Final Order 1

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MHCC010016522020
IN THE COURT OF JUDGE, CITY CIVIL AT GREATER MUMBAI
SUMMONS FOR JUDGMENT NO. 23 OF 2020
IN
SUMMARY SUIT NO. 1082 OF 2017
Laherchand B. Shah, an adult Indian
Inhabitant aged 78 year carrying on his
business in Hardware in the name & style
of M/s. Shah Brother Hardware Co., as the
sole proprietor at 31, Israil Mohalla,
Bhagwan Bhuvan, 3 Floor, Masjid Bunder
Road, Mumbai-400009 through his
constituted attorney Kamal L. Shah an
adult, aged 48 years. (since deceased
deleted)
1(a) Kamal Laherchand Shah, An adult of
India Inhabitant Age: 52 years,
Occupation: business Having address
at:601/6A, Tribute Rajkamal Studio
Compound, Rajkamal Lane, Parel,
Mumbai-400 012.
...Plaintiff
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Suit No.1082/2017
VERSUS
1. Mewar Hi Tech Engineering Ltd., a
limited company having its office at 1,
Hawa Magri Industrial Area, Sukher,
Udaipur-313 001 (Raj).
2. Mahendra Sing Singhvi, an adult
Director of Mewar Hi Tech Engineering
Ltd., having address 172-A, Fatehpura
Sukhadia Circle, Udaipur-313 001 (Raj)
3. Pratap Singh Talesara, an adult
Director of Mewar Hi Tech Engineering
Ltd., having address 185,Bhupalpura,
Udaipur-313 001 (Raj)
4. Virendra Prakash Rathi, an adult
Director of Mewar Hi Tech Engineering
Ltd., having address 214-C, Sardarpura,
Udaipur-313 001 (Raj)
5. Chatrsing Harisingh Rathore, an adult
Managing Director of Mewar Hi Tech
Engineering Ltd. having address 3-C,
Ambavgarh, Near Kurabad House, Amba
Mata, Udaipur, Shastri Circle, Udaipur-313
004 (Raj)
6. Reena Rathore, an adult Wholetime
Director of Mewar Hi Tech Engineering Ltd.
having address 419, Teachers Colony, Amby
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Mata Scheme, Udaipur-313001(Raj)
5. Vaibhav Singh Rathore, an adult
Wholetime Director of Mewar Hi Tech
Engineering Ltd. having address 3-C,
Abavgarh, Near Kurabad House, Udaipur,
Shastri Circle, Udaipur-313 004 (Raj)
...Defendants
Appearance :
Ld. Adv. Mr. Lalit Jain for plaintiff.
Ld. Adv. Ms. Bhavna Jain for defendants.
CORAM : DR. S. D. TAWSHIKAR
(Court Room No.61)
DATE : 02/05/2023.
ORAL ORDER
(Dictated and pronounced in Open Court)
Plaintiff has taken out present Summons for Judgment(SJ)
as per Sub rule (4) of Rule 3 of Order XXXVII of Code of Civil
Procedure, 1908 (hereinafter referred as ‘CPC’ for short) claiming
Judgment for recovery of principal sum of Rs.5,01,436/- lakhs along
with interest thereon at the rate of 18% p.a. from 30-04-2017 onward.
2. Defendants have strongly objected the Summons for
Judgment by filing affidavit in reply and thereby claims unconditional
leave to defend.
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Plaintiff’s case in brief:-
3. Plaintiff claims to have supplied goods i.e. ‘bearings and
sleeves’ to the defendant No.1 company as per the purchase order
received from it. Defendant Nos. 2 to 7 are alleged to be the Directors of
defendant No.1.
4. It is contended that against the supply of goods an amount
of Rs. 7,52,037/- was due and outstanding against defendants as per
the ledger maintained by the plaintiff. The copy of the ledger is at Exh.B
to the plaint.
5. Plaintiff further contends that as the amount was not paid
by the defendants, he had issued notice through his advocate on 18-05-
2017. The said notice was received by defendant Nos.5 and 7, whereas
rest of the notices returned back with the remark “left”. As the
defendants failed to pay the outstanding amount including interest,
plaintiff has filed present suit.
6. By way of present SJ, plaintiff contends that defendants
have no defence at all. There is no substantial issue as such raised by
the defendants and therefore, leave to defend may not be granted.
Defendant’s case-
7. Defendants by filing detailed reply in affidavit objected SJ
and claimed unconditional leave to defend. Amongst others, the main
contention of defendants is with respect to suppression of martial fact of
settlement of dispute between the parties before the Ld. Metropolitan
Magistrate Mumbai on 27-04-2017. The plaintiff had filed complaint
u/s. 138 of Negotiable Instruments Act 1881 (NI Act), before Ld. MM
Court, Sewree for dishonour of two cheques aggregating Rs. 2,79,994/-.
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Defendants, towards full and final settlement of pending disputes, have
paid a sum of Rs.2,79,994/- and thereby plaintiff withdrew the
complaint. The said fact is suppressed by the plaintiff and has filed
present suit without any cause of action.
8. It is contended that defendant Nos. 2, 3 and 4 have
resigned from the defendant No.1 company in the year 2018. They
being independent Directors were not active in the day-to-day working
of defendant No.1 and therefore filing of suit against them is
unwarranted. Defendants have placed on record copies of their
resignation letters.
9. Defendants further contend that some of the goods
supplied by the plaintiff were found to be duplicate and not genuine,
therefore complaint with FIR No.0177 u/s. 420 of IPC was lodged (at
Udaipur, Rajasthan). Same is still pending for investigation. It is
contended that so as to pressurize the defendants to withdraw the said
complaint, present false suit is filed. Defendants have filed copy of
Inspection Report along with email dated 13-07-2017 to support their
contention about supply of defective goods and consequent action taken
by defendant No.1.
10. Defendants further contend that there is no outstanding
liability on their part. The filing of present suit is misuse of process of
law. There are various triable issues involved in the matter and
therefore unconditional leave to defend be granted.
11. Plaintiff has refuted allegations of defendants by filing
affidavit-in-rejoinder.
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12. In the backdrop of the rival contentions raised, 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
leave to defend ?
If yes, conditional or unconditional?
Conditional leave to
defend is granted to the
defendants.
2. What order ? As per final order.
REASONS
13. 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 merits of either side. 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 at the contentions and documents relied upon by both the sides.
14. Heard both the sides. With the assistance of both the
learned advocates, I have gone through the documents placed on record
by either side.
As to Point No.1-
15. Mr. Lalit Jain, Ld advocate for the plaintiff took this Court
through pleadings and the documents placed on record by the plaintiff.
He submits that there is no suppression of any fact on the part of
plaintiff. The fact of filing complaint by plaintiff bearing complaint
No.253/SS/2017 before Sewree Court for offence u/s. 138 of NI Act is
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not disputed. The said complaint was filed against dishonour of two
cheques, amounting to Rs.2,79,994/-. As the defendants paid said
amount, the complaint came to be withdrawn. In fact accused therein
i.e. defendants, had undertook to withdraw all the criminal complaints
and allegations made against the present plaintiff, however defendants
did not withdraw the FIR No. 0177 lodged at Udaipur against the
plaintiff.
16. Ld advocate for the plaintiff further submits that the copy
of ledger (Exh.B) clearly reveals that the amount received from
defendants under the compromise is duly reflected in the ledger. By
adjusting said amount, the outstanding amount as on 30-04-2017 is Rs.
7,52,037/-, including interest thereon. Therefore, plaintiff has filed
present suit to recover the outstanding amount against the goods
supplied.
17. Ld adv for plaintiff contends that there was no full and final
settlement about the outstanding dues as alleged by the defendants.
The defence is therefore vague, misleading and frivolous.
18.
Per contra, defendants through written notes of arguments
reiterate the contention of full and final settlement of the outstanding
dues claimed by the plaintiff. It is contended that plaintiff has cheated
defendants by supplying defective and duplicate goods. Therefore, the
criminal case is filed by the defendants before the court at Udaipur. Said
matter is pending for framing of charge.
19. It is further submitted that the present suit is filed for the
same cause of action for which complaint u/s. 138 of NI Act was filed
by the plaintiff. Defendants have also filed copy of the complaint
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No.253/SS/2017, application for withdrawal filed in the said complaint
and order passed thereon dated 27-04-2017.
20. After considering the submissions of both sides, it can be
gathered that plaintiff has filed present suit on the basis of outstanding
ledger. The ledger reflects credit sales as well as payment received from
the defendants from time to time. The last payment is through two
demand drafts dated 27-04-2017, amounting to Rs. 2,79,994/-.
Admittedly, the said amount is received by plaintiff from the defendants
towards the settlement of the complaint No.253/SS/2017. Thus, the
amount received from defendants is duly accounted for by the plaintiff
in its ledger account. There is nothing placed on record to reveal that
the plaintiff had waived right to claim outstanding dues from the
defendants. The withdrawal application filed before the Ld
Metropolitan Magistrate seems to be restricted to withdrawal of that
complaint only. Therefore, I am not convinced about the submissions of
defendants regarding full and final settlement of the account.
21. Supply of goods by plaintiff to the defendant is not
disputed fact. It appears that defendants have filed a criminal complaint
against the plaintiff at Udaipur for supply of defective goods. I find that
claim raised in the present suit and the criminal complaint filed by
defendants is altogether different. The criminal complaint cannot have
bearing on the present suit for recovery of the amount. It is needless to
say that if defendants succeeds to prove the allegations of cheating and
supply of defective goods, defendants would be at liberty to seek the
cost/compensation against the plaintiff, as per the law. However, so far
as present claim is concerned, same needs to be proceeded with.
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22. From the aforesaid factual and legal matrix involved in the
matter in hand, I find that the defendants have no substantial defence
as such. However, there are some defences available to the defendants
regarding the supply of defective goods, full and final settlement, etc,
but said defences cannot be equated with ‘substantial defence’. At the
most those defences can be seen as plausible and distant defences.
23. In view of the guideline of Hon’ble Apex Court in the case
of IDBI Trusteeship Services Limited Vs. Hubtown Limited, (2017) 1
SCC 568, I find this to be a fit case wherein conditional leave be
granted. So as to secure the interest of the plaintiff and to afford one
opportunity to defendants to defend the suit. In facts and circumstances
of the case, I find condition to deposit 50% of principal amount (which
approximately comes to Rs. 2,50,000/-) would be just and proper. That
would protect the interest of both sides and would help for expeditious
disposal of the suit. Hence, I answer point No.1 accordingly.
As to Point No. 2-
24. It is obvious that due to grant of conditional leave to
defend, plaintiff is not entitled for judgment at this stage. Hence, SJ is
bound to be rejected.
2. It is made clear that observations made in this order are
prima facie and without prejudice to the rights of the parties in trial.
24. In view of the above, I pass following order-
ORDER
A Conditional leave to defend is granted to the defendants subject
to their depositing an amount of Rs. 2,50,000/- (Rupees Two
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Lakhs Fifty Thousand only) before this Court, as a security, within
eight (08) weeks from today, excluding intervening vacation
period.
B Amount, if deposited by the defendants, be invested in fixed
deposits with Nationalized Bank, as per the rules.
C Defendants are at liberty to file Written Statement within four
weeks, from the date of compliance of condition of deposit of
amount.
D Summons for Judgment No.23 of 2020 is disposed of
accordingly.
(Dr. S. D. Tawshikar)
Judge, City Civil Court, Gr. Mumbai.
Date: 02-05-2023. Court Room No.61
Dictated on : 02-05-2023
Printed on : 02-05-2023
Signed on : 02-05-2023
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
02-05-2023 at 5.55p.m. Mrs. V. V. Malgaonkar
Name of the Judge
(with Court Room No.)
Dr. S.D. Tawshikar
C.R. No.61
Date of Pronouncement of JUDGMENT/
ORDER
02-05-2023
JUDGMENT/ORDER signed by P. O. on 02-05-2023
JUDGMENT/ORDER uploaded on 02-05-2023
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