M/S V. K.
Enterprises & ANR. Vs. M/S Shiva Steels  INSC 583 (4 August 2010)
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION SPECIAL LEAVE PETITION(C)
NO.25144 OF 2009 Ms. V.K. Enterprises ... Petitioner M/s. Shiva Steels ...
The short point involved in this Special Leave Petition is whether
the learned District and Sessions Judge, Delhi, had rightly dismissed the
Petitioner's application under Order XXXVII Rule 3, read with Section 151 of
the Code of Civil 2 Procedure (C.P.C.) for leave to defend the suit filed by
the Respondent under Order XXXVII for recovery of Rs.6,68,513/-, together with
interest @18% per annum and pendente lite and future interest.
On account of business transactions, the Petitioner purchased iron
sheets on credit from the Respondent on account whereof a sum of Rs.4,42,724/-
became due and payable by the Petitioner to the Respondent. The Petitioner
settled the accounts and acknowledged the liability in respect of the said
amount. Thereafter, the Petitioner issued a cheque for a sum of Rs.3,50,000/-
dated 11th October, 2006, towards part-payment of the said dues which,
according to the Respondent, was signed by one Pyare Lal, the sole proprietor
of the Petitioner-firm. On presentation, the said cheque was dishonoured and a
legal notice was, therefore, sent by the Respondent 3 to the Petitioner for
payment of the outstanding dues. Since, despite such notice the Petitioner
failed to pay the said dues, the Respondent filed Suit No.57 of 2008 in the
Court of District and Sessions Judge, Delhi, under Order XXXVII Rules 1 and 2
C.P.C. The Petitioner entered appearance in the Suit and filed an application
under Order XXXVII Rule 3 C.P.C., which was dismissed, as mentioned
In the said application for leave to defend the suit, the
Petitioner contended that the cheque in question had been handed over by the
Petitioner to the Respondent-firm by way of security only and not for
presentation. Furthermore, the said cheque was issued by the Petitioner on 11th
October, 2000, but the date of the cheque was, thereafter, interpolated and
altered from 11.10.2000 to 11.10.2006, and presented to the Bank. It was also
indicated that apart from the signature on the face 4 of the cheque and the
date mentioned therein, the rest of the cheque was blank and an attempt was
made by the Respondent to misuse the same with the intention of withdrawing or
misappropriating the amount subsequently inserted in the cheque. A specific
allegation was also made to the effect that the date of the cheque issued on
behalf of the Petitioner firm for the month of October was always written with
the Roman numerical `X', which was altered and shown in ordinary numericals,
which clearly establish the fact that the cheque in question had been doctored
to obtain the benefit thereof six years after the same had been issued.
In the said application, it was also denied that any cheque of
such a large amount had been issued to the Respondent after 1992 in order to
bolster the case of the Petitioner that the cheque in question had been forged.
It was ultimately stated in the complaint that the Respondent had 5 concocted
the story and the Bills placed on record by the Respondent were also forged as
the Petitioner had neither purchased any material nor counter-signed the last 4
bills as per the details provided.
Before us, the same submissions were reiterated and it was
submitted that the learned trial court had wrongly dismissed the Petitioner's
application for leave to defend the suit, although, several triable issues had
been raised. It was contended that the denial with regard to the validity of
the cheque and receipt of goods, were triable issues, which could be decided
only upon appraisal of the evidence adduced by the parties. It was also urged
that since the cheque was issued in 2000, the claim of the Respondent was also
barred by limitation.
submitted that not only had the learned District and Sessions Judge committed
an error in rejecting the Petitioner's application under Order 6 XXXVII Rule 3
C.P.C., but that the High Court had also erred in affirming the said order.
On the other hand, it was the case of the Respondent that the
order of the High Court did not call for interference having regard to the
nature of the disputes raised by the Petitioner before the trial court. It was
submitted that except for a bare denial of the signatures on the ledger
accounts settled by the Petitioner and alleging that the cheque issued had been
forged, there is nothing concrete in the Petitioner's application under Order
XXXVII Rules 1 and 2 read with Section 151 C.P.C. to indicate any triable
issue. Even as far the forgery alleged in respect of the cheque is concerned,
the hollowness of such an allegation would be revealed from the cheque itself
which does not show any signs of interpolation in any part thereof.
On consideration of the submissions made on behalf of the
respective parties and on an examination of the photocopy of the cheque itself,
it will be apparent that the allegations made in the application filed by the
Petitioner under Order XXXVII Rule 3 C.P.C. were without any foundation.
submitted on behalf of the Respondent, there is no sign of any interpolation
having been made on the cheque and in particular, the date thereof where the
figure `10' in Roman numericals had not even been inserted. There are no signs
of attempt to erase any of the writings or figures on the cheque to support the
allegations made on behalf of the Petitioner.
Order XXXVII C.P.C. has been included in the Code of Civil
Procedure in order to allow a person, who has a clear and undisputed claim in
respect of any monetary dues, to recover the dues quickly by a summary
procedure instead of taking the long route 8 of a regular suit. The Courts have
consistently held that if the affidavit filed by the defendant discloses a
triable issue that is at least plausible, leave should be granted, but when the
defence raised appears to be moonshine and sham, unconditional leave to defend
cannot be granted.
required to be examined for grant of leave is whether the defence taken in the
application under Order XXXVII Rule 3 C.P.C. makes out a case, which if
established, would be a plausible defence in a regular suit. In matters
relating to dishonour of cheques, the aforesaid principle becomes more relevant
as the cheques are issued normally for liquidation of dues which are admitted.
In the instant case, the defence would have been plausible had it not been for
the fact that the allegations relating to the interpolation of the cheque is
without substance and the ledger accounts relating to the dues, clearly
demonstrated that such dues 9 had been settled between the parties. Moreover,
the issuance of the cheque had never been disputed on behalf of the Petitioner
whose case was that the same had been given on account of security and not for
presentation, but an attempt had been made to misuse the same by dishonest
Against such cogent evidence produced by the plaintiff/respondent,
there is only an oral denial which is not supported by any corroborative
evidence from the side of the Petitioner. On the other hand, the ledger book
maintained by the Respondent and settled by the Petitioner had been produced on
behalf of the Respondent in order to prove the transactions in respect of which
the cheque in question had been issued by the Petitioner.
In our view, the defence raised by the Petitioner does not make
out any triable issue and 10 the High Court, has dealt with the matter
correctly and has justifiably rejected the Petitioner's application under Order
XXXVII Rule 3 C.P.C. and the same does not call for interference by this Court.
The Special Leave Petition is, therefore, dismissed, but without any order as
................................................J. (ALTAMAS KABIR)