N. Rajshekar Reddy vs Lease Plan Fleet Management India Private Limited

The present appeal is by the appellant being aggrieved by the judgment and decree passed by the Fast Track Court, Bangalore Rural District in O.S. No. 1409/2009 dated 28.09.2012.

Heard Mr. Shanmukhappa, learned counsel for the appellant and Mr. Ganapati Hegde, learned counsel for the respondent.

Facts leading to this appeal are as hereunder:

The respondent-plaintiff filed the suit under the provisions of Order XXXVII Rule 1 and 2 under summary proceedings on the ground that the plaintiff had agreed to take the premises of the appellant-defendant on a monthly rent of Rs. 80,000/-. Accordingly, an agreement came in existence in the month of January, 2008. On 16.11.2007 he had paid a token advance of Rs. 30,000/-. It was further agreed between the parties that the balance of Rs. 7,70,000/- security deposit has to be paid and after receipt of the entire security deposit of Rs. 8,00,000/- the defendant was required to hand over the possession of the premises in question on a lease for a period of five years.

It is the further case of the plaintiff that he paid the balance security deposit of Rs. 7,70,000/- under a cheque bearing No. 285613 on 18.01.2008, however in terms of the agreement the defendant did not hand over possession of the property on or before 01.04.2008 since the building was not completed. In the circumstances he demanded the defendant to refund the security deposit since possession was not handed over to the plaintiff. Though a demand notice was issued the defendant did not sent any reply. In the circumstances invoking the provisions of Order XXXVII Rule 1 of CPC the suit came to be filed.

On service of summons under Order XXXVII Rule 1 of CPC the defendant made an application under order XXXVII Rule 3 of CPC seeking leave to defend and contest the case. The plaintiff filed a detailed objections to the aforesaid application on the ground that the said application is not maintainable and that no plausible defence has been raised in the application filed under Order XXXVII. In the meanwhile the plaintiff also filed an application to grant decree by producing the summons for judgment as contemplated in Rule 3 of Order XXXVII. In the circumstances the learned trial Judge heard the application filed by the defendant under Order XXXVII Rule 3 and also considered the request of the plaintiff to decree the suit in terms of the summons for judgment. He formulated the following points for his consideration.

Whether the defendant proves permission is need to be accorded to seek leave to file the objection and to defend the case?

Whether the plaintiff is entitled for the relief as claimed in the plaint?

What order?

Since the defendant did not appear before the trial court inspite of granting sufficient opportunity the learned trial Judge heard the plaintiff counsel and held point No. 1 in negative and point No. 2 in affirmative. Ultimately suit came to be decreed.

Aggrieved by the judgment and decree of the trial court the present appeal is filed.

According to Mr. Shanmukhappa, learned counsel appearing for the appellant the trial court has committed an error in rejecting the application filed under Order XXXVII Rule 3 of CPC. According to him the possession of the property was delivered to the plaintiff on 18.01.2008 only and since then the plaintiff did not pay the rent payable to the premises in the circumstances the defendant got adjusted the security deposit towards the arrears of rent and the balance left out was also not paid to the defendant by the plaintiff and the possession of the premises was also obtained from the plaintiff and contended that the defendant is not liable to pay the suit claim and that the trial court has committed an error in rejecting the application even though there is a plausible defence for the defendant to resist the; suit by filing necessary written statement.

Learned counsel appearing for the respondent submits that the contention of the appellant counsel that there was a plausible defence available to the defendant is incorrect because much prior to the filing of the suit the plaintiff had called upon the defendant to refund the security deposit. Though the defendant received such letter he did not sent any reply and also did not refund the security amount. In the circumstances, he submits that the defendant having not placed any material before the court to show that the possession of the property was actually delivered to the plaintiff and that there was a failure on the part of the plaintiff to pay the rents regularly and also on account of non-payment of rents the defendant obtained possession from the plaintiff. In the circumstances he contends that the trial court is justified in rejecting the application filed under Order XXXVII Rule 1. To support his arguments he has relied upon the judgment of Hon''ble Supreme Court in the case of V.K. Enterprises Vs. Shiva Steels, .

Having heard the learned counsel appearing for the parties the only point to be considered by us in this appeal is,

"Whether the trial court is justified in rejecting the application filed by the appellant-defendant under Order XXXVII Rule 3 of CPC and whether the judgment and decree of the trial court requires to be set aside?"

After hearing the learned counsel for the parties the following facts are not in dispute in this appeal, that the plaintiff had paid a sum of Rs. 30,000/- as token advance in 2007. It is also not in dispute that the plaintiff had agreed to take the premises of the defendant on lease for a period of five years on a monthly rent of Rs. 80,000/- per month. The plaintiff had also agreed to 80 lakhs security deposit to the defendant. On 18.1.2008 the plaintiff has paid the balance security deposit of Rs. 7,70,000/- by means of a account payee cheque and the same is acknowledged by the defendant.

The actual dispute in this appeal is as hereunder:

According to the plaintiff though security deposit was paid by the plaintiff to the defendant the possession of the property was not delivered to the plaintiff and as such he demanded the defendant to return the security deposit by addressing registered letter in the month of October, 2008. The defendant does not dispute the receipt of such a letter.

The actual defence of the defendant in the suit is that possession was delivered to the plaintiff and plaintiff did not pay the rent from the date of inception. To show that possession was delivered to the plaintiff no material is placed before the court by the defendant. It is the further case of the defendant that since the rents were not paid from January 2008, the rent payable by the plaintiff was adjusted towards security deposit and the remaining arrears of rent was also given up by the defendant and defendant has taken back the possession of the property from the plaintiff. If really the defendant had produced any document to show that the possession was delivered to the plaintiff either on 18.1.2008 or subsequently or if the plaintiff has failed to pay the rents to the defendant and on account of the same if the defendant has taken back possession of the property by adjusting the security deposit and also giving up the remaining arrears of rent, naturally the defendant would have obtained a receipt or an acknowledgement from the plaintiff. But unfortunately no material is placed before the trial court. There is also no explanation offered by the defendant for not sending reply to the plaintiffs letter. The plaintiff has specifically contended that the possession is not delivered to the plaintiff and therefore he has demanded for refund of security deposit. If really the possession was delivered to the plaintiff and plaintiff had not paid the rents, the normal conduct of a prudent man would be to send a reply to the letter of the plaintiff denying the allegations made therein or atleast he would have demanded from the plaintiff to deliver possession to him. Since the defendant has not sent any reply and as he has not denied the contents of the letter of the plaintiff, we are of the view that there is no plausible defence available to the defendant to defend the suit seeking permission to file the defence.

The Hon''ble Supreme Court in the case of V.K. Enterprises Vs. Shiva Steels, has ruled hereunder:

"10. Order 37 CPC has been included in the Code of Civil Procedure in order to allow a person, who has a clear and undisputed claim in respect of any monetary dues, to recover the dues quickly by a summary procedure instead of taking the long route of a regular suit. The courts have consistently held that if the affidavit filed by the defendant discloses a triable issue that is at least plausible, leave should be granted, but when the defence raised appears to be moonshine and sham, unconditional leave to defend cannot be granted."

In view of the conduct of the defendant not denying the allegations made by the plaintiff and considering the contents of the affidavit of the defendant filed in support of the application filed under Order XXXVII Rule 3 we cannot find fault with the findings of the trial court as the trial court has rightly considered the case of the parties on merits.

In the result, the appeal is dismissed. Parties to bear the costs.