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 to defend the suit.

JUDGMENT

Jyoti Singh, J. (Oral)

CM APPL. 6309/2023 & 6311/2023 (Exemption)

1. Allowed, subject to all just exceptions.

2. Applications stand disposed of.

CM APPL.6310/2023 (delay in re-filing)

3. Present application has been preferred on behalf of the Appellant seeking condonation of delay of 45 days in re-filing the appeal.

4. For the reasons stated in the application, the same is allowed.

5. Delay of 45 days in re-filing the appeal is condoned.

6. Application is disposed of.

RFA 110/2023 & CM APPL. 6308/2023 (stay)

7. By way of the present appeal, Appellant lays challenge to the impugned judgment and decree dated 02.09.2022 whereby application filed by the Appellant seeking leave to defend has been dismissed albeit by a separate order of the same date, application for condonation of delay in filing the leave to defend application has been allowed. Appellant before this Court is the Defendant before the Trial Court and Respondent is the Plaintiff and parties are referred hereinafter by their litigating status before the Trial Court.

8. Factual matrix necessary for disposal of the appeal is that the Plaintiff filed a suit under Order 37 CPC for recovery of Rs.5,45,500/- against the Defendant wherein it was averred that the Defendant along with his employee Sh. Sanjeev Kumar Sharma, the brother-in-law of the Plaintiff, approached the Plaintiff representing himself to be a proprietor/authorized signatory of M/s. Surender Kumar & Sons seeking a loan of Rs.5,00,000/- for two months as he was in dire need of money for his business. Keeping in view the relationship the Plaintiff had with Sh. Sanjeev Kumar Sharma, who was employed with the Defendant, Plaintiff advanced a loan of Rs.5,00,000/- in cash to the Defendant on 20.09.2018, for a period of two months for his alleged bona fide need.

9. Plaintiff further avers that Defendant executed a Pronote dated 20.09.2018 in favour of the Plaintiff in respect of the said loan and also handed over a cheque bearing No. 012475 dated 27.11.2018, for a sum of Rs.5,00,000/- drawn on ICICI Bank, Azadpur Branch, Delhi for the loan amount, in favour of the Plaintiff. Defendant also promised that he would pay interest on the loan amount @ 24 % per annum w.e.f. 20.09.2018. When the period expired, Plaintiff demanded the said amount and pursuant thereto, Defendant requested the Plaintiff on 27.11.2018 to present the cheque, assuring that he had sufficient funds in the bank to meet the liability and the cheque will be honoured.

10. It is the case of the Plaintiff that on presentation of the cheque, the same was dishonoured on 03.12.2018 for the reason `Payment stopped by drawer'. Constrained by the fact that the Defendant was not repaying the loan, a legal notice was sent by the Plaintiff followed by filing a complaint under Section 138 of NI Act and the present suit.

11. Upon service of summons, Defendant filed his Memo of Appearance and after being served with summons for judgment, filed an application for leave to defend albeit with an application for condonation of delay. The grounds put forth for grant of unconditional leave to defend were: (a) Suit was not maintainable having been filed on false and frivolous facts since Defendant had never taken loan from the Plaintiff; (b) Sh. Sanjeev Kumar Sharma was working with the Defendant as Munshi and blank signed cheques and documents of the Plaintiff were kept in his custody, which he did not return while leaving the job and in collusion with the Plaintiff, misused them; and (c) Defendant had neither borrowed any money from the Plaintiff nor issued any cheque.

12. Plaintiff filed a reply to the application and contested the grant of leave to defend. After hearing the parties, the Trial Court dismissed the application for leave to defend and decreed the suit in favour of the Plaintiff, leading to filing of the present appeal.

13. Arguing on behalf of the Appellant, learned counsel contends that the Trial Court failed to appreciate that the De