DINESH KUMAR AGGARWAL Vs. JOGINDER SETHI

JUDGEMENT

(1.) This is an application filed by defendants seeking leave to defend the suit. Plaintiff has filed a suit for recovery of Rs. 7,05,468.00 under summary procedure of Order 37 of the Code of Civil Procedure (for short 'the Code'). His case is that he is doing business as Exports Surplus Cloth Merchant and the defendant No. 1 who is doing the business of garment fabrication and export had purchased cloth from him on credit vide bills dated 4.7.1995,5.7.1995,7.7.1995 and 11.7.1995 and towards these purchases two cheques, one dated 18.8.95 for Rs. 2,11,663.00 and cheque dated 25.8.95 for Rs. 2, 82,805.00 and later on third cheque dated 22.11.1995 of Rs. 2,11,000.00 were issued. These cheques were presented for payment but were dishonoured. As a security for the payment of Rs. 7,65,000.00 due from defendant No. 1, defendant No. 2, his wife mortgaged her property No. 6/292, Geeta Colony, Delhi on 30.8.1995 agreeing to pay the same with interest (a) 36% per annum. The defendant had paid a sum of Rs. 20,000.00 towards interest and credit of another Rs. 74,000.00 was given against supply of clothes made by defendants to the plaintiff, out of which Rs. 20,000.00 were adjusted towards interest and Rs. 54,000.00 against the principal amount and Rs. 7,05,468.00 remained due which has not been paid inspite of service of two notices of demand sent by the plaintiff.

(2.) The suit having been filed under Order 37, defendants have sought leave to defend. They have taken the pleas that there is no privity of contract with defendant No. 2; the mortgage deed dated 30.8.1995 is inadmissible in evidence being insufficiently stamped and not registered, it was not executed by the defendants, the rate of interest of 36% p.a. envisaged therein is not permissible under the law, the said document is a fabricated document and was obtained fraudulently; the suit for enforcement of mortgage is not maintainable under Order XXXVII; that the first two cheques are without consideration as the goods of four bills mentioned by the plaintiff were returned to him and he had undertaken not to present the same. Plaintiff has denied these pleas.

(3.) Learned Counsel for the defendants has contended that the defence raised by defendants raises bona fide and triable issues and defendants are entitled to defend the suit. He has relied on Punjab and Sinfd Bank v. Seth Roller Flour Mills and Others, AIR 1988 Delhi 308. Whereas learned Counsel for the plaintiff has contended that the suit against defendant No. 1 is based on three dishonoured cheques issued by him a gainst goods admittedly supplied and the defendant No. 2 is liable as a surety having undertaken to pay the same under the written agreement dated 30.8.1995, the said document is a security bond and is admissible in evidence, the goods as alleged were not returned, the plea to that effect is vexatious and false and no particulars about the return of the goods have been given. The notices of demand were sent after dishonour of the cheques to which no reply was given which also belics this plea. The defence raised is frivolous, vexatious, false, bogus and sham and no bona fide triable issue arises and as such the defendants are not entitled to leave to defend. He has relied on Anchal (Binny Showroom) v. Anand Prakash & Ors., 53 (1994) Delhi Law Times 348.