2001 (4) TMI 935 - HC - Indian Laws

Summary

Issues:
- Suit for recovery of Rs. 5,78,931 under Order XXXVII of the Code of Civil Procedure based on dishonored cheques.
- Defendant seeking unconditional leave to defend.
- Defendant's denial of liability and grounds for leave to defend.
- Plaintiff's contentions and defense against the leave to defend application.
- Examination of the defendant's defense and the plaintiff's actions.
- Application of principles for granting leave to defend.
- Suit maintainability under Order XXXVII due to non-presentation of some cheques.
- Granting unconditional leave to defend the Suit.

Analysis:

The plaintiff filed a Suit for recovery of Rs. 5,78,931 under Order XXXVII of the Code of Civil Procedure based on dishonored cheques by the defendant. The defendant sought unconditional leave to defend, denying liability and raising various grounds. The defendant argued that the Suit was not maintainable under Order XXXVII as only four out of eleven cheques were presented, and no clause for interest was mentioned in the agreement. The defendant claimed that the cheques were without consideration and goods were not received for some bills. The plaintiff contended that four cheques were dishonored due to insufficient funds and claimed interest based on mutual agreement. The Court applied principles from Mechalec Engineering case, considering the defendant's defense not entirely sham and raising doubts about the plaintiff's actions.

The Court analyzed the plaintiff's actions, noting the lack of notice to the defendant before filing the Suit and discrepancies in the statement of account regarding payments received. Referring to the Suri and Suri Private Limited case, the Court found that the Suit might not be maintainable under Order XXXVII due to non-presentation of some cheques. As seven out of eleven cheques were not presented, the Suit under Order XXXVII was deemed not maintainable. Consequently, the defendant was granted unconditional leave to defend the Suit. The Court directed the filing of a written statement, followed by replication and document submission within specified timelines for further proceedings.

In conclusion, the Court allowed the defendant unconditional leave to defend the Suit, emphasizing adherence to the procedural schedule for filing statements and documents. The judgment highlighted the importance of presenting all relevant cheques for maintainability under Order XXXVII and considered the defendant's defense as fair and bona fide, warranting the grant of leave to defend.