IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 09--09--2008 CORAM THE HONOURABLE MR.JUSTICE S. PALANIVELU C.R.P.(N.P.D) Nos. 2756 & 2757 of 2007 & C.M.P. Nos. 2873 & 2874 of 2007 1. G. Karthik 2. Mrs. Champa Karthik ..Petitioners in both the C.R.Ps Vs. Suresh & Sons, H.U.F.S. Rep. by its Manager & Kartha, Sureshkumar D. Jain, At No.30, Moddox Street, Choolai, Chennai 600 112. ..Respondent in C.R.P.No.2756/2007
Sureshkumar D. Jain,
carrying on business under
the name and style of
Adgro Advertising
at No.30, Moddox Street,
Choolai, Chennai 600 112. ..Respondent in
C.R.P.No.2757/2007
Prayer: Civil Revision Petitions against the fair and decretal order of the learned XIV Assistant Judge, City Civil Court, Chennai in I.A. Nos. 12508 & 12509 of 2003 in O.S. No. 2188 & 2189 of 2003 respectively dated 18.12.2003.
For Petitioners :: Mr.R. Ravi
For Respondent :: No Appearance
COMMON ORDER
The respondent/plaintiff filed suits in O.S. No. 2188 & 2189 of 2003 against the petitioners/defendants for recovery of a sum of Rs.62,000/- together with interest on Rs.50,000/- at the rate of 24% per annum from the date of plaint till the date of realisation.
2. The averments contained in the affidavits of the petitioners/defendants filed in support of the I.As are as follows:
The 1st petitioner borrowed a sum of Rs.25,000/- through one M/s Navakar Finance and the amount was paid to him in the name of S.K. Finance on 8.3.2001. At the time of obtaining the loan, his signature was obtained in three blank forms purported to be promissory notes. His wife, the 2nd petitioner was also present at that time and she was requested to sign as a witness and accordingly, she also signed as a witness in three blank forms. The 1st petitioner repaid the entire amount with interest on 7.9.2001 itself and when he requested for the return of the above said blank forms, the said persons represented that they are only brokers and that the blank forms have been forwarded to the actual financiers and that they will collect the same from them and return to him. The said brokers were delaying the return of the blank forms and told the 1st petitioner that the forms have been destroyed and that he need not worry about them. Now, three different suits have been filed in three different names as if the petitioners had borrowed on three occasions from them. The transactions alleged in the suits are entirely false and there is no such entity as Suresh & Sons and Adgro Advertising . The pro-notes produced along with the plaint were not executed by the petitioners and the respondent/plaintiff in the respective suits is trying to misuse the above said blank forms and the petitioners are not liable to pay any amount to them. The respondent/plaintiff in the respective suits has not come with clean hands. The suit claim is false and fictitious and hence, it is prayed that the Court may be pleased to grant leave to the petitioners/defendants to defend the suits in O.S. Nos. 2188 & 2189/2003.
3. In the counter affidavit filed by the respective respondent/plaintiff, the following allegations are found:
“The averments found in the affidavit are imaginary and invented. At the outset, the petitioners/defendants admit the execution of the suit pronotes. When the petitioners/defendants stated that they are in dire need of money and requested to lend money in cash, the respondent/plaintiff paid the amount. But, now the petitioners/defendants have taken a different stance. If M/s. Navakar Finance are brokers, as alleged by the petitioners, then they would not have kept quiet for all these periods and would have taken action against the said M/s. Navakar Finance. At least, after the filing of the suits, the petitioners should have taken action against the said M/s. Navakar Finance, which they have not done and the allegation of discharge is also equally false even to the knowledge of the petitioners. A perusal of the suit promissory notes would sufficiently prove to the satisfaction of this Court that both the petitioners/defendants joined in the execution of the suit pro-notes. Having joined in the execution of the said pro-notes and having received the consideration in cash, they have not chosen to send any reply to the notice of demand and when the suits have been filed, they have come forward with the present applications. It is crystal clear that the petitioners have not come with clean hands and the defence raised by them, is nothing but illusory, moonshine, sham and lacks bona fides and devoid of merits and the same is liable to be rejected.
4. When a defendant approaches the Court with a request to grant leave to defend under Order XXXVII Rule 5 CPC, the Court has to analyse the circumstances and find out whether any valuable defence is surfacing in the case. In case, if there is an admission on the part of the defendant in his petition for leave to defend to the effect that he, either directly or indirectly, is liable for the payment of money, then the Court may consider for rejection of the request. If, in case, the Court finds that the defence to be raised by the defendant contains triable issues and if the Court feels that oral and documentary evidence are necessary to finally decide the case, then it may grant leave to defend. It is settled that in the process of finding out the above said factors, the Court shall not form any opinion and render it in its order.
5. As far as the facts of the present case are concerned, it is the version of the respective respondent/plaintiff that both the petitioners/defendants had received money on 7.4.2002 and executed the suit promissory notes in favour of the respective respondent/plaintiff by receiving a sum of Rs.50,000/- on promissory notes. The specific case of the petitioners/defendants is that they received a sum of Rs.25,000/- each through M/s. Navakar Finance and the amount was paid to them in the name of S.K. Finance on 8.3.2001 and the signature of the 1st petitioner was obtained in three blank forms. At the request of the said persons, the 2nd petitioner/wife of the 1st petitioner, signed as a witness in those three blank forms. It is further stated that on 7.9.2001, the petitioners repaid the entire amount with interest in respect of all the three pro-notes. While the 1st petitioner demanded the return of the promissory notes, he was informed that they had been given to the actual financiers and subsequently, it was represented that the said blank forms were destroyed.
6. The above said allegations found in the affidavits would go to show that to decide the matter in issue, oral evidence have to be brought on record . When the probable defence is looked into, it is also discernible that it would involve the examination of witnesses. In view of the same, the necessary finding would be, a valuable and triable issue would arise from the pleadings of the defendants.
7. When legal principles already settled on this subject are looked into, reference has to be made to an earlier decision of the Supreme Court reported in (1976) 4 SCC 687 [Mechelec Engineers and Mfrs. v. Basic Corpn.], wherein it has been held as follows:
“In the case before us, the defendant had denied, inter alia, liability to pay anything to the plaintiff for an alleged supply of goods. It is only in cases where the defence is patently dishonest or so unreasonable that it could not reasonably be expected to succeed that the exercise of discretion by the trial Court to grant leave unconditionally may be questioned”
In the above said judgment, the Apex Court has referred to the judgment of the Calcutta High Court in AIR 1949 Cal 479 (Sm.Kiranmoyee Dassi v. Dr.J. Chatterjee). Narrating as many as 5 guidelines, the operative portion of the order contains the guidelines as hereunder:
“8. In Sm. Krianmoyee Dassi v. Dr.J. Chatterjee, Das, J., after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by Order 17 C.P.C. In the form of the following propositions (at p. 253):
(a) If the defendant satisfies the court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend.
(b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend.
(c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he has a defence, yet, shews such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff’s claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the court may in its discretion impose conditions as to the time or mode of trial but not as to payment into court or furnishing security.
(d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend.
(e) If the defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defence.
9. The case before us certainly does not fall within the class (e) set out above. It is only in that class of case that an imposition of the condition to deposit an amount in court before proceeding further is justifiable.”
8. After culling out the portion of the guidelines as contained in the decision of the Calcutta High Court, the Supreme Court has observed that if a case does not fall within clause (e) extracted above, there is no need for the Court to direct the defendant to pay into the Court any amount. If the Court is of the opinion that the matter involves appreciation of oral evidence and scrutiny of documents, then there is no need to term the defence as illusory or sham or practically moonshine. If the defendant has no proper defence, the Court, inorder to protect the plaintiff, may direct the defendant to pay amount into Court equal to the amount claimed. But, as per the above said decision of the Supreme Court, if the factual aspects show that there is a valuable defence and triable issue, there is no need for any direction as per clause (e). Since, this Court has found out that a triable issue is involved in the case, it has become necessary to grant leave under Order XXXVII Rule 5 CPC.
9. In the result, the orders passed by the learned XIV Assistant Judge, City Civil Court, Chennai in I.A. Nos. 12508 & 12509 of 2003 in O.S. No. 2188 & 2189 of 2003 respectively are set aside and the civil revision petitions are allowed. No costs. Consequently, connected C.M.P.s are closed.
nv
To
The XIV Assistant Judge,
City Civil Court,
Chennai