Interim Order 5

Order Details: COPY OF JUDICIAL PROCEEDINGS
Pdf Text: Civ Suit102/23
MR. NURUDDIN
Vs.
SH. PAWAN KUMAR GUPTA
CNR No.DLNE03-000174-2023
23.01.2024
Present: Plaintiff in person alongwith Counsel Mohd. Tarik.
Defendant alongwith Counsel Sh. Harvinder Chowdhry.
Arguments on application seeking leave to defend are heard. It is
deemed appropriate to pass order on the application today itself.
This order is in respect of leave to defend application filed on behalf of
defendant Pawan Kumar Gupta in the civil suit filed by plaintiff Nuruddin, Proprietor
of M/s Sameer Garments under Order XXXVII of the Code of Civil Procedure, 1908
(hereinafter referred to as ‘CPC’) for recovery of Rs.45,150/- (Rupees Forty Five
Thousands One Hundred and Fifty Only) along with pendente lite and future interest
and costs.
Succinctly, the suit of the plaintiff is that he is doing business in the
name and style of M/s Sameer Garments and deals in kurta-pyjama and other ready-
made garments etc. The defendant used to purchase goods from him from time to
time against various bills/invoices, an account of which was maintained by the
plaintiff in usual course of business. On 18.04.2021 as per the ledger account an
amount of Rs.3,64,595/- was due from defendant to plaintiff. The defendant issued
cheques bearing no. 000290 and 000291 of Rs.19,950/- and Rs.25,200/- dated
30.01.2021 and 27.02.2021 respectively both drawn on HDFC Bank, Chandani
Chowk, Delhi, in favour of M/s Sameer Garments towards part payment of his
liability. The defendant requested the plaintiff not to present the cheques for
encashment and represented that he would make the payment in cash. The plaintiff
acceded to the request and did not present the cheques but the defendant failed to pay
the amount of cheques to plaintiff. Thereafter, legal notice dated 20.01.2023 was sent
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by plaintiff to defendant through speed post and whatsapp calling upon defendant to
pay a sum of Rs.45,150/- alongwith interest. Despite service of notice, the defendant
neither paid the money nor gave any reply to the same. Hence, the present suit.
Application for leave to defend was filed by the defendant within time
wherein he stated that he had already made payment to plaintiff through cash on
different occasions and he had documents to prove the same. He further stated that he
also maintained a ledger account of the plaintiff in his books of accounts in ordinary
course of business. He alleged that the post-dated security cheques given to the
plaintiff have been misused by him even after receiving the entire payment in cash.
He attached a photocopy of a register maintained by him. During arguments, ld.
Counsel for the applicant submitted that the applicant will produce the original
register in due course, if given an opportunity to defend the case.
At this juncture, it is profitable to advert to the guidelines laid down (for
consideration of a prayer for leave to defend) by the Apex Court in the case 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 18 January, 2022, which are as under:-
16.1. In the case of Mechelec Engineers (supra), the principles for consideration of a prayer for
leave to defend in a summary suit were laid down by this Court in the following terms: -
“8. In Kiranmoyee Dassi Smt v. Dr J. Chatterjee [AIR 1949 Cal 479 :49 CWN 246, 253 :
ILR (1945) 2 Cal 145.] Das, J., after a comprehensive review of authorities on the subject,
stated the principles applicable to cases covered by Order 37 CPC in the form of the
following propositions (at p. 253):
“(a) If the defendant satisfies the court that he has a good defence to the claim on its merits
the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to
unconditional leave to defend.
(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or
reasonable defence although not a positively good defence the plaintiff is not entitled to sign
judgment and the defendant is entitled to unconditional leave to defend.
(c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend,
that is to say, although the affidavit does not positively and immediately make it clear that
he has a defence, yet, shews such a state of facts as leads to the inference that at the trial of
the action be may be able to establish a defence to the plaintiff's claim the plaintiff is not
entitled to judgment and the defendant is entitled to leave to defend but in such a case the
court may in its discretion impose conditions as to the time or mode of trial but not as to
payment into court or furnishing security.
(d) If the defendant has no defence or the defence set-up is illusory or sham or practically
moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the
defendant is not entitled to leave to defend.
(e) If the defendant has no defence or the defence is illusory or sham or practically
moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the
court may protect the plaintiff by only allowing the defence to proceed if the amount claimed
is paid into court or otherwise secured and give leave to the defendant on such condition,
and thereby show mercy to the defendant by enabling him to try to prove a defence.”
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16.2. In the case of IDBI Trusteeship (supra), this Court modulated the aforementioned principles
and laid down as follows: -
“17. Accordingly, the principles stated in para 8 of Mechelec case [Mechelec Engineers &
Manufacturers v. Basic Equipment Corpn., (1976) 4 SCC 687] will now stand superseded,
given the amendment of Order 37 Rule 3 and the binding decision of four Judges in
Milkhiram case [Milkhiram (India) (P) Ltd. v. Chamanlal Bros., AIR 1965 SC 1698 : (1966)
68 Bom LR 36] , 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 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.”
17. It is at once clear that even though in the case of IDBI Trusteeship, this Court has observed that
the principles stated in paragraph 8 of Mechelec Engineers’ case shall stand superseded in the wake
of amendment of Rule 3 of Order XXXVII but, on the core theme, the principles remain the same that
grant of leave to defend (with or without conditions) is the ordinary rule; and denial of leave to
defend is an exception. Putting it in other words, generally, the prayer for leave to defend is to be
denied in such cases where the defendant has practically no defence and is unable to give out even a
semblance of triable issues before the Court.
The defence raised by the defendant is plausible but highly improbable. Certain
triable issues have though arisen as the defendant denied having any liability against
both the cheques. Issuance of post-dated security cheques for purchasing goods on
credit is not an unheard of practice in business circles. It also appears from the
contents of the plaint itself that the practice of accepting cash in lieu of the cheques
already issued is also in prevalence in the line of business of parties to the suit. Both
the parties are willing to produce books of accounts maintained by them which may
show different versions of dealings between the parties. The conduct of both the
parties qua both the cheques in question had not been diligent. Since a very weak
defence is raised by the applicant, therefore, a conditional leave to defend is granted
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to the defendant subject to the condition that the defendant shall deposit an interest
bearing FDR of Rs.45,150/- in favour of Ld. Principal District & Sessions Judge,
North-East, Karkardooma Courts, within a period of 30 days from today, so as to
safeguard the interest of the plaintiff. Subject to deposit of the aforementioned FDR,
the defendant may file written statement within 30 days from today with an advance
copy to the plaintiff.
List for further proceedings on 27.02.2024.
(Anurag Thakur)
JSCC/ASCJ/G. Judge(N/E)
23.01.2024
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