JUDGMENT
Anil Kumar, J.
1. This order shall dispose of defendants’ application under Order 37 Rule 3(5) of the Code of Civil Procedure seeking unconditional leave to contest and defend the suit for recovery filed against them.
2. The brief facts are that the plaintiff has filed the suit under Order 37 of the Code of Civil Procedure for recovery of Rs. 36,92,300.00 contending that the amount claimed is based on a liquidate sum based on written contract and the relief claimed in the suit fall within the ambit of Order 37 of the Code of Civil Procedure.
3. The plaintiff contended that defendants had entered into an agreement to sell dated 9th December, 2000 in respect of property bearing No. 11/105 Subhash Nagar, Delhi. The plaintiff paid an earnest money of Rs. 3,21,000.00 and also paid an advance of Rs. 22.00 lakh to the defendants on different dates on the representation of the defendants that they had a clear title to the property and after conveying the same they will get the property registered under the name of the plaintiff. The defendants represented that they had purchased the property for less than Rs. 05.00 lakh in the year 2000.
4. The plaintiff contended that defendants misrepresented about their clear title of the property and that the value of the property was only Rs. 05.00 lakhs though defendants had represented its market value to be Rs. 48,21,000.00.
5. Though the advance payment as detailed hereinabove was paid to the defendants, however, they did not show the title documents creating a doubt in the mind of the plaintiff. On persistent refusal by the defendants to show the title documents, the plaintiff contended that he was forced to sign another agreement which the plaintiff had to sign in order to get his amount which he had already paid to the defendants.
6. The original consideration was reduced by 2.25 lakhs in the subsequent agreement which was got executed from the plaintiff under coercion. After execution of the subsequent agreement on 13th September, 2001, it transpired that the defendants have defrauded him by fabricating false documents in order to get property converted from lease-hold to free-hold. On coming to know about the forgery committed by the defendants, plaintiff demanded his money back which was given for purchase of the property and in one of the meetings defendants had agreed to return the money, however, instead of returning money immediately, the defendants sought three months’ time to refund the amount.
7. Assertion of the plaintiff is that he approached the defendants a number of times to get the money, however, the money was not returned. The defendants in collusion with some officials of LandDO had forged the documents and had converted the lease-hold property into free-hold which facts were not disclosed to the plaintiff before the agreement to sell was executed between the plaintiff and the defendants. After coming to know about the forgery and manipulations done by the defendants, the agreement was canceled.
8. The First Information Report for cheating and forgery was also registered being FIR No. 301/2002 under Section 420 and 120(b) IPC against the defendants. During the investigations, it transpired that the defendants had obtained conveyance deed by fraudulent misrepresentations by giving false affidavit on 3rd October, 2002 before the LandDO contending that Smt. Shanti Rani the previous lessee is alive though she had died on 21st September, 1996.
9. The defendants canceled the agreement after realizing that their forgery has come to light, however, after canceling the agreement on account of facts imputable to them they have no right to misappropriate or forfeit the amount of Rs. 26,01,000.00 the amount paid as advance and as earnest money. The plaintiff also claimed an amount of Rs. 77,030.00 as interest @ 24% per annum and Rs. 3,21,000.00, double the amount of earnest money, a total amount of Rs. 36,92,300.00.
10. The plaintiff complained that instead of paying the amount as claimed by him, which the defendants are liable to pay under the agreement, on 2nd May, 2002, in his absence, the defendants and their associates broke open the locks and trespassed into the portion of the property and also committed theft of valuable goods of the plaintiff.
11. As the defendants failed to return the amount of Rs. 26,01,000 despite requests and demands, the plaintiff filed the suit for recovery of Rs. 36,92,300 comprising of Rs. 26,01,000 as the amount paid by the plaintiff to the defendants, interest on the said amount @ 24% per annum amounting to Rs. 7,70,000 and Rs. 3,21,000 penalty of double the earnest money, under Order 37 of Code of Civil Procedure.
12. After the summons were served on the defendants, they filed appearance and thereafter on service of summons for judgment, the defendants filed an application for leave to defend and contest in the suit for recovery filed by the plaintiff against the defendants.
13. The defendants sought unconditional leave to defend and contest the suit inter alia on the grounds that plaintiff is a Chartered Accountant who had scrutinized all the documents before entering into an agreement to purchase the property on 9th December, 2000. Final payment had been agreed to be made after re-settlement agreement was executed on 13th September,2001 which was executed after execution of conveyance deed in favor of defendants. The defendants asserted that the plaintiff did not have sufficient funds and did not go to sub registrar’s office on 3rd October,2001 and the defendants produced a receipt of the Sub-Registrar’s office. The defendants contended that they have already filed a suit for cancellation of agreement dated 9.10.2000 and resettlement agreement dated 13th September,2001 and injunction. In the suit by order dated 24th June,2002 the learned Civil Court has granted ex-parte injunction restraining the plaintiff and IO from dispossessing the defendants which stay order is continuing till date. The defendants averred that the plaintiff connived with the police officials to register a false case against the defendants and a false case has been registered against the defendants.
14. The defendants averred that the plaintiff is not entitled for any amount as he resoled from the agreement and had not complied with the terms of agreements dated 9.12.2000 and 13.9.2001. According to the defendants, plaintiff is blowing hot and cold. On one hand plaintiff is contending that the defendants have no rights or interests in the property but on the other hand they are seeking restrain against defendants from transfer of rights in the property. The defendants plea is that the plaintiff has suppressed and distorted the facts and had accepted the ownership of the defendants and therefore, they can not allege that the defendants are not the owners of the property and not competent to sell the property. Relying on the written statement filed by the plaintiff in the suit of injunction filed by the defendants, it was asserted that the plaintiff had admitted that he had scrutinized all the documents and got all the verification done.
15. According to the defendants, the plaintiff is seeking recovery on the basis of documents which have been cancelled. The defendants denied their liability to pay the double the amount of earnest money of Rs,3,21,000. It was contended that the plaintiff can not claim any amount on the basis of cancelled agreement.
16. Regarding the allegation of possession taken over by the defendants, it was pleaded that the resettlement agreement stipulated that the possession was to be given after receiving full consideration and since the entire agreed consideration has not been paid, the possession could not have been given by the defendants. The receipt of possession on the basis of document dated 16th March,2001 was denied and the document challenged the document being inadmissible under Section 17 of Registration Act and Section 35 of the Indian Stamp Act. The defendants stated that the plaintiff could not have paid about Rs. 26 lakhs without scrutinizing the documents. The resettlement deed was executed after the conveyance deed dated 25th July,2001 was executed in favor of the defendants. Relying on the bail order by which bail was granted to the defendants, it was asserted that the possession was always with the defendants and was not given to the plaintiff. The defendants also claimed that the suit is barred under the principles of promissory estoppel as on 13th September, 2001 the plaintiff had further paid a sum of Rs. 80,000 to the defendants. The plea of the defendants is that there is no defect in the title of the property as has been alleged and the plaintiff can not assert that he was misled about the value of the property and the title of the defendants in the property. The defendants in the circumstances, contended the pleas raised by the defendants, if proved, will disentitle the plaintiff from a decree of recovery as claimed by him and in the circumstances the defendants contended that they are entitled for an unconditional leave to contest and defend the suit.
17. The plaintiff refuted the allegations made by the defendants in their application for leave to defend and contest the suit. The plaintiff contended that the defendants had filed a false affidavit dated 3rd October,2000 about Smt. Shanti Rani, previous Lessee that she is alive though she had already died on 21st September, 1996. The conveyance deed, therefore, obtained by the defendants was by concealment of facts and in fraudulent manner and did not give any rights to them. The plaintiff filed a complaint against the defendants and a F.I.R has already been registered against them. The plaintiff stated that the defendants have no right to appropriate the money given by the plaintiff after cancellation of the agreement to sell the property by them. The agreement was cancelled by the defendants after realizing that their concealment and fraudulent conduct has become known to the plaintiff.
18. The plaintiff asserted that the property was originally allotted to Smt. Shanti Rani wife of Shri Ram Lal who had executed agreement to sell and power of attorney in favor of Veena Rani wife of Shri Shaym Sunder. Smt. Veena Rani had executed power of attorney and agreement to sell in favor of Shri Ram Raj Yadav. Though Shri Ram Raj Yadav had not appointed his brother as his attorney nor had executed any registered instrument in his favor, Shri Kanshi Nath Yadav, brother of Shri Ram Raj Yadav executed power of attorney in favor of the defendants. Shri Kanshi Nath Yadav did not have any rights in his favor and he could not have transferred any rights of Ram Raj Yadav in favor of defendants. In the circumstances, the defendants could not transfer rights in the property in favor of the plaintiff. On the objection being raised by the L and D.O, the defendants had filed an affidavit that Smt. Shani Rani was alive whereas she had died on 21st September,1996. The conveyance deed thus obtained by the defendants from Land D.O by concealment of fact and by filing a false affidavit does not give them any right to convey any rights in the property to the plaintiff. The defendants, therefore, are liable to return the entire amount paid by the plaintiff to the defendants. The plaintiff contended that the defendants have not filed any legal and valid documents to show that they have rights in the property by which they could convey the rights to the plaintiff. In the circumstances the plaintiff asserted that defendants have failed to show any valid defense and the defense set up by the defendants is illusory or sham or practically moonshine and the defendants are not entitled for leave to defend and contest the suit.
19. I have heard the learned Counsel for the parties and have also perused the application for leave to defend and contest the suit filed by the defendants and the reply filed by the plaintiff and the averments made in the plaint.
20. What is to be considered for granting or refusing leave to defend and contest the suit to the defendants. The parameters and principles to be kept in mind for grant of leave to contest were set out by the apex Court in M/s. Mechalec Engineers and Manufacturers v. M/s. Basic Equipment Corporation which are as as under:
(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 a 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 have 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.
21. In MRs. Raj Duggal v. Ramesh Kumar Bansal AIR 1990 Supreme Court 2218 it was held:
3. Leave is declined where the Court is of the opinion that the grant of leave would merely enable the defendant to prolong the litigation by raising untenable and frivolous defenses. The test is to see whether the defense raises a real issue and not a sham one, in the sense that if the facts alleged by the defendant are established there would be a good or even a plausible defense on those facts. If the Court is satisfied about that leave must be given. If there is a friable issue in the sense that there is a fair dispute to be tried as to the meaning of a document on which the claim is based or uncertainty as to the amount actually due or where the alleged facts are of such a nature as to entitle the defendant to interrogate the plaintiff or to cross-examine his witnesses leave should not be denied. Where also, the defendant shows that even on a fair probability he has a bona fide defense, he ought to have leave. Summary judgment under Order 37 should not be granted where serious conflict as to matter of fact or where any difficulty on issues as to law arises. The Court should not reject the defense of the defendant merely because of its inherent implausibility or its inconsistency.
22. At the time of grant of leave to defend the Court is required to examine whether there is a real or a sham plea by the defendant in the application or whether the allegations made by the defendant, if established, would be a good defense. The Court should not go into the question whether the facts alleged are true or not and that situation would arise only after the leave was granted and at the trial.
23. In , Radha Mohan and Anr. v. Radha Fancy Stores and Ors. the following principles were enunciated in respect of grant of leave to defend:
(a) It is discretionary with the Court either to refuse or to grant leave to defend unconditionally or upon such terms as may appear to the Court to be just. But the aforesaid exercise of the discretion should be judicial and not arbitrary and whimsical.
(b) In case the defense intended to put up in frivolous or vexatious leave to defend must be refused.
(c) An unconditional leave to defend must be given if the facts disclosed by the defendant indicate that he has a substantial defense to raise, which means that defense so raised has good chance of success or has good potentiality to dislodge the plaintiff or which is bona fide and honest one and raises such question of law or of facts which require thorough judicial scrutiny.
(d) If the facts set up by the defendant do not disclose a substantial defense, leave should normally be refused or else on account of mercy as provided for in the Supreme Court judgment (AIR 1977 Supreme Court 577) or due to desire to exclude even remote chance of injustice to the defendant, leave to defend may be granted subject to the condition of a deposit of amount claimed by the plaintiff or furnishing a security in respect of that amount or deposit of part of that amount and furnishing security for the payment of balance.
(e) Where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court.
24. The defendants entered into an agreement to sell the property on 9th December, 2000 contending that the property is free from all sorts of encumbrance and liens on it. The defendants also represented that they could transfer rights in the property in favor of the plaintiff and consequently on different dates a total amount of Rs. 26,01,000 was paid by plaintiff to the defendants. The entire sale consideration was payable within two months from the date of the agreement. The defendants thereafter, gave another affidavit extending the time to 10th March, 2001. In the affidavit it was contended that the time has been extended because of the personal reasons of the defendants and the plaintiff shall not be responsible for it. The date for possession was further extended till 2nd April, 2001.
25. A letter dated 24th August, 2000 addressed to the defendants by Land and Development Office has been filed where a specific objection was raised that the General Power of attorney executed by Shri Kanshi Nath Yadav in favor of defendants does not create any rights in their favor because he was not the lessee nor he was the attorney of the lessee. The proof was also demanded that the lessee is alive and the general power of attorney has not been cancelled by the Lessee. Thereafter despite the fact that Smt. Shani Rani wife of Shri Ram Lal had died on 21st September,1996 and even rights in the property could not be transferred to the defendants by Shri Kanshi Nath Yadav, a conveyance deed was executed in favor of defendants by concealment of facts and in a fraudulent manner.
26. The defendants have not shown or produced any other document that they could convey rights in the property and were entitled for consideration. Realizing that the fraud committed by them in obtaining conveyance deed in their favor from L and D.O has become apparent, the defendants cancelled the agreement between plaintiff and them, though they took the plea that the plaintiff failed to perform his part of agreement. If the defendants have cancelled the agreement and they have also failed to show that they could convey rights in the property to the plaintiff, whether they are entitled to forfeit the amount paid by the plaintiff.
27. From the agreement and resettlement agreement executed between the parties and the correspondence, it cannot be inferred that the time was the essence of the agreement for sale of immovable property. In any case before the defendants can forfeit the amount, they are liable to show that they could transfer rights in favor of plaintiff. The defendants have executed documents in favor of plaintiff on the basis of power-of-attorney executed by Shri Kanshi Nath Yadav, brother of Shri Ram Raj Yadav who himself was neither an attorney nor had any other documents in his favor entitling him to transfer any rights in favor of defendants. This objection was also raised by Land and Development Office when defendants applied for execution of a conveyance deed in their favor. In defense to the suit for recovery of amount paid by the plaintiff to the defendants, they have failed to produce any document which would show that Shri Kanshi Nath Yadav was entitled to execute any document in their favor. Shri Kanshi Nath Yadav could not execute any document in favor of plaintiff transferring any rights in the property nor the defendants can rely on conveyance deed got executed by them from the Land and Development Office in their favor, yet can they forfeit the amount paid by the plaintiff to them.
28. Where a defendant under a contract agrees to sell his property to the plaintiff on a consideration and also receive a part of consideration in advance from the plaintiff then if the defendant himself cancel the contract after committing a breach of the contract then the defendant cannot require the plaintiff’ to perform his part of the contract. Rather on cancellation of the contract by the defendant, the plaintiff will be justified in discharging himself from all liabilities and plaintiff will be entitled under Section 64 of the Contract Act to receive back the amount paid by him to the defendant. Where the defendant himself cancelled the contract then it was not necessary to decide whether the plaintiff was ready and willing to perform his part of the contract. Reliance for this can be placed on , Gurdial Singh v. Pearey Lal Malhan relied on by the plaintiff. The court had held: ‘That where the defendant under a contract agreed to sell his property to the plaintiff on a consideration of seventy-five thousands rupees and also received ten thousand rupees in advance from the plaintiff then if the defendant himself cancelled the contract after committing a breach of the contract then the defendant cannot require the plaintiff’ to perform his part of the contract. On renunciation of the contract by the defendant, the plaintiff was justified in regarding himself as discharged from all liabilities. In other words, after the cancellation of the contract by the defendant there was no obligation on the part of the plaintiff to do any act for the completion of the contract. On the other hand, under Section 64 of the Act the plaintiff was entitled to receive back the amount paid by him to the defendant. Where, therefore, the defendant cancelled the contract and he had received Rs. 10,000 under the contract, he was liable to refund that amount to the plaintiff with interest. Under Sections 39 and 64 of the Act on the cancellation of the contract by the defendant the plaintiff became entitled to the refund of the amount received by the defendant without proving any thing more. Further, where the defendant himself cancelled the contract then it was not necessary to decide whether the plaintiff was ready and willing to perform his part of the contract.’
Section 64 of the Contract Act is as follows:
64. Consequences of rescission of voidable contract.- ‘ When a person at whose option a contract is voidable rescinds it, the other party thereto need not perform any promise therein contained in which he is promisor. The party rescinding a voidable contract shall, if he have received any benefit there under from another party to such contract, restore such benefit, so far as may be, to the person from whom it was received.
29. The plea of the defendants is that the agreement to sell was voidable and it has been rescinded by the defendants on alleged non performance of the agreement by the plaintiff, as the plaintiff failed to pay the balance sale consideration. If that be so the plaintiff does not have to establish that they were always ready and willing to perform his part of agreement. In that case the plaintiff shall be entitled for the entire amount of Rs. 26,01,000 paid by plaintiff to the defendants.
30. The defense raised by the defendants that the plaintiff is a chartered accountants who should have and who had scrutinized all the documents before entering into an agreement to purchase and therefore should have paid the entire consideration in terms of the agreement despite the fact that the defendants do not have rights in the property which could be transferred by them and the conveyance deeds obtained by them from Land and Development Office by concealment of facts and by playing a fraud, merely raises a shame defense which will enable the defendants to prolong the litigation and in my opinion will not be a plausible defense. Whether the possession was given by the defendants to the plaintiff and subsequently taken from the plaintiff, will not be material in the present facts and circumstances in the suit for recovery of amount paid by plaintiff to the defendants. This is not a suit for recovery of possession. The plea of the defendants that the plaintiff could not have paid Rs. 26,01,000 without verifying the facts also does not entitle the defendants to forfeit that amount or not to return the same when they do not have any rights in the property which could be transferred by them to the plaintiff for valuable consideration. In the circumstances the defendants have not raised any friable issue which will entitle them for leave to defend and contest the claim of the plaintiff for return of Rs. 26,01,000 paid by plaintiff to the defendants.
31. The plaintiff has also claimed an amount of Rs. 3,21,000, which is on account of double the amount of Rs. 3,21,000 which was paid as earnest money. The amount of Rs. 26,01,000 includes the earnest money of Rs. 3,21,000. This amount is, therefore, the double the amount of earnest money. The agreement itself postulates that in case buyer failed in the transaction, it will be considered cancelled and earnest money will be forfeited. However, if the seller failed to complete the transaction they will have to pay the double amount and all costs and expenses. The re-settlement agreement dated 30th September, 2001 is in continuation of agreement to sell dated 9th December, 2000. The re-settlement agreement also contemplated that if the defendants failed to honor their agreement, the plaintiff shall be entitled to have the liberty to move the court. The claim of the plaintiff for an amount of Rs. 3,21,000, double the amount of earnest money, is consequently based on a written contract and such a claim shall be maintainable in a suit under order 37 of code of civil procedure.
32. The defendants are unable to show that they have such rights in the property which could be transferred by them for consideration, as detailed hereinabove in an earlier plea. The defendants had also cancelled the agreement. The agreement between the parties clearly stipulates that in case the seller will fail to perform the agreement, the buyer shall be entitled to double the amount of earnest money. In 2001 (I) AD (Delhi) 128, Surinder Sethi v. Deepak Kapoor, it was held that where an agreement contemplated payment of double the amount of earnest money in case of failure of the seller to execute the documents, the buyer shall be entitled for double the amount of earnest money and shall not be entitled for the relief of specific performance. In another matter 2001 I AD (Delhi) 537, Ashok Aggarwal v. Bhagwan Das Arora, a single Judge of this Court had held that in view of the stipulation made in the agreement to sell that on failure of the seller to sell the property, the buyer shall be entitled the double the amount of earnest money, the suit for specific performance was dismissed holding that it is not maintainable and the buyer shall only be entitled for double the amount of earnest money.
33. The plaintiff has not sought the specific performance of the agreement to sell executed between the plaintiff and the defendants. The plea of the plaintiff is that the defendants do not have such rights in the property which could be transferred by the defendants to the plaintiff for consideration. The defendants misrepresented to the Land and Development office and gave the affidavit about Smt. Shani Rani being alive though she had died on 21st September, 1996 and thus on the basis of conveyance deed executed in their favor they are not entitled to transfer rights in the property to the plaintiff nor they are entitled for entire consideration. In the circumstances it will be defendants who are unable to conclude the transaction and they are liable to pay double the amount of earnest money received by them. The plaintiff, therefore is also entitled for a sum of Rs. 321000 from the defendants and the leave is declined as it will merely prolong the litigation as the defense in this respect raised by the defendants is untenable and does not raise any real issue. Whether the possession of the property was given by the defendants to plaintiffs or after giving the possession, the defendants trespassed in the property and took the possession, is not material and germane for the decision whether the plaintiff is entitled for return of the amount paid by the plaintiff to the defendants for the sale of the property. Thus the leave to defend and contest the suit by the defendants on this ground is declined and the claim of the plaintiff for a sum of Rs. 321000 is allowed.
34. The next plea is whether the plaintiff is entitled for interest on the amount which was paid by the plaintiff to the defendants. The plaintiffs have claimed interest at the rate of 24 % per annum. The plaintiff has claimed a sum of Rs. 770300 on account of interest till the date of filing of the suit. Perusal of the application for leave to defend and contest the suit reveals that the defendants have not challenged that the plaintiff is not entitled for interest at the rate of 24 % per annum or at any other rate. The agreement to sell does not stipulate any rate of interest on the amount paid by plaintiff to the defendants. The resettlement agreement dated 30th September, 2001 also does not to stipulate any rate of interest payable by defendants to the plaintiff. The defendants, however, claimed from the plaintiff balance amount of the sale consideration along with interest at the rate of 24% per annum by their notice dated 4th March,2002. In reply to defendant’s notice dated 4th March 2002, which was sent on behalf of plaintiff, dated 18th March, 2002 the amount claimed was Rs. 2601000 and an amount of Rs. 666300 as interest at the rate of 24% per annum. As already observed earlier that the defendants have not challenged the right of the plaintiff to claim interest at the rate of 24% per annum in the application for leave to defend and contest the suit filed by defendants. In the circumstances whether the defendants are entitled to claim that they are entitled to challenge the amount of interest claimed by the plaintiff from the defendants at the rate of 24% per annum’
35. In order to succeed about the interest claimed by the plaintiff, he also had to show that the claim is based on a written agreement and covered under the provision of Order 37 of the Code of Civil Procedure. The agreements between the parties do not reflect that the plaintiff is entitled for interest on the amount paid by him at the rate of 24% per annum or at any other rate nor the parties agreed that in case any amount will become due under the agreements, the party liable to make payment shall also pay interest at the rate of 24% per annum or any other rate. Since the claim of interest is not based on any written agreement, the suit of the plaintiff for the amount of interest claimed by him at the rate of 24% per annum can not be allowed nor the suit of the plaintiff can be decreed nor the defendants can be deprived of their rights to contest the claim of the plaintiff for interest. In 124 (2005) DLT 463, Greaves Limited v. Sandeep Darwar, the Court had granted unconditional leave to defend and contest the suit regarding amount of interest claimed by the claimant as there was no contract between the parties to pay the interest on the amount and no invoices were placed to show that the defendant was liable to pay interest on the amount of materials supplied by plaintiff to the defendant. It was held that in absence of a written contract, the Court cannot grant the relief for recovery of interest under the provisions of order 37 of the code of civil procedure and leave to defend and contest the suit for the claim of recovery of interest and therefore the leave was granted to the defendant. Consequently in absence of any written agreement between the parties regarding payment of interest by the defendants to the plaintiff, the claim for recovery of interest is not covered under order 37 of Code of Civil Procedure, and therefore, the defendant shall be entitled for and unconditional leave to defend and contest the suit in respect of the claim of the plaintiff for recovery of interest at the rate of 24% per annum or at any other rate till the filing of the suit.
36. Therefore, considering the pleas and contentions of the parties the application of the defendants for unconditional leave to defend and contest the suit in respect of return of the amount of Rs. 26,01,000 and for double the amount of earnest money of Rs. 3,21000 is declined, however, the application for leave to defend and contest the suit regarding the claim of the plaintiff for recovery of interest at the rate of 24% per annum is allowed and the defendants are granted unconditional leave to contest the suit to the defendants for the relief of recovery of interest by the plaintiff from the defendants at 24% per annum.
37. Thus a decree for a the total sum of Rs. 29,22,000 is passed in favor of plaintiff and against the defendants. Pendent lite and future interest at the rate of 9% per annum is also awarded to the plaintiff against the defendants on the this amount.
38. The defendants are, however, granted unconditional leave to defend and contest the suit of the plaintiff for recovery of Rs. 770300, the amount of interest claimed by the plaintiff against the defendant at the rate of 24% per annum till the filing of the suit.
39. With these observations the leave to defend application of the defendants is partly allowed and the suit of the plaintiff for recovery of the amount as stated hereinabove is decreed with pendent lite and future interest at 9% per annum and unconditional leave to defend and contest the suit regarding the claim of pre-suit interest is granted to the defendants. Decree be drawn for the amount decreed in favor of plaintiff.