C.R. No. 1640 of 2011 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.R. No. 1640 of 2011 Date of Decision: 3.10.2011 Dhrenderpal Gupta ....Petitioner. Versus Mahipal ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. C.B. Goel, Advocate for the petitioner. Mr. V.D. Sharma, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1. This order shall dispose of two petitions bearing CR Nos. 1640 and 1641 of 2011 as according to the learned counsel for the parties identical facts are involved therein. For brevity, the facts are being taken from CR No. 1640 of 2011. 2. The petitioner-landlord feeling aggrieved against the order dated 8.1.2011 passed by the trial court granting leave to defend to the respondent has approached this Court under Article 227 of the Constitution of India seeking setting aside of the said order. 3. Briefly stated, the facts necessary for adjudication of the present petition are that the plaintiff-petitioner filed a suit under Order 37 of the Code of Civil Procedure (in short “the Code”) for recovery of Rs.1,11,780/- on account of arrears of rent, house tax and interest from C.R. No. 1640 of 2011 -2- 1.11.2008 to 30.9.2010 on 5.10.2010. Notice of the said suit was issued for 16.11.2010 and the defendant-respondent was served on 8.10.2010. The defendant did not appear in the suit despite due service within ten days and, therefore, the plaintiff-petitioner filed an application on 20.10.2010 for decreeing the suit due to non-appearance of the defendant within ten days from the date of service of notice. The said application was ordered by the trial court to be put up with the file. The trial court, however, did not pass a decree in terms of the provisions of Order 37 of the Code even though the defendant-respondent did not file an application for leave to defend within ten days of the service of the notice of the suit as provided under Order 37 Rule 3 of the Code. On 16.11.2010, the defendant-respondent filed an application for leave to defend. The plaintiff contested the said application by filing reply. The trial court vide order dated 8.1.2011 allowed the application filed by the defendant-respondent and granted leave to defend the suit. Hence, the present petition. 4. Learned counsel for the petitioner submitted that the suit was filed on 5.10.2010 and the defendant was served on 8.10.2010 and he did not put in appearance and file application for leave to defend within ten days therefrom. An application for passing a decree in terms of the suit was filed on 20.10.2010. The defendant put in appearance in the main suit and the application on 16.11.2010 and filed an application for leave to defend. He submitted that the order impugned herein was erroneous on two grounds, namely, (a) that the application for leave to defend had been filed beyond the period of 10 days of service of notice of the suit which was personally served on 8.10.2010 in which the C.R. No. 1640 of 2011 -3- defendant had failed to put in appearance in time and (b) that the plaintiff-petitioner had filed ejectment petition on the ground of non- payment of rent before the Rent Controller on 9.3.2010, wherein, it was stated by the defendant that he did not possess the amount of provisional rent and had sought time of three months for making the payment which was rejected by the Rent Controller vide order dated 4.9.2010. The said order was challenged before this Court by filing CR Nos. 4480 and 4493 of 2010 which were dismissed by this Court vide order dated 21.7.2010. It was argued that there was no defence to offer by the defendant-respondent and the leave to defend has been granted which would delay the proceedings as the defendant had not paid any amount from 1.11.2008 till vacation of the premises on 30.9.2010 as he was liable to pay the arrears of rent, house-tax and interest for the said period. 5. Learned counsel for the respondent, on the other hand supported the order passed by the trial court. He submitted that Order 37 of the Code had no applicability to the present case. It was also urged that the defendant had an arguable case and the trial court had rightly allowed leave to defend as the rent note was a forged document. He relied upon the judgment of this Court in Nand Kumar v. Sheela Devi, 1996 (3) PLR 756 to contend that the summons which were initially received by the defendant were not accompanied by annexures and, therefore, no decree could be passed on that basis. 6. Rebutting the aforesaid arguments, learned counsel for the petitioner reiterated his stand and submitted that under sub-rule (2) of rule 1 of Order 37 of the Code, the case of the plaintiff was covered C.R. No. 1640 of 2011 -4- under sub-clause (b) thereof. 7. I have heard learned counsel for the parties and have perused the record with their assistance. 8. The issue relating to validity of impugned order granting leave to defend to the defendant-respondent may be examined first. 9. The relevant portion of Order 37 of the Code for adjudicating the present controversy reads thus:- “1. Courts and classes of suits to which the Order is to apply.- (1) XX XX XX (2) Subject to the provisions of sub-rule (1), the order applies to the following classes of suits, namely: (a) suit upon bills of exchange, hundies and promissory notes; (b) suits in which the plaintiff seeks only to recover a debt or liquidated demand in money payable by the defendant, with or without interest arising,-- (i) on a written contract; or (ii) on an enactment, where the sum sought to be recovered is a fixed sum of money or in the nature of a debt other than a penalty; or (iii) on a guarantee, where the claim against the principal is in respect of a debt or liquidated demand only. C.R. No. 1640 of 2011 -5- 2. Institution of summary suits.- XX XX XX XX 3. Procedure for the appearance of defendant.- (1) In a suit to which this Order applies, the plaintiff shall, together with the summons under rule 2, serve on the defendant a copy of the plaint and annexures thereto and the defendant may, at any time within ten days of such service, enter an appearance either in person or by pleader and, in either case, he shall file in court an address for service of notice on him. (2) to (4) XX XX XX XX (5) The defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defend may be granted to him unconditionally or upon such terms as may appear to the court or judge to be just: PROVIDED that leave to defend shall not be refused unless the court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious: C.R. No. 1640 of 2011 -6- PROVIDED FURTHER that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him, leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in court. (6) & (7) XX XX XX XX 4 to 7. XX XX XX XX 10. A plain reading of sub-rule (2) of Rule 1 of Order 37 of the Code provides for classes of suits to which this order applies. According to it, the Order 37 applies where the suit is upon bills of exchange, hundies, promissory notes or where the plaintiff seeks to recover a debt or liquidated demand in money, with or without interest on account of a written contract, or on an enactment or on a guarantee. The claim of the plaintiff-petitioner being based on rent note, i.e. a written contract would fall within the ambit of Order 37 of the Code. 11. Further sub-rule (1) of Rule 3 of Order 37 of the Code prescribes that the defendant shall be served with the summons under sub-rule (2) along with a copy of the plaint and the annexures thereto and the defendant may enter appearance in person or by pleader within ten days of such service and shall file his address for service of notice on him. Sub-rule (5) of Rule 3 of Order 37 of the Code provides that the defendant may at any time within a period of ten days from the date of service of such summons for judgment apply for leave to defend such suit which can be granted to him unconditionally or upon such terms as the Court may think just. Proviso to the aforesaid sub-rule stipulates C.R. No. 1640 of 2011 -7- that the leave to defend shall not be refused unless a satisfaction is arrived at by the Court that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious. It has also been provided that where the part amount is accepted by the defendant, leave to defend shall not be granted unless the admitted amount is deposited by the defendant in the Court. 12. The Apex Court in M/s Mechalec Engineers & Manufacturers v. M/s Basic Equipment Corporation, AIR 1977 SC 577 had laid down the principles for grant of leave to defend in a suit filed under Order 37 of the Code. They are:- “(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. (b) If the defendant raises a triable issue indicating that he has a fair or bonafide 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, C.R. No. 1640 of 2011 -8- 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 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 thereby show mercy to the defendant by enabling him to try to prove a defence.” 13. Adverting to the facts of the present case, the salient features may be noticed. The defendant had not denied the occupation of the premises for the period for which arrears of rent, house tax and interest has been claimed, i.e. 1.11.2008 to 30.9.2010 as petition for ejectment had been filed against him in which order of eviction had C.R. No. 1640 of 2011 -9- been passed. Further, as averred by the plaintiff-petitioner, the ground of ejectment was non-payment of rent in which an application dated 9.3.2010 had been filed by the respondent wherein it was stated that he did not possess the amount of provisional rent on account of off season of business and had sought three months time for making the payment. The respondent having failed in discharging his liability of payment of rent of the premises was ordered to be evicted on 4.9.2010 which order was affirmed by this Court in the revision petition filed by him. Learned counsel for the defendant-respondent was unable to refer to any prima facie material to show that the amount claimed by the plaintiff-petitioner had been paid by the defendant-respondent either under the Rent Act or under civil law for use and occupation of the demised premises. Still further, a perusal of the application for leave to defend shows that neither the rate of interest nor the amount claimed by the plaintiff- petitioner had been disputed except to allege that the rent note was forged. The only plea of the defendant is that he has an arguable case and, therefore, leave to defend has rightly been granted. It is not that every or all pleas even if they are frivolous would entitle a person to leave to defend unless prima facie there is some substance in the same. On a query being put to the learned counsel for the respondent that in case the rent note was forged, how the possession of the defendant could be justified, the learned counsel was again unable to give any satisfactory reply. In the absence of any prima facie material to substantiate that the petitioner had made payment of the amount either by way of rent or mense profits for the period he had occupied the premises, leave to defend granted by the trial court was not justified. C.R. No. 1640 of 2011 -10- The only plea regarding forged rent note could not be a substantial defence entitling the defendant to leave to defend. In such a situation, the para meters laid down by the Apex Court does not entitle the defendant to leave to defend just to delay the decision of the civil suit. 14. Since, the second ground raised by the learned counsel for the petitioner that there existed no defence for the defendant to offer and the plaintiff was entitled to sign judgment has been accepted, the first ground relating to leave to defend having been filed beyond period of ten days from the date of service, i.e., 8.10.2010 loses its significance. Equally, the plea of the defendant-respondent that the summons were accompanied by plaint but were without annexures and, therefore, no decree could be passed also loses its importance and, thus, no support can be derived from the decision reported in Nand Kumar's case (supra) on which reliance has been placed by him. 15. In view of the above, the revision petitions are allowed and the orders dated 8.1.2011 are set aside. The applications for leave to defend are accordingly dismissed. October 3, 2011 (AJAY KUMAR MITTAL) gbs JUDGE C.R. No. 1640 of 2011 -11- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.R. No. 1641 of 2011 Date of Decision: 3.10.2011 Dhrenderpal Gupta ....Petitioner. Versus Mahipal ...Respondent. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. C.B. Goel, Advocate for the petitioner. Mr. V.D. Sharma, Advocate for the respondent. AJAY KUMAR MITTAL, J. For orders, see C.R. No. 1640 of 2011 (Dhrenderpal Gupta v. Mahipal). October 3, 2011 (AJAY KUMAR MITTAL) gbs JUDGE