SANJEEV JAIN vs. RAJNI DHINGRA & ORS.

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
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Date of decision: 19 December, 2018
+ CS(OS) 378/2018 & I.A. 16982/2018
SANJEEV JAIN ..... Plaintiff
Through: Mr. Dinesh Garg & Ms. Rachna
Agrawal, Advocates (M-9810027444)

versus

RAJNI DHINGRA & ORS. ..... Defendants
Through: Ms. Shrishti Gupta & Mr. Mohit
Chaudhary, Advs. (M-8860033260).
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)

I.A. 16982/2018 (u/O XXXVII Rule 3(5) CPC)
1. The present suit under Order XXXVII has been filed by the Plaintiff -
Mr. Sanjeev Jain (hereinafter, „Plaintiff‟) , seeking recovery of principal
amount of Rs.3 crores and Rs.84 lakhs as the interest component, levied
st
from 1 April, 2016, till date of filing of the suit. The background is that the
Plaintiff claims to have issued a loan to one Late Mr. Virendra Dhingra for a
sum of Rs.3 crores in May, 2015. The amounts were paid through banking
channels in the following manner:

CS(OS) 378/2018 Page 1 of 9

”
2. It is the case of the Plaintiff that Mr. Virendra Dhingra started paying
simple interest @ 12% per annum to the Plaintiff and towards the said
interest, had made payments. Since the details of the payments, were not
filed, on a query from the Court, counsel for the plaintiff has handed over a
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chart showing four payments towards interest, on 21 August, 2015, 14
nd st
October, 2015, 2 January, 2016 and 31 March, 2016 in the following
manner:

of interest and principal, despite repeated requests, the payments were not
made. It is claimed that the Plaintiff then approached Mr. Dhingra and
demanded the loan amount. Mr. Dhingra then issued a cheque for Rs.3
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crores dated 26 December, 2017. Copy of the cheque has been placed on
record. The cheque when presented was not honoured on three occasions as
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is evident from the bank memos dated 5 January, 2018, 18 January, 2018
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and 27 February, 2018.
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4. The Plaintiff thereafter got issued a legal notice dated 21 March,
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2018 calling upon the Defendant to pay the outstanding amount. Since, the
same was not replied to, a complaint under Section 138 of the Negotiable
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Instruments Act, 1881 ( hereinafter, „NI Act‟ ) was filed on 20 April, 2018.
Before the said complaint could be registered and statement of the Plaintiff
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could be recorded, Mr. Dhingra passed away on 30 April, 2018. The
complaint under Section 138 of the NI Act, was thus dismissed as the
Respondent had passed away.
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5. Thereafter, the Plaintiff has filed the present suit on 30 July, 2018
under Order XXXVII CPC, seeking recovery of the principal sum of Rs.3
crores along with interest thereon.
6. The suit, was instituted against the legal heirs of Mr. Dhingra as he
had already passed away by that time. Defendant No.1 – Ms. Rajni
Dhingra – the wife of Mr. Virendra Dhingra, Defendant No.2 - Mr. Sanjeev
Dhingra – his son and Defendant No.-3 - Ms. Shivani Bhushan Bansal, his
daughter are the Defendants in the suit. The Defendants have filed a leave to
defend application under Order XXXVII which has been placed before this
Court as the Plaintiff took an objection on the ground that the application
was belated.
7. It is further submitted by Ld. counsel for the Plaintiff the he does not
wish to file a reply to this application and is willing to make the submissions
straight away. Submissions have been heard on behalf of Plaintiff by Mr.
Dinesh Garg, and on behalf of the Defendants by Ms. Shrishti Gupta and
thereafter by Mr. Mohit Chaudhary.
8. The main submission raised by the Defendants is that they are only
the LRs of Late Mr. Dhingra, and are not aware of any transactions that have
been pleaded in the plaint, and cannot be held liable for the same. They are
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relying on two judgments in support of their claim. One of Bombay High
Court and one of this Court. The Bombay High Court’s judgment relied
upon by Defendant is Rajesh Steel Centre v. Smt. Rashmi K. Agarwal 1986
Mah L.J. 993 (hereinafter, „Rajesh Steel Centre‟) and judgment of a Single
Judge of this Court in Sarla Devi & Ors. v. Daya Ram & Ors. [IA
nd
9565/1994 in Suit no.1518/1994 decision dated 22 November, 1994]
9. The Ld. Counsel for the Plaintiff on the other hand submits that both
the judgments relied upon by the Ld. counsel for the Defendant have been
either over ruled or set aside. He places reliance on Bank of India v.
Industrial Polymer (1991) 93 BOMLR 218 (hereinafter, „Bank of India‟)
and the Division Bench’s judgment in Sarla Devi & Ors. v. Daya Ram &
Ors. 60 (1995) DLT 3 (DB) (hereinafter, „Sarla Devi DB‟) .
10. It is further submitted by counsel that there is a difference between a
decree being passed against the LRs and decree being executed. Insofar as
the passing of a decree under Order XXXVII is concerned, the two
judgments relied upon by him, support the case of the Plaintiff that there is
no bar against claiming a remedy against the LRs of a person who may have
availed a loan. He further submitted that the Defendants have not challenged
the signatures of Mr. Virendra Dhingra but have specifically argued that
they are not aware of the transaction itself.
11. The Court has heard the counsel for the parties. The first and foremost
fact is that the LRs of Late Mr. Virendra Dhingra have been impleaded as he
passed away prior to the filing of the suit. Thus, for all intents and purposes,
the LRs have been made parties here in respect of the loan availed by Mr.
Dhingra. The Defendants do not dispute that they are the LRs of Mr.
Virendra Dhingra. Their submission is one in law i.e. that a summary suit is
CS(OS) 378/2018 Page 4 of 9



not maintainable against LRs, in view of the two judgments relied upon by
them.
12. However, a perusal of the Division Bench’s judgment of in Bank of
India (supra) and Sarla Devi DB (supra) leave no matter of doubt that
Order XXXVII suit is maintainable against the LRs and the right to sue
survives.
13. The relevant paras of Bank of India (supra) are set out herein below:
“7. Order XXXVII does not exclude from its
purview a suit where the heirs and legal
representatives of a deceased are party defendants.
Nor is there any protection under the Civil Procedure
Code to the heirs and legal representatives of a
deceased defendant from a decree being passed
against them, provided of course, that the right to sue
them survives. The protection which Section 52 of the
Civil Procedure Code gives to the heirs and legal
representatives of a defendant is a protection against
the enforcement of a decree against them in execution.
Under Section 52, where a decree is passed against a
party as the legal representative of a deceased person
and the decree is for the payment of money out of the
property of the deceased, it may be executed by the
attachment and sale of such property. The decree can
be executed to the extent of the property of the
deceased in his hands. This is a protection which is
granted at the stage of execution. Hence even in a case
where a decree is passed against such an heir or legal
representative under Order XXXVII of the Civil
Procedure Code, the decree can be executed only to
the extent of the estate of the deceased coming to his
hands. The apprehension of the learned judge in the
case of Rajesh Steel Centre (supra) is, therefore,
unfounded.
8. In the case of Lallu Bhagvan v. Tribjuvan Motiram
(1889) I.L.R. 13 Bom. 633 (D.B.), a Division Bench of
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this Court held that the decree against the legal
representatives of a deceased debtor can be passed
even if they have not inherited any property. If they
have not inherited any property, the only result is that
the decree can not be executed against them. This is a
matter to be decided at the stage of execution. It does
not affect the right of a court to pass a decree. This
decision has been followed in the case of Ranjitsingh v.
Narmadi (1931) A.I.R. Nagpur 173 where it is held
that where an heir of a debtor is sued it is not open to
him to raise the plea in course of the suit that he does
not hold the assets of the deceased debtor.
The plea is confined to execution only.
9. In our view, therefore, the difficulty expressed by the
learned single Judge in the case of Rajesh Steel Centre
v. Rashmi K. Agarwal (supra) is misconceived. A
summary Suit can be filed against an heir and legal
representative of a deceased defendant and the
provisions of Order XXXVII apply in full to such a suit
also. The decree however, can be executed only to the
extent of the estate of the deceased in the hands of the
judgment debtor. We therefore agree with Variava J.
that the summons for Judgment against the heirs of
defendant No.3 is maintainable.”

14. The relevant portion of Sarla Devi (supra) is extracted herein below:
“3….
Thereupon the appellants required the respondents to
refund the sum of Rs.4 lakhs, which was paid by Brahm
Prakash to the first two respondents and Tej Ram at
the time of execution of the agreement to sell. Failing
to receive any favorable response from the
respondents, the appellants filed a suit under Order 37
CPC against them on the basis of the agreement to sell.
On November 22, 1994 the learned Single Judge
passed an order holding that the suit was not triable
under Order 37 CPC as the third and fourth
respondents, were not parties to the agreement to sell.
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In reaching this conclusion the learned single Judge
relied upon a decision of the Bombay High Court in
Rajesh Steel Centre vs. Smt. Rashmi K. Agarwal &
Ors., 1986 Mah. L.J. 993. It is this order of the learned
Single Judge which has been impugned before us.
4. We have heard learned Counsel for the
parties and we are of the opinion that the learned
Single Judge was not right in holding that the suit
under Order 37 CPC would not lie. In an identical
matter where the present appellants had instituted a
suit, being Suit No.1507/94 under Order 37 against
some other parties, the learned Single Judge has
veered around to the view that such a suit would be
maintainable against the heirs and legal
representatives of the contracting party who have
received his assets. The following are the observations
of the learned Single Judge recorded in his order dated
May 3,1995 with which we respectfully concur.”

15. Thus, the above judgments are conclusive as to the maintainability of
the present suit against the LRs of Late Mr. Virendra Dhingra. This Court
however, is not going into the issue as to whether the said LRs in fact came
into possession of any assets of Mr. Dhingra, or if the decree which may be
passed in the present suit is executable against Mr. Dhingra’s assets and if
so, against which of the assets. This is not an issue that has been raised in
the present suit.
16. The maintainability of the suit being not an issue any more, the facts
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of the present case show that Mr. Dhingra had given a cheque dated 26
st
December, 2017 for a sum of Rs.3 crores. The notice dated 21 March,
2018 is also placed on record. The payment of the interest also having been
made on various dates, the availing of the loan in itself is not in dispute.
17. The same being not in dispute and the cheque of Rs.3 crores having
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been issued in 2017 towards the principal amount, the suit is clearly
maintainable under Order XXXVII CPC. The same is in respect of a
liquidated sum based on a financial instrument and hence the question of
maintainability is also decided in favour of the Plaintiff.
18. The next submission of the learned counsel for the Defendants is that
since the suit prays for a decree for a sum of Rs.3,84,00,000/- and not the
exact amount of Rs.3 crores which is the amount of the cheque, the suit
under Order XXXVII CPC is not maintainable. This is based on a reading
of judgment of this Court in IFCI Factors v. Vasudev Rao & Anr. in FAO
(OS) 2014/2014. This judgment does not help the case of the Defendant as
the ratio in the said judgment reads as under:
“8. Pleadings in a summary suit have to be
construed strictly for the reason an otherwise valuable
right recognized by law that every person has a right
to defend a proceedings initiated against him is
curtailed by a summary suit because of business
efficacy requiring that in commercial transactions of
the kind envisaged by Order XXXVII a defendant must
obtain leave to defend by prima facie pleading facts
which if proved would non-suit the plaintiff.”

19. The pleadings in the present suits are clear to the effect that Rs.3
crores is claimed as the principal amount and Rs.84 lacs is claimed towards
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the interest from 1 April, 2016 till the date of filing of the suit @12% per
annum. The pleading is clear and categorical. It brooks no ambiguity. A
reading of the said pleading shows that it is in accordance with the
instrument issued by Late Mr. Dhingra i.e. a cheque of Rs.3 crores. This,
objection is also not tenable.
20. The leave to defend, therefore, does not raise any triable or valid
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defence. The question of limitation is not being gone into as the summons
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for judgments were served on the Defendants on 6 November, 2018 and
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first filing of the leave to defend was on 12 November, 2018. Though,
there was a refiling of the said application, the date of filing of the said
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application would have to be construed as 12 November, 2018. The
objection of limitation is, thus, rejected.
21. Under these circumstances, the suit is decreed for a principal sum of
Rs.3 crores. In the facts and circumstances of the present case, since the
actual individual i.e. Late Mr. Dhingra, who availed of the loan has passed
away and it is only his wife and children who are the Defendants in the
present suit, interest is awarded @6% per annum from the date when the
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cheque was given i.e. 26 December, 2017. It is clarified that this Court has
not gone into the issue as to whether the LRs or any of their assets can be
attached or sold. The defences available to the LRs under Section 52 shall
continue to be available in any execution of the present decree.
22. The suit is, accordingly, decreed in the above terms. There shall be
no orders as to costs. All pending applications also stand disposed of.

PRATHIBA M. SINGH
JUDGE
DECEMBER 19, 2018
Rahul
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