Leave To Defend Is Lost If Litigant Makes False Statement On Oath: Bombay HC Reiterates

While allowing the suit to be tried summarily, the Bombay High Court held that consequences set out under S. P. Chengalvaraya Naidu V/s. Jagannath (Dead) by LRS [(1994) 1 SCC 1] must be followed where the defendant has chosen to make a false statement on oath.

While denying Defendant leave to defend, the High Court clarified that where the Defendants have chosen to make a false statement on oath, the necessary consequences must follow, since the Supreme Court in S. P. Chengalvaraya Naidu V/s. Jagannath (Dead) by LRS, had set out the consequences which must follow in cases where a party’s case is based on falsehood.

The Single Judge Bench of Justice Arif S. Doctor observed that, “The Apex Court and this Court have, on many occasions, stated that if a party comes to the Court with unclean hands or basis its case and/or defence on falsehood, as has been done in the present case, the party should be dealt with very strongly and substantial costs also should be imposed on the party. The conduct of a party intends to impede and prejudice the administration of justice the same must be dealt with finally. Judiciary is the bedrock and handmaid of orderly life and civilized society.”

In a nutshell, Plaintiff had filed to try the suit summarily on the ground of dishonor of cheques.

After perusing the submissions, the High Court stated that Defendants have falsely taken oath by stating that they did not know who is Tejal V. Bhawani, whereas, the same name is mentioned by the Exhibit ‘C’ presented by the Defendants which they claim to be the ‘original letter’.

Hence, the Bench highlighted that the statement made in the Affidavit-in-Reply that the Defendants do not know who Tejal V. Bhawani is, is a patently false and misleading statement, and hence the defendant should not be allowed leave to defend on the pretense of making false oath on the affidavit.

While observing that Exhibit ‘A’ produced by the Plaintiff mention repayment of loan through cheques, the Bench referred to the decision in case of Motilal Laxmichand Salecha HUF Vs. M/s Mour Marbles Industries Pvt. Ltd. & Ors [Summons for Judgment No.64 of 2016 dated 18th April, 2018] in which it was held that once a party issues a cheque for repayment of a loan, then the liability under the loan is substituted by the liability to honor the cheque and in a sense the original liability to pay the loan is discharged by means of execution of cheque.

In the present case, the Bench further found that the Defendants have not denied issuance of the said cheques but have only attempted to contend that the same were for return of investments and not loans.

Thus, the Bench decreed the suit while directing the Defendants to pay the Plaintiff sum of Rs.1,47,64,000/- along with interest at 9% per annum from Dec 31, 2019 till realization.

Cause Title: Tiscon Realty Private Limited v. C. G. Edifice and Ors. [Neutral Citation No: 2023: BHC-OS: 4639]

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