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2004 DIGILAW 737 (DEL)

DEEPAK ARORA v. S. N. SAPRA

2004-09-09

MUKUL MUDGAL

body2004
MUKUL MUDGAL ( 1 ) THIS is an application for leave to defend filed by the defendant in a summary suit under Order XXXVII of the Civil Procedure Code. ( 2 ) THE plaint averred as follows: (A)THE plaintiff, the defendant and Lt. Col. S. M. Chaudhary entered into an agreement for the development and construction of the property No. J 1839, Chittranjan park, New Delhi measuring 340 sq. yds. By virtue of the said agreement the plaintiff and the defendant were to bear the entire cost of the development and construction and the first floor was to be owned by the plaintiff, second floor by the defendant and Lt. Col. Choudhary was entitled to own the basement and the ground floor. The plaintiff invested a sum of Rs. 33 lacs and the construction work was taken control of by the defendant. The plaintiff came to know about the defendant being a land grabber and 4 cases having been registered against him and consequently decided not to continue the aforesaid development and construction work with the defendant and called for the recovery of the said Rs. 33 lacs. The defendant eventually agreed to and than offered to pay only Rs. 30 lacs on 31st January 1999 in full and final settlement of the said amount by giving three cheques. Accordingly a rajinama was entered into on 31st January 1999 acknowledging the liability of the defendant and three cheques given were for Rs. 10 lacs each. At the request of the defendant the said cheques were sent for encashment after a couple of days. Even in a criminal case filed by the plaintiff and in an anticipatory bail application moved therein, the defendant applied for anticipatory bail by submitting that he had offered to pay a sum of Rs. 30 lacs to the plaintiff. Since all the three cheques bounced, the bouncing of the said cheques were communicated to the defendant and at the defendant s request the said cheques were again presented on 10th September 1999 but were dishonoured again. This was done again at the request of the defendant and the cheques were received back with the remarks account closed. In respect of the said bouncing of the said cheques three complaints were pending before different criminal courts. Thereafter the defendant again promised and assured to pay a sum of rs. This was done again at the request of the defendant and the cheques were received back with the remarks account closed. In respect of the said bouncing of the said cheques three complaints were pending before different criminal courts. Thereafter the defendant again promised and assured to pay a sum of rs. 30 lacs by a letter dated 20th September 1999 admitting and acknowledging his liability to pay the said amount in 4 instalments starting from 5th October 1999 and ending on 30th October 1999. However, no such payment was made leading to the present summary suit based on aforesaid acknowledgment. ( 3 ) THE defendant had filed an application for leave to defend, IA 1162 of 2002, and the affidavit in support of the application. The contention of the defendant is that no cash was paid by the plaintiff and the sum of rs. 30 lacs was incurred by the plaintiff by way of purchasing material, payment to labour etc. He further stated that the building in question remained sealed in the year 1996-97 and was demolished in the year 1996-99 and, therefore, the whole investment made by the plaintiff nd the defendant went in vain. The total sum invested was Rs. 1. 18 crores and odd and out of which rs. 30 lacs were invested by the plaintiff and the remaining by the defendant. It is further submitted that the second floor of the building was disposed of with the consent of the plaintiff to Balvinder Singh and M/s sarin Trading Co. for a sum of Rs. 20 lacs. Out of which 10 lacs were taken by the plaintiff and now only Rs. 20 lacs remained invested by the plaintiff. Since the first floor of the building could fetch only Rs. 50 lacs which also could not be sold because of the rumour in the market that the building had twice been sealed and demolished by the Corporation. There is thus a loss of rs. 40 lacs which the plaintiff is liable to share with the defendant. The plaintiff has been given opportunities to sell out the first floor but the plaintiff has threatened the defendant for extorting money by various means and civil and criminal proceedings including by filing the present suit. There is thus a loss of rs. 40 lacs which the plaintiff is liable to share with the defendant. The plaintiff has been given opportunities to sell out the first floor but the plaintiff has threatened the defendant for extorting money by various means and civil and criminal proceedings including by filing the present suit. It is also submitted that the disputed question of facts are involved and triable issues have been raised which cannot be decided without going into evidence. Accordingly in view of the above pleas the unconditional permission for leave to defend should be granted. The defendant has given several details of the dispute between the parties including the order dated 23rd August 1991 passed in CW 2662 of 1991 where interim orders were passed restraining the illegal construction. The defendant has also given the details what according to it were the amount paid to the collaborator, M/s Mitra specialized Services (I) Pvt. Ltd. The defendant has also given an explanation for the cost transaction between the parties including the transaction of the property in Defence Colony. However, the material averment on the issue of cheques, the only allegation made is that these were obtained from the defendant under pressure and threat against which already a police report has been lodged which is dated 24th January 1999 and seeks to offer an explanation for the issuance of the cheques by the defendant. ( 4 ) THE learned counsel for the defendant has contended that since various disputes necessiating assertainment after a full trial have been raised by him, the suit cannot be proceeded under Order XXXVII of the Code of Civil Procedure and, therefore, he should be granted an unconditional leave to defend. ( 5 ) IN my view there are certain undisputed documents on record including three cheques of Rs. 10 lacs each issued by the defendant. The defendant has, however, sought to deny the execution of the cheques and the rajinama dated 31st January 1999. The bald assertion that the documents including the rajinama and the cheques were signed under threat is prima facie not believeable, particularly, since it is stated that the report in regard to issue of cheques under pressure and threat was made to the police on 24th January 1999 and later on the rajinama was signed on 31st January 1999 and secondly on 6th March 1999 before the Addl. Sessions judge the following offer was made" " Heard. Ltd. APP submits that the IO has not come today and he is not aware of the facts of the case. Ld. Counsel for the petitioner further submits that the FIR has not so far been registered and the police is unnecessary harassing and threatening to arrest the petitioner. It is further submitted that it is the petitioner who has raised construction in collaboration with the complainant and has spent more than Rs. one crore and the complainant has spent only Rs. 10 lacs. It is further submitted that this petitioner has ever offered to pay back Rs. 30 lacs to the complainant. Considering the facts and circumstances of the case, it is directed that one week s written notice be given to the petitioners before taking any action against them. Dasti. " ( 6 ) IN my view the assertion about the issuance of the cheques and the rajinama of 31st January 1999 having been made under threat/coercion not having been made before the Magistrate on 6th March 1999 when the defendant was under no threat and present before a judicial officer demonstrates that such an assertion is not worthy of belief at all. Consequently, the defendant s application does not justify the unconditional leave to defend to the defendant because a complaint could have been made before the magistrate and a statement on 6th March 1999 could not have been made under threat or coercion and is sufficient to indicate that the defendants version about the nature of cheques and their being issued under threat or coercion is wholly unbelievable. Therefore, the relevant position of law laid down by the Hon ble Supreme Court in M/s Mechalec enginners and Manufacturers vs. M/s Basic Equipment corporation, reported as AIR 1997 SC 577, is applicable which reads as follows: "8. . . . . . . . . . . . . . . (a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend. . . . . . . . . . . . . . . (a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and 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 positively good defence the plaintiff is not entitled to sign judgment and the defendant s 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 to say, although the affidavit does not positively and immediate make it clear that he had a defence, yet, shews such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff s claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security. (d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and 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 then although ordinarily the plaintiff is entitled to leave to sign judgment, the court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defence. " ( 7 ) THE above position of law as per clause (e), quoted above, clearly applies in this case and the defendant is, therefore, liable to deposit a sum of Rs. 30 lacs in this court within 6 weeks so as to enable this Court to grant to leave to defend to the defendant. " ( 7 ) THE above position of law as per clause (e), quoted above, clearly applies in this case and the defendant is, therefore, liable to deposit a sum of Rs. 30 lacs in this court within 6 weeks so as to enable this Court to grant to leave to defend to the defendant. If the defendant deposits the said amount of rupees thirty lacs in this court, leave to defendant shall be granted to the defendant to defend the suit. Accordingly the application stands disposed of. CS (OS)1236/02 and IAs 6639/02 and 8527/02 ( 8 ) LIST the suit for further directions and for reporting compliance of the order of deposit of rupees thirty lacs on 7th December 2004.