Surender Kumar v. Manoj Kumar

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’).

3. 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. According to the Plaintiff, the Defendant bought a Mercedes car by using the amount given by the Plaintiff. The 2020:DHC:3591 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:

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: