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IN THE HIGH COURT OF DELHI
Prathiba M. Singh, J.
Alok Gupta - Appellant
Versus
Krishan Kumar Sarin - Respondent
C.R.P. 59 of 2020 & CM Appl. 21898 of 2020
Decided On : 07-07-2022
Unconditional Leave to Defend - Recovery Suit - Order XXXVII, Rule 2, CPC
Fact of the Case:
The plaintiff filed a suit seeking recovery of Rs.25 lakhs under Order XXXVII CPC. The suit was decreed against Defendant No.1 for default in appearance. Defendant No.2, the wife, filed a leave to defend application, which was unconditionally allowed by the Trial Court.
Finding of the Court:
The Court found that Defendant No.2 was entitled to unconditional leave to defend based on the lack of written agreement, collateral security, and documentary evidence provided by the plaintiff. The Court also noted discrepancies in the plaintiff's conduct and found that Defendant No.2 raised a fair and reasonable defense.
Issues: The issues revolved around the entitlement of Defendant No.2 to unconditional leave to defend, the plaintiff's conduct, and the sufficiency of the evidence provided.
Ratio Decidendi: The Court's decision was influenced by the lack of written agreement, collateral security, and documentary evidence, as well as the discrepancies in the plaintiff's conduct. The Court also considered the principles established in recent Supreme Court decisions regarding the grant of unconditional leave to defend.
Final Decision: The Court modified the impugned order to grant conditional leave to defend to Defendant No.2, requiring her to deposit a total sum of Rs.5 lakhs, with the Registrar General of the Court. Failure to comply would allow the plaintiff to approach the Trial Court for appropriate orders.
JUDGMENT
Prathiba M. Singh, J. (Oral)--The present revision petition has been filed challenging the impugned order dated 24th August, 2020, passed in CS DJ ADJ No.517848/2016 titled Alok Gupta v. Krishan Kumar Sarin & Anr., vide which unconditional leave to defend was granted to Respondent No.2/Defendant No.2 (hereinafter "Defendant No.2").
2. The suit underlying the present revision petition had been filed by the Plaintiff/Petitioner (hereinafter "Plaintiff") against the Defendants, who are husband and wife, namely, Mr. Krishan Kumar Sarin and Mrs. Priya Sarin, under Order XXXVII CPC, seeking recovery of a sum of Rs.25 lakhs, with pendente lite and future interest at 18% p.a. The suit has already been decreed against the husband/Defendant No.1 vide the Trial Court's order dated 20th August, 2020. The relevant extract of the said order reads as under:
"3) This Court is of the considered view that the plaintiff is entitled for a judgment against the defendant No.1 on account of default in appearance in terms of Order XXXVII, Rule 2(3), CPC, which reads as under:
"Rule 2. Institution of summary suits-(1) ..... .
(2) ..... .
(3) The defendant shall not defend the suit referred to in sub-rule (1) unless he enters an appearance and in default of his entering an appearance the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree for any sum, not exceeding the sum mentioned in the summons, together with interest at the rate specified, if any, up to the date of the decree and such sum for costs as may be determined by the High Court/from time to time by rules made in that behalf and such decree may be executed forthwith. "[Emphasis added by underlining text}
4) In view of the above, the suit of the plaintiff is decreed qua the defendant No.1 on account of default in appearance under Order XXXVII, Rule 2, CPC for an amount of Rs.25,00,000/-. (Rupees Twenty five lakhs only) alongwith pendente lite interest and future interest @ 15% per annum until its realization. Let decree sheet be drawn accordingly."
3. Thereafter, the wife of Defendant No.1 i.e., Defendant No.2, filed a leave to defend application before the Trial Court. The present revision petition arises out of the Trial Court's order, vide which the same has been unconditionally allowed. The relevant portion of the impugned order reads as under:
"37. This Court finds and rules that Priya/defendant No.2 is entitled for unconditional leave to defend for the following reasons:
(a) Though on one hand, the plaintiff has pleaded and argued that he is a man of means and the loan was advanced in cash to the defendants but surprisingly the plaintiff did not bother to undertake any receipt and/or enter into a written agreement with the defendants at the time of advancement of a loan of Rs.20,00,000/- (Rupees Twenty lakhs only).
(b) This Court also finds that for a loan of Rs.20,00,000/- (Rupees Twenty lakhs only), the plaintiff did not care to take any collateral security towards the repayment of loan of Rs.20,00,000/- (Rupees Twenty lakhs only) by the defendants.
(c) That the entire loan transaction being in cash, a grave cloud is raised against the plaintiff for having not shown the availability of funds and also source of funds at the time of advancement of loan.
(d) This Court also observes from the list of documents and documents filed by the plaintiff that the plaintiff has only cared to file the certified copy (copy to copy) of cheques, his bank statement, five legal notices dated 24. 11.2015 coupled with postal receipt and envelopes, however, the plaintiff has failed to file the cheque returning memo(s) from which it would have properly been ascertained whether the cheques were dishonoured on presentation on account due to insufficiency of funds or dishonoured for mismatch of signature(s) of only one of the two joint account holders or any other reason. This does leave a huge void and thus it is imperative that such fact be established in
The main legal point established in the judgment is that the grant of unconditional or conditional leave to defend is dependent upon the facts and circumstances of each case, and recent Supreme Court....
Defendants failed to present a viable defense; allegations of collusion were unsubstantiated and deemed illusory, warranting denial of leave to defend under Order XXXVII of the CPC.
The main legal point established in the judgment is the court's discretion to grant conditional leave to defend based on the defendant's disclosure of a fair and reasonable defense, ensuring a delica....
A defendant in a summary suit is entitled to leave to defend if they raise plausible triable issues, even if the defense is not strong.
In summary suits under Order XXXVII, defendants are entitled to unconditional leave to defend if they demonstrate triable issues, necessitating a full trial to resolve outstanding complexities.
If the defendant raises a substantial defence or triable issues, they are entitled to unconditional leave to defend, and a full-fledged trial may be necessary to adjudicate disputed facts.
The Defendant's defense must be substantial and likely to succeed to be entitled to leave to defend. A defense found to be moonshine, vexatious, and frivolous does not entitle the Defendant to leave ....
In summary suits, the trial judge has discretion to grant conditional leave to defend based on triable issues, essential for expediting commercial disputes, unless genuine financial inability is subs....
A defendant raising a triable issue is entitled to unconditional leave to defend in a summary suit, and courts should avoid imposing harsh conditions that may hinder the defendant's ability to contes....
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