Daljeet Singh Bhatia v. M/S Karamsar Electronics Pvt. Limited

1. This appeal is directed against the judgment and decree dated 09.06.2022, whereby the appellant’s/defendant’s application moved under Order XXXVII Rule 3 of the Code of Civil Procedure, 1908 [in short, “CPC”] was dismissed.

2. Consequently, on dismissal of the application, the trial court proceeded to decree the suit in favour of the respondent/plaintiff for Rs.3,80,950/-. 2.[1] Besides this, the trial court has also awarded simple interest to the respondent/plaintiff, at the rate of 12% per annum, commencing from the date of institution of the suit i.e., 06.06.2018 till the date of passing the decree. This apart, costs were also awarded to the respondent/plaintiff.

3. The respondent/plaintiff filed the summary suit based on the following broad facts: 3.[1] It is averred that the respondent/plaintiff sold the subject goods to the appellant/defendant. The subject goods consisted of electronic goods and equipments i.e., speakers, amplifiers, CCTV cameras, etcetera. The goods supplied by the respondent/plaintiff were subject matter of nine (09) invoices. These invoices spanned the period obtaining between 10.03.2018 and 30.03.2018. The cumulative value of these goods was pegged at Rs.6,49,750.36, as on 31.03.2018. 3.[2] Further, the case set up by the respondent/plaintiff was that against the aforementioned nine (09) invoices, certain payments were made by the appellant/defendant, of which the balance outstanding amount, as on 09.04.2018, was Rs.4,24,750.36. 3.[3] Against the aforementioned outstanding sum, the respondent/plaintiff received a cheque bearing number 760491, drawn on Karnataka Bank Limited, dated 11.04.2018, amounting to Rs.4,25,950/-, which included Rs.1200/- towards the charge levied by the respondent’s/plaintiff’s banker with regard to the two (02) dishonoured cheques issued in the past by the appellant/defendant. 3.[4] Admittedly, the aforementioned cheque, bearing number 760491, presented on behalf of the respondent/plaintiff, was also dishonoured. The respondent/plaintiff received a memo dated 18.04.2018 from its banker i.e., Kotak Mahindra Bank [Chandni Chowk Branch, Delhi] which gave “funds insufficient” as the reason for dishonour of the cheque.

3.5. Evidently, the appellant/defendant, instead of making the payment of the entire amount, remitted to the respondent/plaintiff, via RTGS, Rs.45,000/- on the same date i.e., 18.04.2018. 3.[6] Consequently, the outstanding debt, which the appellant/defendant had to defray, was scaled down to Rs.3,80,950/-.

3.7. Thus, the respondent/plaintiff filed a summary suit for Rs.3,80,950/-. In addition thereto, interest was also claimed by the respondent/plaintiff at the rate of 18% per annum.

4. The record also reveals that the respondent/plaintiff had issued a legal notice dated 27.04.2018, calling upon the appellant/defendant to pay Rs.3,80,950/-, along with interest at the rate of 18% per annum, commencing after expiry of 30 days from the date of receipt of the said notice. Since the appellant/defendant did not liquidate the debt, the respondent/plaintiff took recourse to a suit action.

5. Significantly, prior to the issuance of the cheque dated 11.04.2018, the appellant/defendant had issued cheques, which were returned by the respondent/plaintiff upon receipt of a fresh cheque dated 11.04.2018 for Rs.4,25,950/-.

6. Upon issuance of summons in the suit, the appellant/defendant moved the aforementioned application for entering appearance and to seek leave to defend. As noticed at the outset, the application was dismissed by the trial court via the judgment and order dated 09.06.2022.

7. Mr Brijesh Sharma, learned counsel, who appears on behalf of the appellant/defendant, says that the impugned judgment and order is erroneous since triable issues have been raised before the trial court. Mr Sharma submits that therefore, the leave to defend ought to have been granted. 7.[1] In support of his plea, Mr Sharma makes the following submission:

(i) The cheque dated 11.04.2018 for Rs.4,25,950/- did not, to begin with, bear the amount. In other words, a blank cheque had been furnished to the respondent/plaintiff for security.

(ii) Because monies were paid in cash, the respondent plaintiff had returned the cheques, the details of which are set forth hereafter: Cheque no. Date Amount (Rs.) 760459 19.03.2018 33,018/- 760456 19.03.2018 64,779/- 760477 28.03.2018 40,643/- 760476 27.03.2018 60,000/- 760478 31.03.2018 60,000/- 760479 31.03.2018 49,238/- 760480 01.04.2018 60,000/- Total 3,67,648/-

8. Thus, the mainstay of the submission advanced by the appellant’s/defendant’s counsel is that because monies were paid in cash, original cheques were returned, albeit after they were dishonoured and therefore no proceedings under Section 138 of the Negotiable Instruments Act, 1881 were instituted.

9. We have heard the counsel for the appellant.

10. Unfortunately, there is no representation on behalf of the respondent/plaintiff.

11. In our view, the appellant/defendant has raised a sham defence which tantamount to moonshine.