Sh. Rinku Aggarwal vs Smt. Kanta Kumari
2012 Latest Caselaw 2777 Del

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*IN THE HIGH COURT OF DELHI AT NEW DELHI

+      IA No. 7089/2010 (u/O 37 R 3(5) r/w Sec. 151 of the Code
       of Civil Procedure, 1908) in CS(OS) 1912/2006

                                         Decided on 27th April, 2012

       SH. RINKU AGGARWAL                        ..... Plaintiff
                     Through         :Mr. Manu Bansal and Mr.
                                     Ankit Jain, Advs.

                   versus

       SMT. KANTA KUMARI                        ..... Defendant
                    Through          :

Coram:

HON'BLE MR. JUSTICE A.K. PATHAK

A.K. PATHAK, J. (ORAL)

1. Plaintiff has filed this suit under Order 37 of the Code of

Civil Procedure, 1908 ("CPC", for short) against the defendant for

recovery of `21 lacs together with future interest @ 18% per

annum and costs.

2. After service of summons under Order 37 CPC, defendant

entered appearance within the prescribed period. Thereafter,

summons for judgment were issued. Upon service of summons,

defendant has filed this application under Order 37 Rule 3(5) CPC,

seeking „leave to defend‟ the suit.

3. Perusal of record shows that the defendant has been avoiding

to argue the matter for quite some time. On 29th August, 2011

matter had to be adjourned as counsel for the defendant was stated

to be down with viral fever. On 27th February, 2012 also

adjournment was sought on the ground that counsel was unwell.

Again on 7th March, 2012 adjournment was taken by the defendant

on the ground of illness of the counsel. Again on 26th March, 2012

adjournment was taken by the defendant on the ground that counsel

was busy in Supreme Court. It was made clear in the order dated

26th March, 2012 that in case matter is not argued by the defendant,

appropriate orders would be passed. Today counsel for the

defendant submits that he would be seeking discharge from the

brief. I am convinced that defendant is only interested in dragging

on the matter. Adjournment is declined I proceed to dispose of the

matter after hearing counsel for the plaintiff and perusing the

record.

4. Case of the plaintiff is that vide an Agreement to Sell dated

25th March, 2006 (hereinafter referred to as "Agreement")

defendant had agreed to sell a plot of land bearing No. C-7, Sector

Swarn Nagri, Greater Noida, Gautam Budh Nagar (hereinafter

referred to as "suit property") to the plaintiff for a total sale

consideration of `67,68,000/- (Rupees Sixty Seven Lacs and Sixty

Eight Thousand Only). `15,00,000/- (Rupees Fifteen Lacs Only)

was paid by the plaintiff to defendant towards advance money.

`10,00,000/- (Rupees Ten Lacs Only) was paid in cash; whereas

`5,00,000/- (Rupees Five Lacs Only) was paid through a cheque

bearing no. 099541 drawn on Urban Co-operative Bank, Suraj Pur,

Greater Noida. Balance sale consideration of `52,68,000/- (Rupees

Fifty Two Lacs Sixty Eight Thousand Only) was agreed to be paid

on or before 4th May, 2006. Plaintiff arranged this amount,

approached the defendant on 2nd May, 2006 and requested her to

execute the documents. Defendant represented that she wanted to

alter the terms of agreement as she wanted higher price for the suit

property, inasmuch as, she misbehaved with the plaintiff. Plaintiff

filed a complaint with Police Station Seema Puri in this regard. On

4th May, 2006 defendant called the plaintiff at her residence and

requested him to grant some more time to her for completing the

transaction. On 9th May, 2006 plaintiff again approached the

defendant with remaining amount of `52,68,000/- (Rupees Fifty

Two Lacs and Sixty Eight Thousand Only) but defendant showed

her reluctance. She requested plaintiff to wait till 15th May, 2006

and thereafter upto 19th May, 2006. On 19th May, 2006 plaintiff

finally asked the defendant to make up her mind as to whether she

was willing to sell the suit property or not and requested her to fix

a date for completing the formalities of sale. Defendant agreed to

complete the sale transaction by 15th June, 2006. She further

agreed to hand over possession by 15th June, 2006 failing which

she undertook to pay `22 lacs, that is, `15 lacs advance plus `7

lacs as penalty to the plaintiff. An agreement to this effect was

executed on 19th May, 2006. Defendant failed to fulfill her

promise, thus, issued four postdated cheques totaling to `22 lacs,

on 15th June, 2006, details whereof are as under:-

S.No. Cheque No. dt.                   Amount        Drawn on

1.      402914       19.6.2006         `100000/-     Corporation
                                                     Bank, Dilshad
                                                     Garden, Delhi

2.     402919        25.6.2006         `400000/-      - Do-

3.     402920       5.7.2006           `1000000/-      - Do-

4.     402910       25.7.2006          `700000/-      -Do-

First cheque was encashed on presentation. However, remaining

cheques, on presentation, were returned dishonored with the

remarks "Insufficient Funds".

5. Plaintiff served a legal notice dated 11th August, 2006 on the

defendant through his counsel, calling upon her to make payment

within the statutory period. But defendant did not make any

payment. It is stated in the plaint that no relief which does not fall

within the ambit of Order 37 CPC has been claimed in the suit.

6. In her „leave to defend‟ application, defendant has not

denied execution of Agreement to Sell as also receipt of earnest

money. It has also not been denied that the deal was to be

concluded on or before 4th May, 2006. Defendant has alleged that

the plaintiff has failed to pay the balance sale consideration on or

before 4th May, 2006. On 4th May, 2006 one Mr. Ankur Mittal and

Mr. Arora visited her residence and sought extension of time,

inasmuch, as showed a photocopy of agreement dated 25th March,

2006 signed by the defendant. Defendant agreed to extend the date

of payment of balance sale consideration till 9th May, 2006. The

above named two persons obtained endorsement and signatures of

defendant on the photocopy of agreement, to this effect. Even on

9th May, 2006 balance sale consideration was not paid, instead

plaintiff took extension of time till 15th May, 2006. Balance sale

consideration was not tendered even on 15th May, 2006. At the

request of plaintiff, time was further extended by the defendant till

19th May, 2006. In the morning of 19th May, 2006, plaintiff along

with five other persons including Mr. Ankur Mittal came to the

house of defendant and sought further extension of time to make

payment. They represented that balance amount would positively

be paid on or before 15th June, 2006. However, they wanted

assurance from the defendant that on tendering of balance sale

consideration defendant would hand over possession of the suit

property and in case, she fails to do so she would pay `7 lacs. On

the basis of this understanding, a fresh agreement was executed on

the stamp paper of `100/- which was signed by the defendant and

plaintiff. Plaintiff along with said five persons again came to

defendant‟s residence, in the evening of 19th May, 2006 itself and

forced her to sign four postdated cheques amounting to `22 lacs by

extending threats. They assured that cheques were being taken

towards security so as to see that defendant hands over possession

of the plot to them by 15th June, 2006. Defendant was assured that

cheques will not be encashed. Even on 15th June, 2006 plaintiff

failed to pay the balance sale consideration, thus, earnest money

stood forfeited in terms of the agreement. However, plaintiff got

encashed the cheque bearing No. 402914 dated 19th June, 2006 for

`1 lac, in the meanwhile. He also took `1 lac from the defendant

in cash on 7th July, 2006, on the pretext that his wife was unwell

and was hospitalized. In nutshell, defence of the defendant is that

plaintiff had failed to fulfill his part of obligation, as contained in

Agreement to Sell and did not tender balance sale consideration,

resulting in forfeiture of earnest money. Cheques were given

towards security, regarding handing over of the possession of suit

property, on receipt of balance sale consideration. It is further

alleged that a criminal complaint being complaint case no.

503/2006 was filed by the plaintiff but has been rejected by the

Additional Chief Metropolitan Magistrate-1 (East) on 27th August,

2009 since the plaintiff admitted in the said case that he did not

approach the defendant after 19th May, 2006 for making balance

payment and executing the Sale Deed. Whole case of the

defendant is that the cheques in question were taken by the plaintiff

from the defendant by exercising force and threat, inasmuch as,

cheques were issued towards security.

7. Before „leave to defend‟ can be granted to the defendant, she

has to satisfy the Court that she has a good defence to claim on

merits. Defendant has to raise triable issues indicating that she has

a fair or bona fide or reasonable defence though it may not be

positively a good defence. In case defendant discloses triable

issues by raising plausible and reasonable defence, she is entitled to

leave to defend the suit conditionally or unconditionally. However,

if defendant sets up an illusory or sham or vexatious defence, she

would not be entitled to „leave to defend‟ the suit. In Mechelec

Engineers & Manufacturers v. M/s. Basic Equipment Corporation

(1976) 4 SCC 687 Supreme Court quoted with approval a decision

of Calcutta High Court in Smt. Kiranmoyee Dassi v. Dr. J.

Chatterjee Das, J., AIR 1949 Cal 479 in the following terms:-

"24. (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 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 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."

8. In Milkhiram India (P.) Ltd. v. Chamanlal Bros., AIR 1965

SC 1698, Apex Court has held that if Court is of the opinion that a

case raises a triable issue, then leave to defend should ordinarily be

granted unconditionally. On the other hand, if the Court is of the

opinion that the defence raised is frivolous or false or sham, he

should refuse leave to defend altogether. Though no strait-jacket

formula can be formulated on the issue, however, Court may

entertain a genuine doubt whether the defence is genuine or sham

or whether, in other words it raises a triable issue or not. Such an

opinion is to be formed by the Court from the pleadings and

affidavit of the parties placed before it.

9. In the backdrop of above settled legal position, if defence of

the defendant is considered in this case, same appears to be

frivolous, baseless, vexatious and moonshine. Defendant has

alleged that plaintiff had obtained cheques in question by

threatening her. However, it is also a fact that no complaint was

lodged by the defendant with the police authority that plaintiff had

forcibly taken cheques worth `22 lacs from her by pressurizing and

threatening her. Her this conduct is quite unnatural. No prudent

person would sit idle without taking any action in such

circumstances. Not only this, she did not even take any steps to

inform her bankers in this regard. One cheque has even been

encashed. Other cheques have been returned unpaid for the reason

"Insufficient Funds" and not on the ground of "stop payment".

That apart, defendant is not sure of her defence. On one hand she

has alleged that the cheques had been taken by extending threats;

on the other she has claimed that cheques were issued as security.

Not only this, defendant claims that plaintiff had taken `1 lac in

cash from her on 7th July, 2006, that is, after about 2 months on the

pretext that he needed money as his wife was hospitalized. Had

plaintiff obtained the cheques by exercising force and relations

between them were strained, defendant was not expected to pay `1

lac to the plaintiff. Accordingly, defence taken by her does not

appear to be plausible, in the facts and circumstances as narrated

hereinabove. Defence raised by the defendant in this case falls

within clause (d) of the principles culled out in Kiranmoyee Dassi

(supra), that is, if the defendant has no defence or the defence set

up is an 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.

10. Defence set up by the defendant, in my view, is baseless,

frivolous, moonshine and defendant is not entitled to leave to

defend the suit. Application is, thus, dismissed.

CS(OS) No. 1912/2006

11. Defendant has already been refused leave to defend the suit.

Thus, plaintiff is entitled to a decree of `21,00,000/- (Rupees

Twenty One Lacs Only). However, rate of interest claimed appears

to be on the higher side. In my view interest @ 9% would meet the

ends of justice.

12. Accordingly, a decree is passed in favour of the plaintiff

against the defendant in the sum of `21,00,000/- (Rupees Twenty

One Lacs Only) together with interest @ 9% per annum from the

date of filing of the suit till realization of decretal amount. Plaintiff

is also awarded costs of proceedings. Decree-sheet be drawn.

A.K. PATHAK, J.

APRIL 27, 2012 rb