Final Order 1

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MHCC010026632020
Presented on : 03/03/2020
Registered on : 03/03/2020
Decided on : 06/05/2022
Duration : Y M D
02 02 03
BEFORE THE CITY CIVIL COURT, MUMBAI
( Court No.14 )
(Presided Over by Sunil U. Hake)
SUMMONS FOR JUDGMENT NO.41 OF 2020
IN
COMMERCIAL SUIT NO.436 OF 2021
Vikas Gaurishankar Jhunjhunwala
of Mumbai Indian Inhabitant
carrying on business in the name and
style of M/s. Shree Krishna Papers as a
Sole Proprietor thereof and having its
Office at 5, Jolly Bhavan No.2, Ground
Floor, 7, New Marine Lines, Bombay400 020
And also having its branch office at 402, Shekhar Sadar CHS,
Subhash Cross Road, Vile Parle East,
Mumbai 400057. ..Plaintiff
VERSUS
1. M/s. Laminating and Packing Products
A partnership firm having its factory
address at Plot No.22, Dewan & Shah
Industries Estate, Behind Sundaram
Central School, Mahim Road, Village
Mahim, Palghar (West), Thane401 404
Also having its office address at 119D, Bombay Talkies
Compound, Malad (W), Mumbai 400 064.
2. Mr. NandaKishore O. Dhanuka,
Flat no.27, Building No.6,
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Malad Cooperative Housing
Society Ltd., Poddar Road,
Malad(East), Mumbai400 097.
3. Mr. Subhash O.Dhanuka,
Flat no.19, Building No.6,
Malad Cooperative Housing
Society Ltd., Poddar Road,
Malad(East), Mumbai400 097. ..Defendants
__________________________________________________________
Ld. advocate Mangal Bhandari i/b. Adv. Ajinkya Lokare for
plaintiff.
Ld. advocate Rajendra Mishra alongwith Adv. J.P. Dhanuka and
Adv. Priya Mehra for defendant Nos.1 to 3.
__________________________________________________________
ORAL ORDER
(Dated this 6th day of May, 2022)
Summons for Judgment is taken out for decree of an
amount of Rs.54,99,302/ alongwith future interest.
Plaintiff's case is as under:
2. Plaintiff does the business of M.G. Kraft papers.
Defendant No.1 is a partnership firm. Defendant Nos.2 and 3 are
the partners of defendant No.1firm. In pursuance to the purchase
orders placed by defendants, plaintiff sold and supplied M.G.
Kraft papers to defendants. Goods were delivered to defendants.
Defendants acknowledged receipt of the goods. Plaintiff has
pleaded, in detail, about the invoices raised against defendants
during the period from 13/03/2016 to 17/12/2016. Plaintiff has
also given details regarding Confirmation Notes executed by
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defendants regarding receipt of invoices. Defendants have also
given Confirmation of Accounts for the financial year 20152016
and 20162017. As per Confirmation of Accounts given by
defendants, an amount of Rs.45,59,177/ was outstanding against
defendants as on 31/03/2017. Defendants made payment of
Rs.One lac on 09/05/2017. Thus, an amount of Rs.44,59,177/ is
outstanding against defendants. Plaintiff sent a letter dated
14/11/2017 asking defendants to pay the outstanding amount.
Defendants by giving reply dated 25/11/2017 denied their
liability. Plaintiff issued notice dated 14/09/2018, through
advocate, asking defendants to pay outstanding amount
alongwith interest. Said notice was duly served to defendants.
However, defendants failed to pay the outstanding amount.
Defendants have no defence to plaintiff's claim. They have caused
their appearance only to delay passing of the decree. By making
all these submissions, plaintiff prayed for making Summons for
Judgment absolute.
3. Defendant Nos.1 to 3 applied leave to defend the
suit. They submitted that the reliefs claimed in the suit do not fall
within the ambit of Order 37 of C.P.C. Suit is barred by law of
limitation. Defendants have a strong defence to plaintiff's claim.
Plaintiff took undue advantage of the trust and faith of
defendants, which existed between parties due to long business
relationship, and forged the documents. Defendants have paid
amounts towards purchase of the goods received by them.
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Certain quantity of goods were found to be absolutely defective.
Defendant Nos.2 and 3 informed plaintiff about the defective
goods. Plaintiff has shown his willingness to take back those
defective goods. Plaintiff also assured to adjust consideration
amount of defective goods. However, plaintiff failed to do so.
Thereafter, defendants have disposed of defective goods in scrap.
4. Defendants further submit that they have replied
letter dated 14/11/2017 and denied their liability. Defendants
have given Confirmation of Accounts in good faith without
ascertaining the veracity of the same. They have paid entire
consideration amount to plaintiff. Plaintiff has misused the
cheque issued for security purpose. Ledger accounts, prepared by
plaintiff, are forged and fabricated. Defendants did not receive
demand notice. Defendants have raised triable issues. By making
these averments, defendants prayed for unconditional leave to
defend the suit.
5. Ld. Counsel appearing for plaintiff made following
submissions:
(a) As per purchase orders placed by defendants,
plaintiff has supplied the goods to defendants. Plaintiff has given
details of the invoices.
(b) Copies of the invoices are filed on record. Copies of
invoices filed on record show that those invoices were duly
acknowledged by defendants. All the invoices filed on record
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bear seals and signatures of defendants. Defendants, in their
reply affidavit, have not specifically denied their signatures and
seals on the invoices filed on record.
(c) Defendants are claiming that goods supplied by
plaintiff were defective. Plaintiff has filed on record receipts
regarding Confirmation of Notes executed by defendants. All
these receipts show that defendants received the goods mentioned
in the invoices. These receipts contain details regarding invoices
and value of invoices amount. It is specifically mentioned in these
confirmation of notes that goods have been delivered in
satisfactory condition as per oral orders. Therefore, defendants
cannot claim that goods were defective.
(d) Plaintiff has maintained ledger account of
defendants. Plaintiff has filed on record ledger account of
defendants for the year 20152016 and 20162017. These
accounts are duly confirmed by defendants. Thus, defendants
confirmed that an amount of Rs.45,59,177/ was outstanding
against them as on 01/04/2017.
(e) Defendants have made payment of Rs.One lac after
giving confirmation of these accounts. Therefore, an amount of
Rs.44,59,177/ remained outstanding against defendants.
(f) All the defences raised by defendants are not
supported by material on record. Defendants have no defence.
By making these submissions, Ld. Counsel for plaintiff prayed for
passing the decree forthwith.
6. As against this, ld. counsel for defendants made
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following submissions:
(a) Suit is not based upon invoices, but, it is based upon
running account.
(b) Summary suit under Order 37 of C.P.C. would not be
maintainable on running account.
(c) Defendants are coming with the specific case that
running accounts, filed on record, are signed by them in good
faith without verifying contents therein.
(d) Plaintiff is claiming interest at the rate of 1.67% p.m.
As per copies of the invoices filed on record, plaintiff can claim
interest at the rate of 2% p.m. It is not made it clear as to how
plaintiff is claiming interest at the rate of 1.67% p.m. instead of
2% p.m. Therefore, claim for interest requires trial.
(e) The copies of the invoices filed on record show that
amounts under invoices were payable after certain period. Thus,
plaintiff was entitled for interest after the period mentioned in the
invoices. Plaint is silent as to how plaintiff has calculated the
interest component.
(f) Defendants are denying the suit claim since
inception. Record shows that defendants have immediately
replied notice on 25/11/2017 and disputed their liability.
Defendants are coming with the specific case that goods supplied
by plaintiff were defective.
(g) Ld. Counsel for defendants relied upon following
judicial pronouncements :
(i) Anil Gupta V/s M/s. Sant Ram Dhuper & Co.,and
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another, AIR 1977 DELHI 164.
(ii) Milkhiram (India), Private Ltd. And Others V/s.
Chamanlal Bros., AIR 1965 SC 1698.
(h) By making all above submissions, ld. Counsel for
defendants urged with vigor that defendants have raised the
issues which require trial. Therefore, they are entitled to
unconditional leave to defend the suit.
7. Considered the submissions advanced on behalf of
both sides. Both the case laws cited on behalf of defendants
relate to scope of Order 37 of C.P.C. Hon’ble Supreme Court in
case of IDBI Trusteeship Services Ltd. V/s. Hubton Ltd., 2017 1
SCC 568, pleased to modulate principles for deciding leave to
defend applications under Order 37 of C.P.C.
8. Defendants, in their reply affidavit, claims that
certain quantity of the goods supplied by plaintiff were defective.
This contention regarding defective quality of the goods is too
vague that it cannot be relied upon. Defendants have not specified
the quantity of defective goods. Defendants have not pleaded
under which invoices, they have received defective goods. They
have also not pleaded as to when they have received defective
goods. Plaintiff has filed on record invoices which are duly
acknowledged by defendants. Plaintiff has also filed on record
receipts issued by defendants acknowledging that they have
received the goods under invoices in satisfactory condition. In
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view of the material placed by plaintiff, primafacie, from the
vague plea of defendants, it cannot be construed that defendants
raised the issue of supply of defective goods.
9. Ld. Counsel for defendants vehemently argued that
suit cannot be based upon running account. As stated supra,
plaintiff has filed on record ledger account maintained by him for
the financial year 201516 and 201617. These accounts show
that plaintiff maintained running account of the defendants.
However, suit is not based upon running account only. These
running accounts were duly confirmed by defendants.
Defendants have not disputed their signatures and seals on the
Confirmation of Accounts filed on record. In case of Jyotsna K.
Valia V/s T.S. Parekh & Co., 2007(4) ALL MR 718, Hon'ble
Bombay High Court pleased to hold that summary suit under
Order 37 Rule 2 of C.P.C. would be maintainable on the basis of
settled accounts.
10. Defendants claim that they have signed the
Confirmation of Accounts without verifying the veracity of these
accounts. The accounts contain details regarding sales and
receipt of amount from defendants. Entries in the account
statement are further supported from the copies of the invoices
duly acknowledged by defendants. Defendants could not point
out as to how the accounts filed on record are not maintained
properly. Therefore, there is no primafacie substance in the
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submission of defendants that they have confirmed the accounts
without verifying them.
11. Plaintiff has filed on record copies of the invoices
duly acknowledged by defendants. Plaintiff has further filed on
record receipts executed by defendants regarding receipt of goods
under invoices in satisfactory condition. Plaintiff maintained
ledger account of the defendants. These ledger accounts are duly
confirmed by defendants. As against this, defendants are taking
vague plea regarding supply of defective goods. Defendants failed
to substantiate their defence regarding receipt of supply of
defective goods. Defendants claim that they are not liable to pay
any amount to defendants. However, they have not filed on
record any material to show that they have made payment
regarding the invoices filed on record. Thus, although,
defendants raised the issue of liability, but, they failed to
substantiate their defence.
12. Ld. Counsel for defendants submit that from the
accounts filed on record, it is not clear as to how plaintiff has
applied the interest. On perusal of account statement for the
financial year 201516, it is evident that plaintiff has not claimed
any amount towards interest in the said financial year. However,
in the financial year 201617, there are five entries regarding
interest. The total of these five entries comes to Rs.5,24,531/.
Thus, the outstanding amount of Rs.45,59,177/, includes an
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amount of Rs.5,24,531/ towards interest amount. Thus, principal
outstanding amount was around Rs.40 lacs. As discussed above,
considering the material placed before the Court, this Court
would have been fully justified in allowing Summons for
Judgment. However, to allow defendants to file a written
statement and contest the suit on merits, conditional leave to
defend the suit to defendants can be granted on depositing
principal amount of Rs.40 lacs in the Court within 12 weeks from
today. In the result, following order:
ORDER
1. Defendants shall deposit a sum of Rs.40,00,000/ (Rupees
Forty Lacs only) in Court within a period of 12 weeks from today.
If this condition is complied with, defendants are granted leave to
defend the suit and defendants shall file Written Statement within
a period of 30 days from the date of deposit.
2. If aforesaid condition of the deposit is not followed by
defendants within stipulated time, plaintiff shall be at liberty to
apply for exparte decree against defendants.
3. There shall be no order as to costs.
4. S/J No.41/2020 is disposed of accordingly.
S.U. HAKE
JUDGE,
06/05/2022 CITY CIVIL COURT, GR.MUMBAI.
Dictated on : 06/05/2022
Transcribed on : 10/05/2022
Signed on : 11/05/2022
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE
ORIGINAL SIGNED JUDGMENT/ORDER”.
11/05/22 at 03.45 pm.
Mrs.Tanushree C.Kamble
Name of the Judge HHJ SHRI SU Hake
Date of Pronouncement of
judgment/order
06/05/2022
Judgment and order signed by P.O. 11/05/22
Judgment/order uploaded on 11/05/22
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