Leather Perfection And Ors. vs Export And Allied Services
2001 Latest Caselaw 311 Del

JUDGMENT

S.K. Mahajan, J.

Admit.

1. With the consent of parties the matter has been heard and is being disposed of finally.

2. The plaintiff had filed suit for recovery of Rs. 29,500/- under the provisions of Order 37 of the code of Civil procedure on the allegations that the defendant had issued a cheque for Rs. 19,735/- in favor of the plaintiff, this cheque on presentation was not encashed by the Bank and the defendant was, therefore, liable to pay the cheque amount along with interest at the rate of 18% per annum. The defendant appears to have been served by publication and since no one appeared on behalf of the defendant, the Court deeming the allegations made in the plaint to be correct, passed decree against the defendant. On receipt of an order of attachment from the Court in execution of the decree the defendant is alleged to have become aware of the decree passed in the suit and an application under Order 37 Rule 4, CPC was, therefore, filed by the defendants/ petitioner contending inter alia that the defendant had not been served with the summons in the suit and that the cheque in question was issued without consideration. It is submitted in the application that no commercial dealing were entered into between the parties and the plaintiff's services were engaged by the defendant as the cargo clearing agent. It is submitted that on two occasions the plaintiff raised two bills of Rs. 29,500/- and Rs. 19,735/- respectively. It is submitted that the payment of the second bill of Rs. 19,735/- was withheld because the plaintiff had failed to discharge its obligations by not furnishing the export promotion copy to the defendant thereby depriving the defendant to cash compensatory support of Rs. 19,375/-. It is submitted that the defendants had repeatedly called upon the plaintiff to produce the export promotion copy before payment of the aforesaid bill could be made. It is, therefore, submitted that since the export promotion copy was not supplied by the plaintiff, it was not entitled to any amount from the defendant. It is also submitted that the suit of the plaintiff was barred by time and consequently the defendant was entitled to leave to defend the suit.

3. By the impugned order, the learned Trial Court dismissed the application of the defendant/petitioner. It was observed in the order that during the course of arguments Counsel for the plaintiff had offered to place on record the export promotion copy and the defendant would, therefore, be entitled to receive the same from the Court on making payment of the decretal amount. Aggrieved by this order present revision petition was filed by the petitioner.

4. I am informed that pursuant to orders passed by the Court the entire decretal amount of Rs. 24,000/- has been deposited in this Court and a sum of Rs. 5,000/- had earlier been paid to the respondent. It is, therefore, submitted that the entire suit amount has been paid or deposited in Court. A perusal of the application for leave to defend shows that the petitioner had raised substantial questions in the application inasmuch as the Court was required to decide the question as to whether or not the respondent was entitled to encashment of the cheque without supplying the export promotion copy. The court has itself admitted in the order that export promotion copy had been placed on record by the respondent. This clearly shows that the petitioner was entitled to the export promotion copy which had not been supplied by the respondent to the petitioner. In case, the petitioner was entitled to the export promotion copy and encashment of the cheque was dependant upon the supply of that copy, in my view, the learned trial Court ought not to have dismissed the application in this manner. Moreover, even assuming that the defense raised by the defendant was not substantial, in view of the judgment of the Supreme Court in Mechalec Engineers & Manufactures v. Basic Equipment Corporation, , the petitioner was still entitled to leave to defend on deposit of the entire amount in Court. The Supreme Court in this case has held that if the defendant had no defense or the defense was illusory or sham or practically moonshine, then along with 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 in Court or otherwise secured, and give leave to the defendant on such conditions and thereby show mercy to the defendant by enabling him to try to prove a defense. Since the entire amount stands deposited, in my view, the petitioner is entitled to leave to defend the suit. I. accordingly, allow this petition and set aside the impugned order and grant leave to the petitioner to defend the suit on merits.

5. The amount of Rs. 24,500/- deposited by the petitioner in this Court on 10.12.97, be placed in a fixed deposit initially for a period of two years. Parties are directed to appear before the Trial Court on 16.4.2001.

6. Petition allowed.