Final Order 6

Order Details: COPY OF JUDGMENT
Pdf Text: IN THE COURT OF AASHISH GUPTA, DISTRICT JUDGE-01,
NORTH-EAST DISTRICT, KARKARDOOMA COURTS, DELHI
In the matter of
RCA DJ No. 56/25
CNR No. DLNE010032882025
Mr. Surendra Giri
S/o Sh. Mahender Giri
R/o J-591, Gali No. 3,
Near Nav Jeevan Adarsh Public School,
Jai Prakash Nagar, Ghonda,
Delhi - 110053 ….. Appellant
versus
Sh. Bitu
S/o Sh. Baburam
R/o H.No. B-282, Gali No. 4,
Mahalaxmi Enclave,
Karawal Nagar,
Delhi - 110094 ….. Respondent
Date of institution : 04.11.2025
Reserved on : 29.01.2026
Date of Decision : 13.03.2026
JUDGMENT
1. The present first appeal impugns the order and decree dated
02.04.2025 passed in Civ Suit No. 412/20 (hereinafter referred as
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the ‘impugned order/decree’) whereby the Ld. Trial Court has
decreed the suit of plaintiff.
2. Appellant was defendant before the Ld. Trial Court.
3. Appellant/defendants’s leave to defend application before the trial
court came to be dismissed vide impugned order dated 02.04.2025
and as a consequence, a decree for a sum of Rs. 2 lac with
pendente lite and future simple interest @ 6% per annum has been
awarded to the plaintiff. Being aggrieved, the defendant is an
appeal before this court.
4. For the sake of convenience, parties shall be referred to by the
nomenclature used in the Ld. Trial Court.
5. In brief, plaintiff/respondent had sued the defendant on the
ground that he gave a sum of 2 lakhs in cash as a friendly loan	₹
for a period of five months on 1 May 2019. At the time of grant of
loan, a receipt in this regard was also executed between the
parties.
6. Plaintiff claims that eventually a cheque in discharge of the said
liability was issued by the defendant on 01.10.2019 to the plaintiff
which got dishonoured on presentation. Thus, plaintiff sued the
defendant for recovery of the said amount.
7. The defendant's application for leave to defend was premised on
the ground that he only took a loan of 1.5 lakhs from the	₹
plaintiff; the said loan was partly repaid to the extent of 1 lac;	₹
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and the defendant is willing to repay the remaining amount of
50,000. It is also the case of the defendant that he had	₹
approached the plaintiff in first week of October 2019 for
repaying the balance amount of Rs. 50,000/- and asked the
plaintiff to return the original cheque. Plaintiff, as per defendant
told him that the same was not traceable and undertook to return
the same as and when the same is available. The said cheque is
stated to be a security cheque and is claimed to have been
misused by filling up the same (see para 8, 10 and 11 of the leave
to defend application).
8. This defence of the defendant was disallowed by the Ld. Trial
Court by treating it as frivolous and vexatious. In the opinion of
the learned Trial Court, since the defendant did not specify any
date or time of repayment of the amount of 1 lakh, therefore, the	₹
defence of the defendant cannot be believed. The reasoning of the
learned Trial Court is contained in para 8 of the impugned order
and the same reads as under:
8. Upon perusing the leave to defend application, it is
found that the only defence raised by the defendant is that the
plaintiff has misused the blank cheque given by the defendant
to the plaintiff and that the plaintiff has filed a false and
fabricated case demanding Rs.2,00,000/- instead of
Rs.50,000/- which is the actual liability of the defendant in
favour of the plaintiff. However, the defendant has not
provided any specific details or annexed any documents to
make his defence believable. He has failed to state when
exactly the alleged loan of Rs.1,50,000/- was taken by him
from the plaintiff and when it was repaid partly in cash. He
has not provided any details regarding the repayment of Rs.
1,00,000/- to the plaintiff including the date and time or the
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presence of any witnesses or issuance of any receipt in his
application. Further, no bank statement or withdrawal proof
has been placed on record to substantiate the claim of the
defendant of arranging Rs. 1,00,000/- in cash. Merely making
a bald statement that only an amount of Rs.1,50,000/- was
taken as loan from the plaintiff out of which Rs. 1,00,000/-
has been repaid does not raise a triable issue in favour of the
defendant. The plaintiff, on the other hand, has placed all
relevant documents including his bank statements reflecting a
withdrawal of Rs.2,50,000/- by him on 01.05.2019 to prove
that a friendly loan was advanced by the plaintiff to the
defendant in the sum of Rs.2,00,000/-.
9. Counsel for the appellant argued that the Ld. Trial Court did not
consider the valid plea of defence raised by the defendant. It was
argued that while deciding a leave to defend application, only
plausible defence is required to be raised by the defendant. It was
submitted on behalf of the defendant that defendant fairly
admitted the fact that he took a sum of 1.5 lakhs from the	₹
plaintiff; that he is ready and willing to repay the outstanding
amount of 50,000; and that he has already repaid 1,00,000 to	₹ ₹
plaintiff.
10.It was argued that even though the date of the repayment has not
been stated in the application, this fact would have been disclosed
by the defendant in the written statement which would eventually
be filed by the defendant. It is the submission of the counsel for
defendant that if one considers the plea taken by the defendant
before the Trial Court, the said plea cannot be treated to be
vexatious or frivolous. Thus, it was submitted that unconditional
leave to defend should have been granted to the defendant.
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11.On the other hand, counsel for the respondent argued that there is
no infirmity in the impugned order and the same is as per law.
Thus, respondent prayed for dismissal of the present appeal.
12.I have given thoughtful consideration to the arguments of the
parties and have gone through the record.
13.In my humble opinion, the plea taken by the defendant in the
leave to defend application cannot be treated as vexatious or
frivolous. The defendant has specifically stated that he only took a
loan of 1.5 lakhs from plaintiff; that he repaid 1,00,000 to	₹ ₹
plaintiff; and that he is willing to be repay the remaining amount
of 50,000 to plaintiff. It is also pleaded in the application that the	₹
cheque in question was a security cheque given by defendant and
the same was filled up by plaintiff for a sum of Rs. 2 lac.
14.In my humble opinion, even though the learned trial court took
note of the judgment passed in the matter of B.L. Kashyap &
Sons Ltd. v. M/S JMS Steels & Power Corporation & Anr. arising
out of SLP (C) NO. 19413 OF 2018) decided on 18th January
2022, but, it did not appreciate the ratio of the said judgment in
the right perspective. A bare perusal of the said judgment would
show that only in cases where the defence raised by the defendant
is vexatious or frivolous that the leave to defend application of the
defendant can be dismissed.
15.But, in cases where either a substantial defence or fair/reasonable
defence, although not a positively good defence is raised, plaintiff
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is not entitled to judgment and in such cases ordinarily an
unconditional leave to defend should be given. In the same
judgment, it is noted that if some amount is admitted by the
defendant, leave to defend shall not be granted to the defendant,
unless the amount so admitted is deposited in Court by the
defendant.
16.In the present case, defendant claims that he only took a loan of
Rs. 1.5 lac and has repaid Rs. One lac. He claims that he is
willing to repay the amount of Rs. 50,000/- to plaintiff. Thus, at
least part admission was made by the defendant of his liability
and the Ld. Trial Court should have directed the defendant to
deposit the said sum of Rs. 50,000/- in Court.
17.With respect to the remaining claim, there are two versions of the
parties. One is of the plaintiff who claims a loan of Rs. 2 lac
(supported by a written receipt and a cheque dated 01.10.2019).
On the other hand, defendant claims that the said receipt is forged
and his liability was only to the extent of Rs. 1.5 lac of which Rs.
50,000/- is only due. Even if defendant did not have any
documents to show repayment of Rs. One lac or did not produce
any receipt/bank statement/withdrawal proof of the same, still
there is an oral claim of repayment made by defendant. The
omission to give the date of repayment cannot be treated as fatal
to the claim of defendant qua the payment. Defendant could
specify the said dates in his detailed written statement.
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18.At the stage of deciding an application for leave to defend, a
Court is only required to see as to whether defendant has any
substantial defence or a fair/reasonable defence (although not
positively good defence). It is only in cases where the defence is
found to be frivolous or vexatious can the application for leave to
defend be dismissed.
19.In my humble opinion, defendant fairly admitted the part case of
the plaintiff to the extent of Rs. 50,000/-. He then proceeded to
dispute the remaining amount and this defence, even if oral and
unsupported by any document, cannot be treated to be frivolous or
vexatious. Even if the same is not treated as substantial defence, it
is a fair and reasonable defence raised by the defendant qua the
liability being set up by the plaintiff.
20.Thus, in my humble opinion, the impugned order/decree cannot
be sustained in law.
21.Since the defendant had admitted part claim of the plaintiff, the
Ld. Trial Court should have directed the defendant to deposit the
admitted amount of Rs. 50,000/- in Court before considering the
application for leave to defend. This was in light of second
proviso to Order XXXVII Rule 3 (5) CPC. Thereafter, for the
remaining amount of Rs. 1.5 lac, the Trial Court could have
considered the leave to defend application and an unconditional
leave to defend should have been granted to the defendant by
allowing him to file his written statement. The Ld. Trial Court
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erred in law by treating the defence of defendant as vexatious and
frivolous.
22.Thus, considering the above, in my humble opinion, plaintiff is
only entitled to a part decree of Rs. 50,000/- (i.e the amount
admitted by defendant as payable to plaintiff). It is ordered
accordingly. Defendant is granted 4 weeks from today to pay the
said amount to the plaintiff, failing which he shall be liable to pay
simple interest @ 6% from the date of default till realization.
23.For the remaining amount of Rs. 1.5 lac, defendant is granted
unconditional leave to defend. He is at liberty to file his written
statement within 30 days from today before the Ld. Trial Court
who shall then proceed to adjudicate the suit for the said amount,
as per law.
24.Let part decree sheet for the amount of Rs. 50,000/- awarded to
the plaintiff be drawn.
25.Let copy of the judgment passed in appeal alongwith the part
decree sheet be sent to Ld. Trial Court for necessary information.
Announced in the Aashish Gupta
open Court on 13.03.2026 District Judge-01, North-East District,
Karkardooma Courts, Delhi
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