DALVEER BHANDARI ( 1 ) THE plaintiff has filed a suit under Order 37 of the Code of Civil Procedure against the defendants for recovery of Rs. 28,30,000. 00. ( 2 ) THE learned Registrar vide order dated 25th May, 1990 observed that this suit has been filed under Order 37, Code of Civil Procedure, on the basis of Memorandum of Understanding. According to the learned Registrar Order 372) (c), Code of Civil Procedure, can be invoked in these categories of suits in which the plaintiff seeks recovery of a debt or liquidated demand in money payable by the defendant with or without interest, arising out of a written contract. The learned Registrar further observed that this Memorandum of Understanding does not fall within the purview of Order 37 (2) (b), Code of Civil Procedure. The learned Registrar registered the plaintiff s suit as an ordinary suit and issued summons to the defendants. ( 3 ) THE plaintiff aggrieved by the order of the Registrar filed an appeal (O. A. 13/90 ). The appeal was decided by R. L. Gupta, J. He accepted the appeal and directed that the suit be registered under Order 37 and summons be issued to the defendants. The defendants have entered their appearance and filed leave to defined applications. ( 4 ) IN these leave defend applications following submissions have been made :- I. There is not valid service of summons on the defendants. II. The present suit is liable to be stayed under Section 34 of the Arbitration Act, and according to clause 6 of the agreement, the disputes have to be referred for adjudication to the sole arbitration of a person mutually appointed by the parties. Clause 6 is reproduced as under:- "that if any dispute on difference arises between the parties hereto concerning or arising out of this agreement, then all such disputes shall be referred to the sole arbitrator mutually appointed by the parties and the award made by the arbitrator shall Be fully and effectively binding on the parties. The arbitration proceedings shall be governed by the Indian Arbitration Act, 1940. All disputes and differences arising out of this agreement shall be decided by courts situated at Delhi. " ( 5 ) IT has been further submitted that me defendant has been ready and willing to refer me matter to the arbitration in terms of the above clause. The arbitration proceedings shall be governed by the Indian Arbitration Act, 1940. All disputes and differences arising out of this agreement shall be decided by courts situated at Delhi. " ( 5 ) IT has been further submitted that me defendant has been ready and willing to refer me matter to the arbitration in terms of the above clause. The defendant submitted that the plaintiff is guilty of suppressing this arbitration clause from the court and he has not approached the court with clean hands. III. The suit under section 37 of the Code of Civil Procedure is not maintainable against defendant no. 1 because the alleged Memorandum of Understanding was not executed by or on behalf of defendant IV. It is further submitted that the alleged Memorandum of Understanding, itself provided for a regular agreement. The property in question out of which an area of l. 275 sq. ft is to be provided, belongs to defendant no, I. Therefore, the regular agreement was an essential condition to be fulfilled before the sale by defendant no. 1. ( 6 ) THE alleged Memorandum of Understanding is vague, unfair, uncertain, lunconscionable and against the public policy, rendering it illegal and void. In the applications for leave to defend, it has bene incorporated that the plaintiff has in fact agreed to execute work at Sahibabad Unit, totaling to Rs. 4 lakhs. Even as regards to the aforesaid delhi property of defendant no. l, the plaintiff had abandoned the work and did not complete the work in terms of the contract. The work executed at Sahibabad was in the premises of another company, namely, M/s Allied Fibre-glass products (P) Ltd. This work at Sahihabad was done by one Mr. Naveen Jaitley. All bills of this work at Sahibabad are signed by Mr. Naveen Jaitely. The plaintiff, therefore, has no connection in regard to the said transaction, which is a totally distinct and separate transaction. ( 7 ) DEFENDANT no. 1 had denied that he had agreed to pay Rs. 15 lakhs or any other amount to the plaintiff for an area of 1275 sq. ft. ( 8 ) THE defendant no, 2 filed a separate application for leave to defend on 21st of january, 1991. ( 7 ) DEFENDANT no. 1 had denied that he had agreed to pay Rs. 15 lakhs or any other amount to the plaintiff for an area of 1275 sq. ft. ( 8 ) THE defendant no, 2 filed a separate application for leave to defend on 21st of january, 1991. In the application, it is mentioned that relief claimed as per clauses (b) and (c) of the prayer made in the plaintiff do not fall within the ambit of the sub-rule 1 of Order 37 of the Code of Civil Procedure, 1908, and as such present suit under the summary procedure is not maintainable. VI. The instant suit has been filed on the basis of Memorandum of Underataftding. Even the plaintiff has not asserted that the basis Memorandum of Understanding was a written contract, therefore, the court was not justified is describing the same as written contract in its order dated 6. 9. 1990. VII. It has been mentioned that defendant no. 2 was only a confirming party and no decree could be passed against defendant no. 2. Even defendant no. 2 is not liable to satisfy the alleged claim of the plaintiff inasmuch as defendant no. 2 is liable on the original cause of action nor he is surety or guarantor for and on behalf of defendant no. 1. VIII. It is also incorporated in the application of defendant no. 2 that alleged agreement dated 18. 12. 1986 is without consideration and not enforceable under the law. ( 9 ) THE plaintiff has not been able to give any plausible reply why the above arbitration clause is not referred to and if the same is in existence, why the dispute ought not to be referred to the arbitration as envisaged in the agreement. ( 10 ) IT is further mentioned by the plaintiff that agreement dated 12. 7. 86 between the defendants and the plaintiff has not been terminated or cancelled or superseded by agreement dated 18. 12. 1986. The plaintiff has denied that the said Memorandum of Understanding is in nay manner either uncertain, unfair and unconscionable. . The plaintiff has also mentioned that both the defendants are jointly and severally liable under me Memorandum of Understanding dated l8. 12. 1986. 12. 1986. The plaintiff has denied that the said Memorandum of Understanding is in nay manner either uncertain, unfair and unconscionable. . The plaintiff has also mentioned that both the defendants are jointly and severally liable under me Memorandum of Understanding dated l8. 12. 1986. ( 11 ) I have heard the leamed counsel for the parties at length, the defence which has been taken by the defendants, if construed in proper perspective, cannot be said to be sham or totally devoid on any merit. ( 12 ) LEARNED counsel for the parties have also cited some cases. I do not propose to burden this order by those cases which in fact have no relevance or bearing on the issues involved in this case. Each application for leave to defend has to be decided and determined on the merits of the facts and circumstances of each case. ( 13 ) I do not propose to determine and decide the various contentions raised by the learned counsel for the defendants and the plaintiff because adjudication of submissions raised by the learned counsel for the parties at this stage ma prejudice the future trial of the case, directly or indirectly. ( 14 ) THEREFORE, after careful consideration of the pleadings and submission of the learned counsel for the parties. I am of the considered view that the defence taken by me defendant cannot be called sham or totally devoid of any merits or has been raised only to drag on the suit. Therefore, in my opinion, both the defendants are entitled to unconditional leave to defend. The applications filed by me defendants are allowed. However, in the facts and circumstances of this case, I direct the parties to bear their own costs. ( 15 ) LIST this matter before the Deputy Registrar for further proceedings, on 30th July, 1993.