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HIGH COURT OF DELHI
Date of Decision: 15.09.2023
BHARAT CHUGH ..... Petitioner
Through: Mr. Vikram Kumar & Ms. Anushka Kumar, Advocates.
Through: Mr. Abhishek Gupta and Ms. Sneh Lata, Advocates.
JUDGMENT
Allowed, subject to all just exceptions.
Accordingly, the present application is disposed of.
1. Thepresentpetitionfiled under Article227 oftheConstitutionofIndia impugns the order dated 08.08.2023 passed by the ADJ-11, Central District, Tis HazariCourt,Delhi (‘Trial Court’)in CS DJ No. 904/2021 titled as “Raj Kumar v. Bharat Chugh & Ors.” whereby, the Trial Court allowed the application for grant of leave to defend to the Petitioner subject to the condition that the Petitioner shall deposit the amount of cheques i.e., Rs. 12,00,000/-.
1.1. The Petitioner herein is the defendant no.1 and the Respondent herein is the plaintiff in the suit. The Petitioner is also the proprietor of the firm impleaded asdefendant no.2. Thesuit hadbeen filed by theRespondent under Order XXXVII of Code of Civil Procedure (‘CPC’) for recovery of Rs. 12,00,000/- alongwith 18% p.a. against the Petitioner.
2. Thelearned counselfor thePetitionerstates thatthePetitioner doesnot have the financial wherewithal to comply with the directions issued by the TrialCourt videorder dated08.08.2023 for depositofsum ofRs. 12,00,000/-.
2.1. He statesthatthefour(4)cheques onwhich thesuitis based weregiven by the Petitioner as a security to the Respondent and do not amount as an acknowledgment of the liability.
2.2. He states that the surety letters relied upon by the Respondent in the suit aredisputedbeingforged as they do not bear thestamp and signaturesof the Petitioner.
2.3. Hestates thatthe Respondent hasrelied uponlist of criminalcomplaint cases filed against thePetitioner. Hestatesthat thosecases havebeen filed by a common complainant and are pending trial; and therefore, no adverse inference can be drawn on account of the said cases.
2.4. He states that the amount of Rs. 12,00,000/- received from the Respondentwas invested as thesub-brokerofSMC GlobalSecurities Ltd. in thefutureand options segmenton behalfoftheRespondent. Hestatesthatthe losses weresuffered in March, 2020and theentireinvestmentwas wiped out and in fact, the Petitioner has to recover an amount of Rs. 3,925/- from the Respondent.
3. The learned counsel for the Respondent states that the Respondent herein had been investing monies directly with the Petitioner since 2011 through bankingchannels andthequantum of investment hadbeen increased progressively and the principal amount deposited stood at Rs. 12,00,000/- in the year 2018.
3.1. He statesthat asper practicebetween theparties, thePetitioner herein used to issue 12 monthlycheques in advancetowardsliability of interest and the 13th cheque towards principal amountsimultaneously. He relies uponthe ledger statements issued by the Respondent itself which duly reflects the paymentofthe interest amount andthedeductionofTax Deducted at Source (‘TDS’) in favour of the Respondent. He states that the ledger statements issued by thePetitioner wereduly enclosedwiththesurety letters. Hehasalso relied upon the Respondents Form 26AS statement downloaded from TRACES to substantiate the deposit of TDS in his favour.
3.2. He relies upon the entries in the Respondent’s bank statement held in CanaraBank and StateBank ofIndia which dulycorrespond tothe entriesfor paymentof interest reflected in the ledger statements issuedby thePetitioner herein. He states that these entries duly prove that the principal amount advanced by the Respondent to the Petitioner was as a loan on which the Respondentwasentitledtoreceive fixed incomeas interestat14% perannum.
3.3. He statesthat, therefore, theissuanceofthe cheques towardsprincipal amount is duly substantiated from the ledger statements issued by the Petitioner herein.
3.4. He states that there is no document on record evidencing that the Petitioner wasa sub-broker ofSMC GlobalSecurities Ltd. or he invested the monies advanced by theRespondentthrough SMC GlobalSecurities Ltd. for and/or on behalf of the Respondent herein.
3.5. He further states that the Petitioner has been repeatedly changing his address on the record for purposes of service.
4. This Court has considered the submissions of the parties and perused the record.
5. At the outset, it is noted thatinitially on 25.08.2023 thecounselfor the Petitioner on instructions had statedthatthePetitioner is willing to deposita sum of Rs. 6,00,000/- with the Trial Court; however, on 15.09.2023, the counselfor thePetitioner statedthatthePetitioneris unwillingto deposit the said amount. In fact, the counsel for the Petitioner stated that the Petitioner does not have the means to deposit the amount.
5.1. ThePetitioner hasnotdisputedthatheis facingmultiplelitigationfrom several parties for recovery of money including banks.
6. In thefacts ofthis case, thePetitionerdoes notdispute(i) receipt ofthe sum of Rs. 12,00,000/- from the Respondent through banking channels; (ii) issuance of the four (4) cheques on which the suit is based; (iii) payment of interest at 14% per annum to theRespondentin the past;and (iv) issuanceof monthlycheques in thepast, which evidencesregularpaymentof14% interest to the Respondent.
6.1. It is not in disputethatthesaid amountofRs. 12,00,000/-advanced by the Respondent has not been returned by the Petitioner.
7. The only defence offered by the Petitioner is that thethattheprincipal amount ofRs. 12,00,000/-received from the Respondentwas invested in the future and options segment in the stock market; which suffered losses in March, 2020wipingout thesaid investment. However, thePetitioner hasbeen unable to substantiate the said defence by any documentary evidence recording any such understanding between the parties or contemporaneous evidence which would corroborate this defence.
7.1. No correspondence between the parties recording such an understanding or proof of any investment in the name of the Respondent through SMC Global Securities Ltd. in the stock market has been placed on record.
7.2. ThecontentionofthePetitionerthattheparties hadagreed to investthe Respondent’s principal amount in the stock market and share the profits earned therefrom is also not substantiated by any cogent evidence.
7.3. In these facts the findings of the Trial Court that the ground raised by the Petitioner in his leave to defend are unconvincing suffers from no infirmity.
8. Thus, in theaforesaidcircumstances,wheretheexplanation offered by the Petitioner has not been substantiated byany evidence, whereas theclaim of the Respondent of advancing money and payment of interest stand duly evidenced by bank statements, this Courtis of the opinionthatthedirections issued by the Trial Court to the Petitioner for depositing the amount of cheques i.e., Rs. 12,00,000/-suffers from noinfirmity and in consonancewith theprincipalsettled bytheSupremeCourtin B.L. KashyapandSonsLimited vs. JMS Steels and Power Corporation and Another; (2022) 3 SCC 294.
9. Accordingly, thepresentpetitionis dismissed. Thependingapplication is disposed of.