Gurdip Singh Kalra vs Surjit Singh Sood
2003 Latest Caselaw 353 Del

JUDGMENT

Manmohan Sarin, J.

1. The defendant Shri Surjit Singh Sood, is an Advocate. He appears in person and by this application, under Order 37 Rule 3 Sub-Rule (5) of Code of Civil Procedure, seeks unconditional leave to contest. Defendant had filed an affidavit on 23rd April, 2001, seeking unconditional leave to contest the suit. The present application filed on 18th July, 2002 has been filed in the proper form, accompanied with an application under Section 5 of the Limitation Act to condone the delay and to avoid any technical objection.

2. The application under Section 5 of the Limitation Act was allowed vide orders dated 20th March, 2003. Learned counsel for the plaintiff also gave his no objection to the application IA 6306/2002 being considered Along with the affidavit as originally filed. Arguments were heard in the application and judgment was reserved on 20th March, 2003.

3. The plaintiff Shri Gurdeep Singh Kalra, has filed the present suit under Order 37 of the Code of Civil Procedure for recovery of a sum of Rs. 5,32,200/- ( Rs. Five Lacs Thirty Two thousands Two Hundred) from the defendant. The plaintiff's case as set out in the plaint and the application for summons for judgment, may be briefly noted.

I. Plaintiff a Member of the Punjab Superior Judicial Service, retired as District & Sessions Judge (Vigilance) in October, 1992. Plaintiff decided to shift to Delhi to stay Along with his two daughters and son-in-law, who are settled in Delhi. Plaintiff owned house bearing No. 435 Sardar Mota Singh Nagar in Jalandhar. Plaintiff on 12th February, 1995, entered into an agreement to sell the said house to Smt. Mahinder Kelar for a consideration of Rs. 19 lacs. Smt. Mahinder Kelar paid a sum of Rs. 7 lacs as advance. Upon payment of balance consideration of Rs. 12 lacs, the sale deed was to be registered in her favor. The house was in the tenancy of Ms. Radhika Tandon. Plaintiff, through the defendant Shri S.S. Sood, Advocate, who was his friend of longstanding, instituted a petition for eviction.

II. Plaintiff claims that as the sale transaction with Smt. Mahinder Kelar was getting delayed, he requested the defendant to handle the transaction with said Ms. Mahinder Kelar. The defendant suggested to the plaintiff that at least 1/5th of the advance money i.e. Rs. 1,40,000/- should be made available with the defendant, to negotiate with Ms. Kelar and make payment to get the contract rescinded. Plaintiff accordingly sent a demand draft No. 932831 dated 20th July, 1995 in favor of the defendant for Rs. 1,40,000/-. A legal notice was served by the defendant on Smt. Mahinder Kelar, calling upon her either to pay the balance sale consideration of Rs. 12 lacs or end the agreement dated 12.2.1995 with advance money being returned. Defendant notified Mrs. Mahinder Kelar that 1/5th of the said amount was already lying deposited with the defendant. Defendant there upon further informed the plaintiff that the balance of the advance money i.e. Rs. 5,60,000/- should also be sent to the defendant so that in case Smt. Mahinder Kelar was not willing to pay the balance sale consideration and complete the transaction, the entire advance money could be returned and the agreement would be rescinded.

 III.    The plaintiff, therefore, had handed over another Demand Draft to the defendant in Delhi bearing  No. 932843 dated 22nd August, 1995 for  Rs. 5.60 lacs.   Plaintiff also authorized the defendant to execute the sale deed with Smt. Mahinder Kelar in case she made the balance payment or return the advance if the agreement was to be rescinded.     
 

 IV. The plaintiff avers that the defendant did not resolve the dispute with Smt. Mahinder Kelar.  In August, 1996, Smt. Mahinder Kelar asked the plaintiff to return  Rs. 4.40 lacs as she had received  Rs. 2.60 lacs from the defendant between April and June, 1996 out of the advance of  Rs. 7 lacs.   The plaintiff called  upon the defendant to return  Rs. 4.40 lacs to Smt. Mahinder Kelar vide letter dated 31st August, 1996.   This was followed by letter dated 10th September, 1996.   However, there was no response.    The defendant rather wrote a letter in the form of a Bill of fee dated 18th September, 1996, calling upon the plaintiff to pay fees and charges of over  Rs. 5 lacs on account of alleged professional services rendered.  The case of the plaintiff is that the defendant has misappropriated a sum of  Rs. 4.40 lacs out of  Rs. 7 lacs deposited with the defendant as an advocate to settle the matter with the plaintiff.  
 

 V. Plaintiff was sued by Smt. Mahinder Kelar vide S. No. 329/96 and the plaintiff was required to pay  Rs. 4.75 lacs in full and final satisfaction of the claim of Smt. Mahinder Kelar in a compromise decree.   
 

VI. Plaintiff claims that the receipt of the said amount of Rs. 7 lacs vide two bank draft bearing Nos. 932831 dated 28.7.95 for Rs. 1.40 lacs and 932843 dated 22.8.1995 for Rs. 5.60 lacs, is duly admitted by the defendant. The plaintiff filed a complaint against the defendant with the Bar Council of Punjab for professional misconduct, breach of trust etc. The said complaint got dismissed. The plaintiff, however, has preferred an appeal with the Bar Council of India, which is pending. Plaintiff accordingly claims a sum of Rs. 5.32 lacs including the interest @ 18% from the date of payment, being the balance advance amount out of Rs. 7 lacs misappropriated by the defendant.

4. The defendant who appears in person has been heard in support of the application for leave to contest. Defendant firstly urged that the Single Judge, vide order dated 18.9.98, had returned the plaint for being presented to a Court of Competent Jurisdiction, upholding the objection of lack of territorial jurisdiction. The plaintiff preferred an FAO(OS) 284/98. The said FAO(OS) was allowed by the Division Bench vide orders dated 25.9.98, holding that at the stage of issuance for summons in the suit, averments made in the plaint with regard to the bank drafts having been handed over at Delhi to the defendant, though payable at Jalandhar, was required to be assumed as correct. Similarly other averments with regard to the cause of action having partly arisen within the territory of Delhi, were required to be assumed as correct. The defendant submits that he was a resident of Jalandhar at Punjab, the Bank Drafts by which payment was made to defendant, were payable at Jalandhar. Hence no part of cause of action had arisen in Delhi. The Division Bench having permitted the defendant to raise the plea of lack of jurisdiction, the said plea alone was sufficient for the grant of unconditional leave to contest.

5. Mr. Sood does not deny the receipt of the sum of Rs. 7 lacs by the demand drafts No. 932831 dated 28.7.95 for Rs. 1.40 lac and 932843 dated 22.8.95 for Rs. 5.60 lacs. He claims that the said amount was meant for and was paid to Shri Kamal Kapoor, son of Shri R.D. Kapoor, Lajpat Nagar, Jalandhar, a business associate of plaintiff. He relies on an affidavit purported to have been jointly executed by Shri Kamal Kapur and the plaintiff dated 23rd September, 1995, wherein the plaintiff as well as Shri Kamal Kapoor declared that the defendant was neither a beneficiary nor recipient of the amount of Rs. 7 lacs sent through the above Bank Drafts. The amount was meant to be paid to Shri Kamal Kapoor on behalf of plaintiff. Receipt by Shri Kamal Kapoor is acknowledged. It is further stated in the affidavit that Shri Surjit Singh Sood is not liable to be taxed for the said amount. This is followed by another affidavit of Mr. Kamal Kapoor wherein it is claimed that the sum of Rs. 7 lacs had been invested on behalf of the plaintiff in his catering business, being run under the name and style of "Food & Food" at Jalandhar. Mr. Kamal Kapoor also states that the balance amount of Rs. 4.60 lacs can be claimed by plaintiff subject to settlement of business account and determination of profit and loss. It is averred that the said amount was paid by plaintiff, vide the said two drafts to the defendant, for getting the same encashed and the amount so realized to be paid to Mr. Kamal Kapoor. It is further claimed that a sum of Rs. 2.60 lacs was paid by Kamal Kapoor to Smt. Mohinder Kelar at the request of the plaintiff. A certificate from the Allahabad Bank with regard to the payment of Rs. 1 lac by a cheque drawn in favor of Smt. Mohinder Kelar and issued by Shri Kamal Kapoor has also been produced.

6. The case of defendant thus is that the amount of Rs. 7 lacs as received, was remitted to Kamal Kapur at the instance of the plaintiff. Further that Mr. Kamal Kapoor had paid Ms. Mohinder Kelar a sum of Rs. 2.60 lacs and out of which a sum of Rs. 1 lac is stated to have been paid vide cheque issued by the Kamal Kapur, for which the bank certificate has been enclosed.

7. The defendant further submitted that this suit had been filed mala fide by the plaintiff since he was trying to usurp the property at Kasauli which has been built jointly with the defendant. The plaintiff wanted it to be mutated only in his favor.

8. The defendant also claims that he had rendered extensive professional services to the plaintiff over a long period of time, defendant was liable to pay for the same. There was thus nothing wrong in the defendant demanding a sum of Rs. 5.29 lacs for professional services vide his letter of 18.9.1996. He submitted that plaintiff had failed in his attempt to impute professional misconduct to defendant. Mr.Sood also submitted that the subject matter of the suit would not fall within the ambit of Order xxxvII CPC.

9. Mr. Kirti Uppal appearing on behalf of the plaintiff submits that the plea of the defendant that as a result of the observations of the Division Bench, the plaintiff is entitled to leave to contest, is wholly misconceived. The Division Bench had only reserved the defendant's right to object to the territorial jurisdiction of the Court. Mr. Uppal submitted that the defense sought to be set up by the defendant was wholly false. The plea sought to be raised of the money having been remitted by the defendant to Mr. Kamal Kapoor was an after thought and not mentioned in any correspondence by the Defendant previously. Defendant had, admittedly, received the Bank Drafts in his favor and encashed them. In case the plaintiff was to invest money with Mr. Kamal Kapoor, who is also stated to be a close business associate of the plaintiff, there was no occasion for the plaintiff to first remit the money to the defendant by demand drafts and thereafter have the defendant encash them and then remit to Mr. Kamal Kapoor for investment in his catering business. The entire story was incredulous. Learned counsel submitted that the defendant had fabricated the affidavit and other documents with Shri Kamal Kapoor. The blank signed papers left by plaintiff with the defendant had been used for fabricating documents, thus breaching the trust reposed by plaintiff as a counsel and friend of over 30 years.

10. Counsel submitted that a bare perusal of the photo copy of the affidavit said to have been executed by the plaintiff and Mr. Kamal Kapoor shows that it was a fabricated document. The attempt was to utilize the signatures already available, which resulted in the signatures of the deponents on the affidavits and verification all coming in a straight line. Mr. Uppal submits that the defendant has caused this and other documents to be fabricated along with Mr. Kamal Kapoor. The entire defense of the money having been remitted to Mr. Kamal Kapoor is belied by the legal notice sent by the defendant himself on 31.7.1995 to Smt. Mohinder Kaler. Defendant himself admits having a deposit of 1/5th of advance money i.e. Rs. 1.40 lacs with him from the plaintiff to enable reaching a settlement. In case, the defendant had remitted the amount of Rs. 7 lacs to Sh. Kamal Kapoor on behalf of the plaintiff for investment in Kapoor's catering business, there would have been no occasion for the defendant to write that he was holding a deposit of 1/5th of the advance money. Plaintiff also relies on letter dated 20.10.1995 to the defendant calling upon him to return the sum of Rs. 7 lacs deposited with the defendant for settlement of the dispute with Mrs. Mohinder Kelar, as the same had not materialized. Again in plaintiff's letter of 31.8.1996, it is mentioned that Mrs. Kaler had been paid Rs. 2.60 lacs and the remaining amount had not been paid to her. Further that the plaintiff was receiving calls from Mrs. Mohinder Kaler's agent for return of earnest money. Repeated requests were made to the defendant to return the balance amount of Rs. 4.40 lacs lying with the defendant but to no avail.

11. Having covered the factual aspects, let me notice the legal principles evolved by judicial pronouncements for grant of leave to contest in summary suits. In M/s Mechalec Engineers and Manufacturers v. M/s Basic Equipment Corporation , the Supreme Court set out the principles applicable in the form of following propositions:

"(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 no 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 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 Mrs. Raj Duggal v. Ramesh Kumar Bansal it was held:

"3. Leave is declined where the court is of the opinion that the grant of leave would merely enable the defendant to prolong the litigation by raising untenable and frivolous defenses. The test is to see whether the defense raises a real issue and not a sham one, in the sense that if the facts alleged by the defendant are established there would be a good or even a plausible defense on those facts. If the Court is satisfied about that leave must be given. If there is a friable issue in the sense that there is a fair dispute to be tried as to the meaning of a document on which the claimis based or uncertainty as to the amount actually due or where the alleged facts are of such a nature as to entitle the defendant to interrogate the plaintiff or to cross-examine his witnesses leave should not be denied. Where also, the defendant shows that even on a fair probability he has a bona fide defense, he ought to have leave. Summary judgments under Order 37 should not be granted where serious conflict as to matter of fact or where any difficulty on issues as to law arises. The Court should not reject the defense of the defendant merely because of its inherent implausibility or its inconsistency."

A defense may raise a friable issue and yet may not prima facie impress the Court in view of the common course of human conduct. In such a case to refuse leave would certainly tend to lead to injustice; at the same dictates of justice may demand that the leave to defend may be granted on some terms. (Firm New Afghan Co. and another v. Firm Sadhu Singh Thakor Singh ).

Where the defendant challenged and disputed the very existence of the foundation of the suit viz. The suit promissory note itself on the ground of being forged and fabricated document, held, the defendant had raised a probable defense and thereby a `triable issue' and leave was to be given to him to defend the suit and at that stage the trial court was not justified in taking upon itself impermissible exercise of comparing the disputed signature of the defendant on the promissory note with an undisputed signature of the defendant on his Vakalatpatra in absence of any other evidence. (Jashbhai Motibhai Patel v. Hasmukhbhani Ravjibhai Patel ).

12. Let us consider the factual matrix of the above cases as noticed earlier in the light of the judicial principles enunciated above. Having heard counsel for the parties and having perused the pleadings i.e. Plaint, summons for judgment, application for leave to contest and reply thereto as also the documents, relied on by the parties, the position which emerges is that the defendant admits the receipt of Rs. 7 lacs vide the two demand drafts. The long old standing relationship between plaintiff and defendant is admitted by both of them. Defendant, undoubtedly, enjoyed the trust and confidence of the plaintiff being his counsel also. Defendant's case that the sum of Rs. 7 lacs received from plaintiff was remitted to Mr. Kamal Kapoor by the defendant does not appear to be plausible. There is no apparent reason given by the plaintiff to explain that if he wanted to invest the money with Mr. Kamal Kapoor in the catering business, he would not have directly remitted the same to Mr. Kamal Kapoor, who was directly known to plaintiff rather than adopting the circuitous route through the defendant. Defendant nevertheless has produced documents purported to have been executed by Mr. Kamal Kapoor and signed even by the plaintiff, where it is stated that defendant was not the beneficiary of the said sum of Rs. 7 lacs and that the defendant is not liable to be taxed on the said amount. The plaintiff has attempted to point out the inconsistencies and pecularities in the joint affidavit, purporting to be of plaintiff and Kamal Kapoor to urge that the same is a fabricated document. The submissions even though appealing are not to be considered at this stage by returning a finding as to the genuineness or otherwise which is to be determined at the stage of trial. However, at the same time, there is one document produced by the defendant, namely, a certificate from Allahabad Bank which confirms that a cheque of Rs. one lac had been paid to Smt. Mohinder Kelar from the account of M/s Moti Mahal Hotel and the said cheque had been signed by the Director Mr. Kamal Kapoor. It, therefore, appears that the amount was paid to Mrs. Mahinder Kelar also through Mr. Kamal Kapoor. However, as far as the defendant is concerned, the defendant himself has admitted in the notice dated 31.7.1995 that he was holding 1/5th of the advance amount as deposit for settling the matter with Mrs. Mahinder Kelar.

13. In this view of the matter, the defendant cannot disclaim all responsibility or liability by claiming that Rs. 7 lacs received were meant for Mr. Kamal Kapoor and had been so remitted to the latter. Defendant has also failed to give the particulars of the cheques, drafts or cash by which the said amount of Rs. 7 lacs was remitted to Mr. Kamal Kapoor for investment in the company. Moreover, defendant did not take up the plea of the amount having been remitted to Mr. Kamal Kapoor in reply to the communication received from the plaintiff demanding return of the money. The defendant, on the other hand, countered by raising bill of fee of Rs. 5.29 lacs by way of letter dated 18.9.1996.

14. Defendant has also raised objection as to the territorial jurisdiction of this Court and urges that no part of cause of action had arisen within the jurisdiction of this Court as the drafts were payable at Jallandhar. Defendant was a resident of Jalandhar. This is a plea which merits consideration.

15. Considering the following factors:-

(i) Affidavits/acknowledgement purported to be executed by plaintiff and Kamal Kapur by which receipt of Rs. 7 lacs from defendant by Mr. Kamal Kapoor is acknowledged.

(ii) Authenticity or otherwise of the above documents to be determined at trial.

(iii) Bankers certificate certifying the issuance and encashment of cheque of Rs. 1,00,000/- from Kamal Kapoor to Mrs. Mohinder Kelar and admitted return of Rs. 2.40 lacs to Mrs. Mohinder Kelar.

(iv) The close relationship between plaintiff, defendant No. 1 and Kamal Kapoor.

(v) Plea of lack of territorial jurisdiction, in view of the Bank Drafts being encashable at Jalandhar as also defendant being resident of Jalandhar. the case would fall in the class of cases, where leave to contest should not be refused but granted on terms i.e. propositions 'c' and 'e' in M/s. Mechalic Engineers and Manufacturers Vs. M/s. Basic Equipment Corporation (Supra).

In view of the foregoing discussion and keeping the legal principles as enunciated hereinbefore, defendant is granted leave to contest the suit, upon deposit of 50 per cent of the suit amount in Court within 4 weeks from today.

IA stands allowed in the above terms.