Sanjeev Sharma vs Avinash Rastogi

Jayant Nath, J

This suit has been filed under Order 37 CPC against the defendant for recovery of Rs.3,30,00,000/- based on an agreement/letter dated 06.07.2013

and dishonoured post dated cheques.

It is the contention of the plaintiff as stated in the plaint that a company, namely, Baxter India (P) Ltd. (BIPL) approached it to offer distributorship

for the sale of Haemodialysis Machines and Haemodialysis Consumables in North India. The defendant is said to have placed various purchase orders

for a total sum of Rs.5,74,31,168/- in the year 2012-13. After adjusting payment received, it is stated that the defendant was liable to pay a sum of

Rs.3,30,00,000/-. The defendant is said to have acknowledged this liability by a written agreement/letter dated 06.07.2013. The defendant also issued

four post dated cheques for Rs.82,50,000/- each and assured encashment on presentation. As security, the defendant has also kept the original title

document of the property at Cycle Market, Jhandenwalan Extension, New Delhi-110055 in a locker in the Bank of Maharashtra under joint operation

of the plaintiff and the defendant. It is pleaded that the cheques of the defendant when presented were dishonoured and no payment has been

received.

The defendant filed his application for leave to defend. On 17.07.2017 this court granted conditional leave to defend to the defendant on depositing

Rs.1,43,00,000/- with the Registrar General of this court within four weeks from the said date.

Against the above order dated 17.07.2017, the defendant went up in appeal before the Division Bench. The Division Bench in FAO(OS)(COMM)

176/2017 on 20.09.2017 dismissed the appeal.

When the matter came before this court on 29.11.2017, on the request of the learned counsel for the defendant, it was adjourned to 21.12.2017.

This court had made it clear, in case order dated 17.07.2017 is not complied with, adverse consequences would follow. On 21.12.2017 as no payment

had been deposited as directed by this court vide its order dated 17.07.2017, the right of the defendant to file written statement was closed.

Today also, the defendant pleads inability to deposit the amount. Learned counsel for the defendant however states that the plaintiff would have

lead evidence to prove their case.

Learned counsel for the plaintiff relies upon a judgment of the Division Bench of this court in Agarwal Developers Pvt Ltd Vs. M/S Icon Buildcon

Pvt Ltd., 2013 (V) ILR (Delhi), 3648. It is pleaded that a similar plea was rejected and a decree was passed in the said case.

Order 37 Rule (3) (6) (b) CPC provides as follows:-

“(3) Procedure for appearance of defendant (1) to (5) xxx

(6) At the hearing of such summons for judgement,-

(a) xxx

(b) if the defendant is permitted to defend as to the whole or any part of the claim, the Court or Judge may direct him to give such security and within

such time as may be fixed by the Court or Judge and that, on failure to give such security within the time specified by the Court or Judge or to carry

out such other directions as may have been given by the Court or Judge, the plaintiff shall be entitled to judgement forthwith.â€​

Hence, in view of the above provision, in case of failure of the defendant to provide security as directed, the plaintiff is entitled to judgment

forthwith. The Division Bench in Agarwal Developers Pvt Ltd Vs. M/S Icon Buildcon Pvt Ltd. (supra) had also rejected a similar contention and

noted as follows:-

“7. The sole submission made before us by the learned counsel for the Appellant is that the interpretation given by the learned Single Judge

regarding Order XXXVII Rule (3)(6)(b) CPC is contrary to the law and consequently the impugned order is liable to be set aside. It is submitted that

even in an ex parte case the Court is under an obligation to look into the merits of the case and then give an ex parte judgment. It is further contended

that similarly in a case of bonafide requirement under the provisions of Delhi Rent Control Act, even if leave to defend is declined the Court is under

an obligation to ascertain the bonafide requirement of the landlord on merits and then to pass an eviction order or dismiss the eviction petition.

We find the aforesaid contention of the Appellants counsel to be wholly misconceived. The provisions of Order XXXVII Rule 3(6)(b) envisage that

on the failure of the Appellant to deposit the amount required to be deposited by it as a condition to the grant of leave to defend the suit, the Court has

no other option but to pass a judgment forthwith. This is the clear mandate of law and we, therefore, find no merit in the contention of the Appellant

that the interpretation given to Order XXXVII Rule 3(6)(b) is contrary to the law. Further, in our opinion, an order passed in a summary suit under the

provisions of Order XXXVII Rule 2 CPC cannot be equated to an ex parte order passed in an ordinary suit. As regards compliance with the

provisions of Order XXXVII Rule 2, we find that the said aspect has been addressed by the learned Single Judge at length in his order dated April 20,

2012 and only after considering the same, the prayer of the Appellant for grant of unconditional leave to defend the suit was not acceded to by the

learned Single Judge. An appeal filed from the order of the learned Single Judge was dismissed by the Division Bench, albeit the Division Bench was

persuaded to reduce the rigors of the order by directing deposit of 25% of the principal amount as against 50% of the principal amount in terms of the

order of the learned Single Judge. The Special Leave Petition filed by the Appellant against the order of the Division Bench of this Court was also

dismissed during the pendency of the present Appeal.â€​

As only conditional leave to defend was granted to the defendant and the defendant has failed to comply with the directions, in terms of the Order

37 CPC a decree is to be passed. Accordingly, a decree is passed in favour of the plaintiff and against the defendant for Rs.3,30,00,000/-. The plaintiff

shall also be entitled to pendente lite simple interest @ 12% p.a. from the date of filing of the suit till the date of the decree. In addition, the plaintiff

shall also be entitled to simple interest @ 12% p.a. from the date of decree till recovery. The plaintiff shall also be entitled to costs.

The suit stands disposed of as above.

IA No. 11676/2017

In view of the above order, the application is dismissed.