Shri Nandan Prasad Gupta vs Shri Sunil Gupta
2003 Latest Caselaw 234 Del

JUDGMENT

S. Mukerjee, J.

1. The plaintiff has filed the suit under Order 37 CPC on the basis of the sale agreement agreement executed by the defendant in his favor for the sale of the first floor of the property bearing No. D-68, East of Kailash, New Delhi for a total sale consideration amounting to Rs. 25 lakhs.

2. It is stated that the plaintiff has paid Rs. 6 lakhs through cheque No. 481325 dated 30.10.99 drawn on Bank of India, Haus Khas, New Delhi. The possession of the property was to be handed over after completion of construction on or before 30.6.2000 and simultaneously the sale of documents were to be executed and registered besides the balance consideration of Rs. 19 lakhs was to be paid at the time of registration of the documents. It is further stated that the defendant from time to time approached the plaintiff and expressed need for money on the ground that construction is going on and he is short of money. The plaintiff believed his representation and entrusted a sum of Rs. 6 lakhs in three installments of Rs. 2 lakhs each on 23.12.99, 19.4.2000, 14.6.2000. All the payments were made through cheques. As per the plaintiff he has made a total payment of Rs. 12 lakhs to the defendant under the agreement to sell. However, as per the plaintiff, he found that the progress of work is at a snail speed the defendant would not be able to give the possession and execute sale documents by the agreed date i.e, 30.6.2000. The apprehension of the plaintiff proved true and the date passed off without the plaintiff getting anything into his hands. As such, the plaintiff became suspicious and the defendant to refund his money advanced under the agreement to sell as the defendant had no intention to complete the sale transaction. As per the plaintiff, the defendant agreed and handed over a sum of Rs. 4.5 lakhs through cheque dated 8.8.2000 towards the refund of monies advanced by the plaintiff. The defendant undertook to repay the balance of Rs. 7.5 lakhs Along with 25% interest within two months. However, later on, the defendant failed to fulfilll this promise as well. Hence a notice dated 5.12.2001 was served asking the defendant for payment of balance amount of Rs. 7.5 lakhs with interest. @ 24% per annum w.e.f. 23.12.1999, in alternative to execute the agreement of sale in favor of the plaintiff.

3. The suit is under Order 37 CPC Defendant filed the leave to defend after the service of summons for judgment. The grounds raised by the defendant in the application for leave to defend are that firstly, the present suit is not maintainable under Order 37 as there is no acknowledgement of debt that in writing. Secondly, the defendant has stated that there was an oral agreement between the defendant and one Shri Ashok Gupta who is the son of the plaintiff. Under the said oral agreement, it was agreed that the defendant Along with Shri Ashok Gupta would invest equal amount under the collaboration agreement with Mrs. Vinay Tuli who is the owner of the property in the reconstruction of the premises bearing No. D-68, East of Kailash Colony, New Delhi. In terms of the said oral agreement, Shri Ashok Gupta started making investment towards his share in the construction. However, he wanted to secure his interest and accordingly, he persuaded the defendant to execute an agreement to sell with regard to the first floor of the property in favor of his father, i.e, the plaintiff Nandan Prasad Gupta. Accordingly, the agreement to sell was executed by the defendant in favor of the plaintiff. However, there was no intention between the plaintiff and the defendant to enforce the agreement to sell and it was only a piece of paper and was executed only to secure finance invested by Shri Ashok Gupta, son of the plaintiff. It is also pleaded that the agreement to sell did not confer any right or create any interest in favor of the plaintiff. The defendant also pleads that Shri Ashok Gupta has not obeyed the collaboration agreement entered with the defendant and Mrs. Vinay Tuli. As per the defendant, Shri Ashok Gupta contributed Rs. 7,50,000/- (Rupees seven lakhs fifty thousand only) towards the collaboration agreement. He has also stated that initially Shri Ashok Gupta invested only Rs. 12 lakhs and he had taken back a sum of Rs. 4,50,000/- (Rupees four lakhs fifty thousand only). It is also stated that first and second floor of the property bearing No. D-68, East of Kailash, New Delhi were sold by defendant and Shri Ashok Gupta, jointly in consultation with each other to some one other than plaintiff and sales proceeds were equally distributed amongst Shri Ashok Gupta and the defendant. It is further stated in the application for leave to defend that as per the oral agreement between the defendant and Shri Ashok Gupta on one hand and between the owner Smt. Vinay Tuli on the other hand a sum of Rs. 23 lakhs is to be paid to Mrs. Vinay Tuli out of which, Shri Ashok Gupta has to pay his share amounting to Rs. 11,50,000/- (Rupees eleven lakhs fifty thousand only).

4. In view of the defendant's claim for Rs. 11,50,000/- towards the said Shri Ashok Gupta, the son of the plaintiff, the defendant has pleaded that the above stated fact constitute a friable issue and he be therefore granted an opportunity to lead evidence and accordingly prayed for leave to defend.

5. The plaintiff has filed the reply to the application for leave to defense re-asserting that the claim is maintainable under Order 37 being based on the written agreement between the parties. The defendant has admitted/acknowledged the agreement and the liability under the same by refunding a sum of Rs. 4.50 lakhs by cheque to the plaintiff. The plaintiffs has relied upon the provisions of sections 91 & 92 of the Indian Evidence Act the ground that no oral evidence can be looked into when there is a written agreement between the parties.

6. Learned counsel for both the sides have advanced their arguments at length. I have scrutinized the pleadings of the parties and documents filed on record. The defendant has sought leave to defend on two grounds, maintainability under Order 37 CPC and the existence of certain oral agreement and written agreement between defendant, son of the plaintiff and Mrs. Vinay Tuli the erstwhile owner of the property No. D-68, East of Kailash, New Delhi.

7. Under Order 37 CPC, a suit is maintainable on the basis of the agreement. In the present case, the agreement to sell has been made the basis of the suit, the claim of the plaintiff is to refund the balance of the amount advanced by the defendant under the said agreement. The amount claimed by the plaintiff is the ascertained amount. The defendant has made the payment of three cheques each amounting to Rs. 2 lakhs on 23.12.99, 19.4.2000, 14.6.2000 each after the plaintiff has asked to refund his amount advanced under the agreement to sell. The defendant admits the payment of this cheque amount to the plaintiff. Since the plaintiff has asked for the refund of his amount because of the failure of the defendant to hand over the possession on the appointed day, i.e, 30.6.2000, on the ground that the defendant has failed to complete the sale transaction. To my mind, the plaintiff has exercised his option to cancel the agreement to sell for default of the defendant. As such, the claim of the plaintiff for the refund of the remaining ascertained amount of Rs. 7,50,000/- (Rupees Seven lakhs and fifty thousand only) comes within the purview of the Order 37 CPC. As stated above, the defendant has already acknowledged his liability by refunding Rs. 4.5 lakhs to the plaintiff out of Rs. 12 lakhs in part performing and has acted upon the option exercised by the plaintiff for the refund of the money. In view of these circumstances, I hold that the claim of the plaintiff on the basis of agreement to sell in the suit, on the basis of agreement to sell for the ascertained amount is within the purview of the Order 37 CPC.

8. The defendant has raised the second ground for granting a leave to defend based on certain oral agreement between the son of the plaintiff and the defendant and the some collaboration agreements with Mrs. Vinay Tuli the actual owner of the property claiming that the agreement to sell was executed with the intention that the same shall not be enforced by the parties. In view of the oral agreement with the third parties i.e, between the defendant Shri Ashok Gupta and Mrs. Vinay Tuli, the defendant pleads that the agreement to sell is a waste paper. As per the defendant, these facts constitute and raised a traible issue. The intention of the parties at the time of the execution of the written document is to be gathered from the contents of the documents. Section 91 & 92 of the Indian Evidence Act, bar taking into consideration of any oral agreement or oral evidence for proving a written document. The defendant has pleaded an oral agreement as against the written agreement which is barred under the Evidence Act. Therefore, in my opinion the setting up of an oral agreement does not raise a trivial issue so as to dis-lodge the plaintiff from his claim.

9. Even otherwise the oral agreement and the collaboration agreement which have been made the basis/ground for grant of leave to defense have been alleged to be executed in between the strangers to the suit and the defendant. In none of the agreements/collaboration agreement filed by the defendant Along with the leave to defend the plaintiff is shown to be a party. As such, the plaintiff is not bound to do or not to do any act under the agreement between the defendant, Shri Ashok Gupta and Mrs. Vinay Tuli. Whatever may have been the agreements between the defendant, Mr. Ashok Kumar and Vinay Tuli, the same are extrinsic to the agreement to sell. The claim of the Defendant for Rs. 11,50,000/- (Rupees eleven lakhs fifty thousand only) if any as per alleged the collaboration agreement is against Shri Ashok Gupta which are separate and distinct agreements and have no reference at all to the present agreement to sell between the plaintiff and the defendant. The defendant is trying to seek a remedy against the third party, Shri Ashok Gupta by setting up a ground of defense in the present suit. The circumstances disclosed by the defendant are completely extraneous to the present agreement to sell before me. There is nothing on record which will constitute a reasonable defense even on prima facie basis so as to entitle the defendant the leave to defend. The purpose of Order 37 Rule 5 CPC is the early disposal of the litigation and to prevent the unnecessary prolonging of the trial by vexacious, un-tenable and fallacious defense. If the defense raised by the defendant on the face of it is vexacious, unspecific, evasive and self-contradictory, he is not entitled to leave to defense. The purpose of granting leave to defense is not to put the plaintiff on the unnecessary trial to prove his case. The purpose is to grant the defendant an opportunity to prove his case only if the defendant raises a friable issue which if allowed to be proved would completely dis-lodge the claim of the plaintiff. The test is crystal clear. "The Court has to see whether the affidavit of the defendant seeking leave to defend discloses any friable issue."

10. The documents filed by the defendant are the agreements to sell which on the face of it is executed between the defendant and the third party, plaintiff is not at all a party in these agreements and none of the agreement contains any clause concerning the plaintiff. These agreements between the defendant and the third party did not constitute a ground for dis-lodging the claim of the plaintiff under the agreement to sell on basis on which the suit has been filed. I may also make it clear that under Section 92 Clause V which is by way of the exception oral agreement can be looked into only if the same is set up to explain the contents of the written agreement. But, Section 92 Clause 6 of Indian Evidence Act, clearly bars taking into consideration the oral agreement which are as defense set up so as to contradict an existing written agreement, the same would not be taken into consideration being extraneous to the written agreement. The said clause 6 of Section 92 of the Evidence Act only allows such facts to be proved which are in relation to existing facts. This view finds support as re Amrita Bazar Patrika Press Ltd. AIR 1920 Cal.478 (487), U Thin & Ors Vs. Daw Hmu & Anr; AIR 1937 Rang 142., Harichand Mancharam Vs. Govind Luxman Gokhale AIR 1923 PC 47 and also Sobharam Mahato Vs. Raja Mahto ; where it has been held that oral evidence regarding what took place at the time parties entered into contract, is irrelevant and inadmissible. As discussed earlier, the intention of the parties at the time of the execution of the document, has to be gathered from the contents of the documents and the conduct of the parties thereafter. The defendant by making payment of Rs. 4.5 lakhs to the plaintiff has acknowledged defendant's liability to refund the advance received by him under the agreement to sell in question, and has thus partly performed his part under this agreement. The payment of money is intrinsic in relation to the existing facts and in consonance with the terms of the agreement to sell; the defendant has thus admitted the liability by part performance. An admitted fact needs no further proof; and unless dislodged by cogent material, cannot be made a ground for granting leave to defend or for requiring the plaintiff to prove the same.

11. As the plaintiff has claimed an amount of Rs. 7.5 lakhs towards the principal amount refundable by the defendant and the defendant has not been able to effectively deny denied this claim. Rather, defendant has sought the adjustments of the so-called amount allegedly due towards the dues against the son of the plaintiff, which the defendant has cited more or less as a counter-claim to the admitted claim of the plaintiff. Therefore, the question before me is whether I can take into consideration such a counter-claim of the defendant against a third party as a ground for grant of leave to defend the claim of the plaintiff in a summary trial under Order 37 CPC.

12. The legal position is very clear. Leave to defend is not to be granted where the defense is sham or illusory. I may have considered the grant of conditional leave but in this case the counter claim, if any, is not only contrary to the written documents and based on oral evidence which, prima facie, appears to be contrary to the provisions of Sections 91 & 92 of the Indian Evidence Act, but furthermore is a claim against a third party i.e. Son of the defendant. Even the consideration of such a defense would merely cause unnecessary delay in the disposal of the suit. Reference may be made to the judgment reported as Punjab & Sind Bank Vs. S.K. Tulshan; 1990 RLR page 556. If the defendant has any such claim against the plaintiff, he can bring a separate suit in that behalf. Even otherwise in the present case, the counter claim tried to be set up by the defendant as a ground to entitle him leave to defense is not sought against the plaintiff, but against the third party, i.e, Shri Ashok Gupta who happens to be the son of the plaintiff. As such, the same cannot be taken to constitute a ground against the claim of the plaintiff by way of even as a counter claim.

13. For the reasons stated above and in view of my findings, I hereby dismiss the application for leave to defend.

14. The suit of the plaintiff is therefore decreed for Rs. 7.5 lakhs as principal and Rs. 1.95 lakhs as interest @ 24% which is the commercial rate of interest w.e.f. 23.12.99 till the filing suit i.e. 15.1.2002. The suit is also decreed for pendent elite and future interest @ 18% per annum in favor of the plaintiff against the defendant with cost.