Sameer Bhutani v. Kewal Krishan Kumar

judgment forthwith." of IDBI Trusteeship Services Limited Vs. Hubtown Limited (2017) 1 SCC 568, for the following reasons:

A. No particulars have been given of the legal constraint of the plaintiffs, if desirous of purchasing large quantities of rice grain for subsequently selling the same, to do so without involving defendant and/or SBFL. B. Similarly, no particulars have been given of entitlement of SBFL to do so. It has not been pleaded, what did SBFL have, to be qualified to do so, which the plaintiffs did not have. C. No dates have been given of (i) when the plaintiffs instructed the defendant / SBFL to purchase rice grain; (ii) when such rice grain was procured by SBFL, at what price and from whom;

(iii) when SBFL sold the said rice grain, for how much and to whom; and, (iv) what loss if any has been suffered by SBFL on account of stress sale of the said rice grain. D. Had there been any semblance of truth in the pleas on which leave to defend is sought, it would not have been difficult for the defendant, who has not disputed to be the Managing Director of SBFL, though now in liquidation, to furnish the said particulars. In fact, the date on which SBFL went in liquidation has also not been pleaded. E. Without the said particulars being pleaded, it has but to be held that there is no chance of the defendant succeeding, even if was to be given an opportunity to lead evidence. Even if the suit had not been under Order XXXVII, in the absence of such pleas which under the law the defendant was required to incorporate

in his pleadings, the plaintiffs would be entitled to a decree forthwith under Order XV Rule 1 of the CPC. F. Without the said particulars, the story set up is indeed a cock and bull story. G. Else, the defendant has not disputed receipt of monies from the plaintiffs and / or the rate of interest agreed which the defendant had agreed to pay to the plaintiffs. Though the defendant has pleaded that reasonable return was agreed to be given to the plaintiffs on the amounts paid by the plaintiffs to the defendant but the defendant has shied away from disclosing the rate at which such reasonable return was agreed to be given. H. It is inconceivable that had there been any semblance of truth in the version of the defendant, there would have been no reflection thereof in the income tax returns and / or books of accounts, which not only the defendant but SBFL also is statutorily required to maintain. The defendant again, has shied from making a statement in the applications for leave to defend, as to how the amounts received from the plaintiffs were reflected in the income tax returns which the defendant can be presumed to be filing and/or in the books of accounts and balance sheet of SBFL. Though SBFL is not a party to the suits but the defendant in his capacity as Managing Director of SBFL was/is in a position to disclose all the said particulars specially since the monies were routed through the defendant.

I. It is unbelievable that the plaintiffs, if had wanted to trade in rice grain would have advanced monies therefor one and a half years before they are actually claimed to have so traded. The said version of the defendant is contrary to normal human conduct and is unbelievable. J. I have in Raj Narain Vs. HBN Housing Finance Ltd. 2013 SCC OnLine Del 3847 and Renu Aggarwal Vs. Baldev Raj Sachdeva 2018 SCC OnLine Del 12299 (SCL(C) Nos.30541-30542/2018 preferred whereagainst was dismissed on 30th November, 2018) held that "if such unsubstantiated and vague pleas were to be entitled to grant of leave to defend, I fail to fathom as to in which cases, leave can be refused and if such interpretation is to be taken, the same would render the provisions of Order XXXVII of the CPC nugatory." It was further held that if on such pleas leave to defend were to be granted, the same would not serve the purpose for which Order XXXVII incorporated in the CPC, to provide summary procedure for disposal of some kind of suits and would result in leave to defend being granted qua all suits filed under Order XXXVII of the CPC, making the procedure for disposal thereof more elaborate rather than summary. Similarly, in Sasumorov Enterprises Pvt. Ltd. Vs. Odeon Builders Pvt. Ltd. 2018 SCC OnLine Del 12509 it was held that once the defendant does not dispute the transaction, amount due whereunder is claimed by the plaintiff, it is incumbent on the defendant to produce its statement of account to disprove the claim of the plaintiff and to

show the status of the said transactions in the books of the defendant statutorily required to be maintained. It was further held that the defendant, without producing the same, cannot be heard to contend that the statement of account produced by plaintiff is contrary to the books of account of the defendant and the silence of the defendant in this regard entitles the Court to, while considering the application for leave to defend, draw adverse inference against the defendant. It was yet further held that a defendant cannot be permitted to convert a summary suit to an ordinary suit, by mere denial and by contending that the onus is on the plaintiff to prove; Order XXXVII of the CPC, if so interpreted, will defeat the legislative intent and will make the procedure for disposal of suits of the class intended to be summarily decided, longer rather than shorter. It was yet yet further held that Order XXXVII is concerned with commercial suits, claim wherein is based on documents and a mere denial of the document cannot entitle the defendant to leave to defend; the defendant, in the leave to defend application, is required to plead all surrounding circumstances concerning the document, to create a doubt as to authenticity of the document and if the defendant does not plead so and/or does not produce documents which in the ordinary course of the transaction ought to be with the defendant, leave to defend has to be refused. To the same effect is Versatile Commotrade Private Limited Vs. Balraj 2019 SCC OnLine Del 6558 holding that a defendant in an Order XXXVII suit cannot be entitled to leave to defend,

merely by taking a plea and without giving particulars and filing documents as would logically be available in support of the said plea and if fails to do so, cannot be entitled to leave to defend. It was reiterated that if leave to defend suits under Order XXXVII of the CPC were to be granted merely by taking a plea, even if does not inspire confidence owing to lack of particulars and documents, there would be no case in which leave would not be granted owing to the drafting skills of the Advocates for the defendants and disposal of the suits under Order XXXVII of the CPC, instead of being summary, would be lengthier, for having additional issuance of summons for appearance, summons for judgment and filing of application for leave to defend and consideration thereof.

¶21Resultantly, the applications for leave to defend are dismissed.

¶22The claim of the plaintiffs for pre-suit interest at 15% per annum in terms of the contract between the parties has to be upheld in the face of the defendant shying away from disclosing the rate at which reasonable return was agreed to be given to the plaintiffs.

¶23The plaintiffs are thus found entitled to pre-suit interest at the contractual rate claimed.

¶24As far as pendente lite and future interest is concerned, it is deemed appropriate to award interest at the rate of 10% per annum.

¶25Axiomatically, a decree is passed (i) in favour of the plaintiff and against the defendant in CS(OS) No.462/2018 for recovery of Rs.3,40,62,500/- with interest at 10% per annum on Rs.2,50,00,000/- with

effect from date of institution of the suit till realization; and, (ii) in favour of the plaintiff in CS(OS) No.463/2018 and against the defendant therein for recovery of Rs.2,72,50,000/- with interest at 10% per annum on the sum of Rs.2,00,00,000/- from the date of institution of the suit till realization.

¶26The plaintiff in both the suits will also be entitled to costs of the suit with professional fee assessed at Rs.1,50,000/- per suit. Decree sheets be drawn up.

RAJIV SAHAI ENDLAW, J. JANUARY 24, 2019 "gsr/bs"

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 24th January, 2019. + CS(OS) 462/2018, IA No.16387/2018 (u/O XXXVII R-3(4) read with S-151 CPC) & IA No.472/2019 (u/O XXXVII R-3(5) CPC) SAMEER BHUTANI ..... Plaintiff Through: Mr. Abhijat, Mr. Rishabh Bansal & Mr. Ajay Arjun Sharma, Advs. Versus KEWAL KRISHAN KUMAR ..... Defendant Through: Mr. Narendera M. Sharma, Ms. Prachi Gupta & Mr. Abhishek Sharma, Advs. AND + CS(OS) 463/2018, IA No.16386/2018(u/O XXXVII R-3(4) read with S-151 CPC) & IA No.471/2019 (u/O XXXVII R-3(5) CPC) RAJEEV KUMAR BATRA ..... Plaintiff Through: Mr. Abhijat, Mr. Rishabh Bansal & Mr. Ajay Arjun Sharma, Advs. Versus KEWAL KRISHAN KUMAR ..... Defendant Through: Mr. Narendera M. Sharma, Ms. Prachi Gupta & Mr. Abhishek Sharma, Advs. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW 1. The applications of the sole defendant in both the suits under Order XXXVII of the Code of Civil Procedure, 1908 (CPC), for recovery of Rs.2,50,00,000/- and for recovery of Rs.2,00,00,000/- respectively, are for consideration. 2. The counsel for the plaintiffs and the counsel for the defendant state that the pleadings in both the suits and in the applications for leave to defend in both suits are identical and have argued the two suits as one only. Thus this order is in the context of facts in CS(OS) No.462/2018 but will also apply to CS(OS) No.463/2018 with the variations of the amount in claim in the two suits. 3. The counsel for the plaintiffs and the counsel for the defendant have been heard. 4. The plaintiff has instituted the suit pleading that (i) the plaintiff is an exporter of home textile (the plaintiff in CS(OS) No.463/2018 is in the business of printing and paper conversion as well as export of stationary); (ii) the defendant is a renowned businessman and is on the Board of Directors of many renowned companies such as Shakti Bhog Foods Ltd. (SBFL), Bikano Foods Pvt. Ltd., Sumesh Financiers Pvt. Ltd. etc.; (iii) sometimes in August, 2014 (April, 2015 in CS(OS) No.463/2018), the defendant approached the plaintiff and represented that he was in dire need of funds and sought a loan on friendly basis for a period of three years from the plaintiff; (iv) the plaintiff, on account of past acquaintance with the defendant and because of the illustrious background of the defendant agreed to loan a sum of Rs.50,00,000/- (Rs.2,00,00,000/- in CS(OS) No.463/2018) for a period of three years at an interest rate of 15% per annum and on 2nd September, 2014 (10th April, 2015 in CS(OS) No.463/2018) forwarded a loan of Rs.50,00,000/- to the defendant vide RTGS; (v) in October, 2014, the defendant again sought a loan of Rs.1,00,00,000/- from the plaintiff at the same rate of interest and to which the plaintiff agreed and the said amount of Rs.1,00,00,000/- also was loaned on 15th October, 2014 vide RTGS on the same terms; (vi) similarly on 23rd December, 2014, a further amount of Rs.1,00,00,000/- was loaned to the defendant via RTGS transfer; (vii) thus the plaintiff loaned a total sum of Rs.2,50,00,000/- to the defendant; (viii) the defendant immediately started paying interest at the agreed rate of interest and continued to promptly pay the same till March, 2016; (ix) after March, 2016, the defendant started defaulting in payment of interest, compelling the plaintiff to repeatedly call upon the defendant to return the entire loan with interest; (x) by the end of April, 2018, a sum of Rs.78,12,500/- (Rs.60,00,000/- in CS(OS) 463/2018) had accumulated on account of interest alone besides the principal amount of Rs.2,50,00,000/-; (xi) on 30th April, 2018, the defendant drew five cheques in the sum of Rs.2,50,00,000/- in favour of the plaintiff in part payment of his total liability of Rs.3,28,12,500/-; (xii) however all the aforesaid cheques were returned dishonoured for the reason, either of the funds in the account of the defendant being "Insufficient" or the "Drawer"s Signatures Differing"; (xiii) a notice of demand was got se