REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION(C) NO.25144 OF 2009

Ms. V.K. Enterprises              … Petitioner Vs.

M/s. Shiva Steels … Respondent

J U D G M E N T

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 XXXVII Rule 3,  

read  with  Section  151  of  the  Code  of  Civil

Procedure  (C.P.C.)  for  leave  to  defend  the  suit  

filed  by  the  Respondent  under  Order  XXXVII  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  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  

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  

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to the Petitioner for payment of the outstanding  

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 XXXVII Rules 1  

and 2 C.P.C.  The Petitioner entered appearance in  

the  Suit  and  filed  an  application  under  Order  

XXXVII  Rule  3  C.P.C.,  which  was  dismissed,  as  

mentioned hereinabove.    

3. In the said application for leave to defend the  

suit, the 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  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  

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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  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  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 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  Respondent  had  

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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.

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  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 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  

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XXXVII Rule 3 C.P.C., but 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 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 XXXVII Rules 1 and 2 read with Section  

151 C.P.C. to indicate any triable issue.  Even as  

far the forgery 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.

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7. On  consideration  of  the  submissions  made  on  

behalf  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  

XXXVII Rule 3 C.P.C. were without any foundation.  

As submitted on behalf of the Respondent, there is  

no sign of any interpolation having been made on  

the  cheque  and  in  particular,  the  date  thereof  

where the figure ‘10’ in Roman numericals had not  

even 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.

8. Order XXXVII 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  

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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,  

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 XXXVII Rule 3 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 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  

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had been settled between the parties. Moreover, the  

issuance of the cheque had never been disputed on  

behalf of the Petitioner whose case was that the  

same had 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/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  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  

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the High Court, has dealt with the matter correctly  

and  has  justifiably  rejected  the  Petitioner’s  

application under Order XXXVII 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.  

…………………………………………J. (ALTAMAS KABIR)

…………………………………………J. New Delhi    (A.K. PATNAIK) Dated: 04.08.2010

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