Raj Kumar vs Latafat

Prathiba M. Singh, J

This hearing has been done by video conferencing.

The present petition challenges the impugned order dated 17th March, 2020, passed by the ADJ-05, South East District, Saket Courts, by which the

Trial Court has granted conditional leave to defend to the Petitioner/Defendant in the suit.

A suit for recovery for a sum of Rs.9,50,000/- was filed by the Respondent/Plaintiff. The transaction was an agreement to sell based on certain

documents in respect of the property measuring 92 sq. yards, bearing Khasra/Khewat no. 241/192, Khatoni no. 363/33, M. No. 15 Killa No. 15 (8-0)

16 (8-0), M. No. 23 Killa No. 6 (8-0), situated in the area of Mouja Agwanpur Abadi , Tehsil & Distt. Faridabad, Haryana (hereinafter, “suit

propertyâ€). According to the Plaintiff, a sum of Rs.9,50,000/- was paid to the Defendant and in turn a promissory note and other documents like

GPA, Agreement to sell and Receipt was executed. The Defendant, however, took the position that the signatures on all the documents are not

genuine and challenged the existence of the transaction itself. The Trial Court, after hearing the parties granted leave to the Defendant, via the

impugned order, subject to a deposit of a sum of Rs.9,50,000/- in an FDR.

The submission of Mr. Lakshya Dheer, ld. counsel for the Petitioner, is that the promissory note does not contain the thumb impression of the

Plaintiff/ Respondent, and in any case, the Defendant has very seriously challenged the genuineness of all the documents filed by the Plaintiff, before

the Trial Court. He relies upon the judgment of the Gujarat High Court inJ ashbhai Motibhai Patel v. Hasmukhbhai Rajivbhai Patel (AIR 1992 Guj

115), to argue that in such a fact situation, an unconditional leave ought to have been granted.

Mr. Nizamuddin, ld. counsel for the Respondent/ Plaintiff, upon a query from the Court, submits that the entire payment of Rs.9,50,000/- was made

in cash. However, the documents was duly executed by the Defendant.

After hearing the parties and after going through the pleadings on record, it is clear from the perusal of the application seeing leave to defend that

the Defendant’s stand is that he never executed these documents. The relevant paragraph from the application is set out below:

“7. That the defendant never executed all these documents namely General Power of Attorney, Agreement to Sell, Receipt, all dated

22.12.2012 and Promissory Note and Receipt dated 20.12.2013 and letter dated 20.12.2013 are not signed and executed by the defendant

in favour of Latafat or any person at any point of time.â€​

The legal position in respect of granting of leave to defend is well settled in the judgment of the Supreme Court in IDBI Trusteeship Services Ltd. v.

Hubtown Ltd (2017) 1 SCC 568. The Supreme Court held therein:

“18. Accordingly, the principles stated in paragraph 8 of Mechelec’s case will now stand superseded, given the amendment of

O.XXXVII R.3, and the binding decision of four judges in Milkhiram’s case, as follows:

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;

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;

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;

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..

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The decision of the Gujarat High Court in Jashbhai Motibhai Patel (supra), has been relied upon by the Petitioner to argue that if the signatures and

the very existence of the promissory note are denied, it raises a “triable issue†and in such a situation, unconditional leave to defend ought to be

granted.

A perusal of the impugned order shows that the basic premise on which the trial court observes that the Defendant’s case is not bonafide is

that the Defendant has not denied his thumb impression on the documents. After this observation, however, the trial court in paragraph 20 concludes

as under:

“However the defendant is given opportunity to prove its case that he had never entered into any agreement to sell regarding the said

plot, he had not executed the said documents in favour of the plaintiff, he had not received sale consideration of Rs. 9,50,000/-, the said

documents do not bear his signatures and thumb impressions and the suit is barred by limitation.â€​

A perusal of the Promissory note cum receipt shows that the same does not bear the thumb impression of the Defendant. It is a clear plea in the

leave to defend application that the defendant has not executed the documents i.e., the GPA, Agreement to Sell, Receipt dated 22.12.2012 or the

Promissory Note and Receipt dated 20.12.2013. Thus there is a clear denial by the Defendant. Moreover, no proof whatsoever has been adduced to

show the payment of the amount of Rs. 9.5 lakhs which is a substantial sum which is allegedly paid in cash.

The question of grant of leave to defend depends on the facts and circumstances of each case. There cannot be a hard and fast rule. The Court

has to consider the pleadings and documents and whether they inspire confidence. In the present case the fact that the entire amount is stated to have

been paid in cash without any acknowledgement, leads this Court to the conclusion, that the case of the Plaintiff cannot be taken completely on face

value. None of the documents relied upon are registered. Thus, there is not independent corroboration of the payment of money by the Plaintiff. Leave

to defend is to be granted considering the overall facts. The defendant’s case cannot be held to be completely trivial or moonshine.

Another important fact is that the impugned order is dated 17th March, 2020 and the Defendant moved an application seeking extension of the

time for complying with the order, which was granted on 16th October, 2020. After seeking extension, the present petition has been filed. Accordingly,

the defendant does not deserve unconditional leave but the condition for granting leave deserves to be modified. The Defendant shall deposit a sum of

Rs.2,00,000/- before the Trial Court within a period of eight weeks from today.

Subject to the deposit of Rs.2,00,000/- before the Trial Court, the leave to defend is granted, the written statement shall be taken on record and the

suit shall proceed in accordance with law.

With these observations the present petition and all pending applications are disposed of.