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TMI Blog2013 (9) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... ined code, the claim of the plaintiff for the grant of interest wholly depends upon the terms of the agreement between the parties - The rate of interest as provided for in the agreement dated December 5, 1989 was to be 16% from the date of the debit of the amount till reimbursement. The suit under Order 37 was based on the written acknowledgment of the defendants and it was held by this Court that though the defendants specifically denied the written acknowledgment and alleged that the case of the plaintiff was based on a false document and the claim was barred by time, leave to defend the suit could be granted to the defendants only upon their furnishing a bank guarantee for the amount decreed by the trial court and in case of their failure to do so, the plaintiff would be entitled to pursue her execution application. National Small Scale Industries v. Novavision Electronics Pvt. Ltd. & Ors. [2006 (7) TMI 574 - DELHI HIGH COURT] - Not only has the agreement between the parties, but the RMAS also stipulated that the defendant no. 1 was required to make payments to the plaintiff from time to time - It was manifestly clear from the record that the defendants themselves gave a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . C. Manchanda executed Guarantee Deeds dated March 8, 1989 whereby they guaranteed to pay the dues in the event of a default by defendant no. 1. And that they also undertook to ensure complete compliance of the terms and conditions of the two agreements along with the RMAS. The plaintiff also submits that the said guarantee was a continuing guarantee and was to remain binding and operative until the terms of the said agreements had been fully complied with. The plaintiff submits that it granted assistance to defendant no. 1 as and when required by it, which has been acknowledged by the defendant no. 1 from time to time. And that the defendant no. 1 has also been acknowledging the amounts due and payable to the plaintiff. 5. The plaintiff submits that defendant no. 1 stopped paying its dues, and did not pay the same despite various letters and reminders. The plaintiff submits that with effect from April 1, 1992, it froze the defendant no. 1 s account. Thereafter, the plaintiff states that the defendant no. 1 made some payments to the plaintiff, but the substantial amounts largely remained due and outstanding in the account. The plaintiff submits that the defendant no. 1 made seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd vide its legal notice dated January 24, 2000, the plaintiff called upon defendant no. 1 to pay a sum of Rs. 69,12,023.35 due as on November 30, 1999 along with upto date interest. The plaintiff further submits that vide the same legal notice, it also invoked the guarantee deed dated March 8, 1989 executed by defendants no. 2 to 4 and the late Sh. Manchanda. The plaintiff submits that despite the notice, the defendants failed to pay the dues, and thus as per the terms of the agreement dated June 25, 1999, the defendants are liable to pay a sum of Rs. Rs. 78,49,274.89/- as on May 31, 2002 as per accounts maintained by the plaintiff in its regular course of business. Further, the plaintiff also contends that as per the terms of the agreement between the parties, it is entitled to claim interest at the rate of 16% per annum. And that the defendant no. 1 had also agreed to pay additional interest at the rate of 2% on the overdue of amounts along with processing and administrative charges, as amended from time to time. Therefore, the plaintiff submits that it is entitled to interest on the suit amount at the rate of 18% per annum as agreed between the parties. 8. The plaintiff furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication, the plaintiff has denied that the liabilities of defendant no. 1company were taken over by M/s. Morgan Tectronics Pvt. Ltd. in the year 1992. It further submits that the defendant no. 1 company still exists since defendant no. 3 has entered into the agreement dated June 25, 1999 in his capacity as one of the directors of defendant no. 1. Moreover, defendant no. 3 has also filed the supporting affidavit to his leave to defendant application in his capacity as one of the directors of defendant no .1. Further, the plaintiff also submits that it was not necessary to furnish a detailed statement of accounts to show the amount recoverable from the defendants, because the defendants themselves had admitted their liability vide agreement dated June 25, 1999, on the basis of which the present suit has been filed. 13. Defendant no. 5, Smt. Nirmal Kanta Manchanda, who is the widow of Late Sh. P. C. Manchanda, submits that the plaintiff never served any legal notice of demand, calling upon her late husband, during his lifetime, to make the payment of the amount due by defendant no. 1, for which Sh. Manchanda had stood as one of the guarantors. And thus, she contends that the plainti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of limitation as the principal borrower had been acknowledging and accepting liability towards the plaintiff from time to time. 17. I have heard the learned counsel for the parties, and perused through the documents placed on record including the various agreements and undertakings executed between the parties. At the very outset, it is unequivocally clear to me that, not only the agreement between the parties, but the RMAS also stipulates that the defendant no. 1 was required to make payments to the plaintiff from time to time. The answering defendants do not contest their default under the agreements dated March 8, 1989, December 5, 1989 as well as the RMAS. The answering defendants only seem to allege the legality of the Acknowledgement Deed/Agreement dated 25 June, 1999. I am of the opinion that this defense is frivolous and far from being substantive. 18. The amount due as on March 31, 1992 was Rs. 27,24,945.59/- (Rupees Twenty Seven Lakh, Twenty Four Thousand, Nine Hundred and Forty Five And Paise Fifty Nine only), whereafter the account was freezed on April 1, 1992. Thereafter, the defendant no. 1 acknowledged its liability of this amount along with interest thereon vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was in this backdrop that the agreement dated 25th June, 1999 was entered into between the parties. Further, as per the terms of the Guarantee Deeds executed by the guarantors as well as the acknowledgment agreement dated June 25, 1999, the individual guarantees continued to subsist until all the dues were fully paid to the plaintiff. Having failed to abide by the terms of the agreement dated 25th June, 1999, it does not now lie in the mouth of the defendants to allege that they have a substantial defense to the suit. 23. The defendants have also not been able to that the said agreement is forged and fabricated. Moreover, as per Clause 6 of the agreement dated June 25, 1999, the defendants have also extended the Guarantee Deeds till such time as the entire payment due was made to the plaintiff. Furthermore, as per Clause 5 of the Guarantee Deeds, the guarantee was not affected by the death of any of the guarantors. Therefore, the defense of the Guarantee Deeds being inoperative or barred by time is not legally tenable. 24. This Court, in similar case with the same plaintiff and some of the guarantors in the suit had made some pertinent observations. In National Small Scale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The legal principles relating to the grant of leave to contest a summary suit have been evolved by a catena of decisions. The Supreme Court in the case of Mechalec Engineers and Manufacturers v. Basic Equipment Corporation clearly held that where the defendant sets up a defense which is illusory, sham or practically a moonshine, then ordinarily the plaintiff is entitled to a judgment. To the same effect are the decisions in Aganall Traders Ltd. v. Shyam Ahuja , Minerals and Metals Trading Corporation Ltd. v. Dimple Overseas Ltd. 2001 V AD (DELHI) 206, Reliance Industries Ltd. v. Imperial Pigments (P) Ltd.2003 III AD (DELHI) 278, Mrs. Raj Duggal v. Ramesh Kumar Bansal , Goyal Tax Fab Pvt. Ltd. v. Anil Kapoor 2001 IV AD (DELHI) 741 and Daya Chand Uttam Prakash Jain v. Santosh Devi Sharma 1997 III AD (Delhi). In the last mentioned case, the suit under Order 37 was based on the written acknowledgment of the defendants and it was held by this Court that though the defendants specifically denied the written acknowledgment and alleged that the case of the plaintiff was based on a false document and the claim was barred by time, leave to defend the suit could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch reads as follows: That the party of the Second Part agrees and undertakes to redeem the material from pledge by clearing the material against payment of the cost of material, interest, service charge and all other charges incurred by the party of the First Part in terms of this letter with interest thereon as agreed herein within 100 days from the date of storage of material. In the event of seeking extension of time by the party of the Second Part of removing the material against payment, it shall be lawful for the party of the First Part at its sole discretion to grant such extension on condition that the party of the Second Part shall be liable to pay as agreed damages for delay in redemption, additional interest of 2% over and above the agreed interest @ 16% on the amount due and payable in terms of this letter for the period for which the extension of time is allowed to the party of the Second Part on its application in that behalf. It is expressly agreed that in the event of its applying for extension of time it shall not be entitled to rebate on service charges provide for hereinbefore. 27. In view of the aforesaid findings, it is apparent to me that the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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