TaxTMI 
TaxTMI 
2024 (11) TMI 112
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....rder XXXVII Rule 3(7) of the CPC, seeking condonation of delay in filing I.A. 16106/2022. 3. I.A. 15990/2022 was allowed by this Court vide its Order dated 02.08.2023, condoning the delay in filing of I.A. 16106/2022. 4. In view of the above developments, the present application has been rendered infructuous and is accordingly disposed of. It is however, clarified that the disposal of this application shall not in any manner prejudice the rights of the plaintiff in the Suit. I.A.17444/2022 in CS(OS) 233/2022 5. This application has been filed by the defendant seeking condonation of delay in filing of the application under Order XXXVII Rule 3(5) of the CPC, being I.A. 17443/2022, seeking leave to defend the Suit. 6. For the reasons stated in the above application, and as the learned counsels for the parties have made detailed submissions on the merit of I.A. 17443/2022, the delay is condoned. The application is allowed. I.A. 16106/2022 in CS(OS) 232/2022 I.A. 17443/2022 in CS(OS) 233/2022 7. These Suit(s) have been filed by the plaintiff under Order XXXVII of the CPC, praying for recovery of Rs. 6,42,76,712.33 along with interest at the rate of 18% per annum ....
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....so handed over a signed cheque bearing no.000629 drawn on Standard Chartered Bank, New Friends Colony for an amount of Rs. 6,90,00,000/- to the plaintiff. 15. The plaintiff asserts that he demanded the repayment of the loan amounts on multiple occasions but each time the defendants sought time for repayment of the same. In view of the family relations, the plaintiff agreed to the defendants' requests to not encash the cheques given by the defendants to the plaintiff towards the repayment of the loan amounts. 16. The plaintiff makes a claim regarding another transaction of an Agreement to Sell of the property bearing H.No. 10, Maulsari Avenue, Westend Greens, A F Rajkori, South West Delhi, New Delhi-110038, belonging to R.C. Nursery Private Limited, which he claims is controlled/managed by Mrs. Rajshree Singh, Mrs. Arundhati Khanna, and Mrs. Aditi Singh. The said transaction is not the subject matter of the present Suits and, therefore, is not discussed hereinafter. 17. The plaintiff asserts that on 24.12.2021, the plaintiff presented the cheque given by Mrs. Rajshree Singh for encashment, however, the same got dishonoured and was returned vide Return Memo dated 27.12.2021,....
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....between Mrs. Aditi Singh and the plaintiff only, though, the money was routed through the said defendants. 22. He submits that Mrs. Aditi Singh was a victim of extortion committed by a notorious conman, namely, Sukash Chandrashekhar, who, by impersonating as a high ranking official of the government and by misusing the name and image of such high ranking officer, had committed a continuous and sustained extortion against Mrs. Aditi Singh. He submits that after brainwashing her into thinking that she was communicating with authorities in the government, the conman had established trust and extorted money from Mrs. Aditi Singh and her family members. He submits that the same has also been reported in a press release dated 30.04.2022, issued by the Enforcement Directorate (in short, 'ED'). He submits that an FIR No. 208/2021 dated 07.08.2021 was also registered with the Special Cell, Delhi Police on the complaint filed by Mrs. Aditi Singh against such protracted extortion. Investigation in the FIR is being undertaken by the Economic Offences Wing, New Delhi (in short, 'EOW'). The ED is also investigating offences under the Prevention of Money Laundering Act, 2002 (in short, 'PMLA')....
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.... Mohan Singh would be released from jail and the pending litigations were resolved. He submits that the plaintiff, acting in sheer greed and malice has now sought to illegally recover the money that was voluntarily given by him as financial aid to the defendants with no fixed date for return. He submits that the Suits filed by the plaintiff are a clear afterthought and are not maintainable. 26. He submits that the plaintiff has concocted the letter dated 13.08.2020 to claim that the amount given by him to Mrs. Rajshree Singh was repayable on his demand. Similarly, a letter dated 29.08.2020 has also been concocted by him for the same purpose against Mrs. Arundhati Khanna. He submits that no documents evidencing the terms of repayment, such as the rate of interest or period of repayment, were discussed/agreed upon or reduced to writing. He submits that the defendants have never acknowledged, explicitly or implicitly, any obligations to repay the money on demand. 27. He further submits that in the WhatsApp messages exchanged between the parties, the plaintiff has asserted that the repayment had to begin from December 2020, however, it is the own case of the plaintiff that an amo....
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....y the defendants that they have taken 'financial help' from the plaintiff. It is not the case of the defendants that these amounts were not repayable to the plaintiff. In the absence of any stipulation on the date of repayment, the repayment would be on demand of the plaintiff. 33. He submits that in the application seeking leave to defend, the defendants themselves have pleaded three distinct dates when the amount taken by them would be repayable to the plaintiff. At one place, they state that it was a short term financial aid, while at another, they state that it was to be repaid when Dr. Shivinder Mohan Singh is released from prison, while in the letter dated 01.11.2021, Mrs. Arundhati Khanna states that she herself had suggested that she would return the money in three years' time. He submits that Dr. Shivinder Mohan Singh was released from prison more than one and a half years back, and the three years' period, as pleaded by Mrs. Arundhati Khanna, has also long expired. He submits that therefore, it is not a case where the defendants deserve the grant of leave to defend. 34. He submits that as far as the plea regarding the conman and the alleged extortion is concerned, t....
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....the wake of amendment of Rule 3 of Order XXXVII but, on the core theme, the principles remain the same that grant of leave to defend (with or without conditions) is the ordinary rule; and denial of leave to defend is an exception. Putting it in other words, generally, the prayer for leave to defend is to be denied in such cases where the defendant has practically no defence and is unable to give out even a semblance of triable issues before the Court. 33.1. As noticed, if the defendant satisfies the Court that he has substantial defence, i.e., a defence which is likely to succeed, he is entitled to unconditional leave to defend. In the second eventuality, where the defendant raises triable issues indicating a fair or bona fide or reasonable defence, albeit not a positively good defence, he would be ordinarily entitled to unconditional leave to defend. In the third eventuality, where the defendant raises triable issues, but it remains doubtful if the defendant is raising the same in good faith or about genuineness of the issues, the Trial Court is expected to balance the requirements of expeditious disposal of commercial causes on one hand and of not shutting out triable is....
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....uld be imposed while granting leave but, denying the leave would be ordinarily countenanced only in such cases where the defendant fails to show any genuine triable issue and the Court finds the defence to be frivolous or vexatious." 40. From the above, it would be apparent that the denial of leave to defend is not the rule but an exception. However, leave to defend may not be granted where the defendant has practically no defence and is unable to give out even a semblance of triable issues. Where the defendant raises triable issues indicating a fair or bona fide or reasonable defence, albeit not a positively good defence, the defendant would still be ordinarily entitled to unconditional leave to defend. Where the defendant raises triable issues, but it remains doubtful if the defendant is raising the same in good faith or there is a doubt about the genuineness of the issues, the Court may impose conditions both as to time or mode of trial, as well as payment into the Court or furnishing of a security by the defendant. Where the defence appears to be plausible but improbable, heightened conditions may be imposed as to the time or mode of trial as also of the payment into the Cou....
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.... all. 46. A clue in this regard can be received from the provisions of the Limitation Act, 1963 and specifically Articles 19 to 21 of the Schedule to the Limitation Act, which read as under: Description of suit Period of limitation Time from which period begins to run 19. For money payable for money lent. Three years. When the loan is made. 20. Like suit when the lender has given a cheque for the money. Three years. When the cheque is paid. 21. For money lent under an agreement that it shall be payable on demand. Three years. When the loan is made. 47. A suit for the money lent can, therefore, only be filed within three years from the date the loan is made. Similarly, if the lender has given a cheque for the money, the suit can be filed within three years from the date the cheque is paid. The provision does not provide for a default option for the defendant/borrower to decide when he will pay or be able to refund the said amount to the lender. Therefore, unless there is a contract to the contrary, which may even be oral, the amount is repayable upon the lender's demand. 48. In addition to the above, it is also admitted that the defendant....
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....son as endorsee and to complete the endorsement into a blank cheque, it makes it clear that by doing that the holder does not thereby incurred the responsibility of an endorser." Likewise Section 86 states that where the holder acquiesces in a qualified acceptance, or one limited to part of the sum mentioned in the bill, or which substitutes a different place or time for payment, or which, where the drawees are not partners, is not signed by all the drawees, all previous parties whose consent has not been obtained to such acceptance would stand discharged as against the holder and those claiming under him, unless on notice given by the holder they assent to such acceptance. Section 125 NI Act permits the holder of an uncrossed cheque to cross it and that would not render the cheque invalid for the purposes of presentation for payment. These provisions indicate that under the scheme of the NI Act an incomplete cheque which is subsequently filled up as to the name, date and amount is not rendered void only because it was so done after the cheque was signed and delivered to the holder in due course. 19. The above provisions have to be read together with Section 118 NI Act whi....
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....e help of presumptions of law and presumptions of fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact as held in Hiten P. Dalal [Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 : 2001 SCC (Cri) 960]. *** 33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. 35. It is not the case of the respondent-accused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent-accused that the unfilled signed cheque had been stolen. The existence of fiduciary relationship between the payee of the cheque and....
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.... law, and as held hereinabove, mere filling up of a date in an undated cheque is not a material alteration rendering the cheque void. 57. In Krishna Finhold Pvt. Ltd. (supra), this Court was confronted with the facts where the person who had signed the purported loan application was not impleaded as a party defendant in the suit. The Court also found other suspicious circumstances in the transaction. The Court also found that the terms of the loan were not immediately forthcoming and it could only be a matter of conjecture that a loan may have been given for a period of 5 or 10 years. It was in those peculiar facts that the Court found that the defendant has been able to make out a case for grant of leave to defend. The said judgment also cannot support the case of the defendants in the facts of the present case. 58. In the present case, as is noted hereinabove, the liability to repay is admitted by the defendants. It is also admitted that they had given the cheques under their own signatures with the amounts filled in to the plaintiff, and the plaintiff has merely inserted a date on the said cheques. The said Judgment, therefore, cannot come to the aid of the defendants. ....