Telangana High Court

K.Amarender Reddy vs Ashok Kumar Agarwal on 5 July, 2024

     THE HONOURABLE SMT. JUSTICE M.G. PRIYADARSINI

            City Civil Court Appeal No.35 OF 2022

JUDGMENT:

Aggrieved by the judgment and decree dated 14.12.2021

in O.S.No.453 of 2021 (hereinafter will be referred as 'impugned

judgment') passed by the learned I Senior Civil Judge, City Civil

Court at Hyderabad (hereinafter will be referred as 'trial Court'),

the defendant preferred the present appeal to set aside the

impugned judgment.

2. For the sake of convenience, the parties hereinafter are

referred to as they are arrayed before the trial Court.

3. The brief facts of the case, which necessitated the

appellant to file the present appeal is that, the plaintiff filed suit

for recovery of Rs.45,66,000/- by invoking Order XXXVII of the

Civil Procedure Code. The averments of the plaint in brief are as

under:

a) The defendant is the client of plaintiff, who is an advocate,

and the defendant has entrusted 46 cases to be handled by the

plaintiff in respect of his property situated at Ammuguda

Village, Kapra Municipality and various other cases. Out of

such acquaintance, in the month of December, 2017 the

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defendant has requested the plaintiff for a short hand loan of

Rs.20,00,000/-. Hence, the plaintiff transferred an amount of

Rs.20,00,000/- on 28.12.2017 by way of RTGS from his Bank

Account bearing No.62479766296 in the State Bank of India,

City Civil Court Branch, Hyderabad to the bank account of

defendant i.e., IDBI Bank. The defendant promised to repay the

said amount along with interest @ 3% per month. The

defendant paid interest for the month of January, 2018 and

thereafter failed either to pay interest or towards principal

amount.

b) On the request of the defendant, the plaintiff has returned

all the case bundles on 25.08.2018. The defendant issued two

cheques bearing Nos.786709 and 786710 drawn on IDBI Bank,

Mahaveer House, Basheerbagh Square, Hyderabad on

19.09.2018. Cheque No.786709 was issued towards repayment

of Rs.20,00,000/- and cheque bearing No.786710 was issued

for Rs.4,64,000/- towards interest. When the plaintiff

presented two cheques, they were dishonoured on 03.10.2018

on the ground that the drawers signature differs in so far as

first cheque is concerned and funds insufficient in so far as

second cheque is concerned. The plaintiff has issued legal

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notice dated 15.10.2018 and the same was served on the

defendant on 17.10.2018 and 20.10.2018. As the amount

covered under the cheques was not paid by the defendant, the

plaintiff constrained to file calendar case vide C.C.No.358 of

2018 on the file of II ACMM, Manoranjan Complex and the same

is coming up for cross examination of PW1 and at that stage the

case was transferred to Nampally, Criminal Courts.

c) While C.C.No.358 of 2018 was pending, the defendant has

approached the plaintiff and signed a Memorandum of

Understanding dated 03.08.2019 stating that he will pay an

amount of Rs.27,44,000/- on or before 31.08.2019. The

defendant has also filed a petition in the concerned criminal

court on 05.08.2019 but the same was not recorded by the

Court in view of the fact that NBWs are pending against the

defendant, who was not present. The defendant has presented

a petition on 09.08.2019 before the Criminal Court on

09.08.2019 stating that he will pay Rs.33,40,000/- or on before

20.08.2019 but the said petition was also returned. The

defendant has executed an undertaking that he will pay

Rs.32,60,000/- on or before 31.10.2019 but he did not pay the

same. The defendant has also served a copy of the petition

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dated 06.11.2019 agreeing to pay the amount of Rs.34,70,000/-

on or before 21.11.2019 but the said petition was also not taken

into consideration by the criminal court. The plaintiff is entitled

to recover Rs.20,00,000/- with interest @ 3% per month from

the month of February, 2018 till the date of filing of the suit i.e.,

23.08.2021 for a period of 42 months and 23 days which

amounts to Rs.25,66,000/- and the principal amount of

Rs.20,00,000/- totally Rs.45,66,000/-. Hence, this suit.

b) After receipt of summons, the defendant filed petition vide

I.A.No.828 of 2021 under Order XXXVII Rule 3 (5) read with

Section 151 of the Code of Civil Procedure to grant leave to

defend the suit. The brief averments of the affidavit filed in

support of the petition in I.A.No.828 of 2021 are as under:

i) The plaint averments are silent and do not plead or state

that the plaintiff has lent the alleged transactions with the

defendant. The defendant denied about his request to plaintiff

to lend Rs.20,00,000/- as short hand loan.

ii) The plaintiff has submitted Xerox copies and there is no

single original document. There are no pleadings as to on which

dates the defendant approached the plaintiff for want of money.

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There are no specific dates mentioned in the pleadings to show

as to when the defendant approached the plaintiff for hand

loan. The plaintiff has not mentioned about the nature of the

business of the defendant.

c) In response to the above petition, the plaintiff filed

counter denying the petition averments and contended as

under:

i) It is specifically mentioned in the plaint in paragraph

Nos.3 and 4 of the plaint that the defendant has approached the

plaintiff in the month of December, 2017 and that at the request

of the defendant, the plaintiff transferred an amount of

Rs.20,00,000/- on 28.12.2017 by way of RTGS from the bank

account bearing No.6249766296 in State Bank of India, City

Civil Court branch to the bank account of the defendant i.e.,

IDBI Bank account.

ii) The original documents were not filed with the plaint, as

all the document were filed in a Criminal Case vide C.C.No.358

of 2018 on the file of XI Special Magistrate Court and the said

case was transferred to VIII Additional Chief Metropolitan

Magistrate, certified copies of the said documents were filed.

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iii) The defendant did not plead that he has not taken any

personal loan from the plaintiff. The defendant has issued

cheques calculating interest @ 3% per month and also executed

Memorandum of Understanding that he will clear the loan with

interest @ 3% per month. The leave to defendant does not

disclose or indicate that he has substantial defence to raise in

the suit. The defence intended to be put up by the defendant is

frivolous and vexatious and thus, prayed to decree the suit.

4. During the course of inquiry, the plaintiff relied upon

Exs.R1 to R15 and whereas the defendant did not adduce any

documentary evidence in support of his contentions. The

learned trial Court after considering the rival contentions,

dismissed the petition on 14.12.2021 and also decreed the suit

in favour of plaintiff on the same day vide judgment dated

14.12.2021. Aggrieved by the same, the defendant has

preferred the present appeal.

5. Heard both sides and perused the record including the

grounds of appeal.

6. The first and foremost contention of the defendant is that

suit requires proper filing of original documents, proper

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pleadings and proper evidence to come to a judicial conclusion

and whereas the plaintiff has filed Xerox copies of documents.

It is further contended that the trial Court failed to see that

liability cannot be proved by Xerox copies. On the other hand,

the learned counsel for the plaintiff submitted that as all the

document were filed in a Criminal Case vide C.C.No.358 of 2018

on the file of XI Special Magistrate Court (transferred to VIII

Additional Chief Metropolitan Magistrate) certified copies of the

said documents were filed before the trial Court. As can be

seen from the record, the documents relied upon by plaintiff

were marked in I.A.No.828 of 2021.

7. As can be seen from the record, the plaintiff relied upon

Ex. R1 is the certified copy of statement account of plaintiff

dated 02.11.2018, Ex.R2 is the certified copy of return of case

bundles of the defendant dated 19.09.2018, Exs.R3 and R4 are

the certified copies of two cheques i.e., for Rs.20,00,000/- and

Rs.4,64,000/- respectively, Exs.R5 and R6 are the certified

copies of cheque returns memos, Ex.R7 is the certified copy of

legal notice, Ex.R8 to R10 are the postal

receipts/acknowledgments, Ex.R11 is the memorandum of

understanding between the parties, Exs.R12, R13 and R15 are

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the petitions, Ex.R14 is the undertaking alleged to have been

executed by the defendant. All these documents, which are

material in establishing the transaction between the plaintiff

and defendant, are certified copies of the said documents.

Since the plaintiff has filed original documents before the

criminal Court, the plaintiff could not file the very same original

documents in the present suit and thereby, the plaintiff

constrained to file secondary evidence i.e., certified copies,

which is admissible in law. Thus, the contention of the learned

counsel for the defendant that the plaintiff filed Xerox copies of

the documents is not sustainable.

8. The next contention of the learned counsel for the

defendant is that there is no pleading as to when the defendant

approached the plaintiff and sought for a short hand loan of

Rs.20,00,000/-. As rightly contended by the learned counsel

for the plaintiff and as observed by the trial Court in the order

dated 14.12.2021 in I.A.No.282 of 2021, at paragraph Nos. 3

and 4 of the plaint, the plaintiff has clearly mentioned that the

defendant has approached the plaintiff in the month of

December, 2017 and sought for a short hand loan of

Rs.20,00,000/- and on such request, the plaintiff has

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transferred an amount of Rs.20,00,000/- from his account (SBI)

to the account of the defendant (IDBI) through RTGS method.

In support of this contention, the plaintiff relied upon Ex.R1

i.e., statement account of the plaintiff and the said document

discloses that the plaintiff has transferred an amount of

Rs.20,00,000/- from his account (SBI) to the account of the

defendant (IDBI) on 28.12.2017. Exs.R3 and R4 discloses that

the defendant has drawn two cheques from IDBI Bank in the

name of the plaintiff, who has presented the said cheques,

which were returned vide cheque returned memos under

Exs.R5 and R6. The defendant is not disputing all the above

aspects, except contending that the plaintiff has relied upon

Xerox copies but in fact the documents relied upon by the

plaintiff were all certified copies but not Xerox copies.

9. It is the specific contention of the plaintiff that the

defendant has agreed his liability payable to plaintiff by filing

petitions, memorandum of understanding and undertaking

before the trial Court vide Exs.R11 to R15. Since NBWs were

pending against the defendant before the criminal court, the

petitions filed by the defendant before the trial Court

undertaking to pay the amount to the defendant were returned

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and not accepted by the trial Court. Though the defendant has

been executing undertakings and memorandum of

understandings, he is not coming forward to discharge the suit

claim. All these documents coupled with the plaint averments

clearly discloses that the defendant has obtained short hand-

loan from the plaintiff and failed to repay the said amount and

thereby the plaintiff is entitled for suit claim.

10. The other contention of the learned counsel for the

defendant is that petition filed by him ought to have been

allowed by the trial Court and an opportunity to contest the suit

ought to have been given to him but as a result of dismissal of

his petition under Order XXXVII Rule 3 (5) read with Section

151 of the Code of Civil Procedure, irreparable loss and injury

was caused to him. It is further contended that the trial Court

failed to appreciate the scope of the petition to defend under

Order XXXVII. On the other hand, the learned counsel for the

plaintiff contended that the defence intended to be put up by

the defendant is frivolous and vexatious.

11. The learned trial Court by relying upon the decision of the

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High Court of Delhi in Avtar Kaur v. Zuleikha Karnik 1

observed that leave to defend petition has to be dismissed if the

defence raised by the defendant is moonshine, sham,

illusionary and raises no triable issue. Per contra, the learned

counsel for the defendant contended that if the court is satisfied

of a plausible or probable defence and which defence is not

considered a sham or moonshine, but yet leaving certain doubts

in the mind of the court, it may grant conditional leave to

defend. In support of the above said contention the learned

counsel for the defendant relied upon a decision in Sudin Dilip

Talaulikar v. Polycap Wires Private Limited and others 2

wherein the Honourable Supreme Court observed as under:

"11. In a summary suit, if the defendant discloses such facts of a prima facie fair and reasonable defence, the court may grant unconditional leave to defend. This naturally concerns the subjective satisfaction of the court on basis of the materials that may be placed before it. However, in an appropriate case, if the court is satisfied of a plausible or probable defence and which defence is not considered a sham or moonshine, but yet leaving certain doubts in the mind of the court, it may grant conditional leave to defend. In contradistinction to the earlier subjective satisfaction of the court, in the latter case there is an element of discretion vested in the court. Such discretion is not absolute but has to be judiciously exercised tempered with what is just and proper in the facts of a particular case. The ultimate object of a

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summary suit is expeditious disposal of a commercial dispute. The discretion vested in the court therefore requires it to maintain the delicate balance between the respective rights and contentions by not passing an order which may ultimately end up impeding the speedy resolution of the dispute."

12. Further, the learned counsel for the defendant relied

upon a decision in B.L. Kashyap and Sons Limited v. JMS

Steels and Power Corporation and others 3, wherein the

Honourable Supreme Court observed that if the defendant

raises triable issues, particularly concerning its liability, such

defence cannot be said to be frivolous or vexatious altogether.

13. On the other hand, the learned counsel for the plaintiff

relied upon a decision in Sapna Saree Centre and others v.

Bank of Rajasthan Limited 4, wherein the High Court of

Rajasthan observed as under:

"8. The provisions in Order 37, CPC incorporated by the amending Act of 1976 prescribe summary procedure for trial and expeditious disposal of cases in suits on the basis of bills of exchanges, hundies and promissory note. The very object underlying summary procedure for trial of suits under Order 37 CPC is to prevent unreasonable delay and obstruction by a defendant from advancing sham or illusory defences which if allowed to do so, in facts, the very purpose of legislature incorporating Order 37 in the CPC would stand frustrated. That apart, the very object by insertion of such provision in Order 37, CPC by the amending Act of 1976 was to curb malady prevailing in the society when loans are advanced by the Financial Institutions to borrowers who refused to honour the spirit of the agreements at the cost of public exchequer and also with intent to

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keep control over financial institutions over excessive charge of interest from the helpless borrower. If sham and illusory defences are allowed to be advanced by the defendants then no institution such as nationalised Banks would be to safe in advancing the loan to any party in difficulty. Therefore, provisions of summary trial of suits under Order 37, CPC has been envisaged with a view to safeguards the bona fide money lenders like the banks from exploitation at the instance of those borrowers who take loan by making all promises of repayment by executing all relevant documents relating to loan advanced to them and thereafter take false plea and betrays promises by saying that no loan was advanced, so as to defeat the legitimate and genuine rights of the financing authority.

14. The learned counsel for the plaintiff further relied upon a

decision of the High Court of Delhi in Sh.Vipin Gupta v. Sh.

Prem Singh 5, wherein it was held as under:

"5. Under Order 37 Rule 3 Sub-clause (5), the appellant had moved an application for leave to defend the suit but the learned Trial Court dismissed the application for leave to defend and delivered the judgment in favor of the plaintiff/respondent. The plea taken by the appellant in the application for leave to defend the suit is that he had lost the two cheques which appeared to have been stolen by the plaintiff/respondent and have used the same for filing the present suit against the appellant. We have perused the record and we find that the appellant/defendant has not denied his signatures on any of the documents which have been annexed and relied upon by the plaintiff/respondent in filing the present suit. Both these cheques in question bear the signatures of the appellant. We have also perused the non judicial stamp paper placed on record by the appellant/defendant in which the appellant/defendant has given an undertaking in writing that he will return the sum of Rs. 3,00,000/- by 13.06.2001. The appellant has put his signatures on this undertaking on non judicial stamp paper and besides that, he has also put his thumb impression on the said undertaking. We have also gone through the receipt placed on record by the plaintiff/respondent. The receipt has also been duly executed by the appellant for having received Rs. 3,00,000/- in cash. This receipt is also duly signed by the appellant. After perusing all these documents, it appears that the appellant has taken a false defense that he had lost these two cheques in question which have been stolen by the plaintiff/respondent and has filed a false suit against the appellant. We do not find any force in the plea taken by the appellant in this case. The other documents which

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have been signed by the appellant are the undertaking given by the appellant on a non judicial stamp paper in which he has stated that he will refund the amount of Rs. 3,00,000/- by 13.06.01 and the appellant has also put his signatures as well as the thumb impression on the undertaking. The appellant has also executed a receipt duly signed by him for having received a sum of Rs. 3,00,000/- in cash. So, we are of the opinion that all these documents cannot be created by the plaintiff/respondent. In our opinion, the plea taken by the appellant is a sham and has got no force. The appeal filed by the appellant is without any merit and the same is, therefore, dismissed. The parties are left to bear their own costs. Trial court record be sent back. File be consigned to record room."

15. In view of the above decisions it is apparent that the leave

to defend in a summary suit can be granted to the defendant

only when he raised defences, which are not vexatious and

frivolous and that the defence raised by the defendant shall lead

to triable issues. Thus, the question that needs to be

adjudicated at this juncture is whether the defendant while

filing petition under Order XXXVII Rule 3 (5) read with Section

151 of the Code of Civil Procedure has raised proper defence

leading to triable issues.

16. As seen from the petition averments in I.A.No.828 of

2021, the only defence adopted by the defendant is that the

plaintiff filed Xerox copies of the documents, there are no

specific dates mentioned in the plaint as to when the defendant

approached the plaintiff for a hand loan and also details about

the nature of business of the defendant. It is to be seen that

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non mentioning of the specific date of defendant approaching

the plaintiff in money recovery suit is not fatal to case of the

plaintiff, until and unless the defendant denies his liability to

pay the amount to the plaintiff. It is not the case of the

defendant that amount has not been credited from the account

of the plaintiff to the account of the defendant. It is not event

the case of the defendant that he has not issued cheques to the

plaintiff towards discharge of legally enforceable debt. It is not

even disputed by the defendant that the cheques issued by him

in favour of plaintiff were not dishonoured. The defendant is

not denying about the filing of the criminal case against him by

the plaintiff. The defendant is not even denying his signature

on the cheques. The defendant is not denying about the

undertakings, memo of understanding and the petitions

promising to pay the amount covered under two cheques issued

by him to the plaintiff with the interest. The defendant is not

even in a position to explain as to why the cheques issued by

him were in possession of the plaintiff. In this regard, the

learned counsel for the plaintiff relied upon a decision in M/s.

Delhi Book Store v. K.S. Subramaniam 6, wherein the High

Court of Delhi observed that the onus is on the defendant to

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explain as to he had issued cheques in favour of the plaintiff.

In such circumstances, the defence raised by the defendant

against the plaintiff in the petition filed under Order XXXVII

Rule 3 (5) read with Section 151 of the Code of Civil Procedure

appearing to be vexatious, moonshine, sham, illusionary and

not leading to any triable issues. The grounds urged by the

defendant in the petition vide I.A.No.828 of 2021 are not worthy

enough to shatter the case of the plaintiff.

17. The learned counsel for the plaintiff relied upon a

decision of the High Court of Calcutta in Darshan Mekani v.

Aman Khema 7 wherein it was observed as under:

"18. The Hon'ble Supreme Court in Ajay Bansal v. Anup Mehta and Others reported in (2007)2 SCC 275, considering on Order 37 Rule 3(5) held that a decree passed in a summary suit where leave to defend the suit has been refused is almost automatic. The consequence of passing a decree cannot be avoided." In view of the aforesaid, this application stands dismissed. However, there shall be no order as to costs."

18. Even in the case on hand, on considering the rival

contentions, the trial dismissed the petition vide I.A.No.828 of

2021 on 14.12.2021 and even decreed the suit in favour of

plaintiff on the very same day vide judgment dated 14.12.2021.

A perusal of the judgment dated 14.12.2021 read with the order

dated 14.12.2021 in I.A.No.828 of 2021, wherein the certified

GA No.174/2016 with CS No.294/2015 decided on 22.08.2017

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copies of the documents relied upon by the plaintiff were

marked as Exs.R1 to R15, this Court is of the opinion that the

plaintiff could succeed in establishing his case that the

defendant is liable to pay the amount covered under two