ANIL GUPTA Vs. SANT RAM DHUPER AND CO

JUDGEMENT

(1.) Anil Gupta filed a suit to recover Rs. 1,91,690.65 from Messrs Sant Ram Dhuper & Co., and its sole proprietor Sant Ram Dhuper under the provisions of 0. 37 of the Code of Civil Procedure on 25-5-1976. It was submitted by him that Sant Ram Dhuper had executed a promissory note on 16-6-1975 in favour of the plaintiff in the sum of Rs. L66,518 for consideration and this promissory note was to bear interest at the rate of 15 per cent per annum, payable with monthly rests. The defendants made no payments to meet their liability on demand, and by the 25th May, 1976, a sum of Rs. 25,172.65 fell due as rest. Hence this, suit for Rs. 1,91,690.65 with costs and future interest calculated at the rate of 1A per cent per annum with monthly rests.

(2.) On receipt of the notice of the suit the defendants moved an application under R. 3 of O. 37 of the Code of Civil Procedure (I. A. No. 1434/76) for leave to appear and defend the suit. It was submitted that Yogesh C. Gupta, father of the plaintiff, had advanced a loan of Rs. 1,00,000 to defendant No. 1 on 3-8- 1970 and Rs. 6,000 on 17-11-1970 in the name of the plaintiff and this loan had been secured against pledge of diverse shares. The defendants paid back a sum of Rs. 70,000 to the plaintiff on 13-7- 1972 and received a sum of Rs. 48,500 on 5-9-1972 in his account from his father, as principal. The plaintiff claimed compound interest firstly at the rate of 1% per month with monthly rests and later at the rate of 1% per month so that on 15-6-1975 a sum of Rs. 1,66,518 was shown due to him in the account which the defendants were maintaining. On 16-6-1975 the plaintiff procured a promissory note for the said sum from the defendants through his father. The provisions of the Punjab Relief of Indebtedness Act, 1934, as amended up-to-date, were made applicable to the Union Territory of Delhi vide Government of India Notification dated 8-6-1956 and in consequence thereof certain changes were brought about in S. 3 of Usurious Loans Act, 1918. Under the last mentioned provision a creditor cannot recover interest at a rate higher than 7% per annum simple interest or more than two per centum over the Bank rate, whichever is higher in the case of a secured loan or 12 per centum simple interest in the case of an unsecured loan. The loan advanced to the defendants had remained a secured loan for one year and thereafter it became unsecured loan although the plaintiff still had with him life policies of defendant No. 2 of the total value of Rs. 40,000 assigned in his favour as security. On 16-6-1975 the plaintiff could recover legally Rs. 84,500 as principal and Rs. 47,097 as interest, Rs. 1.31,597 in all, and even if interest be calculated for the first year as well at 12% per annum the total sum due to him was Rs. 1.36,597. The promissory note in suit was thus without consideration, except for Rupees 1,36,597. Moreover, under S. 30 of the Punjab Relief of Indebtedness Act the principle of 'Damdupat' was applicable to a debt advanced in Delhi and as such the plaintiff could not claim anything beyond double the amount of Rs. 84,500 i. e. Rs. 1,69,000. Therefore, issues of law and facts deserving to be tried arose in the case and the defendants were entitled to get leave to appear and defend the suit.

(3.) In his reply the plaintiff did not offer any adequate answer to the two crucial points raised by the defendants. According to the defendants interest could be charged by the plaintiff for the first year of the loan at the rate of 7% per annum and subsequently at, the rate of 12% per annum because of the provisions of S. 3 of the Usurious Loans Act as amended by the Punjab Relief of Indebtedness Act and to this contention the plaintiff has responded by saying that the relevant paragraph contains pleadings relating to law and therefore needs no reply. There is again no definite denial to the defendants' averment that the sum of Rs. 1.66,518 for which the promissory note was executed comprised interest calculated against the dictates of the law and all what has 'been said is that the sum stood in favour of the plaintiff against the defendants. Vide R. 4, Chapter XV of the Delhi High Court (Original Side) Rules the Court shall upon application by the defendant give leave to appear and to defend the suit, upon affidavits which disclose such facts as would make it incumbent on the holder to prove consideration, or such other facts as the Court may deem sufficient to su pport the application. It is not disputed that the affidavit submitted by the defendants does unravel facts as put on the plaintiff the burden of establishing not an inconsequential part of the consideration. In consequence the defendants must get the Court's permission to appear and defend the suit. At this stage when the defendants ask for leave to appear and defend the suit, the Court will not weigh the substance their defence embodies; that has to be done in its proper time. What is to be seen at such a moment is whether the affidavit put in by the defendant gives rise to a triable issue. If the plea put forward by him is real though just plausible he will be taken to have earned the leave. The defendant need not make out a case as should warrant a sure success in the end. It does not matter whether the defence is based on law or equity. There is no rigid rule as a matter of fact to guide the Courts where and why the leave is to be granted or refused. Each case has to seek its determination from its peculiar facts and circumstances. It was held by the Supreme Court in Santosh Kumar v. Bhai Mool Singh (AIR 1958 SC 321), quoted for the defendants, that at the stage of leave all that the court has to determine is whether if the facts alleged by the defendant are duly proved they will afford a good or even a plausible answer to the plaintiff's claim and once the court is satisfied about that leave cannot be withheld. There can be no two opinions about this principle.