Delhi High Court
Delhi Power Supply Company Ltd. ... vs M/S Hindustan Vidyut Products ... on 13 November, 2014
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ C.R.P.No.72/2012
% 13th November, 2014
DELHI POWER SUPPLY COMPANY LTD. (DT. LTD.) ..... Petitioner
Through Ms. Avnish Ahlawat with Ms.Latika
Chaudhary and Ms.Gunjan Bansal,
Advocates.
versus
M/S HINDUSTAN VIDYUT PRODUCTS LIMITED ..... Respondent
Through None
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not? Yes.
VALMIKI J. MEHTA, J (ORAL)
1. Challenge by means of this petition under Section 115 of the Code of
Civil Procedure, 1980 (CPC) is to the impugned order of the trial court dated
29.5.2004 by which the trial court dismissed the application under Order
XXXVII Rule 4 CPC filed by the petitioner/defendant. By the application
under Order XXXVII Rule 4 CPC, the petitioner/defendant prayed for
setting aside of the judgment and decree dated 07.4.2003 which was passed
in default of non-filing of appearance within 10 days as required under
Order XXXVII CPC.
2. A reading of the impugned order shows that the trial court has relied
upon the judgment of the Supreme Court in the case of Rajni Kumar Vs.
Suresh Kumar Malhotra 2003 (2) UJ 810 (SC), which holds that the
petitioner besides pleading good cause for non-appearance had to plead
merits of the case, but since no merits of the case were pleaded and which
were sine qua non for an application to be considered under Order XXXVII
Rule 4 CPC, the application was to be dismissed.
3. I do not find any error in the reasoning of the order of the trial court
because the Supreme Court in the judgment in the case of Rajni Kumar
(supra) categorically states that the cause of action for filing of an
application under Order XXXVII Rule 4 CPC is besides giving reasons for
non-appearance, that the applicant/defendant must also state grounds on
merits by which the plaintiff would not have been entitled to a decree.
4. However, in my opinion, the present petition is liable to be allowed on
a totally separate ground, and which goes to the root of the matter because
the subject suit which is filed and treated under Order XXXVII CPC could
not have been filed and treated under Order XXXVII CPC. The reasons for
the same are that the respondent/plaintiff by the suit claimed recovery of
earnest money deposited with the petitioner/defendant, and which earnest
money was given with respect to a tender which was submitted by the
respondent/plaintiff to the petitioner/defendant. The suit was filed under
Order XXXVII CPC stating that the earnest money amount was not
refunded, and therefore the same was liable to be refunded to the
respondent/plaintiff. For the suit to be considered under Order XXXVII
CPC, the respondent/plaintiff stated the following in para 6 of the plaint:-
" That the present suit is under order XXXVII of CPC and the
plaintiff desires to file the same under the said order. The suit is
based on written contract entered into between the parties vide notice
inviting tenders and depositing the earnest money with them and the
same was confirmed by the defendant vide their various letters as
well as reply to the request for refund of the earnest money thereby
confirming the aforesaid refund of earnest money amounting to
Rs.2,31,000/-. However, the defendant failed to honour the contract
and on the day of filing the present suit, the defendant is in arrears for
a sum of Rs.2,31,000/-. However the plaintiff is claiming the interest
@ 17.25% per annum for which the defendant is liable to pay."
5. A suit under Order XXXVII CPC lies in terms of Order XXXVII Rule
1 Sub-Rule (2) (b) (i) CPC if the amount claimed is a debt or a liquidated
demand of moneys arising on a written contract i.e for a suit to be
maintainable under Order XXXVII CPC it is not enough if there is a
document evidencing payment by the plaintiff to the defendant, but in fact
the document must contain a liquidated demand and an acknowledgment of
debt. This is because it is only a promise to pay which creates a liquidated
demand or a debt. A simple document showing payment by the plaintiff to
the defendant will not be a written contract as is contemplated by Order
XXXVII Rule 1 Sub Rule (2) (b) (i) CPC.
6. I am supported in my conclusion by the judgment of a learned Single
Judge of this Court in case of Syed Moosa Emami Vs. Sunil Kumar Gilani
& Anr. AIR 1982 Delhi 590, which holds that no suit lies under Order
XXXVII CPC where the plaintiff has given an amount to the defendant by a
cheque, and which has been encashed, inasmuch as a suit under Order
XXXVII CPC lies when a cheque is in favour of the plaintiff and it gets
dishonoured. Learned Single Judge of this Court in the case of Syed Moosa
(supra) has held that when a plaintiff made a payment by cheque to the
defendant, at best that will be an evidence of giving moneys to the
defendant, but that will not be a basis to file a suit under Order XXXVII
CPC on the ground that money has been paid by cheque. Money being paid
by a cheque is an evidence of payment but not an evidence of liability in
favour of the plaintiff, and consequently the suit was held not to be
maintainable under Order XXXVII CPC once there was no cheque which
was dishonoured, and which was issued in favour of the plaintiff by the
defendant.
7. In my opinion, the trial court at the time of passing of the judgment by
default on 07.4.2003 ought to have first considered the maintainability of the
suit itself under Order XXXVII CPC. If the suit itself was not maintainable
under Order XXXVII CPC, the non-filing of appearance under Order
XXXVII CPC would be immaterial. The observations of the Supreme Court
in the case of Rajni Kumar (supra) would have applied only if the suit was
firstly filed under Order XXXVII CPC. I am allowing the
petitioner/defendant to take up the non-maintainability of the subject suit,
which only is a legal issue arising from the admitted facts i.e admitted facts
stated in the written statement and it goes to the root of the matter.
8. Lastly, I would like to note that if there is any change in the entity of
the petitioner on transfer of its assets, rights and liabilities to any other
entity, the suit can be continued by the successor entity in view of Order
XXII Rule 10 CPC, and for which the petitioner/defendant may move an
appropriate application before the trial court to bring on record this aspect.
9. In view of the above, the present petition is allowed. The impugned
order dated 29.5.2004 is set aside and the suit is directed to be treated as an
ordinary recovery of money suit and not a suit under Order XXXVII CPC.
10. The amount deposited by the petitioner in this Court be returned back
to the petitioner/defendant along with accrued interest thereon. The
petitioner/defendant will now be entitled to file the written statement in
terms of the directions given by the trial court.
11. List before the District and Sessions Judge, Tis Hazari Court, Delhi on
17.12.2014, and the District and Sessions Judge will now mark the suit for
disposal to a competent court in accordance with law treating the same as an
ordinary suit for recovery of moneys.
VALMIKI J. MEHTA, J
NOVEMBER 13, 2014
KA
