1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE CIVIL JURISDICTION WRIT PETITION NO.6720 OF 2010 Sureshchandra Prabhudayal Agarwal Age: Adult, Occupation: Business, R/at Flat No.4, Shanta Residency, Shanti Sheela Society, Law College Road, Pune 411 004 ...Petitioner. v. Smt. Usha Raghuraman Age: 59 years, R/at: B-31, Yakshnagari, Kothrud, Pune 411 02 ...Respondent. Mr. A. M. Pungliya, adv. for the petitioner. Mr. Manoj M. Gadkari, adv. for the respondent. CORAM : J.H.Bhatia, J. DATE : 16th September, 2010 ORAL JUDGMENT: 1 Rule. Rule made returnable forthwith. Heard the learned counsel for the parties. 2 Respondent filed summary suit no.62 of 2009 in the court of Civil Judge Senior Division, Pune for recovery of an amount of Rs.15 lacs. The trial Court granted leave to the defendant/petitioner to defend the suit subject to his furnishing bank guarantee to the tune of Rs.7,50,000/-. That order is challenged in the present petition by the original defendant. 2 3 According to the plaintiff, she had advanced loan of Rs.16 lakh by four cheques dated 29.10.2001, 19.11.2001, 5.1.2002 and 1.6.2004. According to her, plaintiff had issued a cheque no.469084 dated 8.3.2008. On 12.3.2008 the cheque was presented for encashment but was returned unpaid. The defendant filed summary suit for the recovery of an amount of Rs.15 lac , which was due and also filed a complaint no.13160/2008 under Section 138 of the Negotiable Instruments Act in the Court of J.M.F.C., Pune. According to the defendant/petitioner, he had made total payment of Rs. 28,66,360/- to the plaintiff during the period from May, 2003 to April, 2008. This amount included not only the amount of loan taken by him but also the loans taken by two other members of his family and thus, whole of the loan amount has been actually repayed. According to him, post dated cheque was issued on 7.3.2006 and that cheque was presented on 12.3.2008 by that time whole of the amount was already repaid. Only small amounts were remaining, which were also paid during the period of March and April, 2008 and thus, nothing remains to be paid. 4 Heard the learned counsel for the parties. The learned counsel for the petitioner contended that in the case under Section 138 3 filed by the plaintiff, she had admitted receipt of the amount by the cheques and vouchers shown in the list, Ex.16 filed before the trial Court. That list shows payments some of which were by cheques and the remaining by cash for which vouchers were issued by the plaintiff. The learned counsel also contended that in the cross-examination in the criminal case, plaintiff had admitted most of the payments and also those vouchers. According to the learned counsel for the petitioner, he has good defence and, therefore, as per law laid down by the Supreme Court in M/s. Mechalee Engineers & Manufacturers v. M/s. Basic Equipment Corporation AIR 1977 SC 577, unconditional leave should be granted to the defendant/petitioner. On the other hand, the learned counsel for the plaintiff/respondent contended that the plaintiff had advanced loan of Rs.26 lac to three persons including the defendant in this matter. According to him payments shown by 125 vouchers and cheques as per the list, Ex.16 included payments towards the consultancy fees. He also pointed out that some alterations were made in the said vouchers by the petitioner with intention to change the nature of payments. According to him, plaintiff does not admit correctness of 115 out of 125 vouchers. According to him, the trial Court has granted conditional leave to defend and the 4 condition is not difficult as the defendant is not required to deposit money but is required only to furnish bank guarantee of half of the said amount. Therefore, petition should be dismissed. 5 After hearing the rival contentions and arguments of both the parties, I find that the payments by the cheques and vouchers are not denied by the plaintiffs. Purpose of the payments may be in dispute , but that needs to be examined and scrutinised during the trial. It appears that the parties had business connections for a long time and while the defendant admitted to have obtained loan of Rs.16 lacs as per the confirmation letter dated 31st March, 2006, dispute is only about the repayments. In M/s. Mechalee Engineers & Manufacturers (Supra), the Supreme Court observed thus in paragraph 8: “8 In Sm. Kiranmoyee Dassi v. Dr. J. Chatterjee (1945) 49 CalWN 246 at p.253, Das, J., after a comprehensive review of authorities on the subject, stated the principles applicable to cases covered by Order 37, C.P.C., in the form of the following propositions (at p.253): “(a) If the defendant satisfies the Court that he has a good defence to the claim on its merits the plaintiff is not entitled to leave to sign judgment and the defendant is entitled to unconditional leave to defend. 5 (b) If the defendant raises a triable issue indicating that he has a fair or bona fide or reasonable defence although not a positively good defence the plaintiff is not entitled to sign judgment and the defendant is entitled to unconditional leave to defend. (c) If the defendant discloses such facts as may be deemed sufficient to entitle him to defend, that is to say, although the affidavit does not positively and immediately make it clear that he had a defence, yet, shows such a state of facts as leads to the inference that at the trial of the action he may be able to establish a defence to the plaintiff’s claim the plaintiff is not entitled to judgment and the defendant is entitled to leave to defend but in such a case the Court may in its discretion impose conditions as to the time or mode of trial but not as to payment into Court or furnishing security. (d) If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend. (e) If the defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the Court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into Court or otherwise secured and give leave to the defendant on such condition and 6 thereby show mercy to the defendant by enabling him to try to prove a defence.” The Supreme Court confirmed the principles applicable to the grant of leave to defend summary suit. 6 Taking into consideration the facts and circumstances of the case, it can not be stated that the defence set up is illusory, sham or practically moon shine. Defendant appears to have good defence or atleast he has raised triable issue when he pointed out that he had made payment of more than Rs.28 lacs and the said payments are admitted by the plaintiff in different proceeding. In view of this and the principles laid down by the Supreme Court, I find that the defendant is entitled to unconditional leave to defend. Therefore, the order passed by the trial Court granting conditional leave needs to be modified. 7 For the aforesaid reasons, writ petition is allowed. Impugned order stands modified and the petitioner/defendant is granted leave to defend unconditionally. Defendant shall file written statement before the trial Court within six weeks and the trial Court shall try to expedite the hearing and disposal of the suit. 7 Rule made absolute accordingly. (J.H.BHATIA, J.)