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* IN THE HIGH COURT OF DELHI AT NEW DELHI

+ CS (COMM) 407/2016, I.As. 3108/2018 & 12549/2018
M/S VERSATILE COMMOTRADE PVT LTD ..... Plaintiff
Through: Mr. Nikhilesh Krishnan, Mr. Ratan K.
Singh and Mr. Ashfaq Khan,
Advocates. (M:6260026908)
versus
KARAN SINGH ..... Defendant
Through: Mr. Karam Singh, Advocate with Mr.
Tilak Raj, son of the Defendant.
(M:7503009216)
CORAM:
JUSTICE PRATHIBA M. SINGH
ORDER
% 20.12.2018

1. The present suit for recovery of a sum of Rs.1,42,26,302/- along with

interest has been filed against the Defendant, Shri Karan Singh. The same
was based on an Agreement to Sell dated 15 th April, 2013 under which the
Plaintiff had paid the said amount to the Defendant as an advance payment.
The Defendant had filed its leave to defend and vide order dated 24 th
October, 2017, this Court had granted conditional leave to defend to the
Defendants in the following terms: -
“13. Thus, the law is settled that who may be at
default the advance money cannot be forfeited, unless
the loss is pleaded. The plea of the defendants that
advance was infact the earnest money then also, per
law, it could not have been forfeited in entirety. Even if
one may treat the advance amount to be an earnest
money, the law as it stands today would only allow the
defendants to deduct 5% to 10% of such amount, given
the facts of each case. Hence making provision for

CS(COMM) 407/2016 Page 1 of 3

 10% of the consideration viz ₹Rs.14,22,630/- to plead
and prove the loss, if any, suffered by the defendants,
the leave to defend is hereby granted on deposit of an
amount of ₹1,28,03,672/-(Rupees One Crore Twenty
Eight Lacs & Three Thousands Six Hundred Seventy
Two) by the defendant in the Court or in the alternative
on giving a Bank Guarantee for the said amount, with
the Registrar General of this Court within four weeks
from today. In case the amount is deposited it shall be
converted into a fixed deposit with a nationalised bank
for a term of one year initially, extendable per order of
the Court.”
2. As per the conditional leave to defend granted by the Court, the
Defendant was to deposit a sum of Rs.1,28,03,672/- or give a bank
guarantee for the said amount within four weeks. The Defendant has
admittedly not complied with the said condition. The parties have attempted
mediation. However, no settlement was arrived at and the matter is listed
today. Today, Mr. Tilak Raj, the son of the Defendant, is present and he
submits that due to shortage of funds he is unable to comply with the
conditions.
3. As per the provisions of Order XXXVII Rule 3 CPC, if the conditions
based on which leave to defend is granted are not complied with, the
judgement is liable to be pronounced. The relevant provision is extracted
hereinbelow.
3. Procedure for the appearance of the defendant-
(6) At the hearing of summons for judgment,-
(a)
(b) if the defendant is permitted to defend as to the
whole or any part of the claim, the Court or Judge may
direct him to give such security and within such time as
may be fixed by the Court or Judge and that, on failure
to give such security within the time specified by the

CS(COMM) 407/2016 Page 2 of 3

 Court or Judge or to carry out such other directions as
may have been given by the Court or Judge, the
plaintiff shall be entitled to judgment forthwith.

In Wada Arun Asbestos (P) Ltd. v Gujarat Water Supply and Sewerage
Board AIR 2009 SC 1027 it has been held that if there is non-compliance of
conditional imposed for granting leave, the suit is liable to be decreed. The
relevant observation reads as under:
“12. Where a conditional leave is granted and the
conditions therefore are not complied with, a judgment
in favour of the plaintiff can be passed...”

4. Accordingly, the suit is decreed for a sum of Rs. 1,42,26,302/- along

with simple interest at the rate of 8% p.a. from date of institution of suit i.e.
20th December, 2014 till the date of payment. Costs of the suit as per Rules
are awarded to the Plaintiff. The decree sheet be drawn up. All pending
applications also stand disposed of.

PRATHIBA M. SINGH, J.
DECEMBER 20, 2018
Rekha

CS(COMM) 407/2016 Page 3 of 3