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2016 Supreme(Del) 4023
IN THE HIGH COURT OF DELHI AT NEW DELHI
RAJIV SAHAI ENDLAW, J.
Icon Build Con. Pvt. Ltd. - Plaintiff
Versus
Aggarwal Developers Pvt. Ltd. - Defendant
CS(OS) No. 2656 of 2008 & IA No. 8760 of 2016 (for stay)
Decided On : 07-11-2016
Advocate Appeared:
For the Plaintiff : Mr. Gopal Jain, Mr. Ankit Jain
For the Defendant : Mr. Sanjay Manchanda
The principle of finality of judgments and orders, and the limited scope of Rule 4 of Order XXXVII CPC in changing a previous decision.
Headnote:
Order XXXVII Rule 4 CPC - Setting aside of money decree - Code of Civil Procedure, 1908 (CPC) - Summary suit - Negotiable Instruments Act, 1881
Fact of the Case:
The plaintiff filed a suit under Order XXXVII of the CPC for recovery of a sum of money with interest based on dishonoured cheques. The defendant applied for leave to defend, contending that the cheques were without consideration. The court granted conditional leave to defend, but the defendant failed to deposit the required amount, leading to the decree in favor of the plaintiff. The defendant's subsequent appeals were dismissed, and the plaintiff also initiated criminal proceedings under the Negotiable Instruments Act, resulting in the defendant's acquittal.
Finding of the Court:
The court found that the application under Order XXXVII Rule 4 CPC to set aside the decree was not maintainable as the decree had merged with the decree of the Division Bench. The court also held that Rule 4 does not provide for a situation where leave to defend has been considered and declined, and it cannot be invoked to change a previous decision. The court expressed sympathy for the defendant but emphasized the principle of finality of judgments and orders.
Issues: The main issue was the maintainability of the application under Order XXXVII Rule 4 CPC to set aside the money decree.
Ratio Decidendi: The court held that the power to set aside a decree can only be exercised by the court whose decree governs the subject matter at a given point of time. It emphasized the principle of finality of judgments and orders, stating that Rule 4 cannot be used to change a previous decision.
Final Decision: The court dismissed the application under Order XXXVII Rule 4 CPC, emphasizing that the decree had merged with the decree of the Division Bench and Rule 4 does not allow for changing a previous decision.
IA No. 8761 of 2016 (of the defendant under Order XXXVII Rule 4 CPC).
1. The defendant, by this application seeks setting aside of a money decree passed in this summary suit.
2. The counsel for the defendant/applicant and the senior counsel for the plaintiff/non-applicant have been heard.
3. The plaintiff instituted this suit under Order XXXVII of the Code of Civil Procedure, 1908 (CPC) for recovery of Rs.4,05,67,347/- with interest inter alia pleading that –
(i) the plaintiff had entered into agreements with others for purchase of some land in Tehsil Najafgarh, New Delhi and in pursuance to the said agreements had paid a sum of Rs.1,92,92,500/- out of the total sale consideration of approximately Rs.3.6 crores to the sellers;
(ii) the plaintiff, vide Agreement dated 24th February, 2007 with the defendant, agreed to assign its right under the said Agreements to Sell in favour of the defendant and the defendant in pursuance to the said Agreement dated 24th February, 2007 handed over cheques for a total sum of Rs.3,60,59,864/- in favour of the plaintiff to the plaintiff; and,
(iii) the said cheques were dishonoured on presentment. Accordingly, the suit for amount of the cheques together with interest at 15% per annum thereon up to the date of institution of the suit, on the basis of the contract dated 24th February, 2007 with the defendant and the dishonoured cheques was filed.
4. The defendant applied for leave to defend inter alia contending that since the cheques were in pursuance to an agreement of assignment of rights to purchase land and which land had not been assigned in favour of the defendant, the said cheques were without consideration.
5. Vide order dated 20th April, 2012 conditional leave to defend, subject to the defendant depositing 50% of the principal amount in this court, was granted.
6. The defendant preferred FAO(OS) No.278/2012 against the order aforesaid and of which, vide order dated 6th July, 2012 of the Division Bench, notice was issued but in the meanwhile the defendant was directed to deposit 25% of the principal amount instead of 50% as directed by this Bench.
7. The defendant filed CM No.13358/2012 in FAO(OS) No.278/2012 supra for modification of the order dated 6th July, 2012 but which application was dismissed on 6th August, 2012.
8. The defendant preferred SLP(C) No.27916-27917/2012 against the orders dated 6th July, 2012 and 6th August, 2012 aforesaid of the Division Bench but which SLP was dismissed in limine on 21st September, 2012.
9. When FAO(OS) No.278/2012 came up before the Division Bench on 24th September, 2012, in view of dismissal of the SLP, the appeal was disposed of with a direction that in case the defendant deposits 25% of the principal amount within a period of one month from that day, the order dated 20th April, 2012 of this Bench would stand varied to that extent and failing which consequences of not depositing the amount would follow.
10. The defendant did not deposit 25% of the principal amount and vide order dated 30th January, 2013 this Bench decreed the suit for recovery of Rs.4,05,67,347/- along with pendente lite and future interest at 18% per annum.
11. The defendant preferred RFA(OS) No.79/2013 against the decree aforesaid but which appeal was dismissed vide judgment dated 3rd September, 2013.
12. The plaintiff, as stated in the plaint itself, on the basis of the same cheques had also initiated proceedings under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 against the defendant and its directors and which proceedings were put to trial and vide judgment dated 18th February, 2013 therein, the defendant and its directors were acquitted inter alia holding that the cheques forming basis of the proceedings were without consideration.
13. I may at this stage notice that the aforesaid order of acquittal of the defendant and its directors is of a date before dismissal on 3rd September, 2013 of RFA(OS) No.79/2013 aforesaid preferred by the defendant. Howeve
