Ankit Sharma vs Shilpi Arora

VALMIKI J. MEHTA, J

C.M. No.45104/2018(exemption)

Exemption allowed subject to just exceptions.

C.M. stands disposed of.

C.M. Nos.45103/2018 (for condonation of delay in filing) & 45105/2018(for condonation of delay in re-filing)

For the reasons stated in the application, delay of 98 days in filing and 37 days in re-filing the appeal is condoned subject to just exceptions.

C.M.s stand disposed of.

RFA No.887/2018 and C.M. No.45102/2018(stay)

This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the defendant in the suit impugning the Judgment

of the Trial Court dated 02.01.2018 by which the trial court has dismissed the leave to defend application filed by the appellant/defendant and has

decreed the suit for recovery of the loan amount of Rs.6 lakhs with respect to which a cheque was given by the appellant/defendant and which was

dishonored on presentation.

The facts of the case are that the respondent/plaintiff filed the subject suit under Order XXXVII CPC pleading that two loans of Rs.6 lakhs and

Rs.8 lakhs were granted by the respondent/plaintiff to the appellant/defendant in the year 2015. Originally the loan was granted of Rs.6 lakhs and

thereafter another loan was granted of Rs.8 lakhs. When the loan amount of Rs.6 lakhs was given, the appellant/defendant had issued for repayment

a cheque dated 01.05.2015 bearing no.965880 of State Bank of India, Rani Bagh Market Sharkur Basti, Delh-34 and this cheque of Rs. 6 Lakhs was

dishonored on presentation with the remarks 'funds insufficient' vide Return Memo dated 02.05.2015, and therefore, the subject suit was filed under

Order XXXVII CPC.

The appellant/defendant filed the leave to defend application and in the leave to defend application except generally denying the case of the

respondent/plaintiff, the appellant/defendant laid out no positive defence as to why the cheque which bore his signatures and issued from the account

of the appellant/defendant was with the respondent/plaintiff, and why this cheque was dishonoured for insufficient funds.

The trial court has dismissed the leave to defend application by observing that once there is no dispute that the cheque bears the signatures of the

appellant/defendant, and by also effectively holding that the cheque is indubitably of the bank account of the appellant/defendant, and this cheque

which has been dishonored not for any other reason but only for insufficiency of funds, hence no grounds are made out for leave to defend.

Learned counsel for the appellant/defendant argued before this Court that there are various FIRs between the parties and that the

appellant/defendant was kidnapped and other facts are also now pleaded orally for the first time, however, all these facts in the opinion of this Court

cannot be looked into because none of these facts are found to be stated in the leave to defend application. Therefore, this Court is forced to conclude

that these facts raised, which in any case cannot be raised at the first appellate stage challenging the judgment dismissing the leave to defend, are

without any basis whatsoever.

The principles with respect to leave to defend have been recently encapsulated by the Hon'ble Supreme Court in the judgment in the case of IDBI

Trusteeship Services Ltd. v. Hubtown Limited, (2017) 1 SCC 568 and the relevant paras of which judgment read as under:-

Accordingly, the principles stated in paragraph 8 of Mechelec case will now stand superseded, given the amendment of Order 37 Rule 3, and the

binding decision of four judges in Milkhiram case, 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.

The Hon'ble Supreme Court has therefore held that once defence is frivolous or vexatious or in the case that the appellant/defendant has failed to

show a bona fide triable issue, leave to defend has to be refused. In the present case, as already stated above, except generally denying the case of

the respondent/plaintiff, the appellant/defendant laid out no positive defence and it is not disputed by the appellant/defendant that the cheque is signed

by the appellant/defendant, and which was dishonored on presentation on account of insufficient funds. The trial court was therefore justified in

dismissing the leave to defend application.

There is no merit in the appeal. Dismissed.