Sh. Mohinder Gupta vs Sh. Subhash Mittal

S. Ravindra Bhat, J.

I.A. 12185/2007 and I.A. 6430/2007

In the suit, the plaintiff seeks a summary judgment against defendant for the sum of Rs. 21,40,000/- under Order XXXVII CPC with interest at 18% per annum.

The suit averments are that the plaintiff and defendant had business relationship whereby the former provided credit facilities to the defendant. The business, it alleged, is purchase of old empty bottles from the plaintiff and the defendant had to pay amounts from time to time. In the suit, the plaintiff refers to 39 bills, said to have been issued on various dates between 19.04.2004 and 30.10.2004 for an amount of Rs. 21,43,185/-. It is alleged that the bills were issued to M/s. Mittal & Co. of which the defendant was proprietor. The plaintiff further avers that the defendant issued five post dated cheques, in satisfaction of the billed amounts. The details of such instruments as follows:

S. No. CHEQUE No. DATED RUPEES 1. 823778 08.11.2004 Rs. 3,60,000.00 2. 823779 13.11.2004 Rs. 4,10,000.00 3. 823780 16.11.2004 Rs. 3,70,000.00 4. 823781 19.11.2004 Rs. 5,00,000.00 Total Rs. 21,40,000.00

The plaintiff claims that the five cheques when presented were not honoured by the defendant''s banker and the comment received, from the latter was that payments were stopped by the drawer. The plaintiff adverts to having issued a legal notice to the defendant on 6.12.2004 and subsequently to having filed a criminal complaint before the Metropolitan Magistrate, Delhi, alleging commission of an offence u/s 138 of the Negotiable Instruments Act, 1881. The plaintiff also refers that the defendant having been approached the police, having lodged a First Information Report (FIR) claiming that he was the victim of an assault.

The plaintiff by his application under Order XXXVII Rule 3(4) moved the Court for summons for judgment. In support of the application, a detailed affidavit incorporating the averments in the plaint and relying upon the documents (which include copies of the 39 bills as well as the cheque return memos etc.) have been filed. The defendant in answer to the summons moved I.A. 12815/2007 seeking leave to defend, within the time prescribed.

The defendant''s case is that on 3.11.2004, he went to village Matiala and furnished a bid in a privately run Chit Fund at 5.00 P.M. According to the defendant, the plaintiff with someone else tried to interfere with his bid and compelled him to furnish some other bid. The defendant alleges inter alia that there is business rivalry between him and the plaintiff and that the latter had forced him to change the business on earlier occasions.

The defendant further alleges that the plaintiff, along with his accomplice took him to his Warehouse and compelled him to sign some blank papers. He also adverts to having been coerced to secure the cheque book along with the rubber stamp and other papers, of his business concern, which were brought to the location. He alleges that the plaintiff thereafter compelled him to sign on the documents as well as the cheques and also severely beat him up.

The defendant deposes to having lodged an FIR, which, according to him was not entertained and that the local police obtained his signatures on certain blank papers. He also adverts to having filed the criminal complaint before the competent court on 3.12.2004. The defendant has produced a copy of the criminal complaint lodged before the Court and medical documents in support of his allegations of having been beaten up. He has also produced a copy of the complaint made to the Commissioner of Police, New Delhi. He, therefore, contends that the averments in the suit are false and baseless and that he does not owe any amount to the plaintiff. According to the defendant, the cheques having been obtained under coercion could not have been acted upon and he ought to be granted unconditional leave in the circumstances of the case.

Counsel for the plaintiff counters the arguments of the defendant and argues that the documents on record including the bills and the bank statement produced in support of the suit show that parties were transacting with each other and had a business relationship since long. He relies upon an entry in his statement of account furnished by the bank reflecting credit/deposit of the sum of Rs. 50,000/- on 21st October, 2004. Learned Counsel also highlighted a discrepancy between what was stated before the police when the FIR was lodged and what was complained before the Court when the defendant moved u/s 200 Cr.P.C. It was urged that the FIR mentioned that the defendant owed money to the plaintiff and that he wanted some time. His allegations, contained in the FIR, were that the defendant was beaten since the plaintiff was unwilling to accede to his request.

The provisions of Order XXXVII are meant to create special category of cases where the plaintiff is enabled to secure a decree upon negotiable instruments and written contracts. The scheme of Order XXXVII Rules 3 to 5 is such that the Court has to be satisfied that the defence disclosed by the defendant is plausible if not a wholly satisfactory one. In the judgment reported as M/s. Sunil Enterprises and Another Vs. SBI Commercial and International Bank Ltd., , he Supreme Court, after examining the provisions and the previous judgments, listed following five situations where leave could be granted or refused and where conditions imposed, by the Court:

The position in law has been explained by this Court in Santosh Kumar v. Bhai Mool Singh; Milkhiram (India) (P) Ltd. v. Chamanlal Bros. and Mechelec Engineers and Manufacturers v. Basic Equipment Corporation. The propositions laid down in these decision may be summed up as follows:

(a) If the defendant satisfies the court that he has a good defence to the claim on merits, the defendant is entitled to unconditional leave to defend.

(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence, although not a possibly good defence, the defendant is entitled to unconditional leave to defend.

(c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is, if the affidavit discloses that at the trial he may be able to establish a defence to the plaintiff''s claim, the court may impose conditions at the time of granting leave to defend-the conditions being as to time of trial or mode of trial but not as to payment into court or furnishing securing.

(d) If the defendant has no defence, or if the defence is sham or illusory or practically moonshine, the defendant is not entitled to leave to defend.

(e) If the defendant has no defence or the defence is illusory or sham or practically moonshine, the court may show mercy to the defendant by enabling him to try to prove a defence but at the same time protect the plaintiff imposing the condition that the amount claimed should be paid into court or otherwise secured.

In fact in identical matters on the file of the said High Court in Summary Suit No. 2963 of 1990 Dena Bank v. Sunil Enterprises and Summary Suit No. 1153 of 1989 Bank of India v. Mahendra Sarabhai Choksi leave to defend had been granted to the defendants.

In the present case, defendant premises his claim for leave on the ground that he was forced into signing the cheques on 3.11.2004 and was also beaten up on that date. He has produced copies of the First Information Report, the complaint lodged with the Commissioner of Police and the complaint filed a month later i.e. on 3.12.2004. The defendant interestingly does not deny having a business relationship with the plaintiff. In the first instance when the FIR was lodged, the defendant, while alleging physical assault and coercion, did not mention about the cheques having been procured; at the same time he also mentioned about some dues being payable to the plaintiff. The FIR, however, mentions about plaintiff having secured his signatures on some blank documents. The complaint lodged on 3.12.2004 gives a different version in so far as the particulars are concerned. In this as well as the complaint to the Commissioner of Police the defendant does not mention about the any amount payable to the plaintiff. However, in the leave to defend application as well as in the complaint filed before the criminal Court, the defendant''s adverts to some pre-existing business relationship.

On an overall consideration of the above circumstances, the Court is of the opinion that the defendant''s case cannot be termed as an implausible one; however, the defendant''s version that no amount is payable too, cannot be accepted uncritically. In the circumstances, the Court is of the opinion that this is a case where conditional leave under Order XXXVII Rule 5 is called for, as the defendant has been able to point out to existence of some triable issues. Accordingly, in exercise of power under Order XXXIX Rule 6-B, the Court permits the defendant to hereby defend the suit subject to furnishing security to the extent of 25% of the claim within four weeks to the satisfaction of the Registrar. It is open to the defendant to furnish a bank guarantee in compliance with the present order.

Applications I.A. 12185/2007 and I.A. 6430/2007 are disposed off in these terms.

CS(OS) 421/2007

The defendant shall file his written statement within six weeks. Replication, if any, may be filed within two weeks thereafter.

List before the Joint Registrar on 24th October, 2008 for admission/denial of documents.

List before the Court on 29th January, 2009.