Final Order 1

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MHCC010028702020
IN THE COURT OF JUDGE, CITY CIVIL AT GREATER MUMBAI
SUMMONS FOR JUDGMENT NO. 43 OF 2020
IN
SUMMARY SUIT NO. 309 OF 2020
Mr. Rameshwar Prabhuji Joshi
B-302, 3rd Floor, Jain Park, Shet Moti
Shah Road, Love Lane, Byculla (east),
Mumbai-400 027.
...Plaintiff
VERSUS
1. Mr. Lalit Kumar Jain,
10th Floor, Kumar Business Centre,
Bund Garden Road, Pune -411 001.
2. K.K.Erector @ Kumar Builder
10th Floor, Kumar Business Centre,
Bund Garden Road, Pune -411 001.
...Defendants
Appearance :
Ld. Adv. Ms. Namrata Shenoy for plaintiff.
Ld. Adv. P.G.Lad for for defendants.
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CORAM : DR. S. D. TAWSHIKAR
(Court Room No.61)
DATE : 09/02/2023.
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) claiming Judgment for
recovery of principal sum of Rs.10 lakhs against defendants along with
interest at the rate of 18% p.a.
2. Defendants have strongly objected the Summons for
Judgment by filing affidavit-in-reply and thereby claims unconditional
leave to defend.
Plaintiff’s case in brief:-
3. Plaintiff claims to be a professional photographer. He had
advanced a loan of Rs. 10 lakhs to the defendants vide cheque bearing
No. 706627 dated 01-06-2010. Defendants had issued a Promissory
Note of Rs. 10 lakhs on the same day in favour of the plaintiff against
receipt of the said amount. Defendants had agreed to pay the principal
amount on demand along with interest at the rate of 1.65% per month.
4. Plaintiff further contends that in view of the understanding
between plaintiff and defendants paid interest on every quarterly
interval up to the month of June-2014. As such, the last installment of
interest received by the plaintiff is dated 28-06-2014. Plaintiff has
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placed on record various bank details showing payments of Rs.10 lakhs
as well as receipt of interest from time to time.
5. Plaintiff further contends that defendants intentionally
defaulted in payment of interest, therefore plaintiff started demanding
due amount. An amount of Rs. 17,25,249/- was due and outstanding
towards principal as well as interest up to 31-12-2017. Plaintiff issued
a legal Notice through his advocate letter on 14-12-2017, calling upon
defendants to repay the due amount. However, defendants failed and
neglected to pay the amount. Hence, the present suit.
6. By way of present Summons for Judgment, 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.
Defendants’ case-
7. Defendant Nos.1 and 2 have filed their separate Affidavit-
in-reply and thereby sought unconditional leave to defend. Following
grounds of defence can be enlisted-
1. That defendant No.1 is joined unnecessarily without
there being any role in the alleged transaction. Thus,
the suit is hit by principle of misjoinder of party.
2. There is no privity of contract between the plaintiff and
defendant No.1.
3. Defendant No.2 is non existing entity. Defendant No.2
i.e. ‘KK Erector’ and ‘Kumar Builders’ were two different
separate entities. The Kumar Builder is now converted
into a company by name “Kumar Builder Project Pune
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Pvt. Ltd.”. Plaintiff, despite intimation by defendants
has not taken steps to amend the suit and bring on
record the existing entity.
4. From the summary of accounts placed on record by the
plaintiff (Exh-A of the plaint), it can be seen that the
amount of Rs. 10 lakhs are in fact paid by plaintiff to
one ‘K.K. Electronics’, with which defendants have no
nexus. Thus, the amount is not transferred to
defendants. Therefore, suit is not maintainable.
5. The alleged Promissory Note is relied upon by plaintiff
(Exh.B of plaint), shows the interest to be paid at the
rate of 1.65% p.m., however, plaintiff has claimed at
the rate of 18% p.a. There is no agreement as such
between the parties to claim said interest. Hence, suit
is not maintainable on this ground as well.
6. Plaintiff has received an amount of Rs. 3,79,232/- from
K.K. Erector towards principal and not towards the
interest.
7. Suit is not filed within the limitation and summary suit
is not maintainable under Rule 2 of order XXXVII of
CPC.
8. Defendants ultimately claim that there are various
substantial and triable issues involved in the suit which requires to be
tested on evidence at trial. Defendants, thus seek unconditional leave
to defend.
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9. 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 defendants are entitled for
leave to defend ?
If yes, conditional or unconditional?
Unconditional leave to
defend is granted to the
defendants
2. What order ? As per final order.
REASONS
10. 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.
11. 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-
12. Advocate Ms. Namrata Shenoy for the plaintiff submits that
plaintiff has paid the amount of loan of Rs. 10 lakhs to the defendants
through the bank cheque. The payment of said amount is duly reflected
in the account statement of plaintiff. She submits that due to
typographical mistake on the part of the Bank, the name of K.K.
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Electronics is wrongly shown in place of K.K. Erector. She submits that
this fact was clarified by the plaintiff in the pleadings itself.
13. Ld advocate for the plaintiff further submits that
defendants had issued the Promissory Note and thereby acknowledged
the receipt of Rs. 10 lakhs and further agreed to repay the same on
demand along with interest at the rate of 1.65% p.m. The cheque
number is also recorded on the Promissory Note itself. Defendants have
not denied the signature on the Promissory Note and therefore the
contention of the defendants about non receipt of the loan is clearly
false and misleading. She further submits that defendants have come
with vague and unacceptable defence. There is no substantial issue
raised, therefore, no leave to defend be granted.
14. Ld advocate Mr. P. G. Lad for defendants points out various
bank statements placed on record by the plaintiff. He submits that
there is nothing on record to show that the plaintiff had paid an amount
of Rs. 10 lakhs to the defendants. He submits that the bank record
shows payment of said amount to one K.K. Electronics and not to the
defendants. He thus submits that from the case of the plaintiff itself
triable issue can be seen to have been raised.
15. Mr. Lad further submits that there is not a single
word/document in entire pleadings of the plaintiff to clarify as to how
defendant No.1 is a necessary party. No role of defendant No.1 is
attributed in entire transaction therefore bar of misjoinder gets
attracted.
16. Mr. Lad further submits that the plaintiff claims to have
paid the loan on 01-06-2010. The alleged Promissory Note is also of the
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same date. However, suit is not filed within 3 years from date of
payment of loan or issuance of Promissory Note. Therefore, suit is
clearly barred by limitation. Mr. Lad also harps upon non existence of
defendant No.2 Firm and failure of plaintiff to bring on record the
necessary party i.e. Kumar Builder Project Pune Pvt. Ltd. and Kumar
Urban Development Pvt.Ltd.
17. Learned advocate for the defendants ultimately submits
that there are various triable issues involved in the suit. Defendants
have successfully pointed out various disputed questions of fact and law,
therefore defendants be permitted to defend the suit unconditional.
18. The law on the point of leave to defend under Rule 3 of
order XXXVII of CPC, is made clear by various pronouncements of
Hon’ble Apex Court. Recently, Hon’ble Supreme Court in the case of
IDBI Trusteeship Services Limited Vs. Hubtown Limited, (2017) 1 SCC
568, in paragraph number 17, has laid down guidelines to be
considered while deciding the leave to defend. It would be worthwhile
to quote the guidelines here-
“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.
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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 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.
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
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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.”
19. In the light of aforesaid guidelines, it would be necessary to
appreciate the submissions of both the sides. Plaintiff though claims to
have parted with an amount of Rs.10 lakhs through the cheque dated
01-06-2010, in favour of the defendants, however the account
statement in support of the same, surprisingly, bears the name of K. K.
Electronics. Thus, the amount seems to have been transferred by
plaintiff to K.K. Electronics and not to the defendants. Though the
plaintiff contends same to be a typographical mistake on the part of
bank, however nothing is produced on record to show that plaintiff ever
contacted the said bank seeking correction in the account statement.
Thus, the transfer of 10 lakhs by the plaintiff in favour of defendants
itself a disputed question of fact. Plaintiff needs to adduce evidence to
prove the said fact.
20. The contention of the defendants that defendant No.1 is
not a proper party bears some weight as the plaint as well as Summons
for Judgment, no where clarified what is the role of Mr. Lalit Kumar
Jain, the defendant No.1, in the alleged transaction. There is not a
single word to connect the defendant No.1 with defendant No.2.
Therefore, the joinder of defendant No.1 in the present suit also
emerges a disputed issue of fact.
21. Defendants contend that K.K. Erector as well as Kumar
Builder Project Pune Pvt. Ltd. were the distinct entities and both of
them are now non existent. It is submitted that both the Firms are now
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converted into Private Limited Companies. Thus, the defendants claim
that the present suit cannot be entertained against the non existent
entities and failure of plaintiff to carry out necessary amendment, gives
rise to another disputed issue of fact as well as law. I find much
substance in the contention of defendants.
22. Another issue involved in the matter is with respect to the
limitation. The plaintiff claims that the last payment received by the
plaintiff towards the interest is on 28-06-2014. However, the demand
Notice seems to have issued after lapse of more than 3 years i.e. on
14-12-2017, whereas the suit is lodged on 06-02-2018. Thus, in view
of Article 21 of Limitation Act, I find that the suit,
prima facie, barred by
law of limitation. In other words, issue of limitation appears to be a
substantial issue to be tried in the present suit.
23. Thus, from the above said discussion it can safely
concluded that the plaintiff’s case raises various disputed issues of facts
as well as law, for which plaintiff needs to lead evidence to prove the
same. The defendants have also raised various triable issues. Those
issues cannot be said to be vague or moonshine. Thus, in view of the
guidelines of Hon’ble Apex Court in the case of IDBI Trustisheep
(supra), I find that the defendants deserve unconditional leave to
defend. Hence, I answer point No.1 accordingly.
As to Point No.2-
24. In view of the above, I hold that defendants are entitled for
unconditional leave to defend. Consequently, Summons for Judgment is
bound to be dismissed. Hence, in answer to Point No.2, I pass the
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following order.
ORDER
A Unconditional leave to defend is granted to both defendants.
Consequently, Summons for Judgment stands rejected.
B Defendants to file Written Statement within four weeks from the
date of this order.
C Summons for Judgment No.43 of 2020 is disposed of accordingly.
(Dr. S. D. Tawshikar)
Judge, City Civil Court, Gr. Mumbai.
Date: 09-02-2023. Court Room No.61
Directly typed on PC : 09-02-2023
Corrected & signed on : 13-02-2023
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
13-02-2023 at 5.45p.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
09-02-2023
JUDGMENT/ORDER signed by P. O. on 13-02-2023
JUDGMENT/ORDER uploaded on 13-02-2023
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