Jaspal Singh vs Shruti Fastners Pvt. Ltd.& Anr
2012 Latest Caselaw 7050 Del

       --
       *      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                        Date of Decision: 10.12.2012
+      CS(OS) No. 767/2010
       GURDEV SINGH                                        ..... Plaintiff
                              Through:         Ms. Kusum Sanchi, Adv.

                     versus

       SHRUTI FASTNERS PVT. LTD.& ANR        .....Defendants
                    Through:       Mr. J.P. Sengh, Sr. Adv.with Mr.
                                               Durgesh, Ms. Rama Yadav and Ms.
                                               Ankita Gupta, Advocates
And
+      CS(OS) No. 768/2010
       JASPAL SINGH                                        ..... Plaintiff
                              Through:         Ms. Kusum Sanchi, Adv.

                     versus
       SHRUTI FASTNERS PVT. LTD.& ANR        .....Defendants
                    Through:       Mr. J.P. Sengh, Sr. Adv.with Mr.
                                               Durgesh, Ms. Rama Yadav and Ms.
                                               Ankita Gupta, Advocates
CORAM:
HON'BLE MR. JUSTICE V.K.JAIN

                              JUDGMENT

V.K.JAIN, J. (ORAL) IA No.723/2012 (under Order XXXVII Rule 3(5) Code of Civil Procedure for leave to defend by defendants in CS(OS) No. 767/2010 And

IA No.541/2012 (under Order XXXVII Rule 3(5) Code of Civil Procedure for leave to defend by defendants in CS(OS) No. 768/2010

1. The plaintiff in CS(OS) No.767/2010 Mr. Gurdev Singh as also the plaintiff

in CS(OS) No.768/2010 namely Mr. Jaspal Singh were employed with the

defendant no.1 company till 31.12.2006. The plaintiffs claim that even after leaving

the employment of defendant no.1, they as per their agreement with defendant no.1

were entitled to increase at the rate of one percent of the sale made by the

defendant no.1. The case of these plaintiffs is that besides salary, they were also

entitled to commission at the rate of one percent of the total sale of the defendant

no.1 company. According to them, though the salary up to December, 2006 was

paid to them, the commission remained unpaid for the period from 1.4.2002 to

31.3.2008. It is alleged in the plaint that the account between the parties were

finally settled on 22.5.2008 whereby a sum of Rs.67,54,554/- become payable to

them. The amount of commission payable to them, according to the plaintiffs, was

rounded off to Rs.65,00,000/- and after adjusting the advance payment of

Rs.9,75,000/-, which they had already received, the balance amount which

remained payable to them was worked out to Rs.55,25,000/-. It is further alleged

that defendant no.1 issued five post dated cheques of Rs.11,05,000/- each, three in

the name of Mr. Jaspal Singh and two in the name of Mr. Gurdev Singh. The

cheques when presented to the bank were returned with endorsement 'account

closed'. Out of these five cheques, one was drawn on UTI Bank, Green Park

Branch and one was drawn on Vaish Cooperative New Bank. The plaintiffs have

now sought recovery of the amount of these above referred five cheques along with

interest @ 24% per annum. The principal amount claimed in the suit filed by Mr.

Gurdev Singh is Rs.22,10,000/- whereas the principal amount claimed by Mr.

Jaspal Singh is Rs.33,15,000/-.

2. In the applications for leave to contest the suits, the defendants have, inter

alia, alleged that (i) no commission was ever agreed to be paid either to Mr.

Gurdev Singh or to Mr. Jaspal Singh, (ii) The signatures of the defendant no.2 on

the cheques have been forged, (iii) the cheque book from which four cheques of

UTI Bank have been taken was issued on 10.12.2004 whereas the cheque book

from which cheque of Vaish Cooperative New Bank has been taken was issued on

25.2.2003, (iv) as many as 66 cheque books from Vaish Cooperative Bank were

issued after issue of the cheque book from which the cheque in question was taken

out and 60 cheque books of 50 leaves each of UTI Bank were issued after the

cheque book from which four cheques of UTI Bank were taken was issued and

those cheques books were consumed by defendant no.1 company, (v) the bank

account with UTI Bank was closed on 13.2.2007 whereas the account with Vaish

Cooperative Bank was closed on 31.7.2004. This is also the case of the defendants

that in fact the plaintiffs had taken personal loan from defendant no.2, which they

are yet to pay and the suit filed by the defendant no.2 against them for recovery of

the amount of those loans and interest thereon are pending in District Court. It is

also pointed out in the applications that the suit filed by defendants no.2 were

instituted prior to filing of these suits.

3. In M/s Mechalec Engineers and Manufactures v. M/s Basic Equipment

Corporation (1977) 1 SCR 1060, the Supreme Court set out the following

principles:-

"(a) If the defendant satisfies the Court that he has a good defense 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 friable issue indicating that he has a fair or bona fide or reasonable defense although not a positively good defense 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 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 defense 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 defense or the defense 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 defense or the defense 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 defense 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 defense."

In these circumstances, the defence taken in the application does not appear

to be bona fide and appears to be sham and illusory.

4. There is no documentary evidence of there being any agreement between the

parties with respect to payment of commission except the settlement agreement

dated 22.5.2008 which the defendants claim to be a forged document. The learned

senior counsel appearing for the defendants states that their case is that the

purported signatures of defendant no.2 Mrs. Asha Rani on the Settlement dated

22.5.2008 are forged. Therefore, the genuineness or otherwise of the purported

signatures of defendant no.2 on the settlement is required to be gone into during

trial and this itself is an adequate ground to grant unconditional leave to the

defendants.

5. The case of the plaintiffs is that they were entitled to commission on the

entire sale made by defendant no.1. This is not their case that they were entitled to

commission only on the sales made from their efforts. It seems unusual that an

employer should be paying commission to the employees in addition to salary even

for the sale in which no contribution is made by them. The second material aspect

in this regard is that according to the plaintiff they were entitled to commission

even after they had left the employment of defendant no.1. I fail to appreciate why

defendant no.1 should agree to pay any commission to the plaintiffs even in respect

of the sale made after they had left its employment. Yet another material

circumstance in this regard is that according to the plaintiffs, they were not paid

commission with effect from 2002. There is no explanation as to why they did not

insist upon commission being paid to them when they left the employment of

defendant no.1 company in December, 2006.

6. A perusal of the certificate issued by Axis Bank, which was earlier known

as UTI Bank, shows that the cheques bearing number 021474, 021448, 021499 and

021500 were issued to defendant no.1 on 10.12.2004 and thereafter as many as 60

cheque books of 50 leaves each were issued to the said company. The certificate

issued by Vaish Cooperative Bank would show that the cheque bearing number

773951 to 773975 were issued to defendant no.1 on 25.2.2003 and thereafter as

many as 66 cheque books of 25 leaves each were issued in the account of defendant

no.1. It is also certified by the bank that the account with Vaish Cooperative Bank

was closed on 31.7.2004 whereas account with UTI Bank was closed on 13.2.2007.

Since the plaintiffs were working with defendant no.1 till December 2006, it is

difficult to accept that they would be unaware of the account with Vaish

Cooperative Bank having been closed. Naturally, if they were aware of the account

with Vaish Cooperative Bank having been closed on 31.7.2004, they would not

accept the cheque of the said bank on 22.5.2008. The learned counsel for the

plaintiffs states that the plaintiffs were not posted with Account Section and,

therefore, they were not aware of the account with the said banks having been

closed. I, however, find it difficult to accept that despite working in the company

for more than four years, they were unaware of the closure of the accounts with

Vaish Cooperative Bank. Be that as it may, what is more important is that the

cheques on which the plaintiffs are relying were issued by the bank years before

they purport to have been issued by the defendants. It is difficult to accept that the

defendants had preserved these cheques from the time they were issued, so that

they could be used in future to cheat the plaintiffs by issuing other cheques of a

closed bank account in the year 2008. Since the plaintiffs were still working with

the defendants when the other cheques contained in the cheque books from which

these cheques have been taken, were used by the defendants and there was no

dispute between the parties at that time, there could be no reason for the defendants

to retain those blank cheques with them. It is rather difficult to accept that these

cheques were not deliberately used so that they could be later on issued to the

plaintiffs. The case of the defendants is that since the plaintiffs were in their

employment, the cheque books duly signed by the defendant used to be in their

custody for carrying out transaction on behalf of defendant no.1 company and since

there were umpteen transactions made by the defendant no.1 company during the

period the plaintiffs were in its employment, it was quite possible that they

committed theft of these cheques without knowledge of the management and,

thereafter, prepared cheques in their own favour.

7. During arguments, I specifically asked the learned counsel for the plaintiffs

as to who had filled the cheques and who had written the Settlement Agreement

dated 22.5.2008. The learned counsel on instructions from one of the plaintiffs,

who was present in the Court, stated that all the cheques were filled and the

Settlement Agreement dated 22.5.2008 was written by the Accountant of defendant

no.1 company Mr. Mahmood Khan, who has since left the employment of

defendant no.1. However, no affidavit of Mr. Mahmood Khan, has been filed by

the plaintiffs in support of their assertions.

8. For the reasons stated hereinabove, I am of the view that the averments made

in the applications disclose triable issues, adjudication of which can be possible

only after recording evidence. The defendants are, therefore, entitled to

unconditional leave to contest the suit. Ordered accordingly. The observations

made in this order will not affect the decision of the suits on merit.

The applications stands disposed of.

CS(OS) No. 767/2010 & IA 5206/2010 (under Order 39 Rule 5 CPC) And CS(OS) No.768/2010 & IA No.5210/2010 (under Order 38 Rule 5 CPC) Written statement be filed within four weeks. Replication be filed within

four weeks thereafter.

List before the Joint Registrar on 31.1.2013 for admission/denial of

documents.

The matter be listed before the Court on 22.3.2013 for framing of issues and

disposal of IAs.

V.K. JAIN, J

DECEMBER 10, 2012/rd