( 1 ) THIS order shall dispose of the application filed by the Defendant under Order XXXVII Rule 3 (5) of the Code of Civil Procedure, 1908 (for short CPC) for obtaining leave to defend the suit filed by the Plaintiff for recovery of liquidated damages of a sum of Rs. 9,99,760. 00 along with pendente-lite and future interest.

( 2 ) THE Plaintiff filed the suit alleging therein that it is engaged in the business of travel and tour under the name and style of apace rent a car it has been regularly supplying luxury vehicles to the various clients in Delhi as well as in other cities, that the Plaintiff entered into three agreements with the Defendant, namely (i) Agreement oil 14th June, 1995 for hiring of six Maruti Gypsy vehicles which were to be supplied at a monthly rental of Rs. 25,000. 00 this agreement was valid for a period of 12 months, and it further provided that in case the vehicle was returned before the said period then the Plaintiff shall be entitled to charge at the rate of Rs. 31,000. 00 per month, for the period tor which the vehicle had been used by the Defendant, (ii) Agreement dated 24th August, 1995 for hiring of one Tata Sumo/tata Estate for a period of 24 months at a monthly rental of Rs. 29000. 00 it was also stipulated that in case the car was lo be returned by the Defendant before the completion of the agreement period then the Plaintiff will be entitled to charge at the rate of Rs. 42,000 per month for the total period for which the car had been used by the Defendant, (iii) Agreement dated 25th April, 1996 for the supply of Maruti Esteem at the hiring rate of Rs. 28,000. 00 per month provided each car remains with the Defendant for a period of 24 months and in case the said vehicle was returned earlier than under the agreement the Plaintiff would be entitled to charge at the rate of Rs. 35,000 for the total period the car has been used.

( 3 ) IT is further alleged that consequent upon the fax message dated 24th June, 1996 from the Defendant the Plaintiff supplied 5 Gypsies w. e. f. 1. 7. 96 and 7 Maruti Esteem w. e. f. 1. 7. 96 under the said agreements, however vide communication dated 23. 9. 96 the Defendants decided to discontinue with the service of car hiring from the Plaintiff be- cause of operational and business reasons with effect from 8th January, 1997; however on 17th January, 1997 on Defendant extended this period upto 27th February, 1997 on this date the Defendant actually sloped the use of these cars and on 30. 1. 1997 Defen- dant also withdrew the use of Tata Estate.

( 4 ) IT is further alleged that the Plaintiff vide letter dated 5th February, 1997 informed the Defendant about the clauses, in the said agreements where under the Defendant was obliged to pay the difference in the rates of hiring charges because of the return of the vehicles before expiry of stipulated period. The Plaintiff also raised the bills at the differential rates for the 18 months i. e. for use of the Tata Estate vehicle Rs. 2,34,000. 00 , for use of seven Maruti Esteem Rs. 3,92,000. 00 and for use of five Maruti gypsy Rs. 2,40,000,- as the Defendant failed to pay the amount due, therefore, the suit under Order XXXVII of the Civil Procedure Code under the summary procedure for recovery of Rs. 8,66,000 towards principal amount and Rs. 3,33,760. 00 towards interest upto 30. 9. 98 was filed.

( 5 ) SUIT was registered and summons in the prescribed form under Order XXXVII CPC were served on the Defendant; they entered appearance and subsequently moved an application for leave to defend under Order XXXVII Rule 3 (5) of the CPC, on the grounds which read as under:

(1) the contract dated 14. 6. 1995 had worked itself out and stood concluded on 13. 6. 1996, (2) the contract dated 24. 8. 1995, as produced by the Plaintiff with the list of documents, the Plaintiff was to provide one Tata Sumo vehicle for 24 months. However, the Plaintiff did not supply the said Tata Sumo vehicle and contract was never acte