IA No.10525/2014 (for leave to defend)

1. This is an application under Order 37 Rule 3 (5) of the CPC seeking leave to defend the suit. The plaintiff has filed the present suit for recovery of Rs.59,85,000/-. It is averred in the plaint that the defendant is well known and acquainted with the plaintiff having business association with her husband. The plaintiff agreed to give a “dasti” loan of Rs.45 lacs to the defendant on 20.01.2011. The defendant acknowledged having received the said sum of Rs.45 lacs in cash vide receipt dated 20.01.2011. The defendant is stated to have handed over an original signed receipt to the plaintiff with two cheques dated 1.2.2012 for Rs.22,00,000/- and Rs.23,00,000/- respectively drawn on Corporation Bank, Noida to enable the plaintiff to realise the sum on the stipulated date. Based on these documents the present suit is filed under Order 37 CPC. Interest @ 12% per annum w.e.f. 21.01.2011 till date of filing of the suit is also sought.

2. In the application filed for leave to defend the defendant has raised the following defences:-

(a) It is averred that this Court lacks territorial jurisdiction as the receipt relied upon by the plaintiff is executed in Noida, U.P. The cheques stated to have been handed over by defendants were also handed over in Noida drawn on a branch in Noida. Hence, it is stated that no part of the cause of action has arisen in Delhi and hence this Court has no territorial jurisdiction.

(b) It is further stated that the plaintiffs have approached this Court with unclean hands. The receipt dated 20.01.2011 is said to have been obtained by fraud and misrepresentation. It is averred that the loan amount was to be transferred through RTGS/NEFT from the account of the plaintiff. The plaintiff insisted that before the same is transferred the defendant should issue cheques as security and pressurised the defendant into issuing the same. The plaintiff it is stated has failed to transfer the money to the defendant through RTGS or NEFT. Hence, it is urged that the receipt was obtained fraudulently. The defendant has placed on record his IT Returns and the bank statements for the relevant period to support the contention that no payment has been received by the defendant.

(c) It is further stated that the receipt is signed by the defendant (Mr. Yash Chhabra) while the alleged cheque is signed by Mr. Yash Chhabra in the capacity of a Director of M/s.Sanya Fibre Private Limited. The cheque is issued by M/s.Sanya Fibre Private Limited. Thus, the receipt is signed by a different entity and the cheque is signed by a different entity.

(d) Learned counsel for the defendant has further averred that the two cheques on the basis of which the present suit under Order 37 CPC is purported to be filed cannot be the foundation for a suit under Order 37 CPC. He relies on judgments of this Court in the case of First Lucre Partnership Co. vs. Abhinandan Jain, 202 (2013) DLT 177 and of the Division Bench in Bal Dev Singh vs. Rare Fuel and Automobiles Technologies (P) Ltd., 119 (2005) DLT 44 to contend that in this regard the settled legal position is that the cheques which are not presented for payment cannot be the basis of a suit under Order 37 CPC.

3. Learned counsel appearing for the plaintiff on the other hand submits that as per the plaint the receipt was executed in Delhi. He also states that the settled legal position is “debtor has to find the creditor”. Hence, it is urged that this Court would have the territorial jurisdiction. Regarding the receipt of payment by the defendant, it is urged that the reliance of the defendant on his Bank Statements and Income Tax Returns is misplaced as payment has been made in cash. It is further stressed that the defendant had executed the receipt in question dated 20.01.2011. If, at a later stage, the defendant did not receive RTGS or any part of the payment as claimed, there is no communication sent by the defendant seeking cancellation of the rece