Delhi High Court
Krishna Engineering Works & Ors. vs Cromption Greaves Ltd. on 22 November, 2011
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA Nos.771/2010, 806/2010, 807/2010, 808/2010,
809/2010 & 810/2010
% 22nd November, 2011
1. RFA No.771/2010
KRISHNA ENGINEERING WORKS & ORS. ..... Appellants
Through: Mr. S.K. Bhattacharaya, Advocate
with Mr. Niraj Bobby Paonam,
Advocate.
versus
CROMPTION GREAVES LTD. ..... Respondent
Through: Mr. Sanjeev Sagar, Advocate.
2. RFA No.806/2010
KRISHNA ENGINEERING WORKS & ORS. ..... Appellants
Through: Mr. S.K. Bhattacharaya, Advocate
with Mr. Niraj Bobby Paonam,
Advocate.
versus
CROMPTION GREAVES LTD. ..... Respondent
Through: Mr. Sanjeev Sagar, Advocate.
3. RFA No. 807/2010
KRISHNA ENGINEERING WORKS & ORS. ..... Appellants
Through: Mr. S.K. Bhattacharaya, Advocate
with Mr. Niraj Bobby Paonam,
Advocate.
versus
CROMPTION GREAVES LTD. ..... Respondent
Through: Mr. Sanjeev Sagar, Advocate.
4. RFA No.808/2010
KRISHNA ENGINEERING WORKS & ORS. ..... Appellants
Through: Mr. S.K. Bhattacharaya, Advocate
with Mr. Niraj Bobby Paonam,
Advocate.
versus
CROMPTION GREAVES LTD. ..... Respondent
Through: Mr. Sanjeev Sagar, Advocate.
5. RFA No.809/2010
KRISHNA ENGINEERING WORKS & ORS. ..... Appellants
Through: Mr. S.K. Bhattacharaya, Advocate
with Mr. Niraj Bobby Paonam,
Advocate.
versus
CROMPTION GREAVES LTD. ..... Respondent
Through: Mr. Sanjeev Sagar, Advocate.
6. RFA No.810/2010
KRISHNA ENGINEERING WORKS & ORS. ..... Appellants
Through: Mr. S.K. Bhattacharaya, Advocate
with Mr. Niraj Bobby Paonam,
Advocate.
versus
CROMPTION GREAVES LTD. ..... Respondent
Through: Mr. Sanjeev Sagar, Advocate.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J. MEHTA
1. Whether the Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest?
VALMIKI J. MEHTA, J (ORAL)
1. These six appeals impugn the judgments of the trial Court
dated 24.7.2010. By these six judgments dated 24.7.2010, the leave to
defend applications filed by the appellant No.1/defendant No.1 were
dismissed and the six suits for recovery filed by the respondent/plaintiff
on the basis of the dishonoured cheques were decreed.
2. The facts of the case are that the respondent/plaintiff
supplied electric motors under different invoices to the appellant
No.1/defendant No.1 as under:-
Invoice No. Date Amount
AK-1608586 29.11.1999 `1,18,227.20/-
AK-1608648 30.11.1999 ` 3,54,681.60
AK-1609328 5.12.1999 ` 1,77,340.80/-
AK-1609223 5.12.1999 `2,85,916.80/-
AK-1609327 5.12.1999 ` 3,54,681.60/-
AK-1609444 10.12.1999 ` 2,36,454.40/-
3. With respect to aforesaid invoices, the respondent/plaintiff
claimed that cheques were issued and which cheques were
dishonoured. These cheques are:-
Sr. No. Cheque No. Date Amount
1. 921304 17.12.1999 `1,18,227.20/-
2. 921303 18.12.1999 `3,54,681.60/-
3. 921313 20.04.2000 ` 1,77,340.80/-
4. 342720 20.04.2000 `2,85,916.80/-
5. 921312 20.04.2000 ` 3,54,681.60/-
6. 921314 18.12.1999 ` 2,36,454.40/-
4. The subject suits for recovery under Order 37 of Code of
Civil Procedure, 1908 (CPC) were therefore filed on the basis of
dishonoured cheques.
5. The appellants after service of summons of judgment, filed
an application for leave to defend inter alia stating that the on account
payments have been made towards the motors supplied and the parties
had a long period dealings as shown in the statement of account
maintained. It was also pleaded that cheques were not to be presented
unless a go ahead was given by the respondent/plaintiff that the
customers in whose premises the motors were installed with the
machinery were satisfied with the working of the machinery. It was
prayed that unconditional leave to defend be granted as amounts which
are claimed are really amounts on the basis of continuous dealings as
shown in a running account and various payments have been made
towards different bills including towards the subject invoices. It is
argued that details of the transactions are contained in the statement of
account filed, and which statement of account has not been disputed by
the respondent/plaintiff although various adjournments were taken
before the trial Court by the respondent/plaintiff for filing of its own
statement of account.
6. The statement of account which is relied upon on behalf of
the appellant No.1/defendant No.1 is as under:-
"STATEMENT OF ACCOUNTS OF M/S CROMPTON GREAVES LIMITED WITH
M/S. KRISHNA ENGINEERING WORKS, W.E.F. 1-4-99 TO 19-11-2003.
Date Particulars Dr. (`) Cr.(`)
27-07-99 By Bill No.3834 2,38,264.00
05-09-99 By Bill No.5367 2,56,664.00
08-09-99 To Cheque No.968378 2,38,264.00
09-09-99 By Bill No.5561 1,53,398.40
12-09-99 By Bill No.5872 1,02,665.60
12-09-99 By Bill No.5873 51,332.80
17-09-99 To Cheque No.912362 94,800.00
17-09-99 To Cheque No.912363 94,800.00
17-09-99 To Cheque No.912364 95,400.00
27-09-99 To Pay order No.086751 95,000.00
08-10-99 By Bill No.6691 1,42,958.40
08-10-99 By Bill No.6692 47,652.80
22-10-99 To Cheque No.917067 47,652,80
24-10-99 To Cheque No.912367 1,53,998.40
18-11-99 To Dr. Note (excess 28,974.00
freight)
18-11-99 To L/C Dr. by Bank 4,10,662.40
22-11-99 To Cheque No.917095 1,13,984.40
23-11-99 By Bill No.8355 4,72,908.80
29-11-99 By Bill No.8586 1,18,227.20
30-11-99 By Bill No.8648 3,54,681.60
05-12-99 By Bill No.9327 3,54,681.60
05-12-99 By Bill No.9328 1,77,340.80
05-12-99 By Bill No.9223 2,85,916.80
05-12-99 By Bill No.9224 2,38,264.00
10-12-99 By Bill No.9444 2,36,454.40
18-12-99 To Cheque No.342721 2,38,264.00
29-01-00 To L/C Dr. by Bank 4,72,908.80
29-03-00 To Pay order No.382542 4,00,000.00
29-03-00 To Pay order No.382543 1,45,000.00
To Amount of 5 Nos. 2,95,568.00
Alternator received
without AVR's without
which Alternators are of
no use
To amount of 1 No. 68,500.00
Alternator Sr. No.YGAG
0284 sent back to factory
vide G.R. No.03074
Dt.13-01-01 to Transport
Corporation of India
7. On the basis of the aforesaid statement of account, it is
argued that after the raising of the disputed bills with respect to the
motors, payments totaling about `15,51,740.80/- have been made and
which are reflected in the last four entries in this statement of account.
It is therefore argued that really the issue is of reconciliation accounts
and therefore the appellant No.1/defendant No.1 is entitled to leave to
defend to show during the trial of the suit that the respondent/plaintiff is
not entitled to the suit amounts.
8. Learned counsel for the appellants has also drawn my
attention to the affidavit filed in support of leave to defend application,
and para 6 thereof which reads as under:-
"6. That after receiving the confirmation from the party
concern that ordered goods have been received necessary
payment of the above mentioned bill on account has been
made, with the condition that the plaintiff will be responsible to
refund the due payment if the supplied goods will not be worked
properly." (underlining added)
It is argued that there is clear cut averment of on account
payment having been made in this paragraph and which is corroborated
by the statement of account.
9. A reference to the impugned orders shows that the trial
Court has neither referred to the statement of account filed by the
appellants/defendants as reproduced above, and nor has referred to
para 6 of the affidavit in support of leave to defend applications which
again has been reproduced above.
10. The appellant No.1/defendant No.1 argued that once
payments have been made totaling to `15,51,740.80/-, and which
payments are after the disputed invoices, surely, appellants are entitled
to leave to defend with respect to the cheques which totaled to
`15,27,308/-.
11. The principles with respect to grant of leave to defend are
now well-settled. The celebrated decision of the Supreme Court, in this
regard, is the decision in the case of M/s. Mechalec Engineers and
Manufacturers Vs. M/s. Basic Equipment Corporation, AIR 1977
SC 577 and in which the following principles have been laid down:-
"(a) If the defendant satisfied the Court that he has a good
defence 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 triable issue indicating that he
has a fair or bona fide or reasonable defence although not a
positively good defence 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 defence, 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 defence 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 not as to
payment into Court or furnishing security.
(d) If the defendant has no defence or the defence 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 defence or the defence 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 defence 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
defence."
12. In my opinion; once the appellant No.1/defendant No.1
showed payments after raising of the disputed bills of about
`15,51,740.80/-, and it was also shown that there was a running
statement of account, and when taken alongwith the fact that
respondent/plaintiff did not file its statement of account and for which
time was taken before the trial Court on 20.9.2008 and 30.9.2008; the
present case falls in clause (b), or in any case clause (c), of the
judgment in M/s. Mechalec Engineers (supra) because the fact of
the payments in the statement of account of appellant No.1/defendant
No.1 and the non-filing of a statement of account by the
respondent/plaintiff shows that the appellants have a good defence or in
any case such a defence if not immediately clear, is such that the
appellants would be entitled to establish during the course of trial of the
suit.
13. In view of the above, the appeals are accepted. Impugned
judgments dismissing the leave to defend applications and decreeing
the suit are set aside. The appellants are granted unconditional leave to
defend the suit. It is however directed that the trial Court will make an
endeavour to dispose of the suit as expeditiously as possible, and to the
extent possible within a period of one and half years of filing of the
written statement by the appellants/defendants, and which shall now be
filed before the trial Court within a period of two weeks of the first date
fixed before the competent Court by the District & Sessions Judge,
Delhi. The trial Court will also not grant more than three opportunities
to either of the parties to complete their evidence. If unnecessary
adjournments are asked for by either of the parties, the trial Court will
impose heavy costs on the party seeking such unnecessary
adjournments. Appeals are accordingly disposed of, leaving the parties
to bear their own costs.
14. Parties to appear before the District & Sessions Judge, Delhi
on 21.12.2011, and on which date the District & Sessions Judge will
mark the suits to a competent Court for disposal in accordance with law.
Bank guarantees given in these appeals by the appellants/defendants
vide order dated 30.11.2010 will accordingly stand discharged,
however, subject to the undertaking to be filed in this Court in four
weeks by the appellants that in case the appellants/defendants fail in
the suit, these bank guarantees will within the period as granted by the
trial Court after the final judgment be again furnished in satisfaction of
the decree, if any which may be passed in favour of the
respondent/plaintiff.
VALMIKI J. MEHTA,J
NOVEMBER 22, 2011
Ne
