Judgment

Shah, J.-Respondent-Companies filed civil suit against Kamlesh Kamal & Company (defendant No. 1), Smt. Kamlesh Kohli, wife of Shri J.N. Kohli (defendant No. 2) and Shri Rajiv Kohli, son of Shri J.N. Kohli (defendant No. 3) for recovery of Rs. 85,62,500/- on the basis of Memorandum of Agreement dated 19th November, 1992. It was alleged that Smt. Kamlesh Kohli had been holding a membership ticket of Delhi Stock Exchange and had been carrying on business in the name of Kamlesh Kamal & Company (defendant No. 1). She approached the plaintiffs to provide finance for ‘Badla’ transactions in or about March/April, 1992. As on 10th September, 1992, a sum of Rs. 3.02 crore was due and pay­able by the defendants. On 21st September, 1992, plaintiffs filed Writ Petition No. 3324 of 1992 in the Delhi High Court against Delhi Stock Exchange impleading defendant No. 2 and J.N. Kohli, her husband as party respondents. The matter was settled between the parties by an agreement dated 19th November, 1992. In view of the agreement between the parties, the Court permitted withdrawal of the said petition. It is stated that payment of Rs. 65 lakhs was made to the plaintiffs on the basis of the said agreement. As the defendants after payment of first instalment did not pay any amount, the plaintiffs issued notice dated 6th July, 1993 calling upon defendant Nos. 2 and 3 to pay the remaining amount with interest within 15 days of the receipt of the notice. As the defendants repudiated their liability, the summary suit under Order XXXVII C.P.C. was instituted on 5th November, 1993.

2. In the said suit, defendants filed I.A. No. 10145 of 1994 under Order XXXVII Rule 4 C.P.C. to grant leave to defend unconditionally. The learned Single Judge arrived at the conclusion that the conten­tions that defendants have absolutely no defence; that they have put forth the plea of no consideration; and that the second defendant was not a party to the agreement and that there were other circumstances to be established and, therefore, leave should be granted, are without any substance. The Court, therefore, dismissed the application for leave to defend by judgment and order dated 1st May, 1997 and decreed the suit for a sum of Rs. 85,62,500/- with simple interest @ 15% p.a. from the date of the suit till the date of the payment.

3. Against the said judgment and decree, Appeal No. FAO (OS) 197 of 1997 was filed by the mother, Smt. Kamlesh Kohli and Appeal No. FAO (OS) 160 of 1997 was filed by the son, Rajiv Kohli. Before the Division Bench of the High Court, it was not disputed that mother was the sole proprietor of defendant No. 1 firm and that Memorandum of Agreement was signed by Rajiv Kohli as constituted attorney of defendant Nos. 1 and 2. It was also not disputed that mother and son were living together. It was also admitted that in pursuance of the Memorandum of Agreement Smt. Kamlesh Kohli had signed the cheque in the sum of Rs. 65 lakhs which was given to the plaintiffs. In the appeals, it was contended before the Court on behalf of Smt. Kamlesh Kohli that her son was only attorney for prosecuting the writ petition and that he had no authority to enter into the agreement dated 19th November, 1992. The Court rejected the said contention by holding that, to say the least, the plea is wholly misconceived, mala fide and abuse of the process of law and may even amount to contempt of the Court. The Court further observed that such dishonest and convenient pleas deserve to be severely condemned. Accordingly, appeal No. FAO (OS) 197 of 1997 filed by Smt. Kamlesh Kohli was dismissed with costs quantified at Rs. 22,000/- payable to plaintiffs.

4. In appeal No. FAO (OS) 160 of 1997 filed by Rajiv Kohli (son), the Court granted unconditional leave to defend as it was averred by the plaintiffs in reply to the application for leave to defend that he was arrayed only as a proforma party and no relief was claimed against him personally.

5. Against the said judgment and decre