Delhi High Court
Saleem Khatri vs Shafiquddin on 3 March, 2015
Author: Mukta Gupta
$~4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ C.R.P. 14/2014 & CM No. 2542/2014
% Decided on: 3rd March, 2015
SALEEM KHATRI . .... Petitioner
Through: Mr. R.S. Soni, Adv.
versus
SHAFIQUDDIN ..... Respondent
Through: None.
Coram:
HON'BLE MS. JUSTICE MUKTA GUPTA
MUKTA GUPTA, J. (ORAL)
1. Despite service, none appears on behalf of the respondent. None
appeared on behalf of respondent even on the last date of hearing. The
petitioner is the defendant in the Civil Suit No. 61/2012 filed by the
respondent/Shafiquddin under Order 37 CPC for the recovery of an amount
of `5,66,425/- based on a cheque. The case of the plaintiff/respondent in the
plaint is that the plaintiff transferred a Slaughter House to the defendant in
consideration whereof, the petitioner/defendant paid a sum of `4,62,425/- by
way of a cheque which was dishonoured due to insufficient funds. The
plaintiff/respondent sent a notice under Section 138 of the Negotiable
Instruments Act and thereafter filed a complaint before the Metropolitan
Magistrate.
2. In the Civil Suit filed by the respondent under Order 37 CPC for
recovery of the amount of `4,62,425/-, the petitioner filed a leave to defend
application challenging the territorial jurisdiction of the learned trial court to
try the suit as according to the defendant, the agreement was executed at
Gurgaon, Haryana and the Slaughter House was situated at Doha, Haryana
and no cause of action took place in Delhi and hence, the trial court had no
jurisdiction to try the suit. It was further stated that the possession of the
Slaughter House was never handed over to the petitioner/defendant and
hence the transaction having not taken place, there was no reason why the
cheque ought to have been encashed.
3. In the suit, though, the plaintiff claimed that they had delivered the
possession of the Slaughter House, however, no document showing the
transfer or delivery of the Slaughter House was filed. Further, the agreement
entered into between the parties was also not filed. In view of these facts, the
learned trial court granted the leave to defend to the petitioner/defendant
subject to the deposit of the cheque amount/furnishing bank guarantee to the
extent of the cheque amount vide the impugned order.
4. The only grievance of the petitioner/defendant before this court is
with regard to the direction to deposit the cheque amount/furnishing bank
guarantee to the said extent as directed by the impugned order.
5. In a suit under Order 37 CPC, if the defendant raises triable issues,
then he is entitled to leave to defend. In the present case, the
petitioner/defendant has raised a triable issue with regard to the territorial
jurisdiction of the learned trial court and secondly with regard to the very
basis of the agreement i.e. the possession of the Slaughter House not having
been handed over to the petitioner/defendant, thus leave to defend was
rightly granted to the petitioner/defendant. However, as settled by the
Supreme Court, only in cases, where the defence appears to be malafide or if
the defendant has no defence or the same is illusiory or sham or practically
moonshine, the court may grant leave to defend subject to the defendant
depositing the contracted amount/liquidated damages.
6. In Smt. Kiranmoyee Dassi and Anr. V. Dr. J. Chatterjee, the Supreme
Court laid down guidelines with regard to leave to defend in a suit under
Order 37 CPC as under:-
" (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. In Santosh Kumar Vs. Mool Bhai AIR 1958 SC 321 the Supreme
Court held that while granting leave to defend the conditions of deposit of
the amount can be imposed only if the Court finds that triable issues are
raised but defence appears to be malafide.
8. In the present case, as noted above, the petitioner/defendant has raised
triable issues inasmuch as he has challenged the territorial jurisdiction of the
learned trial court and also that the contract was never performed and the
possession of the Slaughter House was not handed over for which the
respondent/plaintiff failed to file any document. Thus, the defence of the
defendant cannot be said to be either illusory, sham or practically moonshine
or malafide, consequently, the direction of the learned trial court vide the
impugned order to the extent it directed the petitioner/defendant to deposit
the cheque amount or furnishing the bank guarantee is set aside.
9. The application and the petition are disposed of.
(MUKTA GUPTA)
JUDGE
MARCH 03, 2015
'j'
