M/S. V.K. ENTERPRISES AND ANR.versusM/S. SHIVA STEELS

                    [2010) 9 S.C.R. 647


            M/S. V.K. ENTERPRISES AND ANR.                    A
                              v.
                    M/S. SHIVA STEELS
       (Special Leave Petition (C) No. 25144 of 2009)

                     AUGUST 04, 2010
                                                              B
        [ALTAMAS KABIR AND A.K. PATNAIK, JJ.)

        Code of Civil Procedure, 1908: 0.37 - Object - Leave
  to defend- Grant of- Suit by respondent under 0.37, r.1 and
  2 for recovery of cheque amount alleging that cheque issued C
  by petitioner in 2006 was dishonoured - Application filed by
  petitioner u/ 0.37, r.3, for leave to defend on the ground that
  the cheque was issued in 2000 and the matter was settled
  between the parties and that the year "2006" was interpolated
  in the cheque and presented in bank with dishonest intention· D
  - Dismissal of application by trial court as also by High Court
· - Interference with - Held: Not called for - There was no sign
  of interpolation - A/legation of attempt to erase any of the
  writings or figures on the cheque was without any foundation
  - Ledger book produced by respondent proved that E
  transaction in respect of which the cheque in question was
  issued by the petitioner was settled - Defence raised by the
  petitioner did not make out any uiable issue and courts below
   dealt with the matter correctly - Summary procedure -
   Constitution of India, 1950 - Article 136.
                                                               F
     A suit was filed by the respondent under Order 37
 Rule 1 and 2, CPC against the petitioner for recovery of
 money. The allegation in the suit was that the petitioner
 had purchased iron sheets on credit from the respondent
 and a sum of Rs.4.42 lacs became due and payable by G
 petitioner to the respondent. A cheque was issued on
 11.10.2006 by the petitioner but on presentation by
 respondent, the cheque was dishonoured. The petitioner
 entered appearance in the suit and filed an application
                           647                             H
    648      SUPREME COURT REPORTS             [2010] 9 S.C.R.

A under Order 37 Rule 3, CPC for seeking leave to defend.
  In the said application, the petitioner contended that a
  cheque was issued on 11th October, 2000, but the date
  of the cheque was, thereafter, interpolated and altered
  from 11.10.2000 to 11.10.2006, and presented to the bank
B by the respondent. It was also stated therein that apart
  from the signature on the face of the cheque and the date
  mentioned therein, the rest of the cheque was blank and
  an attempt was made by the respondent to misuse the
  same with the intention of withdrawing or
C misappropriating the amount, subsequently inserted in
  the cheque. It was ultimately stated in the application that
  the respondent had concocted the story and the bills
  placed on record by the respondent were also forged as
  the petitioner had neither purchased any material nor
  counter-signed the last 4 bills as per the details provided.
0
  The trial Court dismissed the application for leave to
  defend. High Court upheld the order of trial court. The
  order of High Court was challenged in the instant special
  leave petition.

E         Dismissing the special leave petition, the Court

       HELD: Order 37 was included in the Code of Civil
  Procedure in order to allow a person, who has a clear
  and undisputed claim in respect of any monetary dues,
F to recover the dues quickly by a summary procedure
  instead of taking the long route of a regular suit. The
  Courts have consistently held that if the affidavit filed by
  the defendant discloses a triable issue that is at least
  plausible, leave should be granted, but when the defence
  raised, appears to be moonshine and sham,
G unconditional leave to defend cannot be granted. What
  is required to be examined for grant of leave is whether
  the defence taken in the application under Order 37 Rule
  3 C.P.C. makes out a case, which if established, would

H
  V.K. ENTERPRISES AND ANR. v. SHIVA STEELS           649


be a plausible defence in a regular suit. In matters relating A
to dishonour of cheques, the said principle becomes
more relevant as the cheques are issued normally for
liquidation of dues which are admitted. An examination
of the photocopy of the cheque shows that the
allegations made in the application filed by the petitioner B
under Order 37, Rule 3 C.P.C. were without any
foundation. There was no sign of any interpolation
having been made on the cheque and in particular, the
date thereof where the figure '10' in Roman numericals
was not even inserted. There were no signs of attempt c
to erase any of the writings or figures on the cheque to
support the allegations made on behalf of the petitioner.
The defence would have been plausible if there had been
some substance in the allegations relating to the
interpolation of the cheque, and the ledger accounts 0
relating to the dues, demonstrated that such dues had
been settled between the parties. Further, the issuance.
of the cheque was never disputed on behalf of the
petitioner whose case was that the same was given on
account of security and not for presentation, and an E
attempt was made to misuse the same by dishonest
means. Against such cogent evidence produced by the
 respondent, there was only an oral denial which was not
supported by any corroborative evidence from the side
of the petitioner. On the other hand, the ledger book
 maintained by the respondent and settled by the F
 petitioner was produced on behalf of the respondent in
 order to prove the transactions in respect of which the
 cheque in question was issued by the petitioner. The
 defence raised by the petitioner does not make out any
triable issue and the High Court, dealt with the matter G
 correctly and justifiably rejected the petitioner's
 application under Order 37, Rule 3 C.P.C. and the same
 does not call for interference by this Court. [Paras 7 to
 10) [652-E-H; 653-A-H]
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    650      SUPREME COURT REPORTS                  [2010] 9 S.C.R.


A       CIVIL APPELLATE JURISDICTION : SLP (Civil) No.
    25144 of 2009.
        From the judgment and order dated 20.05.2009 of the
    High Court of Delhi at New Delhi in RFA No. 147 of 2009.
        Aloke Kr. Bhattacharya, S. Mukherjee and Dharam Bir Raj
8
    Vohra for the Petitioners.
        Anil Mittal, V. Sishant Gupta and Dr. Kailash Chand for the
    Respondent.
          The Judgment of the Court was deliver~d by
C       ALTAMAS KABIR, J. 1. The short point involved in this
  Special Leave Petition is whether the learned District and
  Sessions Judge, Delhi, had rightly dismissed the Petitioner's
  application under Order XXXVll Rule 3, read with Section 151
  of the Code of Civil Procedure (C.P.C.) for leave to defend the
D suit filed by the Respondent under Order XXXVll for recovery
  of Rs.6,68,513/-, together with interest @18% per annum and
  pendente lite and future interest.
          2. On account of business transactions, the Petitioner
    purchased iron sheets on credit from the Respondent on
E   account whereof a sum of Rs.4,42,724/- became due and
    payable by the Petitioner to the Respondent. The Petitioner
    settled the accounts and acknowledged the liability in respect
    of the said amount. Thereafter, the Petitioner issued a cheque
    for a sum of Rs.3,50,000/- dated 11th October, 2006, towards
F   part-payment of the said dues which, according to the
    Respondent, was signed by one Pyare Lal, the sole proprietor
    of the Petitioner-firm. On presentation, the said cheque was
    dishonoured and a legal notice was, therefore, sent by the
    Respondent to the Petitioner for payment of the outstanding
G   dues. Since, despite such notice the Petitioner failed to pay the
    said dues, the Respondent filed Suit No.57 of 2008 in the Court
    of District and Sessions Judge, Delhi, under Order XXXVll
    Rules 1 and 2 C.P.C. The Petitioner entered appearance in the
    Suit and filed an application under Order XXXVll Rule 3 C.P.C.,
H   which was dismissed, as mentioned hereinabove.
  V.K. ENTERPRISES AND ANR. v. SHIVA STEELS                 651
              [ALTAMAS KABIR, J.]
     3: In the said application for leave to defend the suit, the   A
Petitioner contended that the cheque in question had been
handed over by the Petitioner to the Respondent-firm by way
of security only and not for presentation. Furthermore, the said
cheque was issued by the Petitioner on 11th October, 2000,
but the date of the cheque was, thereafter, interpolated and        B
altered from 11.10.2000 to 11.10.2006, and presented to the
Bank. It was also indicated that apart from the signature on the
face of the cheque and the date mentioned therein, the rest of
the cheque was blank 'and an attempt was made by the
Respondent to misuse the same with the intention of                 c
withdrawing or misappropriating the amount subsequently
inserted in the cheque. A specific allegation was also made to
the effect that the date of the cheque issued on behalf of the
Petitioner firm for the month of October was always written with
the Roman numerical 'X', which was altered and shown in
                                                                    0
ordinary numericals, which clearly establish the fact that the
cheque in question had been doctored to obtain the benefit
thereof six years after the same had been issued;
    4. In the said application, it was also denied that any
cheque of such a large amount had been issued to the                E
Respondent after 1992 in order to bolster the case of the
Petitioner that the cheque in question had been forged. It was
ultimately stated in the complaint that the Resppndent had
concocted the story and the Bills placed on record by the
R5!spondent were also forged as the Petitioner had neither
                                                                    F
pu_r~hased any material nor counter-signed the last 4 bills as
per t~e details provided.
      5. Before us, the same submissions were reiterated and
it was submitted that the learned trial court had wrongly
dismissed the Petitioner's application for leave to defend the      G
suit, although, several triable issues had been raised. It was
contended that the denial with regard to the validity of the
cheque and receipt of goods, were triable issues, which could
be decided only upon appraisal of the evidence adduced by
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    652     SUPREME COURT R~PORTS                  [2010] 9 S.C.R.


A the parties. It was also urged that since the cheque was issued
  in 2000, the claim of the Respondent was also barred by
  limitation. It was submitted that not only had the learned District
  and Sessions Judge committed an error in rejecting the
  Petitioner's application under Order XXXVll Rule 3 C.P.C., but
B that the High Court had also erred in affirming the said order.
       6. On the other hand, it was the case of the Respondent
  that the order of the High Court did not call for interference
  having regard to the nature of the disputes raised by the
  Petitioner before the trial court. It was submitted that except for
C a bare denial of the signatures on the ledger accounts settled
  by the Petitioner and alleging that the cheque issued had been
  forged, there is nothing concrete in the Petitioner's application
  under Order XXXVll Rules 1 and 2 read with Section 151
  C.P.C. to indicate any triable issue. Even as far the forgery
o alleged in respect of the cheque is concerned, the hollowness
  of such an allegation would be revealed from the cheque itself
  which does not show any signs of interpolation in any part
  thereof.
        7. On consideration of the submissions made on behalf
E of the respective parties and on an examination of the
   photocopy of the cheque itself, it will be apparent that the
   allegations made in the application filed by the Petitioner under
   Order XXXVll Rule 3 C.P.C. were without any foundation. As
   submitted on behalf of the Respondent, there is no sign of any
F interpolation having been made on the cheque and in particular,
 . the date thereof where the figure '1 O' in Roman numericals had
   not e¥en been inserted. There are no signs of attempt to erase
   any of the writings or figures on the cheque to support the
   allegations made on behalf of the Petitioner.
G         8. Order XXXVll C.P.C. has been included in the Code of
    Civil Procedure in order to allow a person, who has a clear and
    undisputed claim in respect of any monetary dues, to recover
    the dues quickly by a summary procedure instead of taking the
    long route of a regular suit. The Courts have consistently held
H
  V.K. ENTERPRISES AND ANR. v. SHIVA STEELS                  653
                   [ALTAMAS KABIR, J.]
that if the affidavit filed by the defendant discloses a triable     A
issue that is at least plausible, leave should be granted, but
when the defence raised appears to be moonshine and sham,
unconditional leave to defend cannot be granted. What is
required to be examined for grant of leave is whether the
defence taken in the application under Order XX.XVII Rule 3          B
C.P.C. makes out a case, which if established, would be a
plausible defence in a regular suit. In matters relating to
dishonour of cheques, the aforesaid principle becomes more
relevant as the cheques are issued normally for liquidation of
dues which are admitted. In the instant case, the defence would      c
have been plausible had it not been for the fact that the
allegations relating to the interpolation of the cheque is without
substance and the ledger accounts relating to the· dues, clearly
demonstrated that such dues had been settled between the
parties. Moreover, the issuance of the cheque had never been         0
disputed on behalf of the Petitioner whose case was that the
same h,ad been given on account of security and not for
presentation, but an attempt had been made to misuse the
same by dishonest means.
     9. Against such cogent evidence produced by the plaintiff/      E
respondent, there is only an oral denial which is not supported
by any corroborative evidence from the side of the Petitioner.
On the other hand, the ledger book maintained by the
Respondent and settled by the Petitioner had been produced
on behalf of the Respondent in order to prove the transactions       F
in respect of which the cheque in question had been issued by
the Petitioner.
       10. In our view, the defence raised by the Petitioner does
not make out any triable issue and the High Court, has dealt
with the matter correctly and has justifiably rejected the           G
Petitioner's application under Order XXXVll Rule 3 C.P.C. and
the same does not call for interference by this Court. The
Special Leave Petition is, therefore, dismissed, but without any
order as to costs.
D.G.                                            SLP dismissed.       H