Delhi High Court
Harjinder Pal Singh vs R Karthikeyan on 4 August, 2014
$~17.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(OS) 1077/2013
% Judgment dated 04.08.2014
HARJINDER PAL SINGH ..... Plaintiff
Through : Mr.Rajat Aneja and Ms.Aarohi Holani,
Advs.
versus
R KARTHIKEYAN ..... Defendant
Through : Mr.Rajesh Gupta, Ms.Soniya Budholia,
Mr.Harpreet Singh and Ms.Swati
Gupta, Advs.
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI
G.S.SISTANI, J (ORAL)
I.A.NOS.12762/2013 & 3928/2014
1.
Plaintiff has filed the present suit under the provisions of Order XXXVII
of the Code of Civil Procedure for recovery of Rs.57,40,000/- along with
pendente lite and future interest at the rate of 18%, per annum. Present
suit is based on dishonour of four cheques in the sum of Rs.10.00 lakhs,
each. Plaintiff also seeks a decree on admissions.
2. Reliance is placed by the plaintiff on a copy of the application drafted
and signed by the parties under Order XXIII Rule 3 CPC wherein the
defendant had agreed to pay a sum of Rs.62.00 lakhs in full and final
settlement to the plaintiff.
3. I.A.No.12762/2013 has been filed by plaintiff under Order XII Rule 6
CPC for passing judgment on admissions. I.A.No.3928/2014 has been
filed by defendant seeking leave to defend. Both the applications have
been heard together and are being disposed of by a common order.
4. The brief background of the present case is that the plaintiff entered into
an Agreement to Sell dated 05.07.2009 with the mother of the defendant
(Late Smt. Jaya Prada) with respect to a DDA LIG Flat bearing No.9-A,
Ground Floor, admeasuring 1100 sq. feet, situated at Ber Sarai, New
Delhi. Late Smt. Jaya Prada was the exclusive owner of the said property
and she agreed to sell the same for a total sale consideration of Rs.22.00
lakhs, out of which the plaintiff claims to have paid Rs.10.00 lakhs, as
earnest money, at the time of signing of the Agreement to Sell. As per
the terms of the said agreement, sale transaction was to be completed on
or before 04.10.2010.
5. Thereafter on 24.02.2010, mother of the defendant requested the plaintiff
for more payment and assured the plaintiff to execute the necessary
transfer documents in his favour on or before 04.10.2010. Pursuant to
the request made by the mother of the defendant, plaintiff made a further
payment of Rs.10.00 lakhs on 24.2.2010. Late Smt. Jaya Prada, mother
of the defendant, even after taking substantial part of sale consideration
from the plaintiff, failed to fulfill her obligations under the agreement to
sell dated 05.07.2009.
6. Further, as per the plaint, the defendant took upon himself the
responsibility to liquidate the liability of his mother, subsequent to which
a Memorandum of Understanding dated 28.10.2010 was executed
between the plaintiff and Late Smt. Jaya Prada, whereby, Late Smt. Jaya
and her son i.e. defendant, agreed to pay to the plaintiff a total sum of
Rs. 40 Lakhs. Pursuant thereto, defendant alongwith his mother issued
four post dated cheques of Rs.10 Lakhs each in favour of the plaintiff.
The said cheques were issued from a Bank Account held in the joint
names of Late Smt. Jaya Prada and defendant. However, said cheques
were returned dishonored on presentation with remarks „Funds
Insufficient‟.
7. A legal notice dated 26.03.2010 was issued by the plaintiff to both,
defendant and his mother, calling upon them to make the payment of
Rs.40 Lakhs within 15 days. On defendant‟s failure to make the
payment, plaintiff filed a criminal complaint under Section 138 of
Negotiable Instruments Act, which is pending adjudication. During the
pendency of the criminal complaint, plaintiff came to know that the
mother of the defendant expired on 17.10.2011.
8. Plaintiff has claimed from the defendant Rs. 40 Lakhs alongwith interest
@ 18% p.a., which as on the date of filing of the present suit is
calculated at Rs.57,40,000/- (i.e. Rs.40,00,000 plus Rs.17,40,000).
9. Plaintiff also prays for a decree under Order 12 Rule 6 CPC. It is
submitted by counsel for the plaintiff that during the pendency of the suit
parties entered into an amicable settlement and the parties signed an
application under Order 23 Rule 3 CPC. The defendant agreed to pay to
the plaintiff a sum of Rs.62.0 lacs along with interest @ 18% per annum
w.e.f. 20.9.2013 till realization, besides agreed for certain other
conditions. Counsel submits that the defendant had disputed his
signatures on the application under Order 23 Rule 3 CPC, resultantly the
application was sent to the CFSL for examination. The examination
report has been received, as per which the signatures on the application
and affidavit of the defendant appears to be genuine. Counsel prays that
not only the application for leave to defend should be dismissed, but a
decree under Order 12 Rule 6 CPC should also be passed.
10. In I.A.No.3928/2014, Leave to defend is sought by the defendant on the
ground that the parties had no intention of entering into any Agreement
to Sell and in fact the mother of the defendant had taken a loan with
respect to the adjoining flat bearing no. 19-A and the said flat stood
mortgaged to the Bank. She was detected with cancer in 2008, due to
which she was under intense medical treatment and was unable to pay
the loan installments. Under the threat of SARFAESI proceedings by the
Bank the mother decided to sell the said flat bearing no. 19-A to the
plaintiff, who was introduced to her by a property dealer, one Lalit
Kumar Bhalla. The flat was to be sold to none other but to the brother-
in-law of the defendant herein.
11. It is the case of the defendant that taking advantage of the medical
condition of the mother of the defendant, she was made to sign various
documents under the premise that the documents pertain to the said
adjoining flat bearing no. 19-A and not the flat in question. Further,
those papers were utilized by the plaintiff for fabricating the Agreement
dated 05.07.2009, receipts and also the MoU dated 29.10.2010. Similar
argument is advanced by counsel for the defendant with reply to the
application under Order XXIII Rule 3 CPC. Mr.Gupta, has also
contended that there was no reason for the defendant to agree on a
settlement for an amount more than the amount claimed in the suit and
moreover there was no reason for him to go to the Lawyer of the plaintiff
when his own father is a Lawyer.
12. I have heard counsel for the parties and have carefully perused the
documents and the submissions made by the parties.
13. Before dealing with the rival submissions of counsel for the parties, it
would be useful to re-visit the law laid down by the Apex Court with
regard to dealing with an application for leave to defend.
14. The Apex Court in the case of M/s.Mechelec Engineers &
Manufacturers Vs. M/s.Basic Equipment Corporation AIR 1977 SC
577 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 read as under:
"8. In Smt. Kiranmoyee Dassi and Anr. v. Dr. J. Chatterjee 49
C.W.N. 246 , Das. J., after a comprehensive review of
authorities on the subject, stated the principles applicable to
cases covered by order 37 C.P.C. in the form of the following
propositions (at p. 253):
(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."
15. The defendant is unable to answer and given a plausible explanation to
five material questions, which would show that there was reason enough
for the defendant to have issued the four cheques in question in favour of
the plaintiff. It is submitted by Mr.Gupta, Ld. counsel for the defendant,
that four cheques of Rs.10.0 lacs each, which were given to the plaintiff
were blank and the same were pertaining to the transaction of the
adjoining flat bearing No.19-A.
16. Firstly, the Agreement to Sell placed on record is signed by the mother
of the defendant. The Agreement to Sell bears her thumb impression
and the photograph. There are two receipts also bearing the signature
and thumb impression of the mother of the defendant evidencing receipt
of payment of Rs.10.00 lakhs, each. In addition thereto there is a No
Objection Certificate signed by the deceased mother and also there are
four cheques issued by the defendant and her mother herein in favour of
the plaintiff. A person could have been mislead on one occasion but to
say that the defendant and/or his mother was mislead at the time of
signing the agreement to sell, at the time of putting thumb impression
and signing the two receipts, further at the time of signing No Objection
Certificate and also at the time of issuing four cheques, is not acceptable.
Defendant had taken a categorical stand that the application under Order
XXIII Rule 3 CPC and the affidavit do not bear his signatures. By the
order of the court the application under Order XXII Rule 3 CPC was sent
to CFSL for examination. As per the report of the CFSL, the signatures
appeared to be the signatures of the defendant. Another factor, which
goes against the defendant.
17. Although the CFSL report has opined that the signatures on the
application under Order 23 Rule 3 CPC appear to be that of the
defendant, the plaintiff has not been able to explain why the defendant
would agree in a settlement to pay an amount more than the suit amount.
18. In the case of Mrs. Raj Duggal v. Ramesh Kumar Bansal reported at
1991 Supp 1 SCC 191 and more particularly in para 3 thereof, the Apex
Court observed as under:
"3. Leave is declined where the court is of the opinion that the
grant of leave would merely enable the defendant to prolong the
litigation by raising untenable and frivolous defences. The test is
to see whether the defence raises a real issue and not a sham one,
in the sense that if the facts alleged by the defendant are
established there would be a good or even a plausible defence on
those facts. If the court is satisfied about that leave must be
given. If there is a triable issue in the sense that there is a fair
dispute to be tried as to the meaning of a document on which the
claim is based or uncertainty as to the amount actually due or
where the alleged facts are of such a nature as to entitle the
defendant to interrogate the plaintiff or to cross-examine his
witnesses leave should not be denied. Where also, the defendant
shows that even on a fair probability he was a bona fide defence,
he ought to have leave. Summary judgments under Order 37
should not be granted where serious conflict as to matter of fact
or where any difficulty on issues as to law arises. The court
should not reject the defence of the defendant merely because of
its inherent implausibility or its inconsistency."
[Emphasis Supplied]
19. In my view, the defendant has not been able to raise a strong plausible
defence but he has been able to raise some defence, and the case of the
defendant would fall in proposition (c) as provided in the case of
M/s.Mechelec Engineers & Manufacturers (supra). Therefore the
defendant is entitled to conditional leave to defend.
20. Taking into consideration the facts of the case and the defence raised, I
am of the view that the defendant has made out a case of conditional
leave to defend. Accordingly, the defendant shall deposit a sum of
Rs.40.00 lakhs, which is the amount of the cheques with the Registrar
General of this Court within a period of six weeks from today. The
Registrar General shall keep this amount in a fixed deposit to be renewed
periodically till further orders from this Court. Leave granted to the
plaintiff to make an application for release of this amount. It is however
made clear that, in case, the said amount is not deposited within 6 weeks,
the plaintiff would be entitled to a decree of Rs. 40 lakhs alongwith
pendent lite and future interest @ 8% p.a. from the date of filing of the
suit till realization.
21. Accordingly, I.A.NOS.12762/2013 & 3928/2014 stand disposed of in
view of above.
CS(OS) 1077/2013
22. Written statement be filed within thirty days from today. Replication, if
any, be filed within thirty days thereafter. Parties shall file documents
which are in their possession and power within the same period.
23. List this matter before Joint Registrar for admission/denial of documents
on 1.10.2014.
24. List this matter before Court for framing of issues on 5.11.2014, when
parties shall bring suggested issues to Court.
G.S.SISTANI, J.
AUGUST 04, 2014 msr
