Delhi High Court

Maya Nagar vs Suresh Chand Arora & Anr on 4 October, 2013

Author: Rajiv Sahai Endlaw

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                        Date of decision: 4th October, 2013.

+                              RFA 189/2002

       MAYA NAGAR                                         ..... Appellant
                         Through:    Mr. O.P. Aggarwal, Advocate.

                               Versus

    SURESH CHAND ARORA & ANR                 ..... Respondents
                  Through: Mr. Vinod Sharma with Mr. M.N.
                           Khan, Advocates for R-1.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. The appeal impugns the judgment and order dated 14 th December,

2001 of the Court of the Additional District Judge (ADJ), Delhi in Suit

No.170/1999 of dismissal of the application filed by the appellant for

condonation of delay in applying for leave to defend as well as application

for leave to defend and the consequent money decree for a sum of

Rs.2,92,573.30 paise along with pendente lite and future interest @ 12% per

annum against the appellant.

2. Notice of the appeal was issued and subject to the appellant

furnishing bank guarantee for the decretal amount, the implementation of

the impugned decree was stayed. A bank guarantee for Rs.2,92,574/- i.e.

towards principal decretal amount and an additional bank guarantee for Rs.1

lakh towards interest was accordingly furnished and renewed from time to

time.

3. Vide order dated 13th December, 2012, the appeal was admitted for

hearing. The appeal was on 5th February, 2013 listed for hearing when none

appeared; the appeal was accordingly dismissed in default and the bank

guarantees furnished by the appellant invoked and the amount received

thereunder ordered to be kept in a fixed deposit. The appellant applied for

restoration of the appeal and which was allowed vide order dated 25 th

September, 2013. Upon encashment of the bank guarantees, a sum of

Rs.3,92,574/- was received which is kept in a fixed deposit.

4. The counsel for the appellant and the counsel for the respondent No.1

have been heard.

5. The respondent No.1 instituted the suit from which this appeal arises

for recovery of Rs.2,92,573.30 paise from the appellant and from Mr. Ravi

Nagar, husband of the appellant, impleaded as respondent No.2 in this

appeal, pleading:

(i) that the husband of the appellant i.e. the respondent No.2 was a

friend of the respondent No.1/plaintiff;

(ii) that amongst other transactions, the respondent No.2 on 5th

June, 1998 took a loan of Rs.2,20,000/- from the respondent

No.1/plaintiff;

(iii) that after giving the aforesaid loan to the respondent No.2, the

respondent No.1/plaintiff wanted to take some surety/guarantee;

accordingly, the appellant stood surety/guarantor of her husband

respondent No.2 by executing a Deed of Guarantee dated 8 th June,

1998 whereunder the appellant also gave the cheque dated 1st August,

1999 for Rs.2,79,173/- inclusive of interest towards repayment of the

loan taken by the respondent No.2 and it was agreed that in case the

respondent No.2 fails to pay the loan with interest on or before 31 st

July, 1999, then the respondent No.1/plaintiff would be entitled to

encash the cheque;

(iv) that the respondent No.2 failed to repay the loan; accordingly,

the respondent No.1/plaintiff deposited the cheque aforesaid which

was returned dishonoured for the reason of insufficiency of funds in

the bank account of the appellant.

Accordingly, the suit for recovery of Rs.2,92,573.30 paise under

Order 37 of the Civil Procedure Code (CPC), 1908 was filed.

6. A perusal of the Trial Court record shows that summons for

appearance were issued on 5th November, 1999 for 7th February, 2000; that

the respondent No.2 filed his appearance on 18th December, 1999 and the

appellant filed her appearance on 20th December, 1999; that the respondent

No.1/plaintiff applied for issuance of summons for judgment which were on

24th January, 2000 ordered to be issued; on 7th February, 2000, the appellant

appeared before the Trial Court in person and perhaps because the report of

service of summons for judgment had not been received till then, the

summons for judgment were again ordered to be issued for 10 th March,

2000; however on 10th March, 2000, it was recorded that the summons for

judgment had been served on the appellant as well as the respondent No.2

on 3rd February, 2000 by ordinary process and on both, the appellant and the

respondent No.2 by registered post AD on 28th January, 2000 and the matter

was adjourned to 14th March, 2000; the appellant filed application for leave

to defend along with an application for condonation of delay in applying for

leave to defend on 13th March, 2000.

7. The respondent No.1/plaintiff filed reply to the said applications of

the appellant.

8. The respondent No.2 also on 14th March, 2000 applied for

condonation of delay in applying for leave to defend but without any leave

to defend application.

9. The learned ADJ in the impugned judgment/order has

found/observed/held:

(a) that though the appellant had given the reason of her illness in

the application for condonation of delay in applying for leave to

defend but had not filed any Medical Certificate in support thereof;

(b) that the appellant had appeared before the Court on 7 th

February, 2000 and which also belied her plea that she was sick in the

first week of February, 2000; if she was sick as claimed by her, she

could not have appeared on 7th February, 2000; on the contrary, when

she could come to the Court on 7th February, 2000, she could also get

the leave to defend prepared;

(c) that the appellant had failed to explain each and every day's

delay in filing the application for leave to defend;

(d) that the other reason given by the appellant for condonation of

delay, being the call given by the Advocates of strike, was also not

sufficient cause for not preparing and filing the application for leave

to defend;

(e) that the respondent No.2 who according to the respondent

No.1/plaintiff also had an enmity with the appellant, could not give

the reason of the illness of the appellant for delay in his part in

applying for leave to defend;

(f) that the applications of both, the appellant as well as the

respondent No.2 for condonation of delay in applying for leave to

defend were thus liable to be dismissed;

(g) that the respondent No.1/plaintiff had filed the Loan

Agreement dated 5th June, 1998 executed by the respondent No.2 and

the Guarantee Bond dated 8th June, 1998 executed by the appellant,

both in favour of the respondent No.1/plaintiff as well as the cheque

signed by the appellant in favour of the respondent No.1/plaintiff

together with Cheque Returning Memo and the demand notice got

issued;

(h) that there was nothing to disbelieve the averments made in the

plaint and the documents filed on record;

(i) that the appellant and the respondent No.2 having not applied

for leave to defend within the prescribed time, the respondent

No.1/plaintiff had become entitled to judgment forthwith.

Accordingly, the suit was decreed jointly and severally against the

appellant and the respondent No.2.

10. Rule 3(7) of Order XXXVII empowers the Court to, for sufficient

cause excuse the delay of the defendant in applying for leave to defend.

11. I am, for the reasons herein below given, inclined to, in the facts and

circumstances of the present case, not only condone the delay on the part of

the appellant in applying for leave to defend but to also grant leave to

defend to the appellant, on the condition of the appellant depositing the

decretal amount and which already stands deposited in this Court as

aforesaid:

(I) that the suit now pending at the appellate stage, for the last

eleven years, has lost its summary nature;

(II) that though the decree in favour of the respondent

No.1/plaintiff was jointly and severally against the appellant and the

respondent No.2 and further though it is only the appellant who has

challenged the said decree and the respondent No.2 is informed to

have not taken any remedy thereagainst, the counsel for the

respondent No.1/plaintiff on enquiry, whether the respondent

No.1/plaintiff has taken any steps for execution of the decree against

the respondent No.2 has replied in the negative, though of course

justifying it on the ground of stay of decree vide interim order in this

appeal; however, the stay of execution in an appeal preferred by the

appellant would not enure to the benefit of the respondent No.2 and

the factum of the respondent No.1/plaintiff though with a money

decree in his pocket, not opting to execute the same against the

respondent No.2, creates a suspicion/doubt, more so in the light of

what is stated herein below;

(III) that the appellant sought leave to defend pleading:

(A) that she was the sole/absolute owner of property No.B-

71, Dilshad Colony, Delhi;

(B) that her husband respondent No.2 wanted the title of the

said property in his name which was not acceded to by the

appellant and her parents who had financed the purchase of the

said house;

(C) that the respondent No.1/plaintiff in collusion with the

respondent No.2 had been attempting to grab the said property

and with the said motive had forged and fabricated an

Agreement of Sale of the said property in favour of the wife of

the respondent No.1/plaintiff namely Smt. Meenakshi Arora

and in which regard a suit had been filed by the appellant

against the respondent No.1/plaintiff, his wife as well as

against the respondent No.2, since prior to the institution of the

suit from which this appeal arises and which suit was pending

adjudication;

(D) that the wife of the respondent No.1/plaintiff had also

instituted a suit for specific performance of the said Agreement

of Sale and which was also pending adjudication;

(E) that the suit from which this appeal arises was intended

to harass the appellant and to pressurize the appellant to give

into the demand of the respondent No.1/plaintiff and his wife in

the other two suits;

(F) that though the original title documents of the aforesaid

property were earlier in the custody of the appellant but were

not found by the appellant and the appellant had lodged a

missing report in this regard;

(G) that the appellant apprehended that her husband

respondent No.2 had stolen the title documents of the property;

(H) that the respondent No.1/plaintiff and his wife Smt.

Meenakshi Arora claimed to have paid a sum of Rs.6 lakhs to

the appellant as part payment of the sale consideration;

(I) that the appellant had never agreed to sell her property

and had not received any sale consideration;

(J) that the appellant had serious differences with her

husband respondent No.2 and the two were living separately;

(K) that the respondent No.2 had in collusion with the

respondent No.1/plaintiff and Smt. Meenakshi Arora conspired

to deprive the appellant of her property;

(L) that the appellant had never signed the alleged Guarantee

Bond and never stood as a guarantor of her husband for the

loan, if any, taken by the respondent No.2 from the respondent

No.1/plaintiff;

(M) that the appellant had never issued the cheque of

Rs.2,79,173/- and the said cheque did not bear her signature

and had been forged.

(IV) that the respondent No.1/plaintiff filed a reply to the

application for leave to defend in which it was admitted that the

appellant in the suit filed by her against the respondent No.1/plaintiff

and his wife Smt. Meenakshi Arora, since prior to the institution of

the suit from which this appeal arises, has also impleaded her husband

respondent No.2 as a defendant; the enmity of the appellant with her

husband respondent No.2 was expressly admitted;

(V) that it would thus be seen that the respondent No.1/plaintiff

admits his loan transaction to be primarily with the respondent No.2

and further admits the enmity between the appellant and the

respondent No.2. This, coupled with inaction of the respondent

No.1/plaintiff in executing the decree against the respondent No.2,

leads me to form an opinion that the present is not a case where

summary jurisdiction should be invoked, notwithstanding the delay

on the part of the appellant in applying for leave to defend. In that

regard also, it may be noticed that the factum of the Lawyers in the

District Courts at the contemporaneous time being on strike is not

disputed; all that is contended is that inspite of the strike, the leave to

defend application should have been filed;

(VI) that the learned ADJ has been unduly swayed by the

appearance of the appellant before the Court on 7th February, 2000

into disbelieving the illness of the appellant;

(VII) that the service of summons for judgment is in pursuance to the

order dated 24th January, 2000; however, vide subsequent order dated

7th February, 2000, in the presence of the appellant, fresh summons

for judgment were ordered to be issued and qua which the respondent

No.1/plaintiff did not take any steps. Benefit of doubt has to be given

to the appellant that the service prior to 7 th February, 2000 of

summons for judgment stood waived. The summons for judgment

from which the delay in applying for leave to defend is computed are

the summons for judgment ordered to be issued on an earlier date.

For this reason also, I am of the opinion that the present is a fit case

where the delay should be condoned;

(VIII) that the interest of the respondent No.1/plaintiff is sufficiently

protected by obtaining the deposit of the entire amount due from the

appellant;

(IX) that a doubt also arises as to why the respondent No.1/plaintiff

would give a loan of Rs.2,20,000/- to respondent No.2 and make the

appellant guarantor for the same when balance sale consideration was

payable by the respondent No.1/plaintiff to the appellant under the

Agreement to Sell set up by respondent No.1/plaintiff.

12. The appeal is accordingly allowed; the judgment and order insofar as

against the appellant is set aside and the delay on the part of the appellant in

applying for leave to defend is condoned and the appellant is granted leave

to defend on the condition that the appellant shall not withdraw the monies

deposited in this Court till the pendency of the suit and which monies shall

be continued to be kept by the Registry of this Court in maximum interest

bearing deposit awaiting the outcome of the suit.

13. The parties are left to bear their own costs. Decree sheet be drawn

up.

14. The Trial Court file/record be returned forthwith to the District Judge

(North East), Karkardooma Courts, Delhi within whose jurisdiction both

parties are stated to be residing.