Final Order 1

Order Details: Other
Pdf Text: SJ NO.33 OF 2018 1 IN SUM. SU. NO.1199 OF 2017
IN THE CITY CIVIL COURT FOR GREATER BOMBAY
AT BOMBAY
SUMMONS FOR JUDGMENT NO. 33 OF 2018
IN
SUMMARY SUIT NO.1199 OF 2017
Amit B. Mittal
age year Sole Proprietor of Shyam Udyog,
A Proprietary concern, having its office at
310, Gokul Building, 80A, Baroda Street,
Iron Market, Mumbai 400 009. …. Plaintiff
Versus
Krupay Tradepipes Pvt. Ltd.,
A company incorpoarated under the
Companies Act, 1956, having its office at 4
A, Akbar Street, Devi Galli Off. Bhaurao
Bobade Marg, Carnac Bunder, Mumbai
400 009. …. Defendant
Shri. Girish Kedia, Advocate for Plaintiff.
Shri. Atul Singh, Advocate for Defendants.
CORUM :SMT. S.S. NAGUR,
AD HOC JUDGE &
ASST. SESSIONS JUDGE,
(C.R.NO.13)
DATE : 08/07/2019
ORAL ORDER
1) Summons for judgment is filed by plaintiff to pass
decree of Rs.29,51,504/ along with interest 18% p.a. on the
principle amount. The summons for judgment is supported by
affidavit of Anil B. Mittal. He on oath stated that the plaintiff
has sold steel material to the defendant with the invoice. The
-- 1 of 11 --
SJ NO.33 OF 2018 2 IN SUM. SU. NO.1199 OF 2017
said material was received by defendants without disputing
any quality, quantity and price. Notice was issued to the
defendant. They failed to pay the amount but in the reply
dated 31/01/2017 they confirmed the issuance of cheque.
However, denied their liability being false claim.
2) The defendant filed reply by way of affidavit of Shri.
Pradip R. Shah and has denied liability to pay the amount on
the ground that the defendant did not received any material as
stated by the plaintiff in the invoice. The defendants have only
received the material vide invoice No.ST/1706/15/16 dated
29/02/2016. The said amount is paid by the defendant which
is admitted by the plaintiff. The defendant issued cheques to
the plaintiff as security to establish process of trust relationship
inter se the parties in view of the industry norms. The said
cheques are misappropriated by the plaintiff. Plaintiff initiated
various proceedings i.e. before National Company Law
Tribunal, Mumbai u/s. 138 of Negotiable Instrument Act. The
plaintiff is not entitled for recovery of any amount from the
defendant as no goods have been supplied by plaintiff to
defendant. The defendant has triable issue. Therefore, prayed
for unconditional leave to defend.
3) The plaintiff has filed rejoinder affidavit to the reply
of the defendant and has denied contents of the defendant
stated in their reply. The plaintiff had also relied on the
documents to show that the goods were supplied to the
defendant and the defendant has claimed the benefit of
-- 2 of 11 --
SJ NO.33 OF 2018 3 IN SUM. SU. NO.1199 OF 2017
CENVAT benefit.
4) Heard Advocate Shri. Girish Kedia for plaintiff and
Advocate Shri. Atul Singh for defendant. Perused contents of
summons for judgment and reply supported by affidavit as well
as the rejoinder affidavit filed by the plaintiff. I have also gone
through the plaint and the documents relied by the plaintiff.
5) Advocate Shri. Girish Kedia for plaintiff has drawn
my attention to the pleading and the documents relied by the
plaintiff to show that the sold goods of the defendant and
defendant has received the said goods. The defendant towards
their liability issued three cheques out of two cheques were
dishonoured. The defendant has claimed CENVAT by showing
amount of the invoice thereby has admitted that they have
received the goods from the plaintiff. However, at the time of
payment of the amount of goods received from the invoice they
are denying liability to pay and has come with false case of non
receipt of the goods by transaction with the plaintiff.
6) Advocate Shri. Girish Kedia for plaintiff has relied on
the authority reported in, 'IDBI Trusteeship Services Limited
Vs.Hubtown Limited,(2017)1 SCC 568', wherein, the Hon'ble
Apex Court in para 17 has referred the principles of binding of
the decision in Milkhiram case AIR 1965 Supreme Court 1698,
that,
1 “that 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
-- 3 of 11 --
SJ NO.33 OF 2018 4 IN SUM. SU. NO.1199 OF 2017
judgment, and the defendant is entitled to unconditional
leave to defend the suit.
2 If the defendant raises triable issues indicating 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.
3 Even if the defendant 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 be taken to see that such triable issues are
not shut out by unduly severe orders as to deposit or
security.
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.
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.
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.”
7) On the other hand, Advocate Shri. Atul Singh for the
defendant has disputed invoice and the document Kata
Chitthi/Weigh Bridge slip that those goods are never supplied
to the defendant nor there was demand to purchase order. The
-- 4 of 11 --
SJ NO.33 OF 2018 5 IN SUM. SU. NO.1199 OF 2017
weigh bridge slip does not show that it was defendant to
whom these goods are supplied. The statement showing the
benefit of CENVAT u/s.2 by the plaintiff cannot be considered
at this stage as it is a typed paper without any signature and
stamp. Hence, there is a triable issue and prayed for
unconditional leave to defendant.
8) On the other hand, Advocate Shri. Atul Singh for
defendant has relied on the authority reported in, (i) Santosh
Kumar Vs. Bhai Mool Singh, 1958 SCR 1211: AIR 1958 SC
321, that, the issue of fact about the truth and good faith of
which can only be deposited by going into the evidence. The
Hon'ble Apex Court in para 8 of the judgment has however
held that,
8 “that it is always undesirable, and indeed impossible, to lay
down hard and fast rules in matters that affect discretion.
But, it is necessary to understand the reason for a special
procedure of this kind in order that the discretion may be
properly exercised.”
And in (ii) Defiance Knitting Industries (P) Ltd. Vs. Jay Arts,
(2006) 8 Supreme Court Cases 25, that,
“While giving leave to defend the suit the court shall observe
the following principles:
(a) If the court is of the opinion that the case raises a triable
issue then leave to defend should ordinarily be granted
unconditionally. The question whether the defence raises a
triable issue or not has to be ascertained by the court from
the pleadings before it and the affidavits of parties.
(b) If the court is satisfied that the facts disclosed by the
defendant do not indicate that he has a substantial defence
to raise or that the defence intended to be put up by the
defendant is frivolous or vexatious it may refuse leave to
defend altogether.
-- 5 of 11 --
SJ NO.33 OF 2018 6 IN SUM. SU. NO.1199 OF 2017
(c) In cases where the court entertains a genuine doubt on the
question as to whether the defence is genuine or sham or
whether it raises atriable issue or not, the court may
impose conditions in granting leave to defend.
9) The plaintiff has filed suit against the defendant on
the basis of following invoices:
Sr. No. Invoice No. Date Amount (Rs.)
1 ST/1706/1516 20.02.2016 5,23,355.00
2 ST/1732/1516 05.03.2016 9,58,508.00
3 ST/1733/1516 05.03.2016 8,69,505.00
4 ST/1737/1516 06.03.2016 9,17,280.00
10) The plaintiff has filed the invoices along with the
plaint. It is the case of the plaintiff that the defendant's invoice
bearing No.ST/1706/1516 for Rs.5,23,355.00 was paid by the
defendant in discharge of the other liability to pay other
invoice to defendant issued two cheques bearing No.113201
dated 17/12/2016, 113202 dated 17/12/2016 and both the
cheques were dishonoured. These cheques were returned with
remark 'amount insufficient'. The plaintiff issued notice on
28/12/2016 and called upon the defendant to pay the amount
of dishonour cheques. The said notice was replied by
defendant on 03/01/2017 confirmed issues of cheques but
falsely and dishonestly denied their liability.
11) The defendant is not disputing the issuance of
cheques. It is the contention of defendant that these cheques
are issued as security to establish relationship between the
-- 6 of 11 --
SJ NO.33 OF 2018 7 IN SUM. SU. NO.1199 OF 2017
plaintiff and defendant for their business.
12) The defendant is not denying that they have received
goods for the defendant invoice No.ST/1706/1516 and
payment of amount towards the said goods to the plaintiff. The
contention of the defendant is that those cheques were not
signed and nor there was any entry of amount to whom its to
be paid. These cheques are blank cheques issued to the
plaintiff. The above defence of issuance of blank cheque to the
plaintiff without the signature is suspicious on the ground that
in an industry that to dealing with the transactions i.e.
purchase and sale, no prudent person will draw/accept blank
cheque without having signature on that. In the reply to the
demand notice the defendant raised the defence that,
“that there is no question of issuing cheque bearing Nos.
113201 and 113202, both dated 17/12/2016 for Rs.8 lacs
each (hereinafter referred as “the said cheques”) in favour of
your client. My client stated that without the knowledge or
consent of my client, your client has filled up the dates,
amounts, name of payee and signature on the said cheques
by committing the serious offences of forgery for the purpose
of cheating, forgery of valuable security and using forged
documents as genuine.”
13) The defendant has alleged forgery of documents and
cheating but till date not placed on record any document to
show that he has filed any criminal complaint against the
plaintiff nor there is contention in the reply that the defendant
initiated criminal proceeding against plaintiff for the forgery.
On the contrary, the record shows that there are case filed by
the plaintiff against him to recover the debt.
-- 7 of 11 --
SJ NO.33 OF 2018 8 IN SUM. SU. NO.1199 OF 2017
14) The defendants have come with defence about
issuance of blank cheque with reasoning that the cheque which
was deposited by the plaintiff was stopped by the defendant.
Therefore, in the cheque there is no noting of stop payment but
however cheques were not honoured on the ground that there
was no amount kept in the said bank as the defendant was not
operating said bank account. The defendant in para no.6, page
no.5 of reply has stated that,
“that a perusal of the bank remark on the said cheque
(Exhibit B in the captioned suit) evidences the fact that the
cheque was returned due to 'payment stopped'; completely
contrary to the allegation of dishonour of 'funds insufficient'
as alleged by the plaintiff abovenamed. The other two
cheques were accordingly then not deposited by the plaintiff
at such juncture and were supposedly retained by the
plaintiff to be deposited later in time. Fortunately, for the
said account not be in use, the cheques did not clear on
presentation when they were clandestinely presented by the
plaintiff to the bank and the defendant was saved from
illegal loss and prejudice.”
15) The defendant is well aware of the cheque which he
stopped but then too failed to issue any notice to bring the
facts on record which was replied by him in notice reply and
taken any steps to prevent the plaintiff from depositing any
further cheques issued by defendant. The defendant is seeking
unconditional leave to defend. The plaintiff on the basis of
invoice on record and cheques which has been issued by the
plaintiff has prima facie shown that the amount of the debt to
be paid by defendant.
16) I have gone through the authorities relied by both
the parties. The principles laid down in 'IDBI Trusteeship
-- 8 of 11 --
SJ NO.33 OF 2018 9 IN SUM. SU. NO.1199 OF 2017
Services Limited Vs.Hubtown Limited,(2017)1 SCC 568', that
for grant of leave to the defendant is applicable to the present
facts of the case, 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) In the present case the defendant has raised defence
of issuance of cheque as a security and prima facie conclusion
to grant unconditional leave to the defendant cannot be
granted.
18) On the other hand the defendant has only come with
defence of issuance of cheque by way of security and non
receipt of the goods. Therefore, he has not been entitled for
unconditional leave to defend. He can be granted an
opportunity to defend suit on conditional leave to pay an
amount of Rs.16 Lakh. Hence, pass following order:
ORDER
1 The defendant is granted conditional leave to
defend on payment of Rs.16,00,000/ (Rs.
Sixteen Lakh only) within 15 days from the date
of the order failing which summons for
judgment will be made absolute and decree will
-- 9 of 11 --
SJ NO.33 OF 2018 10 IN SUM. SU. NO.1199 OF 2017
be passed.
2 On deposit of the above amount within the
above period the defendant is entitled to file
written statement within one month from the
date of the deposit of the amount.
3 The Registrar is directed to keep the said
amount of Rs.16,00,000/ in nationalised bank.
4 Accordingly, summons for judgment is disposed
of.
(S.S. Nagur)
Date : 08/07/2019 Judge,
City Civil Court,
Greater Mumbai.
Dictated on : 08/07/2019
Transcribed on : 30/07/2019
Signed on : 30/07/2019
-- 10 of 11 --
SJ NO.33 OF 2018 11 IN SUM. SU. NO.1199 OF 2017
“CERTIFIED TO BE TRUE AND CORRECT, COPY OF THE ORIGINAL SIGNED
JUDGMENT/ORDER”
DATE & TIME OF UPLOADING : NAME OF STENOGRAPHER
01.08.2019 & 3.03 p.m. : Mrs. S.A. Shekade (LG)
Name of the Judge (with Court no.) : HHJ Smt. S.S. Nagur
(CR no. 13)
Date of pronouncement of Judgment/: 08.07.2019
Order
Judgment/Order signed by the P.O. on: 30.07.2019
Judgment/Order uploaded on : 01.08.2019
-- 11 of 11 --