A party cannot withhold payment of a debt due on a hundi by referring to a different cause of action, especially when the liability to pay the hundi is unequivocal and distinct from the other cause of action.

( 1 ) THIS suit under order 37 of the C. P. C. has been brought by the Bramec Suri Pvt. Ltd. for the recovery of Rs. 70,000. 00 together with interest amounting to Rs. 8,18426. at 18% per annum It is based upon three Hundies dated 30. 3. 1978, executed by the defendants in plaintiff s favour. Two of them were of Rs, 30,000. 00 each and third of Rs. 10,000. 00 First was payable by 150 days from the date of execution, the second by 180 days and the third by 210 days.

( 2 ) THE averments are that the plaintiff is engaged in the business of manufacture and sale of brake linings, clutch facings and other types of friction materials. For the purpose of effecting sales within the territory of eastern India, defendant No. 1 company was appointed as plaintiff s agent with liabilities to secure orders, ensure payments in respect of supplies made and to collect Candd Forms under the Central Sales Tax Act. On compliance, the defendant company was entitled to payment of commission at the agreed rate.

( 3 ) APART from the agency business, defendant No. 1 also effected direct purchases from the plaintiff of goods for selling them in open market. On such purchases discount was allowed by the plaintiff. Under this head, goods worth several lacs were said to have been purchased by the defendant company from the plaintiff.

( 4 ) IT so transpired that the defendant- company was taken over by defendant No. 2 and 3 as Managing Director and Executive Director, and they on 30. 3. 1978 executed six hundies totalling 16 lacs in plaintiff s favour, five of which were of Rs. 30,000/00 each and sixth of Rs. 10,000/00. These related to the purchases directly effected by the defendant- company from the plaintiff. Three of these hundies were duly honoured, while the remaining three, which are subject matter of the present, suit, remained undischarged although these were duly presented to the defendants through bankers. Hence the suit.

( 5 ) THE defendants have now moved an application under Order 37, rule 3 of the C. P. C. read with the Delhi High Court Rules and Section 10 of the Civil Procedure Code. They have sought permission to defend the suit and further that the proceedings be stayed as the defendants have already instituted a suit in the Calcutta High Court for recovery of Rs. 1,75,495. 54 against the present plaintiff. Further reliefs by way of accounts etc. are also being sought there. The basis of that suit is stated to be that considerable amount of commission is due to the defendants from the plaintiff under the said agency agreement. The defendants are further claiming commission on transferred sales effected within that territory, and also damages for wrongful termination of the agency. Their details are given as under ; (a) Commission for 1977-78 financial year. Rs. 60,495. 54 (b) Commission on account of orders valued at about 10 lacs transferred as per schedule "c" hereto, Rs. 50,000. 00 (c) Damages for wrongful termination of the agency Rs. 65,000. 00 Total Rs. 1,75,495. 54

( 6 ) THE circumstances under which the defendants claim that they felt justified not to honour the three hundies in dispute, were that certain settlement was arrived at between the parties in meetings held from 9 8. 1978 to 13. 8 1978. These were incorporated in the form of minutes of these meetings in a writing dated 14. 8. 1978 in which it was inter alia agreed as under :

"9. All outstanding commissions due to Suri Smith from Bramec Suri for the period 1977-78 and upto 28th June, 1978 will be cleared by 16th of August, 1978. "

( 7 ) SINCE the commission so payable to defendents was not cleared by the plaintiff by 16. 8. 1978 as stipulated in the settlement, it has been claimed that the discharge of these hundies was with held. Specific reference in this regard has been made to the due dates for payment of these hundies and it is pointed out that they all fall due after 16. 8. 1978, and therefore, the defendants were obliged not to honour them as a counter me