Anil Tyagi vs S.D.Infosys & Ors.
2014 Latest Caselaw 1887 Del

$~13.
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                              Date of Decision: 15.04.2014
+                        CS(OS) 1062/2011
      ANIL TYAGI                                    ..... Plaintiff
                         Through :   Ms.Rachna Agrawal and Ms.Surbhi
                                     Sharma, Advs.

                         versus

      S.D. INFOSYS & ORS                              ..... Defendants
                      Through :      Ms.Charu Dalal, Adv. for defendants
                                     no.1 to 4.

      CORAM:
          HON'BLE MR. JUSTICE G.S.SISTANI

G.S.SISTANI, J. (Oral)

CS(OS) No.1062/2011, I.A.No.1085/2014 and IA No.1086/2014

1. Plaintiff has filed the present suit under the provisions of Order

XXXVII of the Code of Civil Procedure, 1980, for recovery of

Rs.1,00,00,000/- (Rupees One Crore).

2. I.A. 1085/2014 has been filed by defendant no.2 and IA 1086/2014

has been filed by defendants no. 1, 3 and 4 under Order XXXVII Rule

3 (5) CPC seeking leave to defend.

3. The necessary facts, to be noticed which have led to the filing of the

present suit and as stated in the plaint, are that the plaintiff is stated

to be carrying on the business in the name and style of M/s Binary

Computers Systems and is dealing in Computer Hardware and

Software of various brands including Hewlett-Packard, Lenovo and

Microsoft. Defendant no.1 is a partnership firm and defendants no.2

to 4 are its partners. Defendant no.5 is the manufacturer of

computers and laptops and defendant no.1 was the registered

distributor of defendant no.5.

4. As per the plaint, the plaintiff and defendant no.1 used to purchase

computers from each other based on their requirement and issue

post dated cheques once the goods were delivered. Between

December, 2010 and February, 2011 defendant no.1 had placed

purchase orders with plaintiff and subsequently issued cheques to

the plaintiff for the value of goods so purchased. The plaintiff has

filed on record copies of 23 invoices issued by defendants no.2 to 4

duly signed by the representatives of the defendants. The plaintiff

has also placed on record the original cheques, which were handed

over by defendants no.2 to 4 to the plaintiff along with the

corresponding original Return memos issued by HDFC Bank to the

plaintiff. The plaintiff has also placed on record the communication

dated 17.3.2011 by defendant no.2, which is stated to be in the

handwriting of Mr. Manish Chawla, defendant no.2, and also an

undated communication issued by defendant no.2 to H.P. Inida (P)

Ltd., 6th Floor, Global Business Park, „D‟ Tower, Gurgaon, whereby

defendant no.2 has authorised the plaintiff to collect all pending

claims/cheques on behalf of defendant no.2.

5. Communication dated 17.3.2011 issued by defendant No.2 reads as

under:

"Dear Anil Ji

Thanks for all the things that you have done for me. I never find such kind of nice person in my whole life. I have to owe

you the money but after my all efforts I am not successful so I find the easiest way due to Ajay Chug. Pls take care of my relative and friends after me so that nobody can hassle them.

For your money kindly take it from HP. Over their you have to contact Mr.Arun Sood 9811148584, Suraj Dixit 09871097999 and Sunil Dutt 9810053115.

I am enclosing the Authorization Letter and few cheques of S.D. Infosys.

I told you that I will never cheat you.

Your friend

Sd/-

Manish Chawla 17.3.2011"

6. The undated communication also placed on record reads as under:

"To, HP India (P) Ltd.

6th Floor Global Business Park „D‟ Tower Gurgaon.

I (Manish Chawla) authorizing Mr.Anil Tyagi (Binary Computers Systems : Laxmi Nagar) to collect my all pending claims cheques of HP on my behalf.

Thanks & Regds

Sd/- & Seal Manish Chawla"

7. Learned counsel for the plaintiff submits that the present suit is

based on invoices and dishonour of the cheques issued by

defendants no.2 to 4 in favour of the plaintiff. Counsel has placed

reliance on a judgement rendered by this Court in the case of M/s

Harkaran Dass Deep Chand vs. Viren Agrotech Pvt. Ltd.

CS(OS) 2377/2010 wherein this Court has recognised invoices to be

a written contract.

8. Reliance is also placed by counsel for the plaintiff on the

dishonoured cheques to show that the present suit is maintainable

under the provisions of Order XXXVII of CPC.

9. Counsel for the plaintiff also relies on G.P. Bhatia vs. Dee Kay Inc.

& Ors. reported at 188 (2012) DLT 721, wherein reliance has in

turn been placed on the case of M/s.Sunil Enterprises vs. SBI

reported at AIR 1998 SC 237 wherein the Apex Court has drawn up

the parameters to be considered by the court while dealing with the

application for leave to defend. Relevant paras of the judgment of

the Supreme Court reads as under:

"4.........

(a) If the Defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the Defendant is entitled to unconditional leave to defend.

(b) If the Defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the Defendant is entitled to unconditional leave to defend.

(c) If the Defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence, yet, shows such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff's claim the Plaintiff is not entitled to judgment and the Defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time

or mode of trial but not as to payment into Court or furnishing security.

(d) If the Defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the Plaintiff is entitled to leave to sign judgment and the Defendant is not entitled to leave to defend.

(e) If the Defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the Plaintiff is entitled to leave to sign judgment, the Court may protect the Plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the Defendant on such condition, and thereby show mercy to the Defendant by enabling him to try to prove a defence."

10. Reliance is also placed by counsel for the plaintiff on V.K.

Enterprises Vs. Shiva Steels III (2010) Banking Cases 718 (SC).

Paragraphs 3,4 and 8 to 10 of the judgment read as under:

"3. In the said application for leave to defend the suit, the Petitioner contended that the cheque in question had been handed over by the Petitioner to the Respondent-firm by way of security only and not for presentation. Furthermore, the said cheque was issued by the Petitioner on 11th October, 2000, but the date of the cheque was, thereafter, interpolated and altered from 11.10.2000 to 11.10.2006, and presented to the Bank. It was also indicated that apart from the signature on the face of the cheque and the date mentioned therein, the rest of the cheque was blank and an attempt was made by the Respondent to misuse the same with the intention of withdrawing or misappropriating the amount subsequently inserted in the cheque. A specific allegation was also made to the effect that the date of the cheque issued on behalf of the Petitioner firm for the month of October was always written with the Roman numerical 'X', which was altered and shown in ordinary numericals, which clearly establish the fact that the cheque in question had been doctored to obtain the benefit thereof six years after the same had been issued.

4. In the said application, it was also denied that any cheque of such a large amount had been issued to the Respondent after 1992 in order to bolster the case of the Petitioner that the cheque in question had been forged. It was ultimately stated in the complaint that the Respondent had concocted the story and the Bills placed on record by the Respondent were also forged as the Petitioner had neither purchased any material nor counter-signed the last 4 bills as per the details provided.

8. Order XXXVII C.P.C. has been included in the Code of Civil Procedure in order to allow a person, who has a clear and undisputed claim in respect of any monetary dues, to recover the dues quickly by a summary procedure instead of taking the long route of a regular suit. The Courts have consistently held that if the affidavit filed by the defendant discloses a triable issue that is at least plausible, leave should be granted, but when the defence raised appears to be moonshine and sham, unconditional leave to defend cannot be granted. What is required to be examined for grant of leave is whether the defence taken in the application under Order XXXVII Rule 3 C.P.C. makes out a case, which if established, would be a plausible defence in a regular suit. In matters relating to dishonour of cheques, the aforesaid principle becomes more relevant as the cheques are issued normally for liquidation of dues which are admitted. In the instant case, the defence would have been plausible had it not been for the fact that the allegations relating to the interpolation of the cheque is without substance and the ledger accounts relating to the dues, clearly demonstrated that such dues had been settled between the parties. Moreover, the issuance of the cheque had never been disputed on behalf of the Petitioner whose case was that the same had been given on account of security and not for presentation, but an attempt had been made to misuse the same by dishonest means.

9. Against such cogent evidence produced by the plaintiff/respondent, there is only an oral denial which is not supported by any corroborative evidence from the side of the Petitioner. On the other hand, the ledger book maintained by the Respondent and settled by the Petitioner had been produced on behalf of the Respondent in order to prove the transactions in respect of which the cheque in question had been issued by the Petitioner.

10. In our view, the defence raised by the Petitioner does not make out any triable issue and the High Court, has dealt with the matter correctly and has justifiably rejected the Petitioner's application under Order XXXVII Rule 3 C.P.C. and the same does not call for interference by this Court. The Special Leave Petition is, therefore, dismissed, but without any order as to costs."

11. Leave to defend is sought by defendant no.2 on the ground that the

plaintiff has taken advantage of the financial conditions of the

defendants. It is submitted by counsel for defendants no.1 to 4 that

5 cheques were issued by the defendants to the plaintiff only as a

collateral security with the condition that the same would not be

presented for encashment without the consent of defendants no.1 to

4. It has further been submitted in the leave to defend application

that the additional cheques sought to be relied upon by the plaintiff

over and above the five cheques issued by defendants as security

are forged and have not been signed by the defendants or any

authorized signatory of the defendant no.1. It is further submitted by

the counsel that the case of the defendants no.1 to 4 is that the

goods, which were supplied by the plaintiff to defendants, were

defective and not as per the specifications and thus defendants no.1

to 4 are claiming money from the plaintiff. Counsel further submits

that defendant no.2 has not been able to file documents on record

as the plaintiff made a complaint before the EOW Cell pursuant to

which defendant no.2 was arrested and his books of accounts are

not available with him anymore.

12. I have heard learned counsel for the parties and considered their

rival submissions. The present suit is based on invoices and

dishonour of cheques issued by defendants no.2 to 4 in favour of the

plaintiff.

13. The application for leave to defend filed by the defendant is to be

decided on the touch stone of the law laid down by the Apex Court.

In order to succeed the defendant must raise a triable issue. The

application must disclose a good, fair, bonafide or reasonable

defence.

14. The Apex Court in the case of M/s.Sunil Enterprises (Supra) has

held that the Court must consider grant of unconditional leave in

such cases where the defendant is able to raise a triable issue or

raises a bonafide defence. The Court can consider grant of

conditional leave in such cases where the defendants are able to

show a reasonable defence unaffected by whether the defendant

would finally succeed or not but where the defence raised by the

defendant is sham or moonshine, in such cases, the plaintiff is

entitled to a decree forthwith and the application for leave to defend

is to be dismissed.

15. In the present case, in the light of original documents placed on

record, which evidence that the goods were supplied to the

defendants, post-dated cheques were handed over by the

defendants to the plaintiff, which raises a presumption under Section

118 of the Negotiable Instruments Act in favour of the holder of the

cheque, in view of the communication dated 17.3.2011 and the

undated communication wherein defendant no.2 admits the claim of

the plaintiff, and also taking into consideration that not a single

document has been placed on record by the defendants to support

the stand taken by the defendants in the leave to defend

application, I am of the view that the defence, sought to be raised by

the defendants, is sham, moonshine and not bonafide, and the same

is not borne out from the record. On the other hand the plaintiff has

been able to establish, based on documents on record that the claim

of the plaintiff is clear and undisputed.

16. In view of above, IA No.1085/2014 and IA No.1086/2014 seeking

leave to defend are dismissed. Suit is decreed in favour of the

plaintiff and against defendants No.1 to 4 in the sum of Rs.1 crore.

Let the amount deposited by defendant no.5 in this Court be

released in favour of the plaintiff, through counsel, together with

interest accrued thereon without any further notice to the

defendant. Plaintiff would be entitled to the balance amount

together with pendente lite and future interest @8% per annum

from the date of filing of the suit till realisation.

17. Decree sheet be drawn up accordingly.

G.S.SISTANI, J APRIL 15, 2014 msr