Delhi High Court
Sunita Gupta vs M/S Shori Lal Chemicals on 26 April, 2012
Author: G. S. Sistani
15.
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 249/2010
% Judgment dated 26.04.2012
SUNITA GUPTA ..... Plaintiff
Through : Mr.Vinay Navare and Mr.Keshav Ranjan,
Advs.
versus
M/S SHORI LAL CHEMICALS ..... Defendant
Through : Mr.Sunil Nayar, Adv.
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI
G.S.SISTANI, J (ORAL)
I.A. 9160/2011
1. Present suit has been filed by plaintiff under the provisions of Order
XXXVII of the Code of Civil Procedure for recovery of Rs.56,57,200/-.
Present suit is based on two invoices, originals of which have been placed
on record. Summons were issued to the defendant in the prescribed form.
The defendant has filed the present application, being I.A.9160/2011,
under Order XXXVII Rule 3(5) of the Code of Civil Procedure seeking
leave to defend.
2. The facts of the case as set out by the plaintiff in the plaint are that the
plaintiff is the sole proprietor concern of M/s Sandeep Chemicals
Corporation and is running its business in the said name and style since
the year 1979. The plaintiff is trading in dyes, colour and chemicals.
Defendant no.1 is also a proprietorship concern, which is carrying on its
business in the name and style of M/s Shori Lal Chemicals and defendant
CS (OS)249/2010 Page 1 of 14
no.2, Mr.Vinay Agarwal, is the proprietor of defendant no.1.
3. As per the plaint, in the month of January, 2009, defendant no.2
approached the plaintiff for the purchase of some dye colours on credit
basis. Defendant no.2 purchased the dye colours for a total sum of
Rs.49,19,200/- from the plaintiff vide invoices dated 16.1.2009 and
18.1.2009. The details of which are as under:
S.No. Invoice No. Particular Amount Dated
a) 20/08-09/C Alpha Blue 23,40,000/- 16-1-09
b) 21/08-09/C Paris Sky Silver 25,79,200/- 18-1-09
4. The said dyes colours were purchased by defendants through the invoices
dated 16.1.2009 and 18.1.2009 on a credit period of sixty days from the
date of billing. The dyes colours were supplied by plaintiff to the
defendants through Shiv Transport Company vide lorry receipts-cum-
G.R. number 12926 dated 16.1.2009 and 13329 dated 18.1.2009. Original
lorry receipts have been placed on record. As per the terms and conditions
of the invoices, parties had agreed that if payment is not received within
the agreed specified period of sixty days, interest would be charged
@18%, per annum.
5. Learned counsel for the plaintiff submits that after the period of sixty days
came to an end, the plaintiff approached the defendant and demanded the
payment for the goods delivered to the defendants, however, defendant
no.2 requested the plaintiff to wait for a period of 15-30 days as defendant
no.2 was arranging for the funds. Counsel further submits that defendant
no.2 thereafter sent a communication dated 6.4.2009 to the plaintiff firm
on the letter head of M/s Surajmal Shorilal (sister concern of the
defendants) requesting for details of outstanding balance as per statement
CS (OS)249/2010 Page 2 of 14
of accounts maintained as on 31.3.2009. The plaintiff sent the statement
of account as on 31.1.2009 in respect of the ledger accounts maintained in
the regular course of business by the plaintiff firm. This statement of
account was sent to the defendants through Blazeflash Couriers vide
receipt dated 14.4.2009 with the request to clear the outstanding sum of
Rs.49,19,200/- on account of the goods/dyes colours purchased by the
defendants and other amounts as reflected in the statement of account.
Counsel next submits that the defendants after verifying the statement of
accounts and confirming its dues towards the plaintiff sent the statement
of account as on 31.3.2009 duly acknowledged by appending the
signatures and also sent five account payee post-dated cheques for a sum
of Rs.15.00 lakhs against part payment to the plaintiff. The details of
cheques are asunder:
Cheque No. Amount Drawn on Dated
733978 3,00,000/- Oriental Bank of 25-6-2009
Commerce
733979 3,00,000/ --------- do ---------- 25-6-2009
733980 3,00,000/ --------- do ---------- 25-6-2009
733981 3,00,000/ --------- do ---------- 25-6-2009
733982 3,00,000/ --------- do ---------- 25-6-2009
6. Learned counsel for the plaintiff submits that in addition to the above five
post dated cheques defendant no.2 also sent one account payee cheque in
the sum of Rs.3.00 lakhs to the plaintiff on account of part payment
towards the other transaction of the friendly loan amount advanced by the
CS (OS)249/2010 Page 3 of 14
plaintiff firm for Rs.5.00 lakhs on 29.12.2008 to the defendants. All the
aforesaid cheques were dishonoured due to payment stopped. Counsel
further submits that on 3.7.2009 the husband of the plaintiff and other
members received a notice dated 30.6.2009 from the counsel of defendant
no.2. As per this legal notice undated cheques were handed over to the
plaintiff towards financial help advanced to the defendants and not
towards the payment of any dues. The family members of the plaintiff
also received a phone call from ASI Shiv Nath from Vijay Nagar Police
Station, Amritsar, to reach the Police Station. Counsel further submits that
on 4.7.2009 the family members of the plaintiff were informed by the
Police officials that defendant no.2 had lodged a complaint against
plaintiff alleging forgery with regard to the aforesaid blank cheques and
for misusing the said cheques. Counsel next submits that under the threat
of arrest and being coerced, the plaintiff's family was forced to sign
certain blank papers. Subsequently, the plaintiff was informed by the bank
that the cheques, in question, have been taken by the ASI on the
complaint filed by defendants. Plaintiff has based the present suit on the
invoices.
7. Learned counsel for the defendants submits that the suit filed by the
plaintiff is misconceived and defendants are entitled for unconditional
leave on account of the fact that the defendants have raised various triable
issues, a strong defence and defendant is likely to succeed. Counsel has
strongly urged before this court that the invoices, sought to be relied upon
by the plaintiff, are forged and fabricated documents as no goods were
ever transported by the plaintiff to the defendant, the lorry receipts are
also procured and the post dated cheques, sought to be relied upon by the
plaintiff, were only handed over to the plaintiff at the request of the
plaintiff for financial help. Counsel further submits that the defendants
CS (OS)249/2010 Page 4 of 14
have complained to the Sale Tax Department that the plaintiff is alleged to
have transported certain chemicals, which were never in existence. It is
also contended that the sales tax which has been deducted was not
deposited and even on this ground alone defendants would be entitled to
leave to defend.
8. In support of his argument, learned counsel for the defendants has relied
upon Inderjeet Kaur v. Nirpal Singh, reported at (2001) 1 SCC 706, more
particularly para 14, relevant portion of which reads as under:
"14. This Court in Charan Dass Duggal v. Brahma Nand, reported
at (1983) 1 SCC 301 ..............
............
In the same judgment, in para 7 it is further observed:-
7. The genesis of our procedural laws is to be traced to
principles of natural justice, the principal amongst them
being that no one shall suffer civil or evil or pecuniary
consequence at his back without giving him an adequate and
effective opportunity to participate to disprove the case
against him and provide his own case. Summary procedure
does not clothe an authority with power to enjoy summary
dismissal. Undoubtedly wholly frivolous defence may not
entitle a person leave to defend. But equally a triable issue
raised, enjoins a duty to grant leave. Maybe in the end the
defence may fail. It is necessary to bear in mind that when
leave to defend is refused the party seeking leave is denied an
opportunity to test the truth of the averments of the opposite
party by cross- examination and rival affidavits may not
furnish reliable evidence for concluding the point one way or
the other. It is not for a moment suggested that leave to
defend must be granted on mere asking but it is equally
improper to refuse to grant leave though triable issues are
raised and the controversy can be properly adjudicated after
ascertainment of truth through cross-examination of
witnesses who have filed their affidavits. Burden is on the
landlord to prove his requirements and his assertion is
required to be tested more so when it is shown that for long
he is staying outside Delhi, that he has a building albeit
standing in the names of his sons and daughters where he is
staying and at which place he receives his normal
correspondence. If in such a situation one can say that a
triable issue is not raised, one is at a loss to find out where,
when and in what circumstances such an issue would arise.
We are, therefore, satisfied that this is a case in which triable
issues were raised and both the learned Rent Controller and
the High Court were in error in refusing to grant the leave."
9. Counsel for the defendant has further relied upon John Impex (P) Ltd. v.
Surinder Singh and Others, reported at (2003) 9 SCC 176, more
particularly on a part of paragraph 4, which reads as under:
"......... At this stage neither evidence is to be weighed nor looked
into. The purpose of introducing a provision like leave to defend, is
only to find out frivolous, uncontestable cases at the initial stage,
not to eliminate other class of cases which require adjudication
after contest. In other words if there be no conceivable contest
possible the litigation has to be nipped in the bud. In the present
case we find that contest of the ownership of the landlord as such is
seriously challenged."
10. Counsel for the defendants has also relied upon M/s Mechalec Engineers
& Manufacturers v. M/s Basic Equipment Corporation, reported at AIR
1977 Supreme Court 577, more particularly para 8, which reads as under:
"8. In Smt. Kiranmoyee Dassi and Anr. v. Dr. J. Chatterjee 49
C.W.N. 246 , Das. J., after a comprehensive review of authorities
on the subject, stated the principles applicable to cases covered by
order 37 C.P.C. in the form of the following propositions (at p.
253):
(a) If the Defendant satisfies 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 has a defence, yet, shews 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."
11. Counsel has next relied upon M/s Sunil Enterprises and Another v. SBI
Commercial and International Bank Ltd., reported at AIR 1998 Supreme
Court 2317, more particularly para 3, which reads as under:
"In this appeal it is contended that what should be examined at the
stage of grant of leave to defend is whether there was a real or a
snam defence and whether the facts alleged by the appellants if
established would be a good defence and the trial court should go
into the question whether the facts alleged were true or not, as that
situation would arise only after leave was granted and at the trial.
That a condition as to security could be imposed if the Court was of
the opinion that the defence was out forward with a view to prolong
this suit."
12. Counsel has also relied upon Ram Raj Ahir v. Hirdaya Narain Rai,
reported at AIR 1982 ALL.L.J. 1435, more particularly para 8, which
reads as under:
"8. The first question which necessarily has to be decided in a
case like the present is whether in fact, the amount alleged to have
been borrowed by the defendant was so borrowed. If a finding on
this question is against the plaintiff, who stakes a claim to that
effect, it is obvious that the mere fact that the signature or thumb
marks of the defendant is found to be present on a document,
purporting to be a sarkhat, not enough to enable the plaintiff to
obtain a decree for realization of that amount from the defendant. In
Chandika v. Sukhnandan (1981 All.L.J. 19) : (air 1981 All 312) I
said in para 5 of the report) that:
".... Eventually, therefore, the plaintiff has failed to establish
to the satisfaction of the final court of fact that the transaction
of loan as evidenced by the pronote in question actually took
place. In these circumstances, in my opinion, the lower
appellate court was justified in dismissing the plaintiff's
suit."
13. The main thrust of the argument of learned counsel for the defendants is
that the defence, which has been raised by the plaintiff, can only be tested
through trial and unless and until leave is granted and the matter is set
down for trial the truth would not be unearthed and the defendants should
be given a fair opportunity to defend their case, as per the law laid down
by the Apex Court and relied upon by the defendant.
14. Strong reliance has also been placed by counsel for the defendant on the
two affidavits, which have been filed on record from the transport
company to show that the vehicle used by the plaintiff was not available
on the said dates and no chemicals were transported at the instance of the
plaintiff to the godown of the defendants. Reliance has also been placed
on the complaint to the Sales Tax Department.
15. I have heard counsel for the parties and carefully considered their rival
submissions. The first submission of counsel for the defendant is that the
present suit has been filed with mala fide motives and intentions, the
plaintiff has approached this court with unclean hands and thus the suit is
liable to be rejected. Counsel for the defendant is unable to point out
either the malafide motive or the material which has been suppressed
from this Court by the plaintiff and thus the submission made, has no
force and the same is rejected.
16. The Apex Court in the case of M/s.Mechalee Engineers &
Manufacturers (supra) has drawn up the parameters to be considered by
the court while dealing with the application for leave to defend. The Apex
Court has repeatedly held that in case the defendant is able to raise a
plausible defence or there is a likelihood of the defendant succeeding in
trial, unconditional leave should be granted. However, in case the Court
is satisfied that the defence, sought to be raised, is of such a nature that it
can prolong the litigation, the Court may either fix a schedule for early
disposal of the matter or even grant conditional leave to defend by
directing defendant to deposit a security. In case the defendant has no
defence or the defence is illusory, sham or practically moonshine then the
plaintiff is entitled to a decree.
17. The triable issue, which is sought to be raised by the defendant, must first
be decided to see as to whether the defence and the triable issues are sham
and moonshine or as to whether they disclose a plausible defence. The
first submission of learned counsel for the defendant is that the two
invoices on which the present suit is based, are forged and fabricated.
Secondly, no goods were transported to the godown of the defendant and
thirdly, the lorry receipts are unreliable which is evident from the affidavit
placed on record of the lorry owner. Soon after the cheques were
deposited by the plaintiff, the defendants admittedly issued a
communication to The Excise & Taxation Commissioner, Bhupindra
Road, Patialia, which is reproduced below:
"To,
The Excise & Taxation Commissioner,
Bhupindra Road,
Patialia.
Sub. Misuse of our TIN Number 03141152045 in the name of
Shori Lal Chemicals, 4, Kashmir Plaza, Batala Road,
Amritsar.
Dear Sir,
It has come to my notice that someone has been misusing my
TIN number, mentioned above, for the purpose of evasion of Tax.
According to my information some one had imported chemicals
worth Rs.49,19,200/-, misusing our TIN Number, as per the
following details:
Date Bill ICC Supplier Vehicle Vehicle
Number number
16.01.09 20 23,40,000 Banur Sandeep HR-37-
Chemical B-3029
Corporation,
Delhi
18.01.09 21 25,79,200 Shamboo Sandeep PB-11-
Chemical F-9383
Corporation,
Delhi
Sir, We had neither placed any order nor purchased any such goods
from anyone. Someone has misused our TIN Number for the
purpose of evasion of tax. We pray that a enquiry may be
conducted with immediate effect to find out the identity of the real
importer and suitable punitive action be taken against the culprits.
With Best regards,
For Shori Lal Chemicals
Sd/-
Vinay Aggarwal
(Proprietor)
3-07-09"
18. The purpose of extracting this communication is that according to the
plaintiff the goods reached the defendants on 17.1.2009 and 19.1.2009.
The cheques handed over by the defendants were deposited by the
plaintiff on 30.6.2009. Till the cheques were deposited there was no
occasion for the defendants to take any action against the plaintiff but the
moment the cheques were deposited at the first opportunity available, the
defendants made a police complaint and also issued a communication to
the Excise and Taxation Commissioner and obtained two affidavits both
dated 4.7.2009 from the lorry owners. The communications addressed to
the Excise and Taxation Commissioner clearly spells out the date of each
invoice, the bill number, the precise value, the name of the supplier and
the vehicle number. Similar details have also been provided in the
affidavits of the owner of the tempo as also owner of both the vehicles,
who have ferried the goods. The affidavits have been placed on record.
There is neither any explanation rendered in the application for leave to
defend, nor by counsel for the defendant during the course of hearing, as
to how and on what basis it came to the knowledge of the defendant that
the goods had been sent to the defendants and the details of the bill
numbers, lorry number and invoice number, in case he had actually not
received the same. In the absence of any explanation at all, there can only
be one conclusion that the goods were received by the defendants with
copies of invoices, and it is the basis of these invoices along with the
receipt of the transport company that the defendant has obtained false
affidavits from the owners of the vehicle.
19. It also shows that the defendants were fully aware about all the particulars
which match with the original documents, which have been placed on
record, all of which would only show that the defence raised by the
defendants that, the invoices and the receipts of the transport company are
forged and fabricated, cannot be accepted, and are without any force. I
do not consider it to be a plausible defence. The defence sought to be
raised by the defendant is dishonest. By writing the letter to the Sales-Tax
Commissioner and by placing two affidavits, the defendant has fallen into
his own trap. The defendants have not only refuted the claim of the
plaintiff but it seems that defendants have also exercised its influence over
the local police by filing a complaint against the plaintiff with the Police
Station at Amritsar. The family of the complainant was called, which is
not disputed, and it seems that the efforts were made to resolve the matter
by pressuring the plaintiff, but no resolution took place. The stand of the
plaintiff that goods were supplied, is further fortified by the fact that the
plaintiff has deposited Rs.90,000/- and Rs.99,200/- respectively with the
sales Tax department in respect to the goods supplied. Sales-tax returns
have been filed to show that the Central Sales Tax Department, CST of
Rs.90,000/- stands deposited with the Sales Tax Department with respect
to the first invoice and Rs.99,200/- also stands deposited with regard to
the second invoice.
20. The plaintiff has also placed on record the notice received from SSP
Amritsar to SHO, Model Town, Delhi, by which the plaintiffs were
directed to attend the office of SP City at Amritsar on 10.7.2009 and
24.7.2009.
21. Applying the law laid down by the Supreme Court to the facts of this case
would show that the defence raised by the defendant is illusory, sham and
practically moonshine. The present case is squarely covered by clause (d)
of the principles laid down by the Supreme Court in the case of M/s
Mechalec Engineers & Manufacturers (supra), which has been extracted
above. While the plaintiff has been able to establish that goods were
supplied to the defendants by placing original invoices on record, the
plaintiff has also been able to establish that for the goods supplied the
defendants had issued five post dated cheques, which were returned due to
payment stopped. Plaintiff has placed on record the Sales-tax return to
show sales as per the two invoices which stand deposited. Plaintiff has
also placed on record the invoice containing full details of goods supplied,
receipt of the transporter and signed statement of account. The defendants
have only raised an illusory defence that they have not received the goods.
The weak and false defence has been exposed by the letter written by the
defendant to the Sales-tax Department soon after the cheques were
deposited by the defendant, which in my view has let the cat out of the
bag. Further by filing a police complaint and ensuring the presence of the
family of the plaintiff, who is a lady, the defendant by using his influence
has attempted to browbeat and force the plaintiff into a settlement. The
conduct of the defendant is far from fair. The judgments sought to be
relied upon by the defendants are not applicable to the facts of this case.
22. In my view the application for leave to defend does not disclose any
triable issue, nor has any plausible defence been raised and granting leave
in the facts of the present case would only encourage unscrupulous
litigants like the present defendant to manufacture false affidavits, raise
false plea and delay the matters. Such matters must be nipped in the bud.
The application for leave to defend is without any merit and the defence
sought to be raised by the defendant is sham and moonshine and thus the
defendant is not entitled to leave to defend. Accordingly, the application
for leave to defend is dismissed.
CS(OS) 249/2010
23. In view of the fact that the application for leave to defend is rejected, the
present suit is decreed. Plaintiff is entitled to the decree as prayed for
together with interest @18% from the date of passing of the decree to the
date of realization with costs. Decree sheet be drawn up accordingly.
G.S.SISTANI, J
APRIL 26, 2012
msr
