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2016 Supreme(Del) 4559
IN THE HIGH COURT OF DELHI
Pradeep Nandrajog, Yogesh Khanna, JJ.
Shailendra Garg - Appellant
Versus
K-7 Impex Pvt. Ltd. - Respondent
RFA(OS) 31 of 2016
Decided On : 16-11-2016
For the Appellant :Mr. Amit Agrawal, Advocate with Ms. Tejaswita, Advocates
For the Respondent:Mr. Ravi Sikri, Sr. Advocate instructed by Mr. Deepak Yadav, Advocate
The main legal point established in the judgment is that disputed issues raised by the appellant must be sufficient to defeat the claim of the respondent in a loan transaction suit.
Headnote:
Code of Civil Procedure - Order 37, Rule 3 - N.I. Act, 1881, Section 87, 20 - Summary Suit - [Loan Transaction] - [Code of Civil Procedure, Order 37, Rule 3, N.I. Act, 1881, Section 87, 20] - The court discussed the applicability of Order 37 of the Code of Civil Procedure and the legal provisions of the N.I. Act, 1881, specifically Section 87 and 20, in relation to the promissory notes and receipts involved in the loan transaction. The court analyzed the disputed issues of filling up the blanks in the promissory notes and the separate transactions between the parties, ultimately influencing the decision to modify the interest rate and decree the suit.
Fact of the Case:
The appellant sought leave to defend a suit filed by the respondent for a loan amount. The appellant claimed that the loan amount was for supply of carpets by a company, while the respondent alleged a loan transaction between the appellant and the respondent's company. The court analyzed the disputed issues of filling up the blanks in the promissory notes and the separate transactions between the parties.
Finding of the Court:
The court found that the disputed issues raised by the appellant were not sufficient to defeat the claim of the respondent. The court also noted contrivances in the documents created by the appellant, and found the appellant's defense regarding the supply of carpets to be unsubstantiated.
Issues: The disputed issues were whether the promissory notes were filled up later on and whether the transactions between the parties concerning the supply of carpets were relevant to the loan transaction.
Ratio Decidendi: The court held that the disputed issues raised by the appellant were not sufficient to defeat the claim of the respondent. The court also found contrivances in the documents created by the appellant and deemed the defense regarding the supply of carpets to be unsubstantiated.
Final Decision: The court modified the interest rate and decreed the suit in favor of the respondent for the loan amount, along with reduced interest rates.
Pradeep Nandrajog, J.
1. IA No. 14316/2014 filed by the appellant under Order 37, Rule 3 of the Code of Civil Procedure, 1908 seeking leave to defend the suit filed by the respondent has been dismissed vide impugned order dated February 16, 2016. The result is the suit being decreed in sum of Rs. 1,75,79,000/- (Rupees One Crore Seventy Five Lakh and Seventy Nine Thousand only) together with interest @ 36% per annum from August 13, 2013 (when the notice of demand was sent) till date of filing the suit and pendente lite interest @ 9% per annum on the sum of Rs. 1,75,79,000/- (Rupees One Crore Seventy Five Lakh and Seventy Nine Thousand only).
2. Highlighting, that to invoke Order 37 of the Code of Civil Procedure, the claim has been founded on the plea that loan in sum of Rs. 2.2 crores was given by the respondent to the appellant, in tranches, and for which not only receipts were executed acknowledging receipt of the amount but even promissory notes and cheques were executed as collateral securities. In the promissory notes it has been recorded that the sum mentioned therein would be paid with interest @ of 36% per annum. Thus, two documents on which the suit could be brought within Order 37 of the Code of Civil Procedure have been specifically referred to. As per the plaint, the respondent, a company registered under the Companies Act, of which Kamal Bajaj is a Director, had at the asking of the appellant, stated to be a known friend of Kamal Bajaj, advanced by way of loan a sum of Rs. 2.2 crores to him as under:-
(i) Rs. 50 lakh by cheque on October 05, 2012
(ii) Rs. 50 lakh by cheque on October 18, 2012
(iii) Rs. 60 lakh by cheque on November 05, 2012
(iv) Rs. 28 lakh by cheque on November 19, 2012
(v) Rs. 20 lakh in cash on November 20, 2012
(vi) Rs. 12 lakh by cheque on April 30, 2013
3. As per the plaint, while receiving aforesaid sums, the appellant not only executed a receipt but even a promissory note i.e. in all executed six receipts and six promissory notes, dated October 05, 2012, October 18, 2012, November 05, 2012, November 19, 2012, November 20, 2012 and April 30, 2013. The receipts in sum of Rs. 50 lakhs, Rs. 50, lakhs, Rs. 60 lakhs, Rs. 28 lakhs Rs. 20 lakhs and Rs. 12 lakhs acknowledge the loan amount received and the promissory notes record the undertaking to pay the sum mentioned in the receipts together with interest @ 36% per annum. Simultaneously, cheques in same amount were issued by the appellant and at the rear of the promissory note the said fact was noted with further writing that the cheque was as a guarantee. Pleading that the appellant had paid Rs. 44.21 lakhs to the respondent, and adjusting the same from the loan amount, the balance loan came to Rs. 1,75,79,000/- (Rupees One Crore Seventy Five Lakh and Seventy Nine Thousand only) and the same remained outstanding, the suit was filed pleading further that the cheques were dishonoured on account of either signatures not tallying or insufficient funds or payment stopped. The suit claimed pre-suit interest in sum of Rs. 58,65,269/-.
4. Seeking leave to defend, the appellant did not dispute having received Rs. 2.2 crores as pleaded in the plaint nor disputed the six cheques issued by him on the six different dates, when different amounts were received by him from the respondent. Regarding the receipts and the promissory notes it was pleaded that he signed the same blank, without any agreement for rate of interest. The writing at the rear of each promissory note to the effect that the cheque was received as a guarantee cheque, was pleaded as an insertion in the promissory note; and not the recording by the appellant or acknowledgment by the appellant. As per the appellant there was no loan transaction. As per him, his mother was carrying on business of manufacturing and selling carpets under the name K.K. Concepts which was later on converted into a company in August 10, 2012 named K.K. Concepts Pvt. Ltd. The money was received by him from the respond
