Raj Narain And Ors vs Hbn Housing Finance Ltd
2013 Latest Caselaw 4403 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                    Date of decision: 25th September, 2013

+                               RFA 341/2012

       RAJ NARAIN AND ORS                                   ..... Appellants
                    Through:           Mr. Amrit Pal Singh, Advocate.

                                Versus

    HBN HOUSING FINANCE LTD                  ..... Respondent

Through: Mr. Shyam Babu, Advocate.

CORAM:

HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW J.

1. The appeal impugns the money decree dated 25 th February, 2012

against the appellants/defendants pursuant to the order of the same day of

dismissal of the application filed by the three appellants/defendants for

leave to defendant Suit No.1405/11/10 filed by the respondent/plaintiff

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

2. The appeal was accompanied with an application for condonation of

40 days delay in preferring the appeal. Notice of the appeal as well as of the

application for condonation of delay was issued. The counsel for the

respondent/plaintiff on 2nd July, 2013, without filing the reply opposed the

application for condonation of delay. Vide order of the same day, subject to

the appellants/defendants paying costs of Rs.15,000/- to the counsel for the

respondent/plaintiff as a condition for condonation of delay in preferring the

appeal, the appeal as well as the application for condonation of delay were

listed for hearing.

3. The counsel for the appellants/defendants has today paid the costs

imposed vide order dated 2nd July, 2013 and in view thereof, the delay in

preferring the appeal is condoned. After the counsel for the

appellants/defendants has been heard for about ten minutes, the counsel

appearing for the respondent/plaintiff states that he is not the arguing

counsel and the matter be adjourned. For the failure of the counsel for the

respondent/plaintiff to argue the appeal, the costs of Rs.15,000/- which was

paid today by the counsel for the appellants/defendants to the counsel for

the respondent/plaintiff has been got returned to the counsel for the

appellants/defendants. The counsel for the appellants/defendants has been

heard and the Trial Court record has been perused to see whether any need

for hearing the counsel for the respondent/plaintiff arises.

4. The respondent/plaintiff instituted the suit, from which this appeal

arises, under Order 37 of the CPC, pleading:

(i) that the appellant/defendant No.1 on 25th July, 2006

approached the respondent/plaintiff for extending loan facility of Rs.5

lakhs and the appellants/defendants No.2 & 3 agreed to be the

guarantors;

(ii) that the respondent/plaintiff after considering the requirement

of the appellant/defendant No.1 sanctioned the loan of Rs.5 lakhs on

27th July, 2006 at fixed rate of interest of 14% per annum for a period

of 180 months repayable in Equitable Monthly Installment (EMI) of

Rs.7,778/- against the property;

(iii) that the three appellants/defendants executed

Sanction/Approval letter dated 27th July, 2006, Home Loan

Agreement dated 25th July, 2006, Power of Attorney dated 27th July,

2006, Guarantee Agreement dated 27 th July, 2006, Demand

Promissory Note and Letter of Continuity dated 27 th July, 2006,

Memorandum of Entry dated 27th June, 2006, Unregistered Equitable

Mortgage in respect of property No.A-2, Khasra No.151, Village-

Mukundpur, Janta Vihar, New Delhi by deposit of title deeds, all in

favour of the respondent/plaintiff;

(iv) that at the request of the appellants/defendants, additional loan

was further extended for a sum of Rs.50,000/- with EMI of Rs.2400/-;

(v) that thus the total loan sanctioned/granted to the

appellant/defendant No.1 as on 1st August, 2007 was Rs.5,50,000/-;

(vi) that on 20th October, 2008, a legal notice under Section 138 of

the Negotiable Instruments Act, 1881 for cheque dated 1st October,

2008 for Rs.7,778/- and for recovery of overdue EMIs of

Rs.1,06,670/- as on 1st October, 2008 was issued and thereafter a

complaint of offence under Section 138 of Negotiable Instruments

Act also filed but which was dismissed as withdrawn for the reason of

the payment of the dishonoured cheque having been made on 5 th

October, 2009 and which was duly reflected and adjusted in the

statement of account;

(vii) that several other cheques against the EMIs issued by the

appellant/defendant No.1 also bounced;

(viii) that as on 31st January, 2010, an amount of Rs.7,04,542/- was

due against the aforesaid loan, jointly and severally from the

appellants/defendants.

Accordingly, the suit on the basis of the aforesaid documents

for recovery of the said amount was filed.

5. Summons for appearance and thereafter summons for judgment were

issued and in response whereto the appellants/defendants filed a joint

application for leave to defendant, though accompanied by affidavit of each

of the three appellants/defendants.

6. The counsel for the appellants/defendants states that the contents of

all the three affidavits are the same. The appellants/defendants sought leave

to defend on the grounds:

(a) that though the appellant/defendant No.1 had taken a loan of

Rs.5 lakhs and Rs.50,000/- from the respondent/plaintiff repayable in

180 installments and time for repayment of all of which installments

had not yet expired, yet recovery proceedings had been initiated;

(b) that the appellant/defendant No.1 was regularly paying

installments "except for some installments";

(c) that the appellant/defendant No.1 had paid Rs.2500/- on 28th

August, 2006 and again Rs.2500/- each on 26th September, 2006 and

26th October, 2006 and Rs.3500/- on 7th December, 2006 and again

Rs.3500/- on 28th December, 2006 and seven Installments with the

amount of Rs.7,778/- were paid till August, 2007 and afterwards

again paid Rs.2400/-, Rs.10,000/-, Rs.2400/- and Rs.10,000/- each

upto 20th February, 2009;

(d) that subsequently also the appellant/defendant No.1 paid

Rs.1000/-, Rs.2400/-, Rs.2400/- till 20th November, 2009 and

Rs.2400/- on 26th April, 2009 and Rs.10,000/- on 3rd May, 2010 "and

many more Installments were paid to the bank which were not

accounted for by the respondent/plaintiff";

(e) that at the time of taking the housing loan, the

appellant/defendant No.1 signed on certain blank papers and at the

time of sanctioning of the loan "half of the amount was taken back by

the agent of the manager of the said bank, on the pretext that the loan

was sanctioned on this condition only. So, the respondent/plaintiff

was left with only Rs.2,50,000/-".

Though certain other pleas were also taken but since the

counsel for the appellants/defendants has not addressed thereon, need

is not felt to reproduce the same here.

7. Needless to state that the respondent/plaintiff filed a reply to the leave

to defend application denying that blank papers were signed or that half of

the loan amount was taken back by the agent of the manager of the

respondent/plaintiff or that the loan was sanctioned on the said condition.

8. Neither any rejoinder to the aforesaid reply was filed by the

appellants/defendants nor did the counsel for the appellants/defendants

argue on the leave to defend application when the same was listed for

hearing.

9. The learned Additional District Judge (ADJ) has vide the impugned

order/judgment held:

(I) that the execution of the documents on which the suit was

based (and which are found in original on the Trail Court record) had

not been denied by the appellants/defendants;

(II) that the plea of the appellants/defendants of having signed the

documents in blank was not convincing; reliance in this regard is

placed on Vinod Kumar Vs. Keshav Anand 96 (2002) DLT 424;

(III) that the sanctioning and grant of loan of total amount of

Rs.5,50,000/- was not in dispute;

(IV) that the factum of the appellants/defendants No.2 & 3 standing

as guarantors for repayment of the said loan amount was also not in

dispute;

(V) that the plea of the appellants/defendants of having made any

payments and the statement of account filed by the

respondent/plaintiff along with the plaint being not correct, did not

raise any triable issue.

10. The counsel for the appellants/defendants relying on certain passages

of Santosh Kumar Vs. Bhai Mool Singh 1958 SCR 1211 as reproduced in

Wada Arun Asbestos (P) Ltd. Vs. Gujarat Water Supply & Sewerage

Board AIR 2009 SC 1027 has contended:

(A) that the appellants/defendants in the leave to defend application

were not required to plead any proof and the pleas of the

appellants/defendants in the leave to defend application, of they

having been made to part with half of the loan amount to the agent of

the manager of the respondent/plaintiff as a condition of sanction,

and, of having made certain other payments towards repayment of

loan are such which require an opportunity to be given to the

appellants/defendants to lead evidence;

(B) that only in cross-examination of the appellants/defendants and

their witnesses can it be determined whether the aforesaid pleas of the

appellants/defendants are true or not;

(C) that no harm will be caused to the respondent/plaintiff if the

matter is put down to trial;

       (D)    that the trial can be made time bound;



        (E)    that it is well nigh possible that the appellants/defendants may

prove payment of half of the loan amount to the agent of the manager

of the respondent/plaintiff by some credible evidence, say a video

recording;

(F) that no notice was given by the respondent/plaintiff to the

appellants/defendants prior to the institution of the suit;

(G) that the pleas aforesaid of the appellants/defendants are

plausible.

11. On enquiry, whether the appellants/defendants have made a video

recording, the counsel for the appellants/defendants states that not in the

present case. On further enquiry, whether under any law or agreement

entered into by the appellants/defendants with the respondent/plaintiff, there

was any requirement to give notice, the counsel for the

appellants/defendants admits that though there is no such requirement but

contends that it is always prudent to give a notice prior to the institution of

the suit. On yet further enquiry, as to whether the appellants/defendants

have suffered any prejudice from non-service of such notice inasmuch as the

suit, from which this appeal arises, was filed nearly three years ago in

October, 2010, the counsel for the appellants/defendants states that the

appellants/defendants could have lodged a complaint against the manager of

the respondent/plaintiff who had taken back 50% of the loan amount. On

yet further enquiry, whether in the last three years any such complaint has

been made, the counsel states that not till now.

12. The plea of the appellants/defendants is of return of half of the loan

amount to the agent of the manager of the respondent/plaintiff. Neither is

the said agent named nor is a date given as to when the said amount was

returned back; there is no plea of how the loan was disbursed; ordinarily, the

loan in such cases is disbursed by making payment directly in the name of

the seller of the house which the loanee is buying with finance from the

institutions as the respondent/plaintiff; there are no particulars whatsoever.

Rather, at this stage, the counsel for the appellants/defendants interjects and

states that the loan was disbursed in four Installments; if that is so, the plea

should have been of payment of 50% of the loan disbursed on different

occasions to the agent of the manager of the respondent/plaintiff. Moreover,

it is not the case of the appellants/defendants that there was any condition in

writing in the documents of such payment. Even if it were to be believed

that the appellants/defendants have paid half of the loan amount to some

agent of some manager of the respondent/plaintiff, though both of them

are not named, the appellants/defendants, for the reason thereof, would not

be entitled to offset the said amount from the loan repayable to the

respondent/plaintiff. The transaction if any of the appellants/defendants

with the agent of the manager of the respondent/plaintiff is distinct from the

transaction of the appellants/defendants with the respondent/plaintiff. Thus,

no case of putting the suit to trial for this reason is made out.

13. As far as the other plea, of having made certain other payments

towards repayment of loan is concerned, though the respondent/plaintiff

along with the suit filed a statement of account but it is not the plea that the

payments made are not reflected in the statement of account. Rather, no

discrepancy whatsoever in the statement of account on the Trial Court

record is pointed out. Rather, the Trial Court record is found to contain

twelve cheques issued by the appellant/defendant No.1 in favour of the

respondent/plaintiff and which were dishonoured on presentation. Nothing

has been said, whether the payments, particulars of which have been given

in the affidavits accompanying the leave to defend application are the

payments by cheques which have been dishonoured.

14. Not only so, had any payment been made, receipts therefor would

have been issued. No receipts or any other document in support of the

payments allegedly made have been filed. The counsel for the

appellants/defendants again argues that the filing of the leave to defend

application is not the stage for filing of the documents and the

appellants/defendants upon leave being granted will file the documents in

the form of receipts issued by the respondent/plaintiff of the said payments.

No receipts have been brought to the Court today also.

15. I am unable to agree with the contentions aforesaid of the counsel for

the appellants/defendants. If such unsubstantiated and vague pleas were to

be entitled to grant of leave to defend, I fail to fathom as to in which cases

leave can be refused and if such an interpretation is to be taken, the same

would render the provision of Order 37 of the CPC nugatory.

16. No error is thus found in the order/judgment of the learned ADJ.

17. No other argument has been raised.

18. There is no merit in the appeal, which is dismissed. However, the

counsel for the respondent/plaintiff having not argued, no order as to costs.

Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J.

SEPTEMBER 25, 2013 bs..