Misapplication of legal provisions and lack of evidence to support the claim

Rajiv Sahai Endlaw, J.

This appeal under Section 96 of the Civil Procedure Code, 1908 (CPC) impugns the judgment and money decree (dated 28th March, 2014 of the Court of Sh. Rakesh Pandit, Additional District Judge (ADJ)-3, South East District, Saket Courts, New Delhi in Civil Suit No.42/2014 filed by the respondent No.1/plaintiff against the appellant and the respondent No.2 Sh. Mahender Singh), consequent to dismissal of the applications of the appellant and the respondent No.2 for leave to defend the suit.

2. Notice of the appeal was issued and subject to the appellant depositing the entire decretal amount in this Court, execution stayed.

3. The respondent No.2 Sh. Mahender Singh failed to appear despite service and was proceeded against ex-parte. The Trial Court record has been requisitioned.

4. The respondent No.1/plaintiff has filed an application sating that the appellant had not deposited the entire decretal amount.

5. The counsel for the appellant today states that the entire decretal amount stands deposited.

6. Admit.

7. Considering that in the event of the appeal being allowed, the matter will have to be remanded and the suit will have to go on, it is deemed appropriate to hear the appeal at this stage only.

8. On a reading of the impugned order of dismissal of application for leave to defend, it appeared that the suit was wrongly entertained under Order 37 of the Code of Civil Procedure, 1908 (CPC). The respondent No.1/plaintiff claiming to be an Advocate practising at Delhi appears in person and has been heard. The need to call upon the appellant did not arise.

9. The respondent No.1/plaintiff filed the suit pleading:

(i) that the appellant/defendant No.1 had on 24th May, 2012 taken a loan of Rs.15 lakhs from the respondent/defendant No.2 and the respondent No.1/plaintiff had stood guarantor for re-payment of the said loan by the appellant/defendant No.1 to the respondent/defendant No.2;

(ii) that the appellant/defendant No.1 issued two cheques of Rs.7,50,000/- each in favour of the respondent/defendant No.2 towards repayment of the said loan and also deposited the title deeds of his properties with the respondent/defendant No.2 to secure the loan;

(iii) that the said cheques issued by the appellant/defendant No.1 in repayment of the loan were dishonoured and it was also learnt by the respondent/defendant no.2 that the title deeds deposited by the appellant/defendant No.1 of his property with the respondent/defendant no.2 had been stolen by the appellant/defendant no.1 from the office of the GIC Housing Finance Limited; the respondent/defendant No.2, to avoid himself being charged as an accomplice of the appellant/defendant No.1 in the theft of the documents, returned the said title deeds to the GIC Housing Finance Limited;

(iv) that the appellant/defendant No.1 took back the dishonoured cheques aforesaid and issued a fresh cheque in favour of the respondent/defendant No.2 for Rs.15,00,000/-;

(v) that the respondent/defendant No.2 pressed the respondent No.1/plaintiff for payment as guarantor and the respondent No.1/plaintiff paid Rs.15 lakhs to the respondent/defendant No.2 (on enquiry, the respondent No.1/plaintiff states that the said amount was paid to the respondent/defendant No.2 in cash and he has not filed any documents of withdrawal of the said amount from any bank account and he was not an income tax assessee at that time);

(vi) that the respondent/defendant No.2 issued a receipt of Rs.15 lakhs in cash from the respondent No.1/plaintiff and also assured the respondent No.1/plaintiff that upon encashment of the cheque for Rs.15 lakhs issued by the appellant/defendant No.1 in favour of the respondent/defendant No.2, the respondent/defendant No.2 shall refund Rs.15 lakhs received from the respondent No.1/plaintiff to the respondent No.1/plaintiff;

(vii) that the respondent No.1/plaintiff called upon the appellant/defendant No.1 as well as the respondent/defendant No.2 to make payment but neither did.

However decre