Sh.Mohinder Gupta vs Sh.Subhash Mittal
2010 Latest Caselaw 3104 Del

Citation : 2010 Latest Caselaw 3104 Del
Judgement Date : 5 July, 2010

Delhi High Court

Sh.Mohinder Gupta vs Sh.Subhash Mittal on 5 July, 2010

Author: V.K.Shali

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+CS(OS) NO. 421/2007 & IA Nos. 4309/2007 & 9402/2009

                                     Reserved on : 19.05.2010
                                   Date of Decision : 05.07.2010

Sh. Mohinder Gupta                              ......    Plaintiff
                               Through:   Mr. Shiv Charan Garg,
                                          Advocate.

                               Versus

Sh. Subhash Mittal                         ......          Defendant

                               Through:   None

CORAM :
HON'BLE MR. JUSTICE V.K. SHALI

1.    Whether Reporters of local papers may be
      allowed to see the judgment?                         YES
2.    To be referred to the Reporter or not ?              NO
3.    Whether the judgment should be reported
      in the Digest ?                                      NO

V.K. SHALI, J.

1. This is a suit under Order XXXVII CPC filed by the plaintiff

for recovery of Rs.21,40,000/-.

2. Briefly stated the facts of the case as averred in the plaint

are that the plaintiff is a proprietor of M/s Gupta Trading

Corporation situated at K-32/19, Palam Road, Matiala

Village, Delhi-110059. It is alleged that the defendant is a

proprietor of M/s Mittal & Co. and deals in business of

supplying old empty bottles to various factories situated all

over India. The plaintiff and the defendants were having

the business transactions because of which the plaintiff

had provided the credit facility to the defendant for

purchasing the old empty bottles from the plaintiff for an

amount of Rs.21,43,185/- against the various bills, the

details of which are given in para 4 of the plaint. It is

alleged that all these bills were issued in favour of M/s

Mittal & Co. and the defendant on its part had issued five

post dated cheques for a sum of Rs.21,40,000/- drawn on

Oriental Bank of Commerce, Najafgarh Road, Delhi in

favour of the plaintiff concerned. It is alleged that on

presentation, all the cheques were dishonoured by five

separate memos dated 09.11.2004, two cheques on

20.11.2004 and the remaining two cheques on 23.11.2004

on account of payment stopped by the drawer. The

plaintiff is purported to have issued a notice through

registered post and UPC on 07.12.2004 to the defendant

and despite the receipt of notice the amount has not been

paid to the plaintiff. Apart from institution of this case, a

case under Section 138 of the Negotiable Instrument Act

has been registered in an appropriate forum and the

plaintiff has chosen to file the present summary suit for the

recovery of the amount under Order XXXVII CPC. The

defendant had put in appearance and sought to leave to

contest the matter. This Court vide its order dated

10.09.2008 while deciding the 12185/2007 and 6430/2007

had granted leave to defend the suit subject to furnishing

security to the extent of 25% of the claim within four weeks

to the satisfaction of the Registrar. It was specifically

directed that it will be open to the defendant to furnish

bank guarantee in compliance to the present order. The

contention of the learned counsel for the plaintiff is that

despite the conditional leave to defend granted to the

defendant the said condition has not been complied, and

therefore, a decree has to be passed in favour of the

plaintiff. For this purpose, the learned counsel for the

plaintiff has relied upon the judgment of the Division Bench

in case titled Kailashpati Steel Industries Ltd. & Anr. Vs.

Steel Authority of India Ltd. 2008 (106) DRJ 532 (DB).

3. I have heard the learned counsel for the plaintiff and

perused the said judgment. The point that in case a

conditional leave to defend is granted to the defendant and

condition so imposed is not complied with by the

defendant, a decree is to follow in favour of the plaintiff as

the averment made in the plaint are deemed to have been

admitted is no more res integra. The observations of the

Division Bench in the Kailashpati Steel (Supra) which are

pertinent in this regard. It was observed in the said case:

"In case the defendant is not able to comply with the condition, the result is that the plaint is taken to be admitted and the plaintiff is entitled to another on that basis. It is true that it will be open for the defendants to file an appeal against the decree that may be passed on account of the inability of the defendant to comply with the condition and in the appeal the grounds for not granting unconditional leave can also be agitated. But in the meantime the plaintiff, having got his final decree, may have levied execution, and it may be too late for all

practice purposes for the defendant to challenge the interlocutory order."

4. A perusal of the aforesaid judgment clearly shows that once

the defendant had been granted the leave to contest the

present suit, on furnishing security to the extent of 25% of

the suit amount to the satisfaction of the learned Registrar

and the same has not been complied with, the averments

made in the plaint are deemed to have been admitted and

accordingly a decree for an amount of Rs.21,40,000/-

deserves to be passed in favour of the plaintiff. In the

instant case, the defendant having failed to furnish the

security, the plaintiff is entitled to a decree.

5. The plaintiff has even filed his affidavit by way of

examination-in-chief which is treated as an ex-parte