M/S Enable Technologies Pvt. Ltd. vs Shankar Krishna Murthy
2018 Latest Caselaw 3590 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                      RFA No. 496/2018

%                                                      3rd July, 2018

M/S ENABLE TECHNOLOGIES PVT. LTD.                       ..... Appellant

                          Through:       Mr. Vaibhav Dang, Advocate.

                          versus

SHANKAR KRISHNA MURTHY                                 ..... 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. 25770/2018 (for exemption)

1. Exemption allowed, subject to just exceptions.

C.Ms. stands disposed of.

RFA No. 496/2018 and C.M. Appl. No. 25769/2018 (for stay)

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

of Civil Procedure, 1908 (CPC) is filed by the defendant no. 1 in the

suit impugning the judgment of the trial court dated 21.2.2018 by

which trial court has dismissed the leave to defend application filed by

the appellant/defendant no. 1/company under Order XXXVII Rule

3(5) CPC and has decreed the suit on the basis of dishonoured cheque

for the sum of Rs.10,92,748/- along with statutory interest at 18% per

annum as per Section 80 of the Negotiable Instruments Act, 1881 and

pendete lite and future interest however only at 6% per annum.

2. The facts of the case are that the respondent/plaintiff filed

the subject suit for recovery for a sum of Rs.10,92,748/- being the

amount of cheque no. 545556 dated 15.4.2013 drawn on HDFC Bank,

Vasant Vihar, New Delhi, and which cheque was issued by the

appellant/defendant no. 1 in favour of respondent/plaintiff towards

arrears of business related expenses. Respondent/plaintiff was given

two cheques, one towards arrears of salary of Rs.29,27,022/- and the

second cheque being the subject cheque towards business expenses

amounting to Rs.10,92,728/-, and the suit is only for this second

cheque.

3. Trial court has rightly applied the principles of grant of

leave to defend application in an Order XXXVII CPC suit in terms of

the recent judgment of the Supreme Court in the case of IDBI

Trusteeship Services Ltd. Vs. Hubtown Ltd., (2017) 1 SCC 568. Trial

court has noted that the defence of the appellant/defendant no. 1 was

that the subject cheque and the letter dated 31.8.2012 are forged and

fabricated, but if that was so, then why the appellant/defendant no. 1

after becoming aware of the alleged forgery took no steps to bring the

respondent/plaintiff/culprit before the law. Trial court also rightly

notes that the leave to defend application is silent as to how forgery

has been done and which is specially so because the cheque bears the

signatures of the appellant/defendant no. 1, the cheque was not

returned for discrepancy of signatures but only on account of

insufficient funds. Also, if the forgery was of 2013, then the trial

court rightly notes that till the filing of the suit in 2016 no action was

taken by the appellant/defendant no. 1. Trial court also rightly noted

that except stating that the cheque was not issued towards any

enforceable liability, there were no other details which were given.

Trial court has further rightly noted that there is a presumption that a

cheque is drawn for consideration due and payable. Trial court

thereafter by applying Section 80 of the Negotiable Instruments Act,

and which provides for a statutory rate of interest on a dishonoured

cheque, has granted interest at 18% per annum till filing of the suit

with pendente lite and future interest at 6% per annum. The relevant

paragraphs of the impugned judgment are paragraphs 8 to 12 and these

paragraphs read as under:-

"8. In IDBI Trusteeship Services Ltd vs Hubtown Ltd MANU/SC/1490/2016, Hon'ble Apex Court observed in para no.18 as below:-

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

a. 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. b. if the defendant raises triable issues indicating that he has a fair or reasonable defence, although, not a positively good defence, the plaintiff is not entitled to sign judgment, ant the defendant is ordinarily entitled to unconditional leave to defend. c. 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.

d. 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 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. e. 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; 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 the court.

9. The instant suit is based upon a cheque which is a Bill of Exchange within the meaning of Negotiable Instruments Act. In order to be entitled to leave to defend, the defendant no. 1 must show that it has a reasonable defence which raises a triable issue. If the defence of the defendant no.1 is moonshine and unreasonable, leave to defend cannot be granted.

10. The case of the defendant no.1 is that the cheque bearing no. 545556 and letter dated 31.08.2012 are forged and fabricated documents. However, there is nothing on record to suggest that the defendant no.1, after becoming aware of the alleged forgery, took any steps to bring the culprit before the law. It is not specified in the application seeking leave to defend how forgery has been done. A certified copy of the cheque in question has been filed by the plaintiff. The cheque pertains to defendant no. 1 company, signed by its authorized signatory. The cheque was returned unpaid for the reason "insufficient funds" and not that signature was not matching or some other like reasons. Defendant no. 1 did not take any action for the alleged forgery since 2013 when the cheque was presented for encashment and even after the filing of the present suit. This itself suggests that the defence raised by the defendant no.1 is without any basis, unreasonable and moonshine. The conduct of defendant no.1 in not making any complaint with respect to the alleged forgery is unnatural and makes the defence raised by the defendant no.1 inexplicable and unbelievable.

11. No other defence, except discussed above, has been raised by defendant no. 1. It is case of the defendant no.1 that it has no enforceable liability law towards the plaintiff. However, presumption in case of the cheque, which is a negotiable instrument, is that it was issued towards an enforceable liability. Defendant no. 1 has not pleaded anything in the application that could explain why cheque in question was issued, except a bald averment regarding absence of any enforceable liability, which suggests that the defence is palpably false, unbelievable and a moonshine.

12. In view of reasons above, the application seeking leave to defend is rejected. The instant suit is based upon dishonoured cheque. Presumption is that the cheque was issued in discharge of legal liability. As per Section 80 of Negotiable Instruments Act, 1881, in case no rate of interest is specified, the interest to be calculated against the negotiable instrument is @18% per annum from the date at which the

same ought to have been paid by the party charged. Hence, plaintiff is also entitled to interest @ 18% per annum from the date of presentation of the cheque i.e. 06.07.2013 in view of Section 80 of Negotiable Instruments Act, 1881." (underlining added)

4(i). Learned counsel for the appellant/defendant no. 1 argued

that the respondent/plaintiff on the one hand is seeking benefit of the

joint letter of the parties dated 31.8.2012 and with which the subject

cheque was annexed, but now the respondent/plaintiff is recanting

from the letter dated 31.8.2012 because the respondent/plaintiff has

filed a suit claiming that his services were illegally terminated and

which is against the jointly agreed letter/terms dated 31.8.2012. It is

argued that respondent/plaintiff cannot take up such alternative cases.

4(ii). In my opinion, this argument urged on behalf of the

appellant/defendant no. 1 is misconceived because the subject suit is

only filed on the basis of a dishonored cheque, and in case the

pleadings in the present case make any admission in favour of the

appellant/defendant no. 1, then the appellant/defendant no. 1 can

always use that admission for getting dismissed the other suit filed by

the appellant/defendant no. 1, of course in accordance with law,

however, this ground cannot be in any manner used to wish away the

liability on the basis of the subject dishonoured cheque.

5. It is not disputed before this Court that the letter dated

31.8.2012 with which the subject cheque was encashed does bear the

signatures of the appellant/defendant no. 1.

6. Therefore, the trial court in my opinion has rightly held that

there is no genuine defence and the defence is frivolous and vexatious

and no triable issue has been raised.

7. Learned counsel for the appellant/defendant no. 1 finally

argued that the trial court should not have granted interest at 18% per

annum, however, in my opinion, even this argument is misconceived

because when amount is claimed of a dishonoured cheque then

statutorily interest has to be granted at 18% per annum in view of Section

80 of the Negotiable Instruments Act. In fact, in my opinion

appellant/defendant no. 1 is lucky that appellant/defendant no. 1 has

escaped liability of rate of interest at 18% per annum for pendente lite

and future period because the trial court has only granted interest for the

pendente lite and future period at 6% per annum. This argument of the

appellant/defendant no. 1 is also therefore rejected.

8. In view of the aforesaid discussion, I do not find any merit

in the appeal. Dismissed.

JULY 03, 2018/ AK                              VALMIKI J. MEHTA, J