IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

C  IVIL APPEAL NO.5527 OF 2002   

Naresh Bhutani & Anr.                                 …Appellants

VERSUS

M/s.A.G.Chit Fund & Finance Co. & Anr.           …Respondents

O R D E R

This  appeal  is  directed  against  a  judgment  and  order  

dated 27th of August, 2001 passed by the High Court of Delhi at  

New Delhi in CR No.1095 of 2000 and CM Nos. 2736 & 2828 of  

2000 by which the High Court  had affirmed the order  of  the  

Commercial Civil Judge, Delhi dated 17th of February, 1998 by  

which the Commercial Civil Judge, Delhi had declined to grant  

leave to defend to the appellant  and decreed the suit  of  the  

respondent  against  him under Order 37 of  the Code of  Civil  

Procedure  and  also  directed  the  appellant  to  pay  a  sum of  

Rs.69,225/-  with  interest  @  18%  per  annum  from  17th of  

December, 1993 till the date of realisation and the cost of the  

suit.  

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We have heard the learned counsel for the parties and  

examined the impugned order of the High Court as well as the  

order  of  the  Commercial  Civil  Judge,  Delhi.  Before  the  

Commercial Civil Judge and also before the High Court,the only  

question that was raised by the appellant was that since the  

respondent which is a Chit Fund Company was not registered  

under the Madras Chit Funds, the suit filed by the respondent  

under Order 37 Rule 1 of the Code of Civil Procedure was not  

maintainable.The High Court as well as the Commercial  Civil  

Judge, Delhi, in our view, have rightly pointed out that even if  

the respondent was not registered,it  cannot take out  the suit  

from the purview of Order 37 Rule 1 of the CPC. Apart from that  

the  allegations  of  non  registration  was  denied  by  the  

respondent and in fact they asserted that the chit fund was duly  

registered.  Since  the  Commercial  Civil  Judge  and  the  High  

Court  concurrently held that  the question that  was raised for  

permitting the appellant to defend the suit can not be a ground  

for which leave can be granted to the appellant. Before us also,  

the learned counsel appearing for the appellant has failed to  

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satisfy that the findings of the courts below were perverse or  

arbitrary.  

That being the position, we are not inclined to interfere  

with the orders passed by the courts below and accordingly the  

appeal is dismissed. Interim order, if any, stands vacated.     

The  learned  counsel  appearing  for  the  appellants  

submits, on instruction, that the rate of interest granted by the  

courts  below  was  18%  and  prays  that  the  interest  rate  be  

reduced.  Considering  the  facts  and  circumstances  of  the  

present case, we modify the order of the courts below only to  

the extent that the rate of interest  should be 12% instead of  

18%. Subject to this modification, the appeal stands dismissed.  

There will be no order as to costs.

………………………J. [Tarun Chatterjee]

……………………….J. [Aftab Alam]

New Delhi;         …………………………J. September 15, 2009. [R.M.Lodha]        

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