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2006 Supreme(Del) 13

High Court Of Delhi
PAVITRA SINGH - Appellant
Versus
UNITEX OVERSEAS PVT LTD - Respondent
Decided On : 01/02/2006

A defendant is entitled to unconditional leave to defend if they have a good defense on merits or raise a triable issue indicating a fair or reasonable defense.

Headnote:

Cheques - Summary Suit - Code of Civil Procedure, 1908 - Order 37 Rule 3 (5)

Fact of the Case:

The plaintiff filed a summary suit based on the dishonour of six cheques issued for the payment of natural silk fabrics. The defendant sought unconditional leave to defend, claiming that the goods were not delivered to them and the cheques were issued on the instructions of a third party.

Finding of the Court:

The court found that the defendant's defense was illusory and not borne out by contemporaneous documents. However, the court granted conditional leave to defend, requiring the defendant to deposit the disputed amount with the court.

Issues: The main issue was whether the defendant was entitled to unconditional leave to defend the summary suit based on the non-delivery of goods and the issuance of the cheques.

Ratio Decidendi: The court applied the principles laid down by the Supreme Court, emphasizing that a defendant is entitled to unconditional leave to defend if they have a good defense on merits or raise a triable issue indicating a fair or reasonable defense.

Final Decision: The court granted conditional leave to defend, requiring the defendant to deposit the disputed amount with the court.

BADAR DURREZ AHMED, J.

( 1 ) THIS is an application filed on behalf of the defendant under order 37 Rule 3 (5) of the Code of Civil Procedure, 1908 seeking unconditional leave to defend the summary suit filed on behalf of the plaintiff.

( 2 ) THE plaintiff s case is founded upon six cheques which are set out in paragraph 5 of the plaint. The details of the cheques are as under:-

Cheque No.

Date

Bankers

Amount


028881

07. 10. 96

American Express Bank

5,00,000/-


028882

14. 10. 96

American Express Bank

5,00,000/-


028883

21. 10. 96

American Express Bank

5,00,000/-


028884

28. 10. 96

American Express Bank

5,00,000/-


028885

05. 11. 96

American Express Bank

5,00,000/-


028886

12. 11. 96

American Express Bank

3,99,057. 75


these cheques are for a total amount of Rs. 28,99,057. 75. According to the plaintiff, in terms of an invoice dated 06. 06. 1996, a copy of which is at page 1 of the documents filed by the plaintiff, the plaintiff had supplied natural silk fabrics of various styles to the defendant. The total value of the invoice was rs. 28,99,057. 75 and the Invoice No. was 005103 dated 06. 06. 1996. The case for the plaintiff is that the aforesaid six cheques were in respect of the payment for the amount covered by the said invoice. These cheques were presented to the plaintiff s banker on 26-27. 03. 1997 but they were returned with the endorsement that the defendant had stopped the payment of these cheques. The suit is founded on the dishonour of the said six cheques.

( 3 ) THE learned counsel for the defendant submitted that the defendant was entitled to unconditional leave. The main plank of his argument was that the goods were shown to have been accepted and received by the defendant on 06. 06. 1996 as per the said invoice dated 06. 06. 1996 but the same could not have been supplied to the defendant inasmuch as the very same goods were the subject matter of Invoice No. UT 96/02 dated 24. 05. 1996 whereby the said goods were consigned to one Triumph-I Pvt. Ltd at Moscow. The learned counsel for the defendant further submits that although the consignor on the face of the document appears to be the defendant, it was actually the plaintiff who had consigned the goods under the said invoice dated 24. 05. 1996. Alongwith the synopsis of submissions filed on behalf of the defendant, annexed thereto as annexure- a is a chart comparing the entries in the invoice dated 06. 06. 1996 filed by the plaintiff and the invoice dated 24. 05. 1996 filed by the defendant. It is apparent from going through the chart that the items style numbers and the quantities of each of the style numbers are identical. Although the invoice dated 24. 05. 1996 is in terms of dollars (US$ 83,735. 655), if the same is converted into Indian rupees at exchange rate prevailing on 24. 05. 1996, it would come to an exact figure of Rs. 28,99,057. 75 which is the total amount of the said six cheques as well as the amount shown in the invoice dated 06. 06. 1996. Therefore, it is the contention of the learned counsel for the defendant that the goods which were said to have been represented under invoice dated 06. 06. 1996 were, in fact, not delivered to the defendant, but had already been consigned to the said Triumph-I Pvt. Ltd, Moscow under invoice dated 24. 05. 1996. As regards the issuance of the six cheques, the learned counsel for the defendant submitted that these cheques were only issued on the instructions of the Moscow party to facilitate the transaction between the plaintiff and the moscow party. He further submitted that as the goods were not received by the defendant, no gain or advantage accrued in favour of the defendant and because the Moscow party had raised objections with regard to the quality of the goods, the defendant had issued instructions for stopping payment of the cheques. The learned counsel for the plaintiff also submits that the plaintiff and the defendant went to Moscow at the request of the Moscow party to inspect the goods. He also says that t







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