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2015 Supreme(Del) 748

High Court of Delhi
HIMA KOHLI, J.

Delhi Structures – Appellant
Versus
Gulati Hospitality & Others – Respondents
CS (OS) No. 3184 of 2011
Decided On : 06-05-2015

Advocate Appeared:
For the Plaintiff:Parveen Kumar Aggarwal, Advocate
For the Defendants:Anshul Garg, Abhishek Goyal, Advocates, D2, In Person

The main legal point established is that a defendant must raise a genuine and triable defense to warrant the grant of leave to defend in a summary suit, and the defense set up must not be illusory or devoid of merit.

Headnote:

Cheque Dishonour - Recovery of Construction Work Payment - [Negotiable Instruments Act, 1881 - Section 138, Code of Civil Procedure, 1908 - Order XXXVII] - The court discussed the dishonour of cheques issued for construction work payment, the legal principles under the Negotiable Instruments Act, and the conditions for granting leave to defend under the Code of Civil Procedure. The court found that the defendants' defense was implausible and devoid of merit, leading to the dismissal of the leave to defend application and a decree in favor of the plaintiff.

Fact of the Case:

The plaintiff, a building contractor, undertook construction work for the defendants and raised a bill for the payment. The defendants issued three cheques totaling Rs. 54,45,000 to the plaintiff, which were dishonored. The plaintiff filed a summary suit for recovery of the amount and interest.

Finding of the Court:

The court found that the defendants' defense, including allegations of poor quality material and delay in project completion, was implausible and devoid of merit. The court dismissed the leave to defend application and decreed in favor of the plaintiff for the recovery of the amount and interest.

Issues: The issues involved the dishonour of cheques, the validity of the defendants' defense, and the conditions for granting leave to defend.

Ratio Decidendi: The court applied legal principles under the Negotiable Instruments Act and the Code of Civil Procedure to assess the defendants' defense and the conditions for granting leave to defend. The court emphasized the need for a genuine and triable defense to warrant the grant of leave to defend.

Final Decision: The court dismissed the leave to defend application, decreed in favor of the plaintiff for the recovery of the amount and interest, and awarded costs of the suit.

JUDGMENT :

I.A. 11737/2012 (by the defendant No.1 & 2 u/O XXXVII R3(5) CPC)

1. The present leave to defend application has been filed by the defendants in a summary suit instituted by the plaintiff for recovery of a sum of Rs.54,45,000/-, being the value of three cheques issued in its favour by the defendant No.1, towards payment of construction work with material that was undertaken by it for the defendants.

2. As per the averments made in the plaint, the plaintiff/firm is a building contractor and has undertaken a number of projects in and outside Delhi. The defendant No.1 is a private limited company and the defendant No.2 is a Director of the defendant No.1.

3. The plaintiff claims that in the month of March, 2008, the defendants had approached it for undertaking construction of a hotel on a plot of land owned by them and situated at Gurgaon and had asked for a quotation for the said work. The plaintiff had forwarded its quotation on 01.03.2008 and it had quoted the rate of Rs.600/- per square feet for the actual slab casted area. On 07.06.2008, the defendants had executed a work order in favour of the plaintiff for undertaking construction of the hotel building @ Rs.600/- per square feet, including steel and the plaintiff had successfully constructed the hotel which is presently being run under the name, “Hotel Tulip Inn”.

4. After the plaintiff had concluded the construction work, it raised a bill on the defendants that was duly certified and verified on 29.01.2009, by Mr. Vimal Bajaj, an Architect and Interior Designer appointed for the project by the defendants. In support of the said submission, learned counsel for the plaintiff has drawn the attention of the Court to page 8 of the documents filed under index dated 15.12.2011, which shows that a sum of Rs.2,73,50,950/- had been certified by the Architect on 29.1.2009 for being released in favour of the plaintiff. Further, vide letter dated 05.12.2009, the Architect had informed the defendants that the total extra items executed by the plaintiff had been verified for a sum of Rs.95,41,080/-.

5. Though it has not been so averred in the plaint, learned counsel for the plaintiff submits that the defendants had released the amounts payable in terms of the bills raised and certified by their Architect on 29.01.2009 and 05.12.2009, except for an amount of Rs.85 lacs. Out of the said outstanding amount of Rs.85 lacs, the following three cheques totalling to a sum of Rs.54,45,000/- had been issued by the defendants:

S.No

Cheque No.

Drawn on

Date

Amount

1.

603087

UCO Bank, Civil Lines, Gurgaon.

24.06.2010

Rs. 19,80,000/-

2.

603088

UCO Bank, Civil Lines, Gurgaon.

24.06.2010

Rs. 19,80,000/-

3.

603089

UCO Bank, Civil Lines, Gurgaon.

24.06.2010

Rs. 14,85,000/-

Total

Rs. 54,45,000 /-

      6. Counsel for the plaintiff submits that when the aforesaid cheques were presented by the plaintiff to its banker for encashment, they were returned vide memo dated 02.07.2010 with the remarks, “effect not cleared, present again”. When the plaintiff had re-presented the said cheques, the defendants’ banker had returned them vide memo dated 06.10.2010, with the remarks, “payment stopped by the drawer”.

7. Aggrieved by the dishonour of the three cheques, the plaintiff had served a legal notice dated 16.11.2011 on the defendant. Despite receiving the aforesaid notice, the defendants had failed to respond, thus compelling the plaintiff to institute the present summary suit, based on the three cheques. Counsel for the plaintiff states that over and above the value of the three cheques totalling to Rs. 54,45,000/-, the plaintiff has also claimed interest on the said amount @ 18% per annum, from the date of issuance of the said cheques, till realiza


























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