Whether plaintiff can file a Summary suit based on the entry in the bank passbook about the transfer of money to the defendant?
The brief background is that the Plaintiff filed a summary suit under
Order XXXVII CPC for recovery of a sum of Rs.21 lakhs along with
interest. The case of the Plaintiff is that the Plaintiff gave a loan to the Defendant to the tune of Rs.21 lakhs, which was transferred from the bank account of the Plaintiff in Bank of Baroda to the bank account of the Defendant’s firm i.e., MK Clothing, in HDFC Bank, Priyadarshini Vihar, Delhi. The payment of Rs.21 lakhs and receipt thereof on 8th August, 2015 is not disputed by the Defendant.
14. Considering the fact that the amount, which was transferred by the Plaintiff to the Defendant was through proper banking channels for which clear evidence has been placed on record, the suit under Order XXXVII CPC would be maintainable as it is for a liquidated sum. The onus would be on the Defendant to show as to why the leave to defend should be granted.
IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 15th December, 2020
C.R.P. 57/2020 & CM APPL.20305/2020
SURENDER KUMAR Vs MANOJ KUMAR
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
Dated: DECEMBER 15, 2020
1. This hearing has been done by video conferencing.
2. The present petition challenges the order dated 18th August, 2020 by
which the suit under Order XXXVII Rule 3(5) CPC filed by the
Plaintiff/Petitioner (hereinafter ‘Plaintiff’) has been converted into an
ordinary suit and unconditional leave to defend has been granted to the
Defendant/Respondent (hereinafter ‘Defendant’).
Order XXXVII CPC for recovery of a sum of Rs.21 lakhs along with
interest. The case of the Plaintiff is that the Plaintiff gave a loan to the
Defendant to the tune of Rs.21 lakhs, which was transferred from the bank
account of the Plaintiff in Bank of Baroda to the bank account of the
Defendant’s firm i.e., MK Clothing, in HDFC Bank, Priyadarshini Vihar,
Delhi. The payment of Rs.21 lakhs and receipt thereof on 8th August, 2015
is not disputed by the Defendant. According to the Plaintiff, the Defendant
bought a Mercedes car by using the amount given by the Plaintiff. The
Plaintiff repeatedly sought repayment of the amount, which was not done.
Hence, the suit for recovery was filed.
4. In support of the Plaintiff’s claim of bank transfer of Rs.21 lakhs, the
Plaintiff’s bank passbook of Bank of Baroda has been placed on record.
The passbook shows four transactions i.e., three transactions of Rs.5 lakhs
each and one transaction of Rs.6 lakhs – all in favour of M.K. Clothing.
.
5.The case of the Defendant in the leave to defend application is that
the Defendant had given a loan to the Plaintiff in cash in 2013-14, which
was repaid by the Plaintiff through banking channels. However, not a single
document has been placed on record by the Defendant, either in support of
the leave to defend application or even thereafter, along with the written
statement.
6. Mr. Harsh Kumar, ld. counsel for the Plaintiff relies upon two
judgments of this Court in Anju & Anr. v. Rampal & Anr. [CS (OS)
1159/2014, decided on 11th April, 2019] and Jindal Steel & Power Limited
v. N.S. Atwal [CS(OS) 713/2010, decided on 4th July, 2013] to argue that
once the money is paid through banking channels, an Order XXXVII CPC
suit is liable to be entertained. Further, it is argued that technicalities ought
not to come in the way if receipt of the amount is admitted and the suit
would be liable to be decreed.
7. On the other hand, Mr. Hemant Chaudhari, ld. counsel for the
Defendant submits that the Defendant disputes the fact that the amount was
a loan. Though the amount is credited to the Defendant’s bank account, the
same was merely in repayment of a loan given by the Defendant. He fairly
states that no document has been placed on record in support of this
contention until this stage. Ld. counsel also raises an issue as to the suit being barred by limitation.
8. Heard ld. counsels for the parties. A perusal of the impugned order
shows that the Trial Court has held that a mere bank passbook would not be
sufficient to show the nature of the transaction and the mutually agreed
terms and conditions and whether it is a loan or not. The observations of the
Trial Court are as under:
“11. …. However, in the case at hand there is no
document under the signature of the defendant to
show that what was transferred to his bank
account was in fact towards a loan. It also bears
repetition to state that there is no document
whatsoever to show as to what were the terms and
conditions of any such contract between the
parties. There is no document in writing
evidencing any contract. The photocopy of the
bank passbook showing such a transfer through
cheques will not of its own accord constitute a
written contract. There is no document, under the
signature of defendant, to show that what was
transferred to his bank account was actually a
loan and no other transaction. It is only the self
serving ipse dixit of the plaintiff as set out in his
plaint (and nowhere else) that it comes out that it
was a loan. Merely and merely on the basis of
what is averred in the plaint, this Court will not
take it that it was a loan transaction and no other
transaction. A photocopy of the bank passbook
would at the most show such a transfer but the
same will not show the nature of the transaction,
the mutually agreed terms and conditions and
whether it was in fact a loan or some other
transaction. Had there been a receipt, or else a
cash receipt showing that it was a loan
transaction, the matter may have been entirely
different. The only and only document being
relied upon is photocopy of a bank passbook. This
document would not show as to what was the
nature of the transaction and why the amount was
transferred to defendant's account. It would also
not show as to whether the transaction was one
that was not prohibited by law. If in a given case
it turns out the the transaction was illegal, the
mere fact that there is a copy of bank passbook
showing such a transfer, without anything more,
the outcome may be entirely different.”
9. As per the above findings, the Trial Court holds that since the only
document relied upon is a bank passbook, the reasons why the money was
transferred would not be clear from the said passbook. It would only show
that the transaction was one that was not prohibited by law. In view thereof,
the unconditional leave to defend was granted.
10. The law in respect of a suit under Order XXXVII CPC is well settled by the Supreme Court in the judgment of IDBI Trusteeship Services Ltd. v. Hubtown Ltd (2017) 1 SCC 568 wherein the Supreme Court has held as under:
“17. Accordingly, the principles stated in para 8
of Mechelec case [Mechelec Engineers &
Manufacturers v. Basic Equipment Corpn., (1976)
4 SCC 687] will now stand superseded, given the
amendment of Order 37 Rule 3 and the binding
decision of four Judges in Milkhiram case
[Milkhiram (India) (P) Ltd. v. Chamanlal
Bros., AIR 1965 SC 1698 : (1966) 68 Bom LR 36],
as follows:
17.1. If the defendant satisfies the court that
he has a substantial defence, that is, a
defence that is likely to succeed, the
plaintiff is not entitled to leave to sign
judgment, and the defendant is entitled to
unconditional leave to defend the suit.
17.2. If the defendant raises triable issues
indicating that he has a fair or reasonable
defence, although not a positively good
defence, the plaintiff is not entitled to sign
judgment, and the defendant is ordinarily
entitled to unconditional leave to defend.
17.3. Even if the defendant raises triable
issues, if a doubt is left with the trial Judge
about the defendant's good faith, or the
genuineness of the triable issues, the trial
Judge may impose conditions both as to
time or mode of trial, as well as payment
into court or furnishing security. Care must
be taken to see that the object of the
provisions to assist expeditious disposal of
commercial causes is not defeated. Care
must also be taken to see that such triable
issues are not shut out by unduly severe
orders as to deposit or security.
17.4. If the defendant raises a defence
which is plausible but improbable, the trial
Judge may impose conditions as to time or
mode of trial, as well as payment into court,
or furnishing security. As such a defence
does not raise triable issues, conditions as
to deposit or security or both can extend to
the entire principal sum together with such
interest as the court feels the justice of the
case requires.
17.5. If the defendant has no substantial
defence and/or raises no genuine triable
issues, and the court finds such defence to
be frivolous or vexatious, then leave to
defend the suit shall be refused, and the
plaintiff is entitled to judgment forthwith.
17.6. If any part of the amount claimed by
the plaintiff is admitted by the defendant to
be due from him, leave to defend the suit,
(even if triable issues or a substantial
defence is raised), shall not be granted
unless the amount so admitted to be due is
deposited by the defendant in court.”
11. Order XXXVII Rule 1 CPC applies to suits in which a debt or
liquidated demand is sought to be recovered. The term ‘liquidated demand’ has been defined by a ld. Single Judge of this Court in Rajinder Kumar Khanna v. Oriental Insurance Co., AIR 1990 Del 278 as follows:
“2. It was asserted by the plaintiff in the suit and
the petitioner before me, that the claim in the suit
was a “liquidated demand”. The petitioner seeks
to take advantage of the amendments made to the
Code of Civil Procedure, by which “liquidated
demand” became subject-matter of summary suits
for the first time.
3. The industry of counsel had not been able to
produce a single precedent of courts in India,
which explained what is “liquidated demand”.
However, reference has been made to Words and
Phrases Permanent Edition, in which reference is
made to Rifkin v. Safenovitz, 40 A 2d 188. It is
stated that “amount claimed to be due is a
“liquidated demand” within statute authorizing
summary judgments if it is susceptible of being
made certain in amount by mathematical
calculations from factors which are or ought to be
in possession or knowledge of party to be
charged”.”
It is therefore clear that any sum which can be ascertained from the
documents on record would constitute a liquidated demand.
12. As per the above decisions, the Court has to see as to whether the suit relates to the liquidated sum and whether any plausible defence has been set up by the Defendant. In the present case, a perusal of the leave to defend shows that the plea of the Defendant is as under:
“B. That the deponent never took any loan from
the plaintiff on 08.08.2015 to the tune of
Rs.21,00,000/-, in fact, it was the plaintiff, who
took the loan from the deponent time to time
during the period of 2013 to 2014 in cash to meet
his business needs and later on in order to repay
the same, he transferred the said amount in the
account of the firm of the deponent. Now, by
taking the advantage of the said bank transfer, the
plaintiff cooked up a false story and filed the
aforesaid false suit against the deponent without
any legal enforceable liability payable to the
plaintiff by the deponent.”
13. In support of the plea of the Defendant that he gave a loan to the
Plaintiff in 2013-14, which was being given on a continuous basis of
various amounts from time to time, there is not a single document that has
been placed on record. It is highly improbable that any party which is
giving huge sums of money would not file a single receipt or promissory
note and merely proceed to lend money on some oral arrangement. Even
otherwise, a perusal of the leave to defend does not inspire confidence.
14. Considering the fact that the amount, which was transferred by the Plaintiff to the Defendant was through proper banking channels for which clear evidence has been placed on record, the suit under Order XXXVII CPC would be maintainable as it is for a liquidated sum. The onus would be on the Defendant to show as to why the leave to defend should be granted.
15. At this stage, since ld. counsel for the Defendant clearly concedes
that no document has been placed on record in support of the plea that a
loan was given to the Plaintiff, allowing unconditional leave to defend would not be in accordance with law. At best, since the written statement has now been filed and the suit is proceeding further, this Court is of the opinion that the suit under Order XXXVII CPC is maintainable but some conditions be imposed upon the Defendant to permit him to defend his case.
16. Accordingly, it is directed that the Defendant shall furnish either a Bank Guarantee or any other security to the tune of Rs.10 lakhs, to the satisfaction of the Trial Court, within 8 weeks. Subject to the said condition being fulfilled, the written statement shall be taken on record and trial in the suit shall continue.
17. The petition is disposed of in the above terms. All pending
applications are also disposed of.
