Omaxe Limited vs Madhu Sudan Sharma And Ors.
2012 Latest Caselaw 4034 Del

*          IN THE HIGH COURT OF DELHI AT NEW DELHI

+                       CS(OS) 890/2008

                                           Date of Decision: 10th July, 2012

IN THE MATTER OF
OMAXE LIMITED                                             ..... Plaintiff
                        Through: Mr. Shalabh Singhal, Advocate

                  versus


MADHU SUDAN SHARMA AND ORS.                       ..... Defendants
                 Through: Mr. Nalin Tripathi, Advocate


CORAM
HON'BLE MS.JUSTICE HIMA KOHLI


HIMA KOHLI, J. (Oral)

1. Vide order dated 07.05.2010, the leave to defend application

filed by the defendants under Order 37 Rule 3(5) CPC and registered as

I.A.No.15502/2009 was conditionally allowed upon the defendant No.1

furnishing a bank guarantee for the principal cheque amount of `65 lacs

to the satisfaction of the Registrar General within six weeks.

2. Aggrieved by the aforesaid conditional leave to defend

granted to the defendant No.1, an intra-court appeal was preferred by

him, registered as FAO(OS) 551/2010. Vide order dated 27.09.2011, The

aforesaid appeal was disposed of by the Division Bench and while

upholding the impugned order dated 07.05.2010, the same was modified

only to the extent that instead of furnishing a bank guarantee to the tune

of `65 lacs, the defendant was called upon to furnish an alternative

solvent security to the satisfaction of the Registrar General within one

month from the date of passing of the said order, i.e., on or before

28.10.2011.

3. Counsel for the defendant No.1 states that the said defendant

has filed a copy of the sale deed of an immoveable property with a

valuation report on 14.12.2011.

4. The aforesaid documents are not on record. Counsel for the

defendants states that they have been filed in the appeal proceedings.

Counsel for the plaintiff denies having received copies of the aforesaid

documents and states that the aforesaid documents ought to have been

filed by the defendant No.1 in the suit proceedings. He submits that in

any case, the said documents were filed much beyond the timeline

prescribed by the Division Bench and therefore, could not be taken on

record. He further states that defendant No.1 is not serious as he has not

taken any step to pursue the matter and have the said documents

scrutinized to the satisfaction of the Registrar General, as directed by the

Division Bench.

5. Counsel for the defendant No.1 concedes the fact that the

sale deed offered as an alternative solvent security was neither filed

within the time granted by the Division Bench nor has the said defendant

approached the Division Bench for seeking extension of time or for

condonation of delay. He also concedes that though an application was

filed in the Registry alongwith the aforesaid documents for acceptance of

the title deeds of a property to the satisfaction of the Registrar General,

the same has not been pursued by the defendant.

6. In view of the aforesaid submissions, the sequence of events that

emerge are that vide order dated 7.5.2010, the leave to defend

application filed by defendant No.1 was allowed but only after putting him

to terms. In other words, defendant No.1 was granted conditional leave

to contest the suit upon his furnishing a bank guarantee for the principal

amount of `65 lacs only, to the satisfaction of the Registrar General of

this Court within a period of six weeks from the date of passing of the

order dated 7.5.2010. Admittedly, defendant no.1 did not comply with

the aforesaid order. On the next date of hearing, i.e., on 8.7.2010,

counsel for defendant No.1 sought further time of two weeks for moving

an appropriate application for seeking extension of time for furnishing the

bank guarantee in terms of the order dated 7.5.2010. The aforesaid

request made on behalf of defendant no.1 was acceded to, subject to

imposition of costs of `5,000/- on him.

7. On 12.7.2010, defendant No.1 filed an application(IA

No.11817/2010) for seeking extension of time to furnish the bank

guarantee. The aforesaid application was accompanied by an

application(IA No.11818/2010) for waiver of costs imposed on 8.7.2010.

However, on 22.12.2010, counsel for defendant No.1 submitted that he

did not wish to press the aforesaid applications and instead wanted to

seek appropriate relief from the Appellate Court. Both the applications

were accordingly dismissed, as not pressed. In January 2011, defendant

No.1 filed an application, registered as IA No.420/2011 requesting that

the matter be proceeded with, without insisting upon furnishing of the

bank guarantee, till the disposal of an appeal that had been preferred by

him. The court however did not find any merit in the said application and

observed that it was nothing but an attempt to seek review of the order

dated 7.5.2010 and accordingly the said application was disposed of.

8. Subsequently, the appeal preferred by defendant No.1 against

the order dated 7.5.2010 and 8.7.2010 registered as FAO(OS)

No.551/2010 was disposed of by the Division Bench vide order dated

27.9.2011, with the observation that the objective of the impugned order

requiring defendant No.1(appellant in the appeal) to furnish the bank

guarantee was to secure the amount in case a decree would be passed

against him. It was further observed that any alternative security would

also serve the same purpose and therefore, the order dated 7.5.2010 was

modified to the extent that the requirement of furnishing a bank

guarantee to the tune of `65 lacs was permitted to be substituted with

defendant No.1 furnishing an alternative solvent security to the

satisfaction of the Registrar of this Court for the said amount within one

month from the date of passing of the aforesaid order. The period of one

month granted by the Division Bench had expired on or around

28.10.2011.

9. Pertinently, till date, defendant No.1 has not placed on record

any documents to establish that he had taken any steps to furnish an

alternative solvent security within the stipulated time, in terms of the

order of the Division Bench. However, learned counsel for defendant no.1

submits that the aforesaid document along with a valuation report were

filed with an application in the appeal proceedings. It is rather surprising

that defendant No.1 chose to file the aforesaid documents in an appeal,

which stood disposed of vide order dated 27.9.2011 and more so, when

the Division Bench had only modified the order passed in the suit

proceedings by substituting the requirement of furnishing a security by

way of bank guarantee to an alternative solvent security.

10. It is, therefore, apparent that leave to defend granted to the

defendant No.1 had remained a conditional order, but with a limited

change of the nature of security permitted to be offered by the Division

Bench. It was thus incumbent upon the defendant No.1 to have filed any

subsequent document furnishing an alternative solvent security in the

present proceedings and not in the appeal. Even if it is assumed that the

aforesaid documents were erroneously filed by defendant no.1 in the

appeal proceedings, they were filed much beyond the timeline granted by

the Division Bench and therefore, he ought to have sought enlargement of

time/condonation of delay in filing the said documents. Admittedly,

defendant No.1 took no such steps. Instead, after filing the documents in

question which are not on the record, he proceeded to sleep over the

entire matter.

11. To show his seriousness, defendant No.1 ought to have

pursued the matter further by approaching the Division Bench and

seeking condonation of delay for belatedly filing the documents in

question and diligently following up the matter in the Registry so as to

have the same placed before the Registrar General for purposes of

acceptance of the security offered by him. Over nine months have

already lapsed since the date of passing of the order dated 27.9.2011 by

the Division Bench. Even if the period of delay is reckoned from the date

when counsel for defendant No.1 states that the documents in question

were filed in the appeal proceedings, i.e., from 14.12.2011, over six

months have expired ever since, but the defendant No.1 has not been

able to demonstrate that he took any steps to approach the Registrar

General for acceptance of the alternative solvent security allegedly offered

by him.

12. In the aforesaid circumstances, this Court has no option but

to hold that as the leave to defend granted to the defendant No.1, vide

order dated 7.5.2010, was conditional and in view of the breach of the

said condition imposed on him and further, as defendant No.1 has chosen

not to approach the Division Bench for seeking condonation of delay in

offering a solvent security in terms of the order dated 27.9.2011 passed

in the intra court appeal, the present suit is decreed in favour of the

plaintiff and against the defendants, for a sum of `65 lacs, being the value

of the cheque amount issued by the defendant No.1 in favour of the

plaintiff. As the counsel for the plaintiff has not been able to demonstrate

from the Memorandum of Understanding dated 2.5.2005 (Annexure-A to

the plaint) executed between it and the defendant No.1 that the plaintiff

is entitled to claim any amount towards interest from the defendant No.1

on the principal amount of `65 lacs, the plaintiff cannot be granted any

interest on the said amount for the period anterior to the institution of the

present suit. However, the plaintiff is held entitled to receive interest @

9% per annum from the defendant No.1 on the amount of `65 lacs from

the date of institution of the suit till realization alongwith costs of the

proceedings. Decree sheet be drawn accordingly.

                                                             (HIMA KOHLI)
JULY 10, 2012                                                   JUDGE
rkb/mk