Order 18

Order Details: COPY OF ORDER
Pdf Text: IN THE COURT OF SH. M. K. NAGPAL, DISTRICT
JUDGE (COMMERCIAL COURT)-13, CENTRAL
DISTRICT, TIS HAZARI COURTS, DELHI
CS (COMM.) NO. 1263/2023
CNR No. DLCT01-013414-2023
IN THE MATTER OF:
Ms. Kanchan Windhwani & Ors.
…….Plaintiffs
Vs.
Dtwevle Spaces Pvt. Ltd.,
through its Directors
…....Defendant
ORDER ON APPLICATIONS U/S 151 CPC, U/O 37
RULE 3(5) CPC & U/O 37 RULE 3(7) R/W SEC. 151 CPC
OF THE DEFENDANT
06.12.2024
1. By this common order, I shall dispose of three separate
applications filed by defendant company (originally impleaded as
defendant no.1) i.e. one under Section 151 CPC seeking
conversion of this summary suit to an ordinary suit; second under
Order 37 Rule 3(5) CPC seeking leave to defend the present suit
and third under Order 37 Rule 3(7) read with Section 151 CPC
seeking condonation of delay in filing of the leave to defend
application.
2. Though the plaintiffs have filed reply to the second and
third applications of defendants seeking leave to defend and
condonation of delay in filing thereof, but no formal reply has
been filed by plaintiffs to the third application moved under
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Section 151 CPC by defendant seeking conversion of the suit to
an ordinary suit.
3. The arguments advanced on above applications by Sh.
Robin George, Ld. Counsel for defendant company assisted by
Sh. Yogesh Bhatt Advocate, and Ms. Aanchal Bumb, Advocate
appearing on behalf of Sh. Imran Ali, and Ms. Dhriti Chhabra Ld.
Counsels for plaintiffs, have been heard and considered. The case
record has also been perused.
4. Facts of the case, as far as the same are necessary for
disposal of present applications, are that the plaintiffs have filed
the present suit as a commercial and summary suit under the
provisions of Order 37 CPC seeking recovery of an amount of
Rs. 38,91,259/- from defendant on account of arrears of rent,
along with
pendente lite and future interest @ 18% per annum
thereon, in respect to the suit property bearing No. C-1/33-34,
Malka Ganj, Delhi-110007. The suit of plaintiff is based on a
registered lease deed dated 17.07.2020 executed between parties
and the above amount claimed by plaintiffs has been stated to be
the arrears of rent due from defendant and spreading over the
period between March, 2021 to November, 2022. It is found
mentioned in the plaint itself that possession of the suit property
stands already delivered by defendant to the plaintiffs.
5. Besides impleading the defendant company as defendant
no.1, the plaintiffs had also initially impleaded its four directors
as defendants no. 2 to 5 in this suit and as per record, summons
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in the prescribed format of a suit under Order 37 CPC were
served upon all defendants and even appearance before this court
was filed on behalf of all the defendants.
6. However, an application under Order 1 Rule 10(2) CPC
came to be moved by defendants no. 2 to 5 subsequently seeking
deletion of their names and on an application filed on behalf of
plaintiffs, this court had then directed issuance of summons for
judgment upon all the defendants pending adjudication of the
said application. The record reflects that leave to defend
application under Order 37 Rule 3(5) CPC, along with
condonation of delay application, came to be filed before this
court subsequently on behalf of defendant no.1 only and another
application on behalf of plaintiffs was also filed seeking passing
of a decree against defendants no.2 to 5 for their failure to file
leave to defend applications despite service of summons for
judgment.
7. The application under Order 1 Rule 10(2) CPC filed by
defendants no.2 to 5 was decided vide order dated 25.04.2024 of
the court and since this court had observed that they were
impleaded in the suit merely in their capacity as directors and
without having any personal liability, their names were directed
to be deleted from the array of parties. On the same date, this
court had also observed that in view of the above order directing
deletion of their names, the application filed by plaintiffs seeking
a decree against these defendants became infructuous and hence,
the same was dismissed as such. The above order of this court
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has been stated to be under challenge before the Hon’ble High
Court in Civil (M) No. 2763/2024, which now stands listed for
hearig somewhere in March, 2025.
8. In the above application moved under Section 151 CPC,
the defendant has submitted that the present suit filed by
plaintiffs is and could not have been filed and maintained under
the provisions of Order 37 CPC as the amount claimed by
plaintiffs in this suit is not a liquidated amount or sum of money
stated or mentioned in the above lease deed and it has been
arrived at by way of additions and subtractions of the amounts of
rent due from or paid by the defendant. The judgments/orders of
the Hon’ble High Court in cases of Vinod Kumar Abbey Vs.
Mountain Fall India India Pvt. Ltd. & Ors, bearing CS (OS)
1369/2015 decided on 16.11.2015, Ajay Shaw Vs. HDFC
Limited & Ors, RFA No. 115/2017 decided on 18.07.2018 and
Satya Prakash & Bros. (P) Ltd. & Ors. Vs. Qutab Realcon Pvt.
Ltd. & Ors., CS (OS) 51/2019 decided on 30.09.2019 have also
been referred to and relied upon by Ld. Counsel for defendant in
support of his above submissions.
9.
Per contra, it is the submission of Ld. Counsel for
plaintiffs that though some calculations have been made by
plaintiffs for arriving at the above amount of Rs. 38,91,259/-
claimed in the present suit, as the said amount has been arrived at
after considering the entire liability of defendant to pay rent and
also after adjusting the part payments of rent made by him during
the above said period, but still, the liability of defendant to pay
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the above entire amount arises out of the above document only
i.e., lease agreement and since it is a written agreement signed by
or executed between parties, the present suit is very much
maintainable under the provisions of Order 37 CPC. It is also her
submission that once this court has entertained the suit under the
above provisions and even issued process under the said
provisions, this court cannot review its order and revert back to
say or hold now that the suit should have been filed or be treated
as an ordinary suit, unless the plaintiffs themselves consent for
the same. She has also referred to one judgment of the Hon’ble
High Court in case of S.S. Steel Industry Vs. Shri Guru
Hargobind Steels, MANU/DE/2911/ 2019 in support of this
submission.
10. As far as the leave to defend application under Order 37
Rule 3(5) CPC is concerned, the main contentions of defendant
company in said application are that nothing is due towards
arrears of rent from it towards plaintiffs as the payments of rent
which were made by them to plaintiffs during the above said
period were infact the actual amounts of rent paid by it for the
months stated therein, as the same were mutually and orally
agreed between the parties due to Covid pandemic and its after
effects and also in terms of the
force majeure clause contained in
the said lease deed. Hence, the case of defendant is that the claim
of plaintiffs in this suit is false and rather the defendant is entitled
to recovery of the security amount of Rs. 6,48,000/- from
plaintiffs in terms of the said agreement. The above defence
taken by defendant company is based on grounds that the suit
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property consisted of 36 beds meant to be given further on rent
by it to other persons as the defendant had taken the said property
on rent for its use as a PG accommodation and due to Covid
related conditions and the
force majeure clause incorporated in
lease deed, the parties have mutually agreed that the defendant
could pay rent on actual occupancy basis instead of vacating the
premises, which the defendant company claims to have paid to
plaintiffs in toto.
11. The reply of plaintiffs to the above submissions of
defendant is that no such waivers in payment of rent were given
by them to defendant company during the above period and
hence, the payments made to them by defendant during the said
period were only part payments of rent and the amount claimed
in this suit is the genuinely due and outstanding amount against
defendant as per the terms of above lease deed.
12. The above condonation of delay application of defendant
is in respect to a delay of around 8 days that occurred in filing of
the above leave to defend application.
13. Coming back to the application under Section 151 CPC of
defendant seeking conversion of this summary suit to an ordinary
suit, it is observed by this court that Ld. Counsel for defendant is
right in making a submission that a suit filed under the provisions
of Order 37 CPC can be brought by a plaintiff based on a written
contract or agreement only if the plaintiff is seeking recovery of a
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debt or liquidated amount of money payable by defendant and as
stated in the said document.
14. On perusal of case record, it has been observed that
through the above registered sale deed dated 17.07.2020, the suit
property was let out by plaintiffs, who are joint owners thereof in
different proportions, to defendant no.1 company on a monthly
rent of Rs. 3,24,000/- and a provisions was also made in the said
agreement for enhancement of rent at the given rates and after the
given periods, as stated specifically in the said deed. It is also
observed on a bare perusal of contents of para 8 of the plaint that
the claimed amount of Rs. 38,91,259/- has been arrived at by the
plaintiffs on basis of three different rates of monthly rents i.e.
3,56,400/-, Rs. 3,74,220/- and Rs. 4,30,353/- and further after
adjusting the payments or part payments of rent made by
defendant and by calculating the outstanding dues on the basis of
said monthly payments and the rates of rent. The above monthly
rates of rent have been decided in terms of the above clause
contained in lease deed and entitling the plaintiffs to enhance or
revise the rates of rent in terms thereof.
15. Hence, it is crystal clear from the above facts and
background that the amount of Rs. 38,91,259/- is not the amount
specifically mentioned or stated in the above lease deed and
made payable by or recoverable from defendant and it has been
arrived at on the basis of calculations carried out by plaintiffs or
their counsels and by way of additions and subtractions of
different amounts. Therefore, it cannot be said to be a liquidated
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sum of money contained or stated in the above lease deed, which
could be or could have been made the basis for filing of the
present suit by plaintiffs under the provisions of Order 37 CPC.
16. Though the judgment in case of Vinod Kumar Abbey
(Supra) being relied upon by Ld. Counsel for defendant can be
differentiated on facts as the claim of plaintiff in said suit was
found to be based not only on the record of his salary, but also
on some admissions allegedly made by defendant in the said suit,
but the propositions of law laid down in the said case are also
found duly applicable in the present case as it was observed by
their Lordships in the said case that a suit under Order 37 CPC
should contain a specific liquidated sum mentioned or stated in
the written document. However, judgment in the case of Ajay
Shaw Vs. HDFC Limited & Ors. (Supra) being relied upon by
Ld. Counsel for defendant can be applied to the facts and
circumstances of present case as in the said case also the plaintiff
bank had claimed a specific amount from defendant, which
according to them was arrived at on the basis of calculations
carried out and interpretation of the terms and conditions
contained in a loan agreement executed between the parties. It
was held by their Lordships in the said case in clear words that
the such a suit cannot be filed or maintained under the provisions
of Order 37 CPC. While laying down the above propositions,
their Lordship has also reiterated the earlier judgments of the
Hon’ble High Court pronounced in some other cases, including
the case of IFCI Factors Ltd. Vs. Maven Industries Ltd. & Ors.,
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225 (2015) DLT 32. The relevant observations made by their
Lordship in the said case Ajay Shah (Supra) are as follows:-
“2. A reading of the plaint shows that the suit is not based on a
dishonoured cheque or a written agreement containing the
liquidated amount which is the suit amount. The suit plaint
shows that the suit is filed on the ground that the term loan was
granted to the appellant/defendant No. 1 and the
appellant/defendant No. 1 executed a Loan Agreement on
29.01.2011. The total disbursement of Rs.18.40 lacs was made
and which was repayable in equal monthly installments every
month. Respondent no.1/plaintiff pleaded default in paying of the
loan amount and the amount claimed in the suit is actually the
amount which is the balance due at the foot of the account
inasmuch as the appellant/defendant no.1 paid certain EMIs but
defaulted in payment of certain other EMIs. Therefore the
amount claimed in the suit is as a result of various debit and
credit entries, and the balance at the foot of this account is the
amount which is claimed by the respondent no.1/plaintiff in the
suit.
3. An Order XXXVII CPC suit lies if the suit is based on a
dishonoured cheque or an amount which is claimed in the suit
arising as a liquidated amount specifically so stated as a
liquidated liability in the written instrument including a
guarantee. The suit amount claimed is not a liquidated amount
payable under an agreement because the suit amount is the
amount which is different than as contained in the loan
agreement as it is the balance at the foot of the account as a result
of various debit and credit entries over a long period of time. The
subject suit therefore is not maintainable under Order XXXVII
CPC and as so held by this Court in the judgment in the case of
IFCI Factors Ltd. Vs. Maven Industries Ltd. & Ors. 225 (2015)
DLT 32. The relevant paras of this judgment in the case of IFCI
Factors Ltd. (supra) are paras 9 to 16 and these paras read as
under:-
………………..
4. In view of the aforesaid discussion since the suit itself was not
maintainable under Order XXXVII CPC, there does not arise any
issue of any prayer by the appellant/defendant no.1 to seek leave
to defend or the trial court declining leave to defend by the
impugned judgment. The suit had to be tried as an ordinary suit
and not an Order XXXVII CPC suit.”
(emphasis supplied)
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17. Now coming to the question raised by Ld. Counsel for
plaintiffs as to whether at this stage, this court can direct
conversion of a summary suit to an ordinary suit, it has been
observed that the judgments being relied upon by Ld. Counsel for
defendant in case of Vinod Kumar Abbey (Supra) and Satya
Prakash & Bros. (P) Ltd. & Ors. in fact pertain to summary suits
only, which were filed under the provisions of Order 37 CPC
before the Hon’ble High Court and were later on directed to be
treated as an ordinary suit.
18. Moreover, this court is also of the view that if a suit has
been considered and maintained under the provisions of Order 37
CPC merely due to some oversight, mistake or inadvertence on
part of the court, it does not mean that the court cannot convert
the said suit to an ordinary suit later, if the court is of the view on
perusal of the case record that it could not have been filed or
instituted under the above provisions. The court has inherent
powers under Section 151 CPC to pass any order to ensure that
the ends of justice are met and process of the court is not abused.
The above mistake in considering the suit as a summary suit,
despite the fact that it was not in respect to a liquidated sum of
money given or mentioned in the above said lease agreement,
requires to be corrected or amended at the threshold and at the
initial stage itself when the same comes or is brought to the
knowledge of the court.
19. Hence, in view of the above factual and legal discussion, it
is held that the present suit has been wrongly filed by plaintiffs
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under the provisions of Order 37 CPC and the same is not
maintainable and cannot be tried further under the said provisions
as such. Therefore, it is directed to be treated and tried further as
an ordinary suit and the application moved by defendant under
Section 151 CPC seeking conversion of this summary suit to an
ordinary suit stands allowed.
20. Further, in view of above order, the other two applications
filed by defendant under Order 37 Rule 3(5) CPC seeking leave
to defend the present suit and under Order 37 Rule 7 r/w Section
151 CPC seeking condonation of delay in filing of leave to
defend application become infructuous and the same are being
dismissed as such.
Announced in the open court
Dated: 06.12.2024
(M. K. Nagpal)
District Judge, Commercial Court-13
Central District, Tis Hazari Courts,
Delhi/06.12.2024
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