Judgment:
R.L. Gupta, J.
(1) Plaintiff filed a suit under Order 37 of the Code of Civil Procedure (hereinafter called 'the Code') against the defendants for recovery of Rs. 1,50,502/10 P. with costs of the suit and pending and future interest at the rate of 18% per annum from the date of the suit till realisation of the decretal amount. Defendants were served with the summons and they put io appearance through Sh. B.L. Anand Advocate within ten days of the service. Thereafter commons for judgment were issued against the defendants J, No. 674/87 wa also-moved on behalf of the plaintiff praying that defendants may be allowed to be served through their counsel and that they may be given dusty notice for service of the defendants through their counsel. The application was allowed by the Deputy Registrar. It led to the filing of 1.A. Mo. 719/87 on behalf of the defendants staling that the address for service of notice/summon on them at their residential address had been given and thereforee the summons under Order 37 of the Code should be served upon the defendants themselves and not through their counsel. The order dated 6th February, 1987 recorded by the Deputy Registrar while passing order in this is No. 719/87 shows that actually the service had been effected on the defendants by the Process Server at their residence on 20th October, 1986 under Order 37, Rule 3(2) of the Code. And since leave to defend application had not been filed- on behalf of the defendants, no farther orders were necessary in respect of 1A No 719/87.
(2) The matter was then listed before Charanjit Talwar, J. on 24-4-1987. His Lordship did not see any reason to differ with the order of the Deputy Registrar holding that the defendants were properly served. The Hon'ble Judge was further of the view that if at. all the defendants felt aggrieved by the order of the Deputy Registrar, they were at liberty to file an appeal against the said order under Rule 4 of Chapter Ii of Delhi High Court (Original side) Rules. But nd such appeal was filed. At that point of time Mr. Anand, learned counsel for the defendants submitted that on the plaintiff's own showing i.e. on, perusal of the plaint itself it was clear that the plaint ought not to have been entertained under Order 37 of the Code. thereforee, he requested some time to address arguments on this aspect of the matter, it then appears that a review application No. 10/87 was also moved Ob behalf of the defendants seeking review of the order dated 24-4-1987 of Talwar, J but the same was dismissed as withdrawn. Later on it further appears that a contention was raised on.behalf of the defendants that in the instant case the plaint under Order 37 of the Code did not comply with the mandatory provisions of Order 37, Rule 2 (1) & iC) of the Code This point was referred by B N. Kirpal, J. to Hon'ble the Chief Justice for constituting a larger Bench. Vide judgment dated 4th April 1989 it was held by a Division Bench comprising of BN. Kirpal, J. and Y.K. Sabharwal. J. that though the provisions of Order 37 Rule2 (1) are mandatory in nature but if there has been substantial compliance of the same, then the plaint will be regarded as being under Order 37. thereforee, in sum and substance there having been substantial compliance with the provisions of Order 37 of the Code, the plaint in this case was deemed to have been filed under Order 37 of the Code.
(3) At no stage of the case the defendants came forward with any application for leave to defend the suit It was then urged before G.C Jain, J. on behalf of the defendants that besides the point decided by the Division Bench the suit was not maintainable under Order 37 of the Code for other reasons also The defendants were directed to file an affidavit taking all their pleas regarding the non-maintainability of the suit under Order 37 of the Code An affidavit in this respect has been filed of sh, Balbir Singh, defendant No. 2. The basic contention raised by this affidavit is that there was no agreement written or oral in respect of the payment of interest at the rate of 18% per annum by the deponent and no such agreement bad been pleaded in the plaint. thereforee, in the absence of any such agreement the suit was not maintainable under Order 37 of the Code In view of this fact the suit did not fall within the ambit of Order 37 Rule 2 and the averment in this respect in the plaint was manifestly wrong Another ground raised was that the defendants were not properly served with summons and it was actually a mistake on the part of the course to' have held that they were served on 20-1086. The third point raised by way of this affidavit is that Sh. Balbir Singh defendant No 9 was the sole proprietor oi ihe firm defendant No 1 and defendant No. 3 had no concern whatsoever with defendant No. I and. thereforee, she bad been Wrongly imp leaded.
(4) I have heard arguments advanced by learned coi?sel for the parties and have given my careful consideration to the points urged at the bar. So far as the aspect of proper service of the defendants is concerned, I am of the view that the defendants in this respect cannot be beard The reason is that the Deputy Registrar had found that they had been served on 20-1086. Thereafter when the case was listed before Talwar, J. vide order dated 24-4-1987 it was held by the Lordship that he saw no reason to differ with the order of the Deputy Registrar and if at all the defendants felt aggrieved they could have filed appeal against the order of the Deputy Registrar. This step was also not taken by the defendants and thereforee it seems to,be too late in the day now to urge thai defendants were not served on 20-10-86. In this respect I may also cote further that for about three years now the defendants are putting in appearance through their counsel Sh. B.L. Anand. Vide order dated 6- 2-87 the Deputy Registrar had held that the service on the defendants was complete on 20-10 1986. This was done in the presence of Sh. B.L. Anand, Advocate who was present during the course of proceedings on that date before the Deputy Registrar. In spite of that when it came to the knowledge of the learned counsel for the defendants no steps were taken to file an application for leave to defend the suit which is ordinarily done within a period of ten days from the daie of service of summons for judgment. I may then deal with the other submissions made in this affidavit regarding interest. It is provided in Order 37 of she Code it self that it applies to suits open Bills of Excbang, Hundies and Promissory potes. It also applies when the plaintiff seeks only to recover the debts or liquidated demand in money payable by defendants with or without interest arising on a written contract or on an enactment, where the sum sought to be recovered is a fixed sum of money or in the nature of a debt other then a penalty. This order also applies to action based on guarantees where the claim against the Principal is in respect of a debt or liquidated demand only. It does not Mate at all that before a plaintiff is entitled to recover interest, there must be a written agreement between the parties that interest is payable at a certain specific rate As is clearly stated in this sub-rule the suits csn also be filed on the basis of promissory notes. The promissory note is defined as follows in the Negotiable Instrument Act, 1981. 'A promissory note is an instrument in writing (not being a bank note or a currency note) containing an un-conditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument'. Some illustrations then are given under this definition contained in Section 4 'I promise to pay B or order Rs. 500.00 is an illustration appended with this Section. A bare perusal of the above form of the promissory note clearly shows that the promissory note may not even contain an agreement between the parties to pay interest However, it is a matter of common knowledge that generally promissory notes are executed between the parties which contain a promise to pay interest also at a certain rate. But that would not mean that a promissory note which does not contain any such promise to pay interest would not fall within the ambit of a promissory note. thereforee, in a case under Order 37 of the Code which is based upon a promissory note. there seems to be no bar against a plaintiff prohibiting him from claiming interest as per the rate of interest prevalent in the market Similarly suits are also filed on the basis of dishonoured cheques under Order 37 of the Code The very from a cheque issued by a debtor to the creditor will convince any one that it' does not contain any column regarding payment of interest It is only a promise or direction by a debtor to his bank to pay a certain fixed sum of money to his creditor. Can by any stretch of imagination it be said that in the absence of any agreement to pay interest, the plaintiff is debarred from claiming interest in a suit under Order 37'of the Code I am or the view that there is nothing to indicate in the language of Order 37 of the Code which may disentitle the plaintiff to claim interest iron from the On the other hand it seems rather clear from a bare perusal of Order 37 Rule 1 Sub-rule (2) of the code that summary suits under this order can be filed .based on Bills of Exchange. Hundies and Promissory notes where there is even no promise to pay interest at a certain specified rate. thereforee, simply because there was no agreement between the parties to pay interest at the specific rate of 18% per annum will not debar the plaintiff from filing a suit under Order 37 of the Code, In fact, in the circumstances such as prevailing in this case, the plaintiff will always be entitled to recover interest, the transaction in question being of a commercial nature It is a matter of common knowledge that the rate of interest for procuring money for business these days is not less than 18% per annum. If after issuing of cheque the same is not honoured by the banker of the debtor, certainly the debtor will be liable to pay interest for having deprived the plaintiff of his money. That is why it is recognised in Section 34 of the Code that in so far ai a decree is for the payment of money, the Court may order interest at such rate as the court deems reasonable to be paid on the principal sum from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit. Proviso to this Section further says that where the liability in relation to the same arises out of a commercial transaction the rate of future or further interest may exceed 6% per annum but it shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which the monies are lent or advanced by a Nationalised bank in relation to commercial transactions. In the present case, thereforee, the claim of the plaintiff regarding interest at the rate of 18% per annum is very reasonable, as loans by nationalised banks these days are not allowed below this rate.
(5) The third argument raised by learned counsel for the defendant is that defendants No. 3 had no concern whatsoever with the firm defendant No. I and she had been wrongly imp leaded as such It is difficult to agree with this contention of the learned counsel for the defendants. The reason is very simple. The plaintiff made averment in para-2 of the plaint that defendant No. 1 is a partnership firm and defendants 2 and 3 held themselves out as partners of the said firm to the plaintiff during transactions in question. Admittedly there is no application for leave to defend the suit. In the absence of any such application the allegations made in the plaint shall be deemed to be admitted as correct. The principle of holding out under the Partnership Act is very well known. Even though a person may not be actually a partner in the firm, yet on the principle of holding out as contained in Section 28 of the Indian Partnership Act, as a partner in a particular firm makes such a person liable as a partner of the firm. thereforee, simply because while acknowledging his liability defendant No. 2 issued a cheque with a rubber sta.up showing himself to be sole proprietor of the firm defendant No. 1 will not make any difference so far as liability of defendant No. 3 is concerned. She is actually the wife of defendant No. 2 and there is nothing improbable about the fact that defendants 2 and 3 held out that they were the partners of the firm defendant No.1. thereforee, it is not possible to say that the paint suffers from an misguide of parties.
(6) In view of what has been stated above, the plaintiff is entitled to the grant of a decree under Order 37 of the Code against the defendants. The plaintiff is thereforee, granted a decree for recovery of Rs. 1,50,502.10 P. with costs and pending and future interest at the rate of 18 % per annum from the date of the suit till realisation against the defendants.