The court emphasized the importance of substantiating defenses with supporting documents and upheld the legal provisions of Order XXXVII CPC and Section 138 of the Negotiable Instruments Act, 1881.

Valmiki J. Mehta, J.

C.M. No.42741/2017 (exemption)

1. Exemption allowed subject to just exceptions.

C.M. stands disposed of.

C.M. No.42742/2017 (for condonation of delay)

2. For the reasons stated in the application, delay of 129 days in filing the appeal is condoned.

C.M. stands disposed of.

RFA No.981/2017 and C.M. No.42743/2017 (stay)

3. This Regular First Appeal is filed under Section 96 of Code of Civil Procedure, 1908 (CPC) impugning the judgment of the Trial Court dated 24.3.2017 by which the trial court has dismissed the leave to defend application filed by the appellant/defendant and decreed the suit for a sum of Rs.12 lacs along with interest at 9% per annum simple. The suit was filed under Order XXXVII CPC on the basis of the dishonoured cheque for an amount of Rs.12 lacs.

4. The facts of the case as pleaded by the respondent/plaintiff are that the respondent/plaintiff gave a loan of Rs.10 lacs to the appellant/defendant in terms of cheque no.058063 drawn on State Bank of India, Greater Kailash-II Branch, New Delhi and which cheque was encashed on 10.11.2008. To secure the loan amount the appellant/defendant had executed a promissory note and receipt on 7.11.2008. The appellant/defendant further asked for a sum of Rs.2 lacs from the respondent/plaintiff and which was paid by the respondent/plaintiff to the appellant/defendant and consequently the appellant/defendant issued the subject cheque bearing no.657066 in favour of the respondent/plaintiff dated 4.3.2013 for Rs.12 lacs drawn on Vijaya Bank, Nehru Place Branch, New Delhi. However this cheque when presented was dishonoured with the remarks “account closed” and therefore after serving the legal notice dated 30.3.2013, the subject suit under Order XXXVII CPC was filed.

5. As per the leave to defend application filed by the appellant/defendant it was pleaded that no loan was taken of Rs.10 lacs originally and nor was the impugned cheque given to the respondent/plaintiff by the appellant/defendant. Appellant/defendant pleaded that he had handed over 20 blank cheques to one Sh. Siddharth Sapra for seeking a loan of Rs.1 lakh without mentioning the date/name/amount in the cheques but the said Sh. Siddharth Sapra never disbursed any amount to the appellant/defendant. It was pleaded that Sh. Siddharth Sapra had filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 which is pending before the court of concerned MM. It was pleaded by the appellant/defendant that the subject cheque of Rs.12 lacs was misused by the respondent/plaintiff in connivance with Sh. Siddharth Sapra. Appellant/defendant pleaded that he had repaid the loan amount of Rs. 10 lacs to the respondent/plaintiff.

6. The respondent/plaintiff in the reply to leave to defend application pleaded that defence is moonshine because the defence raised by the appellant/defendant is not corroborated by even a single document. The story propounded by the appellant/defendant of the cheques being given to Sh. Siddharth Sapra which was allegedly misused by the respondent/plaintiff was denied.

7. Three issues arose as per the leave to defend application and which are reproduced by the trial court in para 10 of the impugned judgment as under:-

“(i) the claim of the plaintiff is time barred as is evident from the own admission of the plaintiff that the loan was granted in the year 2008.

(ii) the cheque which has been used by plaintiff has never been issued by the defendant in acknowledgement of any debt.

(iii) since there is no written contract between the plaintiff and defendant hence the suit is not covered under any Clause of Order 37 CPC.”

8. All these aforesaid three aspects were held in favour of the respondent/plaintiff holding that the subject suit is rightly filed under Order XXXVII CPC as it was based on a dishonoured cheque and that since the cheque was dishonoured on 6.3.2013 therefore the subject suit which was filed on 3.6.2015 was within limitation period of three years. Trial court held tha