Naresh Kumar vs Nitin Luthra
2018 Latest Caselaw 1085 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RFA No. 169/2018

%                                                15th February, 2018

NARESH KUMAR                                           ..... Appellant
                             Through: Mr. S.B. Sharma, Advocate.

                          versus

NITIN LUTHRA                                            ..... Respondent

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

C.M. Appl. No. 5706/2018 (for exemption)

1. Exemption allowed, subject to all just exceptions.

C.M. stands disposed of.

C.M. Appl. No. 5707-08/2018 (for delays)

2. For the reasons stated in the applications, the delays of 12

days in filing the appeal and 4 days in re-filing the appeal are

condoned, subject to just exceptions.

C.Ms. stand disposed of.

RFA No. 169/2018 and C.M. Appl. No. 5705/2018 (for stay)

3. This Regular First Appeal under Section 96 of the Code

of Civil Procedure, 1908 (CPC) is filed by the defendant in the suit

RFA No.169/2018 page 1 of 9 impugning the judgment of the trial court dated 6.9.2017 by which the

trial court has decreed the suit filed by the respondent/plaintiff by

dismissing the leave to defend application filed by the

appellant/defendant under Order XXXVII Rule 3 (7) CPC.

4. The facts of the case are that admittedly the

appellant/defendant admits that he received a loan of Rs.15,00,000/-

from the respondent/plaintiff in terms of cheque no. 377709 drawn on

UCO Bank, Punjabi Bagh, New Delhi dated 9.3.2016 for a sum of

Rs.15,00,000/-. It is also not disputed that the cheque was of the bank

of the respondent/plaintiff and the amount was credited to the account

of the appellant/defendant. Appellant/defendant in the leave to defend

application pleaded that the loan of Rs.15,00,000/- was returned back

by the appellant/defendant to the respondent/plaintiff in cash and in

good faith the appellant/defendant neither took back the subject

cheque of the appellant/defendant which was dishonoured on

presentation being cheque No. 465877 dated 29.8.2016 for

Rs.15,00,000/- nor and in fact any receipt evidencing payment to

respondent/plaintiff was taken. It was pleaded by the

appellant/defendant that he received the loan amount by means of a

RFA No.169/2018 page 2 of 9 cheque, but he repaid the amount in cash with interest and in support

of which appellant/defendant only relies upon certain entries made by

him in his own hand in his own diary. The appellant/defendant

contends that in fact he had given to the respondent/plaintiff not one

cheque but a total of four cheques bearing nos. 465877, 465878,

465879 and 465880 and that respondent/plaintiff is misusing the

cheques although the loan amount with interest stands repaid.

5. The principles with respect to grant of leave to defend

application in an Order XXXVII CPC suit have been recently stated

by the Supreme Court in the judgment in the case of IDBI Trusteeship

Services Limited vs. Hubtown Limited (2017)1 SCC 568. The

relevant paras of this judgment laying down the test with respect to

grant of leave to defend are paras 17 to 17.6 and theses paras read as

under:-

"17. Accordingly, the principles stated in paragraph 8 of Mechelec's case will now stand superseded, given the amendment of Order XXXVII Rule 3, and the binding decision of four judges in Milkhiram's case, as follows:

17.1. If the defendant satisfies the Court that he has a substantial defence, that is, a defence that is likely to succeed, the Plaintiff is not entitled to leave to sign judgment, and the Defendant is entitled to unconditional leave to defend the suit.

17.2 If the defendant raises triable issues indicating that he has a fair or reasonable defence, although not a positively good defence, the Plaintiff is

RFA No.169/2018 page 3 of 9 not entitled to sign judgment, and the Defendant is ordinarily entitled to unconditional leave to defend.

17.3 Even if the Defendant raises triable issues, if a doubt is left with the trial judge about the Defendant's good faith, or the genuineness of the triable issues, the trial judge may impose conditions both as to time or mode of trial, as well as payment into court or furnishing security. Care must be taken to see that the object of the provisions to assist expeditious disposal of commercial causes is not defeated. Care must also be taken to see that such triable issues are not shut out by unduly severe orders as to deposit or security.

17.4 If the Defendant raises a defence which is plausible but improbable, the trial Judge may impose conditions as to time or mode of trial, as well as payment into court, or furnishing security. As such a defence does not raise triable issues, conditions as to deposit or security or both can extend to the entire principal sum together with such interest as the court feels the justice of the case requires. 17.5 If the Defendant has no substantial defence and/or raises no genuine triable issues, and the court finds such defence to be frivolous or vexatious, then leave to defend the suit shall be refused, and the Plaintiff is entitled to judgment forthwith.

17.6 If any part of the amount claimed by the Plaintiff is admitted by the Defendant to be due from him, leave to defend the suit, (even if triable issues or a substantial defence is raised), shall not be granted unless the amount so admitted to be due is deposited by the Defendant in court."

6. Applying the aforesaid test if it is found that the

appellant/defendant has raised no substantial defence or genuine

triable issues and that the defence is frivolous or vexatious then leave

to defend shall be refused.

7. In the present case, the trial court for dismissing leave to

defend application filed by the appellant/defendant has rightly

observed that the loan taken by the appellant/defendant from the

respondent/plaintiff was in cheque and therefore there was no reason

RFA No.169/2018 page 4 of 9 why the loan would be repaid in cash, that too without taking any

receipt of payment and also further by not taking back the cheque

given as security. Clearly, therefore, the story put forth by the

appellant/defendant is a moonshine and the same raises no substantial

defence or genuine triable issue because such a story put forth is

frivolous and vexatious as this Court cannot believe that if a loan is

taken by a cheque repayment was made by the appellant/defendant in

cash, that too not only without taking any proof of payment but also

without taking back the cheque given as security. Admittedly, it is not

as if the loan was given between close relations and

appellant/defendant admits that he had taken the loan from the

respondent/plaintiff for the purpose of constructing his house.

8.(i) Learned counsel for the appellant/defendant argued by

placing reliance upon a letter dated 18.7.2016 sent by the

appellant/defendant to his bank informing that the four cheques have

been given to the respondent/plaintiff as security and since full and

final payment has been made by the appellant/defendant to the

respondent/plaintiff hence the payment of the cheques should be

stopped. This letter date 18.7.2016 reads as under:-

RFA No.169/2018                                                 page 5 of 9
                                                                  "18 July 2016
       To
       The Bank Manager
       Syndicate Bank
       East Punjabi Bagh (Branch)
       New Delhi 110026
       Sir/Madam

Subject: Application for stop payment of cheque Nos.465877, 465878, 465879, 465880, blank signed cheques I Naresh Anand s/o Shri Subhash Chander R/o E-263 Karampura, New Delhi 110015. My saving A/c No. 91412010037495 in your Bank (Syndicate Bank).

Kindly stop my above mentioned 4 cheques (four cheques) which was given to Shri Nitin Luthra as security. I have already given him his full n final payment. So there is no use of my 4 above mentioned cheques that I am not related to these above mentioned (4) cheques in future. Kindly do my a favour. So that I am highly thankful to you.

Thanking you Sd/-

Naresh Anand S/o Shri Subhash Chander E-263 Karampura New Delhi-110015 A/c No.91412010037495"

(ii) Learned counsel for the appellant/defendant argues that

respondent/plaintiff was misusing one of the four cheques by filing the

subject suit and that the appellant/defendant's letter to his bank dated

18.7.2016 shows that well before the date of the subject cheque which

was dishonoured, and which is dated 29.8.2016, the

appellant/defendant since had informed his bank, hence the

appellant/defendant should be held to be not liable.

RFA No.169/2018 page 6 of 9

(iii) I cannot agree with the arguments urged on behalf of the

appellant/defendant because firstly the appellant/defendant has failed

to show that four cheques as stated in its letter dated 18.7.2016 of the

appellant/defendant to his bank were ever given to the

respondent/plaintiff. In fact, this letter to the bank dated 18.7.2016

admits that the subject cheque was the cheque given by the

appellant/defendant to the respondent/plaintiff as security i.e security

with respect to loan taken by the appellant/defendant from the

respondent/plaintiff. I have put a specific query to counsel for the

appellant/defendant that whether respondent/plaintiff was sent a copy

of this letter dated 18.7.2016, but it is admitted that no copy of this

letter was sent by the appellant/defendant to the respondent/plaintiff.

In my opinion, therefore this letter dated 18.7.2016 written by the

appellant/defendant to his bank will not in any manner help the

appellant/defendant to show that the appellant/defendant had repaid

the loan of Rs.15,00,000/- and that the respondent/plaintiff was

misusing the subject cheque. As already stated above the story put

forth by the appellant/defendant is completely unbelievable and is

frivolous and vexatious, that the loan taken from a stranger by cheque

RFA No.169/2018 page 7 of 9 is repaid not by cheque but by cash and that too without obtaining any

receipt for cash payment and also by not taking back the cheque given

as security for the loan.

9.(i) Learned counsel for the appellant/defendant then sought

to argue that appellant/defendant had filed a suit against the

respondent/plaintiff for not misusing the four cheques, and which are

the four cheques as stated in the letter dated 18.7.2016 to his bank, and

that in that suit the respondent/plaintiff admitted for not misusing the

cheque bearing no. 465879, therefore, it is argued that it is shown that

the respondent/plaintiff is misusing the subject cheque for

Rs.15,00,000/- bearing no. 465877.

(ii) I cannot agree with this argument because in the other suit filed

by the appellant/defendant against the respondent/plaintiff, the

respondent/plaintiff in his written statement in the suit filed by the

appellant/defendant has not admitted to receiving four cheques from

the appellant/defendant. In fact the respondent/plaintiff has admitted

to having received only two cheques, with one cheque being the

subject cheque bearing no. 465877 and the other cheque bearing no.

465879, and that as per the statement of the respondent/plaintiff

RFA No.169/2018 page 8 of 9 recorded on 24.1.2018 in the suit filed by the appellant/defendant the

respondent/plaintiff clearly stated that he will not in any manner use

the second cheque bearing no. 465879 received by him from the

appellant/defendant.

10. In view of the above discussion, I do not find any merit in

this appeal and the same is hereby dismissed.

FEBRUARY 15, 2018                          VALMIKI J. MEHTA, J
AK




RFA No.169/2018                                             page 9 of 9