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2016 Supreme(Del) 4408
IN THE HIGH COURT OF DELHI AT NEW DELHI
RAJIV SAHAI ENDLAW, J.
DAP BUILDCON PVT. LTD. – Plaintiff
Versus
B.B. LAL AGGARWAL – Defendant
CS(COMM) 85 of 2016
Decided On : 16-12-2016
For the Plaintiff : Mr. Mukul Talwar with Mr. Sunil Kumar, Mr. Ankit Dixit and Mr. Nitin Sharma
For the Defendant : Mr. Kirti Uppal with Mr. Satish Sharma
The court emphasized the importance of timely application for leave to defend, upheld the jurisdiction of the court, and enforced the principle that the debtor must seek the creditor.
Headnote:
Delay - Jurisdiction - Code of Civil Procedure, 1908 - Order XXXVII - MOU - Delhi High Court Rules - [CPC, 1908, Order XXXVII, MOU, Delhi High Court Rules]
Fact of the Case:
The defendant applied for leave to defend a suit for recovery of Rs.2,76,00,000 with interest, accompanied by an application for condonation of delay. The plaintiff claimed that the defendant failed to refund the money advanced for bidding on industrial plots. The defendant admitted liability but disputed the court's jurisdiction.
Finding of the Court:
The court dismissed the defendant's application for leave to defend, ruling that the court had jurisdiction and the defendant's delay was unjustified. The plaintiff was awarded a decree and interest at 11% per annum.
Issues: Delay in application for leave to defend, jurisdiction of the court, liability of the defendant, and award of interest.
Ratio Decidendi: The court held that the defendant's delay was unjustified, the court had jurisdiction, and the defendant's admission of liability was binding. The court also applied the principle that the debtor must seek the creditor.
Final Decision: The defendant's application for leave to defend was dismissed, and the plaintiff was awarded a decree and interest at 11% per annum.
IAs No.9656/2016 & 9657/2016 (both of defendant for leave to defendant and for condonation of 12 days delay in applying therefor) & IA No.12094/2016 (for condonation of 12 days delay in filing reply to IA No.9656/2016)
1. The application of the defendant for leave to defend the suit under Order XXXVII of Code of Civil Procedure, 1908 (CPC) for recovery of Rs.2,76,00,000/- with interest is accompanied with an application for condonation of twelve days delay in applying for leave to defend and the application of the plaintiff for condonation of twelve days delay in filing reply to application for leave to defend are for consideration.
2. On the aspect of delay, I may notice that the defendant in this case had delayed entering of appearance in pursuance to the summons for appearance, also by two days. Even though there was no application for condonation of such delay but the counsel for the plaintiff on 11th July, 2016, for the sake of expediency, agreed to the delay in entering appearance to be ignored subject to the defendant waiving service of summons for judgment and filing leave to defend application within the prescribed time from that date.
3. The delay of twelve days is thus the second delay on the part of the defendant in this suit. The reason given for the delay is the ailment of the wife of the defendant. The ailment of the wife of the defendant has no correlation to the timely filing of the application for leave to defend. The counsel for the defendant must have had instructions when he entered appearance and appeared before this Court on 11th July, 2016 and no such circumstance has been shown that the defendant could not spare the time to give further instruction, if any required or to sign the application for leave to defend.
4. Though the leave to defend application is liable to be dismissed on this ground alone but the senior counsel for the plaintiff, again for the sake of expediency, states that the leave to defend application be decided on merits.
5. The senior counsels for the parties have been heard.
6. The plaintiff has instituted this suit pleading (i) that it had advanced a sum of Rs.5,97,00,000/- to the defendant to enable the defendant to bid on behalf of the plaintiff for industrial plots bearing No.41/42 and 42/1 Site-4, Industrial Area, Sahibabad, Ghaziabad, Uttar Pradesh in the auction to be held by the Official Liquidator (OL) of the Allahabad High Court (AHC); (ii) that a sum of Rs.3.21 crores was paid by way of demand draft in favour of OL of the AHC, Rs.11 lakhs by way of a pay order in favour of the defendant and Rs.2.65 crores in cash to the defendant; (iii) that a Memorandum of Understanding (MOU) dated 3rd October, 2012 and a receipt dated 3rd October, 2012 were executed by the defendant in this regard; (iv) that Clause 5 of the said MOU was as under:
“(5) THAT the First Party assures the Second Party to get the “ACCEPTANCE LETTER” latest by 31st December, 2012. If the First Party fails to lawfully arrange the “Acceptance Letter” up to 31.12.2012, the First Party will return back the entire amount to the Second Party along with interest payable @ 16% P.A. from date of original payment, within a period of 7 days. The Second Party shall have first charge towards the First Party and associated entities in this respect. In case the Second Party accepts any delay beyond this date in exceptional circumstances, the First Party shall become liable for interest @ 24% P.A. from date of original payment beyond this date. The Second Party shall only be responsible for the remaining consideration.”;
(v) that the defendant was unable to get the property for the plaintiff and though represented to the plaintiff that he had deposited the entire amount with the OL of the AHC and the plaintiff can obtain refund thereof but the plaintiff on approaching the OL of AHC found only a sum of Rs.2.35 crores having been deposited on behalf of the plaintiff, though another sum of Rs.86 lakhs had been deposited on behalf
