Delhi High Court
M/S.Jay Rapid Rollers Ltd. ... vs M/S. Modern Pipe Company on 19 September, 2008
Author: Pradeep Nandrajog
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA 546/2004
M/S.JAY RAPID ROLLERS LTD. (THRU' ITS LIQUIDATOR)
..... Appellant
Through: Mr.S.K.Luthra, Adv. for Official Liquidator.
versus
M/S. MODERN PIPE COMPANY ..... Respondent
Through: Mr.R.K.Jain, Adv.
DATE OF DECISION:
% 19.09.2008
CORAM:
Hon'ble Mr.Justice Pradeep Nandrajog
Hon'ble Mr.Justice J.R. Midha
1. Whether reporters of local papers may be allowed
to see the judgment?
2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?
: PRADEEP NANDRAJOG, J. (Oral)
CM Nos.13105-13106/2004
1. Delay in filing the appeal as also delay in re-filing the
appeal is condoned.
2. The 2 applications stand disposed of.
CM Nos.13108/04 and 1589/2006
The 2 applications are disposed of as infructuous for
the reason the appeal is being heard for final disposal today
itself.
RFA No.546/2004
1. The appellant has failed to secure a favourable order
in the suit filed by the respondent under Order 37 of the Code of
Civil Procedure 1908.
2. Application seeking leave to defend filed by the
appellant has been found to be without any merit. It has been
held that the projected defence was frivolous, vexatious,
tainted and mala fide.
3. Respondent's suit was predicated on a cheque
drawn on the account of the appellant maintained with the
Oriental Bank of Commerce, Industrial Finance Branch, New
Delhi. The cheque dated 31.8.1999 is in sum of
Rs.3,08,794.20. It has been drawn in favour of the respondent
and has been signed by the Managing Director of the appellant.
4. The cheque was returned dishonoured by the banker
when presented for encashment.
5. Seeking leave to defend, the appellant projected a
defence as under:-
"6. That the delay of one day if at all it can be said
that there is a delay, is not at all intentional, even on
the facts and merits of the case, no case is made out in
favour of the plaintiff and against the defendant as the
defendant submits that only a sum of Rs.67,000/- is due
and payable by the defendant to the plaintiffs and the
plaintiffs have misused the Cheque whih was left with
the Defendants which was duly signed by the Managing
Director of the Defendant Company and the Purchaser
Manager of the Defendant Company after buying the
material forgot to fill-up the exact amount and left the
blank signed cheque with the plaintiff, it is pertinent to
mention that the said cheque has been filled-up later
fraudulently by the Plaintiff's to the tune of the said
amount."
6. Learned Trial Judge has held that the defence
projected is without any substance for the reason it was not
believable that the Purchase Manager would have left the
cheque blank after purchasing the goods.
7. We may only further state that if the appellant had
purchased goods worth only Rs.67,000/-, reference ought to
have been made by the appellant to the bill under which goods
worth only Rs.67,000/- were purchased; the bill could have been
produced.
8. Under Section 118 of the Negotiable Instruments Act
1882, a statutory presumption arises that a cheque is for
valuable consideration.
9. Under the law, a presumption arises that a
negotiable instrument is duly drawn before it is signed.
10. We find the assertion in the application seeking
leave to defend that goods were purchased only in sum of
Rs.67,000/- is unsupported with any material particulars
pertaining to the bill raised by the respondent while selling the
goods.
11. We further note that it was not pleaded in the
application seeking leave to defend that in the books of account
of the appellant an entry in sum of Rs.67,000/- was made
pertaining to the cheque in question and relatable to the
alleged purchase of goods worth Rs.67,000/-.
12. We concur with the view taken by the learned Trial
Judge that no plausible defence has been projected.
13. The appeal is dismissed.
14. Since the appeal has been dismissed the decree
obtained by the respondent would become executable. We
note that pursuant to orders passed in C.R.No.954/2001
between the parties, and pertaining to the instant suit,
appellant had deposited 50% of the decretal amount with the
learned Trial Judge.
15. Learned counsel for the appellant states that since
the appellant company is in liquidation, the amount cannot be
released to the respondent whose remedies are stated to be to
stand in a queue along with other unsecured creditors and
receive payment under the decree as and when the official
liquidator invites claims and declares the dividend.
16. It is not in dispute that 50% of the decretal amount
was secured before the appellant company went into
liquidation. Thus, we are of the opinion that the said amount
has to be released in favour of the respondent.
17. We direct the learned Trial Judge to release the 50%
of the decretal amount along with interest to the respondent.
18. No costs.
PRADEEP NANDRAJOG, J.
J.R. MIDHA, J.
SEPTEMBER 19, 2008
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