Parekh Marketing Ltd. vs Amarphal Marketing [P] Ltd.

S.N. Aggarwal, J.—This is unfortunate that a leave to defend application filed by the defendant in a suit under Order XXXVII CPC is pending for about five years.

The plaintiff has filed this suit against the defendant for recovery of Rs. 25,21,160.67 with pendente lite and future interest @ 24% per annum. The suit was filed under Order XXXVII CPC in August 2003. The plaintiff has stated that the defendant was a wholesale stockist and in the course of business used to purchase various goods such as Fevicol brand adhesives, synthetic resins, etc. from the plaintiff. The defendant is alleged to had given three cheques of total aggregate amount of Rs. 25,21,160.67 to the plaintiff towards price of the goods purchased by the defendant from the plaintiff. The details of the cheques as given in para 6 of the plaint, are as follow:

Cheque No. Dated Amount (in Rs.) 356869 13.2.2003 10,00,000/- 356870 21.2.2003 10,00,000/- 356871 28.2.2003 5,21,120.67

The further case of the plaintiff is that all the above mentioned three cheques when presented for encashment, were returned unpaid by the banker for "insufficient funds". The present suit had been filed by the plaintiff for recovery of the amounts of the above mentioned three cheques.

In response to the summons of the suit, the defendant filed its leave to defend application which was within limitation. The leave is sought by the defendant inter alia on the ground that the three cheques mentioned above were never issued by the defendant and they are without consideration. The defendant has alleged in leave to defend application that in the course of business dealings the defendant had given blank cheques duly signed by one of its Directors to the plaintiff company for being filled up on instructions from time to time. The defendant has contended that the blank cheques given by the defendant to the plaintiff as security were misused by the plaintiff and according to the defendant it is not liable to pay any amount to the plaintiff company. The main defence raised by the defendant in the leave to defend application is that the alleged cheques relied upon by the plaintiff were blank and were misused by the plaintiff.

Mr. Om Prakash, learned Counsel appearing on behalf of the defendant has referred to certain documents at pages 35 to 37 of 1A part of the file. The reliance on these documents is placed on behalf of the defendant to substantiate the defence that the cheques in question given by the defendant to the plaintiff were blank. It would be relevant to refer to one of these three letters which is at page 35. The said letter is dated 30.05.2002 written by the defendant to the plaintiff and the same reads as under:

Date : 30.05.2002

The Branch Manager,

Parekh Marketing Ltd.,

Rajdhani Enclave, New Delhi

Dear Sir,

We are regret to say that despite our discussions with you in our office regarding not to use any blank cheque with you, as our authorised signatory has been changed (and agreed by you) you have deposited a cheque No. 356885 dt. 28.05.2002 for Rs. 509881.68 and Cheque No. 341845 dt. 21.05.2002 for Rs. 174337.43 both drawn on State Bank of Bikaner & Jaipur and the same has been returned unpaid by our bankers with the reason "required Iind Signature"

You are once again requested not to use any blank cheque, which are in your custody as our authorized signatory has been changed, failing which we will not be responsible for any default.

Also in future we will make all payments by Bank Draft.

In lieu of the above-returned cheques we are sending you the material vide our bill No. AMP 12365 to AMP 12368 and AMP 12373 dt. 30.05.2002 total amounting to Rs. 461129.16 Which is duly received by your representative Mr. Ajay Sharma. Please credit the same in our account. Kindly do the needful & oblige.

Thanking you,

For Amarphal Marketing Pvt. Ltd.

Sd/- Director

The above referred letter written by the defendant to the plaintiff was prior in point of time to the dates of the cheques in question on the basis of which the plaintiff has filed the present suit. It may be seen from the said letter of the defendant that the defendant did write to the plaintiff that it had given duly signed blank cheques to the plaintiff. One of the cheques referred in the letter dated 30-05-2002 at page 35 of Part 1A file is cheque No. 356885 dated 28-05-2002 for Rs. 5,09,881.68 paise. All the three cheques on the basis of which the plaintiff has filed the present suit were allegedly issued by the defendant during the month of February 2003. The numbers of these three cheques on which the plaintiff has sought reliance are 356869, 356870 and 356871. In case cheque No. 356885 was given by the defendant on 28-05-2002 as referred in letter at page 35, then how could the cheque which bears earlier serial number, mentioned in para 6 of the plaint, have been issued by the defendant in February 2003, i.e., after about nine months of issuance of the subsequent cheques from the same cheque book. The matter does not rest here. The counsel appearing on behalf of the respondent has further drawn attention of this Court to the documents at pages 15, 16 and 17 of part A file and also to the contents of para 8 at page 7 of leave to defend application and relying on the same he has contended that as per resolution passed by the Board of Directors of the defendant company on 25-05-2002, the cheques exceeding Rs. 30,000/- were required to be signed by all the three directors of the defendant company whereas the alleged three cheques referred in para 6 of the plaint bear the signatures of only one Director. This Court has gone through the reply of the plaintiff to para 8 of leave to defend application where this fact is not disputed by the plaintiff that the cheques in question mentioned in para 6 of the plaint were signed only by one Director.

This Court was initially not inclined to grant leave to the defendant on its defence of blank cheques but after the court has gone through the pleadings and the documents shown to the court by learned Counsel appearing on behalf of the defendant, there appears to be a prima facie strength in what the defendant has contended in the leave to defend application. In case the defendant is able to prove and substantiate its plea that the cheques in question relied upon by the plaintiff were given to it blank then it would non suit the plaintiff. It may also be noted that the plaintiff has not given any details of the goods allegedly supplied by the plaintiff to the defendant for which the cheques in question were allegedly issued.

In view of the above and having regard to the facts and circumstances of the case, this Court is of the considered opinion that the defendant has raised trible issues which would entitle the defendant to unconditional leave to defend. I, therefore, grant unconditional leave to defend to the defendant to contest the present suit.

This leave to defend application stands disposed of accordingly.

Anything said or observed in this order shall not influence the trial of the case.

CS(OS) No. 1659/03

The defendant is given four weeks'' time for filing of Written Statement. Replication may be filed within two weeks thereafter.

List the case for admission/denial of documents before the Joint Registrar on 07-05-2008.