Final Order 1

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MHCC010010782019
IN THE COURT OF JUDGE CITY CIVIL AT GREATER MUMBAI
SUMMONS FOR JUDGMENT NO. 40 OF 2019
IN
SUMMARY SUIT NO. 63 OF 2018
M/s.Universal Fine Chemicals Pvt.
Limited, a company duly incorporated
under the Companies Act, 1956 and
having office at 507, Raheja Centre, 214,
Nariman Point, Mumb ai-400 021.
...Plaintiff
VERSUS
1.M/s. Raniganj Chemical works
a proprietary concern having office at A-
12, M.I.D.C., Kalyan Badlapur Road,
Ambarnath District, Thane-421 501.
2. Mr. Kishan Bubna, Sole proprietor
M/s. Raniganj Chemical Works, Having
office at A-12 M.I.D.C.,Kalyan Badlapur
Road,Ambarnath District, Thane-421 501.
...Defendants
Appearance :
Ld. Adv. Mr. Prerak Choudhary for plaintiff.
Defendants absent.
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CORAM : DR. S. D. TAWSHIKAR
(Court Room No.61)
DATE : 04-10-2022.
ORAL ORDER
(Dictated and pronounced in Open Court)
Plaintiff has taken out present Summons for Judgment as
per Sub rule (4) of Rule 3 of Order XXXVII of Code of Civil Procedure,
1908 (hereinafter referred as ‘CPC’ for short) and thereby claims
Judgment against defendants for recovery of principal amount of
Rs.36,27,509/- along with interest thereon at the rate of 18% p.a. till its
realization.
Plaintiff’s case in brief:-
2. Plaintiff company is engaged in the business of
manufacturing, trading, and sale of Chemicals. Defendant No.1
company is also engaged in the business of processing and trading of
industrial and general purpose chemicals. Defendant No.2 is the sole
proprietor of the defendant No.1 company.
3. It is contended that defendant approached the plaintiff for
supply of certain chemicals. Accordingly plaintiff supplied the chemicals
vide four invoices amounting to Rs.38,76,609/-. Plaintiff further
contends that defendant received the said chemicals without any
protest. Defendant No.2 issued in all 37 cheques against the payment of
outstanding amount. However, said cheques were dishonoured.
Therefore, plaintiff issued notice under Section 138 of Negotiable
Instruments Act, 1881 (NI Act). As no payment was made by the
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defendant, plaintiff filed in all nine complaints under Section 138 of NI
Act before the Ld. Metropolitan Magistrate Court at Esplanade,
Mumbai. Said complaints are still submitted to be pending. Plaintiff
further contends that as defendant failed to pay outstanding amount
against the invoices and as the cheques issued against the said payment
were dishonoured, plaintiff filed the present suit for recovery of the said
amount.
4. Plaintiff has filed present Summons for Judgment on the
ground that defendant has no case to defend, therefore, it prays to
make Summons for Judgment absolute.
Case of defendant:-
5. Defendants opposed the Summons for Judgment by filing
detailed reply and claimed unconditional leave to defend. Defendant
contends that there is no written contract between the plaintiff and
defendant therefore the suit is not maintainable under Rule 2 of Order
XXXVII of CPC. Defendants claim that there are several triable issues
including the issue of jurisdiction, limitation and maintainability of the
suit. Defendants claim that the documents including alleged
confirmation of account relied upon by the plaintiff are obtained by
plaintiff by putting the defendant under pressure and coercion.
6. Defendant disputed their liability to pay an amount on the
ground that there was no transaction at all between the parties. No
purchase orders were placed by defendant or no goods were ever
supplied by the plaintiff. It is further contended by the defendant that
plaintiff had approached to the defendant with a offer of selling
chemical products cyclohexononl. Defendant introduced some of his
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customers to the plaintiffs. However, the products were of sub-standards
quality and therefore, they discontinued business with the plaintiff. It is
further contended that one of the customer introduced by the defendant
did not pay entire invoice amount to the plaintiff. Therefore,
representative of the plaintiff pressurized defendant No.2 and procured
a letter dated 08-10-2013 under coercion and same is misused. It is
further alleged that plaintiff under the pretext of meeting called the
defendant on 31-07-2014 and by trapping him in cabin, forced him to
write certain statement on the blank papers. They compelled defendant
No.2 to call his son and to ask him to bring cheque book. Thereafter, his
son brought cheque book and plaintiff forced the defendant No.2 to sign
blank cheques and some blank papers.
7. It is further contended that defendant wrote a letter dated
12-09-2014 and thereby intimated the plaintiff not to present cheques
which were obtained fraudulently and forcefully. In spite of the said
letter, plaintiff got the cheques dishonoured and lodged complaints
under Section 138 of NI Act against the defendants. It is contended
that all the complaints as well as the present suit is filed to harass and
pressurize the defendant. On the strength of these contentions,
defendant seeks unconditional leave to defend.
8. Heard both the sides. Perused documents placed on record
by either sides. Following points arise for my determination. I have
recorded findings thereon along with reasons, as under :-
Sr. No. Points Findings
1. Whether defendant is entitled for Defendant is entitled for
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leave to defend ?
If yes, conditional or unconditional?
conditional leave to
defend as per final order.
2. What order ? As per final order.
REASONS
As to Point No.1-
9. It is settled position of law that while dealing with the
Summons for Judgment viz-a-viz leave to defend, Court is not supposed
to delve deep on merit of either sides. The court is expected to examine
whether the defendant raises substantial defence or some issues which
needs to be tried. With a view to examine this aspect, it is necessary to
ponder on the contentions and documents relied upon by both the
sides.
10. Mr. Choudhary, Ld. advocate for the plaintiff, submits that
plaintiff has supplied the chemicals to the defendant. He further
submits that invoices are raised on the M/s. Akshat Chemicals because
defendant himself by way of letter dated 24-06-2013 had requested
plaintiff to issue invoices in the name of M/s.Akshat Chemicals. He
further contends that purchase orders were submitted by the defendants
and as per the said purchase orders, invoices are issued. Mr. Choudhary,
pointing out letter of defendant dated 08-10-2013 (Exh.C to the plaint)
and submits that defendant No.2 has acknowledged his liability and had
promised to pay outstanding amount. He further submits that the copy
of ledger account reflects the outstanding amount as on 24-03-2014 of
Rs.36,27,509/-. The said ledger account is also signed and
acknowledged by the defendant No.2 on 26-05-2014.
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11. Mr. Chaudhari further submits that again there were
settlement talks between the parties. Defendant by letter dated 31-07-
2014 had agreed to pay all outstanding amount and therefore issued
37 cheques of different amount in favour of the plaintiff. However all
the cheques got dishonoured. The defendant, in spite of notice, neglect
to pay the outstanding amount and hence present suit is filed.
12. Mr. Chaudhari further contends that defendant has come
with vague and illusive defence of obtaining signatures on blank papers
and the cheques from the defendant. He further submits that the said
contentions are made with a view to delay the trial. Mr. Choudhary
further submits that the fact of issuance of cheques and its dishonour
cannot be disputed. The defendant has not disputed his signatures on
the documents as well as on the cheques. The defence tried to be raised
is evasive and unacceptable.
13.
Per contra Mr. Mishra, learned advocate for the
defendants, submit that defendant by way of reply has raised various
defences. It is the basic defence that the plaintiff has never supplied
goods to the defendants, as is alleged. He further submits that the
invoices placed on record by the plaintiff are in fact in the name of M/s.
Akshat Chemicals which is not at all related to the defendants. He
further submits that there is nothing on record to connect the defendant
with their liability to pay against the said invoices.
14. Mr. Mishra further submits that the cheques were obtained
by plaintiff forcefully and under coercion. So also the defendant was
required to sign blank papers by the plaintiff. Those documents are
now forged and being used by the defendant in civil as well as in
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criminal proceedings. He also submits that defendant tried to lodge
complaints against the plaintiff, however, police did not register the
same. Mr. Mishra further submits that summary suit is not maintainable
and therefore, leave to defend be granted. He urges that the suit is
based on false and fabricated documents, therefore defendant be
permitted to defend the suit unconditionally.
15. From the submission of both the sides, it transpires that
though the defendants allege that the signatures on the cheques and the
letters are forged one, there is nothing on record to support this
contention. Defendant has not filed any documents showing any prompt
action on their part to file complaint with the police station. The letters
showing acknowledgment of liability, issued by the defendant from time
to time, are placed on record by the plaintiff. Without going into the
merit of the contentions of the defendant, it needs to be observed that
prima facie the defence of fabrication of the documents or obtaining the
cheques forcefully or under pressure by the plaintiff does not seem to be
acceptable.
16. Plaintiff has placed on record purchase order along with
their rejoinder. The e-mail of purchase order dated 24-06-2013 seems to
have been sent by Sushant Bubna, son of defendant No.2 to the plaintiff
wherein it
per se appears that the invoices were demanded in the name
of M/s.Akshat Chemicals. So also there are other purchase orders
placed on record which
prima facie shows demand made by the
defendant to supply chemicals. Therefore, it cannot be said that there
was no transaction at all between the plaintiff and defendant.
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17. So far as contention of non maintainability of Summary
Suit raised by the defendant is concerned, it is evident that the suit is
filed for recovery of amount against dishonour Bill of Exchange ( i.e.
cheques) as well as on the bais of unpaid inoices. Therefore, in view of
Sub Rule (2) of Rule 1 of Order XXXVII of CPC,
prima facie suit is
maintainable.
18. Defendant further relied on Judgment in the case of
Inventa Cleantec Pvt. Ltd. V/s. Amit Mudgal, RFA No.605 of 2015,
decided on 15-09-2016, on the point that present suit is not
maintainable. In para No.14, the Hon’ble Delhi High Court has observed
that in the said matter the plaint was silent with respect to invoices. So
also the amount of claim exceeded the amount of the cheques.
Therefore, Court found suit is not maintainable under Order XXXVII of
CPC. In matter in hand same is not factual position. Invoices are on
record and cheque amount too does not exceed amount of claim.
Therefore, this citation is not applicable to the present facts and
circumstances of the case.
19. Defendant has further relied on Judgment in the case of
M/s. Synergytech Automation Pvt.Ltd. & Anr V/s. M/s. SMC Pneumatics
(India) Pvt. Ltd., RFA No.354 of 2018, decided on 4th July, 2018. This
case relates to different stage. Hon’ble High Court was dealing with a
Regular Appeal against the decree in a Summary Suit. In that case
amount claimed by the plaintiff was not based on negotiable
instruments and therefore, the suit was held to be not maintainable.
Again this is not the case in matter in hand. This authority is not
applicable to the present facts and circumstances of the matter in hand.
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20. The Hon’ble Apex Court in the IDBI Trusteeship Services
Limited Vs. Hubtown Limited, (2017) 1 SCC 568, has dealt with various
situation wherein leave to defend can be granted or refused. The
Hon’ble Apex Court in Para No.17 has laid down certain guidelines to
be considered while granting/refusing to leave to defend. Those are as
under-
“17. Accordingly, the principles stated in para 8 of Mechelec
case will now stand superseded, given the amendment of
Order 37 Rule 3 and the binding decision of four judges in
Milkhiram case, as follows:
17.1. If the defendant satisfies the court that he has a
substantial defence, that is, a defence that is likely to succeed,
the plaintiff is not entitled to leave to sign judgment, and the
defendant is entitled to unconditional leave to defend the
suit.
17.2 If the defendant raises triable issues indicting that he
has a fair or reasonable defence, although not a positively
good defence, the plaintiff is not entitled to sign judgment,
and the defendant is ordinarily entitled to unconditional
leave to defend.
17.3 Even if the defend raises triable issues, if a doubt is left
with the trial Judge about the defendant’s good faith, or the
genuineness of the triable issues, the trial Judge may impose
conditions both as to time or mode of trial, as well as
payment into court or furnishing security. Care must be taken
to see that the object of the provisions to assist expeditious
disposal of commercial causes is not defeated. Care must also
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be taken to see that such triable issues are not shut out by
unduly severe orders as to deposit or security.
17.4 If the defendant raises a defence which is plausible but
improbable, the trial Judge may impose conditions as to time
or mode of trial, as well as payment into court, or furnishing
security. As such a defence does not raise triable issues,
conditions as to deposit or security or both can extend to the
entire principal sum together with such interest as the court
feels the justice of the case requires.
17.5 If the defendant has no substantial defence and/or
raises no genuine triable issues, and the court finds such
defence to be frivolous or vexatious, then leave to defend the
suit shall be refused and the plaintiff is entitled to judgment
forthwith.
17.6 If any part of the amount claimed by the plaintiff is
admitted by the defendant to be due from him, leave to
defend the suit, (even if triable issues or a substantial defence
is raised), shall not be granted unless the amount so admitted
to be due is deposited by the defendant in court.”
21. In the light of the guidelines of the Hon’ble Apex Court
considering the factual position in the matter in hand, I find that the
defendant though tried to show substantial defence, in my view it falls
short. Though defendants pleaded various defence as discussed above,
those do not seem to be fair enough grant unconditional leave to
defend. The contention of the no transaction between plaintiff and
defendant, put forth by the defendants,
prima facie lacks bonafide. So
also the contention of obtaining signatures on blank papers and
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coercing the defendant No.2 to sing blank cheques by the plaintiff not
seem plausible. These defences cannot be said to be substantial.
However at the same time defendants case can not be completely
thrown away. Considering the peculiar facts and circumstances of the
case, I find that defendants can be permitted to defend the suit,
however subject to certain condition.
22. It is admitted position that plaintiff has already invoked
criminal proceedings under section 138 of NI Act against the defendants
and admittedly the amount of claim is not yet paid by the defendants.
Therefore, I find it just and proper to grant leave to defend to the
defendant subject to condition of depositing 50% of amount of the
cheques. The amount of cheques involved in the matter is around Rs.36
lakhs. Therefore defendants can be directed to deposit an amount of
rupees 18 lakhs. This condition is necessary to protect the interest of
plaintiff as well as the defendants. It would also give impetus to the
earlier disposal of the suit. Hence, I answer point No.1 accordingly.
As to Point No. 2-
23. It is obvious that due to grant of conditional leave to
defend, plaintiff is not entitled for Judgment at this stage. Hence
Summons for Judgment is bound to be rejected.
24. It is made clear that observations made in this order are
prima facie and without prejudice to the rights of the parties in trial.
Hence, the order.
ORDER
A. Conditional leave to defend is granted to the defendant subject
to their depositing to Rs.18 lakhs before this Court within eight
weeks from the date of this order.
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B. Consequently, Summons for Judgment No.40/2019 stands
disposed of as rejected.
C. On depositing amount by the defendant, same be invested in
Fixed deposit as per rules, until further orders.
D. On compliance of aforesaid condition, defendant would be at
liberty to file written statement within four weeks thereafter.
E. It is needless to observe that failure to deposit the amount within
the aforesaid time would entail rejection of leave to defend.
F. Cost in cause.
Date: 04-10-2022. (Dr. S. D. Tawshikar)
Judge, City Civil Court, Gr. Mumbai.
Court Room No.61
Dictated on : 04-10-2022
Transcribed on : 06-10-2022
corrected on : 11-10-2022
Signed on : 17-10-2022
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
17-10-2022 at 3.00p.m. Mrs. Vidya V. Malgaonkar
Name of the Judge
(with Court Room No.)
Dr. S.D. Tawshikar
C.R. No.61
Date of Pronouncement of JUDGMENT/
ORDER
04-10-2022
JUDGMENT/ORDER signed by P. O. on 17-10-2022
JUDGMENT/ORDER uploaded on 17-10-2022
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