Sunday 5 February 2017

Whether leave to defend summary suit should be granted if there is dispute regarding interest?

Needless to repeat that in addition to principal amount pf Rs. 4,46,000/-, the plaintiff has also claimed Rs. 3,27,600/- by way of interest on that amount with effect from 5th April 1986 @ 20% p.a. Admittedly, the receipt in question is silent in regard to payment of interest as also the rate thereof. Two notices got issued by the plaintiff to the defendant are dated 14th February 1989 and 28th February 1989. Notice dated 14th February 1989 is stated to have been received back undelivered as the defendant avoided to receive the same. Suit was filed on 3rd March 1989 immediately after the issue of said notice dated 28th February 1989. In the absence of stipulation regarding payment of interest and rate thereof in the receipt in question, claim for the said amount towards interest can only to be decided on the basis of evidence to be led by the parties in the suit. Decisions in Khera Handloom Supply v. O.B. Exports and Ors., and Raghubir Singh and Ors. v. Sarla Devi and Ors., relied on behalf of plaintiff are of no help to the plaintiff as they pertain to the power of court to award pendente lite and future interest under Section 34 CPC. Said amount of Rs. 3,27,600/- is for the period from 5th April 1996 upto the date of filing of suit.
6. In the decisions in Santosh Kumar v. Mool Singh, (1958) SCR 1211; Michalec Engineers & Manufacturers v. Basic Equipment Corporation, and Sunil Enterprises & Anr v. SBI Commercial & International Bank Ltd., JT 1998(3) SC 641 the law in matter of grant of leave to defend suit stand settled by the Supreme Court. The defense raised by defendant in his application about the maintainability of suit under Order xxxvII CPC and entitlement to amount of Rs. 3,27,600/- towards interest cannot be termed as sham or moonshine inviting refusal to the grant of the leave prayed for.
Delhi High Court
Laxmi Narain Gupta vs Suraj Bhan Daruka on 22 November, 2000

Bench: K Gupta


1. This order will govern the disposal of LA. 5495/89.
2. Plaintiff filed suit under Order xxxvII CPC alleging that he gave as friendly loan a sum of Rs. 4,46,000/- on 6th March 1986 for one month without interest to the defendant who acknowledged payment thereof vide receipt dated 6th March 1986. Since the defendant withheld repayment of the said amount despite repeated requests, he is liable to pay interest thereon @ 20% p.a. being the market rate with effect from 5th April 1986. It is further alleged that the plaintiff got a legal notice dated 14th February 1989 sent to the defendant to pay the said amount alongwith interest on his residential address but he kept on avoiding receipt thereof. Thereupon another legal notice dated 28th February 1989 was sent to the defendant by registered AD post as well as under certificate of posting but he has failed to pay the said amount together with interest, total being Rs. 7,13,600/-. Suit is sought to be decreed for this amount alongwith interest pendente lite and future @ 20% p.a.
3. In the suit, defendant filed said LA. 5495/89 seeking leave to defend suit on the grounds that Receipt dated 6th March 1986 is inadmissible in evidence being unstamped; plaintiff is not entitled to interest much less @ 20% p.a.; Said Receipt is without consideration and suit on the basis thereof is not maintainable under Order xxxvII CPC.
4. Said original receipt dated 6th March 1986 is placed on Part III file. Admittedly, it is unstamped. Stamp duty chargeable on a receipt as defined by Section 2(23) of the Indian Stamp Act, 1899 for an amount exceeding Rs. 20/- is 0.20 paisa as per entry 53 in Schedule I appended to the Act. Under Section 35 of the Act any instrument not duly stamped is inadmissible in evidence. Contention advanced by Mr. K.N. Kataria for plaintiff was that on payment of a penalty of rupee one by the plaintiff, said receipt can be admitted in evidence under Section 35(b) of the Act. However, relying on a decision in Yogendra Patwardhan v. Khandelwal Hermann Electronics Ltd., 90 Bombay Law Reporter 560 (Vol. XC. 1988) the submission advanced by Sh. R.S. Kela for defendant was that in a summary suit admissibility of document(s) has to be seen at the time of filing of suit and said receipt, therefore, cannot be looked into at this stage and present suit is not maintainable under Order xxxvII CPC. Said decision does support the contention advanced by Mr. Kela, advocate. My attention was also drawn on behalf of defendant to an order dated 22nd January 1992 passed in LA. 8736/90 in Suit No. 1232/90 by a learned single Judge of this court by which defendant No. 4 in that suit was granted leave to defend suit on the ground of hundi which was the basis of the suit, being insufficiently stamped.
5. Needless to repeat that in addition to principal amount pf Rs. 4,46,000/-, the plaintiff has also claimed Rs. 3,27,600/- by way of interest on that amount with effect from 5th April 1986 @ 20% p.a. Admittedly, the receipt in question is silent in regard to payment of interest as also the rate thereof. Two notices got issued by the plaintiff to the defendant are dated 14th February 1989 and 28th February 1989. Notice dated 14th February 1989 is stated to have been received back undelivered as the defendant avoided to receive the same. Suit was filed on 3rd March 1989 immediately after the issue of said notice dated 28th February 1989. In the absence of stipulation regarding payment of interest and rate thereof in the receipt in question, claim for the said amount towards interest can only to be decided on the basis of evidence to be led by the parties in the suit. Decisions in Khera Handloom Supply v. O.B. Exports and Ors., and Raghubir Singh and Ors. v. Sarla Devi and Ors., relied on behalf of plaintiff are of no help to the plaintiff as they pertain to the power of court to award pendente lite and future interest under Section 34 CPC. Said amount of Rs. 3,27,600/- is for the period from 5th April 1996 upto the date of filing of suit.
6. In the decisions in Santosh Kumar v. Mool Singh, (1958) SCR 1211; Michalec Engineers & Manufacturers v. Basic Equipment Corporation, and Sunil Enterprises & Anr v. SBI Commercial & International Bank Ltd., JT 1998(3) SC 641 the law in matter of grant of leave to defend suit stand settled by the Supreme Court. The defense raised by defendant in his application about the maintainability of suit under Order xxxvII CPC and entitlement to amount of Rs. 3,27,600/- towards interest cannot be termed as sham or moonshine inviting refusal to the grant of the leave prayed for.
7. Accordingly, the application is allowed and defendant is permitted to contest the suit unconditionally, written statement be filed by him within four weeks. Replication to the Written statement be filed by the plaintiff within two weeks thereafter. List on 24th January, 2001.
Print Page

No comments:

Post a Comment