriting which reads as under:- 31st.March, 93. Dear Mr. Warty, This is to inform you, after our conversation yesterday by phone, that by end April I, will make the payment of 6/8 lakhs. And the balance in May/June. Thanking you, Mrs. V.P. Singh"

4.3.On 1st July, 1993 the plaintiff issued a legal notice through its Counsel Mr. J.R. Midha, Advocate. An amount of Rs. 19,68,925.85p in respect of charges for the services rendered by the plaintiff up to 30th June, 1993. This legal notice also makes a reference to the letter dated 31st March, 1993 (quoted here in above). It is further stated that by enjoying the facilities and services of the plaintiff on cash payment basis and holding out representations and assurances for making payment to the plaintiff and not honouring the same though continuing to stay in hotel, the defendant was committing an offence of cheating and was liable to be prosecuted for the same. This notice sent though Regd. A.D. post was served on the defendant on 5.7.93 in Room No. 366 of Taj Palace Hotel as is borne out from the A.D. receipt.

4.4.On 12.7.93 the defendant wrote yet another letter in her own handwriting in favor of the plaintiff which reads as under:- Shri Shashank P. Warty, Area General Manager, Taj Palace Inter-Continental, 2,SardarPatelMarg, Diplomatic Enclave, New Delhi-110 021. Dear Mr. Warty, I am in receipt of the legal notice dated 1st July, 1993 Along with the statement of account issued by Mr. J.R. Midha, Advocate on your behalf. I acknowledge the liability ofRs. 19,68,925.85 as on 30th June, 1993 as per statement of account attached to the legal notice. It is also correct that I had assured on 31st March, 1993 to make a payment of Rs.6 to 8 lakhs by end of April, 1993 and balance in May/June, 1993. I am very sorry that I could not keep my promise but the same was on account of unforseen circumstances. I now promise to clear all the outstanding mentioned in your-notice under reply as per schedule given below. Between 31st July and 20th August the full payment will be made. In view of the above, I most humbly request you to accept the payment of outstanding amount as per schedule given above, & till that time withhold legal action threatened to be taken against me. Thanking you, Yours faithfully, (Mrs. V.P. Singh) (Room No. 366) This letter bears the inward-rubber-stamp dated 12.7.93 of the plaintiff-Hotel also.

4.5.On 11th August, 1993, the plaintiff once again served legal notice through Mr. J.R. Midha, Advocate which was received by the defendant in the same room of the Hotel on 19.8.93 as disclosed by the A.D receipt. This legal notice was accompanied by a statement of outstanding bill? up to 30th June, 1993 and the interest charged thereon. This computerised statement gives all details of the invoices for the period commencing 1st May, 1992 up to 1st July, 1993. It also shows the outstanding amount of interest calculated on days' basis commencing seven days after the date of each bill till the date of the statement. It comes to Rs. 19,68,925.85p. The total of the invoice amount is Rs. 2,33,630.00. Total outstanding is Rs. 22,02,555.87p. This notice was not replied. The facts stated in the notice, or the correctness of the statement of accounts accompanying the notice was not controverted by the defendant.

(5) The application seeking leave to defend dated 26.10.83, accompanied by an affidavit, discloses that the defendant is not at all disputing her stay in the Hotel, the invoice amount, the fact that she had been herself making earlier payments in cash, the demand of interest having been made and stated in the statement of outstandings served on her Along with legal notice/ the receipt of the legal notice, the letters dated 31st. March, 1992 and 12th July, 1992 being in the hand writing of the defendant and signed by her. She also admits that between .1986 to 1990 she was occupying room in the Hotel on her own and making the payments-by herself for her stay. She also admits the subsequent payments having been made by her in cash.

(6) The pleas which she has raised in the application and on the basis whereof, she proposes to defend herself are:-

(I)After April, 1990 M/s. Akita Financial Consultant (AFC, for short) had undertaken to make payments for her stay in the Hotel and on its behalf Mr. Ashok Sethi, Director of A.F.C. used to come to Delhi to settle the bills with the Hotel, but subsequently the defendant was herself authorised to withdraw the amounts from the account of A.F.C, and clear the Hotel bills;

(II)There is a conspiracy between A.F.C. and the plaintiff to save and exonerate the former and fasten the liability upon the defendant;

(III)As to the letter dated 31st March, 1993, it is stated that the General Manager of the plaintiff had come to the defendant and told her that only a formal letter was required from the defendant to avoid audit objection and on such persuasion having been made by the Manager, she had wrote out the letter.

(IV)As to the letter dated 12th July, 1993, it is stated that the General Manager of the plaintiff-Hotel accompanied by Police Inspector and a Police Constable came to the defendant and threatened her with arrest and humiliation if she did not make payment-of the, said amount. The _. defendant had no other alternative but to write what the General Manager dictated to her.

(7) In reply to the defendants' application the plaintiff has filed a number of documents and controverted on affidavit all the averments made in the application. Boxful of documents consisting of the bills, invoices, and receipts issued from time to time by the plaintiff to the defendant have been filed in the Court. All the voluminous documents so filed support the case set out by the plaintiff in the plaint, in the application seeking leave to sign the judgment and in the reply to the application under Order 37 Rule 3(5) CPC.

(8) The four pleas referred to hereinabove do not even prima facie appeal to the Court for the reasons to be stated hereinafter.

8.1.Hed it been at the instance of a third person that the defendant was staying in the Hotel then there is no reason why the bills would have been drawn in the name of the defendant and the defendant would have accepted or connived at such bills being issued in the name of the defendant. The defendant was making all the payments in cash though she states that she was staying at the instance of a third person. It is still strange to find the defendant withdrawing from a bank account of such a third person and then paying cash to the plaintiff. The two letters dated 31st March, 1993 and 12th July, 1993 pull the carpet below the defense set up by the defendant. The letters are admittedly in the handwriting of the defendant and signed by her.

8.2.A plea that the defendant, who is neither an illiterate nor some rustic person would write a letter such as of 31st March, 1993, merely at the persuasion of the Manager of the bank does not even prima facie appeal to me. Had it been for the purpose of audit merely as was represented by the Manager of the plaintiff to her, she could have super scribed the letter by staling "for the purpose of audit." That is not so. The contents of the letter show it having been written in response to a telephonic conversation. The letter is dated 31st March, 1993 and it has been inwarded in the inward section of the plaintiff on 1st April, 1993. The letter contains a promise to pay Rs.6 to Rs. 8 lacs by the end of April and the balance in May or June. Such a language would not have been employed by the defendant had it been for the purpose of audit. The contents of the letter clearly show an acknowledgement of liability and the promise to pay the amount which did not materialise. The plaintiff would not have permitted the defendant to continue her stay in the Hotel if the letter was not a genuine letter.

8.3.So is with the letter dated 12th July, 1993. It does not appeal to the Court even prima facie that an official of the police would have accompanied the Manager of the plaintiff-Hotel for exerting pressure on the defendant and securing the letter for the plaintiff.

8.4.There are two other very weighty factors. If the defendant was staying in the Hotel for and at the instance of a third person namely M/s. Akita Financial Consultant naturally it was for the purpose of fulfillment of some assignment given to her or for rendering some services to such third person. Why would the defendant continue to render her service and for that purpose continue to stay in Hotel if such third person was not paying the Hotel charges. Secondly, if story as set out by the defendant in her application seeking leave to defend about the letters dated 31st March, 1993 and 12th July, 1993 is correct then she would have certainly given a reply to the legal notices served on her. It would bear mere repetition to say that in response to the legal notice dated 1st July, 1993 she wrote a letter dated 12th July, 1993 and she had no courage to controvert the fact stated in the last legal notice dated 11th August, 1993. The minimum which the defendant would have done in response to this legal notice was to vacate tine Hotel which she did not as is borne out from the fact that summons in the suit was also served on the defendant at the address of Room No. 633 of the same Hotel. Last, but no the least, both the letters speak of personal liability of the defendant; there is not the slightest whisper in the letters of the existence of A.F.C. and the defendant's stay in the Hotel having anything to do with A.F.C.

8.5.In so far as the quantum of the charges is concerned, there is no dispute - raised. So also the correctness of the calculation of interest is not under challenge. In view of the terms printed on the bills and as recited in the statement of out- standings accompanying the legal notice, the plaintiff is entitled to recover the interest which it is demanding.

(9) For all the foregoing reasons, I am of the opinion that the defendant has no such defense to offer as may be substantial within the meaning of Order 37 Rule 3(5) (First Proviso). Whatever pleas have been raised by the defendant are frivolous prima facie and amount to raising a defense which is illusory, sham or practically moonshine. The plaintiff is entitled to have the judgment signed and the defendant is not entitled for leave to defend.

(10) In M/s. Machalec Engineers & Manufacturers v. MIs. Basic Equipment Corporation, Their Lordships have laid down principles governing grant of leave to defend. It is said inter alia:- "IF the defendant has no defense or the defense set up is illusory 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."

(11) Ia No. 10006/93 seeking leave to defend rejected. The judgment is signed in favor of the plaintiff. A decree for recovery of Rs. 19,68,925.85p is passed in favor of the plaintiff and against the defendant. The plaintiff shall be entitled to interest @ 12% p.a. on the amount of Rs. 19,68,925.85p from the date of filing of the suit i.e. 21.9.93 till realisation. Costs shall be borne by the defendants. Fee certificate has been filed during the course of the hearing. Let a decree be drawn up.