Neeraj Kumar vs Daryao Singh Khatri
2012 Latest Caselaw 466 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                              RFA No. 698/2003

%                                                          23rd January, 2012

         NEERAJ KUMAR                                             ..... Appellant
                                    Through :   Mr. Kuldeep Balhara, Advocate
                                                with appellant in person.

                      versus

         DARYAO SINGH KHATRI                                    ..... Respondent


CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1.       The challenge by means of this Regular First Appeal (RFA) filed

under Section 96 of Code of Civil Procedure, 1908 (CPC) is to the impugned

judgment of the trial Court dated 19.5.2003 decreeing the suit filed by the

respondent/plaintiff under Order 37 CPC for a sum of `3 lakhs with interest

@ 24% per annum pendente lite and future.

2.       The suit has been decreed inasmuch as it was held that the application

for leave to defend was not filed within the prescribed period of limitation

RFA No.698/2003                                                      Page 1 of 5
 after service of summons for judgment, though, an application for leave to

defend, existed on record much earlier even to service of summons for

judgment.

3.    The brief facts of the case are that respondent/plaintiff filed a suit for

recovery of `3 lakhs with interest @ 24% per annum from 2.7.2000 relying

upon a promissory note, claimed to have been executed by the

appellant/defendant. The payment of the amount under the promissory note

is admittedly in cash and there is no proof except promissory note of the

loan being for `3 lakhs and interest payable @ 24% per annum.

4.    The trial Court refers to the fact that service of the summons for

judgment in the suit was on 6.3.2003 and, therefore, the application for leave

to defend should have been filed thereafter within ten days.                The

appellant/defendant had already filed the application for leave to defend

which was on the record of the trial Court even before service of the

summons for judgment on 6.3.2003. This application for leave to defend is

dated 13.1.2003 which was admittedly on record.

5.    In my opinion, the trial Court has unnecessarily taken a hyper-

technical approach. No doubt, a leave to defend application has to be filed

within ten days from the service of summons for judgment, however, the
RFA No.698/2003                                                     Page 2 of 5
 same cannot mean that the defendant, who acting in caution filed an

application for leave to defend earlier, such earlier application cannot be

looked into by the Court. Obviously, an application filed after ten days

cannot be looked into, but it cannot be the law that the application filed even

before service of summons for judgment cannot be taken as an application

for leave to defend. The only logic of requiring an application for leave to

defend to be filed within ten days is not to delay the proceedings under

Order 37 CPC in the suit, a foundation of which provision is reasonable

expedition in the disposal of the suit. That object of avoiding delay in fact is

not frustrated by a leave to defend application which is filed earlier/prior to

the service of the summons for judgment in the suit.

6.    Learned counsel for the appellant has argued that the appellant has a

very strong case on merits, inasmuch as, the loan was only for `75,000/- and

which amount was returned, because the three cheques giving security of the

amount of `75,000/- have been returned to the appellant/defendant,

however, the respondent/plaintiff failed to return the promissory note which

was taken in blank because the interest was not paid.

      It is also argued that the rate of interest of 24% is exorbitant and

illegal in view of a Division Bench judgment in the case titled as Pandit
RFA No.698/2003                                                     Page 3 of 5
 Munshi Ram Associates v. D.D.A, 2010(9) AD (Delhi) 313, which held that

even the pre-suit rate of interest, if highly excessive, is against public policy.

7.    Learned counsel for the appellant states that his client to show bona

fides is ready to deposit a total of `3 lakhs in the Court. Out of this principal

amount, an amount of `1,98,000/- has already been deposited in this Court

pursuant to orders passed in this appeal. The balance amount of `1,02,000/-

is agreed to be deposited by the appellant in this Court within a period of six

weeks from today. The amount already deposited and the amount which is

now to be deposited by the appellant will abide the orders which would be

passed by the trial Court in the application for leave to defend or as per the

final judgment in the case, as the case may be. The Registry will put the

amount of `1,02,000/- which will be deposited by the appellant, in a fixed

deposit so as to earn maximum rate of interest.

8.    The present appeal is allowed.          The impugned judgment dated

19.5.2003 is set aside. The trial Court will now hear and dispose of the

application   for   leave    to   defend   dated    13.1.2003     filed   by   the

appellant/defendant in accordance with law. Parties are left to bear their own

costs. Trial Court record be sent back.

9.    Appellant to appear before the District and Sessions Judge, Delhi on
RFA No.698/2003                                                       Page 4 of 5
 29th February, 2012, and on which date the District and Sessions Judge will

mark the suit for disposal to a competent Court in accordance with law. It is

clarified that the trial Court will issue notice to the respondent/plaintiff

before proceeding to hear and dispose of the leave to defend application

dated 13.1.2003 filed by the appellant/defendant.




                                            VALMIKI J. MEHTA, J.

JANUARY 23, 2012/AK