Maya Nagar vs Suresh Chand Arora and Another

Rajiv Sahai Endlaw, J.—The appeal impugns the judgment and order dated 14th December, 2001 of the Court of the Additional District Judge (ADJ), Delhi in Suit No. 170/1999 of dismissal of the application filed by the appellant for condonation of delay in applying for leave to defend as well as application for leave to defend and the consequent money decree for a sum of Rs. 2,92,573.30 paise along with pendente lite and future interest @ 12% per annum against the appellant. Notice of the appeal was issued and subject to the appellant furnishing bank guarantee for the decretal amount, the implementation of the impugned decree was stayed. A bank guarantee for Rs. 2,92,574/- i.e. towards principal decretal amount and an additional bank guarantee for Rs. 1 lakh towards interest was accordingly furnished and renewed from time to time.

Vide order dated 13th December, 2012, the appeal was admitted for hearing. The appeal was on 5th February, 2013 listed for hearing when none appeared; the appeal was accordingly dismissed in default and the bank guarantees furnished by the appellant invoked and the amount received thereunder ordered to be kept in a fixed deposit. The appellant applied for restoration of the appeal and which was allowed vide order dated 25th September, 2013. Upon encashment of the bank guarantees, a sum of Rs. 3,92,574/- was received which is kept in a fixed deposit.

The counsel for the appellant and the counsel for the respondent No. 1 have been heard.

The respondent No. 1 instituted the suit from which this appeal arises for recovery of Rs. 2,92,573.30 paise from the appellant and from Mr. Ravi Nagar, husband of the appellant, impleaded as respondent No. 2 in this appeal, pleading:

(i) that the husband of the appellant i.e. the respondent No. 2 was a friend of the respondent No. 1/plaintiff;

(ii) that amongst other transactions, the respondent No. 2 on 5th June, 1998 took a loan of Rs. 2,20,000/- from the respondent No. 1/plaintiff;

(iii) that after giving the aforesaid loan to the respondent No. 2, the respondent No. 1/plaintiff wanted to take some surety/guarantee; accordingly, the appellant stood surety/guarantor of her husband respondent No. 2 by executing a Deed of Guarantee dated 8th June, 1998 whereunder the appellant also gave the cheque dated 1st August, 1999 for Rs. 2,79,173/- inclusive of interest towards repayment of the loan taken by the respondent No. 2 and it was agreed that in case the respondent No. 2 fails to pay the loan with interest on or before 31st July, 1999, then the respondent No. 1/plaintiff would be entitled to encash the cheque;

(iv) that the respondent No. 2 failed to repay the loan; accordingly, the respondent No. 1/plaintiff deposited the cheque aforesaid which was returned dishonoured for the reason of insufficiency of funds in the bank account of the appellant.

Accordingly, the suit for recovery of Rs. 2,92,573.30 paise under Order 37 of the CPC (CPC), 1908 was filed.

A perusal of the Trial Court record shows that summons for appearance were issued on 5th November, 1999 for 7th February, 2000; that the respondent No. 2 filed his appearance on 18th December, 1999 and the appellant filed her appearance on 20th December, 1999; that the respondent No. 1/plaintiff applied for issuance of summons for judgment which were on 24th January, 2000 ordered to be issued; on 7th February, 2000, the appellant appeared before the Trial Court in person and perhaps because the report of service of summons for judgment had not been received till then, the summons for judgment were again ordered to be issued for 10th March, 2000; however on 10th March, 2000, it was recorded that the summons for judgment had been served on the appellant as well as the respondent No. 2 on 3rd February, 2000 by ordinary process and on both, the appellant and the respondent No. 2 by registered post AD on 28th January, 2000 and the matter was adjourned to 14th March, 2000; the appellant filed application for leave to defend along with an application for condonation of delay in applying for leave to defend on 13th March, 2000.

The respondent No. 1/plaintiff filed reply to the said applications of the appellant.

The respondent No. 2 also on 14th March, 2000 applied for condonation of delay in applying for leave to defend but without any leave to defend application.

The learned ADJ in the impugned judgment/order has found/observed/held:

(a) that though the appellant had given the reason of her illness in the application for condonation of delay in applying for leave to defend but had not filed any Medical Certificate in support thereof;

(b) that the appellant had appeared before the Court on 7th February, 2000 and which also belied her plea that she was sick in the first week of February, 2000; if she was sick as claimed by her, she could not have appeared on 7th February, 2000; on the contrary, when she could come to the Court on 7th February, 2000, she could also get the leave to defend prepared;

(c) that the appellant had failed to explain each and every day''s delay in filing the application for leave to defend;

(d) that the other reason given by the appellant for condonation of delay, being the call given by the Advocates of strike, was also not sufficient cause for not preparing and filing the application for leave to defend;

(e) that the respondent No. 2 who according to the respondent No. 1/plaintiff also had an enmity with the appellant, could not give the reason of the illness of the appellant for delay in his part in applying for leave to defend;

(f) that the applications of both, the appellant as well as the respondent No. 2 for condonation of delay in applying for leave to defend were thus liable to be dismissed;

(g) that the respondent No. 1/plaintiff had filed the Loan Agreement dated 5th June, 1998 executed by the respondent No. 2 and the Guarantee Bond dated 8th June, 1998 executed by the appellant, both in favour of the respondent No. 1/plaintiff as well as the cheque signed by the appellant in favour of the respondent No. 1/plaintiff together with Cheque Returning Memo and the demand notice got issued;

(h) that there was nothing to disbelieve the averments made in the plaint and the documents filed on record;

(i) that the appellant and the respondent No. 2 having not applied for leave to defend within the prescribed time, the respondent No. 1/plaintiff had become entitled to judgment forthwith.

Accordingly, the suit was decreed jointly and severally against the appellant and the respondent No. 2.

Rule 3(7) of Order XXXVII empowers the Court to, for sufficient cause excuse the delay of the defendant in applying for leave to defend.

I am, for the reasons herein below given, inclined to, in the facts and circumstances of the present case, not only condone the delay on the part of the appellant in applying for leave to defend but to also grant leave to defend to the appellant, on the condition of the appellant depositing the decretal amount and which already stands deposited in this Court as aforesaid:

(I) that the suit now pending at the appellate stage, for the last eleven years, has lost its summary nature;

(II) that though the decree in favour of the respondent No. 1/plaintiff was jointly and severally against the appellant and the respondent No. 2 and further though it is only the appellant who has challenged the said decree and the respondent No. 2 is informed to have not taken any remedy there against, the counsel for the respondent No. 1/plaintiff on enquiry, whether the respondent No. 1/plaintiff has taken any steps for execution of the decree against the respondent No. 2 has replied in the negative, though of course justifying it on the ground of stay of decree vide interim order in this appeal; however, the stay of execution in an appeal preferred by the appellant would not enure to the benefit of the respondent No. 2 and the factum of the respondent No. 1/plaintiff though with a money decree in his pocket, not opting to execute the same against the respondent No. 2, creates a suspicion/doubt, more so in the light of what is stated herein below;

(III) that the appellant sought leave to defend pleading:

(A) that she was the sole/absolute owner of property No. B-71, Dilshad Colony, Delhi;

(B) that her husband respondent No. 2 wanted the title of the said property in his name which was not acceded to by the appellant and her parents who had financed the purchase of the said house;

(C) that the respondent No. 1/plaintiff in collusion with the respondent No. 2 had been attempting to grab the said property and with the said motive had forged and fabricated an Agreement of Sale of the said property in favour of the wife of the respondent No. 1/plaintiff namely Smt. Meenakshi Arora and in which regard a suit had been filed by the appellant against the respondent No. 1/plaintiff, his wife as well as against the respondent No. 2, since prior to the institution of the suit from which this appeal arises and which suit was pending adjudication;

(D) that the wife of the respondent No. 1/plaintiff had also instituted a suit for specific performance of the said Agreement of Sale and which was also pending adjudication;

(E) that the suit from which this appeal arises was intended to harass the appellant and to pressurize the appellant to give into the demand of the respondent No. 1/plaintiff and his wife in the other two suits;

(F) that though the original title documents of the aforesaid property were earlier in the custody of the appellant but were not found by the appellant and the appellant had lodged a missing report in this regard;

(G) that the appellant apprehended that her husband respondent No. 2 had stolen the title documents of the property;

(H) that the respondent No. 1/plaintiff and his wife Smt. Meenakshi Arora claimed to have paid a sum of Rs. 6 lakhs to the appellant as part payment of the sale consideration;

(I) that the appellant had never agreed to sell her property and had not received any sale consideration;

(J) that the appellant had serious differences with her husband respondent No. 2 and the two were living separately;

(K) that the respondent No. 2 had in collusion with the respondent No. 1/plaintiff and Smt. Meenakshi Arora conspired to deprive the appellant of her property;

(L) that the appellant had never signed the alleged Guarantee Bond and never stood as a guarantor of her husband for the loan, if any, taken by the respondent No. 2 from the respondent No. 1/plaintiff;

(M) that the appellant had never issued the cheque of Rs. 2,79,173/- and the said cheque did not bear her signature and had been forged.

(IV) that the respondent No. 1/plaintiff filed a reply to the application for leave to defend in which it was admitted that the appellant in the suit filed by her against the respondent No. 1/plaintiff and his wife Smt. Meenakshi Arora, since prior to the institution of the suit from which this appeal arises, has also impleaded her husband respondent No. 2 as a defendant; the enmity of the appellant with her husband respondent No. 2 was expressly admitted;

(V) that it would thus be seen that the respondent No. 1/plaintiff admits his loan transaction to be primarily with the respondent No. 2 and further admits the enmity between the appellant and the respondent No. 2. This, coupled with inaction of the respondent No. 1/plaintiff in executing the decree against the respondent No. 2, leads me to form an opinion that the present is not a case where summary jurisdiction should be invoked, notwithstanding the delay on the part of the appellant in applying for leave to defend. In that regard also, it may be noticed that the factum of the Lawyers in the District Courts at the contemporaneous time being on strike is not disputed; all that is contended is that inspite of the strike, the leave to defend application should have been filed;

(VI) that the learned ADJ has been unduly swayed by the appearance of the appellant before the Court on 7th February, 2000 into disbelieving the illness of the appellant;

(VII) that the service of summons for judgment is in pursuance to the order dated 24th January, 2000; however, vide subsequent order dated 7th February, 2000, in the presence of the appellant, fresh summons for judgment were ordered to be issued and qua which the respondent No. 1/plaintiff did not take any steps. Benefit of doubt has to be given to the appellant that the service prior to 7th February, 2000 of summons for judgment stood waived. The summons for judgment from which the delay in applying for leave to defend is computed are the summons for judgment ordered to be issued on an earlier date. For this reason also, I am of the opinion that the present is a fit case where the delay should be condoned;

(VIII) that the interest of the respondent No. 1/plaintiff is sufficiently protected by obtaining the deposit of the entire amount due from the appellant;

(IX) that a doubt also arises as to why the respondent No. 1/plaintiff would give a loan of Rs. 2,20,000/- to respondent No. 2 and make the appellant guarantor for the same when balance sale consideration was payable by the respondent No. 1/plaintiff to the appellant under the Agreement to Sell set up by respondent No. 1/plaintiff.

The appeal is accordingly allowed; the judgment and order insofar as against the appellant is set aside and the delay on the part of the appellant in applying for leave to defend is condoned and the appellant is granted leave to defend on the condition that the appellant shall not withdraw the monies deposited in this Court till the pendency of the suit and which monies shall be continued to be kept by the Registry of this Court in maximum interest bearing deposit awaiting the outcome of the suit.

The parties are left to bear their own costs. Decree sheet be drawn up.

The Trial Court file/record be returned forthwith to the District Judge (North East), Karkardooma Courts, Delhi within whose jurisdiction both parties are stated to be residing.

The parties to appear before the District Judge (North East) or Additional District Judge to whom the suit may be marked, on 10th December, 2013.

The appellant to supply advance copy of the written statement to the counsel for the respondent No. 1/plaintiff within four weeks and file the written statement in the Court on 10th December, 2013 and on which date the respondent No. 1/plaintiff may also file the replication if required and the suit to be tried thereafter. Though considerable delay has been caused in this Court but the District Judge/Additional District Judge to whom the suit is marked, is requested to expedite the trail, considering that the year of institution of the suit, from which this appeal arises, is 1999.