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DELHI HIGH COURT
Rajiv Sahai Endlaw, J.
Icon Build Con. Pvt. Ltd. —Plaintiff
versus
Aggarwal Developers Pvt. Ltd. —Defendant
CS(OS) No.2656 of 2008 and IA No.8760 of 2016 (for stay)
Decided on 7.11.2016
Counsel for the Parties:
For the Plaintiff:Mr. Gopal Jain, Sr. Advocate with Mr. Ankit Jain, Advocate
For the Defendant:Mr. Sanjay Manchanda, Advocate
Headnote:(a) Doctrine of merger – Decree or order passed by the court below – Merges in the decree or order of the superior court passed in appeal against the decree orm order of nthe court below. (Para 26)
(2000) 6 SCC 359; (2004) 8 SCC 724– Relied upon
(b) Code of Civil Procedure, 1908 – Order XXXVII, Rule 4 – Decree can be set aside by the Court granting it – Decree passed by Single Judge – Deivision Bench dismissing appeal thereagainst – Decree in existence and operative would be decree of the Division Bench – Hence, Division Bench alone competent to entertain application under Order XXXVII Rule 4. (Para 27)
(c) Order XXXVII, Rule 4 – Power exercisable only when defendant had no opportunity to show to the Court that he is entitled to leave to defend – Does not apply in situation when application of the defendant for leave to defend has been considered and rejected – Any contrary interpretation would be be contrary to the principle of finality of judgments and orders of the Courts. (Para 33, 34, 35)
(2002) 4 SCC 388; (2011) 8 SCC 161; MANU/DE/3686/2011; MANU/DE/2533/2012 (DB); 187 (2012) DLT 370 (DB); AIR 2014 Delhi 1 – Reled upon
(d) Negotiable Instrument Act, 1881 – Section 138 – Cheques held without consideration – Still decree of ecovery passed on basis of same chques – Incredulous. (Para 40)
(e) Administration of justice – Civil and Criminal proceedings – Judgment of a Criminal Court cannot be binding on a Civil Court. (Para 41)
(2009) 13 SCC 729 – Relied upon
MANU/DE/8922/2007 – Referred
(2010) 8 SCC 775 – Distinguished
(f) Code of Civil Procedure, 1908 – Section 151 – Setting aside of decree – Express masde therefor in Order XXXVII, Rule 4 – Resort cannot be had to section 151. (Para 43)
AIR 1965 SC 1144 – Relied upon
(2006) 3 SCC 699; (2003) 5 SCC 315; AIR 2003 Bom 496; (2015) 10 SCC 521; (2013) 14 SCC 179; (2005) 3 SCC 738; 134 (2006) DLT 137; (2011) 11 SCC 275 – Distinguished
Result: The application under Order XXXVII Rule 4, CPC is not maintainable.
IA No.8761/2016 (of the defendant under Order XXXVII Rule 4 CPC).
Rajiv Sahai Endlaw, J.—The defendant, by this application seeks setting aside of a money decree passed in this summary suit.
2. The counsel for the defendant/applicant and the senior counsel for the plaintiff/non-applicant have been heard.
3. The plaintiff instituted this suit under Order XXXVII of the Code of Civil Procedure, 1908 (CPC) for recovery of Rs.4,05,67,347/- with interest inter alia pleading that (i) the plaintiff had entered into agreements with others for purchase of some land in Tehsil Najafgarh, New Delhi and in pursuance to the said agreements had paid a sum of Rs.1,92,92,500/- out of the total sale consideration of approximately Rs.3.6 crores to the sellers: (ii) the plaintiff, vide Agreement dated 24th February, 2007 with the defendant, agreed to assign its right under the said Agreements to Sell in favour of the defendant and the defendant in pursuance to the said Agreement dated 24th February, 2007 handed over cheques for a total sum of Rs.3,60,59,864/- in favour of the plaintiff to the plaintiff; and, (iii) the said cheques were dishonoured on presentment. Accordingly, the suit for amount of the cheques together with interest at 15% per annum thereon up to the date of institution of the suit, on the basis of the contract dated 24th February, 2007 with the defendant and the dishonoured cheques was filed.
4. The defendant applied for leave to defend inter alia contending that since the cheques were in pursuance to an agreement of assignment of rights to purchase land and which land had not been assigned in favour of the defendant, the said cheques were without consideration.
5. Vide order dated 20th April, 2012 conditional leave to defend, subject to the defendant depositing 50% of the principal amount in this court, was granted.
6. The defendant preferred FAO(OS) No.278/2012 against the order aforesaid and of which, vide order dated 6th July, 2012 of the Division Bench, notice was issued but in the meanwhile the defendant was directed to deposit 25% of the principal amount instead of 50% as directed by this Bench.
7. The defendant filed CM No.13358/2012 in FAO(OS) No.278/2012 supra for modification of the order dated 6th July, 2012 but which application was dismissed on 6th August, 2012.
8. The defendant preferred SLP(C) No.27916-27917/2012 against the orders dated 6th July, 2012 and 6th August, 2012 aforesaid of the Division Bench but which SLP was dismissed in limine on 21st September, 2012.
9. When FAO(OS) No.278/2012 came up before the Division Bench on 24th September, 2012, in view of dismissal of the SLP, the appeal was disposed of with a direction that in case the defendant deposits 25% of the principal amount within a period of one month from that day, the order dated 20th April, 2012 of this Bench would stand varied to that extent and failing which consequences of not depositing the amount would follow.
10. The defendant did not deposit 25% of the principal amount and vide order dated 30th January, 2013 this Bench decreed the suit for recovery of Rs.4,05,67,347/- along with pendente lite and future interest at 18% per annum.
11. The defendant preferred RFA(OS) No.79/2013 against the decree aforesaid but which appeal was dismissed vide judgment dated 3rd September, 2013.
12. The plaintiff, as stated in the plaint itself, on the basis of the same cheques had also initiated proceedings under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 against the defendant and its directors and which proceedings were put to trial and vide judgment dated 18th February, 2013 therein, the defendant and its directors were acquitted inter alia holding that the cheques forming basis of the proceedings were without consideration.
13. I may at this stage notice that the aforesaid order of acquittal of the defendant and its directors is of a date before dismissal on 3rd September, 2013 of RFA(OS) No.79/2013 aforesaid prefe
