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2013 Supreme(Del) 1512
High Court of Delhi
JAYANT NATH, J.
Atul Kumar Jain
Versus
N.K. Jain
IA No. 3498 of 2012 in CS(OS) No. 2617 of 2011
Decided On : 13-11-2013
For the Plaintiff:Sanjay Poddar, Senior Advocate with Govind Kumar, Ms. Navlin Swain, Advocates.
For the Defendant:Vivek Singh, Manish Kaushik, Advocates.
The court emphasized the need for a genuine defense and the presence of real issues in granting unconditional leave to defend under Order 37 CPC.
Headnote:
Leave to Defend - Recovery of Sum - Order 37 Rule 3(5) CPC - V.K. Enterprises and Anr. vs. Shiva Steels, (2010) 9 SCC 256, Bharat Forge Ltd. Vs. ONIL Gulati, 121(2005) DLT 357, Narender Gupta vs. Reliance Polycrete Ltd. & Ors., 178 (2011) DLT 196, National Horticulture Board vs. Global Industries Ltd. in IA No.11691/2002 [u/O 37 R 3(5) CPC] in CS(OS) 411/2012 dated 28.03.2012, M/s Pradyuman Overseas Ltd. vs. Sanjeev Jindal in IA No. 3483/2012 (leave to defend) in CS(OS) 2168/2010 dated 23.05.2013 and Indian Bank vs. Maharashtra State Cooperative Marketing Federation Ltd., (1998) 5 SCC 69 - The court discussed the principles of law applicable to cases covered by Order 37 CPC and granted unconditional leave to defend the present suit.
Fact of the Case:
The plaintiff, an Engineer, claimed Rs. 25 lacs for property valuation services rendered to the defendant, a Chartered Accountant, who issued post-dated cheques in discharge of the liability. The defendant alleged manipulation and denied receipt of services, claiming the plaintiff induced investment and issued cheques for profit sharing.
Finding of the Court:
The court found the plaintiff's claim lacking in details and documentation, and the defendant's defense not illusory, granting unconditional leave to defend the suit.
Issues: Dispute over property valuation services and payment, authenticity of the plaintiff's claim, and the defendant's defense.
Ratio Decidendi: The court applied the principles of law under Order 37 CPC and held that the plaintiff's claim lacked vital details and documents, while the defendant's defense raised a real issue, warranting unconditional leave to defend.
Final Decision: Unconditional leave to defend the suit was granted to the defendant.
Jayant Nath, J.
IA No.3498/2012 (leave to defend)
1. This is an application filed by the defendant under Order 37 Rule 3(5) CPC seeking leave to defend the suit. The present plaint is filed for recovery of a sum of Rs. 25 lacs. The plaintiff states that he is an Engineer from IIT Kanpur and he has vast knowledge of property valuation. It is stated that the defendant is a Chartered Accountant and approached the plaintiff for evaluation/assessment of certain properties during the year 2010-2011.
2. The plaintiff at the request of the defendant evaluated/made assessment in respect of various properties. In lieu of the services rendered by him during the year 2010-2011, on 01.04.2011 he raised a bill for a sum of Rs. 27 lacs. It is stated that the bill was received by the defendant under his signatures and in discharge of his liability, the defendant is stated to have issued seven post dated cheques to the plaintiff payable between 07.06.2011 to 07.12.2011. It is averred that the said cheques were issued in discharge of the admitted liability of the defendant.
3. However, it is further stated that before the plaintiff could present the first cheque for the month of June 2011, the defendant approached and requested him not to present the first cheque for Rs.3 lacs. He, however, paid Rs. 2 lacs in cash as part payment of the said liability. The plaintiff claims to have issued proper receipt.
4. It is stated that the defendant did not fulfill his commitment and failed to make payment of balance of Rs. 1 lac payable from the first cheque. On 07.07.2011, the second cheque for Rs. 4 lacs became due and was presented to the banker of the defendant on 14.07.2011. The cheque was, however, dishonored on account of insufficient funds. The plaintiff is stated to have issued a notice on 03.08.2011 to the defendant. The third cheque for Rs. 4 lacs dated 07.08.2011 when presented was returned with remarks “drawer has stopped payment”. The plaintiff also received a reply dated 18.08.2011 to the legal notice sent on 03.08.2011. In the meantime, it appears that the defendant filed in this Court a suit being CS(OS) 2242/2011 denying the liability and stating that the cheques in question were given on account of booking of some flats.
5. It is further averred that the defendant had dishonest intention from the beginning and this is apparent from the fact that on 01.04.2011, the defendant took the entire material/records and reports from the plaintiff under his acknowledgement and took an undertaking from the plaintiff that he will not retain the record. Hence, it is stated that the plaintiff has no records about the valuation/assessments conducted by the plaintiff. It is stated that having taken the records from the plaintiff, the defendant has in his suit sought production of these records. Hence, the present suit is filed.
6. The defendant in this application for leave to defend states that the plaintiff has indulged in manipulation, concoction and forgery of the documents and has misused the documents and instruments which were given in good faith. The defendant denies any receipt of services from the plaintiff for valuation of the properties. It is denied that at any time the services of the plaintiff were engaged. It is averred that the plaintiff was well known to the defendant. The wife of the plaintiff also worked in the office of the defendant in year 2005-2006 and 2006-2007 and was paid a salary of Rs.13,000/-per month. It is averred that some time in 2010 the plaintiff represented that he has considerable expertise in the immovable property projects where there were huge opportunities of investment. Based on these representations, he induced the defendant to make investment on the plaintiffs advice. Terms and conditions were agreed upon whereby the plaintiff would take 33% of the profit earned from such investments. It is averred that the plaintiff projected certain sound investments which could be made but insisted that the
