Agarwal Developers Pvt Ltd vs M/S Icon Buildcon Pvt Ltd
2013 Latest Caselaw 3904 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI


+                    RFA(OS) 79/2013


AGARWAL DEVELOPERS PVT LTD     ..... Appellant
                Through: Mr. A. Maitri with Mr. Deepak
                         Khosla, Advocates.

                     versus

M/S ICON BUILDCON PVT LTD                     ..... Respondent
                  Through:               Mr. Ankit Jain, Advocate.


%                             Date of Decision : September 03, 2013

CORAM:
HON'BLE MS. JUSTICE REVA KHETRAPAL
HON'BLE MS. JUSTICE PRATIBHA RANI

                     J U D G M E N T (ORAL)

: REVA KHETRAPAL, J.

1. The Appellant has filed the aforementioned appeal against the

judgment and decree dated 30.1.2013 passed by the learned Single

Judge in CS(OS) No.2656/2008 whereby the suit of the Respondent

under Order XXXVII of the Code of Civil Procedure for recovery of

` 4,05,67,347/- was decreed in favour of the Respondent and against

the Appellant along with pendente lite and future interest @ 18% per

annum from the date of its full realization.

2. The factual background in which the learned Single Judge

passed the impugned order briefly delineated is that the

Respondent/Plaintiff entered into three agreements to purchase land

from the original owners whereunder a sum of ` 1,92,92,500/- was

paid by the Respondent to the original owners/sellers through cheques

at the rate of ` 1.50 crore per acre. The Appellant Company which

develops land entered into an agreement with the Respondent on

24.2.2007 for the acquisition/purchase of the said land, subject matter

of the three agreements with the original owners. After negotiations,

the Appellant agreed to purchase the entire land for a sale

consideration of ` 3,60,59,864/-, i.e., amount of ` 1,92,92,500/- plus

profit calculated at the rate of ` 10 Lacs per acre. Pursuant to the said

agreements entered into between the Appellant and the Respondent,

the Appellant issued six cheques in favour of the Respondent

aggregating to ` 3,60,59,864/-, all dated 24.2.2007 to the Respondent.

The Appellant also took over the original documents which were

handed over by the Respondent to the Appellant being the original

agreements which were entered into between the Respondent and the

recorded bhumidars. It transpired that all the six cheques deposited

were returned unpaid by the bankers vide memos dated 1.3.2007,

8.3.2007 and 29.3.2007 on account of insufficiency of funds when the

same were presented on the first occasion. However, when re-

presented, the first cheque was returned on account of insufficiency of

funds and the remaining five cheques were returned on account of

payment having been stopped by the Appellant.

3. After considering the defences raised by the Appellant in its

application seeking leave to defend, a learned Single Judge of this

Court by a detailed order held the Appellant entitled to a conditional

leave, subject to the Appellant depositing 50% of the principal

amount in this Court within three months of the date of the order, i.e.,

April 20, 2012.

4. Aggrieved by the aforesaid judgment and order, the Appellant

preferred an appeal to this Court, being FAO(OS) 278/2012, in which

notice was issued to the Respondent on the limited aspect of reducing

the amount to be deposited as a condition of leave. On 6.7.2012, the

Division Bench modified the order of the learned Single Judge and to

reduce the rigors of the order directed deposit of 25% of the principal

amount as against 50% of the principal amount ordered to be

deposited by the learned Single Judge.

5. Against both the aforesaid orders, a Special Leave Petition

before the Hon'ble Supreme Court was preferred by the Appellant,

which was dismissed on 21.9.2012. No amount was deposited by the

Appellant even after the dismissal of the Special Leave Petition.

Instead, it was submitted on behalf of the Appellant before the

Division Bench that the Appellant was not in a position to deposit

even 25% of the principal amount claimed in the suit as its funds were

locked in various immovable properties. The Appellant offered

instead that the condition be substituted by the requirement of

providing security of immovable property for the entire suit amount.

The said request of the Appellant was rejected by the Division Bench

on the ground that if the Appellant is possessed of sufficient funds to

give security, then it can certainly arrange for the funds to be

deposited in this Court as the amount to be deposited was stated to be

in the range of less than ` 1 Crore and the Respondent claimed to be

in possession of assets of over ` 6 Crores, albeit of a sister concern.

The Division Bench thus disposed of the appeal and the interim

application filed with the appeal on September 24, 2012 holding that

in case the Appellant is able to deposit 25% of the principal amount

within a period of one month from today, the impugned order will

stand varied to that extent, failing which the consequences for not

depositing the amount as a condition of leave would follow.

6. This led to the passing of the impugned order dated January 30,

2013 by the Learned Single Judge, the relevant extract whereof is

reproduced hereinbelow:-

"Admittedly, till date no amount has been deposited by the defendant. In fact, today Mr. Sanjay Manchanda, learned counsel for the defendant states that the defendant is willing to deposit the amount directed by the Division Bench within thirty days from today.

However, this Court is of the view that it is not open for it to vary the order passed by the Division Bench.

Order 37 Rule 3(6)(b) reads as under:-

ORDER XXXVII. SUMMARY PROCEDURE xxxx xxxx xxxx xxxx

3. Procedure for the appearance of defendant xxxx xxxx xxxx xxxx

(6) At the hearing of such summons for judgment:- xxxx xxxx xxxx xxxx

(b) if the defendant is permitted to defend as to the whole or any part of the claim, the Court or Judge may direct him to give such security and within such time as may be fixed by the Court or Judge and that, on failure to give such security with the time specified by the Court or Judge or to carry out such other directions as may have been given by the Court or judge, the plaintiff shall be entitled to judgment forthwith. (emphasis supplied)

Keeping in view the aforesaid facts and circumstances as well as mandate of law, this Court is of the opinion that it has no other option but to pass a judgment forthwith.

Consequently, present suit is decreed for Rs. 4,05,67,347/- in favour of the plaintiff and against the defendant along with pendent lite and future interest @ 18% per annum from the date of its full realisation."

7. The sole submission made before us by the learned counsel for

the Appellant is that the interpretation given by the learned Single

Judge regarding Order XXXVII Rule (3)(6)(b) CPC is contrary to the

law and consequently the impugned order is liable to be set aside. It

is submitted that even in an ex parte case the Court is under an

obligation to look into the merits of the case and then give an ex parte

judgment. It is further contended that similarly in a case of bonafide

requirement under the provisions of Delhi Rent Control Act, even if

leave to defend is declined the Court is under an obligation to

ascertain the bonafide requirement of the landlord on merits and then

to pass an eviction order or dismiss the eviction petition.

8. We find the aforesaid contention of the Appellant's counsel to

be wholly misconceived. The provisions of Order XXXVII Rule

3(6)(b) envisage that on the failure of the Appellant to deposit the

amount required to be deposited by it as a condition to the grant of

leave to defend the suit, the Court has no other option but to pass a

judgment forthwith. This is the clear mandate of law and we,

therefore, find no merit in the contention of the Appellant that the

interpretation given to Order XXXVII Rule 3(6)(b) is contrary to the

law. Further, in our opinion, an order passed in a summary suit under

the provisions of Order XXXVII Rule 2 CPC cannot be equated to an

ex parte order passed in an ordinary suit. As regards compliance with

the provisions of Order XXXVII Rule 2, we find that the said aspect

has been addressed by the learned Single Judge at length in his order

dated April 20, 2012 and only after considering the same, the prayer

of the Appellant for grant of unconditional leave to defend the suit

was not acceded to by the learned Single Judge. An appeal filed from

the order of the learned Single Judge was dismissed by the Division

Bench, albeit the Division Bench was persuaded to reduce the rigors

of the order by directing deposit of 25% of the principal amount as

against 50% of the principal amount in terms of the order of the

learned Single Judge. The Special Leave Petition filed by the

Appellant against the order of the Division Bench of this Court was

also dismissed during the pendency of the present Appeal.

9. We, therefore, find no merit in the present appeal, which is

accordingly dismissed with costs.

CM Nos.110047/2013 and 110048/2013

In view of the aforesaid, CM Nos.110047/2013 and

110048/2013 also stand disposed of.

REVA KHETRAPAL JUDGE

PRATIBHA RANI JUDGE September 03, 2013 km