Delhi High Court
Anjani Technopast Ltd & Ors. vs Shubh Gautam on 27 July, 2018
$~02.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA (OS) 48/2018
% Judgment dated 27th July, 2018
ANJANI TECHNOPAST LTD & ORS. ..... Appellants
Through : Mr.Sushil K. Tekriwal, Adv.
versus
SHUBH GAUTAM ..... Respondent
Through
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI
HON'BLE MR. JUSTICE P.S. TEJI
G.S. SISTANI, J (ORAL)
1. Present appeal has been filed by the appellants under Section 96 of the
Code of Civil Procedure, 1908, (hereinafter referred to as 'the Code')
read with Section 10 of Delhi High Court Act, 1966, against the
judgment dated 11.01.2018 passed by a Single Judge of this Court in
CS (OS) No.66/2016.
2. The brief facts of the case are that the respondents had instituted a suit
under the provisions of Order XXXVII of the Code for recovery of
Rs.4,38,00,617/- along with pendente lite and future interest at the rate
of 24%, per annum. The suit was based on a loan agreement dated
24.2.2010 by which the appellants had borrowed Rs.2,50,00,000/- for
a period of two months. Appellants no.2 and 3 in the suit, executed
RFA (OS) 48/2018 Page 1 of 13
deeds of guarantee to secure the loan. The appellants had also
furnished post-dated cheques for the repayment of loan amount. The
cheques on presentation were dishonoured with the remarks
'insufficient funds'. The respondent thereafter filed complaints under
Sections 138, 141 and 142 of the Negotiable Instruments Act.
Meanwhile, parties entered into an amicable settlement under which
the appellant agreed to settle the matter with the respondent and
offered to pay Rs.3,22,02,660/- along with pendente lite interest and
future interest at the rate of 24%, per annum, till realization. Deed of
compromise dated 31.8.2013 was executed and a post-dated cheque
was handed over to the respondent, which was dishonoured with the
remark 'insufficient fund'. This settlement was also not honoured by
the appellants. As the settlement was not honoured, the respondent
filed a suit for recovery under Order XXXVII of the Code of Civil
Procedure for Rs.4,38,00,617/-. Even before the High Court, parties
entered into a settlement on 23.12.2016. This settlement was also not
honoured by the appellants. When the matter came up for hearing
before the Single Judge on 10.1.2018, counsel for the appellants
sought an adjournment. The matter was adjourned to 11.1.2018
making it clear that no further adjournment would be granted on the
next date. On 11.01.2018, the suit was decreed in the absence of any
application seeking leave to defend.
3. Learned counsel for the appellants submits that an application seeking
leave to defend along with an application seeking condonation of
delay was filed by the appellants but the same was not on record. It is
contended that the learned Single Judge should have adjourned the
RFA (OS) 48/2018 Page 2 of 13
matter to enable the appellants to trace the application seeking leave to
defend, which was filed by him as far back as on 5.12.2016 along with
the application seeking condonation of delay in filing the application
seeking leave to defend.
4. Counsel for the appellants next submits that the appellants were keen
to resolve the matter amicably. Counsel has drawn the attention of the
court to the orders dated 08.08.2016, 16.08.2016, 21.09.2016,
29.9.2016, 03.11.2016, 15.11.2016, 28.11.2016, 5.12.2016,
19.12.2016, 23.12.2016, 17.01.2017 and 10.01.2018 passed by the
Joint Registrar from time to time, to explain the reasons as to why the
application for leave to defend was not filed within the time allowed.
The orders, sought to be relied upon, read as under:
" Order
08.08.2016
Vakalatnama has been file don behalf of defendants no.1
and 2 on 4.08.2016 and the same is within prescribed period.
Learned counsel for the defendants 1 and 2 submits that she will
also file the vakalatnama on behalf of defendant no.2 and also
accepts appearance on behalf of defendant no.3. Since service
report of defendants 1 and 2 is still awaited and defendant no.1
has been served on 26.07.2016, a short delay in refiling the
appearance is condoned subject to filing of an application for
appearance within 3 days from today.
Relist for further proceedings on 16.08.2016."
" Order
12.02.2016
RFA (OS) 48/2018 Page 3 of 13
IA No.9856/2016 (under Order XXXVII Rule 3 & 3(i) CPC by
Defendant)
Heard. The present application has been filed by the
defendants 1 to 3 for taking their appearance on record in terms
of the order dated 08.08.2016. Accordingly their appearance is
taken on record. The applicants have also sought one more
relief in the present application i.e. for directing the plaintiff to
provide complete set of paper book of the present suit with copy
of the plaint and documents, IAs etc. Learned counsel for the
plaintiff has supplied the same to learned counsel for the
defendants today in the court. Accordingly, the application is
allowed
.
Relist for further proceedings on 21.09.2016."
" Order
21.08.2016
Vakalatnama has been on behalf of defendant no.3. All
the defendants have entered appearance. However, the plaintiff
has not taken the steps for issuance of summons for judgment.
Relist for further proceedings on 03.11.2016."
" Order
29.09.2016
IA. 12147/2016 (under Order XXXVII Rule 3(4) (summons
for Judgment) by the plaintiff
Issue notice to the defendants at the address mentioned in
the memo of appearance.
List before the Joint Registrar on 03.11.2016, the date
already fixed.
The Joint Registrar will place the matter before the Court
in the first week of December 2016. Parties to ensure that all
pleadings are completed before the next date of hearing before
the Court."
" Order
03.11.2016
IA No.12147/2016 (u/O XXXVII Rule 3(4) CPC by plaintiff)
The defendants remain un-served. However, learned
counsel for the defendants has entered appearance.
At joint request the matter be sent to the Delhi High
Court Mediation & Conciliation Centre on 07.11.2016 at 02:00
pm
Relist for reporting settlement if any on 15.11.2016. the
short dates have been given in view of directions of the Hon'ble
Court dated 29.09.2016."
" Order
15.11.2016
IA No.12147/2016 (u/O XXXVII Rule 3(4) CPC by plaintiff)
The mediation efforts have failed. Learned counsel for
the defendant is directed to file leave to defend application
within 10 days from today.
Relist for proceedings on 28.11.2016."
" Order
28.11.2016
IA No.12147/2016 (u/O XXXVII Rule 3(4) CPC by plaintiff)
Mediation report qua non-starter has been filed. Leave
to defend has not been filed. However, learned counsel for the
defendants submits that the parties are trying to explore the
chances of settlement and are at the verge of a settlement.
Accordingly, relist for reporting settlement if any else for
leave to defend on 05.12.2016."
" Order
05.12.2016
IA No.12147/2016 filed by plaintiff
Joint request for adjournment is made by learned counsel
for the parties as matter is likely to be settled.
List before concerned JR (Judicial) on 19.12.2016."
" Order
19.12.2016
IA No.12147/2016 (u/O XXXVII Rule 3(4) CPC by plaintiff)
At request of learned counsel for the defendant, learned
counsel for the plaintiff is agreeable to give time of four days
from today to reconsider the proposed settlement. However,
learned counsel for the defendant seeks some more time as the
defendants are travelling.
Vide order dated 29.09.2016 of the Hon'ble Court this
court had been directed to place the matter before the Hon'ble
Court in the first week of December, 2016. However, in the first
week of December, 2016 i.e. 05.12.2016 when the matter was
listed before this court, the undersigned was on leave. To
prevent further delay, the matter be placed before the Hon'ble
Court for further directions on 23.12.2016."
" Order
23.12.2016
Parties have submitted that they have settled their dispute
and seek time to file settlement deed.
List on 17.01.2017"
" Order
17.01.2017
On request, list the matter on 10.01.2018.
Long date is given in view of the terms of the settlement"
" Order
10.01.2018
At the request of learned counsel for the defendants,
adjourned to 11th January, 2018.
It is made clear that no adjournment shall be granted on
the next date of hearing."
5. Learned counsel for the appellants has placed reliance on the orders to
show that in the order dated 21.9.2016 it was pointed out that
defendant no.3 put in their appearance, thereafter summons for
judgment was issued on 3.11.2016 and thereafter the matter was
directed to be placed before the Delhi High Court Mediation and
Conciliation Centre vide order dated 3.11.2016. In the order dated
15.11.2016, the Joint Registrar noticed that the mediation efforts had
failed and the appellants herein were directed to file leave to defend
within ten days. The matter was again adjourned to enable the parties
to explore the possibility of a settlement on 28.11.2016, 5.12.2016 and
19.12.2016.
6. Learned counsel for the appellants contends that on 23.12.2016, the
Court noticed that the parties had entered into a settlement and the
matter was adjourned to 17.1.2017 and then adjourned for almost one
year to 10.1.2018 to enable the appellant to honour the terms of
settlement. It is further contended that on account of the fact that
serious efforts were being made to resolve the matter amicably, the
appellants did not file the application for leave to defend within ten
days of service of summons for judgment. Counsel further points out
that the application for leave to defend was filed on 5.12.2016 but on
account of talks of settlement the appellants were under the impression
that his application for leave to defend and the application seeking
condonation of delay was on Court record. Counsel further submits
that in the absence of the application seeking leave to defend not being
placed before the Judge, serious prejudice would be caused to the
rights of the appellants. It is next contended that suit could not have
been decreed as this court does not have the territorial jurisdiction to
try and entertain the suit; the entire cause of action had taken place in
the State of Uttar Pradesh; the Agreement between the parties had
conferred exclusive jurisdiction to the Courts at Uttar Pradesh; and he
has raised various objections and grounds in the application seeking
leave to defend, which would disentitle to the plaintiffs to the relief so
granted. Additionally, it is contended that the appellants had raised a
strong bona fide defence and they would have been entitled to
unconditional leave to defend.
7. We have heard learned counsel for the appellant, carefully examined
the orders, which have been extracted hereinabove.
8. In the present case, the appellants (defendants in the suit) were duly
served with the summons for judgments and admittedly the appellant
did not file the leave to defend within the prescribed period of ten
days. Surprisingly, the Joint Registrar, without any application on
behalf of the appellants granted further time beyond ten days
prescribed to the defendants to file leave to defend by an order dated
15.11.2016. When the matter was listed on 28.11.2016, it was noticed
that leave to defend had not been filed. No time was extended and
thereafter the matter was adjourned from time to time to enable the
parties to resolve the matter.
9. Learned counsel for the appellants has laboured hard to show that not
only leave to defend application was filed on 5.12.2016 but even an
application seeking condonation of delay was filed. Counsel further
submits that leave to defend application should be taken on record
subject to any terms, which the Court may deem appropriate and the
decree be set aside and the matter be heard on merits.
10.We find no force in the submission made by counsel for the
appellants. Reading of the plaint and the order sheets show that the
present case is a perfect example of how a defaulting party has
successfully delayed the hearing of a summery suit and made a
mockery of the law.
11.The provisions of the Order XXXVII of the Code are no doubt
extremely stringent. The same are to be followed strictly, as the suits
falling in this Chapter, as the heading suggests, are Summary suits,
based on a written contract or dishonour of cheque etc.
12.It may be noted that the parties entered into a settlement on two
occasions but the appellants did not comply with the terms of
settlement. The matter was listed before the Single Judge on
10.1.2018, when the same was adjourned at the request of the counsel
for the appellants, it was made clear that no adjournment would be
granted on the next date. Despite an express direction having been
given, no steps were taken by the counsel of the appellants to ensure
that the applications were placed on record.
13.Additionally, we find that the parties had entered into an amicable
settlement during the pendency of the suit by a Compromise Deed
dated 23.12.2016 on the following terms:
"10. Terms of Settlement:
10.1 It is agreed that the defendants having admitted
their liability jointly and severally in the present suit for entire
amount as prayed but for the purpose of this settlement they
have agreed to pay to the plaintiff a sum of Rs.2,38,61,907/-
(Rupees Two Crores Thirty Eight Lakhs Only) as full and final
settlement amount against all claims of the plaintiff in this suit;
whereas the plaintiff has also agreed and consented to accept
aforesaid full and final settlement amount of Rs.2,38,61,907/-
(Rupees Two Crores Thirty Eight Lakhs Sixty One Thousand
Nine Hundred Seven Only) against his all claims which he
raised in the present suit but subject to encashment of two
cheques mentioned hereunder and as will be given by the
defendants to the plaintiff in furtherance of this settlement; if
said cheques will return unpaid by any reason whatsoever, then
full amount of the suit as prayed in the plaint, shall be decreed
against all the defendants jointly and severally as admitted by
the all defendants in earlier settlement/compromise dt.
31.08.2013.
10.2 It is further agreed that the defendants will pay aforesaid
settlement amount of Rs.2,38,61,907/- (Rupees Two Crores
Thirty Eight Lakhs Sixty One thousand Nine Hundred Seven
Only) by way of following cheques as under:-
1. Cheque No.000130 for Rs.1,00,00,000/- (Rs. One Crore
Only); dated 31st Dec. 2017.
2.Cheque No.000132 for Rs.1,38,61,907/- (Rs. One Crore
thirty eight lacs sixty one thousand nine hundred seven
Only); dated 31st Dec. 2017.
10.3 It is further agreed and undertaken by the all
defendants that aforesaid cheques shall be honoured on
their due dates on presentation; failing which it will be
presumed and proved that defendants have not good
intention to honour the cheques as was done in past.
10.4 It is further agreed by the defendants that they shall
be liable jointly and severally for the entire amount of
plaint as prayed for; in case aforesaid cheques will be
returned unpaid; and also accordingly a decree will be
drawn against all the defendants jointly and severally by
this Hon'ble Court on the basis of Original Compromise
dt. 31.08.2013 as prayed in this suit against all the
defendants jointly and severally."
(emphasis supplied)
14.Learned Single Judge, to ensure that the terms of settlement were
complied with, adjourned the matter for almost one year although in
our view the suit should have been decreed as per the terms of
settlement on the day the settlement was filed before the Court.
15.Be that as it may, even after the gap of more than one year the
appellant neither honoured the terms of the settlement nor had the
application seeking leave to defend listed for hearing. Resultantly the
Single Judge was left with no options but to decree the suit.
16.Sequence of events narrated hereinabove would show the conduct of
the appellants as to how the appellants have succeeded in delaying the
matter, which is evident from the facts that the appellants did not fulfil
their financial liability; the cheques issued by the appellants to secure
the loan were dishonoured; the appellants thereafter entered into an
amicable settlement with the respondent and offered to pay
Rs.3,22,02,660/- along with pendente lite interest and future interest at
the rate of 24%, per annum; deed of compromise was executed and
again post-dated cheque was handed over by the appellant to the
respondent, which was also dishonoured due to insufficient funds.
Since the settlement was not honoured by the appellants, the
respondent was forced to file a suit under the provisions of Order
XXXVII of the Code. In the suit, the appellants again entered into a
settlement with the respondent vide Compromise/Settlement deed
dated 23.12.2016, and agreed to pay the sum of Rs.2,38,61,907/- by
way of two post-dated cheques, which cheques were also dishonoured
on account of insufficient funds.
17.We find no infirmity with the view taken by the Single Judge that in
the absence of leave to defend objection, with regard to jurisdiction
and the plaintiff being a money lender, could not have been
considered. Additionally, we are of the view that once the appellant
had entered into a settlement with the plaintiff and no plea of
jurisdiction was raised at that point of time, the appellant cannot be
allowed to raise the same at this stage. There is no merit in the appeal,
the same is dismissed with costs of Rs.25,000/-.
G.S. SISTANI, J
P.S. TEJI, J
JULY 27, 2018
msr
