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2019 Supreme(Del) 841
IN THE HIGH COURT OF DELHI AT NEW DELHI
SANJEEV NARULA, J.
Avtar Kaur - Appellant
Versus
Zuleikha Karnik - Respondent
Civil Suit (Os) No. 153 of 2018
Decided on : 26-03-2019
Advocate Appeared:
Sukhbir Singh, Adv., Tajinder Singh, Adv.
The main legal point established in the judgment is that a subsequent settlement does not render a previous agreement ineffective if the terms of the subsequent settlement are not fulfilled, and illusory defenses do not entitle the Defendant to unconditional leave to defend.
Headnote:
Leave to Defend - Civil Procedure - Order 37 Rule 3, Section 151 CPC - Section 138 Negotiable Instruments Act - [Order 37 Rule 3, Section 151 CPC, Section 138 Negotiable Instruments Act]
Fact of the Case:
The Plaintiff sought a decree for a sum of Rs.2,65,00,000/- and liquidated damages under Order XXXVII CPC. The Defendant failed to make the payment as per the settlement terms, leading to a complaint under Section 138 of Negotiable Instrument Act. The Defendant sought unconditional leave to defend, claiming that a subsequent settlement superseded the previous MOU.
Finding of the Court:
The Court found that the subsequent settlement did not render the previous MOU ineffective, as the Defendant failed to comply with the settlement terms. The Court applied the principles for deciding the question of grant of leave to defend and concluded that the Defence raised by the Defendant was illusory and raised no triable issue.
Issues: The main issue was whether the subsequent settlement superseded the previous MOU, and whether the Defendant was entitled to unconditional leave to defend.
Ratio Decidendi: The Court held that the subsequent settlement did not render the previous MOU ineffective, and the Defence raised by the Defendant was illusory and raised no triable issue.
Final Decision: The Court decreed the suit in favor of the Plaintiff for the principal amount and damages as per the MOU, and disposed of all pending applications.
Sanjeev Narula, J.
I.A. 921/2019 (delay)
1. For the reasons stated in the application, the delay in filing the application is condoned and the application is disposed of.
I.A. 4150/2019 (delay)
2. For the reasons stated in the application, the delay in re-filing the application is condoned and the application is disposed of.
I.A. 920/2019 (Application under Order XXXVII Rule 3 (5) read with Section 151 CPC)
3. The Plaintiff has approached this Court by invoking Order XXXVII of Code of Civil Procedure, 1908. The prayers made in the suit read as under;
“(i) To pass a decree for Rs.2,65,00,000/- (Rupees Two Crore & Sixty Five Lacs only), being the amount of bill of exchange, under Order XXXVII CPC, in favour of the plaintiff and against the defendant.
(ii) To pass a decree for a sum of liquidated damages for Rs.25,000,00/- (Rs. Twenty Five Lac only), under Order XXXVII CPC, in favour of the plaintiff and against the defendant.
(iii) To allow the cost of litigation, in favour of the plaintiff and against the defendant.”
Brief facts
4. Before dealing with the grounds urged in the present application, it would be apposite to note relevant facts. The parties to the present suit entered into an agreement to Sale dated 01st April. 2015, whereby the Defendant agreed to sell 25% share of the agricultural farm land admeasuring 17 Bigha & 14 biswas, situated in the revenue estate of village Bijwasan, Mehrauli to the Plaintiff for a total sale consideration of Rs.3,00,000,00/-. The Plaintiff (vendee) paid to Defendant (vendor) a sum of Rs.1,00,00,000/- as advanced/earnest money at the time of execution of the Agreement to Sell. The Defendant agreed to execute the registered Sale Deed in respect of said property on or before 30th September, 2015, after obtaining NOC, from the other partners of the Defendant. Plaintiff expressed his willingness to complete the sale transaction but the Defendant did not agree and refused to receive the balance sale consideration and execute the Sale Deed.
5. A legal notice dated 16th June, 2016 was served on the Defendant calling upon him to complete the sale transaction. In this background, the parties then decided to settle the matter amicably. The Defendant agreed to make payment of Rs.2,65,000,00/- (Rupees Two Crore & Sixty Five Lacs Only) to the Plaintiff. The terms of the settlement were recorded in a settlement cum MOU dated 30th June, 2016, which inter alia provided as under:
“1. That in pursuance of this settlement the first party has agreed, undertaken and offered to pay a total sum of Rs.2,65,00,000/- (Rupees Two Crore & Sixty Five Lacs only), in favour of the Second Party, voluntarily, against part sale consideration, which was received by first party from second party.
2. That the First party has issued Cheque bearing No.640046 for Rs. Rs.2,65,00,000/- (Rupees Two Crore & Sixty Five Lacs only),dated 30.09.2016, drawn at DCB Bank, New Delhi in favour of the Second Party, to discharge her above said liability and the Second party has received said cheques as such both the parties have amicably settled their matter.
3. That the first party shall not act in contravention to this Settlement cum Memorandum of Understanding, in any manner. The First Party has undertaken to maintain sufficient amount in her Bank. Account as to facilitate the clearance/encashment of above mentioned Cheuqe.
4. That the first party shall be liable to be prosecuted under Section 138 Negotiable Instruments Act, in case she failed to maintain sufficient amount in her Bank Account as to facilitate the clearance/encashment of above Cheque and First party also undertake to pay additional damages for a sum of Rs.25,00,000/- (Rs. Twenty Five Lacs only) to the Second party, besides the liability under Section 138 Negotiable Instruments Act, under such circumstances. The second party shall also be at liberty to take civil remedies against the First party, within the jurisdiction of Delhi Courts and the first party shall be liable to pay suc
