Delhi High Court
Artisans Guild vs Tirupati Constwell Pvt. Ltd. on 2 March, 2015
Author: Jayant Nath
$~A-6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: March 02, 2015
+ CS(OS) 2683/2012
ARTISANS GUILD ..... Plaintiff
Through Mr.Varun Singh, Advocate.
versus
TIRUPATI CONSTWELL PVT. LTD. ..... Defendant
Through Mr.Rajeev Saxena, Mr.Vardaan
Dhawan and Ms.Mehak Tanwar,
Advocates.
CORAM:
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J. (ORAL)
IA No. 8730/2012 (u/O 37 R 3 CPC)
1. This is an application under Order 37 Rule 3 CPC filed by the
defendant for leave to defend.
2. The accompanying suit is filed based on an order placed on the
plaintiff by the defendant for the supply of different kinds of furniture. It is
stated that an oral order was made on 12.10.2009. A part advance payment
of Rs. 22,73,000/- was made between the period 11.11.2009 to 09.08.2010.
It is further averred that since 11.11.2009 the plaintiff has been maintaining
continuous running account. The plaintiff is said to have supplied all the
orders as per the specifications given by the defendant from time to time. It
is further stated that there was a delay in making payment by the defendant.
On 20.02.2012 after reconciliation of accounts, the defendant has
acknowledged due of Rs.42,19,660/-. The details of pending bills and
challans are shown in Schedule-I. The plaintiff sent a legal notice on
10.04.2012. No reply has been received from the defendant.
3. The defendant in its application for leave to defend has essentially
made two submissions. He has relied on various documents to contend that
as per the vouchers more than Rs.49 lacs has been paid to the plaintiff which
vouchers are duly signed by the plaintiff. It is averred that in fact the
defendant is entitled to a refund of Rs. 23 lacs from the plaintiff for excess
payment made.
4. Learned counsel appearing for the defendant states that the plaintiff
has placed on record certain vouchers which are duly signed by the plaintiff
to show that large number of payments have been made. He states that a
total sum of Rs. 49 lacs has been paid as per these vouchers which are in
excess of the dues of the plaintiff. He also states that though the plaintiff has
denied having executed these vouchers, the stamp of the plaintiff is on the
vouchers. He submits that it is appropriate that the defendant be given an
opportunity to lead evidence and prove these vouchers and also to prove the
offer letters which are dated 10.04.2010 and 12.04.2010 which are also filed.
5. Learned counsel for the plaintiff has reiterated that there is
unequivocal acknowledgement of debt as on 31.03.2012 of Rs.42,19,660/-
which is duly signed and stamped by the authorised signatory of the
defendant. He submits that in view of this unambiguous acceptance of
liability by the defendant, no leave to defend should be granted to the
defendant.
6. The legal position regarding grant of leave to defend needs no
repetition. In the context of grant of leave to defend, the principles of law
applicable are well known. The basic judgment in this regard, namely, M/s
Mechalec Engineers & Manufacturers v. M/s Basic Equipment
Corporation AIR 1977 SC 577, may be looked into for the said purpose. In
para 8, the Hon‟ble Supreme Court has held as follows:
"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 17 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, shews 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."
7. Let me test the defence of the defendant. A perusal of the vouchers
would show that there are nine vouchers in all which alleged payment to the
plaintiff of total Rs.42 lacs. The details of the vouchers are as follows:-
Voucher dated Amount
26.03.2012 Rs.1,20,000/-
02.03.2012 Rs.8,20,000/-
08.03.2012 Rs.9,20,000/-
05.03.2012 Rs.9,20,000/-
04.04.2012 Rs.7,20,000/-
12.03.2012 Rs.1,20,000/-
14.03.2012 Rs.1,20,000/-
17.03.2012 Rs.9,20,000/-
30.03.2012 Rs.1,20,000/-
Total Rs.47,80,000/-
8. A perusal of the above vouchers would show that all are
contemporaneously dated. Eight of them are for the month of March 2012.
One voucher is of 04.04.2012 for a sum of Rs.7,20,000/-.
9. If one compares this with the statement of accounts which is duly
acknowledged by the defendant, it may be seen that the defendant has
accepted its dues as on 31.03.2012 for Rs.42,19,660/-. Hence other than the
single voucher dated 04.04.2012 all the other vouchers are for the period
prior to 31.03.2012. When the defendant acknowledged the debts as on
31.03.2012, it certainly would have taken into account all the vouchers
relied upon except the voucher dated 04.04.2012.
10. In my opinion another reason to doubt the veracity of these vouchers
is that they all clubbed around the month of March 2012. The basis of these
vouchers is not given.
11. Keeping in view the facts and background of this case, in my view the
defence as pleaded by the defendant would fall in the category of „E‟ as
stated by the Supreme Court in the case of Mechalec Engineers &
Manufacturers (supra) Defendant has no defence. However, the plaintiff is
entitled to a protection before the defendant is permitted to proceed and
defend the suit by leading evidence. Hence, I grant conditional leave to
defend to the defendant subject to the defendant depositing a sum of Rs.35
lacs (i.e. deducting Rs.7 lacs on account of the voucher of 4.4.2012) in the
court within four weeks from today.
12. The application stands disposed of.
CS(OS) 2683/2012
List before the Joint Registrar on 6th May, 2015 for compliance.
JAYANT NATH, J
MARCH 02, 2015
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