THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Pronounced on: 14.11.2011
+ CS(OS) No. 60/2009
M/s Pioneer Publicity Corp. Pvt. Ltd. ..... Plaintiff
Through: Ms. Anjali Chopra, Advocate
versus
M/s Vian Infrastructure Ltd. ..... Defendant
Through: None
CORAM:-
HON'BLE MR JUSTICE V.K. JAIN
1. Whether Reporters of local papers may
be allowed to see the judgment? No
2. To be referred to the Reporter or not? No
3. Whether the judgment should be reported No
in Digest?
V.K. JAIN, J. (ORAL)
IA 15644/2010(O.37 R.3(5) CPC)
1. No one has appeared for the defendant even on the
third call to argue this application. I, therefore, have heard
the learned counsel for the plaintiff and proceed to decide
this application on merits.
2. This is a suit for recovery of Rs.1,78,85,461/-. The
plaintiff Company is engaged in the field of outdoor
CS(OS)No. 60/2009 Page 1 of 7
advertising for his clients. The defendant placed two orders
one dated 4th November, 2006 and the other dated 17th
April, 2007 with the plaintiff Company for advertisements.
A sum of Rs.1,94,29,405/- became payable by the
defendant Company. The defendant paid a sum of
Rs.15,32,609/- vide cheque dated 4th November, 2006 and
a sum of Rs.19,46,831/- vide cheque dated 10th January,
2007. These payments were made towards Bill dated 27 th
November, 2006. The defendant thereafter did not make
any payment to the plaintiff Company and a sum of
Rs.1,59,49,965/- is alleged to be due from it to the plaintiff
Company. The defendant issued ten cheques for an
aggregate sum of Rs.1,37,67,600/-, which when presented
were dishonoured. The plaintiff sent a notice dated 4 th
August, 2007 to the defendant which was replied by
defendant vide its reply dated 3rd September, 2007. The
plaintiff has now claimed the aforesaid principal sum of
Rs.1,59,49,965/- along with interest at the rate of 12% per
annum amounting to Rs.14,35,496/-.
3. In its application for leave to contest, the
defendant has alleged that it issued only two work orders in
favour of the plaintiff Company for a total consideration
CS(OS)No. 60/2009 Page 2 of 7
amounting to Rs.31 lakhs and the other for consideration
amounting to Rs.18,50,000/-. It is also alleged that the
work done by the plaintiff was not satisfactory as per the
terms of the work orders and prudent commercial outdoor
advertisement practices. As regards the cheques, it is
alleged that they were issued cheques in advance on rough
estimate basis so that the plaintiff could start its work.
Since the work of the plaintiff was not upto the expectation
of the defendant Company, the amount which it had paid to
the plaintiff Company vide cheques dated 4th November,
2006 and 10th January, 2007 was demanded back. The
parties then reached a full and final settlement whereby the
plaintiff retained the amount which it had already received
from the defendant.
4. The learned counsel for the plaintiff has pointed
out that there is a gap of more than six months between the
date of the first order and the date of the second order
placed by the defendant on the plaintiff Company. It is
further pointed out that as many as five Bills for total
amount of Rs.1,73,97,200/- were raised by the plaintiff
Company during this period. The contention is that had the
work executed by the plaintiff Company not been in
CS(OS)No. 60/2009 Page 3 of 7
accordance of the order placed on it, the defendant who
would not have placed the second order with the plaintiff
Company on 17th April, 2007, I find merit in this contention.
Moreover, no letter or notice was sent by the defendant to
the plaintiff Company at any point of time stating therein
that the work executed by the plaintiff Company was not in
consonance with the work order placed on it and, therefore,
the defendant Company was compelled to instruct the
banks to stop payment of the cheques which it had issued
to the plaintiff Company. It is also pointed out by the
learned counsel for the plaintiff that while placing the
second order dated 17th April, 2007, the defendant had
issued two cheques of Rs.1,37,67,600/- to the plaintiff
Company, which the defendant would not have done had
the work executed by the plaintiff Company being defective.
5. Though in the reply sent to the notice of the
plaintiff Company, the defendant alleged that the job carried
out by the plaintiff did not match the mutually agreed
criteria for the reasons pointed out in para 2 of the reply, no
such defect has been specified in the application for leave to
contest the suit and only a general allegation has been
made that the work executed by the plaintiff was not as per
CS(OS)No. 60/2009 Page 4 of 7
the agreement between the parties.
6. One of the defects mentioned in para 2 of the reply
sent by the defendant-company to the plaintiff-company
was that the actual quality of the flex material was sub-
standard. This according to the learned counsel is patently
false since a perusal of the work orders would show that the
flex material was to be supplied by the defendant-company.
7. In M/s Mechalec Engineers and Manufactures v.
M/s Basic Equipment Corporation (1977) 1 SCR 1060, the
Supreme Court set out the following principles:-
“(a) If the defendant satisfies the Court
that he has a good defense 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 friable issue
indicating that he has a fair or bona fide
or reasonable defense although not a
positively good defense 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 had aCS(OS)No. 60/2009 Page 5 of 7
defense, yet, shows such a state of facts
as leads to the inference that at the trial
of the action he may be able to establish
a defense 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 defense or
the defense 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 defense or
the defense 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
defense 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 defense.”
In these circumstances, the defence taken in the
application does not appear to be bona fide and appears to
be sham and illusory.
8. Following the last guideline laid down by Supreme
CS(OS)No. 60/2009 Page 6 of 7
Court, I grant leave to defendant to contest the defendant
subject to its furnishing a bank guarantee or an FDR for the
principal sum of Rs.1,59,49,965/- to the satisfaction of the
concerned Joint Registrar within three weeks from today.
The application stands disposed of.
CS(OS) No. 60/2009
Renotify for hearing on 8th December, 2011.
(V.K. JAIN)
JUDGE
NOVEMBER 14, 2011
sn
CS(OS)No. 60/2009 Page 7 of 7
