Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
Rekha Palli, J.
Swaranjit Singh Sayal - Appellant
Versus
M. K Jain - Respondent
CS(OS) 3980 of 2014, I.A. 8912 of 2017 (Order XXXVII Rule 3(4), CPC) & I.A. 16784 of 2021 (Order XXXVIII Rule 5, CPC)
Decided On : 30-11-2023
Order XXXVII Rule 3 (5) - Recovery of Sum - Code of Civil Procedure, 1908 - [Order XXXVII Rule 3 (5)]
Fact of the Case:
The plaintiff filed a suit seeking recovery of a sum of Rs.3 crores along with interest @ 18% p.a. from the defendant based on a written acknowledgement for a sum of Rs.2 crores in the form of a receipt issued by the defendant on 23.12.2011 and a cheque dated 06.01.2012 for the remaining sum of Rs.1 crore issued by him. The defendant sought leave to defend the suit under Order XXXVII Rule 3 (5) of the Code of Civil Procedure, 1908 (CPC).
Finding of the Court:
The court found that the plaintiff's claim based on the receipt and cheque fell within the ambit of Order XXXVII CPC. The court also rejected the defendant's defense that the amount received stood forfeited, as it was not supported by evidence. The court held that the plaintiff was entitled to interest at 10% per annum from the date of receipt of the amount by the defendant.
Issues: The issues involved the maintainability of the suit under Order XXXVII CPC, the validity of the defendant's defense of forfeiture, and the plaintiff's claim for interest.
Ratio Decidendi: The court held that the plaintiff's claim based on the receipt and cheque fell within the ambit of Order XXXVII CPC. The court also rejected the defendant's defense that the amount received stood forfeited, as it was not supported by evidence. The court held that the plaintiff was entitled to interest at 10% per annum from the date of receipt of the amount by the defendant.
Final Decision: The application for leave to defend was dismissed, and a decree was passed in favor of the plaintiff for recovery of a sum of Rs.3 crores along with interest at 10% per annum from the date of receipt of the amount by the defendant.
JUDGMENT
Rekha Palli, J. (Oral) -
I.A. 5441/2018 (leave to defend)
1. This is an application filed by the defendant under Order XXXVII Rule 3 (5) of the Code of Civil Procedure, 1908 (CPC) seeking leave to defend the present suit.
2. Before dealing with the rival submissions of the parties, the brief factual matrix, as may be necessary for adjudication of the present application may be noted at the outset.
3. The plaintiff has filed the present suit under Order XXXVII CPC seeking recovery of a sum of Rs.3 crores along with interest @ 18% p.a. from the defendant on the basis of a written acknowledgement for a sum of Rs.2 crores in the form of a receipt issued by the defendant on 23.12.2011 and a cheque dated 06.01.2012 for the remaining sum of Rs.1 crore issued by him.
4. It is the case of the plaintiff that the defendant, claiming to be the absolute owner of the property bearing No.C-107, Naraina Industrial Area, New Delhi, agreed to sell the aforesaid property to him for a total sale consideration of Rs.15.75 crores. The plaintiff claims that in furtherance of the same, he paid a sum of Rs.2 crores to the defendant partly in cash and the remaining amount towards part sale consideration by way of multiple cheques for the said property, receipt whereof was acknowledged by the defendant by way of a hand written receipt dated 23.12.2011. It is on the basis of this receipt that the plaintiff has, under Order XXXVII CPC, filed the present suit for recovery of a sum of Rs.2 crores along with interest @ 18% p.a. After the issuance of the aforesaid receipt by the defendant, the plaintiff paid a sum of Rs.1 crore to the defendant by way of a cheque dated 06.01.2012, receipt whereof is undisputed. The plaintiff has therefore urged that the suit under Order XXXVII CPC for recovery of this amount of Rs.1 crore along with interest is also maintainable.
5. The plaintiff has contended that despite receiving a sum of Rs. 3 Crores towards part sale consideration, the defendant neither executed the sale deed in his favour nor returned to the plaintiff the amount paid by him. It is only later that the plaintiff discovered that the defendant was not in a position to execute the sale deed in his favour as the property already stood mortgaged with Kotak Mahindra Bank, which fact was never disclosed to him by the defendant. It is in these circumstances that the plaintiff served the defendant with a legal notice dated 06.09.2012 seeking refund of the aforesaid amount of Rs.3 crores along with interest @ 18% p.a., a reply whereto was received by the plaintiff on 05.10.2012.
6. In his reply, the defendant inter alia contended that as per the oral agreement between the parties, the sale consideration was Rs.48.75 crores and not Rs.15.75 crores as was claimed by the plaintiff, which amount the plaintiff had failed to pay and therefore, the amount of Rs.3 crores paid as earnest money stood forfeited. In the light of this reply received from the defendant, the plaintiff instituted the present suit under Order XXXVII CPC seeking recovery of a sum of Rs.4.17 crores, which amount includes a sum of Rs.1.17 crores towards interest @ 18 % p.a. Upon summons being issued in the suit on 12.03.2015, the defendant has entered appearance and filed the present application seeking leave to defend.
7. At the outset, learned counsel for the defendant, Dr.Amit George, has urged that the receipt dated 23.12.2011 issued by the defendant, based on which the present suit has been preferred by the plaintiff cannot be termed as a written contract as the said receipt admittedly does not contain the complete particulars of the transaction which the parties had orally envisaged entering into. By placing reliance on the decision of this Court in Ganpati Infrabuild Pvt Ltd vs. Sudarshana Duggal and Ors. 2012 SCC Online Del 3039, he submits that the receipt merely records that the plain
The plaintiff's claim based on the receipt and cheque fell within the ambit of Order XXXVII CPC, and the defendant's defense of forfeiture was rejected due to lack of evidence.
The main legal point established in the judgment is the requirement of written documents for maintaining a suit under Order XXXVII of the CPC and the principles governing the grant of leave to defend....
The court established that under Order XXXVII Rule 4 of the Code of Civil Procedure, a decree can be set aside if 'special circumstances' are demonstrated, allowing for a defendant to defend a suit e....
The judgment established the principles of liquidated damages and reasonable compensation under the Indian Contract Act, 1872, and emphasized the importance of genuine triable issues in determining t....
A defendant is entitled to unconditional leave to defend if they satisfy the court that they have a substantial defence likely to succeed, or if they raise triable issues indicating a fair or reasona....
Cheques may constitute mode of payment by plaintiff and they may constitute evidence of transaction of loan, but they cannot said to be basis of money suit.
The court established that a defendant must present a substantial defense to avoid summary judgment; mere assertions without evidence do not suffice.
The main legal point established in the judgment is the application of the principles for granting leave to defend in a summary suit under Order XXXVII CPC, based on the defendant's ability to raise ....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
