M/S Pact India vs Sh. Sanjiv Bhasin @ Lucky Bhasin
2001 Latest Caselaw 671 Del

ORDER

A.K. Sikri, J.

IA No.6199/99

1. This application is moved by the defendant under the provisions of Order xxxvII Rule 3 of the Code of Civil Procedure (for short 'CPC')seeking leave to defend the suit filed by the plaintiff under Order xxxvII CPC.Before dealing with this application, it would be appropriate to know the basis on which the plaintiff has instituted the suit under Order xxxvII.

2. As per the averments made in the plaint, the defendant owns a plot of land bearing No.F-200G, situated at Sainik Farms, Village Khanpur, Devali, New Delhi.He a approached the plaintiff, who is engaged in the business of construction of houses/buildings for construction of bungalow over aforesaid plot. The defendant also appointed M/s Desing Plus, Architects & Interior Designers(for short 'Architects') for the project.The said Architects prepared plants for construction of the house in question.After the preparation of the plans and approval thereof, the plaintiff was asked to submit its rates, specification etc.Which was agreed to by the defendant.Thereafter an agreement for construction was signed.Construction work to be carried on by the plaintiff was to be supervised by the Architects.In accordance with the understanding arrived at between the parties, payment of the work done by the plaintiff was to be made only after the bill raised by the plaintiff for the work done were duly certified for payment by the Architects appointed by the defendant.The plaintiff had been raising bills from time to time which were linked with the progress of the construction and forwarding the same to the Architects.The Architects used to scrutinise the same and certify for payment and after the certification the defendant was making payment in accordance with the said certification.

The plaint further goes on to aver that after some time the payments to be made by the defendant became irregular as he expressed some financial crunch and wanted some accommodation from the plaintiff on the payment front. The plaintiff realised this difficulty of the defendant and without pressing hard for payment, continued with the work when in May, 1999 the defendant approached the plaintiff and requested it to stop work as he had not been able to overcome his financial difficulties by then. He requested the plaintiff to prepare final bill and submit the same to the Architects for verification.He also requested the plaintiff to complete the minial jobs. The plaintiff accordingly raised final bill dated 31st May, 1997 and submitted the same to the Architects.The Architects verified and certified the same on 9th June, 1997 for Rs.40,83,987/- which included amounts towards extra work done by the plaintiff.Out of this amount, the defendant from time to time paid a sum of Rs.24 lacs. However, the defendant did not pay the balance amount of Rs. 16,83,987/- in spite of repeated demands and telegraphic notice dated 31st December, 1998 requesting the defendant to release the amount along with interest at the rate of 24 per cent per annum. The suit is therefore filed for recovery of balance amount along with interest at the rate of 24 per cent per annum calculated w.e.f.9th June, 1997 which comes to Rs.6,39,813/- till the date of filing of the suit.

3. In the leave to defend application filed by the defendant, the main defense raised by the defendant is that the plaintiff colluded with the Architects to subserve their vested interest and got the final bill certified for an exorbitant amount. The collusion is clear from the fact that the Architect has certified two bills of same date i.e. 31st May, 1997.Both bills are titled "final bill for residence of Shri Sanjiv Bhasin". The first bill is for R.44,02,188.14 paisa and the second bill for Rs.47,78,487.94 paisa.Whereas first bill is duly signed by the plaintiff, the subsequent bill does not bear his signatures and is clearly result of after though in collusion with the plaintiff.It is also the plea of the defendant that the suit does not fall under any category of matter envisaged under Order xxxvII CPC. Various other allegations regarding breach of contract on the part of the plaintiff are imputed in not conforming to terms and conditions..However, these other aspects were not argued/stressed at the time of making submissions and primarily the challenged was confined to non-maintainability of suit under Order xxxvII CPC and the collusion of the plaintiff with the Architect.

4. Elaborating these two submissions, learned counsel or the defendant referred to two final bills dated 31st May, 1997 annexed with application for leave to defend of varying amounts and submitting that while the first bill was not signed by the plaintiff, the second bill was singed by the plaintiff. His submission was that if the defendant is able to prove the allegation to the effect that the certification was done by the Architect in collusion with the plaintiff of the final bill which incorporated exorbitant rates not in accordance with the agreement, the defendant would succeed in the suit, and therefore,it was a friable issue which could be determined only by means of evidence and the defendant was entitled to leave to defend the suit.In any case, it was submitted with reference to various documents in the form of bills starting from bill No. 1 that in order to determine the amount payable by the defendant to the plaintiff, the accounts had to be gone into, and therefore, the plaintiff was not entitled to decree by filing the suit under Order xxxvII CPC.

5. On the other hand, learned counsel for the plaintiff, refuting the aforesaid submissions, submitted that even as per the defendant's own case the payment was to be made after the bills raised by the plaintiff were duly certified by the Architect.The Architect was defendant's man, as he was appointed by the defendant, and therefore, acted as an agent of the defendant.Thus the moment the said Architect certified the payment , it became due to the plaintiff and it was not permissible for the defendant to thereafter raise the bogey of rates being exorbitant or that the accounts were yet to the settled. It was also submitted that the plea of collusion between the plaintiff and the architect was an after thought plea never raised by the defendant at any point of time earlier and rather the certification of the final bill by the Architect.Since the agreement between the parties was for payment of the final bill when it is certified by the Architect, as soon as the final bill was certified, it became a written agreement/document acknowledging the debt, and therefore, the suit was maintainable under Order xxxvII CPC.

6. A perusal of the application for leave to defend shows that the defendant admits the modus as per which the contract was to be worked out and the payment to be made by the defiant to the plaintiff viz. when the bill ils raised by the plaintiff its is to be certified by the Architect.In para 4(a) of the application to leave to defend, the defendant has himself made the averments to this effect i.e. the plaintiff and the defendant/applicant entered into an agreement wherein the plaintiff was to do the construction of a house on applicant's land. M/s Desing Plus were appointed as the Consulting Architects for the project and was also made a party to the agreement.The payment for the work done by the plaintiff for defendant was to be made by the defendant only when the bill raised by the plaintiff duly certified by the M/s Design Plus.To the same effect are the averments at other places also. Thus the defendant agrees that the plaintiff would become entitled to the payment as and when the same is certifies by the Architect.It is not in dispute that the final bill on the basis of which the present suit is filed is duly certified by the Architect as per which net amount payable is Rs.40,83,987.94 paisa. There does not appear to be any contradiction in the two alleged bills as projected by the defendant inasmuch as bill raised is for gross amount of R.47,78,487.94 paisa. However, from this bill certain deductions are made by the architect before certifying the same.These deductions are to the tune of Rs.6,94,500/- thereby making the net payable as Rs.40,83,987.94 paisa.A perusal of these deductions would show that a sum of Rs.4,69,500/- is deducted towards wood supplied by the defendant.This aspect is clarified because of the attempt made on behalf of defendant to show that the bill was defective as it include wood work though wood was supplied by the defendant.No other irregularity was pointed out in this bill.Although it is alleged that the bill raised is on exorbitant rates and not in accordance with rates settled in the agreement, nothing could be pointed out as to how the bill raised was not on the basis of rates settled in the agreement.The Architect was an agent of the defendant. The defendant himself agreed that the payment would be made only when the Architect certifies the same. After certification by the Architect stating that an amount of Rs.40,83,987.94/- paisa is payable by the defendant to the plaintiff for executing the work in question , this payment naturally becomes due to the plaintiff.

7. In the aforesaid conspectus/background the plea of defendant regarding alleged collusion between the plaintiff and Architect is to be examined. The final bill is certified by certificate dated 9th June, 1997.Naturally, before the bill is certified the defendant would not make any payment. He would make the payment only after he is satisfied about the said certification.The defendant started making the payments and has in fact paid, in all, a sum of Rs.24 lacs.He would have received the certification of the final bill before he started making payment,and therefore, the had come to know that the bill is certified for R.40,83,987/94/- paisa.However there is nothing on record to show that the defendant had objected to this certification on the ground that the amount certified was excessive or that bill was not raised in accordance with agreement rates or that the plaintiff colluded with the Architect on this account.On the contrary final bill as well as certification was acted upon as the defendant made substantial payments amounting to the extent of Rs.24 lacks.The plaintiff before exiling the suit even served telegraphic notice dated 31st December, 1998. Even after receiving this notice, the defiant did not raise the plea of any such collusion.The plea regarding exorbitant rates, collusion or defective work finds mention for the first time in this application for leave to defend. Therefore, such a plea is on the face of it an after though and sham plea raised with sole purpose to defeat the legitimate claim of the plaintiff. The defense raised is clearly moonshine or bogus. Therefore, principal No.(d) laid down in the case of M/s Mechalec Engineers & Manufacturers Vs. M/s Basic Equipment Corporation would become applicable in the instant case which is reproduced below:

"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."

8. I do not agree with learned counsel for the defendant that the suit is not maintainable under Order xxxvII CPC. Rule(1) of Order xxxvII mentions the classes of suits to which summary procedure laid down under Order xxxvII would apply. Sub-rule (2), which is relevant, reads as under:

"Subject to the provisions of sub-rule(1), the Order applies to the following classes of suits, namely:-

(a)suits upon bills of exchange, hundies and promissory notes:

(b) suits in which the plaintiff seeks only to recover a debt o or liquidated demand in money payable by the defendant, with or without interest, arising-

(i)on a written contract, or

(ii) on an enactment, where the sum sought to be recovered is a fixed sum of money or in the nature of a debt other than a penalty; or

(iii) on a guarantee, where the claim against the principal is in respect of a debt or liquidated demand only."

9. As already mentioned, the defendant himself agrees that once the bill is certified by the Architect amount there under becomes payable.Final bill, which is a written document, prepared by the plaintiff on being coertigied by the Architect i.e. the agent of the defendant will have the character as if the said bill is signed by both the parties, namely by plaintiff and by the defendant though his authorised agent, the Architect and it would be a written contract acknowledging the debt or liquidated demand in money payable by the defendant to the plaintiff.The suit therefore would be clearly covered by Order xxxvII. In Mrs. Sushila Mehta Vs. Shri Bansi Lal Arora , this court has held that the receipt executed by defendant acknowledge in receipt of certain amount from the plaintiff for the purpose of allotment of shares as application money clearly amounts to contract. {Also see Food Corporation of India Vs. Bal Krishan Garg }. Therefore, I am of the view that no friable issue is raised by the defendant and he is not entitled to any leave to deafen the suit.The plaintiff is entitled to a decree.

10. Although not argued, it would be appropriate to deal with the question of payment of interest.The plaintiff has claim interest at the rate of 24 per cent per annum w.e.f. 9th June, 1997 i.e. the date when the final bill was certified by the Architect on behalf of the defendant. However, admittedly there is no agreement with respect to the payment of interest.Agreement between the parties does not stipulate any such clause.Even is the bill nothing of his sort is mentioned.In view of this position, the plaintiff would not be entitled to interest w.e.f. 9th June, 1997 when the final bill was certified by the Architect.Demand for interest is made for the first time by telegraphic notice dated 31st December, 1998. Therefore, the plaintiff would become entitled to interest only w.e.f. 31st December, 1998 or say w.e.f. 1st January , 1999.Rate of interest of 24 per cent demanded by the plaintiff is also on very high side.The transaction in question was not commercial in nature inasmuch has the defendant was getting his house constructed for the purpose of his residence. Therefore, interest at the rate of 10 per cent per annum would be reasonable and would meet the ends of justice.

11. This application of leave to defend is accordingly dismissed.

S.No.14/99

12. The suit of the plaintiff is decreed for Rs. Rs.16,83,987/- along with interest at the rate of 10 per cent annum w.e.f 1st January, 1999 till payment thereof along with cost. Decree sheet be prepared accordingly.

13. The suit stands disposed of.