Delhi High Court
Shri Hari Om Gupta vs Ifb Industries Ltd on 15 October, 2014
$~19
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA 501/2014
Decided on 15th October, 2014
SHRI HARI OM GUPTA ..... Appellant
Through : Mr. Manish Miglani, Adv.
Versus
IFB INDUSTRIES LTD ..... Respondent
Through :
CORAM:
HON'BLE MR. JUSTICE A.K. PATHAK
A.K.PATHAK, J.(ORAL)
CM Appl. No. 17053/2014 (exemption)
Allowed, subject to all just exceptions.
Application is disposed of.
RFA 501/2014 and CM No. 17054/2014 (stay)
Appellant has filed this appeal against the judgment and decree dated
17th May, 2014 passed by the Trial Court whereby leave to defend
application of appellant has been dismissed, consequently, suit under Order
37 of the Code of Civil Procedure, 1908 (CPC) of the respondent for
`18,89,024/- along with costs, pendente lite and future interest @ 12% per
annum has been decreed. Respondent claimed in the plaint that he supplied
RFA 501/2014 Page 1 of 7
various electronic goods to appellant from time to time vide following
invoices:
"i. Invoice No.DEL/TAX SALES/2264/07-08 dated
31.10.2007 for `1,94,000/-
ii. Invoice No.DEL/TAX SALES/2266/07-08 dated
31.10.2007 for `37,500/-
iii. Invoice No.DEL/TAX SALES/2267/07-08 dated
31.10.2007 for `25,500/-
iv. Invoice No.DEL/TAX SALES/2268/07-08 dated
31.10.2007 for `1,05,000/-
v. Invoice No.DEL/TAX SALES/2306/07-08 dated
03.11.2007 for `2,28,000/-
vi. Invoice No.DEL/TAX SALES/2307/07-08 dated
03.11.2007 for `82,500/-
vii. Invoice No.DEL/TAX SALES/2308/07-08 dated
03.11.2007 for `76,800/-
viii. Invoice No.DEL/TAX SALES/2309/07-08 dated
03.11.2007 for `20,848/-
ix. Invoice No.DEL/TAX SALES/2325/07-08 dated
03.11.2007 for `1,14,000/-
x. Invoice No.DEL/TAX SALES/2330/07-08 dated
03.11.2007 for `84,000/-
xi. Invoice No.DEL/TAX SALES/2334/07-08 dated
04.11.2007 for `84,000/-
xii. Invoice No.DEL/TAX SALES/2344/07-08 dated
05.11.2007 for `1,66,900/-
RFA 501/2014 Page 2 of 7
xiii. Invoice No.DEL/TAX SALES/2391/07-08 dated
07.11.2007 for `1,06,300/-"
2. Respondent was maintaining an account of the goods supplied and
payments received in its books of account. As on 20th September, 2008 a
sum of `12,73,123/- was due and outstanding against the appellant. On the
said date, appellant paid `12,30,580/- through following cheques:-
"i Cheque No.282851 for `25,000/-
ii Cheque No.282852 for `25,000/-
iii Cheque No.282853 for `25,000/-
iv Cheque No.282854 for `25,000/-
v Cheque No.575051 for `77,280/-
vi Cheque No.575052 for `74,000/-
vii Cheque No.575053 for `2,00,000/-
viii Cheque No.575054 for `75,000/-
ix Cheque No.575056 for `20,000/-
x Cheque No.575057 for `1,00,000/-
xi Cheque No.574775 for `1,78,480/-
xii Cheque No.574776 for `2,53,850/-
xiii Cheque No.574777 for `94,500/-
xiv Cheque No.574778 for `23,970/-
RFA 501/2014 Page 3 of 7
xv Cheque No.574779 for `23,500/-"
On presentation, all the cheques were returned dishonoured by the
bank with the remarks "funds insufficient" and „refer to drawer‟.
Respondent sent a legal notice dated 20th October, 2008, to appellant but
same was refused. Respondent had filed a complaint under Section 138 of
the Negotiable Instruments Act, 1881 ("the Act", for short) which was
pending. Respondent alleged that since amounts involved in the cheques
were not paid, hence, the suit for recovery of amounts involved in the
cheques together with interest @ 18% per annum.
Appellant filed leave to defend application stating therein that the
invoices were forged, fabricated and manipulated documents. It was further
alleged that blank cheques were issued by the appellant as „security‟ against
the goods supplied. Cheques were, subsequently, filled and presented by the
respondent despite the fact that no amount was due and payable. It was
further alleged that suit was barred by time. Appellant claimed that
aforesaid defence raised by him disclosed triable issue, thus, leave to defend
be granted.
RFA 501/2014 Page 4 of 7
Trial court has held that defence raised by the appellant was frivolous,
baseless and moonshine, inasmuch as did not disclose any triable issue.
Defence taken by the appellant that blank cheques were issued, did not raise
any triable issue. Reliance was placed on 2002 (2) Civil Court C.R. 600
(Madras) and 2002 (1) Civil C.R. 310 (Andhra Pradesh), wherein it was
held that inchoate instruments are legal instruments and a person handing
over inchoate instruments to another person gives the authority to the holder
to complete the said instruments before its presentation and the borrower is
liable to pay to the holder. Trial court has held that in view of Section 20 of
the Act the plea of handing over blank cheques cannot be entertained.
Section 20 of the Act envisages that if a person gives an incomplete
negotiable instrument to other, the other person has the authority to fill the
same. Trial court has further observed that appellant had not denied that he
was having business transaction with the respondent and was purchasing
goods. He even did not deny that cheques were issued by him. Appellant
failed to disclose anything to show that invoices were forged or manipulated
or did not bear the signatures or stamp of appellant.
I have heard learned counsel for the appellant and have perused the
material placed on record and do not find any illegality or perversity in the
RFA 501/2014 Page 5 of 7
impugned order. It is trite law that in case appellant discloses triable issues,
leave to defend has to be granted. At the same time, if Court is of the view
that defence raised by the appellant is frivolous, baseless and moonshine,
leave to defend is liable to be declined, resulting in signing of judgment. In
Mechalec Engineers and Manufacturers vs. Basis Equipment Corporation,
AIR 1977 SC 577, Supreme Court has held that if the defendant has no
defence or the defence set up is illusory or sham or practically moonshine,
then the plaintiff is entitled to leave to sign judgment and the defendant is
not entitled to leave to defend. In this case, respondent has made a
categorical assertion that the goods were supplied from time to time,
inasmuch as details of invoices have been given in the affidavit. It was
stated that `12,73,123/- was due and outstanding as on 20th September,
2008. In order to clear his liability, appellant had issued various cheques,
details whereof have been given in the plaint. The total amount, involved in
the cheques comes to `12,30,580/- which is more or less equivalent to the
amount which was due and outstanding as on 20 th September, 2008. Except
the bald plea any other deficiency could not be pointed out in the invoices,
inasmuch as the present suit is not based only on invoices and is practically
based on the cheques issued by the appellant. Appellant has not stated that
RFA 501/2014 Page 6 of 7
cheques were not issued by him. Signatures on the cheques have not been
disputed.
As regards plea of handing over the blank signed cheques is
concerned, same does not raise any triable issue. In M/s. Pradyuman
Overseas Ltd. vs. Sanjeev Jindal this court held thus: "Merely pleading that
the cheques were signed in blank and handed over is not sufficient to be
entitled to an opportunity to lead evidence, else Order XXXVII of CPC shall
become a dead letter. The same presumption rule applies to the pleas of
having signed and delivered papers in blank".
Trial Court has rightly held that plea of signing of blank document
does not raise any triable issue. As regards plea of limitation is concerned,
during the course of hearing counsel for the appellant has admitted that the
suit was filed in time. No other argument has been advanced nor any other
point pressed.
Appeal is dismissed. Miscellaneous application is disposed of as
infructuous.
A.K. PATHAK, J.
OCTOBER 15, 2014/rb
