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2024 Supreme(Online)(DEL) 32108
HIGH COURT OF DELHI
Girish Kathpalia, J
SAPNA & ANR. – Appellant
Versus
SHIVESH GARG – Respondent
RFA-861/2024
Mr. Shailendra Ojha, Advocate
Defendants must establish a substantial or triable defence to be granted leave to defend a summary suit; failure to do so results in dismissal.
Headnote:(A) Civil Procedure Code, 1908 - Order XXXVII - Summary suit for recovery of loan - Appellants denied leave to defend due to admission of loan and non-provision of proof of repayment - Court emphasized that the defence was frivolous and vexatious, leading to dismissal of appeal. (Paras 1, 5, 9)
(B) Leave to defend - Principles governing grant or denial - A defendant must present a substantial or triable defence; failure to do so results in refusal of leave to defend. (Paras 5.1, 5.2)
Facts of the case:
The respondent filed a summary suit seeking recovery of Rs.7,77,500/- from the appellants, who admitted to taking a loan of Rs.5,00,000/- but claimed repayment without sufficient evidence. The loan agreement and dishonoured cheque were pivotal. (Paras 2, 2.2)
Findings of Court:
The court found the appellants' defence unconvincing and lacking credible evidence of repayment, thus upholding the trial court's decision. (Paras 9)
Issues: The main issues included the credibility of the appellants' defence regarding repayment of the loan and the sufficiency of evidence provided. (Paras 6, 9)
Ratio Decidendi: The court ruled that the appellants' admission of the loan and failure to provide adequate evidence of repayment justified the trial court's refusal to grant leave to defend. (Paras 6, 9)
Result: Appeal dismissed.
J U D G M E N T
(ORAL)
1. The appellants ( wife & husband ) have assailed judgment and decree dated 30.05.2024 of the learned District Judge, West, Tis Hazari Courts Delhi, whereby their application for leave to defend the suit filed by the present respondent under Order XXXVII CPC was dismissed. Although the appellants have also challenged order dated 04.10.2024 of the learned trial court whereby the application for review of order dated 30.05.2024 was also dismissed, but in view of the provision under Order XLIII Rule 1(w) CPC the appeal against order dated 04.10.2024 is not pressed by them. Having heard learned counsel for appellants and having examined the records, I find
2. Briefly stated, circumstances relevant for the present purposes are that it not a fit case to even issue notice to the other side.
Digitally Signed the present respondent filed a summary suit under Order XXXVII CPC seeking recovery of Rs.7,77,500/- alongwith pendente lite and future interest at a rate of 18% per annum against the appellants, pleading that the appellants are running a jewellery shop and had cordial relations with him, so in the month of April 2020 at request of the appellants he advanced them a friendly loan of Rs.5,00,000/- for a period of 16 months and to that effect a loan agreement dated 19.06.2020 also was executed between the parties; that the said loan amount consisted of Rs.4,50,000/- transferred through NEFT by the respondent to the bank account of the appellants on 20.04.2020 and the balance amount of Rs.50,000/- was handed over to them in cash, as recorded in the loan agreement dated 19.06.2020; and that at the time of execution of loan agreement, the appellants delivered a post-dated cheque of Rs.5,00,000/- to him towards repayment of loan, which cheque got dishonoured with the remarks that the payment had been stopped by the appellants.
2.1 In the summary suit filed by the respondent under Order XXXVII CPC, upon service of summons for judgment, the appellants filed application under Order XXXVII Rule 3(5) CPC seeking leave to defend. Although the application for leave to defend was delayed by five days, the learned trial court condoned the delay.
2.2 The appellants sought leave to defend the suit on the ground that the loan amount had already been paid back by them to the respondent during RFA 861/2024 Page 3 of 8 pages GIRISH the period from 01.08.2020 to 01.07.2022 by way of monthly instalments of Rs.25,000/- each with interest of Rs.1,00,000/-; and that despite having received back the entire loan amount, the respondent did not return the security cheque and the loan agreement.
2.3 After hearing both sides, the learned Trial Court passed the impugned judgment and decree after dismissing the application for leave to defend, broadly on the grounds that the appellants had admitted having availed loan of Rs.5,00,000/- from the respondent and having executed the loan agreement as well as issued the repayment cheque which got bounced. The learned Trial Court after traversing through the pleadings recorded that the appellants had not placed on record any receipt issued by the respondent reflecting the alleged repayment of the loan.
3. Hence, the present appeal.
4. Learned counsel for appellants contends that the impugned judgment and decree is not sustainable in the eyes of law since the appellants had been able to set up a triable issue and reasonable defence to the suit. Learned counsel for appellants vehemently contends that the entire loan amount already stood paid back, so nothing is due and payable by the appellants. Further, learned counsel for appellants refers to the document Annexure A12 to demonstrate that the loan amount stood paid back. No other argument has RFA 861/2024 Page 4 of 8 pages GIRISH KATHPALIA Digitally signed by 2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3962c6fb 4835d435f97626cacca, postalCode=110003, st=DELHI, serialNumber=D3E86796451EC45C07B5D15570996B40F80C BD2EEE60402C487965FF801E26FA, cn=G
